Setting Up A Business In Viet Nam 2019 (Forms of Business)
Viet Nam is becoming the attractive place to invest in Asia because of favourable government policies and laws, in combination with the young and competitive workforce and other advantages. The notable point is that Viet Nam joined World Trade Organization in 2007 and Viet Nam opened a great number of lines of business. Besides, Viet Nam has signed some trade agreements with Japan, Korean, EU to create and encourage the foreign investors coming to Viet Nam.
The foreign investors can set up a company or set up a dependent entity:
Forms of Company:
1. Limited- Liability Company (LLC):
There are two kinds of LLC, including: (i) a 100% foreign-owned company (one member); (ii) a foreign-invested joint-venture company (from 02 members). The LLC need to have a controller or board of supervisors where the LLC has more than 11 members.
The members of company are liable for the financial obligations of the company to the extent of their charter capital contributions. The LLC management structure would consist: council, chairman of the council, general director.
2. Joint-stock Company (JSC):
Joint-stock Company is a limited liability company, established through a subscription for shares in the company. This is the only type of company that can issue shares.
JSC is required to have at least three shareholders (100% foreign-owned, or foreign and domestic investors), but no limit on the maximum number of shareholders in such companies.
The management structure of JSC is general meeting of shareholders, the board of management, the chairman, the general director and a board of supervisors (if the shareholders is 11 and more or if a corporate shareholder holds less than 50% f the shares of the JSC.
Partnership is a unlimited liability company for the operations of the partnership. This form of business is established between two individual partners. This type of business that cannot issue shares.
Forms of dependent entity:
Branched is permitted to conduct commercial activities in Viet Nam. However, there is only opened in a few sectors such as banking, law firms).
Representative Office (RO) is not permitted to conduct commercial activates in Viet Nam such as sale or purchasing goods, provision of services). RO is only permitted to conduct the market researching, promoting the head office’s business and investment opportunities.
This type of business is suitable for investors who are in the first step of a market entry strategy in Viet Nam.
Other forms of Business:
Business Cooperation Contract (BCC)
A BCC is a cooperation agreement between foreign investors and at least one Vietnamese partner. This form of investment does not constitute the creation of a new legal entity.
Public and Private Partnership Contract (PPP)
A Public and Private Partnership contract is an investment form carried out based on a contract between the government authorities and project companies
for infrastructure projects and public services.
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