Vietnam Company Formation

The main advantages of Vietnam jurisdiction:

• Vietnam is an attractive business destination with a growing economy.
• Young population.
• Low labor costs.
• The Vietnamese authorities are loyal to non-residents, encourage investment in the country’s economy and pursue a policy aimed at popularizing the state in the eyes of potential investors, such as:

– Exempt from certain taxes.

– Can get land for rent at reduced prices.

– Exempt from import duties.

– Pay taxes with a delay.

• Vietnam joined the WTO not so long ago, and from that moment on, its economy began to develop at a rapid pace.
• Favorable location relative to sales markets and proximity to many sea routes.

Popular legal forms for non-residents:

An LLC

• Similar to a limited liability company. A company opened in this form will be a full-fledged legal entity. This option is the most common and relevant for small and medium-sized businesses. It is implemented in two forms:
• With full foreign participation – WFOE – allow non-residents to own a legal entity by 100%.
• Areas will be available for business – trade, information technology and not only.
• With Partial participation of foreign capital. The number of participants is not limited, but at least one of them must be a non-resident. Such companies are legally considered as a foreign investment, and therefore they have the widest opportunities for doing business.
• The minimum initial capital. There is only a recommended amount – the equivalent of $10,000.
• A Company legal address – an office where real activities will be carried out
• The management structure: at least one resident – he must be appointed to the position of director
• Hiring employees from local citizens – their number must be at least 80%
• Non-residents must provide police clearances / certificate of criminal record

JSC

• A joint stock company with three or more founders. All of them can be foreigners or only one of the owners with Vietnamese citizenship.
• The company receives the right to issue shares and initiate a listing, so the OPF is suitable for medium and large organizations with a complex structure. T
• The requirements for opening such a company are quite stringent.
• Shareholders are jointly and severally liable for the company.
• Basic registration requirements are the same as in LLP.

Special Economic Zones of Vietnam

Free economic zones account for a significant part of the key macroeconomic achievements of the Vietnamese economy.

There are dozens of free economic zones, industrial parks, technology parks of various types operating in the country.

The most popular are the North, Central, South and SEZs of the Mekong Delta.

Advantages of Vietnamese free economic zones compared to work in the territories of general jurisdiction:

• Favourable location.
• Active business processes in the business sector.
• Guarantee for companies-residents of the FEZ of tax and non-tax benefits.
• special conditions for the acquisition of real estate.
• Simplified administrative procedures.

More developed infrastructure than the rest of Vietnam.

Licenses and Permits

Almost all activities in Vietnam are licensed. Depending on the segment of activity, they are divided into simple and complex.

One business may require several types of licenses. They are renewed on average once a year. But some permits are subject to renewal every 3 years.

Financial statements

Companies must submit reports. There are two types of reports to follow:

• Profit and loss.
• For all transactions.

Once a year, the company submits to the regulatory authorities:

• Balance.
• Calculation of losses and profit.

Registration procedure

To start incorporating your company in Vietnam, EDCON require the following:

• Name of Company to be set up in Vietnam
• The Director/s full name, date of birth, address and nationality (Director can be appointed from shareholder/s)
• The Shareholder/s full name and address. (Shareholder can be individual or entity)
• How much is paid up capital
• Operation field of the company in Vietnam (for example: software processing, trading of kitchen spare parts, designing and architecture service, etc.)

Directors and shareholders must not be local resident but at least one director must register living address in Vietnam

Papers you are required to provide:

• Consulate Notarized copy of Passport of shareholder/s. In case of entity, it is Consulate Notarized copy of register license
• Scanned picture of 3 first pages of Passport of director
• Original Papers identifying financial ability of each of shareholder/s proving that he/she has the amount of money ready to pay up (as registered paid up capital)
• Office leasing agreement to locate company head office in Vietnam;

Shareholders

There are no restrictions with respect to the nationality of the shareholders. No limitation of number of shareholders, even one or hundreds.

• There is no local shareholder requirement (ie the shareholder/s can come from any country)
• A minimum of 1 Director only is required
• There is no local Director requirement (ie the Director/s can come from any country).
• No secretary is required (only local registered office)

Your Company Registered Office

All Vietnamese companies must have a Registered Office which must be a physical address in Vietnam with office leasing agreement. A virtual office may be accepted if you have leasing agreement for exactly place address.

Share Capital

There no regulation on minimum nor maximum share capital for a company, but you have to register an amount to ensure keeping the company in operation. The registered amount must be fully paid up into a bank operating in Vietnam within 90 days from the date of licensed into a bank.

Articles of Association

These include the following information:

• Company name and address
• Company purpose of operation
• Share Capital
• Contributions, types, number and nominal amount of shares
• Calling of shareholders meeting
• Voting rights of shareholders

Documents shall be prepared by EDCON:

–          First step: Investment Registration Certificate

• Registration form
• Investment contents of company set up plan
• Shareholders decision on investment in Vietnam
• Resolution appointing director/s
• Translation of your papers
• Authorization agreement to EDCON
• Official Letter expressing shareholder’s financial ability

–          Second step: Enterprise Registration Certificate

• Registration form
• Shareholders decision on setting up company in Vietnam
• Articles of Association
• List of shareholders
• Authorization agreement to EDCON
• Resolution to announce stamp
• Power of attorney authorizing you to sign documents on behalf of the company

For complete information and advice, you can contact BRIS GROUP team.