Business Incorporation in Hanoi: Opportunities, Requirements, How-To

Hanoi is Vietnam’s vibrant Capital city, strategically located on the banks of the red river and very close to Asean’s most crucial trading ally, China. Most ASEAN capital cities are reachable within a 3-hour flight, making cooperation and trade easily manageable. Furthermore, Hanoi is the focus of the government infrastructure upgrades, including building new metros and connecting roads, improving mobility. The low cost of living and some of the lowest operational prices in Asia are further benefits attracting large inflows of foreign direct investment into the capital city. 

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Hanoi Economic Overview

Strong economic growth, an excellent and affordable labor pool, efficient administrative reform, advantageous tax laws, an ideal location, and a sizable consumer market are just a few of Hanoi’s many advantages.

Hanoi’s economy has demonstrated great potential in the first half of 2022 as the GDP grew by 7.79% compared to the same period in 2021. Moreover, the services sector expanded by 9.05% and contributed 5.91% points to the GDP growth.

There are approximately 3,530 tech businesses in Hanoi, bringing in about $10.44 billion in income annually. Of FDI, the manufacturing and processing sector accounted for 37.2%. In addition, 16.7 million tourists brought in money for tourism and hospitality, while projects like Lotte Group’s $300 million investment in the Ciputra Hanoi Mall helped the retail and wholesale industry flourish.

Here is a summary of the city’s economic growth (sector-wise) 

Sector	Increase (YoY 2021-22)
Construction	1.27%
Agriculture, Fishery and Forestry	2.39%
Paper Production	20.3%
Non-metallic Mineral Products	18.5%
Prefabricated Metal Products	16.1%
Wood Processing and Production	15.5%

Source: Hanoitimes

Expansion of Middle-class Population

According to a recent McKinsey report, Vietnam’s middle-class population will expand by 10 million over the next decade. As a result, the country will be host to 36 million middle-class people by 2030. Moreover, the percentage of people living in urban areas will constitute 44% of the population, driving consumption and income growth.

Most of Vietnam’s middle-class population resides in HCMC and Hanoi, housing more than 10 million in each city. However, urbanization will reach smaller cities like Can Tho, Da Nang, and Hai Phong over the next decade.

Government Support & Outline for Hanoi

The economy of Hanoi has continuously expanded. The predicted 8.8% GDP (Gross Domestic Product) has revenue of VND 130,000 billion.

Hanoi plans to bolster its economy and reform its growth model by leveraging “Industrial Revolution 4.0” and promoting global integration. As per the plan, the government is primarily focussing on restructuring the administrative system, enhancing business conditions, and promoting economic development in accordance with the Organization for Economic Cooperation and Development (OECD) standards.

Moreover, the action plan focuses on achieving rapid development in a sustainable manner. In order to realize this goal, it is imperative to promote social welfare activities, enforce measures to raise the standards of living, and eventually reduce the income gap between rural and urban areas.

Overall, it is clear that Hanoi is experiencing its most potent and favorable economic growth, which has turned the city into a reliable investment destination.

Requirements for Opening a Company in Hanoi

Related: Market Entry in Vietnam: Succeeding Through a Successful Strategy

First and foremost, you need to choose a legal entity for your business that fits your business goals in the long run:

Once you’ve selected your perfect legal entity, here’s the process you have to follow to ensure a successful company setup in Hanoi:

1. Register your company name.
2. Get a registration certificate
3. Apply for a tax registration certificate
4. Obtain a stamp of your company.
5. Register the company stamp with the local police in Hanoi.
6. Open a bank account
7. Apply to receive E-invoices
8. Proceed with registration at the Vietnamese Labor Federation.
9. Upon the publication of your registration notice on the National Business Registration website, pay for the tax of your business license.
10. Register with the local Vietnamese office.
11. Proceed with the registration of a social insurance fund for your employees (if any).

Conclusion and Growth Predictions

By 2045, Hanoi is expected to become a regional economic hotspot accompanied by high standards of living. Moreover, the Politburo’s Resolution No.15 has set the stage for the city to develop strategies for the future.

As a significant economic region of northern Vietnam, Hanoi plans to be an integral part of regional and international competition by 2030. During 2026-2030, the Gross Regional Domestic Product (GRDP) is predicted to register 8.5% growth, demonstrating an estimated value of 13,000 USD. By 2045, it is expected to reach 36,000 USD, according to Vietnamplus.

Moreover, tasks like planning infrastructure construction, urban development, and resource management must be accomplished. 

As a city prioritizing education, training, science, technology, and healthcare, the local government has made it imperative to develop its culture and encourage polite and civilized Hanoians. In addition, citizens must be assured of social security, welfare, and improvement in their living standards.

Furthermore, natural resources must be effectively utilized and the environment must be protected.