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Plan before starting a business in Vietnam
Plan before starting a business in Vietnam
With Asia becoming the prime continent to invest in, all the Asian countries have stepped up their game to attract all sorts of FDI. Companies and investors from all across the world are looking into various countries to see which country suits their business goals the best. Vietnam is one such country where more foreign investors are taking up an interest in. So if you are looking forward to investing in Vietnam, then make sure you ask yourself certain questions before starting your business there.
What kind of business should I do in Vietnam?
The most basic question one has to ask before jumping into investing is what business to do in Vietnam. You cannot just go in blindly and start your business the next day. Each country is suited for certain activities and is blessed with certain resources that should be utilized. Similarly, in Vietnam investments are categorized into two groups, one is the non-conditional investment and the other one is the conditional investment. Non-conditional investments are much easier and less risky investments and include trades such as IT firms, manufacturing and consultancy and so on. On the other hand, conditional investments include the high risk, high reward type of businesses such as real estate, trading, travel agencies among other things. So it is up to you to decide what sort of investment makes the most sense for you and how would the Vietnamese market respond to that.
Name of the business
Finding the correct name of your business is very important. Not only will it give an identity to your business, it will also be needed when you are going to register your business with a company and get a business permit. Not all names are allowed in Vietnam and names that already taken will force you to rethink your choice. Your business should have both a local name, i.e. a Vietnamese name as well as an English name.
Where will be my business?
For every business in Vietnam, you will need a permanent place of operations. A fixed address is required especially when you will be going to incorporate your business in Vietnam. However, not all places are eligible to be registered as an address in this country. There are individual criteria for using addresses for registering. For instance, houses that have got leasing agreement, or office buildings where the owner has a license to rent out their building for offices are eligible for registration purposes. This is one thing that a foreign investor has to be very thorough about. You wouldn’t want to start operations in one address before finding out that you are not allowed to do so there. That would be a big hassle for you and your entire staff to relocate and halt operations.
What will be the structure of the company?
Once you have decided what kind of business it is that you want to do and where to do it from, you will have to come up with the structure of the company. Yes, it is very important to decide on this before moving forward with your plans because then it will determine if you are going to be a partnership business, a limited liability company or a joint venture and so on. Based on your decision you will be required to fulfill certain demands such as appointing the director of a company or have a company secretary who will oversee all the operations. All these are crucial because once you go to apply for company registration or let us say want a business license, data regarding your shareholders and directors will be needed.
How much capital is needed?
Probably the most important matter that needs to be dealt with before starting any sort of business in any country is the capital needed to get started. The amount of capital you have or planning to invest, or planning to rise will determine the type of business you are going to be starting. Even after you fix on a budget, your capital plans will need to go through the certain medium in Vietnam and once approved you can go on to the next step. So you need to come up with clever planning on the financial aspect of your business. In Vietnam, there isn’t any sort of minimum amount of capital needed to start a business. However, there are certain industries which have an entry barrier. Businesses such as real estate, banking, and financial institutes all have a certain amount of capital which needs to be there. So once again, your company planning and capital planning needs to be perfect and well thought out before you finalize and start your business. The last thing you want to do is go to Vietnam unprepared and unplanned and end up running around doing extra work.