Criteria for Setting Up a Single-Member LLC in Vietnam

Currently, many investors choose the type of single-member limited liability company (LLC). Due to the specific nature of a single-member LLC, an individual or an organization is the owner. Therefore, individuals and economic organizations can make decisions related to production and business activities quickly without having to go through any other individual or organization, and this is one of the specific advantages of the type of single-member limited liability company. That is why many investors have chosen this type of company to register to establish a business in Vietnam.

What is a single-member LLC?

Pursuant to Article 74 of the Law on Enterprises 2020, a single-member limited liability company is an enterprise owned by a single organization or individual ((hereinafter referred to as “owner”). The owner’s liability for the company’s debts and other liabilities shall be equal to the company’s charter capital.

Characteristics of a single-member LLC

• A single-member LLC is owned by an individual or an organization.
• The company has legal status from the date of issuance of the enterprise registration certificate.
• The company owner is responsible for the company’s debts and other property obligations within the scope of the LLC’s charter capital.
• The company owner is allowed to transfer part or all of his/her capital contribution to another person.
• The company is not allowed to issue shares.

Criteria for setting up a single-member LLC in Vietnam

Criteria for entities to establish a company

All organizations and individuals have the right to establish a company when they meet the following conditions:

• Organization with legal status;
• Individuals aged 18 and over; with full civil capacity
• Not subject to the State’s prohibition on establishing a company as prescribed in Article 17 of the Law on Enterprise 2020.

Criteria on company name

• The Vietnamese name of a single-member limited liability company must include two elements: the type of enterprise (LLC/Limited Liability Company) and the proper name.
• The enterprise name must be attached at the head office, branches, representative offices, and business locations of the enterprise.
• The company name must be printed or written on transaction documents, records, and publications issued by the enterprise.
• Not falling under the prohibited cases as prescribed in Article 38 of the Law on Enterprise 2020.

Criteria on company headquarters

• The head office of the enterprise is located in Vietnam, is the contact address of the enterprise and is determined by the administrative unit; has a telephone number, fax number and email (if any).
• The company’s headquarters cannot use an apartment or a collective house.

Criteria on business lines

• Enterprises are free to conduct business in business lines that are not prohibited by law, but those industries must be within the Vietnamese economic sector code system. If the industry is not clearly defined, they can register in detail the industry they intend to operate.
• For conditional business lines, enterprises must ensure that they meet the conditions of each industry and profession according to the provisions of law.
• For foreign investors, the business line must comply with the WTO Commitments Schedule, the investment form and the ownership ratio in the company according to each specific business line.

Conditions on charter capital

• The Law on Enterprise does not stipulate a minimum capital level to establish a company. The company decides on its own capital level when registering for establishment.
• The charter capital of a single-member LLC when registering to establish an enterprise is the total value of assets that the company owner commits to contribute and is recorded in the company’s charter.
• The company owner must contribute capital to the company in full and with the correct type of assets as committed when registering to establish the enterprise within 90 days from the date of being granted the Enterprise Registration Certificate, excluding the time for transporting and importing contributed assets and performing administrative procedures to transfer ownership of assets.
• Within 90 days from the date of issuance of the enterprise registration certificate of a single-member LLC, if the company does not contribute enough capital, it must register to adjust the charter capital according to the current contribution level.

Criteria for legal representative of a single-member LLC

• A single-member LLC must have at least one legal representative.
• The legal representative of an enterprise is an individual who represents the enterprise in exercising the rights and obligations arising from the enterprise’s transactions, represents the enterprise as a person requesting settlement of civil matters, plaintiff, defendant, person with related rights and obligations before the Arbitration, Court and other rights and obligations as prescribed by law.
• When registering to establish a single-member LLC, the company owner can also be the legal representative or can hire another person to be the legal representative. This person must have full civil act capacity and be 18 years of age or older.
• The title of the legal representative must be clearly stated, which can be the director (general director).

Advantages of setting up a single-member LLC

• The business owner has full decision-making authority over all matters related to the company’s operations.
• With its nature and scale, this type of enterprise is very suitable for small and medium-sized enterprises.
• Property liability is limited, the owner is only responsible for the business activities within the contributed capital, the owner’s outside assets of the company are not affected.
• Compact and flexible organizational structure, simple business registration procedures are convenient for individuals and organizations wishing to establish this type of enterprise.

