Q&A about setting up foreign-owned Limited Liability Company in Vietnam

Q&A about setting up foreign-owned Limited Liability Company in Vietnam

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Drafted by Dale Chen 20231019
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Vietnam Foreign-funded Limited Liability Company
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Vietnam – Organizational Structure of Foreign-funded Companies
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What are the types of Foreign-funded Companies in Vietnam?

  1. Foreign-Owned Limited Liability Company (LLC): This is one of the most popular business structures for foreign investors in Vietnam. It allows 100% foreign ownership in most industries and provides limited liability protection. An LLC can be a single-member LLC or a multi-member LLC.
  2. Joint Venture (JV): Foreign investors can enter into joint ventures with Vietnamese partners or other foreign investors. In some industries, such as banking, certain ownership restrictions may apply. Joint ventures can be structured as LLCs or shareholding companies.
  3. Representative Office: A representative office is not allowed to engage in profit-generating activities but can serve as a liaison office to conduct market research, promote products or services, and facilitate communication between the foreign parent company and local partners.
  4. Branch Office: Branch offices of foreign companies can operate in Vietnam but are subject to restrictions on their business activities. They are typically used for specific purposes like marketing or managing projects.

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What are the procedures for setting up the Foreign-funded Limited Liability Company in Vietnam?

  1. Choose a Business Name:
    • Select a unique and appropriate name for your LLC. Ensure that the chosen name complies with Vietnamese regulations.
  2. Capital Requirements:
    • Determine the required minimum capital for your LLC, which may vary depending on the industry and location. Ensure that you have the necessary funds in a Vietnamese bank.
  3. Obtain an Investment Registration Certificate (IRC):
    • Submit an application for an Investment Registration Certificate to the local Department of Planning and Investment (DPI). This certificate is essential for foreign investment approval and may include details such as the scope of business, location, and capital.
  4. Apply for a Business Registration Certificate (BRC):
    • After obtaining the IRC, you must apply for a Business Registration Certificate. This is done through the same DPI office or online business registration portal. The BRC contains detailed information about your company’s structure and operations.
  5. Tax Registration:
    • Register for tax at the local Tax Department and obtain a tax identification number (TIN).
  6. Open a Bank Account:
    • Open a bank account in a Vietnamese bank and deposit the registered capital into this account.
  7. Seal and Business License:
    • Order a company seal, which is required for official documents and transactions. Apply for a business license from the local authority, if applicable.
  8. Employment and Labor Registration:
    • Register your employees with the local labor authorities and comply with labor regulations.
  9. Environmental Compliance, Safety, and Fire Protection:
    • Depending on your business type, you may need to obtain certificates of environmental compliance and ensure safety and fire protection measures are in place.
  10. Licenses and Permits (if applicable):
    • Depending on your industry, you may need specific licenses or permits. These can vary widely and may include industry-specific regulations.

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What are the requirements for holding a position of director, manager/ supervisor, company secretary, etc. in Vietnam’s foreign-funded Limited Liability companies?

  1. Director/Manager/Supervisor:
    • In Vietnam, it is generally not mandatory to appoint a statutory director, manager/ supervisor for a company.
    • No specific nationality requirements for holding these positions in a foreign-funded LLC in Vietnam. Foreign nationals are often eligible to serve in these roles.
    • While not specifically termed a “statutory director,” every company in Vietnam must have a legal representative who is responsible for representing the company in its dealings with authorities and third parties. This individual doesn’t necessarily need to hold the title of director, but they play a similar role.
  2. Company Secretary:
    • Vietnam does not have a strict legal requirement for private companies to appoint a statutory company secretary. If a company chooses to appoint a company secretary, there may not be stringent nationality requirements.
    • The specific qualifications and experience required for a company secretary may depend on the company’s needs and the complexity of its operations.

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How long the share capital of a Vietnam Foreign-funded Limited Liability Company must be hold before it can be sold?

There is no specific minimum duration that the share capital of a Vietnam Foreign-funded Limited Liability Company (LLC) must be held before it can be sold.

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Is a Resident Shareholders required for incorporation of Foreign-funded Limited Liability Company in Vietnam?

Resident shareholders are not required, there may be foreign ownership restrictions in certain sectors or industries.
Some sectors may require specific licenses or approvals, and there may be limitations on the percentage of foreign ownership allowed.

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Is a Resident Director required for incorporation of Foreign-funded Limited Liability Company in Vietnam?

Vietnam typically does not require a resident director for the incorporation of a foreign-funded Limited Liability Company (LLC).

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Is there a company secretary required for incorporation of Foreign-funded Limited Liability Company in Vietnam?

Vietnam generally does not require a company secretary for the incorporation of a foreign-funded Limited Liability Company (LLC).

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What are the qualifications of a legal representative in Vietnam Foreign-funded Limited Liability?
Can a foreigner act as a legal representative?
If yes, he/she need a place of residence in Vietnam?

In Vietnam, the legal representative of a Foreign-funded Limited Liability Company (LLC) can be a foreigner.

