Incorporation is the legal process used to form a company or corporate entity. It offers a multitude of benefits for a business and its owners such as:
- Protecting the owner’s assets against the company’s liabilities
- Enabling easy transfer of ownership to another party
- Achieving a lower tax rate than on personal income
- Receiving more lenient tax restrictions on loss carryovers
- The ability to raise capital through the sale of stocks
Company incorporation involves drafting articles of incorporation by your chosen lawyers, listing the primary purpose of the business and where it is located, as well as the number of shares and class of stock if applicable.
For locals and foreigners looking to set up a business in Vietnam’s rising economy, it is important to first understand what the company incorporation laws entail in order to stay compliant while operating within the country.
What Are the Company Incorporation Laws in Vietnam?
Vietnam has a strict and unyielding process when it comes to the incorporation of any company. First and foremost, you need to meet the minimum setup requirements to register your business before going through the lengthy procedures and preparation of the necessary documents:
- Resident director: Vietnam requires all companies to have at least one director who is a local resident with a residential address in the country.
- Registration of business address: All incorporated companies in Vietnam must have a registered business address by law. While some companies are allowed to have a virtual address, most goods-based businesses require a physical location for their registered address.
- Essential documentation: While this varies depending on the nature of your business, the standard set of documents include a business plan, financial documents, corporate profile, residential address of legal representatives, identification documents, articles of association, enterprise registration certificates and application, list of founding shareholders and members, certified copies of registration certificate, as well as power of attorney for representatives performing the business registration.
While company incorporation laws in Vietnam can be difficult to navigate, the process can be effortless and seamless by enlisting the help of a professional law firm with lawyers and attorneys equipped with the knowledge and skill set to guide you through the complex procedures.
What Types of Company Formation Options Are Available in Vietnam?
The most common business legal entities in Vietnam include limited liability companies, joint-stock companies, and partnerships. Below lists more information regarding the three legal classifications for businesses:
1. Limited Liability Company (LLC)
Perfect for small and medium-sized businesses, limited liability companies (LLCs) are the most common legal form adopted by business owners for incorporation in Vietnam. While the company only requires one founder, it can have up to 50 members. Some benefits of LLCs include:
- The ability to freely conduct income-generating activities
- Streamlined business operations and minimal paperwork
- Ease of raising additional capital
- Protection of personal assets
2. Joint-stock Company (JSC)
A joint-stock company (JSC) requires a minimum of three founders, and has a more restrictive framework and structure due to the larger size of the corporation. It includes features such as:
- No limit on the number of shareholders involved
- Ease of transfer for ownership of shares
- Each shareholder’s liability is limited to their contributions
- Larger risk-bearing capacity as company loss is distributed between a big number of shareholders
A partnership business entity is a business consisting of two or more owners who operate their business in accordance with the terms of a written partnership agreement. There are several benefits to this business structure like:
- No personal financial liability of limited liability partners as it is limited in their capital contributions in the partnership
- No restriction on the minimum and maximum number of limited liability partners and no restriction on the maximum number of unlimited liability partners
Why Engage Lawyers from Corporate Counsels for Your Company Incorporation Process?
In Vietnam, it is required by law to have a legal representative when incorporating a company in the country. This ensures that laws and obligations are abided by and that the lawyers involved are actively engaged in transactions between the company and other parties.
At Corporate Counsels, we understand that setting up a business can be a complex and stressful endeavor. Our team of corporate and commercial lawyers are well-trained in the international corporate world and are experts in company incorporation law with the right skills to guide you throughout this procedure effortlessly so that you can achieve peace of mind.
Using our experience and familiarity with the business environment in Vietnam, the lawyers at Corporate Counsels are equipped to assist businesses of all kinds in incorporating their companies in the country without compromising on their legal needs.
What Type of Company Incorporation Legal Services Do We Provide?
Our team of professional lawyers at Corporate Counsels offer a wide range of legal services for incorporating a company in Vietnam including:
- Single-member limited liability companies in Vietnam
- Multi-member limited liability companies in Vietnam
- Joint-stock companies in Vietnam
- Partnership companies in Vietnam
- Representative offices of foreign company in Vietnam
- Branch offices of foreign company in Vietnam
Contact our law firm and find out more information on company incorporation laws in Vietnam today.