Vietnam’s economy has grown substantially in recent years, resulting in a huge need for graphic design. The growth in this demand led to a spike in the number of companies registered in this field every year. These businesses were established to fulfill a variety of reasons, offering a range of products including 2D/3D design for commercial advertisements, architecture, and more aesthetic aspects such as fashion design, etc.
According to data provided by NEXTMSC, the graphic design industry in Vietnam would be valued at USD 1.20 billion in 2021 and will increase to USD 1.85 billion by 2030. Click here for more info.
Many people mentioned “Graphic Design” while describing the type of business they wish to start in Vietnam, but are unaware that it refers to a large family of business codes. Some elements of the “graphic design” industry are available to foreign investment, while others are not. Some members of this “graphic design” family impose unique conditions on foreign investors, in contrast to others. To properly establish a firm with the name “Graphic Design,” it is usually necessary to investigate the product or service that will be offered.
In the same way, although all companies can be categorized as “Graphic Design” businesses if you intend to create a firm to design posters, banners, or other visual advertisements, it is subject to different conditions than architecture design, interior design, or fashion design. Understanding the precise business model will allow you to formulate the most precise needs for business formation in Vietnam.
What Graphic Design company in Vietnam do you want to start? Conditions for setup
Before diving into How to open a Graphic Design company in Vietnam, we need to explore what kind of Graphic Design you are going to do, therefore understanding the conditions for setup. We need to meet these requirements before we start the registration process. We will be showing you the most three popular business concepts registered as a “Graphic Design” company in Vietnam, depending on the products of the business.
Graphic design of commercial ads
The product of this business is the visual products for marketing-related items or commercial ads such as posters, banners, brochures, website interfaces, POSM, large campaign images, logos, creative content, etc. If you are into a cartoon drawing, and character modeling (without full movie production), it can be classified in this group also.
This business when registered for a business code, will be filed under “Advertising services” (CPC 871). To form this kind of firm, however, you must establish a Joint Venture company in which you may own up to 99.9% but not 100% of the company. The joint venture here means you must find a local corporate partner, who is also a company that has “Advertising” in their business license, to establish the business with. Aside from this joint-venture condition, the process to establish the company is quite easy. You can use Virtual Office as a business address and set the capital of the company as low as USD 10,000. The company will be completed after 3-4 weeks from the application submission date.
You can refer to our article about “how to establish a digital marketing company” for more details: https://vietnambusinessgateway.com/open-a-digital-marketing-or-advertising-agency-in-vietnam/
Fashion design company
Although foreign investment in “Fashion Design” is not restricted, it is neither on the list of Vietnam’s WTO commitments nor prohibited. A company with foreign investment in the fashion industry participates in design activities not covered by WTO, any FTAs, or CPTPP between Vietnam and other nations… It indicates the business registration is subject to a separate Ministry review (can be one or multiple ministry reviews and approval). Typically, when a firm is not governed by official commitments or treaties, it requires substantial resources and the reputation of the investors to receive approval from the relevant ministries. For private ownership and the SME model, acceptance is unlikely. If going in this direction, corporate ownership with significant capital is highly recommended.
Architecture or interior design company
If your business has anything to do with Architecture or Interior design as the service, the company would need to obtain a business code for “Construction Design Industry” or CPC 8671 as mentioned in the Vietnam WTO’s Commitment. The good thing is this business is open to 100% foreign ownership, and as long as your nationality is from one of the TWO country members, you will be eligible to open this business. However, corporate ownership will be recommended in this field.
Architecture and Interior Design businesses are expected to communicate closely with the local Department of Planning and Architecture, mostly to verify their expertise. As required by the client, the architects must be properly competent for the job/project, and one of the prerequisites is obtaining a professional license from the government for certified personnel.
- The architects must hold a bachelor’s degree.
- The architects must have a license for architecture job practice.
- The architects must have at least 3 years of experience.
Above are the three most popular sectors in the Graphic Design business in Vietnam. Understanding the requirements for each business setup will allow you to prepare for the setup process more effectively. Sometimes a business must be restructured to comply with local requirements and to achieve a balance with its business plan.
Once you have a clear understanding of the graphic design firm you wish to start and its requirements, we can move on to the next phase of How to incorporate a company to materialize your business idea.
Steps to establishing a business entity in Vietnam – a foreign-owned company (LLC)
Establishing a foreign-owned corporation requires two licenses, known as IRC (Investment Registration Certificate) and BRC (Business Registration Certificate). After obtaining the BRC, the company’s seal/stamp should be created, followed by a bank accounting opening. Once the bank account has been established, the investor will infuse the committed funds into the company to finish the registration procedure.
