Set up a business at the lowest possible cost in Vietnam

New incorporation, Operations, Trending, VNBG

The Simple Ways To Minimize Business Setup Cost In Vietnam

How to set up a business for the lowest possible cost in Vietnam? – that is the question.

Start a business on a budget in Vietnam

When you hear the phrase “business incorporation,” it’s easy to imagine the complicated and, as a result, costly procedures that hundreds of foreign investors face every day in Vietnam.

However, not every business requires a large budget to get started. Indeed, according to our VNBG (Vietnam Business Gateway) experts, many micro-businesses can be launched for as little as $3,000 or even less. These are typically sole proprietorships that operate online, have little physical assets, rely mostly on human resource and require little capital.
In this article, we are going to explain how to have low-cost business incorporation in Vietnam and How an investor can start a business on a budget here.

The cost structure to set up a company in Vietnam

Before we get into how to set up a business for the lowest possible cost in Vietnam, we must first understand the cost structure of the business registration process. Understanding what and where you will have to spend money will allow you to see how to cut costs on the unnecessaries or how to have a cheaper alternative.

Capital investment: This is the biggest cost item of starting a business in Vietnam. It is the initial investment in the business that must be funded before it can be self-sustaining.
Business address: One of the basic requirements for establishing a company in Vietnam is to have a business address. A business address is not the same as a residential address. It is met by displaying a leasing contract that indicates the reason for business registration.
Hire a resident director: During the registration process, a company must appoint a resident director. If the investor is not in the country at the time of registration, he must delegate or hire someone.
Registration admin cost: This includes the cost for paper preparation (documents notarization, legalization), state fees, and the service fee paid to a supporter or agency who will help you complete the registration process.
Service fee from a professional consultant or law firm to proceed everything (if you are not familiar with the process).

How to set up a business in Vietnam at minimal cost

If you have a business idea, but you’re wondering how to incorporate it on a shoestring budget, here are some tips to keep in mind.

1. Select a simple business structure

In Vietnam, there are several ways to structure a business. You can choose to have the company owned by an individual, a corporation, a single shareholder, or a group of shareholders. You can also choose between a Limited liability company (LLC) or a Joint-stock company, a Representative office, a Branch, and so on. Each entity form has its own set of registration procedures and deadlines. Single shareholder ownership can be formed more quickly and easily, resulting in fewer administrative tasks and costs.

As a result, budgeted business owners are advised to keep their business structure as simple as possible. An LLC, which can have multiple shareholders, is always easier to set up than a joint-stock company. Individual-owned businesses can be incorporated faster and spend less money on document preparation than corporate-owned businesses.

2. Register for the unconditional business line

In Vietnam, businesses are classified into two types: conditional and unconditional. Conditional means that the company does not have to meet any other requirements besides the two basic/minimum conditions (address, resident director). The most well-known unconditional businesses are Consulting, IT, simple trading companies, Real Estate, E-commerce, and so on.

On the other hand, the conditional business will give you a list of requirements that you must meet in order to register your company. For example, if you want to open a restaurant, you must first secure a location, which means you must pay the rent in order to obtain the leasing contract to submit with your application. If you want to start a headhunting agency, you will need to pay a $15,000 escrow deposit. If you want to open a Training center, you will need to invest at least $900 per student.
The simpler the business conditions, the less work that must be prepared and the lower the cost.

An experienced consultant can advise you on which business lines are appropriate for your company to register. She should also be able to recommend appropriate alternatives for converting your initial conditional business into an unconditional one. As a result, the process will be simplified, and the cost of incorporation will be reduced.

3. Use the virtual office as a business address

For most unconditional businesses, a virtual office can be used for company registration. Using a virtual business address is far less expensive than leasing a physical office space. Using a virtual office, especially for online-based businesses, is the best option because it allows you to save money on unnecessary expenses.

4. Arrange your resident director via your relationships

According to the law, a company must have at least one director (legal representative) resides in Vietnam. If you live in Vietnam, you can easily put yourself in this role. Those who are not in the country, on the other hand, may need to hire someone to be temporarily assigned to this position. You can save money by asking a friend or someone you trust to fill this position for you.

A friend may express the concern of giving their name to be a legal representative for a business entity. VNBG experts can help explain and clarify all the points to your friend to make them clearly understand the role, which can help them accept your request at ease.

5. Decide a viable capital number to start with

As previously stated, capital investment is the most expensive component of starting a business in Vietnam. It is understood to be the fund that will be used to pay for the company’s expenses in the future until it generates enough revenue to survive and profit.
Many businesses in Vietnam do not require any initial capital. As a result, you have the freedom to choose the number with which to begin.

It is not necessary to begin with a large cash fund for consulting, IT, or other online-based businesses. You can choose to begin with a small amount and then increase your capital as needed. It should be noted that any change in capital investment must be pre-approved by the authority before being implemented. It will necessitate some paperwork, so some forethought would be beneficial. Furthermore, if you apply for an investor visa in Vietnam with insufficient capital, the immigration officer may be suspicious. This will necessitate additional explanation, document submission, and a shorter visa validity period.

6. Minimize admin costs

The cheapest way to get incorporated is to handle the process yourself. In theory, you can do the paperwork to register your company by yourself. In this case, the only costs after that are the incorporation fees you must pay to government authority (state fees) and a few other minor costs relating to translation, notarizations ect.
In order to implement this company registration yourself, you must be able to:
Write legal documents in Vietnamese: English is still not available within Vietnamese public services, and be ready to answer questions from Vietnamese authorities regarding your investment proposal anytime (Vietnamese speaking required).

7. Get yourself a reliable and affordable consultant (or lawyer)

Even for a native Vietnamese, incorporating a firm on one’s own is difficult. The documents required for business registration are intricate and demand a comprehensive understanding of legal jargon and business regulations. Depending on the nature of the firm, the investment proposal or business plan that serves as the basis for the application for company registration would need to contain varied language and explanations. Unless you are a trained business consultant or attorney, this task requires a great deal of time and effort. Our recommendation is to seek professional assistance.

A consulting firm or attorney will charge you a fee to handle this issue on your behalf and ensure that your company is registered according to your specifications. Ensure that you have multiple service proposals and prices to compare. However, the least expensive solution is not always the best. You must strike a balance between price, quality, and credibility, and most crucially, who gives you the most assurance of success.

Low-cost business incorporation service package offered by VNBG

Recognizing the financial challenges that many small business owners face when establishing a company in Vietnam, VNBG offers one of the most competitive service packages to investors who live in Vietnam and intend to establish a business.
Our service package includes a full business registration process, virtual office setup, and the opening of a corporate bank account. We are willing to show you where you can save on the cost without scarifying the quality of the outcomes. Our clients’ benefits are what we always prioritize.

Our consultants are available to answer any questions and provide free consultation on the matter.

Fill the form or book a call with us today to start.

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