  1. Qualifications of a Legal Representative:
    • The legal representative must be at least 18 years old.
    • They must have full civil capacity, which means they are legally competent to perform legal acts.
    • They should not have a criminal record or be subject to legal restrictions that prevent them from holding this position.
  2. Residence Requirement:
    • The legal representative must reside in Vietnam.
    • However, if a foreign legal representative plans to reside in Vietnam and actively manage the company’s operations, they may need to obtain a work permit in accordance with Vietnamese labor laws.
    • The specific requirements related to work permits may vary based on the circumstances.

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Is it possible to establish a Vietnam foreign-owned company through an offshore company as holding company?

Yes, it is possible to establish a foreign-owned company in Vietnam with an offshore company acting as a holding company.

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What are the special features of Vietnam wholly foreign-owned limited liability company (LLC)?

  1. 100% Foreign Ownership: One of the most significant features is that a Wholly Foreign-Owned LLC allows foreign investors to own 100% of the company’s shares. Unlike in some other countries, there is generally no requirement for local partners or resident shareholders.
  2. Limited Liability: Like other forms of limited liability companies, a Wholly Foreign-Owned LLC provides limited liability protection to its shareholders. This means that the personal assets of the shareholders are typically not at risk in the case of the company’s financial difficulties or legal issues.
  3. Flexibility in Business Activities: Wholly Foreign-Owned LLCs are allowed to engage in a wide range of business activities, subject to certain restrictions in specific sectors. Foreign investors can choose the type of business that aligns with their investment goals.
  4. Legal Representative: Every LLC in Vietnam is required to have a legal representative who acts on behalf of the company in legal matters. This individual can be a foreigner, but they must meet certain qualifications and responsibilities.
  5. Registered Capital: While there is no specific minimum capital requirement for Wholly Foreign-Owned LLCs, the registered capital should be adequate for the intended business activities. The capital contribution can be in the form of cash or assets.
  6. Registered Address: The company must have a registered address in Vietnam, which serves as the official address for government communications and legal matters.
  7. Foreign Exchange Regulations: Foreign investors should be aware of Vietnam’s foreign exchange regulations, which may impact issues such as repatriation of profits and capital, currency exchange, and international transactions.

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Vietnam Foreign investment: permitted industries, restricted industries (licensed industries) and prohibited industries.
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Are Vietnam foreign-investment industries and products be listed in a positive or negative list?
Or are there different approaches for foreign investment from different countries?

Vietnam encourages foreign investment and has created a generally open investment environment.
Foreign investors are welcome to invest in a wide range of sectors and industries without needing to be on a specific positive list.

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In the positive list, what are the industries that foreign investment is allowed to invest in, which are the industries that are restricted for foreign investment (licensed industries), and the industries that are prohibited to invest in by foreign investment?
Will the positive list be different for different countries?

Vietnam’s approach to foreign investment does not typically involve a “positive list” of industries.

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In the negative list, what are the industries that foreign investment is allowed to invest in, the industries that are restricted to foreign investment (licensed industries), and the industries that are not allowed to invest in foreign investment?
Will the negative list be different for different countries?

  1. List A of Appendix 1 of Decree 31/2021/ND-CP are sectors which are not accessible for foreign investors.
  2. List B of Appendix 1 of Decree 31/2021/ND-CP are sectors which are accessible with conditions for foreign investors.
  3. Sectors which are not included in List A or List B are sectors to which foreign investors have the same market access as that of domestic investors.

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What are the restriction on foreign investment in Vietnam? For instance, what is the minimum share capital amount?
What are the rules for foreign shareholding ratio? Other?
Are they different for different countries?

  1. Minimum Share Capital: There is no specific minimum share capital requirement for foreign-owned limited liability companies (LLCs) in Vietnam.
  2. Foreign Shareholding Ratio: The foreign shareholding ratio varies depending on the sector and industry. In some sectors, foreign investors can own 100% of the shares of a company, while in others, there may be restrictions on foreign ownership. Foreign ownership limits are typically outlined in laws, decrees, or regulations.
  3. Conditional Sectors: Certain sectors, often related to national security or sensitive industries, have restrictions on foreign ownership and require government approval for foreign investment. These conditional sectors can include banking, telecommunications, media, and aviation, among others.
  4. Land Ownership: Foreign investors are not allowed to own land in Vietnam. Instead, they can lease land from the state or purchase rights to use land for a specific period.
  5. Foreign Exchange Regulations: Vietnam has foreign exchange regulations that impact issues such as repatriation of profits and capital, currency exchange, and international transactions.
    Vietnam’s investment laws and regulations typically apply uniformly to foreign investors, regardless of their country of origin.
    However, there may be specific international agreements or treaties that provide additional protections or benefits to investors from certain countries.

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What are the licensed industries in Vietnam?
What is the difference between the industries that allow foreign investment, the industries that restrict foreign investment (licensed industries), and the industries that do not allow foreign investment?

  1. Industries that Allow Foreign Investment:
    • These industries are generally open to foreign investment, and foreign investors are encouraged to participate.
    • There are typically no significant restrictions on foreign ownership, or the percentage of foreign capital allowed.
    • Foreign investors can engage in a wide range of business activities in these industries, including manufacturing, services, and trading.
    • Examples include manufacturing, information technology, tourism, and retail.
  2. Industries that Restrict Foreign Investment (Licensed Industries):
    • In certain sectors, foreign investment may be restricted or subject to specific conditions and licensing requirements.
    • These industries often involve sensitive areas, national security concerns, or sectors that require close government oversight.
    • Restrictions can include limits on the percentage of foreign ownership, requirements for technology transfer, or specific capital requirements.
    • Examples include banking, telecommunications, media, aviation, education, and real estate in certain circumstances.
  3. Industries that Do Not Allow Foreign Investment:
    • There are specific industries and activities that are reserved exclusively for Vietnamese entities or state-owned enterprises.
    • Foreign investment is not permitted in these industries, and participation is limited to domestic entities.
    • Examples include defense and national security-related industries.

