Thinking to set up a business in Vietnam? Here is what you have to know!
Vietnam is blossoming with tourism and economic growth. Major Vietnam’s economic aspects have emerged out of the shadow of the country’s infamous history. Its big cities continue to develop and attract investors from all around the world. Now it’s time for you to join the fun! Business revenue is not the only thing you will get after you set up a business in Vietnam. Let’s take a look at the extra benefits from setting up a company in Vietnam that you will not find elsewhere.
1. Low cost in Vietnam
Even compared to other countries in Southeast Asia, living cost in Vietnam is relatively low. One portion of decent meal costs not more than 2 USD. Eating out in fancy restaurants will cost you no more than 30 USD per person. One month rent for a modern, full-serviced apartment unit ranges from just 400 USD. This is highly influenced by the currency exchange rate itself. In early 2020, 1 USD is equal to more than 23.000 VND. And since Vietnam’s living cost is in line with your business operating cost, this is a huge advantage.
Setting up the business itself will only take a small chunk of your initial capital. Averagely, investors spend around 20.000 USD to set up a limited liability company in Vietnam. Technically, there is no minimum capital amount required. It is possible to start with 5.000 USD. But for business with bigger scopes, this amount will not be considered adequate. 10.000 USD of capital should suffice. For comparison, you need at least 175.000 USD just for the paid-up capital alone to start a company in Indonesia. Do spare extra 5.000 USD to cover the fees of the incorporation process, legal registration, bank account setup, and government registration.
2. Quick setup
While some countries are notorious for difficult bureaucracy, especially when it comes to setting up a business, Vietnam promises quick resolutions. It takes less than two months from the start of the registration process until you finally have all paperwork you need to get going. If time efficiency is crucial in your startup process, this will play a big part.
3. Skilled workforce available to run your business
As Vietnam’s economy blossoms, the demand of employees rises. To keep up with this, Vietnam produces a higher level of the workforce, both in quantity and quality. Nearly 100 million people live in Vietnam yet only 3% of them are unemployed. The average monthly income is around 250 USD, almost doubled most regions’ minimum wage. This says a lot about the quality of the Vietnamese workforce.
4. Significant and improving trade agreements
Vietnam is serious about making and maintaining trade agreements with other countries in the world. This is proven by the country’s improving bilateral business relations with all Southeast Asian countries, China, Hong Kong, Japan, South Korea, Australia, and even Chile, among other countries. This should assure you about Vietnam’s economic stability.
All four positive facts above are the fundamental benefits of setting up a business in Vietnam. This comes with many other advantages you can take, depending on the field you’re planning to take on.
Getting your business license
You only need to obtain two major things to set up a business in Vietnam: IRC (Investment Registration Certificate) and BRC (Business Registration Certificate). Vietnam itself does not require any company to have an import-export license. The same goes for your product distribution. If your business operates in 11 service sectors including business and distributions, your work requires no additional permits. However, there are a few regulated steps you still need to follow:
1. Getting IRC (Investment Registration Certificate)
IRC (Investment Registration Certificate) is released by the Department of Planning and Investment (DPI). This process takes around a month, sometimes even less. However, this may require more time if your company does not fall into any WTO categories.
2. Obtaining BRC (Business Registration Certificate)
The BRC (Business Registration Certificate) is also known as the ERC (Enterprise Registration Certificate). After you receive your IRC, it should only take a week for DPI (Department of Planning and Investment) to release the BRC or ERC.
3. Tax registration and business license tax payment
Within 30 days upon receiving your BRC, go to the local tax department to register your business tax. Then, you will be required to pay around 90 USD per year for your business license annual tax. You read that right. 90 USD! Didn’t we tell you about the minimum cost of setting up a company in Vietnam?
4. Submitting an initial capital contribution
Within 90 days since the day you obtain the BRC, you need to make the capital contribution. As we mentioned before, there is no official minimum amount for your initial capital contribution. The amount varies and depends on the scope of your business. And you should keep in mind that the amount you submitted should represent the size of your company and your business turnover. Having 10.000 USD in your capital’s pocket should be enough.
After this last process, depending on the type of your business, you may need to apply for sub-licenses. Consult the DPI (Department of Planning and Investment) regarding this matter.
Although these may seem simple and easy, setting up a company in a foreign land can be a handful, especially when it comes down to setting and paying regulated taxes. We suggest you find reliable people to help you out with these. There are many companies in Vietnam offering services to help foreign investors set up their businesses which you can find online. Most of them charge no more than 1.000 USD per company. Since the whole process will take around 2 months or more, 1.000 USD is a good tradeoff.
With so many benefits available to grab at minimum cost and time, setting up a business in Vietnam is a smart move. Now it is no longer a matter of if, but when. Instead of toying around with the idea of starting your company in Vietnam, you should start strategizing your place in this professional race against other investors. Do you have what it takes to win?
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