Set up a company

Set up a company are consulting and procedural services to assist with foreign investment company setup according to Vietnamese law.Foreign investors can invest in companies in two ways:

• Purchase all or part of the shares or capital contribution of an existing company .
• Or establish a project and contribute capital for a new company setup .

Depending on the requirements and actual situation, we will provide suitable and effective solutions for investors.

Vinasc Group is a leading consulting firm , offering services from consultancy for establishment to the operational development stage of the company. Among these, the company setup service is always trusted and utilized by foreign investors when entering Vietnam.

I. Process of providing company setup services

1. Phase 1: Preparing all necessary information to draft the dossier for the investment project and the company setup

Vinasc receives information about the proposed company with the following basic contents – Set up a company :

1. Type of enterprise:

• Similar to domestic investors, foreign investors have the right to choose a type of enterprise that suits their needs to conduct business activities , including: Single-member Limited Liability Company; Multi-member Limited Liability Company; Joint Stock Company; Partnership Company; Sole Proprietorship.
• Distinguish different types of enterprise:

Criteria	Single-member Limited Liability Company	Multi-member Limited Liability Company	Joint Stock Company	Partnership Company	Sole Proprietorship
Legal entity status	Yes	Yes	Yes	Yes	No
Number of members, shareholders, and capital mobilization capability	Only 01 member (can be an individual or an organization)	From 02 to 50 members, who can be organizations or individuals	The minimum number of shareholders is 03 and there is no limit on the maximum number.	There are at least 02 members who are co-owners of the company, doing business together under a common name and may have additional members contributing capital (limited partners).	Owned by a single individual
Liability for property obligations	Bear liability for the company’s debts and other property obligations within the scope of the company’s charter capital	Bear liability for the company’s debts and other property obligations within the scope of the capital contributed to the company	Shareholders are only liable for the company’s debts and other property obligations within the scope of the capital contributed to the company.	– General partners must be individuals and bear unlimited liability with their entire personal assets for the company’s obligations. – Capital-contributing members (Limited partners) can be organizations or individuals and are only liable for the company’s debts to the extent of the capital they have pledged to contribute to the company.	The owner of a sole proprietorship bears full liability with all of their personal assets for all activities of the enterprise.
Capital transfer	Transfer all or a portion of the contributed capital to others in accordance with the law	Transfer all or a portion of the contributed capital to others in accordance with the law	– Within the first 3 years, transfers are only allowed to the founding shareholders. If one intends to transfer to others, the consent of the other founding shareholders must be obtained. – After 3 years, transfers can be made to anyone.	– A general partnership member does not have the right to transfer their capital, except with the consent of the other general partnership members. – A capital-contributing member (Limited partners) has the right to transfer their contributed capital to others.	Lease or sell the sole proprietorship
The right to make decisions on important matters	Owner	The ultimate decision-making authority rests with the Board of Members.	The highest authority lies with the General Meeting of Shareholders.	The Board of Members has the authority to make decisions on all business activities of the company. However, all decisions must be approved by a majority of the general partnership members.	As a sole proprietorship owner, one has full authority to make decisions regarding all business activities of the enterprise.

In practice, the Limited Liability Company (LLC) is the most popular type of enterprise chosen by foreign investors due to its characteristics that are well-suited for investment needs .

2. Proposed company name – Set up a company :

2.1. The Vietnamese name of the enterprise includes two elements: Type of enterprise + Proper name. The proper name is written using letters from the Vietnamese alphabet, the letters F, J, Z, W, numbers, and symbols.

For example: ABC Limited Liability Company; XYZ Joint Stock Company, etc.

2.2. The company name must not be identical or cause confusion with the names of previously established companies.

Investors can provide suggestions, and we can review and advise on an appropriate enterprise name.

3. Investment capital/Charter capital:

Currently, the law does not prescribe a minimum or maximum level for investment capital/charter capital. The determination of investment capital/charter capital for registration depends on the investor’s needs but must ensure the capital contribution as registered in accordance with the law regarding deadlines and procedures.

Except for certain industries that require legal capital (minimum registered capital). We will inform you if the industry you intend to invest in falls under the requirement for minimum registered capital.

Please see details in section V.

4. Investor/Capital contributor information:

You can send a copy of one of the following legal documents for us to prepare the dossier:

• For individual investors/capital contributors: A copy of one of the following documents:
  • Passport or citizen identification card;
• For organizational investors/capital contributors:
  • Decision on establishment/Enterprise Registration Certificate/Investment Registration Certificate or other equivalent documents, and personal identification of the authorized representative managing the capital contribution, along with the authorization document from the owner to the authorized person (if applicable).

