Key Takeaways
- Setting up a trading company in Vietnam requires careful planning and preparation, including legal requirements, business location, permits and licenses, and hiring staff.
- A comprehensive business plan is essential for success and should include objectives, a target market, marketing strategies, financial projections, and an operational plan.
- Building relationships with reliable suppliers and customers through excellent customer service is crucial for the success of a trading company in Vietnam.
Vietnam is rapidly becoming one of the most attractive markets for foreign businesses looking to expand their operations in Southeast Asia.
Its strategic location, low-cost workforce, and improving business environment make it a promising destination for trade and investment.
Setting up a trading company in Vietnam can be a complex and challenging process, especially for those unfamiliar with the local laws, regulations, and business practices.
However, with the right knowledge and guidance, it can also be a rewarding and profitable venture.
Companies that only want to import without setting up a legal entity can use an importer of record.
In this comprehensive guide, we will provide you with a step-by-step roadmap on how to set up a trading company in Vietnam.
We will cover all the legal requirements, licensing procedures, and operational considerations that you need to know to establish and run a successful trading business in Vietnam.
Whether you are an entrepreneur, a small business owner, or a large corporation, this guide will provide you with valuable insights and practical advice on how to navigate the Vietnamese market and set up a trading company that meets your specific needs and objectives.
We will discuss the various types of trading companies in Vietnam, the legal and regulatory requirements for foreign businesses, the process of obtaining necessary permits and licenses, and best practices for finding and hiring local staff.
Additionally, we will cover how to create a business plan, establish operations, and develop a marketing and sales strategy to ensure your trading business thrives in Vietnam.
By the end of this guide, you will have a solid understanding of the steps involved in setting up a trading company in Vietnam and the resources needed to make informed decisions.
So, whether you are new to the Vietnamese market or looking to expand your existing business, let us help you navigate the exciting world of trading in Vietnam.
Before we venture further into this article, we like to share who we are and what we do.
About 9cv9
9cv9 is a business tech startup based in Singapore and Vietnam with a strong presence all over the world.
With over six years of startup and business experience, and being highly involved in connecting with thousands of companies and startups, the 9cv9 team has listed some important learning points in this overview of how to set up a trading company in Vietnam.
If your company needs company registration services, you can use 9cv9 corporate services. Book a consultation slot here, or send over an email to [email protected].
How to set up a Trading Company in Vietnam in 2023
- How is the Import-Export sector in Vietnam?
- Legal Requirements for Setting Up a Trading Company in Vietnam
- Obtaining Necessary Permits and Licenses
- Steps to Set up a Trading Company in Vietnam
1. How is the Import-Export sector in Vietnam?
The import-export sector is a significant contributor to Vietnam’s economy, accounting for approximately 200% of the country’s GDP in recent years.
Recent data show that the number of orders shifting from China to Vietnam has seen a significant increase.
Vietnam is emerging as the clear leader in low-cost manufacturing and sourcing, with the country’s manufacturing sector accounting for 25 percent of the country’s total GDP in 2021.
Vietnam has become an attractive destination for foreign investors due to its strategic location, abundant natural resources, and young, skilled workforce.
Another driving force is the presence of free trade agreements.
The Regional Comprehensive Economic Partnership (RCEP) is a major trade agreement that was implemented on January 1, 2022, between 15 countries in the Asia-Pacific region.
This agreement has had a significant impact on Vietnam’s trade industry by reducing costs, improving market access, and streamlining customs procedures.
One of the key benefits of the RCEP for Vietnam is the reduction in trade barriers, which has facilitated the entry and exit of goods from the country.
This has led to an increase in the volume of exports and imports, boosting Vietnam’s trade revenue and stimulating economic growth.
The RCEP has also improved market access for Vietnamese businesses, enabling them to expand their operations and reach new customers in other member countries.
By opening up new markets, the agreement has created opportunities for Vietnamese firms to diversify their products and services, and tap into new sources of revenue.
The country’s top exports include electronics, textiles, footwear, and agricultural products such as coffee, rice, and seafood.
Vietnam’s main trading partners include China, the United States, Japan, South Korea, and the European Union.
The Vietnamese government has implemented several policies to promote and support the import-export sector.
These policies include reducing import tariffs, streamlining customs procedures, and investing in infrastructure development, such as seaports and airports.
