6/23/2009

10 steps to starting a business in Ho Chi Minh City, Vietnam (summary version)

STEP 1 - Check the proposed company name. Obtain a business registration certificate from the local Business Registration Office under the Department of Planning and Investment
第1步-檢查擬議的公司名稱。取商業登記證從地方商業登記署根據該部的規劃和投資。
Time to complete: 15 days
Cost to complete: VND 200000 (official fees) or $12USD

STEP 2 - Obtain a seal-making license from the Public Security
第2步-從公安獲取印章製作許可證
Time to complete: 4 - 7 days
Cost to complete: no charge

STEP 3 - Make and pick up company seal
第3步-製作並取得公司印章
Time to complete: 7 days
Cost to complete: VND 165,000 ($10USD) for bronze seal

STEP 4 - Open a bank account
第4步-開立銀行帳戶
Time to complete: 1 day
Cost to complete: no charge

STEP 5 - Publish announcement in a daily newspaper
第5步-在日報發布公告
Time to complete: 7 days
Cost to complete: VND 1,026,000 ($63USD)

STEP 6 - Apply for a tax code at the Hanoi Municipal Taxation Department; pay business license tax
第6步-申請稅號在河內市稅務部門;支付營業執照稅
Time to complete: 15 days (simultaneous with previous step)
Cost to complete: VND 3,000,000 ($185USD) for business license tax

STEP 7 - Buy pre-printed VAT invoices from the Municipal Taxation Department or obtain and print self printed VAT invoices
第7步-由稅務部門 購買預先印製的增值稅專用發票,或者打印自我印刷的增值稅專用發票
Time to complete: 15 days (simultaneous with previous step)
Cost to complete: If buying the pre-printed VAT Invoices: VND 14,000 (0.90USD) per book (50 copies). If self-printed : it shall depend on the design and requirements

STEP 8 - Register with the local labor office to declare use of labor (Municipal Department for Labor, Invalids and Social Affairs).
第8步-註冊與當地勞工局宣布使用勞動力(市部勞動榮軍和社會事務部)。
Time to complete: 1 day
Cost to complete: no charge

STEP 9 - Register employees with the Hanoi Social Insurance Fund for the payment of health insurance and social insurance.
第9步-於河內社會保險基金註冊僱員以支付醫療保險和社會保險費。
Time to complete: 1 day
Cost to complete: no charge

STEP 10 - Establish a trade union with the City's Trade Union
10步-和胡志明市總工會(勞動聯團)一起建立公司工會
Time to complete: 15 days
Cost to complete: no charge

以下是十個申請設立步驟的詳細說明:

The following list of 10 steps to starting a business in Vietnam is from The World Bank Group as posted on doingbusiness.org.

oingbusiness.org is a site which provides objective measures of business regulations and their enforcement across 175 countries.

Among other things, they identify the bureaucratic and legal hurdles an entrepreneur must overcome to incorporate and register a new firm. A very cool site!!

I would strongly encourage you to visit http://www.doingbusiness.org/ and view all the cool stats posted on doing business in Vietnam. Please note that there might be other steps you must go through due to the constantly changing requirements in Vietnam. Also, I expect the fees associated with these steps will be increased so visit http://www.doingbusiness.org/ to check for updates or contact each agency and get the latest information yourself.

------------------Data is as of 2006 from doingbusiness.org-------------------

10 steps to starting a business in Ho Chi Minh City (Saigon), Vietnam
STEP 1 - Check the proposed company name. Obtain a business registration certificate from the local Business Registration Office under the Department of Planning and Investment
Time to complete: 15 days
Cost to complete: VND 200000 (official fees) or $12USD

Comment: Application documents should include: the application in the specific form provided by the Ministry of Planning and Investment; the Company's charter; and a list of the company's members. Having obtained the business registration certificate, the company is entitled to business operation and does not need to apply for any further permission from the local authorities.
The Business Registration Office in 2004 introduced online application assistance. Forms now can be downloadable and application can be submitted online. The Business Registry Office shall verify the application submitted online for completeness and correctness then reply via email for an appointment upon which the registrant representative should be present to submit the original application documents. The Business Registration Office then needs another 3-5 days for verification of the original application in comparison with the online submitted documents and the issuance of business registration certificate.

STEP 2 - Obtain a seal-making license from the Public Security
Time to complete: 4 - 7 days
Cost to complete: no charge

Comment: This is done at the Administrative Department for Social Order under the Municipal Police Department (the "ADSO"). The application documents include an application in the form provided by the ADSO and a notarized copy of the certificate of business registration.
Seal making is governed by Decree 58/2001/ND-CP of the Government dated 24 August 2001, which replaces Decree 62/CP of 1993. Most of business transaction documents must be signed and sealed before they are considered valid and legal. Without a seal, an enterprise cannot register with the tax department, open a bank account and apply for operating facilities and services (e.g. telephone, electricity and water supply, office leasing, etc.)
On average, two office visits were required before a company can obtain a seal.

STEP 3 - Make and pick up company seal
Time to complete: 7 days
Cost to complete: VND 165,000 ($10USD) for bronze seal

Comment: The seal must be made by the seal-making service, which is recommended by the ADSO. The original of application for making the seal and the seal-making license must be submitted to the seal maker. The seal maker takes the finished seal to the ADSO. The seal must be picked up at the ADSO together with a certificate of registration of the seal specimen issued by the ADSO.

