What are the benefits of registering a company in Vietnam

What are the benefits of registering a company in Vietnam and how to register company there?

Vietnam is one of the fastest-growing economies in Southeast Asia, with a young population, a stable political system, a strong manufacturing sector, and an open business policy. Many foreign investors have been attracted by the opportunities and advantages of doing business in Vietnam, such as low labor costs, tax incentives, government support, and trade agreements. However, there are also some challenges and risks that need to be considered, such as complex regulations, bureaucracy, corruption, and cultural differences. In this blog post, we will explore the benefits and challenges of registering a company in Vietnam and provide some guidance on how to do it.

Benefits of registering a company in Vietnam

Some of the main benefits of registering a company in Vietnam are:

- Growing economy: Vietnam has been experiencing rapid economic growth since the enactment of the "doi moi" or "renovation" policy in 1986, which transformed the country from an agrarian to a more industrial and market-based economy. Vietnam is also one of the largest recipients of foreign direct investment (FDI) in the region, with FDI inflows reaching $28.5 billion in 2020.

- Developing infrastructure: Vietnam has been investing heavily in improving its infrastructure, such as roads, bridges, ports, airports, railways, power plants, and telecommunications. The government has also launched several major projects to enhance connectivity and competitiveness, such as the North-South Expressway, the Long Thanh International Airport, and the Ho Chi Minh City Metro. These infrastructure developments create opportunities for businesses in various sectors, such as construction, engineering, logistics, tourism, and energy.

- Manufacturing: Vietnam has emerged as a leading manufacturing hub in Southeast Asia, especially in electronics, textiles, footwear, furniture, and machinery. The manufacturing sector accounted for 16.5% of Vietnam's GDP in 2019 and employed about 25% of the labor force. Vietnam has several advantages that make it attractive for manufacturing businesses, such as low labor costs (the average wage is only $2.99 per hour), a young and skilled workforce (60% of the population is between 25 and 49 years old), abundant natural resources (such as coal, oil, gas, iron ore, and bauxite), and preferential access to major markets (such as the US, EU, China, Japan, and Korea) through various trade agreements.

- Ease of doing business: Vietnam has made significant improvements in its business environment to attract foreign investment and encourage entrepreneurial development. The government has simplified and streamlined many procedures related to starting a business, paying taxes, getting electricity etc,.

What are the risks of doing business in Vietnam and how to register company there?

Vietnam is a dynamic and emerging market in Southeast Asia, with a lot of potential and opportunities for foreign investors. However, doing business in Vietnam also involves some risks and challenges that need to be addressed and overcome. In this blog post, we will discuss the main risks of doing business in Vietnam and provide some tips on how to register company there.

Tips for registering a company in Vietnam

Some of the tips for registering a company in Vietnam are:

- Choose the right type of company: Depending on your business objectives, budget, and preferences, you can choose from different types of companies in Vietnam, such as limited liability company (LLC), joint-stock company (JSC), or representative office. Each type has its own advantages and disadvantages, as well as different requirements and processes. For example, an LLC is suitable for small and medium-sized businesses that want to have full control and flexibility over their operations, while a JSC is more suitable for large-scale businesses that want to raise capital from the public or list on the stock exchange. A representative office is not a legal entity, but a liaison office that can conduct market research, promotion, and networking activities, but not generate revenue or sign contracts.

- Check the foreign ownership regulations: Vietnam allows 100% foreign ownership of a company in most sectors, such as trading, manufacturing, IT, and education. However, some sectors have foreign ownership restrictions or limitations, such as advertising, logistics, tourism, banking, insurance, and finance. In these cases, you may need to find a local partner or obtain approval from the relevant authorities. You should also check if your business activities are regulated by the World Trade Organization (WTO) agreements or other local laws that may affect your investment conditions.

- Prepare the necessary documents: To register a company in Vietnam, you need to prepare and submit various documents to the Department of Planning and Investment (DPI), such as application forms, business plan, charter, passport copies, bank statements, etc. You should also have your documents translated into Vietnamese by a certified translator and notarized by a public notary. You should also consult with a local lawyer or consultant to ensure that your documents comply with the Vietnamese laws and regulations.

- Follow the registration process: The registration process of a company in Vietnam consists of two main steps: obtaining an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC). The IRC is issued by the DPI to approve your investment project and its conditions. The ERC is issued by the Business Registration Office of the DPI to establish your company as a legal entity. The process may take from 3 to 6 weeks depending on the type of company and the sector. After obtaining the IRC and ERC, you need to complete some post-registration procedures, such as making a company seal, opening a bank account, registering for tax and social insurance, etc.

- Hire a professional service provider: Registering a company in Vietnam can be complex and time-consuming, especially for foreign investors who are not familiar with the local laws and practices. Therefore, it is advisable to hire a professional service provider who can assist you with the registration process and handle all the paperwork and formalities on your behalf. A professional service provider can also provide you with other services such as accounting,