Foreign businesses looking to enter the Vietnamese import-export market will need to comply with local regulations and obtain necessary permits and licenses.
Additionally, they will need to develop a thorough understanding of the local business culture and establish relationships with local suppliers, distributors, and logistics partners.
Overall, the import-export sector in Vietnam presents a significant opportunity for foreign businesses looking to expand their operations in Southeast Asia.
With a growing economy and favorable government policies, Vietnam is well-positioned to continue its trajectory as a major player in global trade.
2. Legal Requirements for Setting Up a Trading Company in Vietnam
Setting up a trading company in Vietnam requires compliance with a set of legal requirements and regulations.
Here are some of the key legal considerations that foreign investors should be aware of when establishing a trading company in Vietnam:
Types of trading companies
There are several types of trading companies in Vietnam, including limited liability companies, joint-stock companies, and partnerships. Foreign investors are allowed to establish wholly foreign-owned trading companies or joint ventures with local partners, subject to certain restrictions. For more information on the different company structures, refer to our comprehensive guide on company registration in Vietnam.
Foreign ownership limitations
Foreign investors are subject to certain foreign ownership limitations when establishing a trading company in Vietnam. The percentage of foreign ownership depends on the type of company and the industry in which it operates. For example, in some industries, foreign ownership is limited to a maximum of 49%.
Business registration and licensing requirements
All trading companies must be registered with the Vietnamese government and obtain necessary licenses and permits. The registration process typically involves obtaining a business registration certificate, a tax registration certificate, and a seal registration certificate.
Taxes and accounting regulations
Trading companies are subject to various taxes in Vietnam, including corporate income tax, value-added tax, and import/export duties. Additionally, companies are required to comply with Vietnamese accounting regulations and maintain accurate financial records.
Compliance with trade agreements
Vietnam is a member of several trade agreements, including the ASEAN Free Trade Area, the World Trade Organization, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Trading companies must comply with the rules and regulations outlined in these agreements when conducting business.
3. Obtaining Necessary Permits and Licenses
Obtaining the necessary permits and licenses is a crucial step when setting up a trading company in Vietnam.
Here are some of the key permits and licenses required to operate a trading company in Vietnam:
- Business registration certificate: All companies in Vietnam must obtain a business registration certificate from the Department of Planning and Investment. This certificate is required to operate a business legally in Vietnam.
- Investment registration certificate: Foreign investors looking to set up a trading company in Vietnam must obtain an investment registration certificate from the Department of Planning and Investment. This certificate confirms the legitimacy of the investment and outlines the terms and conditions of the investment.
- Tax registration certificate: All businesses in Vietnam must register for taxes with the local tax authority within ten days of receiving the business registration certificate.
- Trading license: Companies engaged in import/export activities must obtain a trading license from the Ministry of Industry and Trade. This license authorizes the company to import and export goods.
- Customs declaration: Companies engaged in import/export activities must declare their goods to the customs authorities. The customs declaration process involves submitting documentation related to the goods being imported or exported, including commercial invoices, packing lists, and bills of lading.
- Environmental permits: Some businesses in Vietnam may require environmental permits from the local environmental authorities. These permits ensure that the business is complying with environmental regulations and taking measures to protect the environment.
It is important to note that the specific permits and licenses required will depend on the nature of the business and the industry in which it operates.
Companies that only want to import without setting up a legal entity can use an importer of record.
Using an importer of record is a popular option for foreign businesses that only want to import goods into Vietnam without going through the process of setting up a legal entity.
This process is especially beneficial for companies that may have time constraints, are only importing a few times, or want to avoid dealing with regulatory and language barriers.
An importer of record is a third-party service provider that acts as the legal importer of goods on behalf of the foreign company.
This service provider takes care of all necessary procedures, including customs clearance, tax payment, and compliance with local laws and regulations.
By using an importer of record, the foreign company can save time and money while still ensuring that their goods are imported legally and efficiently.
It is important to note that while using an importer of record can simplify the importing process, it may also result in a higher cost per unit due to the service fees charged by the third-party provider.
Additionally, the foreign company may have less control over the importing process and may not be able to establish a direct relationship with Vietnamese suppliers.
4. Steps to Set up a Trading Company in Vietnam
A) Step 1: Getting an Investment License (IRC)
When it comes to establishing a trading company in Vietnam, one of the most important documents that foreign investors must obtain is the investment registration certificate (IRC).
