To set up a company in Vietnam, foreign investors can form several kinds of legal entities with a Limited-Liability Company (LLC) and a Joint-Stock Company (JSC) being the most popular choices.
The legal entity is then categorized based on the percentage of its foreign investment. As most industries in Vietnam allow foreign entrepreneurs to own up to 100% of shares, a Wholly Foreign-Owned Enterprise (WFOE) is a common business structure in Vietnam. International investors can also find a local partner and incorporate a Joint Venture Company with local-foreign ownership.
Available Legal Entity Types In Vietnam
Limited Liability Company (LLC)
LLC is the most common legal entity type in Vietnam and an excellent choice for small and medium-sized enterprises (SMEs). Single investors can take advantage of its simple corporate structure, which requires one founder only. LLC is not permissible to issue public shares and be publicly listed on the Vietnamese stock exchange.
Joint-Stock Company (JSC)
JSC is recommended for medium and large-sized businesses as its corporate structure is complicated and requires a minimum of three founders. Furthermore, its registration process is often delayed due to more demanding requirements. This kind of a shareholding company allows its owners to issue shares and be listed on the public stock exchange.
Representative Office (RO)
A representative office is a perfect solution for foreign entrepreneurs who want to observe the local market in Vietnam and gain market presence before expanding to the country. An RO is not allowed to conduct any business activities that generate income and behave like an ordinary company.
A branch serves as an extension of its parent company. Owners of branches in Vietnam can conduct commercial activities and make a profit without incorporating a separate legal entity.
The Process of Vietnam Company Registration
The incorporation process of each legal entity type is different and takes from 1 to 3 months.
In general, foreign investors should pursue the process as follows:
- International investors are obliged to obtain an Investment Registration Certificate (IRC) from the Department of Planning and Investment (DPI).
- A Business Registration Certificate (BRC), often referred to as an Enterprise Registration Certificate (ERC), is the second mandatory document to be obtained during the registration procedure.
- After receiving both certificates, investors are obliged to proceed with their tax registration, pay business license tax and make their initial capital contribution.
Consult A Professional
How can HTIC help your business registration in Vietnam?
- Advise on the most suitable legal entity type.
- Provide instructions on collecting relevant documents and submission of applications.
- Act as a local representative to submit your application on your behalf without you being in the country.
- Provide legal assistance during the business registration set up.
- Assist in applying for Work Permits.
- Submit your inquiry below
- Receive a response from our legal team within 24 hours
- Receive a 1-hour free consultation via phone call or a virtual meeting
- Send us all the required documents
- Service payment
- Let our team process your licensing application on your behalf
Vietnam Company Entity Types
|Entity Type||Joint Stock Company||One member Limited Company||Two members or more Limited company||Branch||Representative Office|
|Applicable||All investors||All investors||All investors||All investors||All members of WTO|
|Minimum Capital||Not limit but shall be reasonable with implementation of investment project||Not limit but shall be reasonable with implementation of investment project||Not limit but shall be reasonable with implementation of investment project||No limit, but must be sufficient for setup costs.||N/A|
|Minimum Number of Shareholders||At least 3 shareholders (individual or entity)||1 corporate or 1 individual||2 or more corporate or individual||Owned by head office||Owned by head office|
|Management||At least having 1 legal representative regularly stay in Vietnam||At least having 1 legal representative regularly stay in Vietnam||At least having 1 legal representative regularly stay in Vietnam||At least 01 Branch Manager||At least 01 Chief of Office|
|Limited Liability Protection||Yes||Yes||Yes||No||No|
|Voting Rights||1 voting right per share||The owner of company has all power for the entire company activities||The voting rights based much on portion of capital contributed in company capital||N/A||N/A|
|Carry-out Importing and Exporting Activities||Yes||Yes||Yes||Yes||No|
|Be a Shareholder of Another Entity||Yes||Yes||Yes||No||No|
|Open a Bank Account||Yes||Yes||Yes||Yes||Yes|
|Issue Stocks to Public||Yes||No||No||No||No|
|Conversion to other entity type||Yes||Yes||Yes||No||No|
|Statutory Audit Requirement||Required for FDI, public company and listed company||Required for FDI||Required for FDI||independent branch of FDI company||No|
|Business Tax Rate (VAT)||Base on business line (from 5%-10%)||Base on business line (from 5%-10%)||Base on business line (from 5%-10%)||Base on business line (from 5%-10%)||Do not need to file VAT|
|Income Tax Rate||20%||20%||20%||20%||N/A|
|Withholding Tax Rate on Distribution of Earnings||Yes (maximum 10%)||Yes (maximum 10%)||Yes (maximum 10%)||Yes (maximum 10%)||N/A|
|Tax Rate on Undistributed Retained Earnings||N/A||N/A||N/A||N/A||N/A|
|Capital Gains Tax on Share/Interest Transfer||Yes||Yes||Yes||N/A||N/A|
|Transfer of Shares / Interest||
3 years from incorporated, founder can and only transfer to other founders;
or approved by|
General Meeting of Shareholders
|Can be transferred freely||Must be approved by members.||N/A||N/A|
|Period Required for Incorporation||1~1.5months||1~1.5months||1~1.5months||1~1.5months||2-3 weeks|