How To Start A Company in Vietnam
Step 1. Set your expectations - Starting a company in the US is incredibly easy, relatively speaking. Anyone with 30 minutes, a credit card and an internet connection can start one up.
In contrast, a creating a company (as a foreigner) in Vietnam requires about 2 months, a minimum of $20,000, tons of paperwork, hiring a lawyer and paying the occasional bribe.
Step 2. Decide what type of investor you are - If you create a company in Vietnam, you're automatically considered a foreign investor. You'll need to decide whether or not you want to personally invest or invest through a business.
I have a US S-Corporation, and technically, the company invested in Vietnam. I decided to go this way because of the extra legal protection (in case someone wants to sue the company) and because it gives me more options to save on taxes and to move money around. Also, it's easier for a US company to accept payments from other US companies rather than for a VN company. The downside is that it is a pain-in-the-ass to get all the paperwork lined up.
Step 3. Decide the type of company to create - There are a few options: 100% Foreign Owned Enterprise, Joint-Stock Company, and a couple others I can't remember off the top of my head. The industry you want to go into may restrict the type of company you can create.
100% FOE's tend to be popular these days and since Vietnam is really encouraging IT/Software Development, I went with a 100% FOE. It's great because you don't have to share ownership, but it's still a VN legal entity, just like any VN domestic company.
Step 4. Prepare your US paperwork - I had to get a hold of my US company's incorporation papers, 2 years of financial records and a letter from my bank confirming that the company had money in the bank. Keep in mind that all of this is to convince some VN guy, sitting at his desk, that yours isn't some fly-by-night company, and it's worth their time to let you invest. And to get some idea that you're relatively legit. So make sure you come off looking good.
For the incorporation papers, I had to get them verified. This means, first, the state you incorporated in has to put their seal on it. Then the US government has to confirm the state's seal and add their own. Then the VN government (acting through their embassy in the US) has to confirm the US seal, and put on a third. All this takes time and money, about a couple hundred dollars and a couple weeks.
If you're personally investing in Vietnam, you'll need to do something similar with your passport instead of the incorporation papers.
Step 5. Hire an attorney - Technically you don't need one if you know what you're doing but I recommend it. Prices vary, from ghetto firms charging $2000 to high-end full-service places charging $15,000 and up. What you're paying for is legal advice, clerical service and the connections that the firm has with people in the government. The latter is most important because it's the difference between everything going smoothly, and your paperwork getting tied up for weeks or months on a technicality.
Be ready to pay 1/3 or 1/2 up front, and the rest after they get you your business permit. If they need to pay a bribe, they'll pass the cost onto you. I paid a bribe because I needed the permit ASAP. I just considered it an expedited service charge.
Step 6. Decide how much to invest - I pushed to invest as little as possible. But again, the guy sitting as his desk needs to be convinced that it's enough money to actually start a company and keep it running. For us, that meant $10,000 up front, and a pledge to invest $50,000 more over the next few years. An "average" foreign company tends to invest at least $200,000.
Step 7. Get office space In Vietnam - You can put your office anywhere. There aren't any zoning issues like in the US. I'd recommend renting an entire house because decent, affordable office space is near impossible to find right now. It's good if you can put your company next to other foreign companies because it means you'll get less harassment from the local police.
Step 8. Open a VN bank account - You're gonna need two accounts, one that holds money in US currency (dollars), and another that holds money in VN currency (dong). When you transfer money into VN, it goes into the US dollar account, and then you usually transfer it into the VN account when the exchange rate is favorable. And you usually withdraw money from the VN account.
Step 9. Figure out what your company does - You'll need a couple sentences on exactly what your company does. Wording is important because foreigners aren't allowed to go into certain industries (such as newspapers or printing) and you can get favorable tax treatment if you can lock yourself into the right industry. You'll need help (lawyer or assistant), because this means going through VN/WTO regulations to figure out what the industries are, and which one you belong to.
Step 10. Get the permit - Once you prepare all the paperwork and greenlight the lawyers, it'll take about 2-3 weeks to get your permit. The permit is just a fancy piece of paper, but once you have it, congratulations, you're in business.
Step 11. Cleanup - You'll need to post information about your business in any VN newspaper for 3 consecutive days. This is where an assistant comes in handy. It'll cost you about $50 dollars. You'll also need a company seal (a.k.a. "chop" or "fancy red stamp"). Another $20-$30 dollars. And it's required you have a visible sign at the entrance of your company. $5-$10 dollars for a cheap plastic one.
Step 12. Transfer the money - You'll need to transfer the money you said you were going to invest into your VN bank account. The government definitely checks up on this. I did it via wire transfer. Bank of America was a pain, I had to physically come back to the US and walk into a branch to set up international wire transfers. Keep in mind that getting money into Vietnam is relatively easy, but once the money is in, it's near impossible to (legally) get the money out.
Step 13. Get all your paperwork in order - Both business and personal. You're going to get a lot of visits from real government officials, fake government officials, real and fake police and people who want donations. The real ones want to make sure you aren't doing anything illegal. The fake ones will pretend the same, but they're after a bribe. The guys who take donations want you to support the local police or some recent disaster but they are just after your money.
It's hard to tell who is real and who is fake (I still don't know), so the best thing you can do is get all of your paperwork perfect so you can be completely open. On the list is: your VN business permit, your US incorporation papers, your passport and visa, your lease for your business office, your lease for your personal house/apt, your driver's license for your motorbike, your motorbike papers, photocopies of the ID cards of all your staff, job contracts of all your staff.
Do NOT give any of this to anyone unless they specifically ask for it. Both the real and fake guys will take advantage if they sense you're eager to give up information, and they'll look closely at any information you do give them for any holes (a.k.a. openings to push for a bribe).
Step 14. Make some money - Congrats, you're good to go. Once a year, in January, you're required to get a financial audit (cost is $1000), but otherwise you're pretty set.