http://www.pwc.

com/sg/en/company-administration/

Doing business
in ASEAN

April 2014
 Foreword

As we see the shift of economic growth move from the West to the East, we are
also seeing many companies coming to ASEAN to take advantage of its growth
potential. As a firm, we have seen evidence of this with numerous clients working
with our various network firms in the region to set up new corporate entities to
engage in various opportunities in the region.

The most common question we get from our clients are the requirements to set
up a company and the options available to them. This guide is to help our clients
understand the high level requirements for company set up in ASEAN and also to
provide readers with a general understanding of the common entity structures
available in each country.

We would highly encourage readers to connect with our local experts to ensure
that you have a complete understanding of the regulatory and compliance
requirements. We would be happy to have a conversation with you, anytime,
anywhere.

We hope you find this guide useful as you explore the various business
opportunities in ASEAN.

Regards

Melvin Poon

2 PwC
Introduction

This guide provides you the following information for each country:

• Country Overview.
• Common corporate structures which includes a description of what the structure is, the legal implication and the
set up requirements.
• Key contacts in the country.

Please note that we have not included every possible structure for each country and have focused primarily on the
most commonly used ones.

The countries we have covered in this guide are as follows:

• Indonesia
• Malaysia
• Myanmar
• Philippines
• Singapore
• Thailand
• Vietnam

Doing business in ASEAN 3

INDONESIA
The following are the key features and requirements for each business structure:

Country Overview

Republic of Indonesia
Capital City
Jakarta
Official Language (s)
Indonesian
Language required for filings
English
Currency
Indonesian Rupiah (Rp)
Corporate tax rate
25%
Foreign exchange controls
No

Company (PT)
w There are two types of company (Perseroan Terbatas upon the issuance of the approval letter from the
or “PT”) in Indonesia, namely private company and Ministry of Law on the Deed of Establishment.
public company limited by shares (private company Depending on the line of business, there may be
limited by shares – less than 300 members; public limitation on foreign ownership. A company must
companies limited by shares – 300 members or more). have board of directors (executive board) and board
of commissioners (supervisory board). Private
w A company is a legal entity, separate and distinct from company must have at least one director and one
its owners/shareholders. It can incur obligations and commissioner (which can be Indonesian citizen or
hold property in its own name. Consequently, it can foreigner). Corporate directors and commissioners
sue and be sued in its own name, it has perpetual are not allowed. Public company must have at least
existence and it can enter into contracts in its own two directors and commissioners, respectivelly. There
name. is a higher requirement for number of directors and
commissioners for company in certain sector
Set up requirements (e.g., financial sector).
w There must be two shareholders (can be a corporate
body or an individual). The shareholders must Share Capital
execute a Deed of Establishment before a public The Minimum paid up capital for (private) company
notary in Indonesia. The Deed of Establishment established within the framework of foreign
must be submitted for approval from the Ministry investment is Rp. 2.5 billion. Company in certain
of Law. The company obtain its legal entity status sector may require a higher capital.

4 PwC
 Representative Office (RO)
w There are five available types of Representative Office w Setting up a Representative Office requires approval
in Indonesia, as follows: (i) Regional Representative from the relevant authority in Indonesia, which
Office, (ii) Trade Rrepresentative Office, (iii) depends on the types of Representative Office. Also,
Construction Representative Office, (iv) Oil and Gas different set up requirements apply for different types
Representative Office, and (v) Bank Representative of Representative Office. Generally, there is no capital
Office. Representative Office is prohibited from contribution requirement. Regional Representative
conducting revenue-generating activities (with the Office and Trade Representative Office is licensed by
exception of Construction Representative Office). the Investment Board. Application must be supported
Generally a Representative Office activity is confined with certain administrative document. Construction
to conduct function such as market reasearch, Representative Office is licensed by the Ministry
promotion related to the products and services of of Public Works. Other than the administrative
the foreign head office and act as liaison office of its requirement, there is a key requirement for
foreign head office. There are different additional Construction Representative Office to form a joint
specific permitted activity depending on the type operation with local contruction company. Bank
of the Representative Office. Trade Representative Representative Office is licensed by the Financial
Office can carry out domestic trade supervision. Services Authority. Other than the administrative
Construction Representative Office can participate in requirement, there is a key requirement that the
a bid for construction project and deliver construction foreign head office must be a bank with total assets
services. Bank Representative Office can supervise qualifying it to be ranked as one of the 300 biggest
project financed by the head office. Oil and Gas banks in the world. Oil and Gas Representative
Representative Office can seek potential oil and gas Office is licensed by Ministry of Energy and Mineral
project. Representative Office can hire staff and rent Resources. Application must be supported with
premises. certain administrative document.

w Representative office is not a separate legal entity.

