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Vietnam Company Formation - A Comprehensive Guide [LHD Law Firm]

Vietnam company formation: Under Vietnamese laws, a foreign investor (foreign entity or individual) may establish its presence in Vietnam as a limited liability company with one or more members, a joint-stock company or a partnerships.

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VIETNAM COMPANY FORMATION - STEP BY STEP GUIDE 

Vietnam company formation Vietnam foreign investment: Legal advice, We have a team of lawyers who have not only good legal backgrounds and skills but having also business mind and strong ties to the field, evidencing by a large number of clients having their foreign direct investment in Vietnam.

Company formation in Vietnam 

One of the most common approaches, is doing business in Vietnam with a local entity. This includes the Limited Liability Company (Wholly Foreign-Owned), which is a fit for most investors whereby the company can both trade with Vietnam and foreign customers.

  1. A Limited Liability Company (Joint Venture) is another commonly incorporated entity beneficial to investors who already have existing business partners in Vietnam, whereby they can tap on their specialist local knowledge.
  2. A Joint Stock Company (JSC) alternatively, may be more attractive if you are planning to form a business with several partners to finance the business by issuing company shares and mobilizing capital by the sale of shares.
  3. If doing business in Vietnam with a foreign entity is of preference, a Vietnam Representative Office is a commonly recommended option.

This entity is suitable for foreign investors looking into developing their business network in Vietnam, such as finding business opportunities in Vietnam and overseeing business development of the parent company, without being subjected to local tax. Otherwise, a Branch Office may also be advantageous especially if the foreign entity is reputable, and in regulated industries such as banking, finance and insurance.    

Vehicles of Foreign Direct Investment

Under the ULE and CLI, foreign investors are entitled to select one of the following vehicles or forms for their investment in Vietnam:

- Business Co-operation Contract ("BCC");

- Limited Liability Company, with One or More Members ("LLC");

- Joint Stock Company ("JSC");

- BOT;

- BTO; and

- BT

It is worthy of note that for any new establishment of LLC or JSC, it is required to attached the establishment to aninvestment project. In this case, an investment registration certificate shall be issued to the newly established LLC or JSC, which serve at the same time as the business registration certificate of the LLC or JSC.

BCC

BCC is a partnership signed by two or more parties with the objective of conducting jointly one or more business operations in Vietnam on the basis of mutual allocation or responsibilities and sharing of profits or losses, without creating or forming a legal entity in Vietnam.

As BCC is not a separate legal entity, the contractual rights and obligations of the parties must be shared. To co-ordinate the daily operation of a BCC, a co-ordination board can be set up when necessary, with presence of the equal nominees from the parties.

LLC

LLC is established by a single investor or pursuant to a joint venture contract signed by one or more investors, either Vietnamese investors and one or more foreign investors; or between foreign investors, individually or institutionally, for the purpose of carrying out business activities in Vietnam. The difference of the LLC compared with the JSC is that the LLC is not permitted to issue shares, and the number of investors, regardless individual or institutional, is not allowed to be excessive of 50.

JSC

JSC is a company established by at least 3 investors, regardless individual or institutional, local or foreign. Differing from the LLC, JSC can issue shares to the publics. JSC is a kind of limited liability company, and has the legal person status in accordance with the laws of Vietnam.

BOT, BTO and BT

Compared to the said vehicles, regulations covering BOT, BTO and BT are quite few, causing difficulties for implementing.

A written contract which must be signed by foreign investor(s) and an authorized agency, constitutes the principal legal basis for implementing a BOT, BTO or BT project. It differs from BOT to BTO in the right to commercial exploitation of the completed project for getting back investments. This right is realized for a fixed time before transferring to the State of Vietnam in the case of BOT, but in the case of BTO, it follows after transferring. As for BT, foreign investor(s) must hand over the project to the State of Vietnam upon its completion, and instead of commercial exploitation like the case of BOT and BTO, foreign investor(s) is/are provided with opportunities to carry out other projects to get back investments.

In all and every case, a LLC or JSC can be established by foreign investor(s) to carry out the project, in accordance with applicable procedures as described hereof.

Project Classification and Licensing Agencies

Unlike the FIL, the projects under the CLI are classified into two groups, requesting the registration procedures and appraisal procedures. More decentralized, all projects (except BOT, BTO and BT projects to which MPI will issue the Investment certificates) are approved and licensed by city/province-level people's committees with respect to projects outside EPZs and IZs, and city/province-level administration boards of EPZs and IZs with respect to projects inside EPZs and IZs.

