With the goal of reforming to make administrative procedures less cumbersome, over the years, government agencies, specifically the Ministry of Planning and Investment, have issued many reforms in procedures as well as tools to help simplify business registration. Reforming the process to carry out legal procedures for company establishment, simplifying and clarifying documents on business establishment to create favorable conditions for the business registration environment. However, not everyone knows how to open a company.

1. Concept of company establishment

Business establishment can be understood as the first process for organizations or individuals to conduct their business activities legally according to the law. That company is defined as an organization with its own name, assets, and transaction headquarters and it has been registered according to the regulations set by the State for business purposes.

2. Conditions for company establishment

Establishing a company helps realize the business ideas of those who want to start a business, which is an extremely important decision and it needs to meet the conditions set by law.

2.1. Determining the type of company, enterprise

According to current legal regulations, there are 5 common types of enterprises in Vietnam: Limited liability company with 1 member, limited liability company with 2 or more members, partnership company, private enterprise and joint stock company.

2.2. Naming the enterprise

• The name of a company must include 2 elements: type of enterprise and proper name. Note: when naming the PRIVATE NAME of all companies in Vietnam, it must not be the same (even if the image is changed).
• The company name can be in Vietnamese or in a foreign language, but it must not be the same or cause confusion with the names of other companies previously registered nationwide. If there is a case of confusion.
• Although it is not necessary for a business to name itself based on its industry, in order to avoid affecting its business operations and the desired brand image in the future, the business should choose a name that is suitable for the registered industry.
• According to Decree 01/2021/ND-CP, the decision of the Business Registration Office on the business name is considered the final decision.

2.3. Company headquarters address

• One address can register many companies.
• If the company address is an apartment or condominium, there must be documents proving that the apartment/condo has an area used as an office area, there must be an office lease contract signed directly with the investor… this is very complicated and time-consuming.

2.4. Business lines

To complete the registration documents, companies need to clearly identify the business code as well as the business lines that the business can operate in the future (to avoid having to carry out additional business lines later, which is both time-consuming and costly and affects business progress).

Companies can refer to the detailed list of Vietnam’s economic sectors or look up the business code of the intended business line.

2.5. Company charter capital

Although there is no legal regulation on the minimum charter capital and enterprises do not need to prove the charter capital in any form, the charter capital is the basis for enterprises to determine the business license fee and commit to financial obligations and responsibilities with partners, customers, etc. Therefore, the higher the charter capital, the more it proves the financial capacity of the enterprise and creates trust with partners and customers. Depending on the business line, the legal capital will be specifically required.

2.6. Legal representative

The legal representative is the person who can be responsible for all activities of the enterprise under Vietnamese law.

The legal representative of a company is usually the person who directly manages and operates most business activities, represents the enterprise in signing documents and procedures with competent state agencies, individuals or other organizations.

The title of the legal representative can usually be director/general director/chairman of the board of members/chairman of the board of directors. However, the Enterprise Law 2020 still allows the legal representative not to hold any position in the enterprise.

3. Legal procedures for establishing a company

To carry out the legal procedures to establish a company smoothly and quickly, customers can use the company establishment service of Viet My Law and Accounting. We will prepare documents and carry out the procedures as below:

3.1. Legal documents for establishing various types of companies

Documents for establishing a limited liability company

– 1 Application for establishing a business with full information declared according to the form prescribed by law

– 1 Company charter (We will support you if you do not understand this issue)

– 1 List of members in the company (Full name; Gender; Date of birth; Ethnicity; Nationality; ID card/Citizen ID card or Passport; Place of permanent residence registration; Current residence; Position in the company (if any); Contributed capital)

– If the member is an individual, a photocopy of the ID card/Citizen ID card or passport is required

– If the member is an organization, a photocopy of the business registration certificate or a document of equivalent legal value is required.

Joint Stock Company Establishment Profile

– 1 Application for business establishment with full information declared according to the form prescribed by law

– 1 Company charter (We will support you if you do not understand this issue)

– 1 List of founding shareholders of the company (Full name; Gender; Date of birth; Ethnicity; Nationality; ID card/Citizen ID card or Passport; Place of permanent residence registration; Current residence; Contributed capital; Position in the company (if any))

– If the shareholder is an individual, a certified copy of the ID card/Citizen ID card or passport must be provided

– If the shareholder is an organization, a certified copy of the business registration certificate or equivalent document must be provided

– If the shareholder is a foreign investor, a certified copy of the investment registration certificate must be provided

With the completion of the above documents, your company establishment procedure The customer is half way there.

Documents for establishing a partnership company

– 1 Application for establishing a business with full information declared according to the form prescribed by law

– 1 Charter of the partnership company (We will support you if you do not understand this issue)

– 1 List of members (Full name; Gender; Date of birth; Ethnicity; Nationality; ID card/Citizen ID or Passport; Place of permanent residence registration; Current residence; Contributed capital; Position in the company (if any))

– 1 Copy of passport or ID card/Citizen ID of the member

Documents for establishing a private enterprise

– 1 Application for establishing a business with full information declared according to the form prescribed by law

– 1 Copy of ID card/Citizen ID or passport of the owner of the private enterprise

3.2. Legal procedures for establishing a company

Step 1: Determine the type of business before establishing

The first procedure for establishing a business that most individuals and organizations need to perform is to determine the type of company. This plays an extremely important role and has a lasting impact on the process of establishing and developing a business. Therefore, everyone should consider and determine a suitable type for themselves.

