Companies and businesses are starting to proliferate in Vietnam to benefit from its continued economic growth. Business owners and foreign investors see the country as a remarkable business prospect. In order to maximise the benefits, many entrepreneurs would opt for an LLC (Limited Liability Company) structure.
Generally, an LLC is a form of the business vehicle which limits the liabilities of shareholders similar to a corporation and at the same time, it has the flexibility and tax pass-through advantages of a partnership.
The succeeding sections in this blog will discuss the Limited Liability Company structure in Vietnam as well as setting up an offshore company in the country.
Forming a company in Vietnam with LLC Structure
Considering that the Limited Liability Company is the most ideal for company formation in Vietnam, it is important to know its two forms:
Single-member Limited Liability Company
It is an enterprise owned by one organization or individual. The owner has the authority on all business operations but is only liable within the company’s charter capital. This is the most preferred business entity when it is wholly owned by a foreign investor.
Multi-member Limited Liability Company
Organizations/individuals should not exceed the number of 50. The liabilities are only limited to the extent of the capital contributed. Purchase and transfer of capital between members are regulated by law, therefore, limiting outsiders’ entry in the company. This is the preferred option for joint-venture companies.
It is also beneficial to learn about LLC corporate structure to gain insight into preparing for your company’s formation. Read on for an overview of the corporate structure and a checklist of documents necessary to register a foreign company.
LLC Corporate Structure and Offshore Company Formation Checklist
The two types of LLCs in Vietnam almost have the same structure. The difference is that members of the multi-member LLC are part of the Member’s Council. Also, for enterprises with more than 11 founders, an Inspection Committee is necessary.
Here’s an overview of the corporate structure and its corresponding role:
Member’s Council
This is the highest decision-making body and its members elect a Chairman to lead the council.
General Director
The director is responsible for managing the day to day activities of the company. However, the role can be a member or it can be outsourced.
Inspection Committee
This role is the main supervisory board of the management structure. But, for a company with less than 11 members, there is no need to elect an inspection committee.
In addition, here are a list documents necessary when setting up an offshore company in Vietnam:
- Certificate of incorporation
- Company charter or articles of association
- Audited financial statements for the past 12 months
- Valid personal identity cards or passports of any of the businesses authorised representatives
Consulting with a Company Formation Expert
Setting up an offshore business can be daunting as there are many considerations needed to be made. Therefore, seeking professional advice from company formation agent can be valuable. By aligning your business with the available structures in Vietnam, you can have a positive impact on the company’s long-term success. Seek advice now if you are looking for a worry-free offshore incorporation.
References:
Limited Liability Company, Entrepreneur.com
Corporate structure of a Limited Liability Company in Vietnam, Emerhub.com
Checklist of Necessary Documents for Setting Up Foreign Invested Company In Vietnam, Sblaw.vn
