Starting a Semiconductor Consulting and Design Firm in Vietnam

Consulting firm in semiconductor business
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The semiconductor industry in Vietnam is a budding sector with immense growth opportunities. At present, Vietnamese companies have limited expertise and resources, prompting the government to actively promote foreign investment in direct semiconductor manufacturing and its associated industries. In this evolving landscape, business consulting and product design are leading the charge, paving the way for manufacturing companies to set foot in Vietnam’s semiconductor market.

In this article, we will guide you step by step to open a consulting, or semiconductor design foreign-owned company in Vietnam. We will cover the necessary steps and requirements to establish a successful business in this industry.

The opportunities and challenges of the semiconductor industry in Vietnam

The opportunities of the industry

Vietnam boasts a stable political system, a strategic geographical location, abundant human resources in engineering and technology, and a rapidly expanding digital infrastructure.

Vietnam has become a magnet for foreign semiconductor companies like Intel, Mavel, Qualcomm, Amkor, and more, all eager to invest and grow their presence in the country. By collaborating with local partners, these companies are not only sharing their expertise but also fueling the creation of groundbreaking products through innovative collaborations.

Vietnam has a great opportunity to build on its expertise in electronics manufacturing and assembly. By moving into more advanced stages like design, testing, and packaging, Vietnam can take its industry to the next level and create even more value.

Vietnam is in a prime position to capitalize on the increasing need for semiconductors across multiple industries, including 5G, Internet of Things (IoT), artificial intelligence (AI), and smart cities. The demand for advanced and tailored semiconductor solutions presents an exciting opportunity for Vietnamese companies to carve out new market spaces.

The challenges of the industry

Vietnam is in need of a robust semiconductor ecosystem, with local suppliers, design firms, testing facilities, and research institutes to support its semiconductor industry.

Vietnam is up against tough competition from regional powerhouses like China, Taiwan, South Korea, and Singapore. These countries have more advanced technologies, larger markets, and stronger government support, making the competition fierce.

Vietnam is facing a significant challenge due to the worldwide shortage of chips and raw materials, impacting the manufacturing and export of its electronic products.

Vietnam has the potential to become a top destination for both foreign and domestic investors, but to achieve this, the country must focus on enhancing its investment climate, infrastructure, intellectual property rights protection, and human capital development.

Can I open a 100% foreign-owned consulting (design) company in Vietnam?

A consulting, or design company, is a company that generally consults about the operation of semiconductor companies and also offers product design (including chips, diodes, transistors, and integrated circuits, etc).

Typically, in Vietnam, the consulting and design industries have distinct business codes. Regarding business consulting, foreign investors have the opportunity to establish a company with 100% foreign investment.

The design industry is subject to specific regulations for different specialized design types, such as interior design, graphic design, web design, and more. However, in Vietnam, the semiconductor manufacturing sector is still in its early stages, and there are currently no specific regulations regarding production or related design fields. As a result, when foreign investors register for the semiconductor product design business, it falls under the category of IT business. Foreign investors can establish businesses with 100% foreign investment in Vietnam’s IT sector.

In brief, at present, there are no particular regulations or prerequisites for setting up a semiconductor consulting firm or design company. Therefore, foreign investors can establish a new business in Vietnam with 100% foreign investment in accordance with the existing regulations.

How can I establish a semiconductor consulting, design company in Vietnam?

1. Decide the form of the entity

When establishing a consulting firm in Vietnam, the first step is to register the company to obtain the business license. The most common business type is limited liability company (LLC).

A foreign can own up to 100% of the company or can form a joint venture with a local partner(s). An LLC allows a company to have up to 50 shareholders.

In Vietnam, the business license requirements for consulting services are notably relaxed compared to other jurisdictions in the region. Unlike in some other countries, consulting firms in Vietnam can start operations without needing a special license. However, employees in certain consulting areas need to have the qualifications or experience to establish credibility in their chosen field.

2. Know the conditions

To open a consulting company, you need to prepare the following requirements

Capital investment: There is no mandatory minimum capital requirement for consulting or IT firms. Investors have the flexibility to determine the amount of capital they are comfortable investing. Some companies have been established with as little as $1,000 or $3,000 as initial capital. Nevertheless, adjusting or increasing the capital would involve some paperwork. Consequently, many investors opt to start with a safe initial investment of $10,000 to $15,000.

Business address: Every company in Vietnam must have a registered address for the establishment, and each industry will have different location requirements for setting up a business. Industries such as restaurants, language centers, and recruitment require a physical office address to provide services, and government agencies will conduct inspections before granting operational licenses.

However, for consulting and IT businesses, things are much easier. You can use a virtual office to register your business. A virtual office is a service that allows you to use the address of the service provider for your company registration. This way, you can save significant amounts on annual rental costs.

Resident legal representative (director): It is mandatory for having at least a person with resident status, whether local or expat (including the owner), to be put as the Legal Representative of the company in Vietnam. If you are not currently in Vietnam or do not have someone available for this role, consider utilizing a nominee resident director service to fulfill this requirement.

Read more about 10 steps to setup and manage business in Vietnam you need to know

How can VNBG assist you to start venturing in Vietnam?

Running a business in Vietnam or any unfamiliar legal environment can substantially raise operational expenses. This not only decreases productivity, but also heightens business risks.

As the consulting firm has many years of experience in advising and supporting thousands of clients, particularly foreign-invested enterprises in Vietnam. VNBG offers a wide range of services, including business establishment, virtual office solutions, and operational services such as recruitment, payroll, accounting and compliance, tax advisory, and disclosures, among others. We provide highly customizable services to meet the unique needs of each business.

Contact VNBG for a free consultation and start your business venture in Vietnam today!

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Micheal Dinh

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