Major Forms of FDI in Vietnam
Vietnam has become an attractive destination for foreign investors in recent years. More and more foreign investors are planning to invest in Vietnam, which include direct investment like creation of legal entities and indirect investment. This article is intended to give you a brief introduction to the major forms of foreign direct investment (FDI) in Vietnam.
- Limited Liability Company (LLC)
Limited liability company is the most common form of foreign direct investment. A limited liability companies may have 1-50 members (shareholders). Thus, it can be divided into single-member limited liability companies and multi-member limited liability companies.
The organizational structure of a single-member limited liability company is comprised of a members?council and a director/general director. In case that there is no members?council, the organizational structure should be a chairman of the company and a director/general director. The company shall have at least one legal representative who holds the position of chairman of the members?council, the chairman of the company or director/general director. The chairman of the members?council, another member of the members?council or the chairman of the company may concurrently hold the position of director/general director.
The organizational structure of a multi-member limited liability company is comprised of a members?council, a chairman of the members?council, and a director/general director. A company shall have at least one legal representative who holds the position of chairman of the members?council or director/general director.
- Joint Stock Company (JSC)
A new joint stock company shall have at least 3 founding shareholders. And there is no limit on the maximum number of shareholders.
The organizational structure of a joint stock company is comprised of a general meeting of shareholders, a board of directors, an inspection committee and a director/general director. If the company has less than 11 shareholders and the shareholders that are organizations hold less than 50% of the company’s total shares, then establishment of an inspection committee is not compulsory.
If the company has only one legal representative, the chairman of the board of directors or the director/general director shall be the legal representative. If the company has more than one legal representative, the chairman of the board of directors and the director/general director shall be the legal representatives.
- Representative Office (RO)
A representative office does not have independent legal person status. The foreign company that intends to set up a representative office in Vietnam shall have been operating for at least one year. A representative office can conduct market research and business promotion activities for the foreign company which it represents, but it is not allowed to engage directly in any profit-making activities.
- Branch
A branch also does not have independent legal person status. The foreign company that intends to set up a branch in Vietnam shall have been operating for at least five years. However, in practice Vietnam only allows foreign companies in specific sectors such as banking, insurance, securities, fund management, etc. to set up branches in Vietnam.
KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.
See also:
Vietnam WFOE Registration Procedures and Fees
Vietnam Trademark Registration Costs and Procedures
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