A joint venture in Vietnam is a popular option for foreign investors looking to collaborate with local partners, especially in sectors with foreign ownership restrictions or where local market insights are crucial.
In this article, we will provide you an overview of how to establish a joint venture in Vietnam and the key requirements you need to know.
Understanding Joint Ventures in Vietnam
A joint venture in Vietnam is a legal entity formed by a partnership between two or more parties, often involving foreign and domestic investors. This structure allows companies to collaborate, combining resources, expertise, and capital to pursue business opportunities in the Vietnamese market.
In some restricted industries, Vietnamese law mandates that local shareholders hold a minimum stake in the venture. This partner can be a 100% Vietnamese-owned company or, in some cases, an individual Vietnamese national. This partnership is often essential to meet both legal and operational requirements.
Additionally, although Vietnam allows 100% foreign ownership in industries like manufacturing, information technology, and education, some sectors have limits on foreign ownership or require a local partner. Key examples include:
- Banking: Foreign ownership is limited to 30% in Vietnamese joint-stock banks.
- Land transportation: 49% cap for passenger transportation, 51% for goods transportation.
- Sea transportation: Foreign ownership is limited to 49%.
- Logistics: 50% cap for container handling services.
Emerhub’s local experts will help you navigate the setup process and ensure compliance with Vietnam's regulations.
Legal Requirements for Setting Up a Joint Venture
The legal requirements for setting up a joint venture in Vietnam vary depending on the type of business and industry. Generally, you'll need the following documents:
- Joint Venture Agreement
- Company Charter
- Investment Registration Certificate (IRC)
- Business Registration Certificate (BRC)
- Proof of capital contribution
- Additional licenses for specific industries
In terms of capital contributions, there is no general minimum capital requirement for most industries in Vietnam. The Department of Planning and Investment (DPI) will review your proposed capital to ensure it covers business expenses and is reasonable and realistic to support the Joint Venture’s objectives.
However, some sectors have specific capital requirements, such as:
- Real estate: VND 20 billion (approximately USD 860,000)
- Consumer finance: VND 500 billion (approximately USD 22 million)
- Audit services: VND 6 billion (approximately USD 260,000)
Steps to Establish a Joint-Venture in Vietnam
Starting a joint venture in Vietnam involves careful planning and coordination with local authorities to secure permits and meet regulatory requirements. Any missteps can cause delays in your establishment and overall approval processes.
Emerhub’s company incorporation experts simplify these procedures by managing all aspects of your joint venture setup, ensuring compliance and efficiency at every stage:
1. Obtain an Investment Registration Certificate (IRC)
Obtaining an IRC is the first key milestone and is mandatory for all foreign-invested projects—including joint ventures.
The IRC application includes the JV contract, proposed charter capital, business scope, location, and financial plans. The Department of Planning and Investment evaluates your documents and issues an IRC if everything is in order.
2. Secure the Business Registration Certificate (ERC)
After receiving the IRC, you must apply for the ERC to formally register the joint venture as a legal entity in Vietnam. This can be an LLC or a Joint Stock Company since both LLCs and JSCs can be wholly foreign-owned or joint ventures.
To do that, you need to submit your company charter details, shareholder information, and other corporate formation documents. Once approved, you will receive an ERC, confirming the joint venture’s legal status in Vietnam.
It is advisable to talk to our business incorporation experts who will guide you on the most appropriate legal structure based on your planned business activities.
3. Register for Tax and Contribute Capital
Once the ERC is obtained, the next step is to apply for a Tax Identification Number and fulfill tax registration requirements within 30 days.
Furthermore, you must ensure to contribute the pledged capital within 90 days from the date of obtaining the ERC, or within the timeframe agreed upon in the JV agreement.
4. Secure Additional Licenses or Permits
Depending on the nature of your planned business activities, you may require further permits. For example, a trading company in Vietnam needs a trading license, while a manufacturing company requires a construction permit and fire safety license. The approval process for these licenses can take anywhere from a few weeks to several months.
You can consult with our local experts for each industry-specific requirement and additional licenses to start your business operations in Vietnam.
Set Up Your Joint Venture in Vietnam with Emerhub
Setting up a joint venture in Vietnam requires a thorough understanding of local regulations and requirements to stay compliant with laws. Emerhub’s local experts will prepare the necessary documents and handle the entire process on your behalf from registration to licenses and permits.
Furthermore, we will assist with ongoing compliance, including initiating timely renewals and detailed tax reporting.
Planning to establish a joint venture in Vietnam? Fill out the form below and one of our business advisors will get in touch with you.