KMC – Expert Business Advisory Services for Foreign Direct Investment (FDI) Enterprises!

With extensive understanding of legal regulations, broad practical experience, and longstanding relationships with administrative authorities, KMC’s professional team is dedicated to advising both domestic and overseas investors throughout the implementation process of their investment projects. We assist in various business fields, from establishment and license amendments to operation termination.

At KMC, we believe in a client-focused approach. By familiarizing ourselves with every aspect of your business and its operating environment, we are able to propose the most suitable plans at competitive service fees. 

Establishment of Limited Liability Company (LLC) / Joint Stock Company (JSC)

Starting a business requires extensive research into the scope of business, investment procedures, and regulations in accounting and tax. You need to dedicate significant time, effort, and resources to ensure everything is set up correctly. At KMC, we simplify this process. Our Enterprise Establishment services allow you to focus on your core business objectives while we handle the complexities.

Company Establishment in Vietnam

In Vietnam, the company establishment process results in obtaining an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC) from the Department of Planning and Investment, depending on the company’s head office location. KMC will guide you through these steps to ensure a smooth and compliant business setup.

The Company Establishment Process

Typically, company establishment involves four main steps:

  • Pre-Investment Approval Required in rare cases, such as for specific sectors.
  • IRC Application Most investors proceed directly to apply for the Investment Registration Certificate.
  • ERC Application: Following the IRC, companies apply for the Enterprise Registration Certificate.
  • Post-Licensing Procedure: After licensing, steps such as obtaining a company seal, opening a bank account, and registering for tax and labor insurance follow.

Capital Requirements and Procedures

The total investment capital for an FDI company combines both charter capital and loan capital. Charter capital contributions must adhere to the schedules established by the Law on Enterprises, and any changes to the charter capital require approval from local authorities. Foreign investors must open a direct investment capital account (DICA) to transfer capital into Vietnam legally. 

Establishment of Resident Representative Office (“RRO”)

A Resident Representative Office (RRO) is a popular and cost-effective market entry option for foreign investors looking to explore the Vietnamese market before committing to larger investments. An RRO serves as an extension of its parent company, allowing businesses to conduct market research, act as a liaison, and promote their activities without directly engaging in profit-generating activities.

Key Features of a Resident Representative Office:

  • Dependence on Parent Company: An RRO is not a separate legal entity and is fully dependent on its parent company.
  • Restricted Activities: It cannot generate profits, enter directly into contracts, or issue invoices.
  • Permissible Activities:
    • Conducting market research.
    • Acting as a liaison office for the parent company.
    • Promoting the parent company’s activities through meetings and other events to support business development.

Considerations for Appointing a Chief Representative:

Before appointing a Chief Representative in Vietnam, consider the following:

  • Unique Position Requirement: The Chief Representative cannot hold the position of Chief for another branch in Vietnam.
  • No Overlapping Legal Representative Roles:
    • The Chief cannot serve as a legal representative for another foreign business in Vietnam unless authorized formally by power of attorney.
    • The Chief cannot be the legal representative of another enterprise in Vietnam under any circumstances.

License Validity and Setup Timeframe:

  • License Duration: The RRO’s license is valid for five years and can be extended for another five years.
  • Setup Timeframe: Establishing an RRO typically takes between six to eight weeks. Due to the complexity of the process, hiring a professional service is recommended.

KMC’s Services for Setting Up an RRO in Vietnam:

KMC offers comprehensive services to help foreign investors establish an RRO in Vietnam, including:

  • Application for RRO’s License: We handle the licensing process through the Department of Industry and Trade.
  • Application for RRO’s Seal Specimen: We manage the process at the Police Department.
  • Registration of RRO’s Tax Code: We assist with tax code registration at the Taxation Department.
  • Initial Personal Income Tax (PIT) Registration: We support the registration for the Chief Representative at the Taxation Department.
  • Support in Opening a Bank Account: Guidance and support for setting up the RRO’s bank account.

THINGS TO CONSIDER BEFORE APPOINTING A CHIEF REPRESENTATIVE IN VIETNAM

  • Cannot be a Chief of another branch in Vietnam
  • Cannot hold the position as legal representative of another foreign business who can sign and approve contracts with the absence of formal power from an attorney. To put it in simpler terms, this means that the Chief for RRO cannot be someone who has the position of a legal representative that has the same power as an attorney for a foreign business.
  • Cannot be a legal representative for another enterprise in Vietnam. This means that the Chief of a Vietnamese RRO cannot be someone who holds the position of legal representative regardless of whether they have a power of attorney or not.

The RRO’s License is valid for five years but can be extended for another five years.

Timeframe: RROs can be set up in between six to eight weeks. We recommend hiring a professional service to deal with the myriad of laws and procedures.

Why Choose KMC?

  • Professionalism and Experience: Our team of seasoned experts in legal and business management is committed to delivering precise and dedicated consulting services.
  • Simple and Efficient Process: We help clients with business license modifications, from preparing documents and submitting applications to tracking progress, ensuring a smooth process.
  • Comprehensive Consulting Services: We offer thorough advice on various business licenses, including modifications to company information, business expansion, and updating contact details.
  • Dedicated Support: Our team is always ready to address your needs, providing the fastest and most effective support.

Benefits for Clients Choosing Our Services

  • Timely Delivery: For urgent processing, KMC provides effective solutions. Our professional team and resources ensure timely completion of tasks, even under tight deadlines.
  • Time and Effort Savings: Outsourcing payroll and business advisory tasks to KMC can save time and effort compared to managing these tasks in-house, allowing businesses to focus on core activities.
  • Cost Savings: Although outsourcing may involve higher per-use costs, it is often more cost-effective than maintaining an in-house department due to savings on salaries, insurance, training, management, office space, equipment, and other expenses.
  • Quality Assurance: KMC’s highly skilled team undergoes continuous training and has extensive practical experience. We provide up-to-date recommendations, legal information, and innovative ideas to help businesses manage risks effectively.

We are the first step as well as the next step for your successful business, contact us today for an initial consultation to discuss how we can help you further. 

Let KMC guide you through every step of your company’s establishment. Contact us to streamline the process and ensure that your business is set up for success.

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