Disadvantages of setting up a single-member LLC

• Because the property liability of a limited liability company is limited, it does not create trust or prestige for the company with outside investors.
• LLCs are subject to stricter legal regulations than other types of enterprise such as private enterprises or partnerships.
• LLCs do not have the right to issue shares and can only raise capital by other methods, which also limits the rapid growth of the enterprise.
• Because the enterprise is owned by only one individual or organization.
• In case the enterprise wants to raise additional capital from other individuals or organizations, the owner will have to carry out procedures to convert the enterprise type to another type such as a multiple-member LLC or a joint stock company.

Dossier of establishment of a single-member LLC

The dossier to establish a single-member LLC includes the following documents:

• Enterprise registration application.
• Company charter.
• List of members/shareholders; List of beneficial owners;
• Copies of the following documents:
  • Legal documents of individuals for the legal representative of the enterprise;
  • Legal documents of individuals for the company owner being an individual
  • Legal documents of organizations for the company owner being an organization (except in cases where the company owner is the State)
  • Legal documents of individuals for the authorized representative and the document appointing the authorized representative.
  • For the company owner being a foreign organization, the copy of the legal documents of the organization must be consularized;
• Investment registration certificate for enterprises established by foreign investors or economic organizations with foreign investment capital according to the provisions of the Law on Investment and its implementing documents.
• Power of Attorney (if any).

Note: In case Vietnamese citizens carry out procedures and already have a personal identification number, the new law applicable from July 1, 2025 will no longer require attaching copies of personal legal documents as before.

Authority to Resolve

• The business registration agency under the Department of Finance of the province or centrally run city issues enterprise registration certificates to enterprises, branches, representative offices, and business locations located in the province or centrally run city within the scope of local management, except for the Management Board of the high-tech park. The business registration agency may organize points to receive dossiers and return results under the business registration agency at different locations in the provincial area;
• The high-tech park management board registers enterprises, branches, representative offices, and business locations located in the high-tech park.
• The business registration agency under the Department of Finance of the province, centrally-run city and the Management Board of the high-tech park are collectively called the provincial-level business registration agency.

Steps to set up a single-member LLC

To successfully set up a company and ensure the conditions according to the provisions of law and through the services of Viet An Law, the procedure for establishing your company will be carried out by the following steps:

Step 1: Prepare documents for company establishment

Immediately after the lawyer receives enough information and advises on issues related to the company name, company headquarters, expected business lines of the company, information on members, founding shareholders of the company, charter capital of the company, information on the legal representative of the company. Based on the information provided by the customer, Viet An Law advises on related legal issues, drafts company establishment documents to send to the customer within a maximum of 01 working day from the date of receiving all information from the customer.

Step 2: Submit company establishment documents and pay enterprise information disclosure fee

• Viet An Law submits application for Enterprise Registration Certificate via the National Electronic Portal on Business Registration.

Step 3: Issuance of Enterprise Registration Certificate

After 03 working days, customers will be granted an Enterprise Registration Certificate. However, because 100% of the Certificates are now delivered by post, customers will often receive them a little later due to the delivery process.

Step 4: Engrave the company seal (round stamp)

• As soon as the Enterprise Registration Certificate and the company tax code are available, Viet An Law will proceed to engrave the seal for the enterprise.
• Implementation time: On the same day the Enterprise Registration Certificate is issued.
• According to the provisions of the on Enterprise 2020 effective from January 1, 2021, enterprises carve their own seals and are responsible for the use of the company’s legal seal. Therefore, the company does not have to publish a notice announcing the seal sample as before. This is also a very new point of the Law on Enterprise 2020 but is also a concern of many enterprises in the issue of self-management and use of enterprise seals without supervision from state management agencies related to seals.

Step 5: Complete the transfer of results to the customer and guide the customer through the procedures after company establishment.

After completing the procedures for obtaining an enterprise registration certificate for the enterprise, Viet An Law transfers the service results to the customer such as the Enterprise Registration Certificate, seal, and archived records. At the same time, advise on the procedures and notes after establishing the enterprise.

Step 6: Support and advise customers on legal issues related to company operations and tax declarations as requested by customers.

• The results of the company establishment service are transferred to the customer, the lawyer, tax consultant of Viet An Law has notes for the customer about tax (tax declaration), notes related to the work that needs to be done after being granted the enterprise registration certificate.
• Viet An Law will provide services related to tax accounting services, tax declaration, consulting on issues related to financial consulting, branding, contract drafting and corporate disputes.
• For business lines that require the following conditions for establishing a company and sub-licenses such as: transportation, tourism, restaurants, labor leasing, education, healthcare, construction, express delivery, postal services, etc.: Apply for licenses that meet the conditions for operating according to specialized laws.

Above is the consulting content of Viet An Law on the criteria for setting up a single-member LLC in Vietnam. Clients who need to establish a company, please contact Viet An Law for support!