A Step-by-step Guide to Setting up a Business in Vietnam

Vietnam had an average economic growth of about 6-7% at pre-pandemic levels, and expected economic growth at similar rates is projected well into the year 2026 according to Statistica. By the year 2036, the size of the Vietnamese economy is expected to surpass Singapore’s, becoming the second-biggest economy in Southeast Asia. However Vietnam is still considered a developing nation, this growth comes with plenty of growing pains, meaning that, in the grand scheme of things, it’s still not an easy place to set up a business. Done correctly, however, it can be an extremely financially rewarding venture.

Investing in Vietnam? See Cekindo’s Company Registration Services for Foreign Entities.

Setting up a Business in Vietnam:

1. Prepare a Business Plan

Your business plan must at least include the most important details:

• Main business lines, production processes, and activities, including those that are conditional, restricted, or developed via tax incentives
• Capital structure, investment scale, and resources
• Mechanism of internal governance. This is especially crucial for a company with many co founders to prevent any potential conflicts
• Board of directors and founding members
• Organisational chart and key management personnel
• Cost structure and revenue scale in the previous fiscal year
• Business details such as business name, website, brand, and contact number. Do check with a professional consultant for naming your business

2. Choose Your Business Location

You need to choose your business location carefully while setting up a business in Vietnam. Things to consider regarding your business location are as below:

• You must choose a business location for your headquarters, representative office, branch, factory, showroom, retail shop, etc.
• There may be certain enterprise registration restrictions and you should avoid choosing some places as your business locations. For example, non-commercial buildings, locations where certain business lines are not allowed to be performed
• You can enjoy corporate tax incentives in certain locations. For instance, a tax exemption for years and a tax reduction for 9 to 15 years

3. Compile Required Documents for Business Registration

The following documents are mandatory:

• Financial documents to prove the founder’s financial capacity
• Profile regarding the founder’s professional experience
• Legal representatives’ current residency
• Passports, identity cards, or other identification documents
• Enterprise registration certificates, decisions of establishment
• Certified copies of enterprise registration
• Investment registration certificate
• Power of attorney for representatives who perform the business registration
• Articles of Association
• Enterprise registration application
• Founding shareholders and members’ list
• Business plan, production plan, and business objectives

Local Investors vs. Foreign Investors: Know the Differences

Local Investors

• The registration of a business certificate takes five working days
• The applicable license is the enterprise registration certificate
• Industries restricted for local investors are very minimum, with the exception for certain industries such as education, healthcare, and conservation
• Documents such as rental contracts for business locations and financial statements are not compulsory

Foreign Investors

• The registration of a business certificate takes 30 to 60 working days
• Applicable licenses are enterprise registration license, investment registration certificate, and business registration certificate
• Documents such as rental contracts for business locations and financial statements are compulsory
• Must open foreign direct investment accounts in Vietnam
• Overseas documents must obtain legalisation
• Several business lines are restricted for foreign investors

Company Establishment Options

Setting up a business in Vietnam means that you can pick from these 4 legal entities:

1. Limited Liability Company (LLC)

This is generally the simplest structure and the most common among foreigners who want to setup a 100% foreign-owned company in Vietnam.

Suitable for: SME businesses from 1 to 50 members.
Processing Time: 6 – 8 weeks.
Minimum Capital Requirement: USD45,000

2. Joint Stock Company (JSC)

This type of entity is for medium to large companies that look to eventually be listed on the stock exchange. Due to its size, the structure is more complex than an LLC and the setup process can take longer.

Suitable for: Foreign entrepreneurs require a complex corporate structure and commercial activities.
Processing Time: 4-6 Weeks.
Minimum Capital Requirement: USD45,000

3. Branch Office

Engage in business operations while a dependant of the parent business that must have been operational for at least five years in your country of residence. For short- to medium-term business ambitions in the nation, this organization is excellent.

Suitable for: Established companies.
Processing Time: 4-6 Weeks.
Minimum Capital Requirements: Sufficient capital for operational costs, transactions & institutional duties.

4. Representative Office

Establish a presence in Vietnam and benefit from market research. You can only employ and pay staff using this corporation, not run a successful business. This organization is perfect for a business that wants to research the market before making a substantial investment there.

Suitable for: Companies abroad that want to do market research before fully starting commercial operations.
Processing Time: 4-6 Weeks.
Minimum Capital Requirements: None stipulated

Cost of Setting Up a Business in Vietnam

The final step is to understand the cost of starting a business in Vietnam. You have to factor in the following options into your overall cost calculation:

• Incorporation & Business Licenses
• Tax Registration & Accounting
• HR Setup & Labor Department Registration

See our cost calculator to input your requirements and book a call with our consultants.