How much capital is required to set up a business?

by DangKhoi

When setting up a business or adding a business line, there must be an amount of capital to register a business license and start operating. However, How much capital is required to set up a business? So, is it possible to establish a company with a small amount of capital or without capital? Let’s find out in this article with LSX Law firm.

Legal Ground

Law on Enterprises 2020

Decree 01/2021/ND-CP

How much capital is required to set up a business?

So, Legal capital is the minimum capital to establish an enterprise, And, The Competent Authority decides the amount depending on the business sector and industry.

Also, some business lines need legal capital as follows:

Establishment of banks, credit funds of state-owned commercial banks, joint-stock commercial banks, joint-venture banks, banks with 100% foreign capital, investment banks, cooperative banks, trust funds Central people’s use: Legal capital 3000 billion VND;

Foreign bank branches: Legal capital of 15 million USD.

Policy Bank, Development Bank: Legal capital is 5000 billion VND.

Grassroots People’s Credit Fund: Legal capital 0.1 billion VND.

Documents proving legal capital: License of the state bank.

Non-bank credit institutions: Finance companies: Legal capital 500 billion VND.

Financial leasing company: Legal capital 150 billion VND.

Real estate business: Real estate company: Legal capital 20 billion VND.

There are many business lines that do not need legal capital. Particularly for the establishment of a joint stock company, there is a requirement for charter capital. So, the law stipulates that the charter capital of shareholders must be sufficient to establish a company, and, the level of charter capital may vary between companies depending on the financial capacity of shareholders and each business area.

The amount of charter capital of a company is recorded in the Charter with reference form without proof. And Charter capital affects the amount of license tax you pay annually.

  • Charter capital is over 10 billion, license tax is 3 million / 1 year
  • Charter capital is less than 10 billion, license tax is 2 million / 1 year

Vietnamese law does not specify the capital level to establish a company However, depending on the business project, financial plan, and industry requirements, future business owners can refer to the capital levels of businesses in the same industry to choose a reasonable capital level for their company. 

Hope this article is useful for you. If you need any further information, please contact LSX Law Firm0833102102

Frequently Asked Questions

What is Charter Capital?

So, Charter capital is the amount of capital that enterprises decide freely without regarding other provisions of law (except for some industries that require legal capital and need to prove capital).

What is margin capital?

Margin capital belongs to legal capital but it is mandatory for enterprises to have an actual deposit in the bank during the operation of the company.

Contributed capital of foreign organizations/individuals?

Foreigners can contribute capital with a certain percentage to a Vietnamese company or use all foreign capital to establish a company with 100% foreign capital.

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