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Vietnam-Foreign-funded Limited Liability Company document certification.
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What are the relevant investment documents required to establish a Foreign-funded Limited Liability Company in Vietnam?
Are there different documents for different countries?

  1. Investment Registration Certificate (IRC):
    • This is one of the key documents required for foreign investors. It is issued by the Department of Planning and Investment (DPI) in the province or city where the LLC will be located.
    • The IRC outlines the details of the foreign investment project, including the investor’s information, project objectives, investment capital, and business activities.
    • Different provinces or cities may have slightly different requirements for the IRC application process.
  2. Enterprise Registration Certificate (ERC):
    • Once the IRC is obtained, you will need to apply for an ERC from the same DPI office. The ERC is also known as the business registration certificate.
    • It provides official recognition of the LLC’s establishment and includes details such as the company’s name, address, capital, and legal representative.
  3. Articles of Association:
    • This document outlines the internal rules and regulations governing the LLC’s operations. It includes information on the management structure, decision-making procedures, and the rights and responsibilities of shareholders and managers.
    • The Articles of Association must comply with Vietnamese law and be submitted as part of the registration process.
  4. Charter Capital Contribution:
    • Foreign investors are required to contribute the registered charter capital of the company. This can be in the form of cash or assets.
    • Proof of capital contribution is typically required during the registration process.
  5. Lease Agreement or Land Use Rights Certificate:
    • If the LLC requires land or facilities for its operations, a lease agreement or evidence of land use rights must be provided.
    • Land use rights are typically obtained through lease agreements with the government.
  6. Other Specific Licenses:
    • Depending on the nature of the business, additional licenses or permits may be required. For example, certain industries like healthcare, education, or finance may have specific licensing requirements.

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What are the procedures for the certification of documents related to the investment of Foreign-funded Limited Liability Company in Vietnam?
Are there different document authentication procedures for different countries?

  1. Notarization:
    • In most cases, you will need to have the investment-related documents notarized by a notary public or a similar authority in your home country. Notarization involves verifying the authenticity of the documents and the signatures on them.
  2. Authentication by Competent Authority:
    • After notarization, the documents may need to be authenticated by the competent authority in your home country. This authority is typically responsible for confirming the validity of the notary’s seal and signature.
    • The specific competent authority can vary from country to country and may include government offices or agencies responsible for foreign affairs or foreign trade.
  3. Legalization or Apostille:
    • Depending on your home country’s legal system and its agreements with Vietnam, you may need to legalize the documents further. This is done by either obtaining an Apostille certificate or having the documents legalized by the embassy or consulate of Vietnam in your home country.
    • The Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents, commonly known as the Apostille Convention, simplifies the process for member countries. If your country is a member, you can obtain an Apostille from the competent authority.
  4. Translation:
    • If your investment documents are in a language other than Vietnamese, you will typically need to have them translated into Vietnamese by a qualified translation service.
    • Both the original documents and the translated versions are usually required for submission.

R-vn-llc-4 Vietnam – Bank Account Opening of Foreign Subsidiaries
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What is the sequence steps of set up a Foreign-funded Limited Liability Company in Vietnam with share capital paid in place and opening a bank account? Which one should come first?

  1. Deposit Share Capital:
    • Deposit the registered share capital of your LLC into a Vietnamese bank account.
    • The capital should be transferred from your foreign bank account to a Vietnamese bank account opened in your LLC’s name.
    • You may be able to open a temporary or provisional bank account with the assistance of the bank where you intend to open your business account. This temporary account can be used to deposit the share capital, and once your LLC’s business account is opened, you can transfer the funds to the new account.
  2. Open a Business Bank Account:
    • Once the share capital is deposited and your ERC is issued, you can proceed to open a business bank account in Vietnam. This account is essential for your LLC’s financial transactions.

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What are the usual KYC regulations when opening a bank account with a Foreign-funded Limited Liability Company in Vietnam?

  1. Identification of Company’s Legal Representative:
    • The legal representative of the LLC (usually the Director or CEO) will need to provide their identification documents, including a valid passport or Vietnamese national ID card.
  2. Company Documents:
    • Enterprise Registration Certificate (ERC): This document proves the legal existence of your LLC in Vietnam.
    • Articles of Association: A copy of your LLC’s Articles of Association may be required.
  3. Address Verification:
    • Proof of business address, such as a lease agreement or land use rights certificate.
  4. Tax Identification Number (TIN):
    • The LLC’s tax identification number issued by the Vietnamese tax authorities.
  5. Company Seal and Resolutions:
    • The official company seal and any board resolutions authorizing individuals to open and operate the bank account.
  6. Financial Statements:
    • In some cases, banks may request financial statements or evidence of the source of funds, especially if you are dealing with significant transactions.
  7. Authorized Signatories:
    • If there are multiple signatories for the account, each authorized signatory may need to provide their identification documents and be present during the account opening process.
  8. Source of Funds Declaration:
    • A declaration stating the source of funds to be deposited into the account.
  9. Additional Documents:
    • Depending on the bank’s policies and the nature of your LLC’s business, additional documents or information may be requested.

