Due to the overwhelming power of China in business, some of the smaller neighbouring countries have been overlooked by foreign entrepreneurs wanting to invest in Asian markets. However, one country is beginning to emerge as a rival to China’s stronghold – Vietnam.
Vietnam is now being seen as a more cost-effective alternative to China due to its low labour costs, especially in the area of manufacturing and food products. Import/export entrepreneurs are finding that the prices of food items such as coffee and rice, as well as the manufacturing of textiles and garments for the clothes industry are now more competitive in Vietnam. But the most surprising area of export in Vietnam (which used to be the crowning glory of Chinese business) is electronics and electrical products.
So in order to take advantage of the emerging business opportunities in Vietnam, entrepreneurs are now setting up companies in the country to help ease their way into doing business in the locale.
How to open a company in Vietnam
In order to apply to open a company in Vietnam, you have to obtain two kinds of certificates. The first is called an Investment Registration Certificate (IRC). To invest in Vietnam, you must have your investment project approved by the Vietnam state, after which an Investment Registration Certificate will be issued. If all the documents are in order, the IRC can be obtained in as little as 15 days.
The documents you will need for an IRC are as follows: For an individual investor, you will need a legalised copy of your passport and a confirmation letter from your bank. A corporate shareholder will need a legalised copy of the company’s incorporation documents, a legalized and notarised copy of your passport (all pages), and a confirmation letter from the bank with confirmation of your business finances plus audited financial statements for the last two years. Depending on the type of business or the location where you wish to set up, the authorities may require additional documents.
Following the receipt of your Investment Registration Certificate, the second certificate you will need to apply for is an Enterprise Registration Certificate (ERC). The total estimated minimum time for an ERC to be issued is five days. After receiving the ERC, you will have access to the National Enterprise Registration Portal where you will be able to make a business seal and post seal sample for your company. This normally takes around three working days.
In order to incorporate and register your company in Vietnam you need to give details of what exactly your business is and what you plan to do in Vietnam. You also need to have a company address and a designated representative. If you have a company formation agent taking care of the process, you don't need to be physically there in Vietnam. You can just sign and scan or mail the documents for them to file on your behalf. Agents are also able to sort out business bank accounts in Vietnam.
You will also need to choose a business structure for your company, for instance a Limited Liability Company, a Joint Stock Company or a branch, according to what serves your business best.
The rules regarding company addresses are as follows : the address used for business registration must be accurate and obvious - for instance, it has to have correct house numbers or an office address in a province or city in Vietnam (it can’t just be a piece of land) and it can’t be an apartment either. In some cases, you may need to provide evidence to prove the ownership or right of use such as an office leasing agreement or factory rental agreement.
Regarding designated representatives, the company can have one or multiple legal representatives, but at least one of them must reside in Vietnam. If the company only has only one legal representative, then that person should make sure they authorise another person in writing to perform the legal representative’s right and obligations if they leave Vietnam for any reason.
Once the documentation, certificates and any licenses have been issued, then you’ll be able to start making some headway into the Asian trade business. For more information about how to open a company in Vietnam, or how to set up an export/import trade company in Vietnam, please call us on 0033 (0)1 53 57 49 10 or email us from our contact page and we’ll be happy to help.