How To Star Business In Vietnam

How to start a business in Vietnam conducted by investors has always been subject to quite rigorous adjustments of investment and business laws.

In recent years, along with the non-stop development of our country’s economy and society, the number of foreign investors investing and building business in Vietnam is more and more increased. Establishing 100% foreign-owned capital companies has become popular business. With its unique characterization, establishing a company with 100% foreign-owned capital has always subject to quite rigorous adjustment of investment and business laws.

Register investment policy prior business in Vietnam

Before carrying out setting up a 100% foreign-owned company, investors must apply for an Investment Registration Certificate at an agency of business registration. In some cases, investors must register its investment policy with a provincial People's Committee.

Required documents include:

-        A request for implementation of the investment project;

-        A copy of ID card, passport, or certificate of business registration, or other equivalent document;

-        A proposal of project investment: investors’ names, investment objectives, scale, capital and capital mobilization plan, location, duration, impact assessment, report on socio-economic efficiency, etc.

-        A copy of one of the following documents: financial statement within the last two years; commitment of financial support from its parent company or a financial institution; guarantee of financial capability; documents proving capital capability;

-        Demand for land use;

-        Explanation on technology application, including name of such technology;

-        BCC contract in case of implementation projects under a BCC

When applying for a business registration certificate to establish a 100% foreign-owned company, investors should prepare a file of documents similar to the file applied for policy registration and send it to an agency in charge of business registration.

Establish a company with 100% foreign-owned capital and register its business

After receiving a certificate of investment registration, investors need to carry out procedures of establishing a company with 100% foreign-owned capital. Required documents include:

-        Request for business registration

-        Charter

-        List of members or shareholders.

-        Copies of the following documents:

+        ID, Passport or other legal personal identification of individual members or shareholders;

+        Decision of establishment, business registration certificate of other equivalent corporate documents and authorization letter;

+        The copies of business registration certificate or other equivalent documents must be notarized at a consular if members are foreign corporates.

-        Business registration certificate as regulated by Investment Law, applicable to foreign investors.

The application for establishing a company with 100% foreign-owned capital shall be submitted at a business registration agency under the Department of Planning and Investment of the province/ city at which the company is intended to be located. Within 05 working days since as to the date of receiving full documents, the business registration agency shall consider and issue a business registration certificate.

Publicize the establishment of the company with 100% foreign-owned capital

After being granted the business registration certificate, the company is obliged to publicize its establishment on a national information portal.

Contents of the announcement include the contents of the business registration certificate and other information as followed:

-        Lines of business;

-        List of founding shareholders and foreign shareholders to joint stock companies.

Have the business seal made

After making the establishment of a 100% foreign-owned capital company public, the company now carries out having company seal made at one of the authorized seal making units. The company decides the number and form of the seal to the extent permitted by law.

Have the seal sample publicized on a national business registration portal

After the seal is made, the company publicizes the seal sample on a national business registration portal and receives 01 confirmation of publicized seal sample issued by the Department of Planning and Investment.

Obligation to provide information during procedures of establishing a company with 100% foreign-owned capital

During procedures of establishing a company with 100% foreign-owned capital, investors have to provide Vietnamese competent authorities with some basic information. Such information is essential to support Vietnamese authorities to verify an authentic file of establishing a company with 100% foreign-owned capital.

If investors are individuals, they need to provide the following basic information and document:

-        Valid ID card, or passport;

-        Confirmation of an account bank balance;

-        Bank’s notice, or confirmation of transferring to capital contribution account of the corporate;

-        Criminal record of the investors;

If investors are legal entities, the below information should be provided to Vietnamese competent authorities while carrying out procedures of establishing foreign-owned capital companies:

-        Resolution/ Decision of capital contribution of the Board of Shareholders/Board of Members according to regulations of law and charter of foreign corporate;

-        Copies and translations of the foreign company’s business certificate/ decision certified at a consular

-        Company’s charter;

-        Foreign investor’s audited financial statement of the latest year;

-        Credit notice (bank confirmation of transfer to the capital contribution account of the company);

Besides, investors also have to provide some more basic information about the intended business, including:

-        Name of the company

-        Business address of the company

-        Charter capital/ Investment capital of the intended company

-        Registered business lines

Obligation to prove its business location legal when registering for company establishment of 100% foreign-owned capital

Investors when registering for establishment of a company with 100% foreign-owned capital in Vietnam are obliged to prove its business location legal. They can fulfill this obligation by providing a Vietnamese competent authority with the following documents:

-        A certified lease contract of headquarters (where the company is located in Vietnam);

-        A certificate of land use right.

