Joint Stock Company in Vietnam

 14.04.2019

Starting company with foreign investment in Vietnam

Business in Vietnam

    Vietnamese law about foreign investments and business creation allows foreign citizens or entity to take a part in Vietnamese joint stock company as a shareholder. Process of opening is the same for all types of companies - first step is establish the company with Vietnamese members, and second step is transfer  their rights, obligation and share to foreign investors.

    Many entrepreneurs have a question, which one is better, joint stock company or limited liability company? Let's see what the difference is.

Main differences between LLC and JSC in Vietnam:

- Number of members - in JSC any number of shareholders, in LLC up to 50 members;
- The way of transferring or selling shares - in JSC within the first three years after the establishment of the company, all shareholders must approve to the sale or transfer of shares. However, after three years shareholders can independently sell, dispose of their shares in any way without the approval of other shareholders. In LLC, the procedure for transfer, sale of shares is always accompanied by the unanimous approval of all its members;
- Increase the capital of the company - JSC to do it much easier, since the company issues shares for borrowed funds, thus investors are guaranteed to participate in the distribution of future profits. LLC must have collateral instruments, or distribute a share in the charter capital to the investor.

 

THE COMMON POINTS FOR ALL TYPES OF JSC IN VIETNAM

Business in Vietnam

❖ Legislatively, the amount of the authorized capital is not regulated, but practice shows that the authorized capital of less than the indicated amounts entails a refusal to issue work permits.
❖ The founders are responsible in the limits of value their stocks.
❖ Minimum price for 1 stock is 10 000 VND.
❖ Controlling stake is 10 %.
❖ Types of stocks:

  1. Simple stocks;
  2. Preferred stocks with preferential right of vote;
  3. Preferred stocks with preferential right distribution of the dividends;
  4. Redeemable preferred stocks prescribed by the Charter of Joint Stock Company.

❖ Each company opening in Vietnam must pay:

  1. Patent at the rate of 2 000 000 VND (90 USD) / per year;
  2. USB flash drive for registration in the tax inspection and submission of tax reports  - 1 850 000 VND (80 USD) /per 18 months;
  3.  If you don’t have a trusted Vietnamese citizen who will allow personal information for the company registration, we can provide such person and you have to pay for Vietnamese member from 300 USD / per year, depending of his shares.

    So, choose the most convenient option for you. Prices and terms depend of the total amount of foreign investment:

I. FROM 1% TO 50% AUTHORIZED CAPITAL

Number of members - no less than 3;
- Minimal authorized capital for each member is 22 000 USD. In order to make an capital contribution, foreign investor have to open personal bank account in any Vietnamese bank. We offer Techcombank, ACB Bank, Nam A Bank. These are the most convenient banks for this purpose. If you cannot carry out making capital contribution by yourself for any reason, we can request to make this procedure using the borrowings (price 1-3%);
Foreign investor can be a director with authorized signatory in the bank;
- Participation Vietnamese co-founder in economic activity of the company - Vietnamese shareholders are rightful participant of the company and they have the right to take a part in economic activity of the company, any further actions with the company you may perform only if there are their signatures in the Record of Board of Directors . Our company provides a trusted person who will not claim for taking part in economic activity of the company. Anyway we will prepare necessary documents for total safety of the foreign investors;
- The term of registration - 15 working days;
- The types of business without the additional permissions:

  • Hospitality business (you can build or rent hotel);
  • Restaurant, cafe, catering (without alcohol);
  • Travel agency (only sales tours of other companies);
  • Advertising;
  • Activity is connected with IT sphere;
  • Consulting services is not connected with manufacture;
  • Production and sales wheat products.

+

The company with share of foreign investor in authorized capital no more than 50% don’t need to get permission for the foreign investment and some additional activities. If you need additional activities they're cheaper and quicker.

-

Weakness is only one, but it’s significant - Vietnamese partners can interfere into the business. However, our company prepares the set of documents for safety of foreign investor and so there is no weakness. Nevertheless there are skeptics who don’t like Vietnamese participation.

Anyway the decision is yours!
Price for registration of the company is 1 500 USD.

 

II. FROM 50% TO 99% AUTHORIZED CAPITAL OF FOREIGN INVESTOR

Number of members- no less than 3;
- Minimal authorized capital for each member is 22 000 USD. In order to make an capital contribution, foreign investor have to open personal bank account in any Vietnamese bank. We offer Techcombank, ACB Bank, Nam A Bank. These are the most convenient banks for this purpose. If you cannot carry out making capital contribution by yourself for any reason, we can request to make this procedure using the borrowings (price 1-3%);
- Foreign investor can be a director with authorized signatory in the bank;
- Participation Vietnamese co-founder in economic activities of the company - If Vietnamese shareholders have the shares of 10% or more, they are entitled to vote at the meeting of Board of Directors and cancel the decision, that way if Vietnamese shareholders have the shares less than 10%, they cannot take the part in economic activity of the company;
- The term of registration - 35 working days;
- The companies with share of foreign investment more than 50% in authorized capital must get the permission for its contribution;
- The types of business without the additional permissions:

  • Hospitality business (you can build or rent hotel);
  • Restaurant, cafe, catering (without alcohol);
  • Travel agency (only sales tours of other companies);
  • Advertising;
  • Activity is connected with IT sphere;
  • Consulting services is not connected with manufacture;
  • Production and sales wheat products.

+

You are the sole owner and managing director of the company.

-

High price and long term of getting additional activities.

Anyway the decision is yours!
Price for registration of the company is 2 000 USD.

 

III. 100% AUTHORIZED CAPITAL OF FOREIGN INVESTOR

- Number of member are no less than 3;
- Minimal authorized capital for each member is 22 000 USD. In order to make an capital contribution, foreign investor have to open personal bank account in any Vietnamese bank. We offer Techcombank, ACB Bank, Nam A Bank. These are the most convenient banks for this purpose. If you cannot carry out making capital contribution by yourself for any reason, we can request to make this procedure using the borrowings (price 1-3%);
- Foreign investor can be a director with authorized signatory in the bank;
- Participation Vietnamese co-founder in economic activities of the company -Vietnamese members don't participate;
- The term of registration - 45 working days;
- The companies with share of foreign investment more than 50% in authorized capital must get the permission for its contribution;
- The types of business without the additional permissions:

  • Hospitality business (you can build or rent hotel);
  • Restaurant, cafe, catering (without alcohol);
  • Travel agency (only sales tours of other companies);
  • Consulting services is not connected with manufacture

+

You are the sole owner and managing director of the company.

-

High price and long term of getting additional activities.

Anyway the decision is yours!
Price for registration of the company is 2 500 USD.

 

Trust "LEADERSHIP TSC" your business routine and get the result on time.

 

Read also:

Documents for starting company in Vietnam

Limited Liability Company in Vietnam

Branch of Company in Vietnam