A unipersonal limited liability company.
A joint-stock company, which de facto is the only other alternative, requires in fact at least three shareholders.
Practical Guide
A unipersonal limited liability company.
A joint-stock company, which de facto is the only other alternative, requires in fact at least three shareholders.
With the exception of regulated industries (e.g. banking, insurance etc.), there is no statutory minimum share capital (called “charter capital” in the local jargon), but – and this can be tricky and even frustrating – foreign invested companies go through an approval procedure conducted at a Provincial level, in which officials assess if the charter capital is sufficient for the declared scope of business. In practical terms the charter capital is never below the equivalent in VND of USD50-100,000, entirely paid up, which of course can be used for the company’s expenses.
If the single member is a company, a supervisory board or a single supervisor must also be appointed by the single member itself. The supervisor cannot hold other positions in the company.
There are no particular requirements the single member must comply with, but, once it decides to establish a company in Vietnam, the main requisites are:
The single member needs to apply for two certificates:
In order to obtain the IRC, if the investment is considered big or strategic, then pre-emptive approval by the Prime Minister’s office is necessary, after which the steps are the same. The single member needs to lodge its application together with the following documents:
Upon obtainment of the IRC, the single member:
Clearly, the intricated procedures and even certain inconsistencies between the Investment Law, the Enterprise Law and tax regulations can be quite burdensome, and so is the determination of the charter capital, as explained above. Small procedural differences in various Provinces’ departments may also have an impact. Companies that wish to engage in retail also need to pay attention to the not-so-easy procedure for the obtainment of a trading licence. However, in 2021 a new Investment Law will be enacted and Vietnam, especially in these months of pandemic and following the execution of several free trade agreements, including the one with the EU, has shown a massive potential for both internal growth and foreign investors.
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