The foreign head office implicitely responsible for all
liabilities of the Representative Office.

Contacts
Laksmi Djuwita Kenna Herdi
Partner Senior Manager
+62 21 5289 0700 +62 21 521 2901 (x. 75305)
laksmi.djuwita@id.pwc.com kenna.herdi@id.pwc.com

Doing business in ASEAN 5

MALAYSIA
The following are the key features and requirements for each business structure:

Company
w There are three types of companies in Malaysia,
namely private/public companies limited by shares Country Overview
(private companies limited by shares – not more than
50 members; public companies limited by shares – Malaysia
unlimited number of members), public companies
Capital City
limited by guarantee (non-profit making activities)
Kuala Lumpur
and unlimited companies.
Official Language (s)
Malay, English
w A company is a legal entity, separate and distinct from
Language required for filings
its owners/shareholders. It can incur obligations and English/Malay
hold property in its own name. Consequently, it can
Currency
sue and be sued in its own name, it has perpetual Malaysian Ringgit (MYR)
existence and it can enter into contracts in its own Corporate tax rate
name. 25% (to be reduced to 24% effective
year of assessment 2016)
Set up requirements Foreign exchange controls
w There must be at least two shareholders, two resident No
directors and a qualified company secretary in the
company and a registered office within Malaysia.
100% foreign ownership is allowed except where
equity diversification is imposed for specific industry
and regulatory purposes. The director and company
Branch
secretary of the company must be at least 18 years of
age. The resident director can be any of the following w A foreign incorporated company, which intends
to carry on a business in Malaysia, may choose to
who has a principal place of residence in Malaysia:
register a branch in Malaysia.

• a Malaysian citizen
• a Malaysian permanent resident w A local branch is viewed as an extension of the
foreign company. An action against the local branch
• an employment pass holder
is an action against the foreign company. The rules
that govern the organisation and structure of a local
Directors cannot be bankrupts or persons convicted of
branch are taken from the country in which the
dishonesty.
foreign company originates.

Share capital
There are 2 levels of capital for companies limited by w To set up a branch in Malaysia, a local agent must
be appointed and the branch must have a registered
shares, namely authorised and paid up capital. The
office address within Malaysia. The agent must be a
minimum authorised and paid up share capital is
person resident in Malaysia, either individual of at
RM2.00 respectively. However, certain government
least 18 years of age and can be one of the following
agencies and third parties may require a higher share
or a company incorporated in Malaysia:
capital before extending credit facilities or granting
incentives or licences. Capital duty is payable,
• a Malaysia citizen
depending on the level of authorised capital.
• a Malaysian permanent resident
• an employment pass holder

6 PwC
 Limited Liability Partnership (LLP) Representative/Regional Office (RO)
w The LLP was introduced in 2013. It has the limited w The RO must confine its activities strictly to non-
liability of a company and the operational flexibility commercial and non-income generation activities.
of a partnership. RO is only permitted to conduct the following
activities:
w Unlike partnership, an LLP is a legal entity, separate
and distinct from its owners/partners. It can sue or • gathering of information on investment/trade
be sued in its own name. It can also own property in opportunities in Malaysia;
its own name. An LLP has perpetual succession until • planning of business activities;
wound up or struck off. • identifying sources and raw materials,
components or other industrial products;
w It requires a minimum of two partners but there is
no cap on the maximum number of partners allowed
• research & development and technical support;
and
for an LLP. Partners can be individuals of at least • other activities which will not result directly in
18 years of age or body corporates (companies or actual commercial transactions.
LLPs). It is compulsory for all LLPs to appoint at least
one compliance officer from amongst its partners A RO is a temporary facility to allow a foreign
or persons qualified to act as secretaries under the entity to assess the viability of setting up a
Companies Act 1965 who is a citizen or permanent permanent establishment in Malaysia. It can be
resident in Malaysia and ordinarily resides in registered for a general period of three years
Malaysia. A compliance officer cannot be a bankrupt subject to evaluation and renewal.
or disqualified to act as director or secretary under
the Companies Act 1965.

