Home Blog Company Incorporation in Vietnam: Essentials Every Foreign Investor Must Know Uncategorized Company Incorporation in Vietnam: Essentials Every Foreign Investor Must Know InCorp Editorial Team 2 October 2019 4 minutes reading time Table of Contents IRC and ERC Legal representative in Vietnam A Business address in Vietnam The issuing process of an IRC and ERC Documents required in order to establish a company Investors contribution to Charter Capital Post-registration of a company in Vietnam Consult a professional now for Company Incorporation in Vietnam As you may be aware, incorporating a company in any country can be a difficult process. Especially in Vietnam, where the economic and social growth is on the rise, changes are made regularly in the business sector that opens up opportunities within the market. Foreign investors need to be kept up to date with the constant changes in the business world to ensure the company incorporation in Vietnam is produced efficiently on the road to success. In order to dodge those newcomer mistakes, we have devised an essential guide for foreign investors to follow when incorporating a company in Vietnam. IRC and ERC An investment registration certificate (IRC) is the first step to establishing a company in Vietnam. Within this project, foreign investors have to have an ‘approval’ as such to reach their company’s incorporation in Vietnam. The foreign investor must then proceed to an enterprise registration certificate (ERC) which usually takes around one week. Once both certificates have been awarded, the company can move on to the further, mandatory stages like tax registration for example. Legal representative in Vietnam In Vietnam, it’s a requirement that every company has to have at least one legal representative. Their role is to ensure that laws and obligations are followed and are engaged in transactions that maybe consisted between other parties. The legal representative’s full name and details need to be present in government documents as they are the primary person representing the company. Related article: Restrictions for Representative Office in Vietnam A Business address in Vietnam It’s a binding requirement that all companies in Vietnam require a fixed, business address for their company. There are certain requirements and boundaries to this as it is insufficient for companies to use virtual offices as a business address. Lawyers and other service providers can lease out offices at a cost for their clients. A certificate of the Land Use Right of the leased property will be issued. The issuing process of an IRC and ERC For an IRC to be issued, it usually takes within 15 days from the date of the approved application to be completed. Upon the completion of the application forms, the ERC will be processed by the Business Registration Division of the Department of Planning and Investment. This usually takes three working days from the completed application. Both are subject to the delays of collation of documents and the completion of forms. Documents required in order to establish a company In Vietnam the specific documents that are required for a corporate investor are as follows: Certificates of the company’s legal documents Original bank statements Passport or ID card of the legal representative Passport or ID card of a representative who is authorized by the investing company Lease contract Documentation of the leasing right of the landlord Regarding an individual investor, the documents that are required are: Passport of the owners Original bank statements Lease contract Documentation of the leasing right of the landlord Investors contribution to Charter Capital For foreign investors, it is expected that they contribute their Charter Capital within 90 days from the date of ERC being issued. The Charter Capital is the amount that shareholders contribute within a prescribed time limit. Upon approval from the local licensing authority, investors cannot increase or decrease the amount. It can either constitute 100 percent of the total investment capital or can be used in combination with loan capital to produce the total investment of the company. Post-registration of a company in Vietnam Once the company has been established in Vietnam, additional procedures need to be fulfilled. The post-licensing procedure includes purchasing a company seal, register tax reports, opening bank accounts, etc. Cekindo can support you with this process from the beginning to even post registration of your company in Vietnam. Related article: What are the Benefits and Challenges of Registering a Company in Vietnam? Consult a professional now for Company Incorporation in Vietnam Cekindo’s specialists can assist you throughout this procedure so those uncertain moments can be clarified leaving you with certainty. Speak to one of our team today and leave your company incorporation procedure in Vietnam to us. Start by filling in the form below. Read Full Bio Verified by Daris Salam COO Indonesia at InCorp Indonesia With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships. Frequently Asked Questions How long does it take to set up a PMA company, and how soon can it begin commercial operations? Establishing a PMA Company in Indonesia typically takes around two weeks after completing document requirements. Following establishment, additional steps such as obtaining licenses and registering for Tax ID vary based on business type. Last, some licensing processes may take time, necessitating thorough planning and preliminary assessments of the business plan for a smoother process. What is a PT PMA? Limited liability company with foreign direct investment ranging from 1-100% If investors intend to conduct business in Indonesia, what kind of organization must they establish? Within the scope of foreign direct investment in Indonesia, foreign investors can typically do business in two ways: Set up a PMA (Perusahaan Modal Asing) PMA is a local subsidiary in the form of a limited liability corporation for foreign investment reasons Set up a RO (Representative Office) According to Law No. 25/2007 on Investment, foreign investors are required to establish a PMA company in order to make direct investments and conduct commercial and business activities in Indonesia. A PMA firm in Indonesia is a legally recognized business entity that can engage in various commercial and business operations as long as it complies with the current laws and regulations. As for RO, its purposes include conducting market feasibility studies and liaison activities. What other things should be considered when hiring local and foreign employees in Indonesia? There are a few things to consider, such as: Prohibit any form of discrimination and provide equal opportunity for Indonesians and expatriates Increase the competence of workers by giving or encouraging job training. Follow the termination procedures (Terminating an employee in Indonesia can be long, tedious, and expensive. Observe working hours, holidays, and overtime regulations Give mandatory employee benefits, including social security and health insurance Withhold only the right amount of income tax on behalf of the employees Follow the wages and other benefits outlined by the law Process work permits for foreign employees Get in touch with us. 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Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website. More on Uncategorized Business Process Outsourcing vs. Call Center in Indonesia: How are They Different? Read more How Offshore Merchants and Providers can Start an Online Business in Indonesia Read more What Happens When a Piece of Land is Abandoned in Indonesia? Read more