Company Formation in Vietnam

Benefits of Company Formation in Vietnam

• Vietnam’s geographic location makes it easily accessible to other ASEAN economies
• Vietnam allows 100% foreign ownership in most business sectors
• Vietnam has among the lowest labor costs in the region
• As a member of the ASEAN Free Trade Area the country has favourable trade agreements with its neighbouring countries
• Vietnam has various economic zones that offer tax benefits and exemptions for companies operating in these areas

Vietnam Company Formation Requirements

The requirements surrounding Vietnam company formation are among the most relaxed in the world. A minimum of one shareholder and one director are required – there are no restrictions in relation to the nationality requirement of these positions. In addition, the position of company secretary is not required. 

For incorporation purposes, a local registered office address is required if a business is expected to utilise space for their business operations, for instance a manufacturing company. However, service-based businesses may have a virtual office for registration purposes.

While there are no restrictions in regards to the minimum capital required to incorporate a company, it is recommended that the capital contribution reflect the activities of the company as the Vietnam government authorities will heavily scrutinize this aspect of your application.

Annual Maintenance

Foreign-owned companies are required to submit the following:

• Annual reports which detail the company’s basic information, developments related to the company’s HR policies and operational activity developments
• Annual reports on the on the status of investment project implementations and the evaluation and supervision of such investment projects
• Annual audited financial statements
• Annual corporate income tax returns, in addition to quarterly income tax payments

FAQs

What are the different company types that I can incorporate?

Joint Stock Company

• Founded with the subscription of shares in the company
• JSC’s are allowed to issue shares to the public and get listed on stock exchanges
• Can be wholly-owned, or partially owned by foreign parties

Multi-member Limited Liability Company

• Limited liability company with more than one owner
• Generally no personal liability of members
• Company’s earnings are subject to corporate income tax and members are taxed on any distributed profits

Single-limited Liability Company

• Only one member is required, either an individual or legal entity
• Company’s earnings are subject to corporate income tax, but the sole member is not taxed on any distributed profits

How long will it take me to complete the Vietnam company formation process? 

The typical Vietnam company formation process takes around one to three months. This of course, is dependent on an application’s approval from the Vietnamese authorities.

How much capital should I inject into my Vietnam company? 

There is no explicit law which states how much capital should be injected into each Vietnam company during incorporation, however, the Vietnam Department of Planning and Investment will often advise on the minimum capital requirement of your business by taking into consideration the industry your business will operate in.

To increase the chances of success for company incorporation, parties should inject a sum that can substantiate their business operations. For example, manufacturing companies should inject sums that exceed the cost of machinery.

Are there any rules dictating what I can name my company? 

Yes. The following rules should be observed:

• Names of a Vietnam company must not be identical, or imply a connection, with names of historically famous persons
• Vietnam company must not be named after earlier country names of Vietnam or after individuals who were against the “good cause and historical development” of Vietnam
• Must not contain words or symbols which directly or indirectly threaten, insult, or disrespect other people/organisations