Starting a Business in Vietnam

Standardized company

Legal Form: cong ty trach nhiem huu han – Private Limited Liability Company
City: Ho Chi Minh City

Registration Requirements Details

Procedure 1. Check the proposed company name; obtain a business registration certificate from the local business registration office under the Department of Planning and Investment

Time to complete: 14 days

Cost to complete: VND 200,000 (official fees)

Comment:

According to Article 15 of Decree 88/2006/ND–CP, to file for a business registration certificate, the founders of a limited liability company with two or more members must submit the following:
- A request for business registration on the standard form issued by the Ministry of Planning and Investment.
- A draft company charter signed in full by the legal representative and, in a company with two or more members, by the members or their authorized representatives.
- A list of members of the company on the standard form issued by the Ministry of Planning and Investment, which includes
- Valid copy of one personal identification document, if a founding member is an individual.
- Copy of the decision of establishment, the business registration certificate or charter (or other equivalent document), a valid copy of one of the personal identity documents for an authorized representative, and the corresponding decision on authorization, if a founding member is a legal entity.
- Confirmation of the legal capital from the authorized body or organization if the company engages in lines of business subject to legal capital requirements.
- Valid copy of the practicing certificates for the partners, directors, and any other managerial individual if the company conducts business for which a certificate is required by law.Forms can now be downloaded, and the application can be submitted online. The Business Registry Office must verify the online application for completeness and correctness and reply via email within 5 days from the day of the received application. If the application must be revised, the Business Registry Office must reply once again within a day of application revision. The registrant must submit the original application and related documents within 10 days of submitting the correct online application and must receive the license on the same day.

Pursuant to Article 15.2 of the Law on Enterprises, No. 60/2005/QH11, issued by the National Assembly on November 29, 2005 (effective July 1, 2006) and Article 20.1 Decree No. 88/2006/ND-CP, on business registration, issued by the government on August 29, 2006, the legal time for obtaining a business registration certificate is 10 working days. According to Article 23 Decree 88/2006/ND-CP, business registration fees must be determined on the basis of the number of lines of business for which business registration is made.

Procedure  2. Obtain a seal-making license from the Public Security

Time to complete: 6 days

Cost to complete: VND 20,000

Comment:

A seal-making license is obtained at the Administrative Department for Social Order (ADSO), which is under the Municipal Police Department. The required documents include an application form provided by the ADSO, a certified copy of the business registration certificate, and a notarized copy of the certificate of business registration. On average, two office visits are required for this process.Seal-making is governed by Decree 58/2001/ND–CP (dated August 24, 2001), which replaces Decree 62/CP of 1993. Most business transaction documents must be signed and stamped before they are considered valid and legal. Without a seal, an enterprise cannot register with the tax department, open a bank account, or apply for operating facilities and services (e.g., telephone, utilities, office leasing)

Pursuant to Circular No. 78/2002/TT–BTC of the Ministry of Finance (dated September 11, 2002), the fee for the seal’s certificate of registration is VND 20,000. The application file, including a certified copy of the business registration certificate, is submitted to an ADSO officer at the Business Registration Office.

Procedure  3. Make a company seal

Time to complete: 6 days

Cost to complete: VND 165,000 – VND 370,000 for bronze seal

Comment:

Procedure  4. Pick up company seal

Time to complete: 1 day

Cost to complete: no charge

Comment:

The seal must be made by the seal-making service recommended by the ADSO. The founder must submit the original seal-making application and license to the seal maker.

Procedure 5. Open a bank account

Time to complete: 1 day

Cost to complete: no charge

Comment:Each bank requires a different minimum deposit to open an account. For instance, whereas Vietcombank requires the fixed amount of VND 5 million for an account in VND and USD 500 for one in USD, Asian Commercial Bank requires VND 1 million for a VND account and US 100 for a USD account.To open the account, the bank requires a bank-issued application form, the company seal, the company’s business registration certificate, and the resolution of the management board on the authorized signatures.

Procedure 6. Publish announcement in a daily newspaper

Time to complete: 5 days

Cost to complete: VND 700,000

Comment:

Under the Law on Enterprises (passed by the National Assembly on November 29, 2005), the notice of company formation to be publicly announced must include:
- Company name.
- Address of headquarters, branches, or representative offices.
- Line of business.
- Charter capital for limited liability companies.
- Full name, home address, nationality, identity card number, passport or other relevant personal certification, and the number of establishment or business registration of company owner or members.
- Full name, resident address, nationality, number of identification card, and passport or other personal certification of the company legal representative.
- Location of business registration.The fee depends on the newspaper, the page, and the number of pages of the notice. In addition to the daily newspaper, other mediums in which the notice may be published include the Business Registration Office’s company information network or e-newsletter.

