Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Vietnam. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
This information was collected from World Bank: Doing Business
* Takes place simultaneously with another procedure.
This information was collected from World Bank: Doing Business
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Check the proposed company name; obtain a business registration certificate as well as a tax registration certificate from the local business registration office under the Department of Planning and Investment | 14 days | VND 200,000 (official fees) |
| 2 | Make a company seal | 6 days | VND 165,000 - VND 370,000 for bronze seal |
| 3 | Registration of the sea-sample at the Police Department | 1 day | VND 20,000 |
| 4 | Open a bank account | 1 day | no charge |
| 5 | Publish announcement in a daily newspaper | 5 days | VND 700,000 |
| * 6 | Pay business license tax | 1 day, simultaneous with previous procedure | VND 1,000,000 (business license tax) |
| * 7 | Buy pre-printed VAT invoices from the Municipal Taxation Department or obtain and print self-printed VAT invoices | 10 days, simultaneous with previous procedure | about VND 200,000 per book |
| * 8 | Register with the local labor office to declare use of labor (Municipal Department for Labor, Invalids and Social Affairs). | 1 day, simultaneous with previous procedure | no charge |
| * 9 | Register employees with the Social Insurance Fund for the payment of health insurance and social insurance. | 1 day, simultaneous with previous procedure | no charge |
| * 10 | Register for trade union with Vietnam General Confederation of Labour | 7 days, simultaneous with previous procedure | no charge |