If the lease contract is made with a legal entity, such legal entity must register for real estate business on its business registration; if it is made with an individual and the term of the contract is more than 06 month, it must be certified at a notary office.

Above are the specific regulations relating to procedures of establishing a company with 100% foreign-owned capital? Foreign investors who intend to establish a company in Vietnam for business operation should carefully consider and comply with those regulations.

Choose LLc or JSC Company in Viet Nam

ORDERING CONSULTING FOR THE CREATION OF A FOREIGN CAPITAL COMPANY

► Review the documents to be prepared, including LEGAL CONSULTATIONS (LAW, POLICY, TAXES, human resources...)

► After receiving the investment certificate, advice on how to obtain the business registration certificate.

► Advice and application for the Enterprise Certificate (ERC) and the Investment Certificate (IRC), in addition to the Business License issued by the Ministry of Industry and Trade (Business License)

► Consultation and production of a seal engraving and report using seal samples

► Regular legal advice after the opening of the business

► Legal advice about taxes, work permit, temporary residence card and child permit (if applicable)

► Support for the registration of trademarks, designs and inventions when required by businesses (LHD Law Firm is a representative of IP No. 146 the National Office of Intellectual Property NOIP)

SERVICES TO BE AVAILED OF AFTER SETTING UP A FOREIGN CAPITAL COMPANY IN VIETNAM

►Advice on CIT, PIT, and monthly, quarterly and annual tax returns

►Social insurance consultation, salary calculation (payroll)

►Consulting for personnel selection in Vietnam

►Trademark, Design, and Invention Protection Consulting

►Consultation on labor law, taxation, and contracts in Vietnam

► Virtual office rental for companies with foreign capital to provide invoice redemption. (⇒ should see)

CONTACT US FOR SERVICES

Currently, LHD Law Firm has 3 offices in 3 major cities in Vietnam: Ho Chi Minh City, Hanoi and Da Nang.→ Over 6,800 clients from 32 countries around the world have trusted the services of LHD Law Firm for 12 years.

10 BARRIER WE WILL REMOVE WHEN CLIENTS USE THE SERVICES OF LHD LAW FIRM

→ Vietnam is considered an attractive place to invest...Foreign investors that want to do business in Vietnam, on the other hand, must consider the following ten major obstacles:

·      First, under Vietnamese law, there are investment conditions for foreign investors. The 2014 Investment Law lists 267 conditional investment areas in Appendix 1, which are detailed in specialized laws governing specific industries or in international commitments, such as WTO commitments. Accordingly, there are restrictions for foreign investors to invest in Vietnam.

·      Second, foreign investors may be subject to a number of taxes, namely corporate income tax, value added tax, special consumption tax, and import and export tax. Taxation is one of the most cumbersome business processes in Vietnam, as it requires a significant investment of time and money from foreign investors.

·      Third, obtaining work licenses for foreign workers in Vietnam might be difficult. Generally, foreign workers who work for more than 3 months are required to obtain a work permit. The employer is responsible for these procedures. Employers must submit a yearly report demonstrating their need for foreign workers as part of the pre-employment procedures. A work permit only has a two-year validity period. After that, there will be conditions for renewing the license.

·      Fourth, intellectual property protection can be a problem when foreign investors plan to invest in Vietnam. Vietnam has access to various international treaties related to intellectual property. In addition, a wide range of intellectual property rights are recognized and protected under Vietnamese law, including copyrights, trademarks, industrial designs and inventions. In practice, violations of intellectual property rights are frequent and the procedures required to protect foreign investors' intellectual property rights can be extremely time-consuming.

·      Fifth, the new 2018 Competition Law, effective July 1, 2019, clearly expands its scope to include all practices that have or may have a restraining effect on competition in the Vietnamese market. There have been many changes from the old law, especially for foreign investors investing in Vietnam. Therefore, foreign investors doing business in Vietnam should pay attention to this issue in order not to violate the law.

·      Sixth, it is not easy to get a construction permit in Vietnam. Foreign investors have to work with many authorities, such as the Department of Construction, the Department of Fire Safety, the Department of Natural Resources and Environment and Urban Affairs.

·      Seventh, Vietnam's banking and financial industries are still tightly controlled. Foreign investors cannot establish a financial company in the form of a joint stock company through investment in Vietnam. In addition, a foreign investor purchasing shares in a limited financial company must not be a strategic shareholder, owner or founding member of any other credit institution in Vietnam.

