SETTING UP BUSINESS IN VIETNAM

Establishing a company is the first step to lay the foundation for starting a business as well as developing and expanding in the future. There are many professions where an individual cannot run a business that requires an organization, especially professions that require business conditions such as lawyers, real estate brokers, and aviation services,… Moreover, doing business without registration will cause problems with long-term business plans and require a lot of requirements and procedures. With the recent amendments to the Corporation Act of 2014, legal procedures for establishing a business, operating a company, as well as other issues related to industries and business sectors have become easier for individuals or organizations who wish to run a business in Vietnam. Before running a business, individuals and organizations must carry out the necessary legal procedures to establish a business. Let’s unravel these procedures with Doanh Tri Law in the following article!

I. Forms of business entity 

Before running a business, you need to figure out what type of business entity you would like to own or operate in order to maximize the profits. 

According the Corporation Act of 2014, there are five business entities: 

• Limited Liability Company : Limited Liability Company with two members or more; One member Limited Liability Company 

• State Corporation

• Joint-Stock Company 

• Partnership 

• Private Corporation

II. Legal procedures for setting up a business in Vietnam 

1. Preparation for corporation registration file Documents for private business registration

• Application for business registration.

• Copies of legal papers for individuals who are private business owners.

a. Documents for a partnership 

• Application for business registration.

• Company rules 

• Members list

• Copies of legal papers for individuals who are members of the company

• A copy of the Investment Registration Certificate for foreign investors in accordance with the Law on Investment

b, Documents for limited liability company 

• Application for business registration 

• Company rules 

• Members list 

• Copies of the following papers:

• Legal papers of individuals for individual members, legal representatives;

• Legal papers of the organization for the member being the organization and the document on appointing the authorized representative; legal papers of individuals for authorized representatives of members who are organizations

If the member is a foreign organization, the copy of the organization's legal papers must be consularly legalized;

• Investment registration certificate for foreign investors in accordance with the Law on Investment.

c, Documents for joint-stock company 

• Application for business registration 

• Company rules

• List of founding shareholders; the list of shareholders who are foreign investors.

• Copies of the following documents:

• Legal papers of individuals for founding shareholders and shareholders being individual foreign investors, the legal representative;

• Legal papers of the organization for shareholders being organizations and documents on appointing authorized representatives; legal papers of individuals for authorized representatives of founding shareholders and foreign institutional shareholders. For shareholders who are foreign organizations, the copy of the organization's legal papers must be consular legalized;

• Investment registration certificate for foreign investors in accordance with the Law on Investment.

2. Contents of the application for business registration

• An application for enterprise registration contains the following principal details:

• Corporation name;

• Address of the head office of the business, phone number; fax number, email (if any);

• Lines of business;

• Charter capital; investment capital of private enterprise owners;

• Types of shares, par value of each class of shares and total number of shares to be offered for sale of each type of shares in the case of a joint-stock company;

• Tax registration information;

•  Number of employees expected;

• Full name, signature, contact address, nationality, legal document information of an individual for the owner of a private enterprise and a general partner of a partnership;

• Full name, signature, contact address, nationality, legal document information of an individual for the legal representative of a limited liability company or joint stock company.

3. Order and procedures for corporation registration

• Enterprise founders or authorized persons conduct enterprise registration with business registration offices by the following methods:

• Direct enterprise registration at the business registration authority;

• Enterprise registration via postal service;

• Enterprise registration via electronic information network.

• Online enterprise registration means that an enterprise founder submits an application for enterprise registration via electronic information network at the National Information Portal of enterprise registration. An application for enterprise registration via electronic information network includes data as prescribed by this Law and is presented in electronic form. An online application for enterprise registration is as valid as a paper application for enterprise registration.

• Organizations and individuals have the right to choose to use digital signatures in accordance with the law on electronic transactions or use business registration accounts to register enterprises via electronic information network.

• Business registration account means an account created by the National Business Registration Information System and granted to an individual for enterprise registration via electronic information network. Individuals who are granted business registration accounts are responsible before law for the registration to be granted and for the use of business registration accounts for enterprise registration via electronic information network.