Application Document Requirement

An application/ registration file for submission to investment registration agencies, under the CLI, normally includes:

- Application for investment certificate;

- BCC or JV contract, as the case may be

- Charter of LLC or JSC, as the case may be

- Technical-economic explanation or feasibility study for a BCC, LLC or JSC;

- Statements certifying the legal status and financial capacity of investors;and

- Explanation on satisfaction of WTO's requirements.

Vietnamese language is lawfully required, but a widely-used foreign language may also be accompanied, for instance, English. In principle, the two languages have equal legal weight in determining the parties' intentions, but in case of discrepancies, the Vietnamese shall prevail.

Licensing Procedures and Timing

All the new establishment of LLCs, JSCs, BCCs, BOTs, BTOs and BTs are required to get investment certificate.

With respect to projects subject to the investment appraisal procedures, the time limit for issuance of an investment registration certificate shall be normally within 30 days from its receipt of the satisfactory files, and in special cases the time can be extended but not exceeding 45 days.

With respect to projects subject to the investment registration procedures, the investment certificates shall be issued within 30 days from the receipt of the satisfactory file.

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Vietnam company formation

Register a company that allows you to run full operations in Vietnam. Choose between a limited liability company or a joint stock company.

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Vietnam company formation is a form of investment in which foreign investors are allowed to implement investment projects in the form of investment in the establishment of 100 foreign-owned company in Vietnam, in which the investment locations are being considered major attraction in Vietnam such as investment in Hanoi, investment in Ho Chi Minh city, Binh Duong, Dong Nai, Bac Giang, Bac Ninh, Thai Nguyen, Da Nang, Quang Ngai.... with lots of different fields. Hong Duc Law Firm is proud to be the investment consulting firm leading in Vietnam with 16800 visitors and over 10 years of experience in the investment advisory field in Vietnam.

Registering a company in Vietnam includes the following documents for setting up a company in Viet Nam.

Granted investment certificates for investment projects outside industrial zones with a total investment of less than 300 billion VND and non- investment conditions. Investor’s prepared three sets of records, including the original one, are including:

 1. Written registration / request for issuance of investment certificates for cases associated with establishment of enterprise

2. Draft Charter Company (select the suitable type for established enterprises)

3. List of members / shareholders founders (select suitable sample  with established business type)

4. Joint Venture Contract (for the case of foreign investors invested joint venture with Vietnam).

5. Documents certifying the legal status of the investor:

    + In case the investor is held together with a copy of the certificate of business registration / Decision established (together with the original for comparison); the text in a foreign language must be translated into Vietnamese and certified by organizations with translation function;

     + In case the investor is an individual copy attached Passport / identity card of the Investor (together with the original for comparison).

6. Written authorization of the investor for the authorized person for the event is organized investors.

7. A copy of one of the personal identification document of the legal representative of the enterprise was established in Vietnam (enclosed with the original for comparison).

8. The financial statements of the most recent year audited balance sheet asset or the most recent year have been audited (for investors is held), documents certifying the account balance (for personal).

9. The documents relating to the location of the project:

+ In case of established project consultancy, software manufacturers, (not construction): venue hire contract and / or certificates of land use rights, house ownership accommodation and assets attached to land for leased assets.

+ In case of established projects construction: Negotiable principles signed between the investor and the city People's Committee (of the land lease agreement) / certificate of land use right and the decision approving Total ground.

10. Decision approving reports environmental impact assessment approved by the Municipal People's Committee / or written commitment to environmental protection has been the district People's Committee / district where the project is confirmed (if applicable).

11. A valid copy of the practicing certificate of the director (CEO) and / or other individuals for business enterprise that trades as prescribed by law, must have a practicing certificate;

12. Documents certifying the legal capital of the organization, the competent authority for the trading company which trades under the provisions of the law must have legal capital.

3.2 Issuance of investment certificates for investment projects outside industrial parks with a total investment of less than 300 billion Vietnam in the fields of conditional investment. Investors to fully prepare 8 sets of records, including the original one, including:

1. Written registration / request for issuance of Investment Certificate for cases associated with establishment of enterprise

2. Draft Charter Company (select the suitable type for established enterprises)

3. List of members / shareholders founders (select the suitable type with the established business type)

4. Joint Venture Contract (for the case of foreign investors venture with Vietnam investors).

5. Documents certifying the legal status of the investor:

     + In case the investor is held together with a copy of the certificate of business registration / Decision established (together with the original for comparison); The text in a foreign language must be translated into Vietnamese and certified by organizations with translation function;

     + In case the investor is an individual copy attached Passport / identity card of the Investor (together with the original for comparison).