Contacts
Theresa Lim Chong Swee Yoon Woo Vi Dea
Senior Executive Director Associate Director Senior Associate Consultant
+60 (3)2173 1583 +60 (3)2173 0671 +60 (3)2173 0765
theresa.lim@my.pwc.com swee.yoon.chong@my.pwc.com vi.dea.woo@my.pwc.com

Doing business in ASEAN 7

MYANMAR
The following are the key features and requirements for each business structure:

Country Overview

Limited Liability Company Myanmar

w There are two types of limited liability company
Capital City
in Myanmar, namely a private limited liability Rangoon
company and a public limited liability company.
Official Language (s)
Currently, there is no public foreign company in Burmese
Myanmar. A private limited liability company is
Language required for filings
required to have at least two shareholders and the Burmese
number of members is limited to 50. The transfer of
Currency
shares to a foreigner is restricted. A public limited Kyat
liability company is required to have at least seven Corporate tax rate
shareholders. 25%
Foreign exchange controls
Set up requirements Yes
w Foreign investors may register their companies
under the Myanmar Companies Act (CA) or in
conjunction with the Union of Myanmar Foreign
Investment Law (MFIL). The differences between
companies registered under the CA and the MFIL
Branch
are: w A foreign company can also set up its branch office
in Myanmar. A foreign branch formed under the CA
does not need to obtain an MIC permit, and is only
• companies registered under the MFIL are eligible
required to apply for a permit to trade and then for
for tax incentives whereas companies registered
registration. The branch is allowed to be formed as a
under the CA are not
manufacturing or a service company (for instance oil
• both companies registered under CA and MFIL
companies are set up mostly in the form of branches).
are allowed to undertake manufacturing
activities and provide services, however the
In contrast, a foreign branch formed under the MFIL
minimum foreign share capital requirements
is required to obtain an MIC permit in addition to a
are significantly different
permit to trade and a registration certificate.
• at least two shareholders and two directors
are required. There is no requirement for the
Registration fees payable on the registration of a
shareholders to be natural persons and there is
branch are US$2,500.
no requirement for the directors to be resident in
Myanmar/Myanmar nationals.

8 PwC
 Representative Office (RO) Joint Venture
w Foreign companies with business relations or w Foreign investors can set up their business in the
investment projects in Myanmar may apply to set up form of a joint venture, either as partnerships or
representative offices in Myanmar (this being limited companies, with any Myanmar partner (an
a common practice for banks). In contrast with individual, a private company, a cooperative society
a branch, a representative office of a company or a state owned enterprise).
incorporated outside Myanmar is not allowed to
perform direct commercial or revenue generating
activities in Myanmar. However, it is permitted to
liaise with its head office and collect data useful for
the head office.

Contacts
MelvinFitzgerald
David Poon Darryl Wee
Veera Mäenpää David OngThuy Duong
Phan Thi
Partner Executive Director
Senior Associate/Lawyer Director
Senior Associate/Lawyer
+8486236
+65 38247688
0116 +65
+84 6236
8 38237023
0796 ext. 1517 +65
+84 6236
8 38233792
0796
david.fitzgerald@vn.pwc.com
melvin.kl.poon@sg.pwc.com darryl.el.wee@sg.pwc.com
veera.maenpaa@vn.pwc.com david.ong@sg.pwc.com
phan.thi.thuy.duong@vn.pwc.com

Doing business in ASEAN 9

PHILIPPINES
The following are the key features and requirements for each business structure:

Corporation (Subsidiary)
w A domestic corporation or subsidiary is established subsidiary undertakes to employ at least 50 direct
under the Corporation Code of the Philippines employees or its business involves advanced
and regulated by the Securities and Exchange technology (as certified by the Department
Commission (SEC), with a personality separate and of Labor and Employment or Department of
distinct from that of its stockholders. It has its own Science and Technology, respectively), the
shares of stock, articles of incorporation, by-laws, required minimum paid-up capital is reduced
set of directors, officers, among others. The liability to USD100,000. If the entity will qualify as an
of the shareholders of a corporation is limited to the export market enterprise (60% of the entity’s
amount of their share in the capital. service activities are rendered to clients abroad
and paid for in foreign currency) the minimum
To establish a corporation, between 5 and 15 capitalization may be reduced to PHP 5,000.
individuals must act as incorporators. They must
each subscribe to at least one share, and majority Among the more important documents required to
of them must be residents of the Philippines. At be filed with the SEC in applying for incorporation
least 25% of the authorized capital stock must be are the articles of incorporation, by-laws, and the
subscribed at the time of incorporation, and at treasurer’s affidavit indicating that the necessary
least 25% of that subscribed stock must be paid. capital has been subscribed and received for the
However, when the capital stock consists of no-par benefit of the corporation to be formed. Before
value shares, the subscriptions must be paid in full. a corporation may commence operations in the
Philippines, it must also register with the Bureau
The minimum paid-up capital to set up a of Internal Revenue (BIR), the social institutions
corporation is PHP 5,000. However, a subsidiary as well as the local government unit where its
with foreign equity in excess of 40% must have principal office will be located.
a paid up capital of at least USD200,000. If the

Branch
w Foreign corporations may establish a branch in operations. Corporate documents of the head office
the Philippines if the laws of their home country and proof that the head office is financially solvent
similarly allow Filipino citizens and corporations to are required to be submitted, among others. Being a
do business there. However, a branch cannot be used mere extension of a foreign company, the liabilities
to conduct activities that are included in the Foreign of a Philippine branch office shall be considered as
Investment Negative List (FINL) because it does not the liabilities of its head office.
have the requisite Filipino ownership. The FINL,
which is issued under the Foreign Investments Act of As a 100% foreign-owned entity, a branch must
1991, prescribes the maximum level of foreign equity have a capital of at least USD200,000 unless the
for specific covered activities. branch will qualify as an export market enterprise.
Similar to the wholly-owned subsidiary, this capital
In the same manner as a corporation, a branch is requirement may be reduced to PHP 5,000 if it
required to register with the SEC and the other could be shown that the entity qualifies as an export
government agencies before it may commence actual market enterprise.

10 PwC
 Country Overview

Philippines
Capital City
Manila
Official Language (s)
Filipino and English
Language required for filings
English
Currency
Philippine Peso (PHP)
Corporate tax rate
30%
Foreign exchange controls
Foreign currency may be remitted freely outside the
Philippines. However, restrictions may apply when
purchasing foreign currency from the Philippine
banking system.

Representative Office (RO) Partnership

w A representative or liaison office can be established w Under the Civil Code of the Philippines, a
to undertake activities such as promoting and partnership is treated as a juridical person, having a
disseminating information about a multinational’s separate legal personality from that of its members.
products, including dealing directly with the Partnerships may either be general partnerships,
clients of the head office. However, it is not allowed where the partners have unlimited liability for the
to engage in revenue-generating activities; its debts and obligations of the partnership; or limited
expenses are funded by the head office. Establishing partnerships, where one or more general partners
a representative office requires an initial inward have unlimited liability and the limited partners
remittance of USD30,000. being liable only up to the extent of their capital
contributions.

Contacts
Lawrence
David Fitzgerald
C. Biscocho RoselleMäenpää
Veera K. Yu Harold
Phan Thi
S.Thuy
Ocampo
Duong
Partner Tax
Partner, Senior Associate/Lawyer
Executive Director, Tax Senior Associate/Lawyer
Director, Tax
+848 3824
+63(2) 8450116
2728 loc 2007 +84 8 3823
+63(2) 845 0796
2728 loc
ext.2023
1517 +84 8 3823
+63(2) 845 0796
2728 loc 2029
david.fitzgerald@vn.pwc.com
lawrence.c.biscocho@ph.pwc.com veera.maenpaa@vn.pwc.com
roselle.k.yu@ph.pwc.com harold.s.ocampo@ph.pwc.comn.pwc.
david.ong@sg.pwc.com
com

Doing business in ASEAN 11

SINGAPORE
The following are the key features and requirements for each business structure:

Country Overview

Company (Pte Ltd) Republic of Singapore

w There are three types of company in Singapore,
Capital City
namely private/public companies limited by shares Singapore
(private companies limited by shares – 50 members or
Official Language (s)
less; public companies limited by shares – more than English, Malay, Mandarin and Tamil
50 members), public companies limited by guarantee
Language required for filings
(non-profit making activities with some basis of English
national or public interest) and unlimited companies.
Currency
Singapore Dollar (SGD)
w A company is a legal entity, separate and distinct from Corporate tax rate
its owners/shareholders. It can incur obligations and 17%
hold property in its own name. Consequently, it can Foreign exchange controls
sue and be sued in its own name, it has perpetual No
existence and it can enter into contracts in its own name.

