Vietnam, known as the land of the “Ascending Dragon”, is now becoming a land of opportunities. The continuous development of business policies and flourishing trade relations encouraged foreign investors to setup the company in the country. However, the top reason is its relatively low setup costs, which is certainly favourable for many entrepreneurs.
So, how can you maximise the benefits from Vietnam’s growing business climate? Discover in this blog about the minimum capital requirements for foreign companies and grow your business in Vietnam.
Capital Requirements Guide for Company Formation in Vietnam
For aspiring entrepreneurs, Vietnam is brimming with opportunities for innovations. Moreover, company formation is made easier. This is because Vietnamese laws typically do not require a minimum legal capital. Did you know that an investor with $10,000 can already have the company approved?
As such, when setting up a branch or representative office as a legal business entity, does not have the minimum capital requirement. However, Limited Liability Company (LLC)/Joint-Stock Company (JSC) entity types would have a minimum capital requirement depending on the area of activity.
So, the next sections will discuss the business fields with the minimum capital requirement.
Industries with Minimum Legal Capital Requirement
Industries with impact on national defence, social order, ethics and public health are under the conditional business line. Some sectors of this line would require a minimum legal capital requirement.
Accordingly, Law No. 03/2016/QH14 stipulates 243 conditional business lines [Economica Vietnam]. It is important to check if a company’s activities will fall under one of the conditional business lines. This is because business industries under this category may have a minimum legal capital requirement. Nonetheless, in order to have a cost-efficient offshore company setup in Vietnam, it is advisable to check with an expert.
Here’s a chart for an overview of some of the business fields along with the legal capital [Lawyer VN]:
Conditional business Line with Minimum Capital requirement
| Business Fields | Legal Capital (USD) |
| Banking sector | $131,100,000-$218,500,000 |
| Real estate | $262,200 |
| Film production | $43,700 |
| General aviation business | $2,185,000 |
| Mutual insurers | $437,000 |
| International travel business | $10,925-$21,850 |
| Setting fixed network telecommunications satellite and mobile satellite | $1,311,000 |
| Credit rating services | $655,500 |
| Commodity exchange | $6,555,000 |
| Debt collection service | $87,400 |
| Audit services | $218,500 |
Discovering Ways for Efficient Offshore Company Setup
Vietnam’s business environment is definitely ideal for anyone who wants to start their business. And, it’s an added merit that the company set up cost is friendly for startups and SMEs.
But it is important to determine if your businesses meet the business line that results in a different minimum capital requirement. Thus, it’s necessary to understand and made adequate adjustments to your resources.
Seeking advice from a company formation specialist might not be too bad of an idea, as it can be quite overwhelming. And this is will help you to accelerate your expansion into Vietnam.
References:
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Minimum capital requirement in Vietnam for foreign companies, Emerhub.com
Legal Structures for Setting Up a Presence in Vietnam [PDF], Daonguyenlegal.com
What is conditional business in Vietnam? How do you treat with this condition for your business in Vietnam?, Gbeeconsulting.com
