10 Steps To Get Your Company Fully Opened And Ready To Run In Vietnam

Is it easy to start a business in Vietnam?

Launching a business in Vietnam can be a complex endeavor, particularly if you are unfamiliar with the country’s language, people, laws, and culture. To assist you in navigating this process effectively, we have prepared a step-by-step guide on How to Establish a Company in Vietnam. This comprehensive guide will provide you with a detailed overview of the entire process, covering everything from initial planning and preparation to the registration phase and ultimately preparing your entity for operation.

Step 1 – Check conditions for business

The initial step that should always be taken is to verify whether the business you plan to establish must meet any additional requirements. This is crucial because successful registration is contingent upon meeting these prerequisites.

Every business is obligated to fulfill two fundamental conditions: Possessing a business address và Having a resident legal representative. Furthermore, in accordance with a new decree that came into effect in 2021, several conditional businesses impose additional requirements such as minimum capital, maximum allowable foreign ownership, qualifications, and credentials of the business founder or manager, among others. It is essential to verify and understand which additional conditions are applicable to your intended business. If you require assistance, please feel free to contact us for a complimentary consultation on this matter.

Step 2 – Obtain a business address

For most business sectors, using a virtual office as the registered business address is acceptable. However, certain conditional businesses, such as those involved in training, coaching, manufacturing, and others, mandate a physical address with specific requirements for space, size, and lease term. Under no circumstances can a residential address be used to register a company. Therefore, if someone offers the use of their home or apartment for your business, it’s important to carefully consider the implications before accepting. Iris International offers services to arrange business addresses, whether virtual offices or physical offices, for our clients. Feel free to contact us if you are in need of one.

Step 3 – Appoint a resident legal representative

Every company incorporated in Vietnam is required to have at least one legal representative who resides in the country. This individual can be either Vietnamese or non-Vietnamese. If the appointed legal representative is a non-Vietnamese citizen, the company will need to obtain a Work Permit for them in the future.

Additionally, to demonstrate their residency, the individual must provide a permanent address in Vietnam under their name and be physically present in the country for a minimum of 183 days per year.

Having a resident legal representative is a mandatory requirement during the registration process. Fortunately, if the investor is unable to appoint the right person immediately, they can arrange for a temporary legal representative solely for the purpose of completing the registration process. Subsequently, they can replace this individual with the appropriate candidate at a later time.

Step 4 – Apply for investment certificate

The process of business registration in Vietnam involves two key administrative steps: obtaining the Investment Certificate and subsequently, the Business Certificate.

To begin, the investor must present a comprehensive proposal for their business, outlining its viability, the benefits it will bring to Vietnam, and its positive impact on society. Subsequently, the Department of Planning and Investment (DPI) will assess and make a decision regarding the investment proposal, either approving or disapproving it. Upon approval, the investor is issued an Investment Certificate. This step typically takes around 3-5 weeks to complete.

It’s important to note that all documentation must be in Vietnamese or translated into Vietnamese before submission. While some cities now allow online application submissions, a significant portion of the process still requires manual handling. If you are not proficient in the Vietnamese language, it is advisable to have someone, preferably a local, assist with the submission. This individual should maintain close communication with the official overseeing the application to explain or provide additional information as necessary.

Step 5 – Apply for business certificate

Once the Investment Certificate is obtained, the next step is to apply for a Business License, which is issued by the same authority, the Department of Planning and Investment (DPI). This process typically takes around 7-10 days to complete. Upon receiving the Business License or Certificate, the company is officially authorized to commence its business operations in Vietnam.

Step 6 – Make the company stamp/seal

Before the company is fully operational, there are some additional steps to complete. One of these steps is to create the company seal or stamp, also known as a chop.

The company seal or stamp is used on official documents issued by the company, adding legitimacy to these documents. It is typically used in conjunction with the legal representative’s signature. The process of obtaining the company seal/stamp usually takes between 2 to 5 days.

Step 7 – Open the bank account for the company

Once the company seal or stamp is obtained, the next step is to apply for a bank account. There are no restrictions on the bank with which a foreign-owned company can open an account, as long as the bank has a presence in Vietnam.

A foreign-owned company is required to open two types of bank accounts:

1. Capital Account: This account is specifically used for capital investment injection.
2. Current Account: This account is used for all other business transactions of the company.

When the company receives a capital injection into its capital account, the capital must be transferred to the current account for use. It is not possible to pay bills directly from the capital account.

Step 8 – Inject committed capital

After the company is established, the investor must inject capital within 90 days as required by the law. This capital injection can occur multiple times, but it must be fully contributed before the deadline. Failure to do so can result in penalties or even the closure of the company. Capital injection should be executed through bank transfers to the capital bank account established in Step 7 above.

Step 9 – Tax Registration

You’re almost there! To fulfill your tax compliance responsibilities, you’ll need to create an account for filing and submitting tax reports through the online tax system. Start by purchasing an e-token, and then complete the registration process with the Tax department.

Step 10 – Other operational tasks

Now that your company is fully operational and ready to go, you’ll likely need to address matters such as building your team, setting up your office, and managing day-to-day operations. Additionally, you may consider hiring someone to assist with tax compliance and monthly payroll. While having an in-house team is ideal, there are cost-effective outsourcing services available for these tasks.

The comprehensive guide on how to open a foreign-owned company in Vietnam provided above has outlined all the necessary steps for the incorporation process. By following these instructions, you can successfully establish and launch your business. If you require further assistance or support at any stage of the process, don’t hesitate to reach out to our consultants for guidance.

Contact us today to know more details of the process.