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Starting a Business

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Vietnam. It examines the procedures, time and cost involved in launching a commercial or industrial firm with between 10 and 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the , which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 190 economies. The most recent round of data collection was completed in June 2019.

Standardized Company

Legal Form: cong ty trach nhiem huu han - Private Limited Liability Company
Paid-in minimum captial requirement: VND 0
City: Ho Chi Minh City

Step: 1

Check the proposed company name, obtain the certificates of business and tax registration and publish the registration contents on the National Business Registration Portal (NBRP)

Time to Complete: 10 days.

Associated Costs: VND 100,000 (registration, free if online); VND 300,000 (publication).

Agency: Business Registration Office, Department of Planning & Investment

To register a company, the applicant must submit documents in accordance with Government Decree 78/2015/N?-CP on enterprise registration dated 14 September 2015.

When the application file for enterprise registration fully satisfies the conditions for issuance of an enterprise registration certificate, the relevant information is transferred to the database of the Department General of Taxation (Ministry of Finance). The Department General of Taxation is responsible, within two working days from the date of receipt of information from the national database of information, to create an enterprise code number and to transfer it to that national database in order for the provincial business registration office to issue it to the enterprise. Each enterprise is issued one unique enterprise code number. This code number is both the business registration code number and the tax code number of that enterprise.?

Business registrations are free of charges if applied for online. The certificates of business and tax registration are either sent by post or collected at the Business Registration Office.

Entrepreneurs also request the publication of the registration contents online, at the moment of business registration. The fee to publish the registration contents on the National Business Registration Portal is VND 300,000 according to Circular No.106/2013/TT-BTC of the Ministry of Finance dated on 10 November 2016.

Step: 2

Make a company seal

Time to Complete: 1 day.

Associated Costs: VND 450,000.

Agency: Sealmaker

The company obtains a company seal from a sealmaker. The company has the right to decide on the design, content and quantity of its seal and can have several seals with the same design and content. Prior to using the seal, the enterprise must send a notification to the Business Registration Office (Article 34 Decree 78/2015/ND-CP)

Step: 3

Submit an online notification of the seal-sample

Time to Complete: 2 days.

Associated Costs: no charge.

Agency: Business Registration Office

Entrepreneurs must submit an online notification of the seal-sample to the Business Registration Office, which will review the notification and send a receipt to the applicant and publish the seal-sample on the National Business Registration Portal.The enterprise may start using the seal upon receipt of the Publication Notice.

Step: 4

Open a bank account

Time to Complete: 1 day.

Associated Costs: no charge.

Agency: Bank

Each bank requires a different minimum deposit to open an account. For instance, whereas Vietcombank requires the fixed amount of VND 1 million for an account in VND and USD 300 for one in USD, Asian Commercial Bank requires VND 1 million for a VND account and US 100 for a USD account. To open the account, the bank requires a bank-issued application form, a copy of the notification on use of the seal with a confirmation stamp of the Business Registration Office, the Charter of the Company, the Enterprise Registration Certificate (ERC) and relevant documents as required by each bank.

Step: 5

Buy pre-printed VAT invoices from the Municipal Taxation Department or obtain and print self-printed VAT invoices

Time to Complete: 10 days, simultaneous with previous procedure.

Associated Costs: about VND 200,000 per book.

Agency: Municipal Taxation Department

Companies shall use self-printed VAT invoices or purchase VAT invoices. The applicant must contact a publisher to order the printing of VAT Invoice Books and must register the self-printed invoices with the Municipal Taxation Department.

To register for self-printing of invoices, company founders must submit an application on a standard form, along with (a) a sample self-printed invoice, including all statutory details; (b) a map showing the location of the company’s office or copy of the lease contract if the premises are leased, certified by the ward commune people’s committee; (c) the general director’s identification card; (d) a copy of the business registration certificate; and (e) and the tax registration certificate and copy.

In total, it takes about 10 days to obtain the self-printed VAT invoices and have them registered with the Municipal Taxation Department.

Step: * 6

Pay business license tax

Time to Complete: 1 day, simultaneous with previous procedure.

Associated Costs: VND 2,000,000 (business license tax).

Agency: Tax office or commercial bank

The business license tax must paid to the tax authority where the enterprise registers its tax reports or through designated commercial banks. This license tax is paid annually and in the first month of a year (with regards to enterprises are operating) and in the month when the newly established enterprise obtains the tax code. A new company established during the first 6 months of the year shall pay the entire annual business license tax. If it was established during the last 6 months, it must pay 50% of the annual license tax.

According to Article 4 of Circular 302/2016/TT-BTC, the business license tax depends on the charter capital of the enterprise as follows:
- An enterprise with charter capital above VND 10 billion: VND 3,000,000 per year;
- An enterprise with charter capital of VND 10 billion or less: VND 2,000,000 per year;
- Branches, representative offices, business locations, business units, other economic organizations: VND 1,000,000 per year.

Step: * 7

Register with the local labor office to declare use of labor

Time to Complete: 1 day, simultaneous with previous procedure.

Associated Costs: no charge.

Agency: Municipal Department for Labor, Invalids and Social Affairs

Within 30 days of starting operations, employers must register all employees and their qualifications with the Labor Office (in conformity with set forms). The relationship between the employer and its employees is regulated by the Labor Code and set forth in labor contracts.

Step: * 8

Register employees with the Social Insurance Fund for the payment of health insurance and social insurance

Time to Complete: 1 day, simultaneous with previous procedure.

Associated Costs: no charge.

Agency: Social Insurance Fund

The company must register employees with the Social Insurance Fund. The employer must complete a form provided by the Social Insurance Fund and include the following information: the employee name and date of birth, salary (as stated in the labor contract), the social insurance book serial number (for employees already issued with those books), a certified copy of the company's business registration certificate, and a copy of each labor contract.

The Social Insurance Office must, within 30 days from the date of receipt of the application file, issue an insurance registration book for each new employee that was not issued such book by the previous employer. The employer is responsible for paying social and health insurance contributions for each employee. Since the health insurance merged with the social insurance funds, payment is made (monthly or quarterly) directly to the Social Insurance Fund. Health insurance certificates are issued during the first month of the year.