Setting Up a Company in Vietnam
Sept. 27 – The first step in setting up a business in Vietnam is acquiring an Investment Certificate (IC), also known as a Business Registration Certificate. The time period required to acquire an IC varies by industry and entity type, as these determine the registrations and evaluations required:
- For projects that require registration, IC issuance takes about 15 working days.
- For projects subject to evaluation, IC issuance time is likely to vary. Projects not requiring the Prime Minister’s approval take 20 to 25 working days, while projects that do need such approval take approximately 37 working days.
In the IC application process, note that under Vietnamese law, all documents issued by foreign governments and organizations need to be notarized, consular legalized and translated into Vietnamese by competent authorities. Once the IC has been issued, additional steps have to be taken to complete the procedure and start business operations, including:
- Seal carving;
- Tax code registration (within ten working days of the issuance of the IC);
- Bank account opening;
- Labor registration;
- Business license tax payment;
- Charter capital* contribution; and
- Public announcement of company establishment.
*Charter capital is the amount that shareholders contribute within a prescribed time limit, as stated in the company articles of association.
Charter capital can be used as working capital to operate the company. It can constitute 100 percent of the total investment capital of the company, or be combined with loan capital to form the total investment capital of the company. Both charter capital and the total investment capital (which also includes shareholders’ loans or third-party finance), along with the company charter, must be registered with the license-issuing authority of Vietnam. Investors cannot increase or decrease the charter capital amount without prior approval from the local licensing authority.
Capital contribution schedules are set out in FIE charters (articles of association), joint venture contracts and/or business cooperation contracts, in addition to the FIE’s investment certificate. Members and owners of LLCs must contribute charter capital within 36 months of the date of IC issuance.
To transfer capital into Vietnam, after setting up the FIE, foreign investors must open a capital bank account in a legally licensed bank. A capital bank account is a special purpose foreign currency account designed to enable tracking of the movement of capital flows in and out of the country. The account also allows money to be transferred to current accounts in order to make in-country payments and other current transactions.
Portions of this article were taken from Asia Briefing’s guide “An Introduction to Doing Business in Vietnam.” This new 32-page report touches on everything you need to know about doing business in Vietnam, and is now available as a complimentary PDF download on the Asia Briefing Bookstore!
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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