Setting up company in Vietnam

Setting up company in Vietnam

1.Investors may set up an company in accordance with Vietnamese law. Before establishment of an company, a foreign investor must have an investment project, carry out the procedures for issuance of an Investment Registration Certificate and satisfy the following conditions:
a)Have the ratio of ownership of chapter capital prescribed in clause 3 mentioned below;
b)Investment forms, scope of activities, Vietnamese party(ies) participating in implementation of investment activities and other conditions subject to international treaties of which the Socialist Republic of Vietnam is a member.

2.A foreign investor shall implement an investment project via an company which is set up in accordance with clause 1 mentioned above, except for investment in the form of capital contribution or purchase of shares or portion of capital contribution or investment on the basis of a contract.

3.A foreign investor is permitted to own unlimitedly the chapter capital of an company, except for the following cases:

a)The ratio of ownership of foreign investors in listed companies, public companies, securities trading organizations and securities investment funds is subject to the law on securities;
b)The ratio of ownership of foreign investors in State enterprises which conduct equitization or convert their ownership into another form is subject to the law on equitization and conversion of State enterprises;
c)The ratio of ownership of foreign investors not covered by paragraphs (a) and (b) of this clause is subject to other relevant laws and international treaties of which the Socialist Republic of Vietnam is a member.

4.Entities and individuals have the right to set up and manage company in Vietnam in accordance with Law on Enterprise, except for the following cases:

a)State agencies and units of people’s armed forces using State assets to establish business enterprises to make private profit for their own agencies or units;
b)Cadres [senior employees], State officials and State employees in accordance with the law on cadres, State officials and State employees;
c)Officers, non-commissioned officers, career servicemen and national defence workers and employees in agencies and units of the people’s army; officers and career non-commissioned officers in agencies and units of the People”s Public Security of Vietnam, except for persons appointed to be authorized representatives to manage the State share of capital contribution in enterprises;
d)Management personnel and professional management personnel in State owned enterprises, except for those appointed to be authorized representatives to manage the State share of capital contribution in other enterprises;
e)Minors; persons whose capacity for civil acts is restricted or lost; organizations without legal entity status;
f)Persons who are prosecuted for criminal liability, serving prison sentences or administrative decisions at compulsory drug rehabilitation establishments or compulsory educational establishments or being prohibited from conducting business, assuming certain positions or doing certain work relating to business pursuant to a decision of a court; other cases as stipulated by the law on bankruptcy and anti-corruption;
Where the business registration office so requests, any person registering establishment of an enterprise must submit a legal record to the business registration office.

5.Forms of company to be set in Vietnam

Investor can set up a company in Vietnam with following forms:
a.Setting up a private company in Vietnam
b.Setting up a partnership in Vietnam
c.Setting up a multi member limited liability company in Vietnam
d.Setting up a single memeber limited liability company in Vietnam
e.Setting up a shareholding company in Vietnam.

6.Setting up a private company in Vietnam

A private company is an company owned by one individual who shall be liable for all activities of the enterprise to the extent of all his or her assets.

7.Setting up a partnership in Vietnam

A partnership is an company in which:
a)There must be at least two members being co-owners of the company jointly conducting business under one common name (hereinafter referred to as unlimited liability partners). In addition to unlimited liability partners, the company may also have limited liability partners12;
b)Unlimited liability partners must be individuals who shall be liable for the obligations of the company to the extent of all of their assets;
c)Limited liability partners shall only be liable for the debts of the company to the extent of the amount of capital they have contributed to the company.

8. Settong up a multi member limited liability company in Vietnam

Multi member limited liability company is an company in which:
a)A member may be an organization or an individual; the number of members shall not exceed fifty (50);
b)A member shall be liable for the debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise, except for the case stipulated in article 48.4 of Law on Enterprise;

9.Setting up a single member limited liability company in Vietnam.

Single member limited liability company is an enterprise owned by one organization or individual (hereinafter referred to as company owner); the company owner is liable for all debts and other property obligations of the company to the extent of the amount of the charter capital of the company.

10.Setting up a shareholding company in Vietnam

A shareholding company is an enterprise in which:
a)The charter capital is divided into equal portions called shares;
b)Shareholders may be organizations or individuals; the minimum number of shareholders is three and there is no restriction on the maximum number;
c)Shareholders are liable for the debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise;

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LAWYER VN - VIETNANESE LAW FIRM