Forms of business in Vietnam

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There are 7 forms of business you can consider when doing business in Vietnam, including:

1. Limited-liability Company:

A limited-liability company is a legal entity established by its members through capital contributions to the company. The capital contribution of each member is treated as equity (charter capital). The members of a limited-liability company are liable for the financial obligations of the limited-liability company to the extent of their capital contributions.

2. Joint-stock Company:

 A joint-stock company is a limited liability legal entity established through a subscription for shares in the company. Under Vietnamese law, this is the only type of company that can issue shares.

3. Partnership

A partnership is a very rare form of investment. It may be established between two individual general partners. The general partner has unlimited liability for the operations of the partnership.

4. Branch

This is not a common form of foreign direct investment and is only permitted in a few sectors. A branch is not an independent legal entity. Branches of foreign companies are different from representative offices in that a branch is permitted to conduct commercial activities in Viet Nam.

5. Representative Office

Foreign companies with business relations or investment projects in Viet Nam may apply to open representative offices in Viet Nam. A representative office may not conduct commercial or revenue generating activities (i.e. the execution of contracts, receipt of funds, sale or purchase of goods, or provision of services).

6. Business Cooperation Contract (‘BCC’)

A BCC is a cooperation agreement between foreign investors and at least one Vietnamese partner in order to carry out specific business activities. This form of investment does not constitute the creation of a new legal entity. The investors in a BCC generally share the revenues and/or products arising from a BCC and have unlimited liability for the debts of the BCC.

7. Public and Private Partnership Contract (PPP)

A Public and Private Partnership (‘PPP’) 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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