Does company establishment require charter capital in Vietnam?
One of the mandatory contents to declare when carrying out the procedure to register for company establishment; is the charter capital. However, many people do not understand this kind of capital. So, in this article LSX legal firm will present information for: “Does company establishment requires charter capital in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 48/2021/ND-CP
Does company establishment require charter capital
Charter capital is a type of capital that needs to be prepared when establishing a new company. This type of capital contributed by members or shareholders of the company, or committed to contributing to the enterprise upon its establishment for a certain period of time.
The Law on Enterprise stipulates that when establishing an enterprise, every company must declare and register an appropriate amount of charter capital before the business registration. Therefore, it is impossible to establish a company without charter capital.
How much charter capital needed to put up a company?
At the present time, Vietnam’s legislation on enterprises does not stipulate the required level of charter capital that a limited liability company (LLC) needs to register upon its establishment (except for the case that the company operates in the business lines where the legal capital and the escrow level are regulated). Therefore, companies can freely choose the proper level of charter capital for their business.
On the other hand, if a limited liability company operates in lines of business that require legal capital conditions (for example, security services, banking, insurance, …) or require a deposit (such as film production services, debt collection, …) then the company must register the charter capital for its establishment at least equal to the legal capital or deposit as prescribed.
Charter capital contribution
The amount of charter capital to establish a limited company will be decided by the members of the company by contributing capital to the company. For the capital contribution, members must contribute as committed within 90 days from the date the company granted the certificate of business registration.
Company members are only allowed to contribute capital to the limited company with assets that differ from those as committed if they are approved by the majority of other members. During this period, members have the rights and obligations corresponding to their contributed capital as committed to contributing.
Conditions to establish a company
Subject
Business owners who are Vietnamese citizens or foreigners residing in Vietnam:
- Enterprises
- Agencies, organizations, individuals demand to establish a company
Foreign entrepreneurs whose nationality is a member of the WTO.
- Establishing a Joint-venture company in Vietnam.
- Company with 100% foreign investment.
- Enterprises establish branches and representative offices in Vietnam.
Company name
The company name must not overlap or cause confusion with the name of other business; which has been registered before on the National Database. The enterprise name must be written in Vietnamese, including numbers and symbols, must be pronounceable, and contain at least two elements:
“Types of company + Name”
Besides, the law allow English in the company’s name.
Business lines
According to regulations, enterprises have the right to perform any business that not prohibited by law and need to register with the Business Registration Authority before operating. If the enterprise operates business in conditional lines, it must satisfy the license and relevant legal papers
Before the establishment, it is necessary to know whether the line of business you intend to do is on the list of prohibited industries or conditional business.
Head Office’s address
“House number with street name + name of ward/commune/town + name of district/township/provincial city + central city/province”
The address must locate in the territory of Vietnam. If the place where the head office located does not have a house number or street name. Then a locality confirmation (that the address does not have a house number or street name) must be submitted together with the business registration dossier.
Before renting an office in a building/apartment, you should check whether the apartment has legal commercial/office functions before signing.
Charter capital and legal capital
Charter capital means the amount of capital contributed or committed to contributing by members or shareholders and recorded in the company’s charter. Legal capital means the minimum capital required to establish a company, prescribed by law for each industry or business line.
Seal
Enterprises have the right to decide on the form and number of seals. However, they must ensure the following information:
- Company’s name
- Business code
- Before using the seal, companies have to register with the competent authority for publication on the national business registration portal.
LSX legal firm’s service on business establishment
When establishing a company, people must carry out the procedure following the law at the competent business registration authority (under the Law on Enterprise 2020). The process of establishing a business includes many different steps and phases. If you are not familiar with the law, this process may take a lot of time.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Using our service, you do not need to do the paperwork yourself. We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application; submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Related articles
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Necessary information for business establishment in Vietnam
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Related questions
According to the Vietnamese legislation, the head office of the Company must not be located in a dormitory or apartment building for living purposes. Rented premises in the form of commercial floors or separate houses with full legal lease contracts can be registered to establish a company.
The trademark protection title valid from the date of issue to the end of 10 years from the filing date. When it expires, the owner can extend it further, without limiting the number of extensions.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Does company establishment require charter capital in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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