Forms of business in Vietnam:

• Limited liability company (LLC);
• Joint-stock company;
• Partnership;
• Branch;
• Representative office;
• Business Cooperation Contract (BBC);
• Public and Private Partnership Contract (PPP).

1. Investment in establishment of economic organizations

A foreign investor might establish its presence in Vietnam as a limited liability company, a joint-stock company, a partnership, a branch, a representative office.

Limited liability company (LLC)

Limited liability company is the most popular form of enterprise in Vietnam. This is a legal entity established through capital contributions by its members. The members could be either individual or organization and are liable for the financial obligations of the company to the extent of their contributed capital. A limited liability company can not issue shares in order to mobilize capital.

A limited liability company established by a foreign investor could take the form of either:

• A 100% foreign-owned enterprise. In that case, there are two forms of legal entity, single-member or multi-member. A single-member LLC can be owned by an organization or an individual. A multi-member LLC is made up of no more than 50 members.
• A joint-venture between a foreign investor and at least one Vietnamese company.

Joint stock company (JSC)

A joint stock company is a limited liability legal entity established through a subscription for shares. There is required to have at least three shareholders and no limit on the maximum number of shareholders. Shareholders are only responsible for the debts and other financial obligations of the enterprise up to the amount of capital contributed to the company.

This type of company can issue shares and bonds in order to mobilize capital.

A joint stock company might either be 100% foreign-owned or a joint-venture between both foreign and domestic investors.

Partnership

A partnership is a quite rare form of investment. Partnership is a combination of personal prestige and reputations of many people. Partnership is an enterprise in which there must be at least 02 members who are the joint owners of the company and called partnership members. In addition, the company may have capital contributing members.

Partnership members must be individuals, and have unlimited liability for the operations of the company.

While that Capital contributing members are only responsible for the company’s financial obligations to the extent of contributed capital.

Branch

A branch is not an independent legal entity. It operates business activities as the authorized representative of the enterprise.

A branch of foreign company in Vietnam can conduct commercial activities and get revenue in Vietnam.

Representative office

Representative offices are quite popular in Vietnam. This legal form is similar to the branch. However, representative offices may not permitted to conduct commercial activities in Vietnam.

A representative office is only permitted to:

• Conduct market research;
• Promote its parent company;
• Find business and investment opportunities for the parent company.

Because of limited scope of activities, so the procedure for opening a representative office is easier than that of other economic organizations. Thus, this form is a reasonable choice in the stage of market research.

2. Business Cooperation Contract (BBC)

BCC is an investment form that does not lead to opening a new economic organization in Vietnam. This is a cooperation agreement between foreign investors and one or more Vietnamese partner in order to conduct business activities.

According to the BCC, the foreign investors can earn revenues and/or products arising from cooperation activities.

3. Public and Private Partnership Contract (PPP)

A public and private partnership contract is a cooperation agreement between foreign investors and government authorities for infrastructure and public services projects.

This form of investment includes:

• Build – Operate – Transfer (BOT);
• Build – Transfer (BT);
• Build – Transfer – Operate (BTO);
• Build Own – Operate (BOO);
• Build – Transfer Lease (BTL);
• Build – Lease – Transfer (BLT);
• Operate – Manage (O&M).

Those projects that are implemented through PPP contracts mostly related to sectors:

• Infrastructure for transportation;
• Social and resettlement houses;
• Lighting systems, clean water supply systems, water and waste collection and treatment systems;
• Power plants and power transmission lines;
• Infrastructure for healthcare, educational and training, cultural, sport;
• Infrastructure for science and technology, economic zone, industrial zone, high- tech zone, information technology application;
• Infrastructure for agriculture and rural development.