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Will the bank require a Vietnam local director when opening a bank account for a Vietnam wholly foreign-owned limited liability company (LLC)?

In Vietnam, banks typically do not require a Vietnam local director when opening a bank account for a Wholly Foreign-Owned Limited Liability Company (LLC).
However, there are specific requirements and considerations related to the company’s legal representative and authorized signatories:

  1. Legal Representative: The legal representative of the LLC is often required to be a foreign national. This individual is responsible for representing the company in legal matters and can be a director or CEO of the company. The legal representative’s identification documents are essential for KYC purposes when opening the bank account.
  2. Authorized Signatories: The authorized signatories for the bank account can be appointed by the LLC and may include both foreign and local individuals. It’s common for companies to designate specific individuals, such as the company’s legal representative and/or chief accountant, as authorized signatories to manage the bank account.

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Will the bank require foreign legal representative have to be physically present for the bank interview, when opening a bank account with a Foreign-funded Limited Liability Company in Vietnam?

The requirement for the foreign legal representative of a Foreign-funded Limited Liability Company (LLC) to be physically present for a bank interview when opening a bank account in Vietnam can vary depending on the bank’s policies and procedures.
Some banks may require the legal representative to be physically present, while others may allow for remote or proxy representation.

R-vn-llc-5 Vietnam – Staff Work Permit, Visa, and Residence
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Can a Foreign-funded Limited Liability Company in Vietnam send expatriates to Vietnam as the Investor’s role?
What are the application requirements, documents and procedures for the work permit, visa, and residence permit?
Are there differences in different countries?

Work Permit for Foreign Employees:

1.Eligibility : The foreign employee must meet certain eligibility criteria, including having the required qualifications and experience for the position.
2.Work Permit Application : The LLC, as the employer, is typically responsible for applying for a work permit on behalf of the expatriate employee.
3.Required Documents :
• Work permit application form.
• Copy of the employee’s passport.
• Certified copies of diplomas or qualifications relevant to the position.
• Health certificate from a recognized medical facility.
• Criminal record check from the employee’s home country or Vietnam (if required).
• Labor contract or employment agreement between the LLC and the employee.
• Other documents as required by local authorities.
4.Application Submission : The application is usually submitted to the Department of Labor, Invalids and Social Affairs (DOLISA) in the province or city where the LLC is registered.
5.Processing Time : The processing time for a work permit varies but typically takes a few weeks to a couple of months.

Visa and Residence Permit:

  1. Visa Type: The foreign employee will generally enter Vietnam on a business visa or tourist visa, depending on the specific circumstances. However, this visa is usually for a short duration and may need to be extended.
  2. Temporary Residence Card (TRC): For longer stays, the foreign employee may apply for a Temporary Residence Card. This card allows for a more extended stay and can be valid for up to several years.
  3. Application Requirements and Documents:
    • Valid passport with at least six months of validity.
    • Visa extension or TRC application.
    • Proof of accommodation in Vietnam.
    • Sponsorship from the LLC.
    • Health insurance in Vietnam.
  4. Application Submission: The application for a visa extension or TRC is typically submitted to the Immigration Department.
  5. Processing Time: Processing times for visa extensions and TRCs can vary but generally take several weeks to a few months.

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Can a Foreign-funded Limited Liability Company in Vietnam send expatriates to Vietnam as the employee role?
What are the application requirements, documents and procedures for the work permit, visa, and residence permit?
Are there differences for different countries?

Work Permit for Foreign Employees:

  1. Eligibility: The foreign employee must meet certain eligibility criteria, including having the required qualifications and experience for the position.
  2. Work Permit Application: The LLC, as the employer, is typically responsible for applying for a work permit on behalf of the expatriate employee. Application website at https://dvc.vieclamvietnam.gov.vn/
  3. Required Documents:
    • Work permit application form.
    • Copy of the employee’s passport.
    • Certified copies of diplomas or qualifications relevant to the position.
    • Health certificate from a recognized medical facility.
    • Criminal record check from the employee’s home country or Vietnam (if required).
    • Labor contract or employment agreement between the LLC and the employee.
    • Other documents as required by local authorities.
  4. Application Submission: The application is usually submitted to the Department of Labor, Invalids and Social Affairs (DOLISA) in the province or city where the LLC is registered.
  5. Processing Time: The processing time for a work permit varies but typically takes a few weeks to a couple of months.
    Visa and Residence Permit:
  6. Visa Type: The foreign employee will generally enter Vietnam on a business visa or tourist visa, depending on the specific circumstances. However, this visa is usually for a short duration and may need to be extended.
  7. Temporary Residence Card (TRC): For longer stays, the foreign employee may apply for a Temporary Residence Card. This card allows for a more extended stay and can be valid for up to several years.
  8. Application Requirements and Documents:
    • Valid passport with at least six months of validity.
    • Visa extension or TRC application.
    • Proof of accommodation in Vietnam.
    • Sponsorship from the LLC.
    • Health insurance in Vietnam.
  9. Application Submission: The application for a visa extension or TRC is typically submitted to the Immigration Department.
  10. Processing Time: Processing times for visa extensions and TRCs can vary but generally take several weeks to a few months.