Set up requirements
w There must be at least one shareholder (can be a Branch
corporate body or an individual) and one resident w A foreign incorporated company, which intends to
director in the company. 100% foreign ownership is carry on a business in Singapore, may choose to
allowed. The director of the company must be at least register a branch in Singapore.
18 years of age. The resident director can be any of
the following who is ordinarily resident in Singapore: w A local branch is viewed as an extension of the
• a Singapore citizen foreign company. An action against the local branch
• a Singapore permanent resident is an action against the foreign company. The rules
• an employment pass holder that govern the organisation and structure of a local
• an approval-in-principle employment pass holder branch are taken from the country in which the
• a dependant pass holder foreign company originates.

Directors cannot be bankrupts or persons convicted w To set up a branch in Singapore, two local agents
of dishonesty. must be appointed. These agents must be individuals
of at least 18 years of age and can be one of the
Share capital following:
The minimum paid up share capital is typically $1 in • a Singapore citizen
any currency comprising at least one share. However, • a Singapore permanent resident
certain banks and government agencies may require a • an employment pass holder
higher share capital before extending credit facilities • an approval-in-principle employment pass holder
or granting incentives or licences. • a dependant pass holder

12 PwC
 Limited Liability Partnership (LLP)
w The LLP was introduced in 2005. It has the limited
liability of a company and the operational flexibility
of a partnership.

w Unlike partnership, an LLP is a legal entity, separate

and distinct from its owners/partners. It can sue or
be sued in its own name. It can also own property in
its own name. An LLP has perpetual succession until
wound up or struck off.

w It requires a minimum of two partners but there is

no cap on the maximum number of partners allowed
for an LLP. Partners can be individuals of at least 18
years of age or body corporates (companies or LLPs).
It is compulsory for all LLPs to appoint at least one
local manager who is at least 18 years of age and
ordinarily resident in Singapore. A manager cannot
be a bankrupt.

Representative Office (RO)

w The Representative Office must confine its activities
strictly to conduct market research and feasibility
studies. A RO is a temporary facility to allow a foreign
entity to assess the viability of setting up a permanent
establishment in Singapore. It can be registered for a
maximum of 3 years subject to annual evaluation and
renewal.

w A RO is not a legal entity per se. The parent company

is implicitly responsible for all liabilities of the RO.
However, the RO and its representatives will have to
comply with the terms and conditions prescribed by
International Enterprise (IE) Singapore.

w Registration is required with IE Singapore. The

RO must be represented by staff from its own
headquarters and is contactable in Singapore. All new
applications by a foreign commercial entity must fulfil
the following criteria:
• Sales turnover of the parent company must be
more than US$250,000;
• Number of years of establishment of the parent
company must be 3 years or more; and
• Proposed number of RO staff should be less than
5 people (with administrative staff employed
locally).

Contacts
Melvin Poon Darryl Wee David Ong
Partner Executive Director Director
+65 6236 7688 +65 6236 7023 +65 6236 3792
melvin.kl.poon@sg.pwc.com darryl.el.wee@sg.pwc.com david.ong@sg.pwc.com

Doing business in ASEAN 13

THAILAND
The following are the key features and requirements for each business structure:

Company (Pte Ltd)

w There are two types of company in Thailand, namely The Memorandum of Association must contain:
private/public companies (i) The name and address of the proposed company;
(ii) Objectives of the company;
w A (private) limited company is the most common (iii) A declaration of limitation of shareholders’ liability;
structure for conducting business in Thailand. A (iv) The amount of share capital and value per share;
company is regarded as a juristic person with the and
right to own property and carry on business under its (v) Names, addresses, occupations and signatures of the
name and has liabilities to others separately from its promoters and number of shares subscribed by each
shareholders. At least 3 shareholders are required to of them.
form a company. (vi) Registration of incorporation of the company.