6. Written authorization of the investor for the authorized person for the event is organized investors.

7. A copy of one of the personal identification document of the legal representative of the enterprise was established in Vietnam (enclosed with the original for comparison).

8. The financial statements of the most recent year audited balance sheet asset or the most recent year have been audited (for investors is held), documents certifying the account balance (for personal).

9. Explanation ability to satisfy conditions which the investment project must meet prescribed by law;

10. The documents relating to the location of the project:

     + In case of established project consultancy, software manufacturers, (not construction): venue hire contract and / or certificates of land use rights, house ownership accommodation and assets attached to land for leased assets.

     + In case of established projects construction: principle agreement was signed between the investor and the city People's Committee (of the land lease agreement) / certificates of land use rights and coffee Decision approval of Master Plan.

11. The decision to approve the environmental impact assessment report approved by the Municipal People's Committee / or written commitment to environmental protection has been the district People's Committee / district where the project is confirmed (if applicable).

12. A valid copy of the practicing certificate of the director (CEO) and / or other individuals for business enterprise that trades as prescribed by law, must have a practicing certificate;

13. Documents certifying the legal capital of the organization, the competent authority for the trading company which trades under the provisions of the law must have legal capital.

3.3 Issuance of investment certificates for investment projects outside industrial parks with a total investment of 300 billion Vietnam dong or more and do not invest in sectors where conditions permit. Investors to fully prepare 8 sets of records, including the original one, including:

1. Written registration / request for issuance of investment certificates Investment Certificate for cases associated with establishment of enterprise

2. Draft Charter Company (select the type suitable for established enterprises)

3. List of members / shareholders founders (sampling in accordance with the established business type)

4. Joint Venture Contract (for the case of foreign investors venture with Vietnam investors).

5. Documents certifying the legal status of the investor:

     + In case the investor is held together with a copy of the certificate of business registration / Decision established (together with the original for comparison). The text in a foreign language must be translated into Vietnamese and certified by organizations with translation function.

     + In case the investor is an individual accompanied by a passport / identity certificate of the Investor (together with the original for comparison).

6. Written authorization of the investor for the authorized person for the event is organized investors.

7. A copy of one of the personal identification document of the legal representative of the enterprise was established in Vietnam (enclosed with the original for comparison).

8. The financial statements of the most recent year audited balance sheet asset or the most recent year have been audited (for investors is held), documents certifying the account balance (for personal).

9. Explanation economy - engineering project includes the major contents: objectives, scale, location of investment, capital. Project implementation schedule, land use needs, technological solutions and environmental solutions.

10. The documents relating to the location of the project:

      + In case of established project consultancy, software manufacturers, (not construction): venue hire contract and / or certificates of land use rights, house ownership accommodation and assets attached to land for leased assets.

     + In case of established projects construction: principle agreement was signed between the investor and the city People's Committee (of the land lease agreement) / certificates of land use rights and coffee Decision approval of Master Plan.

11. Decision approving reports environmental impact assessment approved by the Municipal People's Committee / or written commitment to environmental protection has been the district People's Committee / district where the project is confirmed (if applicable).

12. A valid copy of the practicing certificate of the director (CEO) and / or other individuals for enterprise business lines as stipulated by law, must have a practicing certificate.

13. Documents certifying the legal capital of the organization, the competent authority for the trading company which trades under the provisions of the law must have legal capital.

3.4 Issuance of investment certificates for investment projects outside industrial parks with a total investment of 300 billion Vietnam dong or more and investment in the field conditions. Investors to fully prepare 8 sets of records, including the original one, including:

1. Written registration / request for issuance of investment certificates Investment Certificate for cases associated with establishment of enterprise

2. Draft Charter Company (select the type suitable for established enterprises)

3. List of members / shareholders founders (sampling in accordance with the established business types

4. Joint Venture Contract (for the case of foreign investors venture with Vietnam investors).

5. Documents certifying the legal status of the investor:

     + In case the investor is held together with a copy of the certificate of business registration / Decision established (together with the original for comparison). The text in a foreign language must be translated into Vietnamese and certified by organizations with translation function.

     + In case the investor is an individual accompanied by a passport / identity certificate of the Investor (together with the original for comparison).

6. Written authorization of the investor for the authorized person for the event is organized investors.

7. A copy of one of the personal identification document of the legal representative of the enterprise was established in Vietnam (enclosed with the original for comparison).

8. The financial statements of the most recent year audited balance sheet asset or the most recent year have been audited (for investors is held), documents certifying the account balance (for personal).

