Vietnam has emerged as an attractive investment destination for foreign investors due to its growing economy and dynamic business environment. However, navigating the complex legal process of setting up a company in Vietnam can be challenging. In this comprehensive guide, we will walk you through the step-by-step process of establishing a Foreign-Owned Enterprise (FIE) in Vietnam.
Step 1 – Pre-Investment Approval (for mega investment projects)
In rare cases, mega investment projects may require approval from Vietnamese competent authorities before initiating the establishment procedures.
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Step 2 – Investment Registration Certificate (IRC) Application (for investment projects)
This certificate is a requirement for all foreign-owned investment projects that allow the foreign company to invest in Vietnam.
To apply for an IRC, the following documents must be prepared:
Step 3 – Enterprise Registration Certificate (ERC) Application (for ALL projects)
The Enterprise Registration Certificate (ERC) is a mandatory requirement for all projects seeking to establish new entities in Vietnam. The ERC will also function as the entity’s tax registration number.
Throughout the application process, ensure the following details:
- Application for enterprise registration.
- Company charter.
- Roster of all board members.
- Roster of legal representatives.
- Letters of appointment and authorization.
*Please be aware that any foreign documents or supporting information must undergo notarization, legalization by consular authorities, and translation into Vietnamese by competent agencies.*
The timeframe for this step is three days from the date of document submission.
Step 4 – Post-Licensing Procedures
After acquiring the mentioned licenses additional actions are necessary to finalize the process and commence business operations. These steps involve:
- Seal carving.
- Opening a bank account.
- Labor registration.
- Business license tax payment.
- Charter capital contribution.
- Public announcement of company establishment.
Additional Requirements for Establishing a Company in Vietnam
Minimum Capital Requirements:
Vietnam’s business landscape offers flexibility in terms of capital requirements, as most sectors do not have specific minimum capital requirements. Instead, the Department of Planning and Investment will evaluate your company’s registered capital. This assessment ensures that your capital adequately covers business expenses until your company generates sufficient revenue. However, it’s important to note that certain sectors, such as finance, banking, insurance, fintech, language centers, vocational schools, and medical clinics, may have specific capital requirements. The registered capital amount will be prominently displayed on your Business Registration Certificate and can impact how your business is perceived by other companies.
Charter Capital and Total Investment Capital:
Charter Capital encompasses the total value of capital and assets provided by the owners during the company’s establishment. It is crucial to register both the charter capital and total investment capital, which includes any shareholder loans or external funding sources, with the local licensing authority. It’s worth mentioning that you can adjust the charter capital sum with advance approval from the local licensing authority, allowing flexibility as your business grows.
Capital Contribution Schedules:
Investors are required to make capital contributions within 90 days from the Foreign-Invested Enterprise (FIE) establishment date, unless otherwise approved by the licensing authority. Timely capital contributions are essential to keep your business operations on track.
Transferring Capital to the FIE:
Foreign investors must open a specialized foreign currency bank account in a legally licensed bank within Vietnam to facilitate the transfer of capital into the country. This special-purpose account ensures transparent tracking of capital flows in and out of Vietnam, enabling domestic payments and transactions.
Registered Address and Resident Director:
Having a legal address in Vietnam is a prerequisite for incorporating a company, especially for businesses that require a physical presence. In some cases, virtual office addresses may be suitable for service-based businesses. The Department of Planning and Investment may verify the address during the incorporation process. Additionally, every company must designate at least one Legal Representative with a residential address in Vietnam. If foreign nationals are involved in your company, they will need to obtain a work permit for Vietnam, which can be obtained during or after the incorporation process.
Ready to Register in Vietnam?
In conclusion, establishing a company in Vietnam offers immense opportunities for growth and success, but it demands meticulous adherence to legal procedures and regulations. Seek professional guidance to navigate the complexities of the process effectively. With patience and due diligence, your investment in Vietnam can flourish in this dynamic and rapidly evolving market. Embark on your journey to success in Vietnam, and let your business thrive in this land of endless possibilities.