What are the requirements to set up a company?
To establish a company, you need to ensure that the following conditions are met:
- Legal representative and owner: Full 18 years old or older, have a valid ID card or citizen identification card or a valid passport and are not in the group of subjects prohibited from establishing a company.
- Company address: has a defined address and is not in an apartment to live in
- Company name: The company name must not overlap or cause confusion with the names of previously established companies (widely applicable).
- Charter capital: Determine the charter capital for business registration. Charter capital is the amount of capital contributed or fully committed by the owner, member or shareholder within a certain period (not exceeding 90 days from the date of issuance of the Certificate of Business Registration) and recorded in the Company rules.
- Identify business lines: The industry you want to register must be allowed by law as well as the business must meet all the conditions in that industry (if any).
- Determining the type of company: Business owners need to consider to choose the right type of organization based on the criteria of tax liability, liability, transferability, addition, replacement and regulation. business size to meet the efficiency in business operations of the enterprise.
General process for setting up a new company
A company/enterprise establishment process for most types of companies/enterprises under the current corporate law/2023 (Enterprise Law 2020) (private enterprise, limited company, public company) joint-stock company, one-member limited liability company) includes 4 stages as follows:
Stage 1: Prepare all the necessary information to set up the business establishment dossier.
Before starting the work of drafting documents to establish a new company, the business owner and members need to sit together to discuss and fully determine the information related to the establishment. company.
1. Select the type of business
The type of business is the first important factor that you need to consider and master. Business owners need to understand the characteristics of each type of business to be able to identify and choose the type of business that best suits the company’s development orientation. The main factors that business owners need to consider to choose the right type of organization: tax, liability, transferability, addition, replacement, business size to attract investors other.
Common types of businesses in Vietnam include: Private enterprise, Partnership, One-member limited liability company, Limited liability company (2 members or more), Joint-stock company.
2. Choose a business line
The line of business of an enterprise regulates the business areas in which the business is allowed to operate, as well as the items that the business is allowed to show on the invoice of added value to the purchaser. Therefore, you need to clearly define all the business lines that the company will operate in the near future.
If choosing a business is so complicated, wouldn’t it always be better to choose them all? The answer is no. Many business lines require businesses to meet certain conditions. For example, the real estate industry needs a legal capital of 20 billion VND or more, or the travel service industry needs an International Travel Business License…
At the present time, all business lines are standardized according to the provisions of the law on business registration.
3. Name the company
The company name is a factor related to the identification, identification and branding of the business later.
When naming a company, it is best to keep it short, easy to remember, easy to pronounce, and not overlap or cause confusion with the names of previously established companies (widely applicable). To determine if the name of your company is identical with other companies, you can visit the “National Business Registration Portal” to look it up.
4. Determine the address of the company’s headquarters
Identify the address of the head office under the lawful use of the company.
The head office of the enterprise is the contact point of the enterprise in the territory of Vietnam, whose address is determined including house number, niche, alley, alley, street, street or hamlet, hamlet, commune, ward. , township, district, district, town, city directly under the central government, phone number, fax number and email (if any).
You should note that the apartment (used for living) cannot be used as the address of the company’s headquarters for business registration.
5. Identification of capital contributors/shareholders
Capital-contributing members/shareholders are those who directly own the company since its establishment. You need to clearly list:
- How many members/shareholders does your company have?
- How much is the capital contribution of each member/shareholder?
- What is the capital contribution ratio of each member/shareholder?
Of course, the member/shareholder with the highest percentage of capital contribution will have the highest rights and responsibilities to the company.
6. Determination of charter capital
Charter capital is the amount of capital contributed or fully committed by members and shareholders within a certain period (not exceeding 90 days from the date of operation license) and recorded in the company’s charter.
Charter capital is determined based on the total capital contributed by members/shareholders in the company.
You also note that the annual license tax payable by the company is determined based on the charter capital of the company.
7. Identify the legal representative
After determining all the above information, you need to determine who will be the legal representative of the company.
A legal representative is a person prescribed by law or a competent state agency to represent the company in transactions such as signing contracts, signing tax documents, etc.
Usually, the title of the legal representative in the company can be director, general director, deputy director, deputy general director.
