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Setting up operations in Vietnam from abroad may seem like a difficult task. But the process will go smoothly if you understand how to set up an office in Vietnam.
In this article, we will tell you everything you need to know to establish a company in Vietnam. We will give you an overview of company registration in Vietnam. We will also discuss how to choose a location for your office and how to set it up. Additionally, we will provide you with key insights about hiring employees in Vietnam.
The process to register a business in Vietnam is relatively simple. This is one of the many reasons why foreign investors open businesses in Vietnam.
Limited Liability Company in Vietnam
The limited liability company (LLC) is one of the most commonly set up legal entities in Vietnam. Depending on the industry, an LLC may be 100% foreign-owned.
Businesses that can have 100% foreign ownership include:
- Trading (wholesale and retail)
- Short-term training centers and language schools
Based on Emerhub’s experience, the average time it takes to set up an LLC is about one month.
Note that some businesses need sublicenses or operational licenses. Examples of such businesses include:
- Short-term training centers and language schools
Representative Offices in Vietnam
Another way to expand operations to Vietnam is with a representative office. Representative offices cannot generate income in Vietnam. However, it can perform tasks to support its parent company. Allowed activities for representative offices include:
- Promoting the parent company’s business abroad
- Conducting market research
- Building relationships with local distributors and suppliers
Through Emerhub, you can set up your representative office in as little as 3 weeks.
The first step to set up an office in Vietnam is picking a location. The top choices among investors are Hanoi or Ho Chi Minh City. Both cities are business hubs in Vietnam. They have adequate infrastructures and facilities to support businesses.
There are other factors to consider when selecting a location for your office. For example, it must be accessible to both clients and employees. Additionally, you must consider how the location will affect your image and branding.
Set up an Office in Ho Chi Minh City in Vietnam
Compared to other areas in Vietnam, Ho Chi Minh City is more business-oriented. There is a high demand for resources and real estate in Ho Chi Minh City. In line with that, rental fees and operational expenses are higher than in other parts of Vietnam.
District 1 of Ho Chi Minh City has many office buildings so you will have many options. However, District 1 has the highest operational costs. District 3 is also quite popular among investors. It is close to District 1, but the rental fees are lower.
District1 and District 3 are best suited for the following types of businesses:
- Business services
- Banking and finance
- Food and beverage
Other districts in Ho Chi Minh City have their own advantages. For example, manufacturing businesses often set up offices in District 2, Tan Phu, or Thu Duc because they are industrial zones. Meanwhile, import and export businesses usually choose districts near the port or airport.
Set Up an Office in Hanoi in Vietnam
Hanoi is the capital of Vietnam, and as such, the political center of the country. It is the second most developed city in Vietnam, just behind Ho Chi Minh City. Its resources and infrastructure are comparable to Ho Chi Minh. However, the operational and labor costs are lower in Hanoi.
The Hoan Kiem district is the commercial center of Hanoi. You will find many large corporations and bank headquarters in this district. Many consulting and finance companies set up offices in Hoan Kiem for this reason.
There are other notable districts in Hanoi where investors can set up an office. Many IT companies choose the Cau Giay district because it has a special high-tech park. Investors can also take advantage of the highly populated districts Dong Da and Ba Dinh by setting up retail businesses.
Alternatives to Ho Chi Minh City and Hanoi
When you set up an office in Vietnam, there are choices other than Ho Chi Minh City and Hanoi. Many investors are also looking into the following locations:
- Da Nang. This city is on the coast of the South China Sea and is an important port city in Vietnam. It is also the commercial and educational center of Central Vietnam. This is also a hub for startup tech companies. Investors can set up an IT company here with Vietnam’s talented pool of developers.
- Nha Trang. This coastal city is primarily known for its tourist spots. However, Nha Trang also has industrial parks to accommodate manufacturing businesses.
- Quang Ninh. The agricultural sector in Quang Ninh is strong. Investors can also look into the tourism and mineral extraction industries. Quang Ninh is also a trading hub between Vietnam and China. As such, it also provides opportunities for trading and logistics companies.
Average Cost of Leasing an Office in Vietnam
The cost to lease office spaces in Vietnam depends on the rating of the building. The Ministry of Construction rates buildings in Ho Chi Minh City and Hanoi. The rating of a building depends on its architecture, infrastructure, and management services. The types of buildings are A, B, and C with A having the highest grade and C with the lowest.
The following table shows the average cost to lease an office in Ho Chi Minh City and Hanoi in 2020.
|Building Grade||Monthly rental fee per sqm||Monthly management* fee per sqm|
|A||USD 35 to USD 50||USD 5 to USD 7|
|B||USD 25 to USD 35||USD 5 to USD 6|
|C||USD 18 to USD 25||USD 4 to USD 5|
*This covers costs for security, parking, building maintenance, cleaning, and safety
Vietnam’s economy is booming which is attracting a lot of foreign investors. Real estate developers are unable to keep up with the demand for offices in Type A buildings. The cost to rent an office in Ho Chi Minh City or Hanoi shows this. Rental fees for offices in these cities are quite high when compared to other Southeast Asian cities.
Emerhub can assist in finding office spaces for your business. We will look for suitable properties and also coordinate with landlords on your behalf. We will also take care of matters related to the lease contract.
Office Fit-Out in Vietnam
After finding a location for your office, you will need to fit out your office. This is an important step when you set up an office because of a couple of reasons.
- Branding and appearance. For some businesses, their branding and appearance are very important. This is particularly true for businesses that often entertain clients in their office.
- Impact on employees. A well-designed office will also positively affect employees. The design of your office must promote productivity. Your office must also take into account your employees’ physical and mental well-being when designing the space.
A qualified office fit-out agency will help you design your office. Office fit-out services in Vietnam usually cost around USD 150 to USD 300 per square meter.
You must be very discerning with your service provider. Lower rates often mean a lower quality of work. Emerhub can connect you with top-tier agencies who can fit out your office per your needs.
Workforce in Vietnam
Vietnam has a young and growing workforce. The median age in Vietnam is just 32.5 years old according to Worldometers. Additionally, 70% of the population is under 35 years old per the World Bank’s data on Vietnam.
The Vietnamese government also allocates 20% of its finances towards education. This shows that Vietnamese workers are highly skilled and educated.
How to Hire Employees in Vietnam
Finding employees in a foreign country is a tricky task. You need to figure out the most common methods workers use to find new opportunities. You must also understand labor regulations and salary standards, among others. A simple solution for this is to work with a professional recruiter.
Recruiters are knowledgeable about the employment landscape of Vietnam. They know how to source top candidates. They will also be able to help you create a compensation package to attract candidates.
Emerhub can help you with your recruitment tasks in Vietnam. We can facilitate the whole process per your requirements. Our usual recruitment process involves the following steps:
- Drafting the job description. Just tell us the details of the role and your requirements for the candidate. Our recruitment will draft a high-quality job description to attract potential candidates.
- Finding candidates. We will use our database and networks to source the best candidates for the role you are offering.
- Recommending candidates. After screening applicants, we will provide you with our recommendations.
- Interview. Our team will facilitate the scheduling of interviews.
- Job offer. Emerhub’s recruitment experts will help you come up with an attractive job offer that also satisfies local labor regulations. We will then extend the offer to the selected candidate.
We can customize the process to suit your specific needs. In addition to this, Emerhub can also act as your employer of record in Vietnam. This will allow you to hire local employees before registering a business in Vietnam.
Emerhub can help you with the whole process of setting up a business in Vietnam. From registering your company to setting up your office, and even recruiting employees. Fill out the form below or send us an email at [email protected] and our consultants will help you get started in setting up an office in Vietnam.
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