STEP 4 - Open a bank account
Time to complete: 1 day
Cost to complete: no charge

Comment: Each bank requires different minimum deposit. For instance, Vietcombank requires the fixed amount of VND 5 million for an account in VND and USD$500 for that in USD, meanwhile Asian Commercial Bank (ACB) requires VND 1 million for a VND account and US$100 for a USD account. An application dossier to open the account includes: an application in the form provided by the bank, the company's business registration certificate, resolution of the management board on the authorized signatures and the company seal.

STEP 5 - Publish announcement in a daily newspaper
Time to complete: 7 days
Cost to complete: VND 1,026,000 ($63USD)

Comment: Cost depends on the newspaper, the page and the length of the announcement. In the case of New Hanoi, 9x4 cm, VND1,026,000 for three issues. Details to be made public: name and type of company; the number and the issuance date of the Business Registration Certificate; headquarters and business objectives; charter capital; name of the legal representative and place of business registration.

STEP 6 - Apply for a tax code at the Hanoi Municipal Taxation Department; pay business license tax
Time to complete: 15 days (simultaneous with previous step)
Cost to complete: VND 3,000,000 ($185USD) for business license tax

Comment: Required documents are: a declaration of tax registration (standard form is available); a certified business registration certificate. This procedure registers the company for all necessary taxes. After issuance of the business registration certificate, the company goes to the Hanoi Taxation Department for declaration of relevant taxes and the accounting system.
Within 15 days from the date of the receipt of the application for tax registration, the company will be issued a taxation code. Taxes and the applied accounting system connected to operations of the company (business license tax, VAT, corporate income tax, personal income tax, etc) are to be declared.
For the approval of accounting system, required documents are: an application for approval of the accounting system, a certified business registration certificate, and a C.V. of the chief accountant. The company must comply with the Ministry of Finance's regulations on accounting standards and maintaining its accounting records.
MOF allows a domestic company to incorporate the application for approval of an accounting system into the application for the tax code and for the combined application to be submitted to the provincial tax department belonging to the MOF.

STEP 7 - Buy pre-printed VAT invoices from the Municipal Taxation Department or obtain and print self printed VAT invoices
Time to complete: 15 days (simultaneous with previous step)
Cost to complete: If buying the pre-printed VAT Invoices: VND 14,000 (0.90USD) per book (50 copies). If self-printed : it shall depend on the design and requirements

Comment: Required documents are: authorization of the General Director of the company to the person who shall contact the Department to buy invoices, Application for buying pre-printed invoices (standard form available), ID card of the buying person, Business registration certificate and copy, tax registration certificate and copy.
Upon completion of the application, Tax Dept shall issue an appointment of not more than 5 later days for purchase of invoices. During this 5 days period tax officer shall pay visits to the company's office to certify the existence of the company and sign with the company a minute of certification of the company office location. First purchase is not allowed to be more than two books (100 copies).
It would take more time to have the company's invoices printed at its own requirements. It may take 7-10 days to obtain registration of self-printed invoice from the Municipal Taxation Department. Required documents are: application for registration of self-printed invoices (standard form available), model form of self-printed invoice including all statutory details, map drawing showing the location of the Company's office or copy of the lease contract, if the office property is leased, certified by ward/commune people's committee, ID card of the General Director, copy of business registration certificate, and tax registration certificate and copy.
It will take 7-15 more days to have approved invoice printed at printer authorized by the General Taxation Department of Vietnam. After having the invoice printed and before use, the Company must register the serials of the invoices with the Municipal Taxation department.
The procedure takes from 10 to 20 days.

STEP 8 - Register with the local labor office to declare use of labor (Municipal Department for Labor, Invalids and Social Affairs).
Time to complete: 1 day
Cost to complete: no charge

Comment: Can be done simultaneously with the previous step. This step must be carried out within 30 days after the company is operational. All the employees and their qualification must be registered with the labor office (in conformity with set forms). The relationship between employees and the company is regulated by the Labor Code and set forth in labor contracts. The company can recruit employees itself or hire labor service agencies to do it.

STEP 9 - Register employees with the Hanoi Social Insurance Fund for the payment of health insurance and social insurance.
Time to complete: 1 day
Cost to complete: no charge

Comment: Can be done simultaneously with the previous step. The company must declare all the employees who engage in the labor contracts with the definite term of 3 months or more. The declaration must be in the form provided by the Hanoi Social Insurance and must include the following information: name, date of birth, salary (as stated in the labor contract), serial number of social insurance book (for employees already issued with those books), together with a certified copy of the company's business registration certificate and copy of each labor contract. The Social Insurance Office will issue an insurance registration book for each new employee (i.e. one who did not have an insurance registration book with his/her previous employer). The company is responsible to pay the social insurance and health insurance contributions for each employee directly to the Hanoi Social Insurance on a monthly or quarterly basis. A health insurance certificate will be issued in the first month of the year.
The Health insurance and social insurance funds have been merged.

STEP 10 - Establish a trade union with the City's Trade Union
Time to complete: 15 days
Cost to complete: no charge

Comment: This procedure is compulsory for every company, and must be done within 6 months after start of operation. This first trade union is provisionary, and its term of office is 1 year. Upon expiry of the aforementioned term and according as the presence of some conditions legally required, the provisional trade union unit shall be transformed into an official grassroots trade union unit. The time is not specified as it doesn't affect the operation of the company.

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