Are you interested to set up your own business in Vietnam? Let’s find out what are the real costs of setting up a business!
In this article, we will explain the different costs of setting up a business in Vietnam. Of course, some of these costs will be more relevant to your business then others, and some costs will no-doubt vary. For some items, such as marketing, you are free to spend as much (or as little … ) as you want.
1) Market research (~$200)
Before starting a new business venture, we always recommend our Clients to spend some time and money on market research. From our experience this is one of the main reasons for a business to be successful. Market research involves gathering information about your industry and market environment. It is to understand factors external to your business. Try to find out whether there is real potential in the market. Who is your target audience? And how can you reach them? You need to know the basic figures and projections, no matter how big or small your business is.
2) Legal advice (~$250)
Obtaining legal advice before starting your venture is also important. This will give you a good idea about the legal feasibility, the requirements and the procedures of your business plans. It will also give you a clear insight in all the potential costs of setting up your business in Vietnam, so there are no surprises.
3) Investment certificate & enterprise certificate costs (from ~$1,500 – … )
Foreign-invested companies need to apply for an investment registration certificate (IRC) and an enterprises registration certificate (ERC). You could try to obtain these certificates by yourself, but this will likely cost you a lot of time (and money) for research, planning, translating, waiting and going to the Vietnamese authorities. If you ask the assistance of a professional service provider, you can expect to be quoted anywhere from USD 1,500 and up. It depends mostly on the quality of the service that you will receive, and on the complexity of your business plans. By the way, if you want to read more about start up procedures: have a look at our previous article on how to open a restaurant or cafe in Vietnam.
4) Additional licences costs for your business. (~$200 – 750 / license)
Depending on your business, you may need additional licenses. Examples include a food safety and hygiene certificate, or a fire prevention and fighting certificate. Sometimes, a website registration certificate and/or a retail license are also required: USD 250 – 750 / license. For any application, you will need to prepare the relevant documents. Consularization, legalization, notarization and/or translation cost ~ USD 10 – 50 / document.
5) Charter capital (~$6,000 or more)
When you start up a business in Vietnam, you will need to commit charter capital / investment capital. The Vietnamese law normally does not stipulate a minimum required amount. Instead, the authorities will evaluate whether your proposed amount is feasible for your business plan: USD 6,000 or more. It will need to be contributed within 90 days upon obtaining the enterprise registration certificate. And it can be shared between the members / shareholders of your company.
6) Open a bank account and register for tax (less than ~$150)
After obtaining your registration certificates, you will need to complete a few more steps. These include opening a corporate bank account, registering with the Vietnamese tax authorities, and purchasing value added tax (VAT) invoices. You also need to make and register your company seal. And you must list your business on the national enterprise database of Vietnam. These items all together cost less than USD 150.
7) Temporary residence card (~$200 – 350 / person)
Obtaining a work permit and/or a temporary residence card is a fast and easy process when you have completed your business registration. You do not need any degree or a minimum number of years of management experience if you are an investor in a business. If you are an employee, on the other hand, the rules are different. You will usually need a degree and / or a minimum of 5 years in a management position. Depending on the business, you may need a stamped and signed letter from your previous employer as proof.
1) Rental fees (~$11 – 18 / office / m2 / month)
Once you have set up your business in Vietnam, there are various operational costs. Probably the biggest of those will be your rental fees for you office or business. The exact amount will depend on factors such as size, location, facilities, and negotiation skills. A modern and clean office will cost around $11 – $18 per m2. Offices are usually not furnished. For land, buildings, shop houses and other properties for lease it really depends on the above variables. Don’t hesitate to contact our property leasing department on Facebook or via email if you have any questions, or if you are looking for a property in Da Nang.
2) Internet, electricity and water fees (~$75 – 175 / month)
You can get a standard internet connection in Vietnam for less than USD 20 / month. Electricity and water cost around USD 0,15 / kWh and USD 0,40 / m3, respectively. All these items together add up to USD 75 – 175 / month. These will come on top of your rental fees. Of course, this varies on how big your office is and the amount of electricity you use. Air-conditioning is usually the biggest cost in Vietnam.
3) Labor costs & accounting
Internal and external accounting services, which are very important for smooth business operations in Vietnam: ~$100 – 200 / month. Something else that we always recommend to our Clients is to set aside a budget for marketing. As a general rule, you can think of spending 10 – 20% of your gross revenue on marketing. Especially at the beginning. Other labor costs include:
- Administration: $300 / month,
- Waiters and waitresses: $150 – 300 / month (depending on hours and skills needed), and
- Full time accountant: $250 – 350 / month.
Please note that these labor costs may vary depending on many variables. However, the above is a good bench mark in Da Nang.
As these are very specific to the actual operations of your business, it is difficult to put a price tag on them. However, you can think of the following cost items: sales commissions, direct labor costs, cost of raw materials used in production, electricity and water (also covered above), and tax. In Vietnam, corporate income tax is normally rated at 20% of your company profits. Value added tax is normally 10%.
Contact us for more information
We hope that this article will have given you a better insight into the real costs of setting up your own business in Vietnam.
Don’t forget to contact us if you have any questions! We can also provide a free consultation meeting.
At Bizlen™, we can advise you about the possibilities and restrictions of your business plans. And we can guide you through each step of the process to realizing them.
Our Bizlen™ Team is specialized in company set up in Vietnam. This means that we can assist you with all the items that are mentioned in this article and more.
Send us an e-mail with your plans and inquiries, or give us a call to make an appointment at our office!
CONTACT US! (first consultation is free!)
Facebook: Bizlen Team
Phone number: +84 354 900 977
Being Partners with Bizlen Leasing, Landbiz and QT Design & Build, we can explore investment opportunities in real estate. Together with our trusted legal partners, we can advise and support you with your business and legal proceedings. For example, we can support you with business set – up, business licensing, contract drafting and reviewing, and legal research.
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