Company Registration in Binh Duong Province
How to company registration in Binh Duong Province?
Vietnam, the third-largest market in Southeast Asia, provides countless opportunities to foreign investors. What are the fundamental things you need to know about company registration in Binh Duong Province? In this article, we are going to walk you through the process of setting up a business in Vietnam. Table of contents Overview of legal entities in Vietnam […]
Table of contents (Company registration in Binh Duong Province)
- Overview of legal entities in Vietnam
- Requirements for setting up a company in Vietnam
- The step-by-step process of company registration in Vietnam
- Frequently Asked Questions about company registration in Vietnam
- Vinasc represents customer to work on legal procedures
- The reason why you should choose Vinasc’s services?
- Ready to register a company in Vietnam?
Overview of legal entities in Vietnam
The two most common legal entity types to set up in Vietnam are a limited liability company (LLC) and a joint-stock company (JSC).
An LLC can have 1 to 50 members who are also known as founders or owners. Take note that LLCs in Vietnam do not have any shareholders.
The alternative to an LLC is to set up a joint-stock company (JSC), also known as a shareholding company. A JSC has 3 to an unlimited number of shareholders.
This article focuses on setting up an LLC in Vietnam. If you would like to know more about JSCs, read our previous article on setting up a joint-stock company in Vietnam.
Requirements for company registration in Binh Duong Province?
- Allowed foreign ownership
The first step of your company registration in Vietnam is to decide what will be your business activities to determine the allowed foreign ownership of the company.
Vietnam allows 100% foreign ownership in most sectors. For example, trading, IT, manufacturing, education sectors welcome foreign investment.
Some business lines such as advertising and tourism, however, require a Vietnamese joint venture partner.
After you know the activities, VINASC can advise on which is the best business line for your company. Also, whether it is possible to set up your company as 100% foreign-owned or you need to establish a joint venture in Vietnam.
Foreign ownership regulations in Vietnam
In Vietnam, the World Trade Organization (WTO) agreements regulate the allowed foreign ownership in different business lines.
However, if there are no WTO agreements nor local laws regulating foreign ownership in that business line, you will need a Ministry-level approval to set up your company.
2. Minimum capital requirement
Some conditional business lines will have minimum regulations on investment capital. However, most business lines will not have regulations and capital constraints for foreign investors when investing in Vietnam.
Therefore, enterprises have full rights to decide on the level of investment capital when investing in Vietnam.
According to our experience, when doing investment activities in Vietnam, foreign enterprises need to pay attention to the following issues of capital:
- Investors should choose the appropriate level of investment with business lines and fields. For example: If the company does production or processing, it will need a large capital for: renting factories, investing in machinery, technology … and working capital. In this case, loans will often be used, especially foreign loans (medium and long-term loans will have to be registered with the State Bank according to regulations). Therefore, it is necessary to analyze and identify two important indicators: Investment capital and contributed capital to implement the project.
- For the professions of: Services, consulting …. need less amount of the fixed capital, but it should be enough to pay working capital, such as: Office, staff salaries….
The most common amount of minimum capital in Vietnam is USD 10,000. This amount is relatively small compared to other similar markets. In Indonesia, for example, the minimum amount of paid-up capital is ~USD 170,000.
3. Registered address (Company registration in Binh Duong Province)
To incorporate a company in Vietnam, you will need a registered address for your business.
Service-based businesses can use a virtual office for registration purposes. Manufacturing companies or companies which require a retail or business space for conducting their activities, on the other hand, need a physical business location in Vietnam.
In some cases, the Department of Planning and Investment will check it before the incorporation. It is sufficient to present a memorandum of understanding (MOU) or an offer letter stating that the founder will use the premises for conducting the company’s activities once it is set up.
4. Resident director
All companies in Vietnam require at least one resident director. The appointed director doesn’t have to have residency status at the time of incorporation. However, they need a residential address in Vietnam.
All landlords must register foreign nationals leasing their premises with the police. If the director is also a founder, he or she will not require a work permit. If the director is not a founder and is a foreign national, he or she will need a work permit in Vietnam.
The step-by-step process of company registration in Binh Duong Province
All foreign-owned companies must follow the below procedure for incorporation.
Step 1: what kind of company you started?
- 2-50 Co. Ltd. Members or 1 member Co.Ltd
- JSC company
- Branch offices of foreign companies in Vietnam
- Vietnam company has 49% ownership by foreigners
Step 2: Investment license
The first step of any foreign-owned company registration in Vietnam is to obtain an Investment Registration Certificate from the Department of Planning and Investment (DPI).
