How to doing business in Vietnam?

You want to develop a business project abroad and are wondering which country to choose, so why not Vietnam? Located in the center of Asia, Vietnam is considered as one of the fastest growing economies. In addition to owning a domestic market of more than 90 million people and a stable political environment, this is a potential destination for those who are dreaming of starting a business. However, these favorable conditions are still not enough to help us come to a decision. Most importantly, it is necessary to clearly state the legal regulations as well as basic information on management, finance, tax, human resources, or cost of doing business in Vietnam … related to foreign business owners.

1.    Corporate governance

1.1 Is it possible to start a company in Vietnam as a foreigner?

The answer is yes. However, due to the nature of Vietnam’s political system, companies with mainly foreign investment will be restricted from investing in some areas and require special permits, for example health or education.

1.2 For this case, there are two possible solutions

  • The Board of Directors of the company must have a Vietnamese person as a major shareholder (holding at least 51% of the shares).
  • Have a Vietnamese person in his name, and this person will hold 100% of the company’s shares. In fact, this is an illegal job, but it is very common in Vietnam, mostly in cases where the spouses have different nationalities, the Vietnamese national will help in the name of the company.

On the contrary, if you are a foreign citizen, you are only allowed to set up a company doing busines in vietnam in the field permitted by Vietnamese law. The areas of licensing are very broad, but mainly in the service sector. If you want to operate in the field of buying and selling goods, then everything will become more complicated, requiring stricter conditions and procedures. Please consult a lawyer specializing in Vietnamese corporate law to learn more about the permitted areas and regulations/incentives for foreigners who want to invest in Vietnam.

doing busines in vietnam

What issues should foreign businesses/individuals invest in Vietnam pay attention to?

>>>Read more: Establish representative office in Vietnam

2.Types of legal businesses in Vietnam

2.1. Limited Liability Company (LLC)

This type is often chosen by foreigners when doing busines in vietnam. The company is allowed to own 100% foreign capital, and can operate in most fields, including commerce, manufacturing, information technology and education.

  • Number of general partners: at least 1 shareholder and 1 manager. This type does not require the presence of a general partner with Vietnamese nationality.
  • Minimum and/or maximum capital: 10,000 VND.
  • Liability of members: Liability is limited to contributions.

2.2. Joint Stock Company (JSC)

The most prominent feature of a joint stock company is the right to issue shares and securities to raise capital. In order to be listed on the stock exchange, a joint stock company must have a share capital of more than $475,000, if last year they made a profit.

  • Number of members: minimum 3 people
  • Minimum and/or Maximum Capital: There is no minimum.
  • Liability of members: Liability is limited to contributions.

2.3. Limited Liability Partnership – CoEntreprise

This business form requires the participation of a Vietnamese shareholder if you want to doing busines in vietnam operate in the following fields: Advertising, agriculture and forestry, video game companies, hosting services , tourism, transportation services. Vietnamese shareholders are not necessarily the ones holding the most shares. Foreign shareholders can own between 49 and 99% of the shares of the company, depending on the regulations in effect for each specific sector.

  • Number of general partners: There are at least 2 shareholders, including one shareholder with Vietnamese nationality.
  • Minimum and/or Maximum Capital: There is no minimum.
  • Responsibilities of members: Liability is limited to contributions

In addition, there is one more form, which is opening a branch or representative office in Vietnam. In this case, foreign enterprises do not have legal status in Vietnam, and their areas of activity will also be much more limited. Mandatory regulations for businesses that want to doing busines in vietnam, open a branch or representative office in Vietnam, have been operating for at least 5 years, from the date of establishment/registration.

cost of doing business in vietnam

Things To Note For Businesses Doing business in Vietnam 2024

3. Which industries allow/disallow foreign investors to do business in Vietnam?

3.1 Most industries and services as well as construction are open to foreign investors (100% or 49%)

  • Electrical and electronic products
  • Building materials
  • Textile
  • Information technology
  • Real estate (construction of offices, apartments, industrial parks)
  • Tourism (Hotel, dining)
  • Transport and postal services
  • Advertising service

3.2 Industries that impose strict conditions (or ban foreign investors entirely) include

  • Petroleum and minerals (exploration, production, processing)
  • Forest and timber exploitation, forestry
  • Games (Lotto) and Casino
  • Tobacco and cigarette production
  • Air and sea transportation
  • Telecommunication
  • Press, radio and television
  • Science and technology
  • University program training
  • Import and export of Vietnamese goods

Looking to doing business in vietnam, or questioning about the cost of doing business in vietnam? S4B is here to support you every step of the way with our comprehensive suite of services tailored to meet your needs. Whether you are a small startup or a large multinational corporation, we have the expertise to assist you in navigating the complexities of business opening in Vietnam.

Leave your financial worries to us. Our experienced team of accountants will handle all aspects of your company’s accounting, bookkeeping, taxation, licensing, permits, and corporate governance and financial reporting, ensuring compliance with local regulations and international standards. With our meticulous approach, you can focus on growing your business while we take care of your financial matters.

SMART HUMAN RESOURCE SOLUTION FOR BUSINESS COMPANY LIMITED

  • Address: Unit 602A, Tower A, Handi Resco Office Building. 521 Kim Ma Street, Ba Dinh
    District, Hanoi
  • Tel: + 84 24 3974 4181
  • Email: service@s4b.com.vn

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