This document is also commonly known as the investment license, and it is a key requirement for foreign investors looking to operate a business in Vietnam.
To begin the process of obtaining an IRC and setting up a trading company in Vietnam, foreign investors must first prepare an application dossier for the Department of Planning and Investment (DPI).
Documents needed for the Investment Registration Certificate in Vietnam
- Application letter
- Copy of identity card or passport of the individual; a copy of the business license or other equivalent documents
- Investment analysis with the following contents: information of investors, the target of investment, the scale of investment, investment capital and planning of capital contribution, location, duration, schedule of investment, labor demand, investment incentives, impact assessment, economic-social efficiency of the project
- A copy of one of the following documents: financial statements from the investors for the two most recent years; commitment of financial support by the parent company; commitment of financial support from a financial institution; guarantee of the financial capacity of the investors; bank reference letters explaining the financial capacity of the investors
- Proposal for land use or copy of land leasing contract/office leasing contract
- Business Cooperation Contract (BCC) for projects invested under a BCC contract
These documents will be carefully reviewed by the DPI to ensure that the proposed business meets all of the necessary legal requirements.
Once the DPI has reviewed the documents and is satisfied with the proposed business plan, they will issue the IRC.
This document enables the trading company to obtain its investment license, which is required for the company to legally operate its business activities in Vietnam.
It’s important to note that the timeline for obtaining an IRC can vary depending on a number of factors.
In general, the process takes around one month, but it can take longer if there are any complications or issues that need to be addressed.
Foreign investors should be prepared to work closely with the DPI and other government agencies throughout the application process to ensure that everything is completed in a timely and efficient manner.
Overall, obtaining an IRC is a critical step in establishing a successful trading company in Vietnam.
By following the necessary procedures and working closely with the relevant authorities, foreign investors can obtain their investment license and begin operating their business activities in this dynamic and rapidly growing market.
B) Step 2: Business Registration Certificate (BRC)
Once an investor has obtained their investment registration certificate (IRC), the next step in the process of setting up a trading company in Vietnam is to secure a business registration certificate (BRC).
This certificate is issued by the Department of Planning and Investment (DPI) and is a critical document that confirms the legal existence of the business and its registration with the Vietnamese government.
To obtain a BRC and officially register the company, the first step is to choose a suitable name and check its availability.
Once a name has been selected and confirmed as available, the company must then prepare the necessary documents, including the company charter, a list of shareholders and directors, and personal identification documents for company representatives.
These documents must be submitted to the DPI for review and approval.
The department will carefully examine the documents to ensure that all legal requirements are met and that the company is properly registered.
If everything is in order, the DPI will issue the BRC, allowing the trading company to legally operate in Vietnam.
It’s important to note that the timeline for obtaining a BRC can vary depending on a number of factors, including the complexity of the company structure and the completeness of the submitted documents.
However, in general, the process takes between 7 and 10 days from the date of obtaining the IRC.
Overall, securing a business registration certificate is an essential step in setting up a trading company in Vietnam.
By following the proper procedures and working closely with the DPI, foreign investors can ensure that their company is legally registered and able to operate in this dynamic and rapidly growing market.
Step 3: Obtain a Retail License
If a foreign investor is planning to establish a trading company in Vietnam that engages in retail distribution, it’s important to obtain a retail license from the Department of Industry and Trade (DOIT).
This license is a permit that allows the company to distribute goods directly to end-users within the country.
To apply for a retail license in Vietnam, the company must first prepare a set of required documents, including the following:
Documents needed for the Retail License in Vietnam
- Business registration certificate (BRC)
- Tax registration certificate
- A detailed list of the products to be sold
These documents must be submitted to the DOIT for review.
During the review process, the DOIT will carefully examine the application and supporting documents to ensure that all legal requirements are met and that the company is fully compliant with Vietnamese laws and regulations.
If the application is approved, the DOIT will issue the retail license.
It’s important to note that the timeline for obtaining a retail license in Vietnam can be lengthy, typically taking between 4 and 6 months.
This is due to the detailed review process and the need to ensure that the company is fully compliant with all legal requirements.
Overall, obtaining a retail license is an essential step for any trading company planning to engage in retail distribution in Vietnam.