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What are the evaluation factors or requirements for a Foreign-funded Limited Liability Company in Vietnam when applying work permit, visa, and residence permit?
What is the relationship with the salary, capital, and turnover of Foreign-funded Limited Liability Company?
Are there differences for different countries?

  1. Position and Qualifications:
    • The employees’ qualifications and experience relevant to the position they will hold in the LLC are assessed. The employee should have the necessary skills and qualifications for their role.
  2. Salary:
    • The salary offered to the employee is often a critical factor. In Vietnam, work permit applications may require a minimum salary level to ensure that foreign employees are adequately compensated.
  3. Capital and Turnover of the LLC:
    • While the capital and turnover of the LLC are important for the company’s financial stability, they may not be directly tied to individual work permit applications. However, a financially stable company is more likely to fulfill its obligations, including salary payments to foreign employees.
  4. Labor Demand and Market Conditions:
    • The labor market conditions and the demand for certain positions may influence the approval of work permits. Companies must justify the need for foreign employees when local labor resources are insufficient.
  5. Background Checks and Health Requirements:
    • Criminal background checks, health certificates, and medical examinations may be required for work permit applications. The individual employee’s health and legal history are considered.
  6. Compliance with Local Regulations:
    • Both the LLC and the individual employee must comply with local regulations and labor laws. The LLC must have all its legal obligations in order to support foreign employees.
  7. Visa and Residence Permit Requirements:
    • The relationship between the company’s status and the employee’s permit status is vital. The LLC’s sponsorship is often required for visa and residence permit applications.
  8. Consistency Across Nationalities:
    • These requirements are generally consistent for foreign employees from different countries. The focus is on qualifications, employment terms, and legal compliance rather than the nationality of the employee.

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Vietnam- Registered Address and Operating Address of Foreign-funded Limited Liability Company in Vietnam.
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What are the regulations on the registered address during the company registration and future operating address of a Foreign-funded Limited Liability Company in Vietnam?

  1. Registered Address:
    • The registered address is the official address of the LLC, and it is used for legal and administrative purposes. It must be within the territory of Vietnam.
    • The registered address is typically the address where the LLC’s business registration certificate is issued. This address will be used for correspondence and official documents.
    • If the LLC’s registered address changes, the company is required to update its business registration certificate with the new address.
  2. Operating Address:
    • The operating address is the physical location where the LLC conducts its business activities. This can be different from the registered address.
    • The operating address can be an office, factory, warehouse, or any other suitable location for the LLC’s business operations.
    • The operating address may be subject to local zoning and business licensing regulations, so it’s essential to ensure compliance with these requirements.
  3. Business Licensing and Zoning Regulations:
    • The specific location of the operating address may be subject to local business licensing and zoning regulations. It’s crucial to check with local authorities to ensure that the intended business activities can be conducted at the chosen operating address.
  4. Notification of Address Changes:
    • If the LLC intends to change its operating address, it should notify the local authorities and update its business registration certificate accordingly.
  5. Leasing Agreements:
    • LLCs often lease office or business space. Leasing agreements should clearly state the purpose for which the property is being used (business activities) and should be registered with the local authorities.
  6. Regulations Specific to Different Industries:
    • Some industries or business activities may have additional regulations related to their operating addresses. For example, certain businesses may require specific facilities or locations to meet industry-specific requirements.

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What are the specific regulations or requirements of a registered office address for a permitted industry of an LLC in Vietnam?

  1. Location within Vietnam: The registered office address must be located within the territory of Vietnam.
  2. Compliance with Zoning and Licensing Regulations: Depending on the industry and location, there may be specific zoning and business licensing regulations that apply to the registered office address. The office should be in a location where the LLC’s business activities are permitted.
  3. Notification of Address Changes: If the registered office address changes, the LLC is required to update its business registration certificate to reflect the new address. This should be done in accordance with local regulations.
  4. Documentation and Leasing Agreements: The LLC should maintain proper documentation related to the registered office address, including leasing agreements. These agreements should specify the use of the property for business purposes.
  5. Accessibility: The registered office address should be accessible for legal and administrative purposes, and it should be where official correspondence and documents can be received.
  6. Legal Compliance: The LLC must ensure that the registered office address complies with all legal requirements, including those related to safety, fire regulations, and other relevant laws.
  7. Consistency with Business Activities: The registered office address should align with the nature of the LLC’s business activities. For example, if the company operates in manufacturing, the address should be a suitable location for manufacturing operations.
  8. Resident Director/Representative: In some cases, the registered office address may be the same as the address of the resident director or legal representative, especially if they are responsible for receiving official documents on behalf of the company.

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Amount of investment, registered capital, and government fees for Foreign-funded Limited Liability Company in Vietnam.
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Are there any regulations on authorized share capital, registered share capital and paid-up share capital of a Foreign-funded Limited Liability Company in Vietnam?
Is there any requirement for minimum funds to be in place within a certain period?

