Comprehensive Guide to Vietnam Company Formation and Registration

The first step to starting a business in Vietnam is forming a company and registering it with the relevant Vietnamese authorities. While the Vietnamese government has made it easier for foreigners to invest in Vietnam, company formation and business registration process can be complicated.

So once you have completed your market research and decided what industry you want to enter in Vietnam you are ready to start the business registration process. Without a valid Enterprise registration certificate setting up a business and running is not possible.

There are multiple departments involved in the registration of a foreign business in Vietnam including the Department of Planning and Investment, the business registration office, and tax authorities. So unless you have the right support from a professional consultant it can be challenging to complete the company registration process. Not to mention if you fail to complete all steps of business registration correctly you may run into compliance issues later on.

Zora Consulting offers expert consultancy to foreign businesses that are interested in registering in Vietnam. We have vast experience in helping foreign companies with their business formation and registration process. If you are interested in learning the exact steps for forming and registering a business in Vietnam we suggest you keep reading this article.

How to form a company in Vietnam?

Forming a business involves choosing the right structure for your business. The type of company you form can have a direct impact on the registration process. At Zora Consulting we have noticed that most foreign investors choose one of the following business types when setting up a business in Vietnam:

●        Limited liability company (LLC): This limits the investor's liability based on their contribution to the company

●          Branch office: A new branch or office of an existing parent company.

●          Joint stock company (JSC): These companies involve at least three founders. JSC is usually formed when a foreign company wants to start a partnership with a Vietnamese company.

Each of these business structures has its distinct properties. We have covered these two and other key business types in Vietnam in a separate blog post. You can learn all about these business types by reading “Foreign Ownership in Vietnam: Can Outsiders Own a Business?” (Link the previously written article for internal link building).

What are the steps involved in registering a company in Vietnam?

Registering a company in Vietnam is a multi-step process that may vary from case to case. With that said most businesses that want to be registered in Vietnam have to go through certain common steps. Here are the most common steps involved in registering a business in Vietnam as a foreigner:

Step 1. Pre-investment approval (Only applicable to specific businesses):

This step may not be the first step for business registration in Vietnam for most companies. However, some types of investments do require pre-investment approval. In case this approval is required you will have to provide a list of documents to additional relevant departments to get your company approved.

Here is a list of specific types of businesses that require pre-investment approval:

●          Residential housing project work

●          Airport, cargo, and ports management

●          Petroleum refinery and processing

●          Casinos and betting companies

●          Infrastructure projects involving industrial and export processing zones

●          Nuclear power projects

●          Golf courses

●          Businesses or projects that are located close to strategic defence sites

●          Projects involving heritage sites

●          Projects involving forest, or crops

If your investment revolves around any of these categories or sectors you may need pre-investment approval. Zora Consulting can help you figure out whether this approval certificate is applicable to your business or not. In addition, we can also help you avail of this approval by assisting with document collection, submission and processing.

Step 2: Acquiring an investment registration certificate:

Unless your business category falls in the list of sectors mentioned in the previous section your business registration in Vietnam starts with an investment registration certificate. An investment registration certificate is essential for all foreign-owned companies that want to operate in Vietnam.

As the name suggests the IRC serves as a certificate that authenticates a foreign investment in Vietnam.

To acquire this certificate foreign investors will have to submit an application containing details of the business project, as well as financial information linked to the company.

Once you have submitted your application along with the required documents you can receive IRC within 15 working days of submission.

Step 3: Enterprise registration certification application

Enterprise registration certificate is meant to provide businesses in Vietnam with their unique number. The companies can use this unique number to identify themselves to the government and pay taxes.

The ERC can be obtained by applying along with a company charter, information about board members/legal representatives, and letters of appointment for members.

Luckily the processing time for an enterprise registration certificate is short and you can receive this certificate within 3 - 5 working days of application submission. However, most foreign investors find this step challenging because all the company information has to be translated into Vietnamese language when applying for the ERC. That is where Zora Consulting comes in and we can help you submit the ERC application in accordance with the requirements to improve your chances of acceptance.

Step 4: Finalizing the registration and company formation process:

Once you have acquired the IRC and ERC your business has gained its legal status in Vietnam. However, there are still some basic aspects of business formation that need to be handled before you officially start your business operations.

To conclude your business formation and registration process you will have to:

●          Open a legit Vietnamese company bank account

●          Register e-signature token, e-invoice and initial accounting information

●          Hang company nameboard at registered address

●          Complete capital contributions within the approved timeline

Conclusion

As you would have probably guessed by now forming and registering a company in Vietnam is a complex procedure. You have to take special care at each step of the business registration process to ensure the success of your application.

Zora Consulting has helped hundreds of foreign investors in registering their businesses in Vietnam. We follow all the best practices when processing your company’s registration applications. So if you want to make sure you get your company registration in Vietnam properly done in a fast and professional way, feel free to get in touch with us.