Vietnam, with its vibrant economy and strategic location in Southeast Asia, has become an attractive destination for foreign investors. If you’re considering starting a business in Vietnam, here’s a comprehensive guide by Global Business Services LLC (GBS), a legal and business consulting firm in Vietnam to help you navigate the process.
1. Choose the Right Business Structure
Before diving into the paperwork, it’s essential to select the appropriate business structure. Consult with legal experts and tax advisors to determine the best fit for your venture. Here are the main options:
a. 100% Foreign-Owned Company
- In this model, you establish a company where you have full ownership. You can operate independently or collaborate with a Vietnamese partner.
- Consider legal obligations, tax implications, and the ease of doing business.
b. Joint Venture Company
- Collaborate with a Vietnamese partner to create a joint venture. This approach allows you to leverage local expertise and resources.
- Draft a clear partnership agreement to define roles, responsibilities, and profit-sharing.
c. Business Cooperation Contract
- Form a business partnership based on a contract. This option is suitable for specific projects or short-term ventures.
- Ensure that the contract covers all relevant aspects of your collaboration.
2. Restricted Business Activities
Vietnam restricts foreigners from engaging in certain business activities. Be aware of these limitations:
* Prohibited Activities:
- Dealing with narcotic substances.
- Handling toxic chemicals, precursors, and minerals.
- Trading natural specimens of endangered, rare, and precious wild fauna and flora species.
- Engaging in prostitution, human trafficking, or related businesses.
- Operating firecracker-related businesses.
- Debt collection.
* Conditional Business Investment:
- The Law on Investment (2020) introduced “conditional business investment” sectors. While not restricted, these activities require meeting specific criteria.
- Examples include accounting services, customs-related businesses, and insurance services.
3. Legal Procedures
a. Direct Foreign Investment
- Obtain an Investment Registration Certificate (IRC) for your investment project.
- Follow local legal procedures for establishing your business entity.
- Seek professional assistance to ensure compliance.
b. Indirect Foreign Investment
- Purchase shares of existing Vietnamese companies.
- The agreement determines your position in company management.
4. Additional Steps
a. Rent a Business Location
- Secure office space for your operations.
- Consider accessibility, cost, and proximity to potential clients.
b. Prepare Required Documentation
- Gather necessary paperwork for registration.
- Documents may include business plans, financial statements, and identification.
c. Register Your Business
- Obtain an **Enterprise Registration Certificate (ERC)** for your company.
- Comply with local regulations and pay any required fees.
d. Open Business Bank Accounts
- Set up accounts for financial transactions.
- Choose a reputable bank that caters to foreign investors.
e. Complete Post-Registration Requirements
- Fulfill any remaining obligations after registration.
- Stay informed about tax filings, reporting, and compliance.
Remember that legal advice and professional assistance are crucial throughout this process. Starting a business in Vietnam can be rewarding, but thorough preparation is key. Best of luck with your entrepreneurial journey in Vietnam!
Any support you may need, please contact GBS at ask@gbs.com.vn or visit its website at: https://gbs.com.vn
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Source: Vietnam Insider