Setting up a mechanical company in Hanoi

Mechanical engineering involves designing, and manufacturing. And repairing machine components and systems. Mechanical equipment used in various applications includes linear guides, ball screws, bolts, shaft couplings, industrial chains, belts, pipes, etc. In this article, Viet An Law Firm provides comprehensive and accurate information on the requirements for the establishment of a mechanical engineering company by current Vietnamese laws, including:

• Vietnam’s WTO Commitments on Services;
• Vietnam Law on Investment 2020; Law in Enterprise 2020; Law on Housing 2014;
• Law on Atomic Energy 2008, as amended and supplemented in 2014 and 2023;
• Decision 27/2018/QD-Ttg promulgated the Vietnam Classification System for Economic Activities;

Cost is a crucial factor that clients consider when setting up a mechanical company in Hanoi. Viet An Law Firm has received inquiries regarding the pricing for mechanical company establishment services in Hanoi. Viet An Law Firm offers a basic service for setting up a mechanical company starting from 1.500.000 VND for the year 2024 (inclusive of all state fees). For more specific cost estimates, please contact our consultation hotline at 0961575566.

Market access conditions for foreign investors

Mechanical engineering companies can exist in two forms: manufacturing and engineering companies or mechanical repair and maintenance service companies.

According to CPC 884 and 885 in Vietnam’s WTO Commitments on Services, Vietnam does not impose any restrictions on the commercial presence of foreign investors in the manufacturing and engineering sectors. However, after 3 years from the date of accession, only joint ventures with foreign capital contributions not exceeding 50% shall be permitted. Five years thereon: 100% foreign-invested enterprises shall be permitted.

According to CPC 633 in Vietnam’s WTO Commitments on Services, Vietnam permits joint ventures with foreign capital contributions not exceeding 49% in the maintenance and repair of equipment sectors. After 4 years from the date of accession, this limitation shall be 51%. Two years thereon, 100% foreign-invested enterprises shall be permitted.

Conditions for setting up a mechanical company in Hanoi

To operate in mechanical engineering, a company must meet the following conditions:

Subject conditions

According to Article 17 of Law on Enterprises 2020, entrepreneurs and members/shareholders participating in capital contributions must consider their eligibility to establish, contribute capital to, or purchase shares in a company.

In addition, clients should note the following two points:

• Meet the minimum number of subjects corresponding to the specific type of company chosen for mechanical engineering.
• Meeting the number of members:
• A multiple-member limited liability company (LLC) is an enterprise with from 2 to 50 members who are organizations or individuals.
• A joint-stock company (JSC) must have a minimum of 3 shareholders and no maximum number of shareholders.

Headquarters address conditions

A mechanical engineering company can be headquartered in any location desired by the entrepreneur but needs to meet the conditions prescribed by the Law on Enterprise 2020 and Vietnam Law on Housing 2014. Specifically:

• The enterprise’s headquarters shall be located within Vietnam’s territory, is the enterprise’s mailing address, has a phone number, fax number, and email address (if any).
• The enterprise’s headquarters shall not be located in the apartment or collective housing building constructed for residential purposes.

Company name conditions

The name of a mechanical engineering company is mandatory information when registering a business. According to Articles 37 and 38 of the Law in Enterprise 2020, the name of enterprises shall be (written) in Vietnamese, may include numbers and symbols, shall be pronounceable, and have at least the following two components:

• The types of enterprise;
• The proper name.

Example: “Quang Minh Mechanical Engineering LLC”, where “LLC” is the business entity type and “Quang Minh Mechanical Engineering” is the proper name. Viet An Law Firm will assist clients in choosing a company name that does not violate prohibitions, check for name duplication, and provide guidance on amendments to ensure clients have the most suitable name.

Business lines conditions

Enterprises operating in mechanical engineering are permitted to engage in business lines that are not prohibited by law according to Decision 27/2018/QD-Ttg. A detailed below table of five business lines that mechanical engineering enterprises can choose to register for:

Conditions for applying a license to conduct radiation activities

In case a mechanical engineering company manufactures, trades, or carries out activities involving radiation, it is required to apply for a radiological work permit. According to Article 75 of the Law on Atomic Energy, an organization that fully satisfies the following conditions may be licensed to perform radiation activities:

• Established in accordance with law;
• Performing radiation activities suitable to operational function;
• Having qualified staff, appropriate material and technical foundations;
• Ensuring safety and security for each radiation activities;
• Complete dossiers and procedures for applying for a license to conduct radiation activities.

Procedures for setting up a mechanical company in Hanoi

In Vietnam, mechanical companies are categorized based on their investment capital into domestic and foreign-invested companies. This categorization dictates the specific procedures that clients shall follow to establish their businesses :

• Procedures for applying for an investment registration certificate (if involving foreign investment);
• Procedures for applying for an enterprise registration certificate;
• Procedures for applying for a radiological work permit (if engaging in radiation-related activities).

Note the procedures for applying for a license to conduct radiation activities

Components of application dossier

• Application for approval of the location;
• General report on the selection of the location;
• Preliminary design of the nuclear facility;
• Report on an environmental impact assessment;
• Evaluation results of the report on environmental impact assessment;
• Preliminary safety analysis report;
• Safety assessment report;
• Plan on radiation inspection of earth, air, groundwater, and surface water environments in the area to be affected by the facility’s operation.

Process of licensing

• Legal basis: Law on Atomic Energy 2008, as amended and supplemented in 2014, 2023
• Receiving agency: The Ministry of Science and Technology grants a license to conduct radiation work
• Application method: Direct/ Online/ Postal submission
• Processing time: 60 days from the date of receipt of a complete and valid dossier
• Results of administrative procedures: License to conduct radiation activities

Notable mechanical companies in Vietnam

Thanh Hai Mechanical Trading LLC (0302819451)

• Phuoc Long B Ward, District 9, Ho Chi Minh City, Vietnam
• 2592: Mechanical; metal treatment and coating

Thanh Tu Construction Mechanical LLC (2800766171)

• Thanh Bac City, Quang Thanh Ward, Thanh Hoa City, Thanh Hoa Province, Vietnam
• 2592: Mechanical; metal treatment and coating

Vitech Mechanical LLC (0109697540)

• 111 Yen Vinh Street, Kim Chung Commune, Hoai Duc District, Hanoi City, Vietnam
• 2953: Producing cutlery, hand tools, and common metal products

Hong Xuan Metal and Machinery private enterprise (0500413358)

• Quoc Oai Industrial Cluster, Quoc Oai Town, Quoc Oai District, Hanoi City, Vietnam
• 2599: Manufacture of other metal products n.e.c

Setting up a mechanical company service of Viet An Law

• Legal consultation on the conditions and procedures for setting up a mechanical company;
• Preparation of a complete and timely application dossier in accordance with contractual requirements;
• Assistance in adjusting the investment registration certificate for the company;
• Representing clients in completing the company establishment procedures at the competent authorities;
• Registration for invoices, tax declarations, purchase of digital signatures, creation of company signs, and other post-establishment service for the company;
• Assistance in obtaining a radiological work permit related to the company’s business activities;
• Ongoing legal advice for the company during its operations.

This article provides an overview of the requirements for setting up a mechanical company in Vietnam. If you require assistance with setting up a mechanical company or have further inquiries, please contact Viet An Law Firm for prompt support.