While Vinasc prepares the dossier, you will also need to prepare and provide notarized copies of the above documents. For documents issued by foreign authorities, they must be certified or legalized by the Vietnamese diplomatic mission or consular office abroad, translated into Vietnamese, and authenticated according to Vietnamese law.

We will send you sample documents and guide you through this procedure.

5. Legal representative information – Set up a company :

Similar to the requirements for investors and capital contributors in section 4.

If the investor or capital contributor is also the legal representative, there is no need to provide the information again.

6. Registered business address:

Must have a specific address that is not a residential apartment.

Note: Valid addresses must have complete documentation proving the company’s legal address: Lease agreement for the headquarters; Confirmation of usage purpose from the project owner (if applicable).

7. Proposed business lines:

The company can register for any sector or lines not prohibited by law. However, the company must fully meet the conditions for conditional business lines. (Here is a link to the list of conditional business lines you can refer to). Investors can send us information about their desired lines or refer here (see details…).

8. Registered email:

You should register an email address to serve the proposed company (it can be a personal email or a company email).

9. Registered phone number:

You should register a phone number to serve the proposed company (it can be a mobile phone number or a landline number).

2. Phase 2: Drafting the dossier for the Set up a company

2.1. Both parties discuss and agree on the service content, then Vinasc drafts necessary documents based on them to hand over to the company for verification.

2.2. Vinasc receives back the fully verified dossier along with the company’s prepared documents to finalize the dossier.

3. Phase 3: Submitting the Investment Registration Certificate (IRC) application dossier

Vinasc submits the Investment Registration Certificate (IRC) application dossier to the investment registration authority:

• Implementation time: Within 25-30 working days from the date of dossier submission.
• Result: Investment Registration Certificate (IRC).

4. Phase 4: Submitting the Enterprise Registration Certificate (ERC) application dossier Vinasc submits the Enterprise Registration Certificate (ERC) application dossier to the business registration authority:

• Implementation time: Within 05-07 working days from the date of dossier submission.
• Result:
  • Enterprise Registration Certificate (ERC);
  • Tax authority management confirmation letter.

5. Phase 5: Making the company’s official seal

• Implementation time: Within 01-02 working days.
• Result: Company seal.

6. Phase 6: Completing the service – Set up a company

• Reviewing all steps of the service to ensure comprehensive completion.
• Handing over specific results collected by Vinasc on behalf of the company during the service provision process.

7. Phase 7: Post-establishment procedures – Set up a company

This content is outside the scope of the company setup services. However, these are the tasks that must be carried out immediately after establishment, so we want to note and emphasize them for the enterprise to control and implement well according to regulations.

After obtaining the Enterprise Registration Certificate, the enterprise needs to carry out the following tasks:

1. Hang the signboard at the company’s head office address.
2. Register a digital signature.
3. Open a bank account.
4. Register for online tax declaration.
5. Submit a declaration and pay for the business license fee.
6. Register the VAT calculation method.
7. Register and notify the use of electronic invoices.
8. Other procedures related to labor and social insurance.
9. Prepare all business conditions for conditional business lines.

II. Results of the set up a company service

• Investment Registration Certificate (IRC);
• Enterprise Registration Certificate (ERC);
• Tax authority management confirmation letter.
• Company seal;

III. Estimated implementation time – set up a company

• Obtaining the Investment Registration Certificate: 25-30 working days
• Obtaining the Enterprise Registration Certificate and Tax authority management confirmation letter: 05-07 working days
• Creating the company seal: 01-02 working days
• Opening the company bank account: 10-15 working days
• Post-establishment procedures: 05-07 working days
• Business license: 45-60 working days

The estimated times above are calculated from the day Vinasc receives all the required documents from you.

IV. List of required documents to set up a company

This section introduces the list of required documents and the responsibilities of the parties in preparing and executing the documents.

No.	Document	Party responsible
		Customer (1)	Vinasc Group (2)	Vinasc Group on behalf of the customer (3)
1	– For individuals: A notarized copy of the Citizen Identification Card/Passport. – For organizations: A notarized copy of the Decision on Establishment/ Enterprise Registration Certificate/ Investment Registration Certificate or other equivalent documents, and personal identification of the authorized representative managing the capital contribution, along with the authorization document from the owner to the authorized person (if applicable). Note: Documents must not be more than 6 months old from the date of notarization or authentication. Documents issued by foreign authorities must be consularly legalized, translated, and notarized.	X		X
2	Documents proving the investor’s financial capacity: Financial statements for the last 2 years of the investor/ Financial support commitment from the parent company/ Financial support commitment from a financial institution/ Guarantee of the investor’s financial capacity/ Bank account balance confirmation. Note: Documents must not be more than 6 months old from the date of notarization or authentication. Documents issued by foreign authorities must be consularly legalized, translated, and notarized.	X		X
3	Documents for applying for the Investment Registration Certificate: 1. Application for investment project registration 2. Investment project proposal 3. Explanation for conditional business sectors (if applicable) 4. Explanation of the investor’s financial capacity 5.     Document appointing the representative of the capital contribution (if applicable) 6.     Power of attorney		X
4	Documents for applying for the Enterprise Registration Certificate: 1. Application for the company setup 2. Company charter 3. List of members/List of shareholders (if applicable) 4. Power of attorney		X
5	Company seal		X
6	Documents for opening a bank account 1. Application for opening a bank account 2. Commitment letter 3. Registration for using electronic tax payment services 4. Agreement letter (if applicable)		X

