Vietnam is increasingly becoming an attractive destination for both domestic and international investors. To establish and operate a business in Vietnam, having a solid understanding of the legal regulations is crucial. This article will provide you with essential information regarding the legal framework for business formation in Vietnam in 2024.
The essential steps to establish a business
Choose a business entity
The business entity is the first factor that needs to be determined before proceeding with establishment. Common types include:
- Limited Liability Company (LLC): Suitable for small and medium-sized businesses.
- Joint-Stock Company (JSC): Suitable for businesses that need to raise significant capital from multiple shareholders.
- Sole Proprietorship: Designed for individuals or households who want full control over their business operations.
Registering a business name
The business name must comply with the laws of Vietnam, not duplicate existing names, and not violate ethical and cultural standards.
Determining charter capital
Charter capital is the amount of capital that the members or shareholders commit to contribute to the company. In 2024, there are not many changes to the regulations regarding charter capital; however, it is essential to ensure that the registered capital accurately reflects the financial capacity and business plan of the enterprise.
Necessary documentation and legal procedures
Business registration documents
The documents for business establishment include:
- Business registration application: Prepared according to the prescribed template.
- Company charter: Outlines the rights and obligations of the members or shareholders.
- List of members or shareholders: Provides detailed information about the founders of the business.
- Proof of identity documents: Includes identification cards or passports of the members and shareholders.
Application submission process
The business registration documents can be submitted directly to the Department of Planning and Investment or online via the National Business Registration Portal. After submission, the relevant authorities will review the documents and issue a business registration certificate if the application is valid.
Seal carving and notification of seal samples
After receiving the business registration certificate, the enterprise must carve its legal seal and notify the business registration authority of the seal sample.
The latest legal regulations for 2024
Regulations on the use of charter capital
One of the significant changes in 2024 is the stricter regulations regarding the use of charter capital. Enterprises must provide clear reports on how the capital is utilized and comply with regulations that protect the rights of shareholders or capital contributors.
Regulations on the rights and obligations of the legal representative
The legal representative of the enterprise must have full civil capacity and not be prohibited from holding management positions. In 2024, these regulations have been clarified further to protect the rights of stakeholders.
Important considerations when establishing a business:
Choosing a legal business location
The business location must meet regulations regarding safety, hygiene, and not violate local zoning plans. Before renting or purchasing a business location, the enterprise should thoroughly check related legal regulations.
Fulfill tax obligations
Businesses must fully comply with tax obligations immediately after establishment. This includes registering for a tax code, opening a bank account, and paying relevant taxes such as value-added tax (VAT) and corporate income tax (CIT).
Establishing a business in Vietnam in 2024 requires strict compliance with legal regulations. Enterprises need to understand the necessary steps and the latest changes in the law to ensure a smooth and compliant establishment process.