  1. Authorized Share Capital: The authorized share capital represents the maximum amount of capital that the company is allowed to issue to its shareholders. It is stated in the company’s charter and can be adjusted through an amendment to the charter. This capital does not need to be fully paid-up at the time of registration.
  2. Registered Share Capital: The registered share capital is the amount that the company commits to contributing, and it is indicated in the company’s charter. It represents the financial commitment of the shareholders to the company.
  3. Paid-up Share Capital: The paid-up share capital is the portion of the registered share capital that the shareholders have contributed to cash or assets. This capital must be available for the company to use for its operations.
  4. Minimum Funds Requirement: While there is no specific requirement for a minimum level of authorized or registered share capital, the Vietnamese authorities may have certain expectations regarding the initial capitalization of the LLC. They often want to see that the company has sufficient capital to support its intended business activities.
  5. Timeframe for Paid-up Capital: The time limit for capital contribution is 90 days from the date of the issuance of the ERC.
  6. Industry-Specific Regulations: Certain industries or business activities may have specific capital requirements, and the company may need to meet those requirements to operate legally in that industry.

R-vn-llc-7-20
What is the relation between government fees with authorized share capital, registered share capital, and paid-up share capital of a Foreign-funded Limited Liability Company in Vietnam?

  1. Authorized Share Capital: Government fees, such as those related to business registration and licensing, may be calculated based on the authorized share capital. A higher authorized share capital may result in higher government fees during the registration process. However, it’s important to note that this capital does not need to be fully paid at the time of registration.
  2. Registered Share Capital: The registered share capital represents the amount that the company commits to contributing, and it is declared in the company’s charter. Government fees are not directly based on the registered share capital, but rather on the authorized share capital.
  3. Paid-up Share Capital: Government fees are generally not directly linked to the paid-up share capital. Paid-up share capital is the portion of the registered share capital that the shareholders have actually contributed, and it reflects the company’s financial capacity to operate. While it’s important for the company’s financial stability, it does not directly affect government fees.
  4. Government Fees: The specific government fees, including those for business registration, licensing, and annual compliance, may vary based on the company’s authorized share capital and the industry it operates in. Different industries and activities may have different fee structures.

R-vn-llc–8
Application of Certificate Number for a Foreign-funded Limited Liability Company in Vietnam
R-vn-llc-8-10
What are the company certificate numbers needed to apply with the relevant legal entities for a foreign-funded Limited Liability Company in Vietnam?

  1. Business Registration Certificate Number: This is the primary certificate issued by the Department of Planning and Investment when your LLC is registered. It includes important information about your company, such as its name, address, business activities, and authorized capital. You will often need to provide this number when applying for other licenses or permits.
  2. Tax Identification Number (TIN): The TIN is issued by the tax authorities and is essential for tax compliance. It’s used for various tax-related matters, including the filing of tax returns. You may need to provide your TIN when dealing with tax authorities or financial institutions.
  3. Employer Code: If your LLC plans to hire employees, you’ll need to obtain an employer code from the labor authorities. This code is required for legal employment and labor-related matters.
  4. Customs Declaration Code: If your business involves importing or exporting goods, you’ll need a customs declaration code for customs clearance and international trade activities. This code is issued by the General Department of Vietnam Customs.
  5. Other Industry-Specific Certificates: Depending on your industry or business activities, there may be additional certificates or permits required. These can include sector-specific licenses or certificates issued by relevant ministries or agencies.

R-vn-llc-8-20
What are the certificate application for the Foreign-funded Limited Liability Company in Vietnam as a tax entity?

  1. Tax Identification Number (TIN): The TIN is crucial for tax compliance. To obtain this number, you’ll need to register with the local tax authorities. The TIN is used for various tax-related matters, including filing tax returns, paying taxes, and engaging in tax-related communications with the authorities.
  2. Value Added Tax (VAT) Certificate: If your business is subject to VAT, you’ll need to register for a VAT certificate. This allows you to collect and remit VAT on your taxable sales and services.
  3. Enterprise Income Tax (EIT) Certificate: This certificate is necessary for the payment of enterprise income tax. It specifies the rate at which your company is taxed on its profits.
  4. Tax Registration Certificate: This is a general tax registration certificate that confirms your company’s eligibility to pay taxes and outlines the types of taxes your company is subject to.
  5. Other Industry-Specific Certificates: Depending on your industry and business activities, you may require additional certificates related to specific taxes or regulations. These can include certificates related to excise tax, import-export tax, or other industry-specific levies.

R-vn-llc-8-30
What are the certificate application for Foreign-funded Limited Liability Company in Vietnam in relation to withholding tax on salary and employee benefits?

  1. Certificate of Withholding Tax Agent Registration: If your company is responsible for withholding taxes from employee salaries and benefits, you will need to register as a withholding tax agent with the tax authorities. This certificate shows that your company is authorized to withhold and remit taxes on behalf of employees.
  2. Employee Tax Code: Each employee should have a unique tax code, which is used for tax calculation and reporting. This code is obtained through the tax authorities and is used for withholding and remitting taxes from employees’ salaries.
  3. Social Insurance Registration Certificate: This certificate is related to employee benefits, specifically social insurance. It certifies that your company is registered to withhold and pay social insurance contributions on behalf of your employees.
  4. Health Insurance Registration Certificate: If your employees are entitled to health insurance, your company should be registered to withhold and remit health insurance contributions. This certificate confirms your compliance with health insurance requirements.

