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Setting up a company in Vietnam

Updated time: 23 Aug, 2019, 16:35 (UTC+08:00)

Setting Up a Company in Vietnam

The first step in setting up a company in Vietnam is acquiring an Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC). The time period required to acquire an IRC varies by industry and entity type, as these determine the registrations and evaluations required:

  • For projects that require registration, IRC issuance takes about 15 working days.
  • For projects subject to evaluation, IRC issuance time is likely to vary. Projects not requiring the Prime Minister’s approval take 20 to 25 working days, while projects that do need such approval take approximately 37 working days.

In the IRC application process, note that under Vietnamese law, all documents issued by foreign governments and organizations need to be notarized, consular legalized and translated into Vietnamese by competent authorities. Once the IRC has been issued, additional steps have to be taken to complete the procedure and start business operations, including:

  • Seal carving;
  • Tax code registration (within ten working days of the issuance of the IRC);
  • Bank account opening;
  • Labor registration;
  • Business license tax payment;
  • Charter capital* contribution; and
  • Public announcement of company establishment.

*Charter capital is the amount that shareholders contribute within a prescribed time limit, as stated in the company articles of association.

Charter capital can be used as working capital to operate the company. It can constitute 100 percent of the total investment capital of the company, or be combined with loan capital to form the total investment capital of the company. Both charter capital and the total investment capital (which also includes shareholders’ loans or third-party finance), along with the company charter, must be registered with the license-issuing authority of Vietnam. Investors cannot increase or decrease the charter capital amount without prior approval from the local licensing authority.

Capital contribution schedules are set out in FIE charters (articles of association), joint venture contracts and/or business cooperation contracts, in addition to the FIE’s investment certificate. Members and owners of LLCs must contribute charter capital within 36 months of the date of IC issuance.

To transfer capital into Vietnam, after setting up the FIE, foreign investors must open a capital bank account in a legally licensed bank. A capital bank account is a special purpose foreign currency account designed to enable tracking of the movement of capital flows in and out of the country. The account also allows money to be transferred to current accounts in order to make in-country payments and other current transactions.

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