• Within 03 working days after receiving the dossier, the business registration agency shall examine the validity of the dossier for enterprise registration and grant an enterprise registration; In case the dossier is not valid, the business registration agency must notify in writing the contents to be amended and supplemented to the enterprise founder. In case of refusal to register an enterprise, a written notice must be made to the enterprise founder, clearly stating the reason.

• The Government shall provide for the dossiers, order, procedures and integration in enterprise registration.

4. Certificate of business registration

• An enterprise shall be granted an enterprise registration certificate when it fully satisfies the following conditions:

• The business lines registered for business are not prohibited from business investment;

• The name of the enterprise is placed in accordance with Articles 37, 38, 39 and 41 of this Law;

• Having valid application for enterprise registration;

• The fee for enterprise registration is fully paid in accordance with the law on fees and charges.

• In cases where an enterprise registration certificate is lost, damaged or otherwise destroyed, an enterprise shall be re-granted the enterprise registration certificate and must pay a fee according to law provisions.

5. Announce business registration content

• After being granted an enterprise registration certificate, an enterprise must make a public announcement on the National Information Portal on enterprise registration and must pay fees according to law provisions. The contents of the announcement include the contents of an Enterprise Registration Certificate and the following information:

• Lines of business;

• List of founding shareholders; list of shareholders being foreign investors to a joint-stock company (if any).

• In case of changes to enterprise registration contents, such changes must be publicly announced on the National Business Registration Portal.

• The time limit for public notification of information about an enterprise specified above of this Article is 30 days from the date of publicization.

6. Company's name

• The Vietnamese name of an enterprise includes two elements in the following order:

• Type of enterprise;

• Proper name.

• Type of business is written as "limited liability company" or "limited company" for limited liability company; written as "joint stock company" or "joint stock company" in respect of a joint stock company; be written as "partnership" or "HD corporation" in respect of a partnership; is written as "private enterprise", "private enterprise" or "private enterprise" for private enterprises.

• The proper name is written in letters in the Vietnamese alphabet, the letters F, J, Z, W, numbers and symbols.

• The name of an enterprise must be affixed at the head office, branches, representative offices and business locations of the enterprise. Business names must be printed or written on transaction papers, documents and publications issued by the enterprise.

• The name of the business in a foreign language and the abbreviated name of the business

• A business name in a foreign language is a name translated from a Vietnamese name into one of the Latin-language foreign languages. When translated into a foreign language, the proper name of an enterprise may be kept unchanged or translated into a foreign language in its respective meaning.

• In case the enterprise has a name in a foreign language, its name in foreign language may be printed or written in a font size smaller than that of the Vietnamese name of the enterprise at its head office, branch, representative office or business location. business or on transaction papers, documents and publications issued by the business

• Short name of the business is abbreviated from Vietnamese name or name in a foreign language.

7. Company seal 

• The Company seal includes the seal made at the stamp-engraved establishment or the seal in the form of a digital signature in accordance with the law on electronic transactions.

• The enterprise decides on the seal type, quantity, form and content of the seal of the enterprise, branch, representative office and other units of the enterprise.

• The management and keeping of the seal must comply with the company's charter or the regulations issued by the enterprise, branch, representative office or other unit of the enterprise with the seal. Enterprises use the seal in transactions according to the provisions of law.

8. Announce business registration content

• After being granted an enterprise registration certificate, an enterprise must make a public announcement on the National Business Registration Portal and pay fees according to the provisions of law. The contents of the announcement include the contents of an Enterprise Registration Certificate and the following information: 

• Fields and Lines of Business

• List of founding shareholders; list of shareholders being foreign investors to a joint-stock company (if any).

• In case of changes to enterprise registration contents, such changes must be publicly announced on the National Business Registration Portal.

• The time limit for public notification of information about an enterprise specified in Clauses 1 and 2 of Article 32 of the Corporation Act is 30 days from the date of publication.

To gain in-depth knowledge about setting up business in Vietnam, please contact Doanh Tri Law Firm via:

Hotline: (+84) 911.233.955 - (024) 6293 8326

Email: [email protected]

Our advisors are fully at your service in Hanoi and Ho Chi Minh City!