Navigating the Financial Landscape: A Comprehensive Guide to Establishing a Financial Company in Vietnam (2023)

The bustling financial sector of Vietnam holds immense potential for aspiring entrepreneurs. Whether you envision fostering economic growth through microfinance or spearheading innovative investment solutions, understanding the legal intricacies of establishing a financial company is crucial for a successful journey. This comprehensive guide from NT International Law Firm, meticulously crafted with legal basis and real-life insights, equips you with the knowledge and resources to navigate the process with confidence and ensure regulatory compliance.

Navigating the Financial Landscape: A Comprehensive Guide to Establishing a Financial Company in Vietnam (2023)

Demystifying the Landscape: Types of Financial Companies

The term “financial company” in Vietnam encompasses a diversified array of entities operating within the non-bank credit institution framework. Each type boasts its own unique characteristics and regulatory requirements:

• State Finance Company: Established and managed by the State with budget allocation, these companies serve national policy objectives and cater to specific social and economic needs.
• Joint Stock Finance Company: Composed of individual and organizational shareholders, these companies operate with a profit motive and offer a range of financial services like consumer loans, factoring, and leasing.
• Finance Company under a Credit Institution: Owned and operated by a licensed credit institution, these companies function as subsidiaries for specific financial activities tailored to the parent institution’s strategy.
• Joint Venture Finance Company: Formed through collaboration between Vietnamese and foreign entities, these companies leverage international expertise and capital to offer specialized financial services.
• Finance Company with 100% Foreign Capital: Wholly owned by foreign credit institutions, these companies bring global knowledge and resources to the Vietnamese market, catering to a specific clientele or niche financial activities.

Laying the Foundations: Eligibility and Conditions

Before embarking on your financial venture, ensure you adhere to the stringent eligibility and operational conditions stipulated by Vietnamese law, primarily the 2010 Law on Credit Institutions with its 2017 amendments:

• Ownership: Individuals must be Vietnamese citizens with full legal capacity and without any legal restrictions on establishing businesses. Organizational shareholders must demonstrate financial stability and compliance with tax and social insurance obligations.
• Capital: The minimum capital requirement for a Joint Stock Finance Company is currently 500 billion VND, with additional capital commitments mandated for companies associated with economic groups. The State Bank of Vietnam sets specific capital requirements for other types of financial companies based on their activity range.
• Industry and Activities: Financial companies can only engage in activities expressly stated in their license issued by the State Bank. These activities typically include various forms of lending, factoring, leasing, and money market operations, all strictly governed by specific regulations.

Charting Your Course: Documentation and Procedures

Charting Your Course: Documentation and Procedures

Establishing a financial company involves meticulous documentation and a well-defined registration process:

• Document Preparation: Gather essential documents like an application for the License, a draft Charter with an operating plan, curriculum vitae of key personnel, capital contribution plans, and financial statements of major shareholders.
• Registration Process: Submit the complete application dossier to the Business Registration Office of the Department of Planning and Investment. Upon a successful review, you will receive a Business Registration License within 3-5 working days.
• License Acquisition: After securing the business registration, apply for the specific license to qualify for your chosen financial activities. This process involves additional documentation and compliance checks by the State Bank of Vietnam.

Post-Establishment Requirements: Building a Compliant Operation

Once your company is officially established, ensure you fulfill the following:

• Publication: Announce your business registration on the National electronic information portal within 30 days.
• Tax Registration and Compliance: Register for relevant taxes like corporate income tax, value added tax, and license tax. Submit timely tax declarations and diligently meet payment obligations.
• Operational Requirements: Open a bank account, obtain a digital signature for online transactions, and design company seals. Issue invoices and maintain clear financial records.
• Signboard and Company Information: Install a prominent signboard displaying your company name, address, and business code.

Real-Life Success Stories: Inspiration for Your Journey

Real-Life Success Stories For New Financial Company: Inspiration for Your Journey

The Vietnamese financial landscape boasts inspiring examples of successful companies navigating the regulatory framework and carving their niche:

• VietCredit: This Joint Stock Finance Company, established in 2008, focuses on microfinance, providing vital loan solutions to underserved communities. Their adherence to regulations and commitment to social impact have earned them recognition and acclaim.
• FE Credit: With its focus on consumer loans and financial services for individuals, FE Credit exemplifies how a Joint Stock Finance Company can cater to a specific market segment through careful planning and regulatory compliance.

Conclusion:

Establishing a financial company in Vietnam demands meticulous planning, adherence to legal requirements, and a commitment to operational excellence. This guide has equipped you with the knowledge and resources to navigate the process with confidence. By choosing the right type of company, securing proper licenses, and diligently fulfilling your obligations, you can transform your dream into great reality.

NT International Law Firm is Here to Help You

NT International Law Firm is Here to Help You

NT International Law Firm has addressed the question of what a financial company is and how you can open one when you fulfill all the requirements. If you have any further questions or concerns regarding corporate law, please contact our law firm immediately for expert legal advice.

If you require any legal assistance, please feel free to reach out to us via phone at 090 252 4567 or through email: info@ntpartnerlawfirm.com. At NT INTERNATIONAL LAW FIRM, our team is committed to offering you prompt and personalized advice.

You also might be interested in:

• The 2015 Civil Code in English
• The 2015 Civil Procedure Code in English
• The 2020 Law on Enterprise in English