(*) According to the process, the customer is responsible for preparing documents at column (1), and Vinasc will be responsible for preparing documents at column (2).

(*) In some cases where customers encounter difficulties in preparing documents, Vinasc may perform on behalf of the customer at column (3). However, in this situation, we need to consider each specific case, which may lead to the following issues:

– Additional costs may arise for document preparation (these costs will vary depending on each governmental agency and the legal regulations at each stage).

– Additional time may be required to prepare these documents.

(*) During the preparation period, customers should scan all the aforementioned documents for us to proceed with timely preparation.

(*) In some special cases, governmental agencies may request additional information to supplement the documents.

V. Consultation on capital contribution scale for Set up a company

This section helps customers establish a basis for determining the scale of capital contribution and investment when conducting business activities . Specifically, there are 02 cases as follows:

Case 1: Enterprises operating in business lines with capital conditions. In this case, it is called legal capital, requiring companies to register with a capital equal to or greater than the legal capital requirement. (See business lines with conditional capital requirements here..)

Case 2: Companies operating in business lines without capital conditions need to consider the following factors:

• Rental costs for offices, workshops, or warehouses
• Initial investment costs for machinery and equipment
• Costs of purchasing goods, raw materials
• Costs of salaries, social insurance, health insurance…
• Other service costs: Electricity, water, accounting, taxes, auditing…
• Time according to debt policies in buying and selling.
• Estimated time for the company to make a profit.

The amount of investment capital needed to be contributed must sustain the company’s operations until profits, and cash flows can return to participate in production and business activities.

VI. Risk warnings during the investment procedure phase

During the investment procedure phase, including the procedures for the company setup and making capital contributions, investors must fully comply with the procedures to avoid the following risks and losses:

1. According to Article 46 of Decree 122/2021/ND-CP on sanctions for administrative violations in the field of planning and investment: A fine of 50,000,000 VND to 100,000,000 VND for conducting business in the form of an enterprise without registration. At the same time, being forced to apply for company setup.
2. According to Article 44 of Decree 122/2021/ND-CP: Enterprises operating in the wrong business lines lead to violations of the deadline for registering changes to the content of the Enterprise Registration Certificate: May be warned or fined from 3,000,000 VND to 30,000,000 VND depending on the duration of the violation.
3. According to Article 46 of Decree 122/2021/ND-CP: Enterprises that do not contribute capital on time without carrying out the capital adjustment procedure as prescribed: A fine of 30,000,000 VND to 50,000,000 VND. At the same time, forced to carry out capital adjustment procedures.
4. According to Article 17 of Decree 122/2021/ND-CP: In case of doing business in the wrong business lines, contributing capital not in accordance with the content received in the Investment Registration Certificate without carrying out the procedure to adjust the Investment Registration Certificate: A fine of 70,000,000 VND to 100,000,000 VND. At the same time, forced to carry out the adjustment procedure.
5. According to Article 9 of Circular 06/2019/TT-NHNN guiding foreign exchange management for foreign direct investment activities : Enterprises that do not open investment accounts and contribute capital in accordance with the process will be affected:

• Transferring profits abroad
• Transferring capital abroad

VII. Taxes and fees payable to the government during the company’s operations

This content helps investors know what procedures to follow after the company setup and the amounts to be paid to the government budget.

To answer the above content, we would like to introduce the main items as follows:

• Initial procedures and costs
• Value Added Tax (VAT) and VAT refund
• Personal Income Tax (PIT)
• Social insurance, health insurance, etc.
• Corporate Income Tax (CIT)
• Import tax
• Other taxes.

Detailed Content – Set Up A Company

1.  Procedures and initial costs when establishing:

1. Initial procedures:

– Registration of license tax. This is a mandatory procedure within 30 days from the date of issue of business license;

– Initial tax registration, including: Registration of depreciation method, registration of accounting regime, and registration of tax calculation method;

– Registration of Insurance and initial records of labor;

– Opening a bank account.