·      Eighth, naturalization rights in Vietnam are limited. According to the Vietnamese Constitution, all land is the common property of all Vietnamese people.

·      Ninth, sustainable development is gradually gaining public interest. The Vietnamese government is drafting a law on environmental protection. Foreign investors are responsible for more activities, such as implementing environmental protection measures in the manner specified in their environmental impact assessment report or environmental protection plan. All large investment projects require an approved environmental impact assessment report, which increases the efforts of foreign investors.

·      Tenth (last), when disputes arise over investment projects during the investment process in Vietnam, questions about the applicable law and dispute resolution forum often discourage foreign investors. Getting it right can have a big impact on their case. Fortunately, foreign investors can turn to a law firm to help with all the above.

→ Steps to work with LHD Law Firm

Step 1: Get Legal Advice English - Vietnamese.

Meet with an attorney. We get legal advice on the type of business best suited to your situation.

Step 2: Find office space and legal representation for your business (if there is no available LHD office)

Then find an office space so that your business not only has a place of business, but also a specific office address required by the government to apply for a business license. If you are not the legal representative for your business, you need to find a trusted partner.

Step 3: Apply for a business license (IRC, ERC, BL)

Prepare all the necessary documents and make sure that you meet all the necessary requirements before applying for a business license. Expect a 15-day waiting period for a Vietnamese-owned company and a 60-day waiting period for a foreign company.

Step 4: Legal and tax advice for foreign companies after establishment

Running your Vietnamese business now has the ability to hire employees and enter into business contracts. There are several things you need to do, such as obtaining your company seal, applying for a tax identification number, opening a company bank account, and publicly announcing your incorporation. Periodic duties include employee tax, accounting  report and insurance payments.

(In addition to legal advice, we also provide accounting services for companies with foreign capital for these companies)

→ Why Choose LHD Law Firm

Everything we do at LHD Law Firm is focused on assisting your business through our investment law expertise and local business experience in Vietnam.

So that your enterprise can grow and expand quickly and avoiding the costly traps that many start-up investors fall into at the hands of unscrupulous lawyers and agents.

How we accomplish this.

We offer the best investment legal service in Vietnam, as well as a wide choice of INDIVIDUAL AND ECONOMIC EFFECTIVE SOLUTIONS for starting a business in Vietnam or managing an existing one.

What we can do ...

Consulting on the establishment of foreign-owned companies in Vietnam, consulting on the establishment of Vietnamese factories and consulting on industrial production, sourcing Vietnam, supporting business registration, accounting, and tax compliance through information intelligence, low-cost operational setup, HR & admin, government liaison services, director services, country representation/management services for M&A, and much more...

→ Senior lawyer LAW FIRM

Lawyer: To Thi Thanh Thuy (email: all@lhdfirm.com) 

→ Lawyer specializing in advising on setting up foreign capital companies in Ho Chi Minh City

She graduated with a master’s degree in Commercial Law - City Law University of Ho Chi Minh City.

Consultancy language: English and Vietnamese

She is as one of the top 20 lawyers in Vietnam, highly rated by Legal500 and Hg.org → specializes in foreign investment, having realized more than 6800 projects in 15 years...

Lawyer: Nguyen Phuong Khanh (email: hanoi@lhdfirm.com)

→ Lawyer specializing in advising on setting up foreign capital companies in Hanoi

She has a master's degree in Commercial Law from Hanoi Law University.

The language of consultation is English and Vietnamese

A senior associate at LHD firm in Hanoi, she has 15 years of experience in foreign investment consulting, having implemented more than 2,466 projects in Vietnam.

Client’s investment to Viet Nam

TOYOTA

WACOAL

DELOITE

DLH; SHISEIDO

FOS

DLT

YAMAZEN

SANKOUGIKEN

DIEMSANG

IFO

ALTECH

TRIUMPH

SOMETHINGHOLDINGS

JABES

SPASH INTERACTIVE

YM

CORELEV

VIET AGO

STENCIL

SHINWON

DLT

AYOBA

E&C VINA

TYCOOND

ILLHO

VIETPOLL

BIOMIN

M&R FORWARDING

WSP VN

J. DROUP

HALFEN MOMENT

MARTIME

DAIKOAD

RICOH VN

CHEMSTATION ASIA

DEVPROSOFT

ATEA

OPTIMUM GLOBAL

V STENCIL .... and More