How to Start a Business in Vietnam?
In recent years,
Vietnam has become an attractive destination for foreign investment thanks to
its advantages of security, political stability, and favorable geographical
position to trade with the world. This is both the connection center of the
region and the gateway to penetrate the economies in the western region of the
Indochina Peninsula. In addition, the Vietnam government has increasingly been
offering more preferential policies to create favorable conditions for foreign
investors to start doing business in Vietnam.
To start a business in Vietnam,
investors first need to choose for themselves an appropriate type of business
based on the number of capital contributors, the amount of capital contributed,
and the business’s purse. According to the provisions of Vietnam law, foreign
individuals and organizations can establish a limited liability company or a
joint stock company or a partnership or a private enterprise.
The next issue that
needs to be considered is the business line. In order for the company to be
able to operate, the company must register the appropriate business lines,
related to business activities. If the selected line of business does not
require conditions, the enterprise can go into operation after the establishment
of the company. This is considered non-conditional business area which most of
company would do. However, if the investor chooses a conditional business line
to do business, the enterprise must meet the necessary requirements, apply for
a business license as prescribed, and then go into operation. This is
considered conditional investment area where there are some restrictions being
required license, minimum charter capital, foreign ownership ratio…
Investors also need to
choose a location for their business, which is legally allowed to conduct
business activities. The company address must be located in the territory of
Vietnam, and comply with requirement corresponding to purpose of business i.e.
company address can not be in an apartment building or a dormitory for living
purposes only; factory location has to be at proper zone for industrial
purpose…
In order to serve the
management of the State and facilitate business activities, newly established
businesses need to have their own name and this proper name must be unique, not
be the same or similar to previously registered businesses. Enterprises are not
allowed to use the names of functional agencies, state management agencies to
name the company. The name of the business must include the type of company and
proper name. To avoid duplication with other companies, businesses can use
abbreviations or English names, but must ensure that the company name will not
cause confusion, without adding prefixes, suffixes or cultural symbols in the
name of the business.
The investors need to
apply for an Investment Registration Certificate at a competent authority in
Vietnam. This is a mandatory procedure for all projects that want to establish
a new legal entity in Vietnam. The processing time for an investment
certificate application is around 30 days depending on the specific project.
After being granted an Investment Registration Certificate, foreign individuals
and organizations need to prepare an application for an Enterprise Registration
Certificate at the Department of Planning and Investment which would take
around 7 days. Completing this procedure, the enterprise has the legal status
according to the provisions of the Law on Enterprises of Vietnam.
From day one since
commencing its operation, the company could by itself or hire professional to
assist with monthly compliance service i.e., submit foreign labour reports,
submit investment report, submit tax report, submit health and insurance
reports to authorities to avoid encountering penalties.
ANT Lawyers – a law firm in Vietnam will
always follow up with authorities for legal update on matters relevant to
investment registration or doing business in Vietnam.
Source ANT Lawyers : https://antlawyers.vn/library/how-to-start-a-business-in-vietnam.html
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