When it comes to conducting business in Vietnam, the cities that come to most people’s minds would undoubtedly be Hanoi and Ho Chi Minh City.
However, these two cities are no longer the only places where Vietnam’s economy is expanding steadily. As a result, Danang is now acknowledged as one of the most appealing destinations for holidays, business, and foreign ventures.
Regarding general growth and economic performance, Danang stands out among Southeast Asian cities. This is due to several factors, including the East-West Economic Corridor, a large labor pool, a prime position, and better infrastructure and technology.
Danang has a lower cost of living than Ho Chi Minh and Hanoi, which can lead to reduced operating costs for companies, including wages and housing costs. In addition, the rapid expansion of the economy emphasizes sectors like tourism, information technology, and transportation. Businesses seeking to join these sectors may find opportunities as a result. Notably, there might be less business competition in Danang than in Ho Chi Minh City and Ha Noi, which is good news for companies seeking to break into a new market.
Common Legal Entity Options for Doing Business in Danang
In Vietnam, you can establish your business in Danang using one of four structures:
- A joint stock company (JSC)
- A limited liability company (LLC)
- A representative office (RO)
- A branch office
In Danang, a joint-stock corporation is a formal organization with a minimum of three shareholders and an unlimited maximum as defined by Vietnamese law. The shareholders are not required to be natives or citizens of Vietnam.
In this business structure, the charter money is split into equal shares. A JSC may be held completely by foreigners, or jointly by domestic and international parties, depending on the business line.
Limited Liability Company
The limited liability company is the most straightforward formal structure for conducting business in Danang. The benefit of an LLC is that the owners’ assets are protected, and their shares are the only ones subject to responsibility.
There are two types of limited liability companies: single-member LLC (with one person who is also the business owner) or a multi-member LLC (with two or more members, capped at 50 members).
Foreigners can easily expand their presence with a straightforward registration process in Danang with the aid of a representative office. However, commercial actions are not allowed.
Using a RO to conduct market research and advertise their enterprise is joint among foreign businesses and individuals.
A branch office can increase the geographic reach of your company and also cater to a specific demographic effectively. In contrast to a representative office, however, there is a more complicated establishment process. The branch office operates as part of the parent company, so no new legal is needed.
We made the most detailed step-by-step guide to setting up a business in Vietnam for investors, now available as an interactive checklist:
Doing Business in Danang
The Da Nang Department of Planning and Trade claims that throughout the first eight months of 2022, the city had drawn investment worth US$108.5 million, in which new projects account for US$67.8 million, reaching 45% over the same time in 2021.
Dynamic business landscape
Danang has become a desirable location for domestic and foreign businesses thanks to its business-friendly policies and facilities.
The city has undertaken several projects to upgrade its infrastructure and foster a supportive atmosphere for company growth. For example, Danang has significantly invested in upgrading its airfield, seaport, and roadway systems. The city has also implemented policies, such as tax incentives, simplified processes, and business support services, to encourage international investment and support local companies.
The Danang Hi-Tech park and Danang IT Park are just two of the commercial and manufacturing zones that Danang has established to accommodate high-tech businesses. The city is also home to a sizable number of research facilities, educational institutions, and other establishments that give businesses access to a skilled labor population. Importantly, Danang is home to the most high-tech parks, dense information technology parks, and software parsk in the central area, according to the International Cooperation Department of the Ministry of Information and Communications.
Danang’s well-developed infrastructure
Danang is a desirable location for business and tourists due to its well-developed facilities and connectivity.
Modern telecommunications networks, public utilities, and transit systems are part of Danang’s well-developed infrastructure. The city’s airport, the Danang International Airport, is the third largest airport in Vietnam and a key entry point to Central Vietnam. In addition, the airport has good connections with other Vietnamese towns and foreign places like South Korea, China, Thailand, and Singapore.
Danang is well-connected by road, rail, sea, and air. The city is connected to other significant hubs by several highways and is situated on Vietnam’s primary north-south transportation path. In addition, the city’s seaport, which connects Danang to other important cities and acts as a gateway to the South China Sea, is an important center for trade and businesses.
The accessibility of Danang is further improved by its closeness to other significant regional towns. The city is conveniently close to other major cities like Hue and Quang Nam and is only 30 kilometers from the famous tourist destination of the ancient Hoi An.
The Process of Registering a Company in Danang
Here is an outline of the steps you must take:
- Get certified copies of your passport or another identification card and any necessary verified foreign papers.
- Translate legal documents from other countries into Vietnamese.
- Obtain a business location
- Select the legal and organizational form, then register your company name.
- Get a business mark
- Register the business seal at Danang’s police office.
- Obtain Enterprise Registration Certificate (ERC) and Investment Registration Certificate (IRC).
- Obtain tax registration
- Create an account at Danang’s local bank
- Get VAT invoices for your business
- Notify the registration of your company on the National Business Registration Portal.
- Pay for the business registration fee for the organization
- Sign up for the company’s social security program
A business expert from a third-party company can significantly speed up and simplify the procedure.
Doing Business in Vietnam with InCorp Vietnam’s Assistance
There are many chances for enterprises and new businesses to succeed in Danag today ,thanks to the city’s well-organized and business-friendly climate.
Danang is an ideal investment option when conducting business in Vietnam because of its thriving economy and secure political climate, which place it among the top investment locations in Southeast Asia.
However, people who intend to conduct business in Vietnam should conduct adequate study and acquire the required information concerning laws and regulations, particularly those related to company formation.
InCorp Vietnam steps in because we are well-informed that many international people and businesses must be aware of the continuously evolving Vietnamese legal and regulatory framework.
The area’s most recent laws and regulations are constantly being kept up to speed by our team of professionals and legal experts. Furthermore, to ensure that establishing a company in Vietnam is simple and of the highest quality, we also maintain strong ties with the relevant authorities.
When you work with InCorp Vietnam, your company is in the best possible hands. Complete the following questionnaire.