How to Start a Business in Vietnam

Starting a business in Vietnam.

Once a very poor country, Vietnam now has a growing economy that encourages entrepreneurship and development. Unfortunately, starting a business in the country is not straightforward and has many stages before completion. Nevertheless, with the help of a skilled and qualified lawyer, an entrepreneur can create a business.

Instructions

1. Determine your business name by checking with the Ministry of Planning and Investment, which will verify whether the selected business name is available for use. Visit a regional branch and fill out the standard form. It is also available online. At a cost of 200,000 VND (approximately $10.51 USD) and over a 14-week period, the Ministry will conduct a name search. Once approved, the business will receive a certified business registration certificate, a copy of which should be notarized by a lawyer.

2. Obtain a seal-making license from the Administrative Department for Social Order (ADSO) which is a part of the Municipal Police Department. Visit the ADSO to request the necessary application form. The completed form must be submitted with the following: a certified copy of the business registration certificate, as provided by the Ministry of Planning and Investment, and a notarized copy of the certificate of business registration. This process will require at least two visits to the ADSO office and will take approximately one week to complete. The cost is 20,000 VND (approximately $1.05 USD) and once completed, a business seal can be created.

3. Announce formation of the new business via publication in a daily newspaper. This notice of formation is required by law and must include the name of the business, address, type of business and where the business was registered amongst other things. The cost will be approximately 700,000 VND (about $36.79 USD).

4. Apply for a tax code at the local Tax Department within 10 days of receiving the certified business registration certificate. The tax code form is available online and after submitting the completed form, it will take approximately five days to process. The fee is 1 million VND (approximately $52.56 USD).

5. Register with the local Tax Department for Value Added Tax (VAT) purposes. To do this, purchase pre-printed VAT invoice booklets at the cost of 20,000 VND (approximately $1.05 USD) per book. Buy at least 50 books.

6. Register employees with the local office of the Ministry of Labor, Invalids and Social Affairs. This must be done within 30 days of commencing business operations. There is no cost for registration.

7. Register all employees who have a contract of three months or more with the Social Insurance Fund. To do this, request an application form from the Hanoi Social Insurance Company. The completed form will be sent by the company to the Social Insurance Office, which will finalize the process. The application is free and can be completed in approximately one day.

8. Register the business with a local trade union within six months of operation. This registration is free and will be completed in one week.

Tips & Warnings

• Contact the American Chamber of Commerce in Vietnam for advice and help before starting your business. Keep in mind that the business structure you choose will affect the capital requirements under Vietnamese law. An Individual Company with only one person requires a share capital of 300 million VND ( $15,768.69 USD). A Private Limited Liability Company, which requires a minimum of two partners, must have at least 600 million VND in capital ($31,537.39 USD). Finally, a Joint Stock Company, which needs a minimum of sever partners, must have 500 million VND ($26,281.16 USD) in capital.

• You will likely need an experienced lawyer to correctly obtain and fill out most of the forms necessary to start your business. An experienced lawyer will also know the local agencies to which your business must register.

References

• Doingbusiness.org: Starting a business in Vietnam
• Ministry of Planning and Investment: Business Registration Application Form
• E-regulations.org: Sample Application For Tax Code Registration

Resources

• Embassy of Sweden Hanoi: Starting A Business In Vietnam?
• Ministry of Planning and Investment: Agency for SME Development
• American Chamber of Commerce in Vietnam
• The Federation of International Trade Associations: Operating a Business in Vietnam