How to Set Up a Small Company for Startups in Vietnam

Nowadays, the need to start a business is growing, especially as more and more individuals and groups of young customers want to realize their business ideas by establishing their own businesses. However, for those who are just starting a business, many people are still concerned about capital, procedures, and how to establish a small company. In this article, Viet An Law will clarify how to set up a small company for startups in Vietnam in 2025, from choosing the right model, preparing legal documents, to business registration procedures, and notes when setting up.

Criteria for identifying a small company

Pursuant to Article 5 of Decree No. 80/2021/NĐ-CP guiding the Law on Supporting Small and Medium-sized Enterprises, criteria for identifying micro, small, and medium-sized enterprises are stipulated. Accordingly, small enterprises are determined as follows:

• Small companies in the fields of agriculture, forestry, and fisheries; industry and construction are those employing on average per year no more than 100 employees participating in social insurance, and having total annual revenue not exceeding VND 50 billion or total annual capital not exceeding VND 20 billion, but not classified as a micro company.
• Small companies in the fields of commerce and services are those employing on average per year no more than 50 employees participating in social insurance, and having total annual revenue not exceeding VND 100 billion or total annual capital not exceeding VND 50 billion, but not classified as a micro company.

How to set up a small company for startups in Vietnam

Choosing the right business form

Starters should consider choosing one of the following forms:

• Sole proprietorship: Suitable for an individual who wishes to operate and manage the business under the individual’s own name. This form of enterprise does not have legal personality.
• Partnership: Requires at least two (02) members who are individuals, referred to as general partners, conducting business together under a common name and bearing unlimited liability with all assets of each partner for the obligations of the partnership. This form is appropriate where the partners have close relationships, family ties, or mutual trust.
• Single-Member limited liability company: Owned by one individual, possessing legal personality, with liability limited to the amount of the contributed capital. This form is suitable if the client intends to start a business independently.
• Multi-member limited liability company: Consists of between 2 and 50 capital-contributing members, with liability limited to the extent of the capital contributions. This form is appropriate for a group of clients pooling capital.

Joint Stock company: Requires a minimum of 3 shareholders and may issue shares to raise capital. A small enterprise should not select this form, as it is suitable only for expansion plans and involves complex shareholder and management structures.

A small enterprise may be established through one of the following methods:

• Capital contribution to set up a new company;
• Conversion from a household business into an enterprise;
• Division or separation of an enterprise to form a new company;
• Acquisition of an existing company.

Selection of company name

• The Vietnamese name of an enterprise shall consist of two elements in the following order: the type of enterprise; the proper name.
• The type of enterprise shall be written as “limited liability company” or “LLC” (công ty trách nhiệm hữu hạn / công ty TNHH) in the case of a limited liability company; as “joint stock company” or “JSC” (công ty cổ phần / công ty CP) in the case of a joint stock company; as “partnership” or “Pship” (công ty hợp danh / công ty HD) in the case of a partnership; and as “private enterprise,” “PE,” or “private ent.” (doanh nghiệp tư nhân / DNTN / doanh nghiệp TN) in the case of a private enterprise.
• The proper name shall be composed of letters in the Vietnamese alphabet, the letters F, J, Z, W, numerals, and symbols.
• The enterprise’s name must be affixed at its head office, branches, representative offices, and business locations. The enterprise’s name must be printed or written on transaction documents, dossiers, records, and publications issued by the enterprise.
• Furthermore, the enterprise’s name must not be identical with or confusingly similar to the names of other companies. It is prohibited to use the names of state agencies, units of the people’s armed forces, or socio-political organizations to form the enterprise’s name.

Selection of the company’s head office

• The principal office of the enterprise must be located within the territory of Vietnam, serving as the contact address of the enterprise and determined in accordance with the boundaries of administrative units; it must have a telephone number, fax number, and email address (if any);
• The address must clearly specify the house number, alley, lane, street, hamlet, village, sub-hamlet, commune, ward, township, district, town, provincial city, province, or centrally-run city;
• The head office of the company shall not be located in an apartment building or a collective housing unit;
• A small company may use a private residential address or a leased office as the registered company address.

