Two members or more Limited Company
There are two most common types of company in Vietnam, Limited Liability Company (separated by one member and two members or more) and Joint Stock Company. Each type of company has the following natures:
- Possess legal person status.
- Liability of each shareholder limited to capital contribution.
Two members or more Limited Liability Company is usually chosen by small-to-medium sized foreign investors. The advantage and disadvantage are summarized as below.
- Liability of the members for the company's debts is limited to the amount of their respective capital contribution.
- The capital transfer regime is tightly regulated so investors can easily control the change of members, limit the penetration of strangers into the company.
- The number of members of the company is not much (maximum 50 members) and the members often have a relationship so the management and administration of the company is not too complicated.
- Two members or more Limited Liability Company is not allowed for share issuance.
- The voting rights based much on portion of capital contributed in company capital.
- Must be approved by members before transferring capital.
Procedures for Setting up a Two members or more Limited Company
- Investors should first select a Vietnamese name for the company that they will be setting up in Vietnam. The company that they set up must then file an application for pre-review of the company name and business scope as well as to retain the company name during the prereview period with the DPI.
- An investor is required to submit the Investment Application Form and relevant documents to the Board of Management Industrial Park (or Board of Management Economic Zone, depends on their location).
- For investors making inward remittances of foreign currencies, investment funds may be remitted from abroad after the investment is approved. When the remittance is settled in Foreign currency, the original approval documents should be submitted to the domestic bank handling the transaction, and approval of the investment amount must be authorized by the authority which approved the investment according to the paragraph above.
- The operator of an export/import business must apply first to the Department of Industry and Trade, DPI for an advance check of its English name, and then apply to that Bureau for registration as an export/import business.
- A company that is engaged in the manufacturing or processing of goods must apply for a factory registration with the local county or city government where it is situated. If the factory is located in an export processing zone, science park, or agricultural biotechnology park, the company should apply for registration with the administrative agency in charge of that zone or park.