For those who are planning to set up a company in Vietnam to start a trading business, this legal guide will serve as a good starting point.
What is a Vietnam trading company?
Vietnam trading company is a company lawfully established under the laws of Vietnam and registerd to perform sale of goods and/or other sale of goods related activities in its business scope.
Can a foreigner start a trading company in Vietnam?
The answer is Yes. In accordance with Vietnam's WTO Commitment and its domestic regulations, foreign investors are allowed to establish Vietnam trading company, with foreign ownership rate up to 100%.
What does a trading company in Vietnam do?
According to Decree 09/2018/ND-CP, foreign-owned trading companies may register to perform Sale of Goods and Other Sale of Goods Related Activities ("Trading Activities"), include of:
- Distribution, include of: wholesaling, retailing, sale agencies, and franchising
- Commercial appraisal service
- Logistics service
- Products rental service, excluding finance lease
- Commercial promotion service, excluding advertising service
- Commercial intermediary service
- E-Commerce service
- Bid-holding service
However, each of those activities has different dificult level and requirements to succesful register. Among them, the import, export and distribute of products are the most popular trading activities chosen and succesful registered by many forein investors previously.
How do I start a trading company in Vietnam?
Step 1. Incorporate a trading company
1. Here are 2 basic requirements for a Vietnam trading company registration:
- Having a physical address in Vietnam. At the registration stage, a leasing contract of office is a compulsory part of the application dossier.
- Having financial ability to run the business in Vietnam, proved by a personal bank statement or financial statements of 2 latest fiscal years.
2. Minimum registered capitals: from $30,000 to $50,000
Although there is no minimum registered capital requirement, the capital should be enough to cover business expenses until the company is able to generate positive cash flow. In practice, proposed registered capital contributions will be closely examined by the licensing authority to assess whether the amount is enough to keep the company running after establishment.
3. Registration timeline
The licensing process often takes from 1 month upon application dossier submission date. Results for a Vietnam trading company establishment are an Investment Registration Certificate and an Enterprise Registration Certificate.
For detailed information, refer to Vietnam company registration guide
Step 2. Register with Vietnam Customs
All importers and exporters must activate their VNACCS code (Vietnam Automated Cargo And Port Consolidated System) account by an USB token with Vietnam Customs before performing import/export activity. It generally takes 24-48 working hours for your account to be activated.
Step 3. Apply for additional licenses or approvals
1. For retail business:
Before performing retail business, the company shall apply for a Retail Business License with provincial Department of Industrial and Trade. Theory, the licensing process takes around 10 working days. The company that plans to open a retail store, in addition, must apply for a Store Establishment License. The process might be time-consuming and “painful” since it will be subject for Economic needs testing (ENT), a test that conditions market access upon the fulfillment of certain economic criteria.
2. For a specific product:
In general, a trading company can import, export and wholesale MOST KIND OF PRODUCTS. But for some conditional products, the importer needs to get prior approvals of management authority before importing. For example, before importing functional, supplement foods or cosmetics, the importers must be announced of regulation conformity and registration of regulation conformity announcement at the Department of Food Safety - Ministry of Health.
Step 4. Apply for C/O in the exporting, or importing country (optional)
Currently, Vietnam is a contracting party of many FTAs such as EVFTA, VKFTA or ASEAN, which provide a lot of favorable tariffs for import and export business. If the imported products are produced in a country which exists a FTA with Vietnam, the imported should apply for C/O (certificate of origin) in the origin country to enjoy preferential tariffs for goods when entering Vietnam.
How can Nova Law assist you?
Looking for a lawyer service to set up your Vietnamese company? Nova Law delights to assist the foreign investors during their path of doing business in Vietnam. Why Nova Law?
- Well-experienced lawyers with years working on foreign investment consulting, have been cooperating with a wide range of clients: from multinational corporations, factories, service companies, to small startups;
- Professional service quality, with high standards in detailed works and professional ethics;
- We are a combination of Vietnamese lawyers who are familiar with Vietnamese laws on investment and corporate. Nova Law always maintain strong relationships with the ministries and provincial authorities. So as the licensing process or consulting for difficult cases will be conducted more smoothly.
Our scope of work includes:
With many years of experience in corporate services, our lawyers will assist you and provide advice in setting up your business. You can save a lot of time and enjoy good services at a reasonable price.