Incorporation Services
5 Main Types of Business Entities
According to the Law on Enterprises 2020, selecting the correct corporate structure from the outset enables investors to maximize operational efficiency and mitigate compliance risks:
An ideal option is a Single-Member LLC or a Private Enterprise.
A Multi-Member LLC offers robust internal structure and controlled partnership limitations.
A Joint Stock Company is highly recommended for public capital funding flexibility.
MANDATORY LEGAL PROCESS FOR FOREIGN-INVESTED ENTERPRISES (FDI)
Foreign investors establishing a business in Vietnam must strictly follow a two-step sequence: Obtain the Investment Registration Certificate (IRC) first, followed by the submission for the Enterprise Registration Certificate (ERC). Upon successful incorporation, the entity must open a Direct Investment Capital Account (DICA) at an authorized commercial bank to remit equity capital on time and fulfill mandatory post-licensing audits.
Single-Member Limited Liability Company
Owned by a single individual or organization that assumes liability for corporate debts up to the registered charter capital. The company gains legal status upon issuance of the ERC but is strictly prohibited from issuing shares.
Multi-Member Limited Liability Company
Comprises between 2 and 50 members (individuals or organizations). Members are liable for financial obligations within the scope of their committed capital contributions. It holds separate legal status and cannot issue shares.
Joint Stock Company
Charter capital is divided into equal portions called shares. Shareholders hold limited liability based on their equity holdings and can freely transfer shares (except founding shareholders within the first 3 years). It retains the right to issue public securities for fundraising.
Private Enterprise
Owned by a single individual who assumes full, unlimited personal liability for all liabilities of the enterprise. This structure does not possess separate legal status and is completely unauthorized to issue any type of securities.
Market Expansion & Scale
When a business reaches a stage of stable growth and intends to boost commercial presence across multiple provinces, choosing dependent corporate units is a strategic milestone:
Dependent Branch
Tasked with executing all or part of the parent company's operations, including commercial revenue generation and authorized representation. The registered business lines of the branch must strictly align with the scope of the parent enterprise.
Representative Office
Functions as a liaison office, handles market promotion, customer relationship management, and legal representation under explicit authorization. This dependent unit is prohibited from engaging in directly profitable commercial trade.
Do you require additional clarifications regarding corporate incorporation procedures, Foreign Direct Investment (FDI) regulations, or business sub-licenses in Vietnam? Contact our consultants for rapid assistance. Leave your contact details, and we will offer a completely free preliminary consultation.
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