Procedure 7. Apply for a tax code at the Municipal Taxation Department; pay business license tax

Time to complete: 7 days (simultaneous with previous procedure)

Cost to complete: VND 1,000,000 (business license tax)

Procedure 8. Buy pre-printed VAT invoices from the Municipal Taxation Department or obtain and print self-printed VAT invoices

Time to complete: 14 days

Cost to complete: If buying the pre-printed VAT Invoices: VND 20,000 per book (50 copies)

Comment:

To obtain VAT invoices, company founders must submit the following documents to the Municipal Tax Department:
- Managing director’s delegation of authority to the procurement agent (contact the Tax Department to buy invoices).
- Application for buying preprinted invoices (standard form available).
- Identify card of the procurement agent.
- Business registration certificate and copy.
- Tax registration certificate and copy.After receiving the company’s completed application, the Municipal Tax Department schedules an appointment for invoice purchase within 5 days. During this 5-day period, a tax officer visits the company’s office to certify its existence and issue the company a certification of the company office location. Note that the first purchase is restricted to not more than two books (100 copies).To register for self-printing of invoices, company founders must submit an application on a standard form, along with (a) a sample self-printed invoice, including all statutory details; (b) a map showing the location of the company’s office or copy of the lease contract if the premises are leased, certified by the ward commune people’s committee; (c) the general director’s identification card; (d) a copy of the business registration certificate; and (e) and the tax registration certificate and copy.

It may take 7–10 days to register the self-printed invoices with the Municipal Taxation Department, and more time for the company to self-print the invoices.

It may take 7–15 days for printing the invoices at a printer authorized by the General Taxation Department of Vietnam. After having the invoices printed and before using them, the company must register the invoice serial numbers with the Municipal Taxation Department.

Procedure  9. Register with the local labor office to declare use of labor (Municipal Department for Labor, Invalids and Social Affairs).

Time to complete: 1 day (simultaneous with previous procedure)

Cost to complete: no charge

Comment:

Within 30 days of starting operations, the employer must register all employees and their qualifications with the Labor Office (in conformity with set forms). The relationship between the employer and its employees are regulated by the Labor Code and set forth in labor contracts.

Procedure  10. Register employees with the Social Insurance Fund for the payment of health insurance and social insurance.

Time to complete: 1 day (simultaneous with previous procedure)

Cost to complete: no charge

Comment:

The company must register with the Social Insurance Fund all employees who have contracts for 3 months or longer. The employer must complete a form provided by the Hanoi Social Insurance and include the following information: the employee name and date of birth, salary (as stated in the labor contract), the social insurance book serial number (for employees already issued with those books), a certified copy of the company’s business registration certificate, and a copy of each labor contract.The Social Insurance Office will issue an insurance registration book for each new employee that was not issued such book by the previous employer. The employer is responsible for paying social and health insurance contributions for each employee. Since the health insurance merged with the social insurance funds, payment is made (monthly or quarterly) directly to the Social Insurance Fund. Health insurance certificates are issued during the first month of the year.

Procedure 11. Register for trade union with Vietnam General Confederation of Labour

Time to complete: 7 days (simultaneous with previous procedure)

Cost to complete: no charge

Comment:

The employer must register with the local trade union or industry trade union (as defined below) no later than 6 months from the date it starts operations. This procedure is mandated by Article 3 of Decree 96/2006/ND–CP (dated September 14, 2006), Providing Guidelines for Implementation of Article 153 of Labour Code on Provisional Executive Committees of Trade Unions in Enterprises.The term “trade union” includes (a) provincial or municipal-level confederations of labor under the Vietnam General Confederation of Labour; (b) central-level industry trade unions; (c) trade unions of corporations under the Vietnam General Confederation of Labor; (d) confederations of labor of districts, towns, and provincial cities; (e) local-level industry trade unions, (f) trade unions of processing zones, industrial zones, and high-tech zones; (f) trade unions of corporations; and (g) superior trade unions of other establishments. These trade unions are responsible for establishing a trade union for the company, according to the provisions of the Labour Code, the Law on Trade Unions, and the Charter of the Trade Union of Vietnam, to represent and protect the lawful and legitimate rights and interests of the employees and the labor collective.If a company trade union is not established within 6 months, the superior trade union shall appoint a provisional executive committee of the trade union to represent and protect the lawful and legitimate rights and interests of the employees and the labor collective. This mandate is provided for by the Labour Code, the Law on Trade Unions, and the Charter of the Trade Union of Vietnam. The term of the provisional executive committee of the trade union and the extension of that term is subject to the regulations of the Vietnam General Confederation of Labor.

Posted by VBN on Mar 7 2010. Filed under Investment process. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry