Foreign investors can expand their market and operate a business in Vietnam by establishing their business presence in the forms of a joint-stock company (JSC), a Limited Liability Company (LLC), a representative office (RO) and a branch office (BO). Selecting an appropriate company form depends on various factors involving the number of investors, capital contribution, business lines, and the scale of the projects.
Popular legal entity types in Vietnam
Limited Liability Company (LLC)
LLC is the most common entity type in Vietnam and a perfect option for small and medium-sized enterprises (SMEs). There are two forms of LLC: Single Member and Multiple Member. Individuals can either set up a 100% foreign-owned firm where all members are foreign investors or a foreign-invested joint venture company between foreign investors and at least one Vietnamese investor. LLC is not permitted to issue shares and be listed on the public stock exchange
Joint-Stock Company (JSC)
JSC is suggested to medium and large-sized organizations since its corporate structure is relatively complicated and compels a minimum of 3 founders. As opposed to LLC, a Vietnamese Joint-Stock Company is entitled to issue ordinary and preference shares as well as be publicly listed on the Vietnamese stock exchange. Moreover, a common shareholder is eligible to obtain dividends, transfer its share, vote, examine company papers as well as sue for wrongful acts.
Representative Office (RO)
RO is ideal for foreigners who want to observe the local market and increase market presence before establishing a legal business form in Vietnam. In contrast to a subsidiary, the representative office is not perceived as an independent legal entity under the law of Vietnam and hence is not qualified to execute business activities that generate revenue. The RO’s head office, however, is empowered to sign, modify and supplement contracts on behalf of the foreign company if they are authorized by its legal representative.
Branch
A branch is a direct extension of the parent company. The owner of a branch office can engage in commercial activities in Vietnam and make a profit from them even though it is not considered an independent legal entity by the Law.
The process of setting up a company in Vietnam
Company registration processing time varies depending on the entity type and decision readiness of the application. In our experience, it normally takes from 15 to 45 days.
How can FISC help with your company registration in Vietnam?
– Provide guidance on the most appropriate legal entity type
– Offer advice on how to gather necessary papers and submit applications
– Acts as a local representative to lodge your application on your behalf
– Assist with the legal aspects of the business registration process
– Support clients in applying for work permits.