Selection of business lines

• Select appropriate business lines, using industry codes in accordance with Decision No. 27/2018/QĐ-TTg;
• Depending on the business line, an appropriate level of charter capital may be determined. Certain business lines require only a small amount of capital, such as online trading, service provision, or handicraft production.
• For conditional business lines, after obtaining the Certificate of Business Registration, it is required to apply for additional Licenses in accordance with the specific requirements of each particular line of business.

Charter capital

• Upon the setup of a small company, the business registration authority shall not require a minimum capital level nor proof of charter capital. However, if the small enterprise operates in a sector requiring statutory capital, it shall then be required to provide proof of charter capital.
• It is advisable to select an appropriate capital amount to ensure business operations and to be consistent with the company’s financial capacity and operational scale.

Preparation of the company registration dossier

The enterprise registration dossier shall include:

• Application for enterprise registration.
• Company charter.
• List of members or founding shareholders.
• Copy of Identity Card/Citizen Identity Card/Passport of the owner.
• Certificate of investment registration (in case of foreign capital contribution).

Note on small business establishment procedures for startups in 2025

Submission of the application dossier

Upon completion of the business registration dossier, organizations or individuals must submit the dossier to the Business Registration Authority at the place where the company’s head office is located.

Note: The Business Registration Authority was formerly the Business Registration Office under the Provincial Department of Planning and Investment. However, at present, in many localities, the Department of Planning and Investment has been merged; therefore, it is necessary to update information regarding the competent authority after the merger.

Forms of submission of the application dossier

Organizations or individuals carrying out business registration procedures may submit the dossier by one of the following three methods:

• Direct submission;
• Submission via postal service;
• Online submission through the electronic system.

Time limit for processing the application dossier

Within 03 working days from the date of receipt of a complete dossier, the Business Registration Authority shall examine the validity of the dossier and issue the Enterprise Registration Certificate.

State fees

Pursuant to Circular No. 47/2019/TT-BTC, the state fees payable by organizations and individuals when carrying out procedures for company incorporation include:

• Business registration fee: VND 50,000 per application. In cases where business registration is made online or the company is established on the basis of conversion from a household business, this fee shall be exempted.
• Fee for publication of enterprise registration information on the National Business Registration Portal: VND 100,000 per application.

Current policies supporting small companies

Pursuant to the Law on Support for Small and Medium Enterprises 2017, small enterprises are entitled to the following support measures:

• Credit access support: companies are supported by agencies, organizations, and individuals in developing feasible production and business plans, enhancing corporate governance capacity, management skills, and financial transparency to improve access to credit; they are granted credit guarantees at the Small and Medium Enterprise Credit Guarantee Fund.
• Tax and accounting support: Small and medium companies are entitled, for a limited period, to apply a corporate income tax rate lower than the ordinary rate applicable to companies in accordance with the provisions of the Law on Corporate Income Tax.
• Production premises support: The People’s Committee at the provincial level shall submit to the People’s Council of the same level for decision the allocation of land funds for the establishment and development of industrial clusters; zones for processing agricultural, forestry, fishery, and seafood products concentrated for small and medium enterprises in conformity with the approved land-use planning.
• Market expansion support: Enterprises and organizations investing in and operating distribution chains of products in which at least 80% of participating suppliers are small and medium enterprises producing in Vietnam are entitled to the following incentives: exemption or reduction of land rent, land use fees, and non-agricultural land use tax; exemption or reduction of corporate income tax for a limited period in accordance with the provisions of the Law on Corporate Income Tax.
• Information, consultancy and Legal support: Information on plans, programs, projects, and activities supporting small and medium enterprises; business guidance information; information on credit, markets, products, technology, and business incubation…
• Human resource development support: Companies are entitled to exemption or reduction of expenses for participating in training courses funded by the State budget on business start-up and corporate governance, as well as vocational training for employees working in small and medium enterprises.

Above is advice on how to set up a small company for startups in Vietnam in 2025. If clients have any related questions or need advice on establishing a business, please contact Viet An Law for the best advice and support!