How to setup a foreign company in Vietnam | Doing business in Vietnam

Setup a foreign company in Vietnam is a guide to help first-time foreign investors understand the process of how to open a company in Vietnam. The articles covers the entire process of starting a new company, the requirements to setup a new company in Vietnam as well as the cost of setting up a company in Vietnam.

Setting up a company in Vietnam typically involves 5 steps.

An investor interested in starting up a new company must complete the following

Firstly, prepare all the pre-application documents.

Secondly, make an application for an Investment registration certificate (IRC) & Enterprise registration certificate (ERC).

Thirdly apply for a tax number and in conclusion open a Direct investment capital account (DICA),

1. PREPARING THE PRE-APPLICATION DOCUMENTS

The first step needed to open a company in Vietnam involves preparing the following documents

1. Notarized passport copies of the investors.
2. An office lease agreement or a valid address to register a company.
3. Banks statement to show proof of funds.

An investor must select the type of entity before deciding to proceed with incorporating a company in Vietnam. The most common choice is a limited liability company (LLC). For more information read our article on Setup a company in Vietnam : 6 essential things you need to konw.

2. APPLYING FOR AN Investment registration certificate (IRC)

An investor looking to open a company in Vietnam must firstly be granted permission to invest in Vietnam. This is done through an investment application process. At the end of this process, the investor is granted an investment registration certificate.

An investor must prepare the following documents inorder to apply for an IRC

1. A written application for permission to execute a project.
2. A comprehensive project report which specifies the following key aspects of the project viz. investment objectives, investment scale, investment capital, location and duration of investment, labor usage request, request for investment incentives, etc.
3. Documents to prove the financial capacity of the investors.
4. Request for land use (if applicable).
5. Explanation of the application of technologies (for manufacturing-related businesses).
6. Passport copies of the investors.

3. APPLYING FOR AN Enterprise registration certificate (ERC)

An investor interested in setting up a new company must also make an application for an enterprise registration certificate. This can only be done after they have been awarded an investment registration certificate. An alternate name for an enterprise registration certificate is a business license. In order to operate a company in Vietnam legally, an entity must have a business license. Both foreign-owned and local companies must have a business license to operate legally.

An investor must prepare the following documents inorder to apply for an ERC

1. Application form for an ERC.
2. Company charter/ Articles of association.
3. The decision of establishment of the entity.
4. Relevant details of the capital contributing members.
5. Passport copies of equity holders.
6. Notarised copies of IRC.

At Mahan, we along with our legal associates will firstly prepare this entire document package based on the preliminary information you provide us. Secondly, we will apply submit the application pack on your behest. In order to achieve this, we request you to sign a time-bound, limited power of attorney so as to enable us to stand in as your representative and address any clarifications sought by the department of planning and investment (DPI). Our main goal is to free up your time so can better focus on the key aspects of your business while we handle all the paperwork.

4. TAX REGISTRATION

As per the law on tax administration, after setting up a new company, an investor must register for a tax code within 10 working days. Basically, the enterprise registration number of a new enterprise is essentially the tax code of the enterprise.

The documents required in order to complete this process are the Enterprise registration certificate and the passport of the investors. An investor may use the service of Mahan or a qualified accountant to complete the entire tax registration process.

5. OPENING A DIRECT INVESTMENT CAPITAL ACCOUNT (DICA)

In Vietnam, all foreign-owned companies are permitted to open two kinds of currents accounts viz. an investment/ DICA account and current accounts. The investment/ DICA account is in US dollars while the current account is in VND and other currencies.

The investment/ DICA account basically has 4 main functions

1. Transfer of the charter capital
2. Receipt of foreign loans
3. Disbursement of loan repayments
4. Outward remittances of profits and dividends

An investor can visit any public or private sector bank to open a DICA account.

An investor must provide the following documents in order to open all necessary bank accounts.

1. Investment registration certificate
2. Enterprise registration certificate
3. Company charter
4. Decision of the board of members (BOM) appointing a legal representative (for multi member companies)
5. Resolution of the BOM appointing authorized signatories  (for multi member companies)
6. Passport copies/ ID card of the investors
7. Tax code registration certificate

If you are a foreign investor interested in investing in Vietnam or considering setup a foreign company or doing business in Vietnam and would like more information on how to apply for a business license, please fill out the form below.