How much capital is suitable to establish a Joint-stock company in Vietnam

Every year, many large enterprises and companies are established in Vietnam. Among those, the Joint-Stock Company is a relatively complex type of enterprise. It is organized and operated in a tight apparatus with high consistency and a large amount of capital. A joint-stock company is the result of many people’s capital as well as efforts of construction and leadership. Therefore, owners and members have to follow the prescribed procedures cautiously when carrying out the establishment. Capital is the top concern of businesses because it determines the first step for the development of a business. LSX legal firm provides this article to answer the question: “How much capital is suitable to establish a Joint-stock company in Vietnam?”

Legal grounds

• Law on Enterprise 2020
• Civil code 2015
• Decree 47/2021/ND-CP

What is the decision to establish a joint-stock company?

First of all, what should we know about the basic information about the joint-stock company?

According to Clause 1, Article 111 of the Law on Enterprise 2020, a joint-stock company is a type of enterprise, in which:

• Charter capital is divided into equal parts called shares;
• Joint-stock companies can raise capital by issuing shares;
• Shareholders are individuals or organizations that own shares. Minimum of 3 shareholders and unlimited on the maximum of shareholders. Shareholders only liability for the debts and other property obligations of the enterprise to the extent of the amount of capital contributed to the enterprise;
• The profits that shareholders receive from owning shares are dividends;
• A joint-stock company has every factor to be considered a legal entity under Article 74 of the Civil Code 2015 after being granted a Business Registration Certificate.

Thus, after meeting the legal requirements for the establishment, business owners will decide to establish a company. 

The decision to establish a company is among the most important steps for your business to carry out legal operations and business productions in accordance with the law. Because this is the key step in bringing the idea of a joint-stock company into reality.

How much capital needed to establish a Joint-stock company?

The amount of available capital and mobilized capital will determine whether the business establishes and operates smoothly or not.

In fact, setting up a joint-stock company does not define the minimum amount of required capital. It depends on the business line and industry that the company chooses to register.

• In case a joint-stock company registers for business lines with no minimum capital requirements, the company may prepare capital depending on its financial capacity.
• On the contrary, if the company registers business lines that have requirements and conditions on legal capital, margin capital, the enterprise must prepare the prescribed capital level. For example, if the law regulated on that business line 700 million VND of legal capital, then the business needs at least 700 million VND. At the same time, the enterprise must have a certificate to verify this capital. 

Types of capital to establish a Joint-stock company

The establishing capital of a company does not simply mean an amount of money that the owner of the company prepares. The capital to establish a joint-stock company includes 4 main types:

• Firstly, Charter capital
• Secondly, Legal capital 
• Thirdly, Margin capital 
• Fourthly, Foreign capital contribution

Minimum amount of charter capital

As mentioned above, charter capital is one of the four main types of capital to establish a joint-stock company. At the time of business registration, the company’s charter capital is the amount of capital contributed by shareholders as well as members of the company or committed to contributing in a certain period of time.
The company needs to declare and register its charter capital with the competent authority.
The level of capital that enterprises must register when establishing is not specified. It depends on each industry that the joint-stock company has chosen.

In conclusion, the minimum charter capital of a joint-stock company varies.

LSX legal firm’s service on company 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

Procedures and dossier for dissolution of Joint-Stock Company at Vietnamese.

Joint-stock companies in Vietnam set up representative offices abroad

Joint-stock company registration procedure under Vietnamese Law

Related questions

Contact LSX

Finally, hope this article is useful for you to answer the question about “How much capital is suitable to establish a joint-stock company in Vietnam”. If you need any further information, please contact  LSX Law firm: +84846175333 or Email: [email protected]

Conclusion: So the above is How much capital is suitable to establish a Joint-stock company in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com