Read more from 10 steps to create a company in Vietnam
To start the incorporation process, besides meeting the requirement for the business, you need to prepare the followings:
- A business address: You must have a lease indicating that you will use an office/address to register a business. To form a company for the majority of businesses, a virtual office is sufficient (no need for a physical office). If you lack your arrangement, you can also use VNBG’s business address arrangement for your company registration (virtual office).
- A resident director: Every business entity in Vietnam is required to have at least one resident legal representative. This can be a Vietnamese or non-Vietnamese individual (including yourself), but they must obtain a permanent address in Vietnam to be deemed a resident. If you are not currently in Vietnam, you can ask a friend or acquaintance to provide their name for a few months. If not, you may consider hiring a director nominee from VNBG for six months before hiring your own or sending your candidate to assume the role.
- Paid-up capital: The law does not specify a minimum investment amount for many businesses; it only states that it must be “fair” based on what you can prove. In theory, you can therefore choose your number. This capital must be invested within 90 days of the business license’s issuance date (meaning AFTER the company is opened). After the registration is complete, a bank account for your company should be opened, so that you can immediately contribute funds. The majority of our clients have chosen USD10,000 as their starting capital. Many have entered a number larger or smaller than this one, as they see fit. This capital is an accessible fund, which implies you will use it to pay for future business needs (such as paying vendors, paying staff, and paying taxes to the government). This capital can be increased or decreased, but this process requires license amendment which is time-consuming and paper-intensive. You should therefore be aware of the timeframe and cost of license amendment for future capital change.
Timeline: It takes roughly 3-4 weeks from the date of paper submission to the completion of the company’s registration.
- If the company is under individual ownership, the process can be quite easy and quick, as only your scanned passport and bank statements (download files) from the last three months are needed.
- If the company will be opened under corporate ownership, you will need to provide the documents of the companies overseas which are legalized at the Vietnamese embassy in your country (hard copy).
Alternative approaches?
As previously indicated, certain Graphic Design enterprises are subject to unique restrictions for the establishment, and there are no binding commitments between the Vietnamese government and other nations or the WTO regarding the Graphic Design industry. The Ministry may accept or reject the business’s application. In reality, the risk of rejection might reach as high as 90 percent, and the processing time can span several months or even years.
If you are unable to meet the requirements for setup immediately, we offer the following alternatives to assist you to achieve your business objectives eventually.
Operating a nominal local business
It is always easier for locals to start and run a graphic design company in any aspect. A Vietnamese investor can open a company in a field that is restricted to foreign investment and can also easily obtain certificates or sub-license for the operation phase.
Therefore, to have an easy start in the business, you can form a firm via a nominee arrangement and manage the business through such an arrangement. It is crucial to find a trustworthy local partner to link them through a service contract.
Eventually, you may organize a transfer of ownership to yourself in the future when the firm is stable and you’ve completed all the prerequisites and obtained the required permits. This M&A approach has been used in a variety of sectors, including Fashion design, architecture, Cartoon production, Advertising, Construction, etc.
Establish and manage your staff via the arrangement of employer-of-record.
If you are uncertain as to whether you want to enter the Vietnamese market with a full-fledged corporate organization. We suggest you establish a team in Vietnam to evaluate the efficiency and effectiveness beforehand. How do you manage the team while you are not present in Vietnam? – you may ask.
The answer is: Using the Employer of Record (EOR) service With the EOR solution, a service provider can host your team. This service provider will manage your payroll and other costs associated with human resources. Utilizing Vietnam’s human resources to fulfill your company’s objectives enables you to enter the market at a reduced cost and without sacrificing market access.
Register a different business sector related to or adjacent to the graphic design industry.
The last suggestion we have for you is to apply for a business license in a different area with a simpler procedure and fewer restrictions, but which nonetheless has the same characteristics as graphic design businesses. This method reduces the expenses associated with entering the market. Contact our professionals at VNBG for more details on this solution.
How can the VNBG support you?
As a leading business consulting organization in Vietnam, VNBG can assist you in any aspect of this business registration. We can assist you in incorporating the firm and acquiring the required sublicense to operate the business. In addition, we offer our nominee local arrangements to help you establish and run your business through us. We also provide our EOR service as the 3rd alternative to help you operate a team of any size and level.
In addition, we can assist you in recruiting and managing staff and conducting business operations in Vietnam (accounting, paying taxes, finding location and address, and so on).
VNBG is delighted to be the most efficient and cost-effective business solution in the Vietnam market, thanks to many years of experience in serving thousands of enterprises.
We are looking forward to bringing our services to you as well.
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