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Forms of business in Vietnam

Depends on your business purpose, market experience, relationships, financial ability, etc., there are different choices to form your business in Vietnam.

Enterprise

Establishing an enterprise is the most popular choice of foreign investors when doing business in Vietnam. Since investors will have a legal entity with fully rights to conduct the business. A Foreign Direct Investment (“FDI”) Enterprise is considered as a Vietnamese Enterprise, and to be treated equally with local enterprises.

“Enterprise means an organization that has legal entity status, its own name, assets, office, and is registered in accordance with Vietnam Law on Enterprise to do business”


There are many types of enterprise under Law on Enterprise, such as: Joint Stock Company, Limited Liability Company, Partnership, etc. Find out more different between types of enterprise in Vietnam in this Article.


Steps to setting up an FDI Enterprise:

Step 1: Apply for investment policy (apply in few very special cases)

Step 2: Apply for Investment Registration Certificate (minimum 15 working days)

Step 3: Apply for Enterprise Registration Certificate (minimum 5 working days)

This Article will help you learning more about How to set up a company in Vietnam

 

Mergers and acquisitions (“M&A”)

 

is a special investment method in which investor no needs to set up new enterprise. By the capital contribution or share purchase in an existing domestic enterprises, foreign investors can become shareholders or members of Vietnamese enterprises. They may have right to management if the ownership ratio reaches the required level. Subject in some cases to ownership limitations which vary depending on the industry sector. Find out more investment condition in this Article.

M&A step guide:


Step 1: Legal Due Diligence and Financial Due Diligence (apply in some cases)

Step 2: Negotiate the price and sign M&A contract

Step 3: Register purchase share in Department of Planning and Investment (minimum 15 days)

Step 4: Amend the current Enterprise Registration Certificate of the Target Company (minimum 3 days)

 

Representative Office (“RO”)


Foreign traders with business relations or investment projects in Viet Nam may apply to open representative offices in Viet Nam. In general, it takes minimum 7 working days to register for a RO establish license. This is a very common form of registered legal presence in Viet Nam, particularly those in the first stage of a market entry strategy


It should be noted that a RO may not conduct commercial or revenue – egenerating activities (i.e. the execution of contracts, receipt of funds, sale or purchase of goods, or provision of services). A RO is only permitted to:

• Act as a liaison office;

• Conduct market research; and

• Promote its parent company’s business and investment opportunities. Thus representative offices can provide a wide range of ancillary support to their foreign-based parent companies.

 

Branch


This is not a common form of foreign direct investment and is only permitted in a few sectors (i.e. banking, law firm, audit firm…). A branch is not an independent legal entity. Branches of foreign companies are different from representative offices in that a branch is permitted to conduct commercial activities in Viet Nam.

 

Business Cooperation Contract


A BCC is a cooperation agreement between foreign investors and at least one Vietnamese partner in order to carry out specific business activities. This form of investment does not constitute the creation of a new legal entity. The investors in a BCC generally share the revenues and/or products arising from a BCC and have unlimited liability for the debts of the BCC.

 

Public And Private Partnership Contract


A Public and Private Partnership (‘PPP’) contract is an investment form carried out based on a contract between the government authorities and project companies for infrastructure projects and public services. PPP contracts include Build-Operate-Transfer (‘BOT’), Build-Transfer (‘BT’), Build-Transfer-Operate (‘BTO’), Build-Own-Operate (‘BOO’), Build-Transfer-Lease (‘BTL’), Build -Lease-Transfer (‘BLT’) and Operate-Manage (O&M) contracts.

SHOULD YOU ENGAGE IN A LAWYER AND AN ACCOUNTANT

Investment registration may seem like a major step in a new business venture for many people. Like anything, it can be daunting if you haven’t done it before and you definitely to make sure that it’s done correctly. Otherwise, you may waste a lot of time and pay fines if you do mistake, even a little one.

The process is generally quite smooth if you involve a professional to help you out. Every one wants to spend less time administering their business and more time running it. In Feline Legal, with many years experience in corporate services, lawyers and accountants will assist you and provide advance with forming your company. We also complete the paperwork, register your company and follow steps after that. You can save a lot of time and enjoy good services with reasonable price

For more information, please leave a message in chat box, or

 

 

 

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