Step 2: Choose a name when establishing a company

People spend a lot of effort and dedication on naming their company. Some company owners will choose according to their preferences, some will choose according to feng shui, or others will choose according to a certain metaphorical meaning. However, regardless of the choice, the mandatory conditions must still comply with the provisions of law. Naming a company sounds simple, but this is the procedure for establishing a company that causes headaches for many individuals and organizations.

Step 3. Registering the head office when establishing a business or company

According to regulations, the head office is the contact location of the company. The information of the head office must be clearly identified such as the village/hamlet/house number, road/street, ward/commune, district/county, province/city.

The head office that is declared in the company establishment procedure also needs this to have legal rights to use. That means you will have to be the owner of the registered head office location, or maybe in the case of the head office being a rented or borrowed location… there must be a contract in accordance with the law.

Another issue related to the head office when performing the procedure for opening a company that Viet My often receives is the issue of apartments. According to regulations, apartments used for living will not be entitled to be the company’s head office. Except for companies on the ground floor, 1st floor, 2nd floor… of an apartment building that the investor has requested permission to be identified as having business functions.

Step 4: Registering charter capital when establishing a company

Before introducing the charter capital section, Viet My should have presented to you the issue of the business lines that you have registered. But because before intending to carry out the procedures for establishing a business, it can be 100% confirmed that individuals and organizations have clearly identified this issue. It is only necessary to check and adjust according to the correct business code table prescribed by law.

Back to the main issue in this section, this is charter capital. Everyone can simply understand that charter capital is considered the amount of money that the company owner, members, and shareholders can contribute when establishing a company, or can also commit to contribute according to the time specified in the Charter. Charter capital is considered the basis for clearly defining the rights and interests as well as obligations between members and shareholders contributing capital. That is, for companies such as limited liability companies or private enterprises, the owner will have to contribute 100% to the charter capital.

Charter capital is also considered a factor affecting the business license tax that the company must pay to the competent state agency. Therefore, customers should not rush to choose a charter capital. Instead, they should consult with their predecessors or receive advice from a law firm to choose the appropriate charter capital.

Step 5: Decide on the company’s legal representative

In the company registration procedure, customers will also need to declare the legal representative as the Director/General Director or Chairman of the Board of Members/Board of Directors. The regulations on legal representatives are clearly stated in the Enterprise Law 2020. Accordingly:

– The legal representative of a company must reside in Vietnam. In case the company has only one representative but has to leave Vietnam, they will have to authorize another person in writing.

– The company representative has the rights and obligations in the company’s transactions. Besides, he/she represents the company before the law.

– There may be more than one representative as prescribed by law for Limited Liability Companies and Joint Stock Companies

In addition, in some other cases, the legal representative will also need to have special adjustments.

4. Time to establish a company

The time to establish a company will be divided into stages of work implementation and based on the fast or slow business establishment service package decided by the customer. Normally, the time to establish a company is calculated as follows:

– Time to prepare documents: 01 working day

– Time to submit documents to the State registration agency: 01 working day after receiving documents from the customer.

– Time to apply for a business registration certificate: from 03-05 working days from the date the documents are submitted and accepted as valid;

– Time to engrave the company seal: 01 working day

– Time to announce the establishment of the company on the national information portal: 01 working day

Thus, the total time for establishing a company will take an average of 05-07 working days

5. Frequently asked questions related to company establishment

5.1. What are the conditions for setting up a company headquarters?

When establishing a company, the company headquarters is considered an important factor, it stores information that any company must have to be approved by the competent state and granted a business registration certificate. According to current law, the company’s headquarters cannot be located in a collective housing area or apartment building used for residence. The premises for lease in the form of commercial floors or separate houses with full legal lease contracts can be completely registered to establish a company.

5.2. Is it necessary to dissolve the business household when converting a sole proprietorship into an enterprise?

According to previous regulations, it is impossible to convert a sole proprietorship into a company, and the business owner can only choose to dissolve the business household at the same time to establish a company.

But currently, according to Decree No. 108/2018/ND-CP amending and supplementing a number of articles in Decree No. 78/2015/ND-CP on business registration, in Clause 6, Article 1, a business household can directly convert into an enterprise.

5.3. How is the company seal regulated by law?

The seal includes the seal made at the seal carving facility as well as the seal in the form of a digital signature according to the provisions of the law on electronic transactions.

The company decides on the type, quantity, form and content of the seal of the enterprise, branch, representative office, and other units of the enterprise.
The management and storage of the seal is for implementation in accordance with the provisions of the Company Charter or regulations issued by the enterprise, branch, representative office, or other units of the enterprise with the seal. The enterprise uses the seal in transactions according to the provisions of the law.

5.4. What is the minimum capital required to establish a company?

According to the current Enterprise Law, the law does not have specific regulations on capital levels for enterprises in general. Therefore, depending on the economic capacity of the company members as well as the purpose of the company’s operations, the charter capital is specifically decided.

5.5. How many forms of establishing a company with foreign investment capital are there at present?

There are 2 forms of establishing a company with foreign investment capital.

Above are the legal procedures for establishing a company provided by VIET MY LAW AND ACCOUNTING, and we are always ready to answer any questions and provide advice related to quick, cheap, and complete divorce procedures. To receive specific information and advice, please contact Viet My’s Legal Consulting Hotline at 0981.345.339. Our team of consulting experts will accompany and support you on your divorce journey, ensuring that you will be treated with care and receive the best help.