In general, it takes up to one month to receive it.
However, if your business line does not fall under any WTO commitments or no local laws regulate foreign investment in that business line, the timeline will be significantly longer since the DPI will have to ask for a Ministry-level approval.
Step 3: Business registration certificate
The second step is to acquire a Business Registration Certificate (BRC), also known as the Enterprise Registration Certificate (ERC).
Generally, it takes up to one week to receive a BRC/ERC.
Step 4: Registered business stamp and Notice of use of stamp
The enterprise has the right to decide on the form, quantity and contents of the stamp of the enterprise. The content of the stamp must show the following information:
- Company’s name (IRC and ERC)
- Business code
After receiving the legal entity stamp and before using the business stamp, the enterprise must send a notice on the stamp of the enterprise to the business registration office for publication in the National Information Portal on the business registration.
Step 5: Open bank account
Investors need to open to types of bank accounts for use Tax and Token ( Tax Department check), namely the investment capital account to receive the investment amount and the transaction account for conducting the daily transactions in Vietnam.
Step 6: Tax registration and payment of the business license tax
The next thing you need to do after obtaining the Business Registration Certificate is to complete tax registration at the local tax department.
In addition to the standard accounting and tax reporting compliance in Vietnam, you must pay the annual business license tax which based on the charter capital recorded on the business license .
Furthermore, you also need to get your yearly accounts audited.
Keep in mind that you have 30 days from receiving the BRC/ERC to complete the tax registration and pay the business license tax.
Step 7: Capital contribution
Once you have received the Business Registration Certificate,/Enterprise Registration Certificate you have 90 days to make the initial capital contribution.
Step 8: Apply for sub-licenses, if applicable
Some business lines such as manufacturing, lodging, and trading also require additional licenses which will extend the process.
Step 9: Follow-up activities
The last step of company registration in Vietnam after other permits are in place is to complete the follow-up activities.
For example, trading companies may need to complete product registration which can take from 10 days to 4 months.
Frequently Asked Questions about company registration in Vietnam
Is the company registration process different if I have a local partner?
No, unless the local owns 100% of the company. If your company has any foreign ownership, the procedure is the same as if the company were 100% foreign-owned.
How long does it take to register a company in Binh Duong Province?
If your company does not have any special conditions, the registration process will approximately take one month.
If your company needs additional licenses, such as for trading or tourism activities, the timeline of the process can stretch to three or four months.
What does the founder need to prepare?
To start your company registration in Vietnam, you will first need to prepare founders’ documents, including the proof of finances.
Depending on whether the founder is an individual or a company, the list of documents is different.
Individual founders require a notarized passport copy and a bank statement with their name on it.
Corporate founders, on the other hand, require:
- Incorporation certificate
- Articles of association
- List of directors
Two years of annual financial statements or a bank statement if you registered the company less than two years ago
Take note that you need to notarize and legalize all documents in the issuing country if issued abroad.
Another reason to set up a nominee company is when you don’t want to wait for several weeks to set up a foreign company in Vietnam.
The process of setting up a local company in Vietnam takes up to one week. At the same time, you can also start the process of registering a foreign-owned company and merge the two companies once the foreign-owned company is in full compliance.
A nominee company can be an alternative to, for example, trading companies since locally-owned trading companies do not require a trading license in Vietnam which can take up to 12 weeks to obtain.
Vinasc represents customer to work on legal procedures:
- Submit the documents for business registration to the state authorities;
- Track the handling process after the submission and send a notice about the result of the submission to the customer;
- Receive the business license (including the tax code) at the Department of Planning and Investment of Ho Chi Minh city;
- Submit the documents for seal specimen registration and contact agencies for seal carving based on the specimen.
- Receive the Certificate of Seal Specimen Registration and the company’s seal.
- Open bank account for the company at licensed banks
The reason why you should choose Vinasc’s services? ( Company registration in Binh Duong Province)
- Investors will be consulted fully and promptly with a team of professional personnel;
- Investors shall complete investment procedures with the fastest time, in accordance with law provisions;
- Vinasc is a unit with experience in foreign investment consultancy with affordability
- At Vinasc, investors will be supported and used solutions and services synchronously for the business operation of the business.
Ready to register a company in Binh Duong Province?
Send us an email or call for us, and our consultants will gladly assist you with your company registration in Vietnam.