Business Vehicles

Enterprise law 2014 stipulates 5 forms of the company, including single member limited liability company (SLLC), multi-member limited liability company (MLLC), joint stock company (SC), partnership and sole proprietorship. Because of unlimited liability nature of partnership and sole proprietorship, MLLC, SLLC and SC are main forms to be considered when investing in Vietnam.
 
Ref. SLLC MLLC
SC
 
Required number of
Members/shareholders
One (individual or legal entity) From 02 to 50 members (individual or legal entity) At least three shareholders
(individual or legal entity)
Organizational structure President/ Members’ Council, Director/General Director, and Supervisor (if the owner is an organization)
 
 
Members’ Council, a Chairperson, a Director/General Director and Supervision Board (if the number of member is 11 or more) General Meeting of Shareholders, Board of Directors, the Supervision Board, and Director/General Director (If the joint-stock company has fewer than 11 shareholders and the shareholders being organizations hold less than 50% of total shares of the company, the Supervision Board is not necessary);
- Or
 
General Meeting of Shareholders, Board of Directors, and Director/General Director (at least 20% of members of the Board of Directors must be independent members and there must be an internal audit board affiliated to the Board of Directors)
 
Property liability of members/
shareholders
Not exceeding the contributed capital or the capital promised to contribute
 
Not exceeding the contributed capital or the capital promised to contribute Not exceeding the amount of sold and registered shares
Issuing bonds Not allowed Not allowed Allowed
 
Issuing shares Not allowed Not allowed Allowed
 
Capital transfer No restriction Must offer to other members first;
 
If offered members do not buy or do not buy wholly within 30 days from the offering date, the offering member can offer to others people.
 
In the first 03 years, only transfer to founding shareholders; transferring to others must be accepted by other founding shareholders.
 
After 3 years, no restriction imposed
 
Some of following business forms may be taken into consideration for the purpose of market exploration, survey and research. The procedures, requirements and conditions to set up such presences are much easier than those applied to company establishment.

 
  • Cooperatives.
A cooperative is a collective economic organization with co-owners and legal entity status, established voluntarily by at least 7 members who cooperate with and assist one another in production, business or job creation activities to meet their common needs on the basis of autonomy, self-responsibility, equality and democracy in management of the cooperative.
Foreign nationals residing in Vietnam, are 18 years or older, with civil act capacity may be members of a cooperative. However, the cap on capital contribution is 20% of the charter capital of the cooperative.

 
  • Branches
A branch of a foreign legal entity in Vietnam is a dependent part of the foreign business entity, established and conducting commercial activities in Vietnam in accordance with the law of Vietnam or an international treaty to which Vietnam is a member. Nevertheless, a foreign branch is not a popular form of commercial presence in Vietnam.
 
  • Representative Office (RO)
Representative Office (RO) is an office established by a legal entity to conduct marketing and other non-transactional operations, commonly in a foreign country where a branch office or subsidiary is not warranted. As they are not used for actual business activities (e.g. sales), establishing Representative Offices are generally easier than setting up a new branch or subsidiar.
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