It is extremely vital to choose the right entity and register your company when starting any business in Vietnam.
There are 5 legal entities that are available to establish in Vietnam: limited liability company (LLC), joint-stock company (JSC), branch, representative office, and shelf company.
Limited Liability Company:
It will require 1-3 months to open a business with this type of legal entity. It is allowed to have 100% foreign ownership with number of owners limited to 1-50 members. LLC has simpler company structure in comparison with JSC (Joint-stock Company).
As it is in LLC, 100% foreign ownership is allowed. The differences are the setup time and number of owners. You will have to spend more than 3 months to establish it and have minimum 3 owners. Apart from LLC, JSC has no maximum in terms of their number.
It is used to establish a presence in Vietnam, can issue a VAT invoice, generate profits, and get into contracts and agreements. In case with branch office license tax applicable. It has more complex setup procedure in comparison with representative office.
It is used to establish a presence in Vietnam as well. VAT invoice issuance, contracts or agreements signing, and profits generation are not allowed. License tax is not applicable. Representative office has relatively simple licensing process and is quite easy to shut down.
You can set up Shelf Company in 1-2 days and start to run business immediately. It can get approval from bank, gain new clients and secure business contracts faster.