Vietnam continues to attract significant foreign investment with its dynamic economy and strategic location. For international businesses considering entry into this vibrant market, understanding the company setup process is crucial. This guide outlines the key steps and essential requirements for establishing a Limited Liability Company (LLC) in Vietnam, ensuring clarity and compliance with current regulations.
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Navigating the Company Establishment Process
Based on the Investment Law of Vietnam, setting up a company in Vietnam typically involves a structured four-step procedure, guiding investors from initial approval to operational readiness.
Step 1: Pre-Investment Approval (If Applicable) for setting up a business in Vietnam
Certain investment projects, particularly those in sensitive sectors or large-scale developments, require prior approval from Vietnamese authorities. These may include, but are not limited to:
- Residential housing construction
- Aviation infrastructure (airports, aerodromes, air transport)
- Petroleum processing
- Casino and betting businesses
- Industrial or export-processing zone infrastructure
- Nuclear power plants
- Golf courses
- Projects requiring special land use rights
- Developments near islands, borders, coastal areas, or defense-sensitive locations
- Projects impacting sensitive heritage sites
- Initiatives necessitating inhabitant relocation or re-purposing specific forests or rice cultivation areas
Investors should verify if their project falls under these categories to initiate the pre-investment approval process.
Step 2: Investment Registration Certificate (IRC) Application
The Investment Registration Certificate (IRC) is a mandatory document for all foreign-owned investment projects in Vietnam. Investors must prepare a comprehensive application dossier, which includes:
- A detailed application form for the investment project
- A comprehensive project proposal outlining lease agreements or land use requirements
- Financial statements from the investor’s last two years of operation (authorities may request additional information to verify financial capacity)
- All necessary legal documents pertaining to the investors
Step 3: Enterprise Registration Certificate (ERC) Application
Upon successfully obtaining the IRC, the next crucial step involves applying for the Enterprise Registration Certificate (ERC), also known as the Business Registration Certificate. This document formally recognizes the establishment of your legal entity in Vietnam.
Step 4: Post-Licensing Procedures for setting up a business in Vietnam
Once authorities issue both the IRC and ERC, businesses must complete several post-licensing procedures to become fully operational:
- Seal Carving: Companies legally require a company seal.
- Bank Account Opening: Establish a bank account for company operations.
- Labor Registration: Register with local labor authorities.
- Business License Tax Payment: Fulfill initial business license tax obligations.
- Charter Capital Contribution: Ensure the timely contribution of registered charter capital.
- Public Announcement of Company Establishment: Publicize the company’s formation as required by law.
Key Additional Requirements for Foreign Investors
Foreign investors must also address several critical requirements beyond the primary licensing steps:
- Minimum Capital Requirements: While most sectors do not impose specific minimum capital thresholds, the Department of Planning and Investment assesses whether the registered capital adequately covers projected business expenses until the company generates sufficient revenue. Specific sectors like finance, banking, insurance, fintech, language centers, vocational schools, and medical clinics have their own defined capital requirements.
- Charter Capital vs. Total Investment Capital: Charter capital represents the total value of capital and assets directly contributed by the company’s owners. Total investment capital encompasses both charter capital and any loan capital. Companies must register both figures with the licensing authority.
- Capital Contribution Schedules: Investors must contribute their registered capital within 90 days from the FIE’s establishment date, unless licensing authorities grant an extension.
- Transferring Capital: Foreign investors typically establish a capital bank account at a legally licensed bank in Vietnam to facilitate the transfer of investment capital into the country.
- Registered Address: Companies must possess a legal, registered address in Vietnam for incorporation purposes. While a physical office is often necessary for most businesses, some service-based entities may operate effectively with a registered office address.
- Legal Representative: Every company must appoint at least one Legal Representative (LR). This individual can hold titles such as Company President, Director, or General Director. A residential address in Vietnam is generally preferable for the LR. Foreign nationals serving as LRs or otherwise involved with the company will also require a work permit.
Disclaimer: This article provides general information regarding company establishment in Vietnam based on publicly available data. Vietnamese laws and regulations are subject to change. Foreign investors should always seek professional legal and financial advice tailored to their specific circumstances before initiating any business setup procedures in Vietnam.
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