A public company is an entity established for the Following the registration of the Memorandum of
purpose of offering shares to the public. The purpose Association, the promoters will summon a statutory
of offering shares of the public company and the meeting of the share subscribers to consider the
liability limit of its shareholders must be clearly and following particulars:
specifically stated in the Articles of Association. At
least 15 shareholders are required to form a public (i) To approve the Articles of Association of the
company. company;
(ii) To ratify the business activities previously carried on
A public company is incorporated in a similar manner by the promoters;
to a private company. A limited company may be (iii) To establish preference shares, if any;
transformed into a public company. Unlike a private (iv) To fix the number of shares to be allotted as paid up
company, a public company may issue debentures and other than in cash, if any; and
offer them to the public. (v) To appoint the first board of directors, including
their authority, and the auditor of the company.
Only a public company can be listed on the Stock
Exchange of Thailand. Following the meeting, the promoters will hand over the
business to the directors who will then call up payment
Set up requirements on the shares, which must be a minimum of 25 percent.
w The procedures on incorporation of a private limited The directors must then apply for registration of the
company can be divided into three stages: company within three months after the date of the
meeting.
(a) Approval and reservation of the name of the
company A company can be registered within one day provided
(b) Registration of the Memorandum of Association that the following conditions are fulfilled:

Initially, there must be at least three promoters, to (i) Promoters arrange for the shareholders to purchase
prepare and register the Memorandum of Association all of the shares;
with the local registration office where the place of (ii) Promoters arrange for the statutory meeting for
business of the company will be situated. consideration of all actions required by law;
(iii) Promoters hand over all work to the director(s); and
(iv) Director(s) call up the capital required and receives
payment.

14 PwC
 Country Overview

Thailand Partnership
Capital City
w Thailand has two types of partnership; i.e., a juristic
and non-juristic. Common form of partnership is
Bangkok
limited partnership, where there are two types
Official Language (s)
of partners, limited and unlimited liability of the
Thai
partnership.
Language required for filings
Thai
Currency w Every partnership requires at least two partners.
Baht A limited partnership can be converted into a private
limited company.
Corporate tax rate
30% on net profit but temporary reduced to 20% for
accounting periods which begin between 1 January 2013
and 31 December 2014
Foreign exchange controls
No

Contacts
Siripong Supakijjanusorn Janist Aphornratana
Partner Director
+66 2 344 1124 +66 2 344 1431
siripong.supakijjanusorn@th.pwc.com janist.aphornratana@th.pwc.com

Doing business in ASEAN 15

THAILAND (continued)

Branch
w Where a foreign company is contracted to carry out w Application process:
a business project in Thailand, the foreign company (1) The Department of Business Development
may choose to perform such a project through a (“DBD”) will conclude the application details for
branch office. However, if the nature of the business the Sub-Committee and Committee of Foreign
falls within any of the restricted categories of the Business for consideration.
Foreign Business Act (1999), a permit will be required
before the business activities can commence. Issuance (2) The consideration period for the application is
of permit is discretionary. A foreign company cannot within 60 days.
engage in businesses listed under the prohibited
categories of the Act. (3) If approval is granted, the applicant will be
notified and license is given within 15 days. In
w A branch office is regarded as having same legal case of denial of approval, notification will be sent
entity as its head office. Therefore, the head office to an applicant within 15 days and the applicant is
and other branches will jointly be held responsible for entitled to appeal to the MOC within 30 days.
all liabilities of the branch in Thailand.
The whole process of applying for a business license
will take around two to three months.

Representative Office (RO)

w A representative office is established merely for the w Under the Foreign Business Act (1999), the activities
purpose of serving its head office of affiliates abroad of RO are considered as a service business under
for the provision of information. The activities of the Act, whereby a foreign company wishing to set
RO generally involve some or all of the following up RO must apply for and obtain permission from
activities: the Director-General of the Department of Business
Development of the Ministry of Commerce, with the
1.  Sourcing of goods or services in Thailand for the approval of the Foreign Business Committee, prior to
head office or affiliated companies. the commencement of its activities.
2. Checking and controlling the quality and quantity
of goods purchased or hired for the purpose of w RO is considered as a non-trading office which is not
manufacturing in Thailand by the head office or permitted to conduct business with a view to profit,
affiliated companies. (e.g. negotiate contracts, marketing, sell or trade,
3. Giving advice concerning the goods of the head etc.).
office or affiliated companies sold to agents or
customers. Procedures for setting up RO is similar to branch
4. Propagation of information concerning new goods registration.
or new services of the head office.
5. Reporting to the head office on the general
business trends or movements in Thailand.

