Overview of Legal Entity Types and Procedures in Vietnam

1. Limited Liability Company (LLC)
(Equivalent to SARL / EURL in France)

This is the most commonly chosen structure by both Vietnamese and foreign investors for its flexibility and limited financial liability. It can be structured as:

• A single-member LLC (EURL): a single individual/owner
• A multi-member LLC (similar to SARL): 2 to 50 members

LLCs are independent legal entities. They can hire employees, sign contracts and open bank accounts. However, they cannot issue shares to the public, which limits their ability to raise capital compared to joint stock companies (JSCs).

2. Joint Stock Company (JSC)

Joint Stick Company (JSC) is designed for companies seeking significant capital from multiple investors.

• Requires a minimum of three shareholders, with no upper limit.
• The only type of Vietnamese legal entity allowed to list on the stock exchange.
• It can issue shares to raise funds, making it well-suited for ambitious, growth-oriented businesses.

3. Representative Office (RO)

A Representative Office (RO) is not a separate legal entity. It operates as an extension of a foreign or Vietnamese company within Vietnam. It is allowed to conduct non-commercial activities such as:

• Market research
• Business promotion
• Brand representation

However, its operations are subject to several limitations. Specifically, a Representative Office:

• Cannot generate revenue, sign contracts, or issue invoices.
• Can still rent office space, hire employees and open a local bank account.

This structure is particularly suitable for companies that wish to explore the Vietnamese market and build a local presence prior to establishing a full commercial entity.

4. Branch Office (BO)

Unlike a Representative Office (RO), a Branch Office is allowed to engage in commercial activities and generate revenue. However, it does not have a separate legal identity and its parent company retains full legal and financial responsibility for the branch's operations in Vietnam. A Branch Office is permitted to:

• Enter contracts
• Issue invoices
• Hire employees
• Open bank accounts

To establish a branch, the parent company typically must have at least five years of operation in a field compatible with Vietnamese regulations.

Other Common Cooperation Structures

• Joint Venture: Not a distinct legal form, but a partnership between a foreign investor and a Vietnamese partner, structurally organized as an LLC or JSC.
• Business Cooperation Contract (BCC): No new legal entity is formed. Each party remains liable for its own obligations while sharing project revenues.
• Public–Private Partnership (PPP): Commonly used in infrastructure and public service projects. The state and private sector collaborate, often through a joint company established as an LLC or JSC.