Open A Company in Vietnam

First, the reason why I write this are: (1)I want to improve my writing; (2)I want to share some of my knowledge to everyone; (3) Many people said that writing blog is a good way to feel better :)

And in this article, I am going to write what I like. The topic today is "Open a company in Vietnam". There are many things that a Foreigner should take a look before stepping into Vietnamese market, and one of these step is:  which type of company is suitable for foreigners in Vietnam. To answer this, It is advisable to pay attention to these factors: Development; Structure; Management and Risk.

Commonly, most foreigners choose establishing a new one. But there is another way which is simpler, a Foreigner has rights to invest in a Vietnamese company with buying shares or contributing capital. An advantage of this method is Foreigner gets access to Vietnamese market easier (A Vietnamese company has its own legal entitle, a constant numbers of customers and has more business knowledge in Vietnam compared to foreign company). Beside these, there are also some problems of this method: The ambiguous financial status of Vietnamese company (debt; shares; client contract 's responsibilities), as well as human resources issues, etc. And it is highly recommended that Foreigner has to examine Vietnamese company carefully before buying or contributing (I will have a article analyzing about this later). In this situation, lawyers and auditors will be "best friends".

Different from UK or US legal system, there are 5 typical types of companies in VN: Limited Liability (LL); Cooperation (C); Joint Stock Company (JS) and Household Entitle(HE). However, HE is not available for Foreigners but others are. It is popular that many Foreign companies in VN choose LL and there are many reasons for this: Its similarity structure to Private Limited Company in the UK legal system, the easy to conduct procedure of registering and the risk is also reduced because of its having legal status.

In UK legal system, Limited Company is a company:
- Liability of Owners: No personal liability, liability is limited to shareholder 's contribution.
- Capital contributions: No minimum share capital is required. 
- Management: Company is managed through its managing director or the board of directors acting as a whole.

LL is the same as this. But there are still differences: LL in Vietnam is a close-relationship company, which means outside people can not buy share or be a member except a acceptance from legal representative, and this is not right for UK Public Limited Company.  

In accordance with HCM DPI (HCM Depart Of Plan and Investment), It shall take about 15-18 days to establish a foreign company in Vietnam. There are some rumors said that Foreigners have to pay more (bribe) so as to make the procedure conducted quickly. As a experienced person who has conducted many business procedures, I briefly says that this is not true any more (for most of business procedures in Vietnam). About 4 years ago, whenever a person submitted a dossier to the Authority, they would not answer whether this dossier was acceptable or not (usually they would give answer after 3-5 days). But now, it is compulsory that they had to answer this immediately (except some specific cases). I am guarantee that this is true for DPI, but others Authorities "not sure :)". 

In Vietnamese regulation, "legal status" means the existence of a company is recognized by Vietnamese Government. If a company does not have legal status, it means that this company is not allowed to conduct business in Vietnam (except HE above). Having legal status permits a company to conduct its business in Vietnam, to get profits and to be supported and protected by Government.

For any question, please contact: yalpus.invest@gmail.com and I will try my best to help you.