16 PwC
 Doing business in ASEAN 17
VIETNAM
The following are the key features and requirements for each business structure:

Country Overview

Limited Liability Company Vietnam

w There are two types of limited liability companies
Capital City
(LLC) in Vietnam: single-member limited liability Hanoi
companies (SLLC) and multiple-member limited
Official Language (s)
liability companies (MLLC). An MLLC can have Vietnamese
between 2 to 50 owners, who are called ‘members’.
Language required for filings
A company is a legal entity, separate and distinct Vietnamese
from its owners/shareholders. It can incur
Currency
obligations and hold property in its own name. Vietnam Dong
Consequently, it can sue and be sued in its own Corporate tax rate
name and it can enter into contracts in its own 22% standard rate currently;
name. 20% standard rate from 1.1.2016 onwards
Foreign exchange controls
w The members of an LLC contribute ‘charter capital’ Yes
to the company; this is akin to equity. They are liable
for the financial obligations of the LLC to the extent
of their capital contributions (actual or declared to
be contributed) to the company.
Joint Stock Company
w Joint stock companies (also referred to as
shareholding companies) (JSC) differs from LLCs in
Set up requirements
that their capital is divided into shares, and unlike
w To obtain an enterprise registration certificate,
LLC, a JSC issues shares. Each shareholder holds a
the members must undergo an ‘registration’ or
number of shares corresponding to the amount of
‘evaluation’ licensing process, depending on the
capital the shareholder contributed to the JSC. The
amont of capital and the business sector. The
minimum number of shareholders in a JSC is three;
certificate (Business Registration Certificate
there is no maximum.
for locally owned companies; and Investment
Certificate for foreign invested companies) acts as
the certificate of incorporation and most commonly w A JSC can be listed in a stock exchange, unlike an
LLC. A listed JSC is a public company. A JSC can also
also as an operating licence. Depending on the
become a public company e.g., if it is not listed in the
exact business sector in which the LLC will engage,
stock exchange, but the number of its shareholders
there may be limitations on foreign ownership.
reaches 100 and its paid up equity is at least VND 10
Also, certain business sectors have minimum capital
billion (around USD 0.5 million). Similarly to LLC,
requirements. The legal representative, who is
the shareholders of a JSC are liable for the financial
commonly the general director, does not need to be
obligations of the JSC to the extent of their capital/
Vietnamese citizen, but under the law should reside
equity contribution.
in Vietnam.

w The set up process of a JSC is the same as for an

LLC and the same (if any) limitation apply to
foreign ownership and minimum legal capital.
The management structure of a JSC comprises of
the general meeting of shareholders, the board of
management, and the legal representative, who is
commonly the general director.

18 PwC
 Branch Representative Office (RO)
w Branches established by foreign entities are not w Representative office are common form for foreign
common investment forms in Vietnam and the investors to assess the viability of setting up a
setting up of branches by foreign entities has become company in Vietnam. An RO is not a separate legal
restricted in practice in the recent years. On the other entity and is not allowed to generate revenue.
hand branches established by Vietnamese enterprises
are more common. Such a branch is not a separate w The RO is permitted to act as a liaison office of its
legal entity, but dependant unit of the domestic foreign head office. It can search for trade and/or
Vietnamese company. investment opportunities and partners, supervise
and accelerate the implementation of contracts
w Unlike a representative office, a branch is allowed to entered into by its head office. It can hire staff and
conduct commercial activities and revenue generating rent premises. It should not without a separate
activities. A branch of a Vietnamese company can power of attorney sign contracts on behalf of its
carry some or all (but not more) of the same business head office.
activities as its ‘parent’ company.
w An application process to obtain a representative
w An application process to obtain a branch licence office licence is required. This licensing process is
is required. This licensing process if more straight- more straightforward than with establishment of
forward than with the establishment of LLCs or JSCs. LLCs or JSCs.

Contacts
David Fitzgerald Veera Mäenpää Phan Thi Thuy Duong
Partner Senior Associate/Lawyer Senior Associate/Lawyer
+848 3824 0116 +84 8 3823 0796 ext. 1517 +84 8 3823 0796
david.fitzgerald@vn.pwc.com veera.maenpaa@vn.pwc.com phan.thi.thuy.duong@vn.pwc.com

Doing business in ASEAN 19

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