Need advice on setting up a 100% foreign company

Hi Vincent,

I can't answer all your questions as I'm not a lawyer, but here are few insights:

+ Last year a Client of mine set up a 100% foreign-owned company in management consulting fee and he hired a law service.

When we looked for law service to help him with, we were offered service fee from $1,800 - $11,000. He selected the offer of $7,100 as they offered best solution and advices.

It takes 1-2 months or more to set up a company.

My Client need to have 20,000 USD as chartered capital.

+ After setting up the company, there are lots of other things to do as: submit documents to Tax office, Labor office, buying token to pay tax online, etc
Hope your Vietnamese partner will do that.

It's better if you share background story of this company set up.

Khuyen

Hi Vincent,

I'm a lawyer here. Perhaps I can help answer some of your qu:

If bedding/furniture = manufacturing, then 100% foreign owned company not a problem and set-up relatively smooth (main headache is finding suitable site). Regardless whether you do with a Vietnamese party (unless it's 100% Vietnamese owned) or 100% foreign owned, procedures are similar.

Otherwise, if you're engaged in trading as foreign-owned company, unless it's export only, the procedures are going to be a lot more time-consuming. You'll need to not only get the company set-up (subject to approvals from Ministry of Industry and Trade), which could take 2+ months, but you also need to obtain a further trading permit.

On your specific queries:

- What are the charges like to register a company? Main charges you're looking at are consulting fees - e.g., lawyers to assist in set-up and accountants to facilitate initial and ongoing tax filings. Some consultants can do full service. Fees vary quite a bit (from USD 2k for the cheap but questionable firms, to up to around USD 12k for the high-end firms). Pays to shop around

- How long it takes to set up the company? 100% Vietnamese company takes about a week. For foreign-owned manufacturing, about 1-2 months (but bulk of procedures is in identifying suitable premises. For foreign-owned trading, about 2-3 months for company set-up and another month for trading permit

- Bank related issues / Rental of the showroom ? You need to find a showroom before setting up. It's a prereqsuite. Bank accounts can be set up after - there are a number of foreign and local banks to choose from

- Initial capital invest to setup by government should be 10K Usd ? No minimum capital under law, but authorities need to be certain that you have sufficient $ before they grant you a license. You may need more than USD 10k, esp. for manufacturing. Amount is subject to scale of operations. Realistically, at least USD 30k would be comfortable. Such capital requirements won't apply to VNese owned to same extent as foreign-owned (< USD 10k for VNese owned is fine...)

- how to apply for the work permit if my stay is for 3 to 4 months ? Procedures for work permit can come after set-up. However, for that length of stay, it might not even be worth your time and cost for the work permit - nowadays, the labour authorities are strict on qualification requirements for work permits

- Is it better to engage lawyer service ? For foreign-owned company, you should engage external consultant like a lawyer. The paperwork is significant and even if you submit, your application may be stuck for x amount of time without proper follow-ups. For VNese owned, the process a lot more simpler and you can do without a lawyer - your biz partner can look everything up on the government website for biz registration

Feel free to PM me when you're in town and happy to have a chat over coffee to give you some pointers on how to start and what to look out for

Hi ,
Thank you for your time to explain . i may be coming to HCM in March first week but yet to confirm , will let you know if i am coming and meet for coffee. Can you please Message me your contact number in message box. Thank you anh