2. Additional expenses that the enterprise must bear:

No.	Expense	Amount	Note
1	License Fee
		3.000.000	Level I. Applied to enterprises with capital of more than 10 billion VND
		2.000.000	Level II. Applied to enterprises with capital from 10 billion VND or less
		1.000.000	Representative office, branch, business location
2	Purchase of electronic invoice	1.600.000	For 1,000 invoices.
3	Purchase of digital signature – Token	3.000.000	Can be used for 03 years

2. Value Added Tax (VAT). This is a tax that applies to most businesses with the following tax rates:

1. VAT rates:

• 0% rate applies to exported goods and services.
• 5% rate mainly applies to goods and services related to agriculture, healthcare, and education.
• 10% rate is the main rate applied to most goods and services in the market.

Except for some specific sectors, businesses will apply the VAT calculation method using the tax deduction method. Specifically, according to the following formula:

VAT payable = Output VAT – Input VAT.

Example: In January 2024, a business purchased goods worth 10,000,000,000 VND with a corresponding tax of 10%, which is 1,000,000,000 VND. During the month, the business sold all goods for 15,000,000,000 VND with a tax rate of 10%, which is 1,500,000,000 VND.

Therefore, in January 2024, the business must pay a VAT of: 1,500,000,000 VND – 1,000,000,000 VND = 500,000,000 VND.

2. VAT refund: Businesses are only allowed to receive a VAT refund in the following two cases and meet the condition of having a tax balance of 300 million VND or more for at least 12 consecutive months.

• Exporting businesses
• Businesses with initial investment projects such as factories, warehouses, etc.

3. Personal Income Tax. This tax applies to both Vietnamese and foreign employees working for enterprises.

1. The tax rates applied to Vietnamese employees and foreign employees who are residents of Vietnam are as follows:

Level	Annual Taxable Income (million VND)	Monthly Taxable Income (million VND)	Tax rate (%)
1	Up to 60	Up to 5	5
2	Over 60 to 120	Over 5 to 10	10
3	Over 120 to 216	Over 10 to 18	15
4	Over 216 to 384	Over 18 to 32	20
5	Over 384 to 624	Over 32 to 52	25
6	Over 624 to 960	Over 52 to 80	30
7	Over 960	Over 80	35

2. For foreign workers not residing , all income is subject to a tax rate of 20%.

4. The amounts payable are Social Insurance, Health Insurance, and Union Fees as follows:

1. For Vietnamese employees:

Employer pays			Employee pays
Social Insurance	Unemployment Insurance	Health Insurance	Social Insurance	Unemployment Insurance	Health Insurance
17,5%	1%	3%	8%	1%	1.5%
21,5%			10.5%
Grand Total     32%

2. For foreign employees:

Employer pays			Employee pays
Social Insurance	Unemployment Insurance	Health Insurance	Social Insurance	Unemployment Insurance	Health Insurance
17,5%	–	3%	8%	–	1.5%
20,5%			9.5%
Grand Total     30%

Notes – Set up a company :

• The above deductions are made monthly, based on the employee’s salary, and are paid to the governmental agencies as regulated.

5. he general corporate income tax rate applied to all enterprises operating is 20%. However, some cases are eligible for tax incentives and will be subject to different tax rates. The main cases eligible for incentives include:

• Investment sector incentives: Details
• Investment location incentives: Details

The common preferential tax rate is: 10% tax rate for 15 years and exemption for 4 years, 50% reduction of payable tax in the next 9 years.

Example: Enterprise A, established in 2023, operates in the software production sector and its profile meets the conditions for incentives, then:

• From 2023 to 2026, it is exempt from corporate income tax
• From 2027 to 2035, a tax rate of 5% is applied (50% reduction of the 10% tax rate)
• From 2036 to the end of 2037, a tax rate of 10% is applied
• From 2038 onwards, a tax rate of 20% will be applied, similar to other enterprises.

6. Import taxes: Depending on the item and the time, customs authorities may apply different tax rates.

7. Other taxes: Contractor tax, special consumption tax, environmental tax… these are taxes that only apply to certain businesses operating in specific fields or those with infrequent economic transactions.

According to our assessment, tax procedures for businesses only account for about 20% of the procedures that businesses must carry out during their operations. To fully comply and avoid legal risks, businesses can refer to the list of tasks to be performed here to control their activities.

VIII. List of administrative procedures to be carried out after the Set up a company

This content aims to help enterprises best comply with administrative procedures as prescribed by law to limit the risk of administrative sanctions or restrictions on business activities. Details include:

1. List of administrative procedures
2. Implementation deadline
3. Risk level
4. Regulations on sanctions for non-compliance.

See details here…

Please contact VinaSC for the best advice and support for the above services – Set up a company