R-vn-llc-8-40
What are the other independent certificate numbers or application, or declaration related to the government’s jurisdiction for Foreign-funded Limited Liability Company in Vietnam?

  1. Environmental Impact Assessment (EIA) Certificate: If your business activities have the potential to impact the environment, you might need an EIA certificate. This is often required for businesses in industries like manufacturing and construction.
  2. Fire Safety Certificate: Certain businesses, especially those involving hazardous materials or large-scale operations, may need to obtain a fire safety certificate to ensure compliance with safety regulations.
  3. Import and Export Permits: If your business involves international trade, you may need import and export permits issued by the Ministry of Industry and Trade.
  4. Food Safety and Hygiene Permits: If your business is in the food industry, you’ll need permits related to food safety and hygiene issued by the Ministry of Health.
  5. Pharmaceutical Licenses: Companies engaged in the pharmaceutical industry may need additional licenses and permits from the Ministry of Health.
  6. Advertising Permits: If you plan to run advertising campaigns, you may need permits related to advertising content and placement.
  7. Intellectual Property Rights: If your company deals with intellectual property rights, you may need to apply for trademarks, patents, or copyrights with the National Office of Intellectual Property.
  8. Certificate of Good Manufacturing Practice (GMP): This certificate is required for certain industries like pharmaceuticals to ensure the quality of manufacturing processes.
  9. Trading Licenses: Depending on your business activities, you may need specific trading licenses issued by relevant authorities.
  10. Building Permits: If your company plans to construct or renovate facilities, you’ll need building permits from the local construction authority.
  11. Certification of Origin: If you’re involved in international trade, you may need certificates of origin for your products.
  12. Work Permits: If you employ foreign workers, you’ll need to apply for work permits for them.
  13. Export Control Licenses: If your business deals with controlled goods or technologies, you may need export control licenses from the Ministry of Industry and Trade.

R-vn-llc-8-50
To summarize: Which of the following certificate numbers do Foreign-funded Limited Liability Company in Vietnam need to apply for?
National (federal) company certificate number, provincial (state) company certificate number, national (federal) tax certificate number, provincial (state) tax certificate number, national value-added tax certificate number, provincial (state) value-added tax certificate number, social insurance card number, medical insurance card number, pension certificate number, other funds such as housing fund certificate number, labor union certificate number, import and export certificate number, and franchise industry certificate number.

  1. National (Federal) Company Certificate Number: Yes, you will need this for company registration.
  2. Provincial (State) Company Certificate Number: Yes, you may need a local business registration certificate from the province where you operate.
  3. National (Federal) Tax Certificate Number: Yes, this is required for tax compliance.
  4. Provincial (State) Tax Certificate Number: Yes, you may need a local tax certificate for compliance with provincial tax regulations.
  5. National Value-Added Tax Certificate Number: Yes, if your business is subject to VAT, you’ll need this certificate.
  6. Provincial Value-Added Tax Certificate Number: Yes, you may need a local VAT certificate in addition to the national one.
  7. Social Insurance Card Number: Yes, if you have employees, you’ll need this for social insurance compliance.
  8. Medical Insurance Card Number: Yes, if you provide health insurance to employees.
  9. Pension Certificate Number: Yes, if you have a pension scheme for employees.
  10. Other Funds (such as Housing Fund) Certificate Number: Yes, if your employees contribute to other funds.
  11. Labor Union Certificate Number: This depends on your company’s participation in labor unions.
  12. Import and Export Certificate Number: Yes, if your business involves international trade.
  13. Franchise Industry Certificate Number: Yes, if your business operates in a franchise industry and requires specific certification.

R-vn-llc-9
Incorporation procedures of Vietnam-Foreign-funded Limited Liability Company and key matters
R-vn-llc-9-10
What are the procedures of setting up a Foreign-funded Limited Liability Company in Vietnam? Documents required? Competent Government unit? Websites?

  1. Investment Registration:
    • Determine the business activities and location.
    • Submit an application for Investment Registration to the Department of Planning and Investment (DPI) of the province where you plan to establish your LLC.
    • The DPI will issue an Investment Registration Certificate (IRC) if your application is approved. This certificate is essential for foreign investors.
  2. Enterprise Registration:
    • Prepare the required documents, including the company’s charter, legal representative’s passport copy, and information about the company’s capital, structure, and operations.
    • Submit an application for Enterprise Registration to the Business Registration Office under the local Department of Planning and Investment.
    • Once your application is approved, you will receive a Business Registration Certificate (BRC) that legally registers your LLC.
  3. Tax Registration:
    • Register for tax with the local tax authorities. You will receive a tax code that is essential for tax compliance.
  4. Seal Carving and Announcing:
    • Create a company seal and submit the seal carving application to the local public security department.
    • Announce the company’s seal sample in the National Business Registration Portal.
  5. Post-licensing Procedures:
    • Open a bank account for your LLC in Vietnam.
    • Register for labor, social insurance, and health insurance for employees.
    • Comply with other specific industry requirements, if applicable.
    Websites for Reference:
  6. National Business Registration Portal: https://dangkykinhdoanh.gov.vn/vn/Pages/Trangchu.aspx
    This portal provides information and resources related to business registration in Vietnam. https://dangkykinhdoanh.gov.vn/vn/Pages/Noidunghuongdan.aspx?lhID=4&htID=23
  7. Department of Planning and Investment:
    You can find the website of the local DPI office for specific provinces. Each province may have its own website with information on investment registration and enterprise registration.