Stage 2: Drafting and submitting the application for company establishment
After preparing the necessary information, the person carrying out the procedures begins to draft and prepare the necessary documents. Depending on the type of business, the type of business that needs to be prepared will be different. Here are the common types of documents that most practitioners must prepare when starting a new company:
1. Application for company registration
The application for company registration is a document with the content of the request for company registration (new enterprise) sent to the competent authority (business registration department). The form of the application form is specified in the guiding circulars (the most recent being Circular 01/2021/TT-BKHDT guiding business registration).
2. Company Charter
The company charter is a document containing the content of an agreement between the members and the company (for the limited liability company, the partnership) or the founder of the company and the shareholders and between the shareholders. for joint-stock companies) are prepared based on common legal frameworks (corporate law, tax law, labor law, financial law, accounting, etc.) to determine how to create, operate and effectively dissolve the company.
The form of content of the company’s charter is specified in the guiding circulars (the most recent being Circular 01/2021/TT-BKHDT guiding business registration).
3. List of members/capital-contributing shareholders
You need to prepare a list of capital contributors (for a limited company) or a list of shareholders (for a joint stock company). This list clearly lists the information of each member/shareholder as well as the percentage of capital contribution in the company you want to register.
4. Copies of personal papers of capital contributors/shareholders
After you have the list, you need to prepare a copy of one of the following documents for each member/shareholder:
- Identity proof.
- Citizen ID.
The selection of who will be the members (shareholders) of the company will be decided by the business owner, but the number of members and shareholders will be determined by the type of business.
Note: The validity of the ID card is not more than 15 years.
5. Investment registration certificate if the company has elements of foreign capital contribution
In case the successful company has capital contribution from foreign members or shareholders, a valid Investment Registration Certificate is required.
6. Additional documents in case the capital contributing member/shareholder is an organization
In case the capital contributing member is a domestic organization, it is necessary to submit together with the establishment decision or the certificate of business registration or other equivalent document and a valid copy of the personal identification paper of the authorized representative. manage the contributed capital portion, the owner’s written authorization for the authorized person.
In case the capital contributor is a foreign organization, you need to prepare additional documents similar to the case of a domestic organization but must be consular legalized.
7. Authorization letter for organization/individual to carry out the business registration application procedure (if the person doing the procedure is not a legal representative)
In case the person doing the procedures is not the legal representative of the company, a power of attorney is required so that the applicant can perform the procedures related to the application on behalf of the representative.
8. Other types of documents for conditional business lines
Many conditional business lines in Vietnam require businesses to prepare documents to apply for special permits, such as Certificates of Food Hygiene and Safety for the food industry, Paper import and export license, for business activities related to import and export.
Stage 3: Submit application & publish report
1. Identification of the affiliated registration agency (where the application is received)
First of all, the implementer needs to know which agency will receive your company incorporation documents. Normally, the receiving agency is the Business Registration Office of the Department of Planning and Investment under the local authority.
Assuming, the company you register is based in Hanoi, you need to bring this document to submit at the Business Registration Office of the Department of Planning and Investment under Hanoi.
2. Submit application & pay fee to publish report
The executor brings the dossier to the receiving agency for submission. In addition, you need to prepare money to pay the publication fee when submitting the application.
Note: It is not necessary for the legal representative of the company to submit the application. The legal representative of the company may authorize another person to file on behalf of the company. In case of authorization, the authorized person needs a valid power of attorney (Article 12 – Decree 01/2021 on Business Registration).
3. Get business registration certificate
After 03 working days from the date of receipt of the application, if your application is valid, you will be granted a Certificate of Business Registration.
4. Post a statement
The application-receiving agency will post the statement on your behalf in case you have paid the fee for posting the statement in step 2 of this stage.
Stage 4: Making the seal of the legal entity
1. Design of seal pattern
Before proceeding to engrave the seal, you need to have a design of the seal sample. You can design it yourself or ask a 3rd party or an imprint to design it for you.
2. Mark engraving
You bring a copy of the Certificate of Business Registration and the seal design (if any) to the establishment that has the function of stamping to make a legal seal for the company.
3. Get the seal of the legal entity
When coming to receive the seal, the business representative brings the Certificate of Business Registration (original). In addition, if the legal representative of the enterprise cannot directly receive the seal, it can authorize (notarized authorization) for another person to receive the seal.
