Post establishment process of JSC company in Vietnam

Key procedures after establishing a JSC company in Vietnam will be navigating in the next steps of this article. According to information from the Department of Business Registration Management (Ministry of Planning and Investment), 36,244 new enterprises were established in the first quarter of 2024 with a total registered charter capital of 332,175 billion VND. The above data shows growth momentum in the field of business establishment in 2024, specifically a 6.9% increase in the number of businesses and a 7.0% increase in newly registered capital compared to the same period in 2023.

However, besides the positive signs, many businesses also encounter difficulties and challenges in meeting regulations on capital, facilities, personnel, and post-establishment procedures to meet the requirements required under current Vietnamese law before going into official operation. This leads to the situation of many businesses being administratively sanctioned and consuming processing time for businesses, especially joint stock companies with complex internal structures and conditions.

Understanding that practical need, Viet An Tax Agent with many years of experience in the market in the field of Law & Accounting – Tax for businesses in Vietnam is always ready to accompany and support businesses from inception and during future operations. The joint stock company will be guided in detail on the steps to carry out documents and legal procedures related to its operations after receiving the Business Registration Certificate based on the professional knowledge and experience of the Joint Stock Company by specialists and lawyers Viet An Law Firm – Tax Agent. It is noted to complete immediately post establishment process of JSC company in Vietnam include:

Payment for registered share when company establish registration

According to the current regulations of the Enterprise Law 2020, the maximum time limit for founding shareholders in a joint stock company to complete procedures for capital contribution and establishment registration recorded in the dossier is 90 days from the date of issuance of the Enterprise Registration Certificate.

This period may be shorter according to the commitment between the founding shareholders recorded in the company charter / share purchase registration contract and in the company establishment documents. In this case, shareholders will have to make payment for shares registered to purchase according to the company charter or contract. Therefore, founding shareholders need to understand clearly to properly fulfill their obligation to contribute capital to the company’s account after being granted an Enterprise Registration Certificate. The Board of Directors is also responsible for supervising and urging full and timely payment of shares that shareholders have registered to purchase.

Form of capital contribution

• Individual shareholders can contribute capital in cash.
• Shareholders who are organizations must contribute capital by bank transfer (not cash).

Legal consequences of violating the capital contribution timelimit

Not paid in full

• After expiration date, shareholders who have not paid for any of the registered shares will automatically no longer be shareholders of the company and will not enjoy the rights of a shareholder of the company (including the right to transfer the right to purchase those shares to another entity).
• Joint stock companies will have to carry out procedures to register a reduction in charter capital and change the list of founding shareholders of the company within 30 days from the end of the capital contribution period.

Partial payment

• Shareholders who only pay part of the registered shares will have the right to vote, receive dividends and other rights corresponding to the number of shares paid.
• That shareholder is not allowed to transfer the right to purchase unpaid shares to another person.
• Joint stock companies will have to carry out procedures for registering a reduction in charter capital and changing the company’s capital contribution structure within 30 days from the end of the capital contribution period.

Prepare a shareholder registration book

• Setting up a shareholder registration book is an obligation of a joint stock company after being granted a Enterprise Registration Certificate.
• Legality: The shareholder register is an important document that records and stores information related to shareholders and share transfers of shareholders in a joint stock company.
• Form: The shareholder register can be a document, an electronic data set, or both.
• Keep Shareholder Book: The shareholder register is kept at the company’s headquarters or the Securities Depository Center (in case of listed joint stock company).
• Right to search of shareholders: Shareholders have the right to inspect, search or extract or copy the contents of the shareholder register during working hours of the company or the Securities Depository Center.

Declare license fees

Pursuant to Article 3.8 of Decree 139/2016/ND-CP on license fees amended and supplemented by Decree 22/2020/ND-CP, businesses will be exempted from license fees in the first year of establishment or production and business activities. Regulations on fee exemption apply to dependent units established in the same year.

Enterprises can carry out procedures to declare license fees from the date of establishment or the date of commencement of production and business activities to the directly managing tax agency, the declaration deadline is before January 30 of the consecutive year adjacent to the year of establishment.

For example: A joint stock company established in July 2024 will be exempted from license fees in 2024. This JSC company will begin paying license tax for 2025 onwards according to the above deadline.

License fee rates are prescribed as follows:

• Enterprises with capital of over 10 billion VND: 3,000,000 VND/year;
• Enterprises with charter capital of 10 billion VND or less: 2,000,000 VND/year;

Hang company signs

The company’s sign needs to be mounted at the address where the company’s headquarters, branches, representative offices, and business locations are located.