R-vn-llc-9-20
What are key consideration matters of when deciding to set up foreign-funded limited liability company in Vietnam?

  1. Market Research: Conduct thorough market research to understand the demand for your products or services in Vietnam. Assess the competition and potential for growth in your industry.
  2. Legal and Regulatory Framework: Familiarize yourself with Vietnam’s legal and regulatory framework for foreign businesses. Understand the rules and requirements for foreign investment, ownership limitations, and industry-specific regulations.
  3. Business Structure: Determine the most suitable business structure, such as an LLC, for your operations. Consider the capital requirements and liability protection offered by different structures.
  4. Investment Capital: Calculate the required investment capital and ensure that you have the necessary funds available. Be aware of any minimum capital requirements based on your business activities.
  5. Local Partners or Agents: In some cases, having a local partner or agent with knowledge of the Vietnamese market can be beneficial, especially if your business activities require local expertise.
  6. Location: Choose the location for your business carefully. Consider factors like access to markets, infrastructure, and local labor force availability.
  7. Industry-Specific Regulations: Some industries have specific regulations and requirements in Vietnam. Make sure you understand the regulations that apply to your industry.
  8. Taxation: Understand the tax obligations and incentives available to foreign businesses in Vietnam. Comply with tax laws and regulations.
  9. Workforce: Assess the availability of skilled labor in Vietnam and understand the labor laws and regulations, including minimum wage and employment contracts.
  10. Cultural and Language Differences: Be prepared for cultural and language differences. Effective communication and cultural sensitivity are essential for success in the Vietnamese market.
  11. Intellectual Property Protection: Ensure that your intellectual property is adequately protected in Vietnam. This may involve trademark registration and other measures.
  12. Logistics and Supply Chain: Plan your logistics and supply chain management to ensure the efficient flow of goods and services.
  13. Exit Strategy: Consider your exit strategy. Know the procedures and regulations for winding down or selling the business if needed.
  14. Local Partnerships: Consider building partnerships with local businesses or government agencies, which can help navigate the local business landscape.
  15. Due Diligence: Conduct due diligence on all aspects of your business plan, including financial projections, local market demand, and legal requirements.

Contact Us

Hanoi Evershine BPO Service Limited Corp.
17D, Oriental Kenzo Apartment C, No. 48 Dongzhimen Outer St.,
Dongcheng Dist., Beijing, Vietnam
E-mail: han4ww@evershinecpa.com
or
Contact us by WeChat or Skype or Whatsapp in the day-work-time of Vietnam  (GMT+8)
The Engaging Manager from Headquarter
Ms. Judy Wang, CPA(Taiwan) Speaks in both English and Chinese.
WeChat: Judy_Evershine
skype: Judy Wang

or
For investment structure relevant to multi-national tax planning and Financial & Legal Due Diligence for M&A (Merge and Acquisition), send an email to HQ4han@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+Vietnam+UK will be accountable for your case.
Email address:dalechen@evershinecpa.com
Linkedin address:Dale Chen

Additional Information

Evershine CPAs Firm Headquarters
6th Floor 378 Chang Chun Rd., Taipei City, Taiwan ROC
Partner Kerry Chen,  USA Graduate School and a well-English speaker
Tel No.: +886-2-27170515 ext. 105
Mobile: +886-939357000
Email: kerrychen@evershinecpa.com
Skype: oklahomekerry

Evershine has 100% affiliates in the following cities:
Headquarter, Taipei, Xiamen, Beijing, Shanghai, Shanghai,
Shenzhen, New York, San Francisco, Houston, Phoenix Tokyo,
Seoul, Hanoi, Ho Chi Minh, Bangkok, Singapore, Kuala Lumpur,
Manila, Dubai, New Delhi, Mumbai, Dhaka, Jakarta, Frankfurt,
Paris, London, Amsterdam, Milan, Barcelona, Bucharest,
Melbourne, Sydney, Toronto, Mexico

Other cities with existent clients:
Miami, Atlanta, Oklahoma, Michigan, Seattle, Delaware;
Berlin, Stuttgart; Prague; Czech Republic; Bangalore; Surabaya;
Kaohsiung, Hong Kong, Shenzhen, Donguan, Guangzhou, Qingyuan, Yongkang, Hangzhou, Suzhou, Kunshan, Nanjing, Chongqing, Xuchang, Qingdao, Tianjin.

Evershine Potential Serviceable City (2 months preparatory period):
Evershine CPAs Firm is an IAPA member firm headquartered in London, with 300 member offices worldwide and approximately 10,000 employees.
Evershine CPAs Firm is a LEA member headquartered in Chicago, USA, it has 600 member offices worldwide and employs approximately 28,000 people.
Besides, Evershine is Taiwan local Partner of ADP Streamline ®.
(version: 2024/07)
Please send email to HQ4han@evershinecpa.com

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