System of economic activities in Vietnam

Economic activities are any systematic, independent activities for remuneration performed by individual person or legal person.

Commercial activity

is an open economic activity, which is performed by merchants in their name for the purposes of gaining a profit

Agricultural company, Fishermen’s household

Cooperative activity

– economic activity which is performed by community of the persons in order to
meet economical requirements of its membership

Non-governmental organizations

(Associations and Foundations)

Governed by:
The Commercial Law.
Governed by:
The legal documents of the Ministry of Agriculture and Rural Development providing for criteria and procedures of issuing certificate of farm economy
Governed by:
The Co-operative Societies Law.
Governed by:
The legal documents on registration and management of activities of non-governmental organizations in Vietnam

I Types of Commercial activity

  1. Private Enterprises:

    This is the most simple business entity.  A private enterprise is owned by an individual who is liable for all of its operations with his/her entire property.

  2. Partnerships:

    A partnership is an enterprise in which there are at least two partners who are co-owners of the company, jointly conduct business under one common name, and are liable for all obligations of the partnership with his/her own entire property. Moreover, a partnership can also have limited partners, who are liable for debts of the partnership only to the extent of their capital contribution.

  3. Joint Stock:

    Companies A joint-stock company is an enterprise where its charter capital is divided into equal portions known as shares. The minimum number of shareholders shall be three and shall not be restricted to any particular maximum number. This business entity is different from the two mentioned above because shareholders may be organizations and/or individuals, and are able to freely transfer their shares in most cases, except for those prohibited by Law on Enterprises.

  4. Limited Liability Companies (LLC):

    There are two types of limited liability companies in Vietnam, which are: multi-member LLC and single-member LLC.

    1. Multi-member LLC: A multi-member LLC is a company of which members may be organizations and/or individuals and must not exceed the number of 50. They are responsible for debts and other property liabilities of the enterprise within the amount of capital that they have committed to contribute to the enterprise.
    2. Single-member LLC: A single-member LLC is an enterprise owned by one organization or individual. The company owner is liable for debts and other property liabilities of the company within the charter capital of the company.
  5. Joint Venture:

    A joint venture between foreign and Vietnamese partners always have the form of a limited liability company with the foreign partner having 30% or more of the legal capital of the company. The establishment of a joint venture company is subject to the approval of the competent authority
    The term of a joint venture is limited to a maximum of 50 years and may be prolonged up to 70 years upon application. The parties may transfer their shares to third parties during that term with a preemption right of the other parties to the joint venture contract.

  6. Company with 100% Foreign Owned Capital:

    If no limitations are prescribed by law, a foreign trader may establish a company with 100% foreign owned capital in Vietnam.
    A company with 100% foreign owned capital is a limited liability company with a business term of up to 50 years. The (general) director of the company is its legal representative, if not otherwise provided for by the charter.

  7. Branch:

    A branch is an organisationally independent part of an undertaking, which is territorially or otherwise separated from the principle undertaking and at the location of which commercial activities are systematically performed in the name of the merchant. The branch can be opened by Vietnamese merchant or foreign merchant. A branch is subject to the same reporting obligations as registered companies, and the head office of the branch is fully liable for activities carried out by the branch.

  8. Representative Office:

    If an overseas company establishes an office that is not used to carry on business or enter into any transaction that causes direct revenue in Vietnam, it may apply for establishment of a representative office.
    The license to establish the representative office will be granted within 15 days upon receipt of the application.

Sources: http://www.gbs.com.vn/index.php/en/faq/business-registration/162-partnership