For content requirements, company signs will usually be A4 sized, use eye-catching colors and must be placed at easy positions to observe and recognizable. The sign must be written in Vietnamese characters and fully display basic information: name, tax code, address, contact phone number or business license code (if required by specialized law) of the business.

Engraving the company seal

The joint stock company will have to engrave the corporate seal after receiving the Enterprise Registration Certificate. The management and engraving of the seal according to any form is decided and implemented by the company itself, which can be in the form of internal regulations without being managed by state agencies (except for other cases prescribed by law). The Board of Directors will hold a meeting, agree and make decisions on the number, form, content, sample, management and use of the seal.

Purchase electronic digital signature

According to current accounting laws, when established, businesses must register to use digital signatures. A digital signature can be understood as an encrypted device used instead of the signature and seal of the legal representative to sign a declaration or other operations to identify all operations as belonging to the enterprise. Digital signatures are often used in e-commerce transactions such as: issuing VAT invoices, declaring and paying taxes, completing insurance procedures, customs procedures… Newly established JSC company can adopt Viet An Law to get preferential rates for using digital signatures and the best support services.

Open a business bank account

Opening a bank account for a business is done by the legal representative of the business. Documents to prepare for opening a bank account according to the requirements of each bank, usually include:

• 01 notarized copy of “Enterprise Registration Certificate”.
• 01 notarized copy of “Citizen ID card” of the legal representative written on the certificate.

Depending on each bank, businesses may be required to bring their business seal when checking in and request other documents. Businesses can open an account themselves or authorize Viet An Law to assist in the implementation.

Note:

• Businesses can open one or more accounts to serve business activities. Registration for electronic tax payment will be done from a bank where the business has registered to open an account.
• Currently, the company does not need to register a bank account with the Department of Planning and Investment and tax authorities.

Register to use electronic invoices

After establishment, if an enterprise has business activities that record revenue, it is required to issue invoices.

According to current new regulations, electronic invoice registration has simplified administrative procedures. Therefore, after contacting the invoice supplier, the enterprise will declare the use of electronic invoices right in the establishment registration dossier or make a notice of registration to use electronic invoices in case it is not declared in the establishment documents. The tax authority will send an email notification of acceptance so that the business can issue invoices. The specific implementation process is as follows:

• Choose an electronic invoice provider
• The supplier will design a sample invoice for the business with all the required information, in addition to additional information such as: Logo, phone number, contact email, bank account information.
• Issue a decision to use electronic invoices
• Notice of registration to use electronic invoices and waiting for notification from tax authorities.

Submit registration of fixed asset depreciation method

According to Clause 3 and Clause 4, Article 13 of Circular No. 45/2013/TT-BTC guiding on methods of depreciation of fixed assets:

• Enterprises decide for themselves the depreciation method and time for depreciation of fixed assets according to the provisions of this Circular and notify the directly managing tax authority before starting implementation.
• When an enterprise purchases fixed assets, before putting the assets into use and calculating depreciation, the enterprise must register the depreciation method with the management tax department.

Note:

The company only has to notify the tax authority once. When new assets arise, no additional notification is required. Therefore, businesses need to register to the situation when fixed assets arise, depreciation is automatically deducted according to regulations.

Preparation for tax inspectors to your company

Tax authorities may inspect newly established businesses or have just submitted registration documents to use electronic invoices, so businesses should prepare documents according to the following contents if tax authorities come to inspect:

• Hang the company sign at the registered office;
• Lease contract or home loan contract; ID card of the landlord;
• Certificate of land use rights (copy);
• Enterprise Registration Certificate;
• Company seal;
• Arrange offices for active businesses;
• Legal representative to welcome tax authorities;
• Other invoices and documents (if any).

Some frequently asked questions related to post establishment process of JSC company in Vietnam

Is it mandatory to contribute charter capital to a joint stock company by bank transfer?

According to the law, individuals establishing a company can choose to contribute charter capital in cash or transfer money to the company’s account. Companies contributing capital to a new company, are required to contribute capital to establish the company by transferring money to the newly established company account.

Is it mandatory to open an account for a joint stock company?

Currently, there are no regulations forcing businesses to open bank accounts. However, company accounts play a vital role in paying electronic license taxes for the company. Using a company bank account shows the professionalism of the business and makes it more convenient to make payments and receive payments from customers. Furthermore, valid proof for invoices for each purchase of goods and services with a payment value of over 20 million VND (one of the conditions for deducting expenses when determining taxable income or deduction conditions of VAT). Once they have a bank account, businesses can withdraw cash at the bank.

Please contact Viet An Tax Agent at hotline: (+84) 988.856.708 for advice, support and answers to all questions about post establishment process of JSC company in Vietnam!