In the process of company formation in Vietnam, foreign investors should note about the 04 significant factors including efficient and suitable forms of company, allowed fields of investment, procedure of opening new company in Vietnam and minimum budget requirement of their investment in Vietnam.
WHY IT IS A GOOD TIME TO FORM COMPANY IN VIETNAM FOR FOREIGN INVESTORS?
Vietnam, a very fast-growing economy (GDP growth 6% to 7% from 2016 to 2018) and a stable political system, now has signed free trademark agreement with different countries and developed markets. Vietnam is one of the most participating countries in FTAs in the world, with 17 FTAs. Vietnamese market is highlighted by the cheap labour costs which could be a good place to shift from China.
Currently, Vietnam has effectively controlled COVID-19 pandemic. Vietnam is a mong the seldom countries which their economic system is still positively developing. Foreign investors are waiting to enter Vietnam market to explore different advantages.
WHAT FIELDS OF COMPANY FORMATION IN VIETNAM ARE INVESTORS ALLOWED?
Vietnamese Government has amended the related laws on foreign investment to encourage investors to invest into Vietnam. Presently, Vietnam has considerably afforded to assure that the foreign companies shall not be disadvantaged compared with domestic ones when doing business in Vietnam. The Vietnamese Government commits to support and create the most favorable conditions for foreign businesses investing and operating in Vietnam. Now 100% Permitted foreign ownership for most sectors is allowed according to Decree 60/2015. By middle of 2018, Japan, South Korea and Singapore are with top investors in Vietnam.
WHAT ARE FORMS OF BUSINESS AVAILABLE TO COMPANY FORMATION IN VIETNAM FOR FOREIGN INVESTORS?
Foreign investors could form company in Vietnam under of the following forms:
- Limited-liability company
A limited-liability company formed by foreign investors in Vietnam may be under the forms of either:
+ A 100% foreign-owned enterprise; or
+ A foreign-invested joint-venture company between foreign investors and at least one domestic one.
- Joint-stock company
A joint-stock company is formed by shareholders based on their subscription for shares in the company. A joint-stock company must have at least three shareholders. The company may either be 100% foreign-owned; or a joint venture between both foreign investors and domestic ones.
This form of foreign investment in Vietnam may be setup between a legal entity or an individual and the individual general partner. The partner has unrestricted liability for the operations of the partnership
- Forming Business cooperation contract (BCC)
- Opening Representative office in Vietnam
- Opening Branches
- Build-operate-transfer ('BOT'), Build-transfer ('BT') and Build-transfer-operate ('BTO') Contracts
- Public and Private Partnership Contract
WHAT SERVICES ASL LAW COULD DO FOR CLIENTS/FOREIGN INVESTORS DOING BUSINESS IN VIETNAM?
ASL LAW with very experienced business lawyers and consultants shall provide the clients a full legal service in Vietnam with affordable quotation to company formation in Vietnam from the initial step until full functional operation. Accordingly, the business of the clients shall operate in Vietnam legally, efficiently and costly.
ASL LAW is the top tier law firm in Vietnam recommended by Legal500, ASIA LAW, WTR, ASIA Law Journal. We are a trusted and reliable legal partner for doing business in Vietnam for foreign investors.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.