Choosing an appropriate form of investment is one of the most important works of investors coming to Vietnam. In order to pick the right one, investors have considered among advantages and disadvantages of each one. Therefore, this article will discuss this issue and provide investors a good understanding in forms of investment in Vietnam.

forms of investment

1.The Limited Liability Company (LLC)

An LLC may take the form of either an LLC with two or more members ("Multiple Member LLC") or an LLC with one member ("Single Member LLC").

An LLC has the status of a recognized legal entity and a member of a LLC is responsible for the debts and liabilities of the enterprise to the extent of the amount of capital that the member has contributed or committed to contribute to the enterprise. An LLC does not issue shares.

a. Multiple Member LLC is an enterprise that has more than one but no more than fifty members, which may be organizations, individuals, or a combination of both.

b. Single Member LLC is owned by one organization or individual member ("Company Owner") who is liable for the debts and other liabilities of the company to the extent of the amount of the charter capital of the company. A single member LLC may increase its charter capital by way of additional investment from the Company Owner or by obtaining capital contributions from other pesons.

2.The Joint Stock Company (JSC)

A JSC is an enterprise whose charter capital is divided into shares held by three or more organizations or individuals. Shareholders are responsible for the debts and liabilities of the enterprise to the extent of the amount of their contributed capital. A JSC has the right to issue securities in order to raise capital and it may list on the Securities Exchange.

The JSC must have common shares and may have preferred shares and/or issue bonds.

3. Partnership Company (PC)

A PC is a form of enterprise set up by at least two partners and has a status of a legal person - a PC is akin to a limites liability partnership in other jurisdictions. A PC must have two general parners and may also have limited partners (literally, "capital contributing members"). General partners are liable for all obligations of the PC with their own property, while limited partners are only liable to the extent of their capital contribution.

4. Business Cooperation Contract (BCC)

A BCC is a contractual relationship akin to a partnership which does not create a new legal entity but which is licensed to engage in business activities in respect of a specific project in Vietnam. This is changing as LLCs and JSCs are being allowed into these fields.

5. Public - Private Partnership (PPP)

Investment under the form of PPP is defined as a form of investment conducted on the basis of a contract ("PPP Project Contract") between an authorized State agency and the investor and/or project enterprise in order to implement, manage and operate an infrastructure project or provide public services.

Apart from the forms of business provided under the Investment Law 2014 and Enterprise Law 2014, other means of establishing a commercial presence in Vietnam may include Representative Offices, Branch Offices, contracted projects and franchising arrangements.

Representative Office is a foreign party interested in having an institutional presence in Vietnam may establish an RO, which does not constitute an independent legal entity and is only allowed to engage in market research, “soft” marketing, liaison with the head office abroad in respect of trade and investment matters and overseeing the implementation of contracts in Vietnam. ROs are prohibited from engaging in direct profit-making activities and receiving any form of revenue.
Branch Offices are dependent units of foreign companies licensed to do business directly in Vietnam. Under present law, the types of businesses that may open branches are restricted.
Franchising
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Address: No.85 Hoang Sa Street, Da Kao Ward, District 1, Ho Chi Minh city, Vietnam.
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Address: The building of Agricultural Garment Co. No. 1/12 Truong Chinh Street, Phuong Mai Ward, Dong Da District, Hanoi city, Vietnam.
Hours of Operation: Monday - Friday from 08:00 - 17:00 ( 8:00 AM - 5:00 PM )
Telephone: (028) 38 20 2929 (20 Line)
Hotline: 0948 68 2349
Email: vanphonghn@quocluat.vn