HOW TO OPEN A COMPANY IN VIETNAM

• 100% Foreign-Owned Limited Liability Company (LLC): This is the most common choice, offering full foreign ownership and management control. You can have single or multiple members (investors) in an LLC.
• Joint Venture (JV): Partnership with a Vietnamese company or individual. JVs can be advantageous for accessing local expertise, networks, and navigating certain market segments where local partners are beneficial.
• Representative Office (RO): ROs are primarily for non-commercial activities. Think market research, product promotion, and acting as a liaison for the parent company. They cannot directly generate revenue.

Yes, Vietnam has a list of “conditional” business lines. These sectors require additional approvals, licenses, or may have foreign ownership restrictions. Here’s a sample of restricted areas:

• Distribution, retail, and trading (ownership limits may apply)
• Telecommunication services
• Education and training
• Healthcare services
• Legal services
• Construction
• Real Estate

Important: This list is not exhaustive. Always check the latest “List of Conditional Business Lines” issued by the Vietnamese government for the most up-to-date restrictions.

• Pre-Investment:

  • Market Research: Thoroughly understand the sector, competition, and regulations.
  • Location: Secure a business address (often required to start paperwork).
  • Legal Consultation: Engage a legal firm specializing in foreign investment.

• Investment Registration:

• Investment Registration Certificate (IRC): Required for some sectors with conditional licenses, larger investments, or land use. Submit to the Department of Planning and Investment (DPI).
• Enterprise Registration Certificate (ERC): Required for ALL business forms, regardless of ownership.

• Post-Licensing:

• • • Company Seal: Registration with local authorities.
    • Bank Accounts: Open Vietnamese corporate bank accounts.
    • Tax and Social Insurance: Register with relevant departments.
    • Additional Licenses: Secure specific licenses or permits for conditional sectors.

While 2-4 months is a general range, several factors can impact the timeline:

• Industry: Conditional sectors often add time due to additional approvals.
• Location: Regulations and processing speed can slightly vary across provinces.
• Preparation: Thorough preparation with the support of a consultant can streamline the process.

Vietnam doesn’t have a blanket minimum capital requirement. However:

• Your investment should realistically align with your business plan: Undercapitalization can lead to operational hurdles.
• Certain sectors may have implicit capital expectations: High-tech or large-scale projects might necessitate a larger investment showing commitment.

Yes, but with certain considerations:

• Work Permits: Foreign employees need valid work permits issued by the Department of Labor.
• Quotas: There may be limits on the ratio of foreign to local workers in some industries.
• Skills: Hiring for specialized roles where local expertise is lacking may be easier to justify for work permits.

Here’s a breakdown of the key taxes:

• Corporate Income Tax (CIT): The standard rate is 20%. Tax holidays and reductions are possible in prioritized sectors and locations.
• Value Added Tax (VAT): Rates vary between 0%, 5%, and 10% depending on the goods or services involved.
• Personal Income Tax (PIT): Applies to employees’ salaries based on a progressive scale.
• Other Taxes: Depending on your activity, taxes like import/export duties, special consumption tax, and natural resource taxes might apply.

Vietnam offers attractive incentives to promote specific sectors and regions:

• Tax Breaks: Corporate Income Tax (CIT) reductions or even holidays are offered for high-tech businesses, projects in priority zones, and certain manufacturing sectors.
• Land Incentives: Favorable land rental rates or exemptions might be available in industrial parks or economic zones.
• Additional Support: Some areas offer support for infrastructure development or workforce training.

While not a legal requirement, Vietnamese language proficiency is highly beneficial:

• Communication: Navigating interactions with authorities, business partners, and even daily operations is smoother.
• Regulations: Important updates and official documents are primarily in Vietnamese.
• Building Trust: Language skills demonstrate commitment and a deeper understanding of the local market.
• Alternatives: If fluency is not feasible, consider a bilingual local partner or a reputable consulting firm to manage communication.

Although technically possible to self-navigate, a professional consultant offers significant advantages:

• Latest Regulations: Advisors stay up-to-date on evolving laws and procedural changes.
• Network & Expertise: They have established relationships with authorities and can handle complex applications efficiently.
• Avoidance of Pitfalls: Consultants help identify potential red flags within your business plan or application.
• Long-Run Support: They can help with post-licensing matters like tax compliance, labor issues, and expansion.