Stage 5: Procedures after company establishment
An enterprise doing business in non-conditional lines, after having an enterprise registration certificate and seal, can conduct its business activities according to the provisions of Article 8 of the Law on Enterprises.
However, according to the law, after obtaining a business registration license, an enterprise needs to perform the following tasks:
1. Hang the sign at the address of the company’s headquarters
Since the business registration certificate of the enterprise is valid, you need to carry out hanging the sign at the address of the company’s headquarters. The company logo should meet the following criteria:
- Must contain information including: Company Name, Tax Code, Address.
- Dimensions: For horizontal signs, the maximum height is 02 meters (m), the length does not exceed the width of the front of the house; For vertical signs, the maximum width is 01 meter (m), the maximum height is 04 meters (m) but must not exceed the height of the floor where the sign is located.
- Location: in a place where it can be clearly seen from the outside.
Signboards must be placed throughout at the head office address from the time the company is established until your company carries out the procedures to move the head office address or dissolve.
2. Digital signature registration
Digital signature is a technology application that helps businesses sign documents and electronic documents like signing & stamping ordinary documents. Most businesses today use digital signatures.
Digital signatures are used in common cases such as:
- Sign electronic invoices
- Sign the tax return electronically
- Sign an electronic contract
3. Register for a bank account
Every business needs at least one bank account (in the name of the business) to use in cases such as electronic tax payment, receiving payments from customers, other transactions…
When opening an account at a bank, businesses need to prepare:
- Certified copy of business registration certificate
- A certified true copy of the personal identification document of the legal representative of
the decision on appointment of an accountant and a certified copy of the personal identification document of the accountant (if the company already has an accountant)
Since the procedure for opening an account at each bank will be different, you need to contact the bank you plan to open an account in advance to prepare the required documents.
4. Register for tax return online
Enterprises log in to the electronic tax system (Etax) with an account issued by the tax authority to register the necessary declarations.
Etax electronic tax system: https://thuedientu.gdt.gov.vn
5. Submit declaration & pay license tax
Submit the license tax return and pay the license fee.
Pursuant to the provisions of Clause 1, Article 1 of Decree No. 22/2020/ND-CP, license fees shall be exempted in the first year of establishment or production and business activities (from January 1 to December 31). with:
– Newly established organization (granted a new tax code, new enterprise code).
– Households, individuals, groups of individuals that start production and business activities for the first time.
During the license fee exemption period, organizations, households, individuals, groups of individuals establish branches, representative offices or business locations, the branch, representative office, business location license fees are exempted during the period when organizations, households, individuals, and groups of individuals are exempt from license fees.
6. Registration of VAT calculation method
Register for the initial tax return with the tax authority within the prescribed time limit.
Registering for tax declaration online via digital signature service, “From July 1, 2013, all businesses in the country must declare and submit tax returns online, this content is provisions in Law No. 21/2012/QH13 on amending and supplementing a number of articles of the Law on Tax Administration”.
7. Registration and notification of use of electronic invoices
Carry out procedures for purchasing, ordering and printing invoices according to Circular 39/2014/TT-BTC, effective from June 1, 2014. From September 1, 2014, newly established businesses will be able to register the method of calculating VAT according to the deduction method and order to print used VAT invoices.
8. Fully prepare business conditions for conditional business lines.
Finally, the performer performs a number of other procedures for conditional business lines to fully meet the legal requirements, such as applying for a certificate of food hygiene and safety (production industry). food products), the decision to allow the establishment of schools (for the education sector)…
Results after completing the legal procedures for establishing a company
Results received after completing the business establishment procedures (These are all documents and records for a company to operate legally and avoid risks for the business in the future):
- Business registration certificate.
- The seal of the legal entity of the enterprise and the certificate of seal sample of the seal engraver.
- Company Charter (Establishment Statement, Certificate of Capital Contribution, Register of Members, Application for Business Registration, Charter of the Company).
- VAT invoice.
- Notice on the use of electronic invoices.
- Notice of opening a bank account to the Department of Planning and Investment.
- Table of registration of the method of depreciation of fixed assets.
- Notice on the change of VAT calculation method of taxpayers.
- Notice of application of withholding tax calculation method.
- Notice of confirmation of electronic tax filing.
- Notice of issuance of electronic invoices.
- Certificate of using digital certificate.
- Tokens for online tax declaration.