By carefully preparing the required documents and working closely with the DOIT, foreign investors can ensure that their company is fully compliant with Vietnamese laws and regulations and able to operate successfully in this dynamic and rapidly growing market.
Step 4: Product Registration
Before commencing any import or export activities in Vietnam, it is essential to register the products with the relevant government agencies and obtain approval for sale.
The product registration process can vary depending on the type of product, and the relevant agency responsible for evaluating and approving products for sale in the country.
For instance, if you are importing or exporting food and beverage products, you will need to register your products with the Ministry of Health, while products such as industrial chemicals may require registration with the Ministry of Industry and Trade.
The registration process involves submitting the required documents, which may include product testing reports, labeling information, and other relevant certifications.
After submitting the necessary documents, the relevant government agency will review the application and conduct testing, where necessary, to ensure that the products meet the country’s standards and regulations.
If the product meets the requirements, the agency will issue a registration certificate, allowing the product to be sold in Vietnam legally.
It is important to note that product registration can be a lengthy process and may take several months to complete, depending on the product’s complexity and the relevant government agency’s workload.
Therefore, it is advisable to begin the registration process as early as possible to avoid any delays in your import or export operations in Vietnam.
Step 5: Obtain Additional Licenses
When setting up a trading company in Vietnam, it is essential to note that in addition to the business registration license, there may be a need to obtain additional licenses and permits depending on the specific business activities and products.
For instance, if a company sells products directly to end-users at a specific outlet facility, they need to acquire a retail license and an outlet establishment license from the Ministry of Industry and Trade.
Moreover, if the company intends to establish a sales e-commerce website with an online ordering function, it must notify the Ministry of Industry and Trade about the website’s establishment.
The notification procedure is relatively straightforward and involves providing the website’s URL and product descriptions.
Finally, a Certificate of Origin may be required when importing or exporting goods.
The Certificate of Origin is a document issued by the chamber of commerce that certifies the origin of the goods being imported or exported.
It is used to determine the tariff rates and other trade-related policies applicable to the goods.
The validity of the certificate typically ranges from six to twelve months, depending on the exporting country and the product category.
It is important to note that the specific licenses and permits required for trading companies in Vietnam vary depending on the business activities and products.
In Vietnam, certain goods fall under a category that requires trading companies to obtain specific import and export permits.
According to Appendix II of Decree 187/2013/ND-CP, such goods include items that are subject to export control under international treaties that Vietnam has entered into or those that are exported within quotas set by foreign countries.
In addition, goods that are subject to import control under international treaties and chemicals, explosive pre-substances, and industrial explosives must also be accompanied by import and export permits issued by the government.
It is important to note that failure to obtain the required permits for importing or exporting goods can result in serious consequences, including fines, penalties, and even criminal charges.
It is highly recommended to seek the professional advice of a top corporate service provider such as 9cv9. 9cv9 Corporate Team stands ready to deliver the best and the most affordable trading company registration and compliance services. Book a free consultation slot here.
Therefore, it is crucial for trading companies to be aware of the specific requirements and obtain the necessary permits before proceeding with any import or export operations involving such goods.
Conclusion
In conclusion, setting up a trading company in Vietnam can be a challenging but rewarding process.
With its growing economy, favorable business environment, and strategic location in Southeast Asia, Vietnam presents a unique opportunity for businesses looking to expand their operations.
To successfully set up a trading company in Vietnam, it is important to understand the legal requirements, choose a suitable business location, obtain necessary permits and licenses, find and hire local staff, create a comprehensive business plan, and establish operations.
Additionally, businesses must be aware of cultural differences, labor laws and regulations, and marketing strategies to ensure success in the competitive Vietnamese market.
With the right approach and support from professionals, businesses can overcome the challenges of setting up a trading company in Vietnam and reap the benefits of a thriving economy and growing market.
By taking the time to plan and prepare, businesses can establish a strong foundation for long-term success in the trading industry in Vietnam.
Overall, setting up a trading company in Vietnam requires careful consideration and preparation, but the rewards can be significant.
Whether a business is looking to establish a presence in Southeast Asia or expand its existing operations, Vietnam offers a range of opportunities for growth and success.
If you need help, 9cv9 Corporate Team stands ready to deliver the best and the most affordable trading company registration and compliance services. Book a free consultation slot here.