9. Explanation ability to satisfy conditions which the investment project must meet prescribed by law.

10. Technical-economic report of the project includes the major contents: objectives, scale, location of investment, capital; Project implementation schedule; land use needs; technological solutions and environmental solutions.

11. Documents related to the location of the project:

     + In case of established project consultancy, software manufacturers, ... (not construction): venue hire contract and / or certificates of land use rights, house ownership accommodation and assets attached to land for leased assets.

      + In case of established projects construction: principle agreement was signed between the investor and the city People's Committee (of the land lease agreement) / certificates of land use rights and coffee Decision approval of Master Plan.

12. Decision approving reports environmental impact assessment approved by the Municipal People's Committee / or written commitment to environmental protection has been the district People's Committee / district where the project is confirmed (if applicable).

13. A valid copy of the practicing certificate of the director (CEO) and / or other individuals for business enterprise that trades as prescribed by law, must have a practicing certificate.

14. Documents certifying the legal capital of the organization, the competent authority for the trading company which trades under the provisions of the law must have legal capital.

We provide foreign investor advisory services company established 100 foreign capitals and for issuance of investment certificates as follows:

Consulting the content needed before conducting investment procedures

Investment consulting areas are permitted to establish 100 foreign-owned companies.

Consulting with the provisions of the law on the type; structure, organization management and operation of the 100 foreign-owned company.

Limited consulting and investment conditions for planned investment field.

Consulting other issues related to investment projects.

Investors Guide prepared papers and legal documents necessary for the establishment of 100 foreign-owned companies.

Conduct procedures established 100 foreign-owned companies

Drafting registration documents for establishment of 100 foreign-owned.

To compile dossiers of application for investment certificates for investment projects.

On behalf of investors proceedings established 100 foreign-owned companies and apply for investment certificates.

Handle the relevant issues arising.

On behalf of the investors receive written answers (if available) of the investment management agency.

On behalf of Investor Investment Certificate at the same time as the certificate of business registration of 100 foreign-owned company.

Established companies with 100% foreign capital is a form of investment in which foreign investors are allowed to implement investment projects in the form of investment in the establishment of 100 foreign-owned companies in Vietnam, in some fields.

In this case, foreign investors conducting registration procedures established 100 foreign-owned companies in conjunction with the procedure for issuance of investment certificate.

Investment Certificate will be issued the certificate of business registration of 100 foreign companies.

Consultations of LHD (LHD Law Firm)

 Individual investors

- A certified copy of ID card / passport

- Bank certificate (proof of financial capacity).

  Investors are held

- A copy of the license company (Duplicate endorsement if the company in the country, consular legalization if foreign company)

Financial statements (consular legalization if foreign company)

A certified copy of ID card / passport of the representative.

Charter companies managing (consular legalization if foreign company)

Written authorization for a representative of the company (if consular legalization of foreign company)

In addition, investors provide

- Documents proving the legal right to use the business office (rental agreement / lease office or home / office organization functions for rent / legal office).

- Profile energy investor's experience.)

Consultant selected investment areas: According to WTO commitments, Decision 10, HS code...

Time consultant for each project

Consultants drafting documents for the establishment of foreign-invested companies

Strategic consulting mining personnel in Vietnam

Tax and accounting consulting protection of trademarks in Vietnam

Virtual office rental and share in Vietnam (District 1, HCM, HN)

Typical customers have used the services of LHD

TOYOTA; Wacoal, Deloite; DLH; SHISEIDO; FOS; DLT; YAMAZEN; SANKOUGIKEN; DIEMSANG; IFO; Altech; TRIUMPH; SOMETHINGHOLDINGS ... ETC…

Answer:

When Expat Set-up a business in Vietnam they can set up LLC or JSC company (An investor can choose from six different types of business when entering the Vietnam market: Representative Office; Limited Liability Company; Joint-Stock Company; Branch Office; Joint Venture; Public Private Partnership)

Answer:

The types of documents required to register an LLC in Vietnam are,
Certificate showing the necessary amount of investment
Articles of Association certificate
Proof of registered address
Information on the shareholders or members of the LLC
The business plan includes the investment project and money that is invested
Information on company director or legal representative and power of attorney

Answer:

Yes, a foreigner can begin a business in Vietnam.

Answer:

Yes, foreigners are allowed to own 100% of the shares of their business in most industries. However, for certain specified industries, company setup is allowed only in a joint venture with a Vietnamese individual or corporate entity.

Tags: vietnam company formation, vietnam formation company, setup company in vietnam

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