Doing business in Vietnam: Advice from a Vietnamese lawyer
Doing business and creating an enterprise in Vietnam is now both simple and quick for foreign investors. An investment by the creation of a new legal entity is the main implementation method in Vietnam.
Doing business in Vietnam: What form should you choose?
Foreign investors have the choice between a 100% foreign capital company or a joint venture to create a business in Vietnam. The joint venture is a company formed on the basis of a contract signed between two or more investors of different nationalities. A joint venture provides access to the foreign market more easily, and is useful to gain knowledge of the cultural-socio-economic characteristics of the market. However, the risk of conflict and disagreement between the involved partners is higher. The company with 100% foreign capital, in turn, ensures greater freedom in the operation and organisation of the company, but market access will prove to be slightly more difficult.
Investors making the choice of an enterprise with 100% foreign capital when they decide to start a business in Vietnam have the choice between three main private company forms:
- a single member limited liability company (SLLC)
- a multi-member limited liability company (MLLC)
- a shareholding company (SC), also referred to as a joint stock company
The methods of doing business in Vietnam
Before doing business in Vietnam, we must know the correct procedure to follow. A foreign company must obtain an investment certificate called an IRC in order to then proceed with registration. In order to be registered, any company must obtain a document certifying its existence, called an ERC. These procedures have been simplified and made more flexible recently, and the time taken to obtain the certificates has been reduced since the adoption of the 2014 laws on businesses and investments.
Doing business in Vietnam: the attractiveness of an emerging country
Vietnam is a country with a young workforce, both dynamic and cheap. Vietnam’s population is over 90 million and it’s domestic consumption is increasing dramatically. The Vietnamese economy is wide-open for internationalization and is attracting more direct investment from abroad. Vietnam also has many natural resources and raw materials. The geographical situation of Vietnam and its membership in many international treaties and customs unions also make it a highly attractive country to invest in.
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