Step by step to establish a trading company in Vietnam

Vietnam is becoming a destination to attract foreign investors. Besides investing in the form of capital contribution, share purchase, capital contribution, etc., the establishment of a new enterprise is favored by many investors. In order to support customers in need, LNP will advise investors on establishing a 100% foreign-owned trading company in Vietnam in the following article.

>> Read more: Granting investment registration certificate (IRC) to foreign investor in Vietnam

1. What is a trading company?

A trading company is a legal entity established by an organization or individual by a legal event in which the parties agree to each other to use their assets or capabilities to conduct business activities, trade to achieve common goals. Trading companies specializing in commercial activities, purchasing and selling goods for profit.

2. Conditions for establishment of companies by foreign investors

The Vietnamese law does not restrict the reception of investment in the field of trade with any country.

Foreign investors are allowed to trade in goods that are not prohibited by Vietnamese law. For goods that Vietnam has committed to open in accordance with WTO commitments, foreign investors do not need to consult with the Vietnamese state managing agency, vice versa. For goods items that Vietnam has not committed to open, foreign investors are only allowed to do business with the written approval from the competent authority.

3. Steps to establish a foreign-invested trading company

Step 1: Identify the issues before establishing a trading company in Vietnam

Foreign investors base themselves on the amount of capital and investment purposes to identify specific issues: investment locations, company headquarters; Company name; investment capital …. This is important information to establish a trading company in Vietnam.

Step 2: Register for issuance of an Investment Registration Certificate (IRC)

An application for an Investment Registration Certificate (IRC) comprises:

– Written request for implementation of investment project;

– Proof of investor’s status

+ A valid copy of identity card, citizen identification or passport for investors being individuals;

+ Copy of Certificate of Establishment, Certificate of Business Registration or other equivalent documents certifying the legal status of institutional investors.

– The investment project proposal;

– Copies of documents proving the financial capacity of the investor:

+ Financial statements of the latest 2 years, commitment of financial support of the parent company;

+ Documents explaining the financial capacity of the investor;

+ Commitment to arrange foreign currencies by credit institutions for investors.

– Proposal of the demand for land use or a copy of the lease contract of the location for the execution of the investment project;

– Explanation on technology use for projects using technology on the List of technologies restricted from transferring;

– BCC contract with an investment project in the form of BCC (Business Cooperation Contract).

Step 3: Register for an enterprise registration certificate (ERC)

After being granted the Investment Registration Certificate (IRC), the investor registers to establish a trading company at the Business Registration Office where Company is headquartered.

A dossier of registration for grant of an enterprise registration certificate (ERC) comprises:

– An application for enterprise registration, made according to a form issued by the Vietnamese Government;

– Company rules;

– List of founding shareholders, for joint stock companies and members, for limited liability companies;

– Certified copy

+ Identity card, citizen identity, valid passport for foreign investors being individuals;

+ Establishment decision or enterprise registration certificate, for institutional investors;

+ Investment registration certificate (IRC);

– Authorization document for individuals to apply (if any).

Step 4: The tasks performed after establishing a trading company

The official trading company has the legal status after being granted the Business Registration Certificate (ERC). Foreign investors carry out the following works after post-establishment of the company:

– Opening a capital account at a bank, transferring investment money into Vietnam via a capital account;

– Buy electronic invoices, issue notices of invoices;

– Buy, register to use digital signatures;

– Declaration of license fees for newly established businesses;

– Engrave company seal, notice of using seal sample;

– Engrave company sign, hang the sign at the headquarters where the company registered operations.

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Hopefully, our consultants will solve your problems regarding Step by step to establish a trading company in Vietnam. If you have any further questions regarding the incident, you can contact the expert lawyers of LNP Legal Consulting Co., Ltd.

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