In recent years, Vietnam has become an increasingly popular destination for foreign company expansion, due to its multiple free trade agreements, robust economic growth, and strategic proximity to major Asian markets, such as China. The country has also seen a significant boost in Foreign Direct Investment (FDI), with a reported increase of 40% in the first month of 2024.
In response to this growth, there is an increase in measures by the Vietnamese government to facilitate foreign business within the country. If you are considering investing or expanding your business operations into this market, then this article will serve as your starting point for company registration in Vietnam.
Limited Liability Companies in Vietnam
What are the different types of LLCs in Vietnam?
In Vietnam, the most common type of legal entity registered by foreign investors is a Limited Liability Company (LLC). The LLC is based on each member’s invested capital, limiting the liability of each to the recorded capital. Two types of LLCs can be started in Vietnam:
| Single-Member LLC | Multi-Member LLC |
| One member (individual or organization) | Between 2 and 50 members (individuals or organizations) |
| The owner has full authority over business operations | A members council is established by shareholders which convenes to determine company decisions. A designated director oversees day-to-day operations |
| The owner is only liable within the enterprise’s charter capital | The liability of each member is determined to the extent of the contributed capital |
| The owner can transfer or use any amount of the company’s charter capital | Purchase and transfer of capital/shares between members is strictly regulated by Vietnamese law |
Keep in mind that all capital contributions, also referred to as the paid-up capital, within a Multi-Member LLC must be made by the founders within 90 days of receiving the business registration certificate.
Shareholder structure of multi-member limited liability company in Vietnam
Multi-member LLCs must have at least 2 shareholders and up to a maximum of 50 members. In Vietnam, all limited liability companies must follow a specific business structure in terms of corporate hierarchy. This involves establishing and designating certain mandatory corporate officers during the company registration process:
- Members Council: This is the highest decision-making body formed by the founders. The council is comprised of the member shareholders or their authorized representatives and oversees corporate governance and decision-making.
- Council chairman: Elected by the council to lead and organize the member council’s work. Must be a council member or an authorized representative of a corporate member. Does not have to reside in Vietnam.
- Director / General Director: Responsible for managing day-to-day company operations and activities. This role can be allocated to a council member, but can also be outsourced. This corporate officer must reside in Vietnam and hold a Vietnamese work permit in the case of a foreign citizen.
Changing or adding members in a registered LLC
A limited liability company relies on the capital contribution by members in the form of assets. Any changes must therefore be approved by the other members. If you want to add new members to an existing LLC in Vietnam, the agreement of distribution of shares must be redefined by the owners, as members are not allowed to exchange or issue new shares.
While the addition of a new member depends entirely on the existing operating agreement and decisions of the Member’s council, there are several options for adding new members to a pre-established multi-member LLC:
- Issue new units which will increase the total capital of the company, hence requiring a re-definement of structural/procedural rules.
- Existing owners can transfer a portion of their units to the new member.
- A member can sell their unit or part of it to a non-member. This option is limited, as existing members have a preemption right to the unit being sold.
- Units can be assigned fully or partially by way of gift. If the recipient is a family member (spouse, parent, child, relative up to 3rd level of heirs) they will automatically become a member of the company. In other cases, council approval is required.
Key considerations for company registration in Vietnam
Foreign ownership explained
Depending on the type of industry you plan on conducting your business in, a limited liability company in Vietnam can qualify for up to 100% foreign ownership. If a specific industry or business sector is regulated, then there will be limits on foreign shares that you cannot exceed. Below are some of the most common industries of interest for foreign investors:
| Popular industries for foreign investment | ||
| Industries that allow 100% foreign ownership | Regulated industries ( ≤50% foreign ownership) | Restricted industries (no foreign ownership) |
| Trading E-commerceITEducationFood & beverageHospitalityConstructionconsultancy | BanksLogisticsLand, sea, and aviation transportationCredit companiesAdvertising servicesLegal servicesElectronic gamingAgriculture | FishingSecurity servicesWeapons and explosives manufacturingPublic services (postal, judicial) |
Business licensing in Vietnam
A Limited Liability Company must obtain a license for the areas of activity in which it conducts its business. The licenses can be obtained both before and after company registration in Vietnam. The most commonly required licenses are for operations concerning food, pharmaceuticals, E-commerce sales, importing, and exporting industries.
Business licenses in Vietnam generally have fixed-term validity ranging from 1 to 5 years. This means that to ensure compliance with local regulations, you will need to apply for license renewal before the expiration date. Emerhub’s team of advisors can help guide you through the licensing process and ensure that your industry licenses remain up to date.
How to register a company in Vietnam
It is important to apply thorough due diligence when planning your business expansion into Vietnam. Regardless of the corporate structure of your limited liability company, you must acquire the relevant licenses for your business operations, nominate the necessary corporate officers and properly manage capital investments.
Emerhub is well-versed in navigating the country’s regulatory landscape and our team of experts can assist you through our company registration service in Vietnam. We’ll ensure that your company is set up according to your business plans and in full compliance with Vietnamese foreign ownership regulations.
If you are considering expanding your operations and investing in Vietnam, contact us via the form below and Emerhub’s consultants will be in touch with you as soon as possible!
