Register Company for Foreigners

How Can a Foreigner Start a Business in Vietnam.

Starting a Business in Vietnam

“Is it easy to register a company in Vietnam for a foreigner?” Many foreign entrepreneurs desperately search reliable info on, “How to start a business in Vietnam for a foreigner?”

Every bit of useful information helps them in making hard & fast decisions about the move. The good news is that starting a business in Vietnam for foreigners is quite easy. If you are first-timer, take advice from a reliable registered filing agent.

How can Foreigners Register a Company in Vietnam?

Just like a local Vietnamese, a foreigner can register a compnay and own its 100% shareholding without facing any difficulties.

In fact, anyone over the age of 18 years can start a company in Vietnam. Provided that he has not been convicted of any legal offence or bankruptcy.

In addition to the Vietnammes, its Permanent Residents (PR), and holders of Employment Pass, can register a company and be its shareholders.

Key Requirements for foreigners to set up a new business in Vietnam

How to Appoint Local or Resident Director

Locals can act as the resident director while self-registering their company on BizFile+ portal. The shareholders of the company must pass a resolution to appoint the local director. Choose a person over 18 years in age and of full legal capacity. An individual with undischarged bankruptcy cannot take this position.

However, foreigners must:

• Appoint local director.
• Engage registered fling agent to register their company, as foreigners cannot self-register their company in Vietnam.

Options in Appointing Local Director

• Option 1: Employ a Vietnammes, Permanent Resident as local director.
• Option 2: Appoint a nominee director for your new company.
• Option 3: Form a company by first applying.

**Sign a contract with the appointee to keep them out of your business activities. The appointee will not be a bank signatory.

**You, alone, will have full control over the company and its corporate bank account.

Can an Employment Pass Holder Register a Vietnam Company?

Yes! Holders of employment pass can register a company in Vietnam. They can also own its 100% shares.

Since they are working for their Vietnam employer who got the EP for them, they cannot work as a local or resident director of the company they own. They will have to hire one at the time of company set up.

Registering a Vietnam Company for Foreign Individuals

You need to complete only 2 procedures to set up a Vietnam company.

Choosing the right business structure is the key to successful company registration in Vietnam. It can affect the taxation of your business.

A foreign individual can register the following businesses in Vietnam:

• Private Limited Company
• Sole Proprietorship
• Limited Liability Partnership

Private Limited Company

A private limited company is a favoured business structure for Vietnam business registration.

• It can have 1-50 shareholders (owners).
• It needs at least one local director who is ordinarily resident of Vietnam.
• A private limited company has a separate legal identity from its owners.
• It has the rights of a natural person.
• It has perpetual existence.
• Co Ltd limits the liability of its shareholders to the amount they have invested in its shares.
• It pays corporate tax (20%).

The banks & financial institutions consider Co Ltd more credible than a sole proprietorship or partnership. They can easily raise funds for expansion of their business activities.

Sole Proprietorship

A sole proprietorship is not an incorporated company but a business firm. We advise this business structure to our clients only when their business is highly risk-free.

• It has no separate legal entity from its proprietor.
• The owner has unlimited liability towards its debts and losses.
• The income of a sole proprietorship is considered as that of its owner.
• The owner pays personal income tax (0%-20%).

Limited Liability Partnership (LLP)

Under the Vietnam Company Law, two or more individuals and/ or corporate can register a partnership.

• LLP has separate legal existence from its owners.
• Its liability of its owners depends on their carelessness, actions or inactions leading to LLP’s loss.
• The partners need to pay personal income tax (0%-20%) on their income from LLP.

A limited liability partnership combines the benefits of a partnership and a company. It allows them to pool their complimenting skills & earn a profit.

Vietnam Company Registration for Foreign Companies

Foreign company registration in Vietnam offers a great opportunity for SMEs from all over the globe. Depending on their business goals, they can choose to,

• Subsidiary Company
• Branch Office
• Representative Office

Subsidiary Company

Incorporating a subsidiary company is most beneficial to foreign corporates. A subsidiary company is a form of limited liability company.

• The parent company can own 100% of its shares.
• A subsidiary company is a separate entity from its parent company.
• The parent company’s liability is limited to its share capital.
• The parent’s assets are not used to pay the debts and losses of the subsidiary.

After forming a subsidiary company, the parent company will have to relocate one of its employees to Vietnam to take its charge. The employee will need an Employment Pass to work in Vietnam.

Branch Office

Mostly foreign SMEs prefer to register a branch office in Vietnam.

• A branch office is a legal entity after registration.
• It is an extension of its parent company.
• The parent company is responsible for all the debts and liabilities incurred by its branch office.

The branch office must hire at least one ordinarily resident Vietnammese.

Representative Office

A foreign company can set up a representative office in Vietnam. Its purpose is to research the business potential of the Vietnammese marketplace.

It conducts feasibility studies.

• A representative office does not have a legal identity separate from its foreign parent company.
• It must also appoint not more than 5 employees.
• It cannot indulge in any profit-making activities.

The parent company should be an established company for more than 3 years, with an annual turnover of more than S$250,000. In case it gets dissolved, the representative office gets de-registered.

A Few Other Essential Notes

• If you are looking for expansion of your on-going business, you can set up a Branch Office of the parent company. For this, you should approach an agent for incorporating a company Vietnam without any hassle.
• You can check with the Economic Development Board for availing a viable business space in Vietnam. There you can find a variety of location choices.
• Vietnam has many cash grant schemes to support start-up companies.
• You can consult with the various government agencies such as Standards, Productivity and Innovation Board and International Enterprise Vietnam.
• There is no limitation on foreigners from availing these schemes.
• As per the Fair Consideration Framework of MOM, you must prefer locals over foreign professionals. Thus, you may refer to online job portals for searching for candidates or advertising job openings.
• While you are in Vietnam, you must abide by the requirements of regulatory authorities very rigorously. Make sure to adhere to the laws of Department of Planning and Investment, tax authority (Inland Revenue Authority of Vietnam) by any means.

Know how Vietnam has simplified rules to make it easy for foreigners to set up a business in Vietnam. Analyse available facts and resolve, “Can foreigners register a company in Vietnam?” Most importantly, do not get sidetracked from your goal of registering a business in Vietnam.

We advise our clients on registering the most suitable type of company for their purposes. Choosing the right business structure for starting a business in Vietnam is an important decision as it can affect the taxation of the new business entity.