Vietnam, located in the centre of Southeast Asia, has so much to offer, but one thing is certain: following the implementation of its economic reform strategy “Doi Moi”, or “renovation” by the Sixth Part Congress in 1986, and the growing affluence of the younger population, we have witnessed Vietnam becoming one of the key emerging economies.
With a more open economy and an average GDP growth rate of 7.2 percent, investors have arrived to explore this new business territory. Vietnam’s economy is expected to grow much further with very favourable conditions, for both PT PMA sectors, in the years to come.
In 2015, Vietnam has received USD $24 billion from PT PMA, a 17 percent increase compared to 2014, with the major investments coming from Korea, Malaysia, Japan, and Taiwan.
As the region’s economy grew, more and more notable changes can be seen in Vietnam’s leading industrial sectors. Agriculture still remains one of the critical industries in Vietnam with its export of coffee, rice, cashew nuts, and aqua-products, etc. leading the global agricultural export.
Agriculture, however, has significantly reduced its share with the focus gradually shifted towards manufacturing and service sectors. In addition to this, rising middle class and higher purchasing power also bring access to exciting new sectors and opportunities outside the mentioned industries.
Hanoi, the capital of Vietnam, is located in the north of the country. The Hanoi-Ho Chi Minh City railway that connects almost all major economic centres in Vietnam has made Hanoi an extremely convenient trading hub of its booming manufacturing sector, competing against China. Manufacturing cost in Hanoi is 3 times lower than China—a once-most-powerful-manufacturing hub that is slowly losing its static comparative edge.
Why Start a Business in Vietnam
In addition to all the benefits mentioned above, here are some other key advantages as a good starting point for investors planning to expand their presence or to set up a company in Vietnam:
1. 100% Foreign Ownership
In Vietnam, foreign investors are available to hold 100% ownership in most industries. Due to that, foreign investors will have sole control of their company with a peace of mind.
You might want to read Is Local Nominee a Safe Way to Start Business in Vietnam?
2. Global Integration
Vietnam became the member of WTO and ASEAN and joined the ASEAN Free Trade Area AFTA. It has since been integrated into the global economy and supply chain, enjoying the economic growth and benefits from markets in North America, Europe and Asia.
3. Simplification of Start-Up Procedure and Improved Legal Environment
The government committed to creating a fair business environment and improving the ranking of Ease of Doing Business (EODB). Both are what driven the Vietnam economic growth.
4. Competitive Production Cost
With the labor and start-up costs being lower than other countries in Asia, it has become the new and more favourable production base. It is also known to investors as “The New China.”
5. Young, Talented, and Growing Workforce
With 45 percent of its population under the age of 30, the large and young workforce is not only skillful but also talented with most of them provided with adequate education.
Related article: Should You Be Investing in Vietnam?
Company Registration in Vietnam Made Easy
Being well-prepared will make most of the problems avoidable while starting a business in Vietnam. Below we provide some insights into the key aspects of undertaking the business and expand its presence in Vietnam:
Forms of Enterprises to Consider
- Limited liability company
- Joint stock company/shareholding company
- Private enterprise
Limited Liability Company (LLC) and Joint Stock Company are the two most common forms for foreign investors
Forms of Direct Investments
- Joint venture
- 100% FOEs/wholly foreign-owned
- Business cooperation contract (BCC)
- Build-operate-transfer, build-transfer, build-transfer-operate, or build-operate arrangements (BOT/BT/BTO)
- Branch and representative office
Therefore, investors can make their companies to be wholly foreign-owned enterprise or choose a joint venture with a local partner.
- Limited Liability Company/Joint Stock Company/Partnership
- Apply at the provincial department of planning and investment, or the provincial industrial zone management authority /economic zone management authority, depending on the types of project.
- Obtain investment registration certificate.
- Register at the provincial department of planning and investment.
- Obtain enterprise registration certificate.
- Representative Office
- Register at the provincial department of industry and trade.
- Obtain representative office license.
- Private-Public Partnership (PPP) Projects (BOT/BTO/BT)
- Sign investment agreement with an authorised state body.
- Apply at the Ministry of Planning and Investment.
- Obtain investment registration certificate.
- Sign project contract with the state body.
- Project company is then set up as a Limited Liability Company (LLC) or a joint stock company.
As a result, it takes 1 to 3 months for the whole incorporation process, usually. But, it depends on the efficiency of document submission and communication with the state authorities.
How We Can Help
To conclude, here Cekindo comes to provide a full suite of business consulting services from business setup to PEO outsourcing to accounting and tax reporting, among many others. We take pride in our excellent team of experienced consultants that can readily provide you with an initial free advice.
Let us discuss our successful partnership in detail by giving us a phone call at +6221 30061585 or emailing us at firstname.lastname@example.org. We can’t wait to hear from you!