Considering business operations in Myanmar? As an FDI specialist, I guide businesses through complex environments. Let's understand the company registration in myanmar process together!

Key Takeaways:

• Myanmar’s changing landscape needs to be understood.
• Choosing the right company structure is key to your goals.
• A clear process is efficient.
• Awareness of compliance avoids pitfalls.
• Expert guidance is essential for navigating and long term success.

Read More: FDI in Vietnam: A Transformation from Isolation to Global Engagement

Understand Myanmar

For foreign investors: regulatory context

Myanmar presents a distinct landscape for foreign investors, underpinned by the Myanmar Foreign Investment Law (MFIL) and the Myanmar Companies Law (MCL) 2017. These laws provide a clear pathway for establishing diverse investment structures, including the significant advantage of up to 100% foreign ownership in numerous sectors, as per ASEAN Briefing's 2022 guide on corporate establishment.

While the period since February 2021 has undeniably introduced complexities to the investment environment, a nuanced understanding of the existing regulatory framework is key to unlocking potential - not only the country's strategic location as a gateway to China and India but especially in the Manufacturing and Services sector. Foreign investors can still actively pursue and benefit from MFIL registration, which offers valuable incentives and potential tax advantages. The Directorate of Investment and Company Administration (DICA) remains a vital contact for streamlined company registration, and the Myanmar Investment Commission (MIC) continues to facilitate approvals for larger investments.

For locals: evolving reforms

The MCL 2017 has modernized the previous company law framework, as explained by Latt Latt Soe Thiri in a 2017 ResearchGate publication. MCL allows foreign investors to hold up to 35% stake in local companies without changing their status as a Myanmar company, which was intended to facilitate foreign investment. While government incentives for Small and Medium Enterprises (SMEs) exist, bureaucracy remains a significant hurdle.

Why Structure Matters

Choosing the right entity

You have Private Limited, Public Limited, Branch or Representative Office. Choosing the right business structure that aligns with your business goals and legal requirements is key. Each has different taxation implications. Plan your profit repatriation early. Your chosen structure must align with your strategic goals, a key consideration also mentioned in Emerhub’s Myanmar company registration guide.

Cross-border founders

Clear shareholding terms are essential. Setting up a legal entity in Myanmar involves many challenges and risks, including potentially lengthy and costly requirements. The MCL generally requires at least one resident director. Historically, and where applicable, Private Limited companies have been a popular choice for new registrations.

Key Legal Enablers: Decoding the Myanmar Companies Law 2017

Registering your company in Myanmar allows businesses to operate legally under the MCL 2017. This legal framework outlines the process for company formation and provides for the protection of local and foreign shareholders' rights, though the practical enforcement and stability of this protection are subject to the prevailing political and economic conditions. While the country possesses long-term potential due to its large and young population, and the government has previously introduced incentives such as tax holidays, it is imperative for potential investors to conduct thorough due diligence and assess the significant risks associated with the current volatile environment before committing to business expansion or investment.

Leveraging Technology: MyCO – Your Portal for Modern Company Administration

Registering your company in Myanmar is a must for businesses looking to set up in the country. The process involves registering with DICA under the MCL 2017. This law provides a framework for company registration, including requirements for local and foreign shareholders, company name, registration number and registered office address. With Myanmar Companies Online (MyCO), the process has become more streamlined and easy. You can now register and access company documents and extracts online, reducing the administrative burden and ensuring compliance with the law. This modernization through MyCO empowers companies to navigate the initial setup with greater ease, providing a solid foundation even as the broader investment environment requires careful consideration.

Step-by-Step Myanmar Company Registration

Company Registration Requirements

Requirement #1: The company must have a unique name.	✅ Approved by DICA.*This is crucial to avoid conflicts and establish market presence
Requirement #2: The company must have a registered office address in Myanmar.	✅ For official correspondence and legal notices.✅ Submit various documents, (including the Memorandum and Articles of Association) to DICA, outlining the company’s structure, objectives, and operational guidelines.
Requirement #3: A private company must have at least one director who is ordinarily resident in Myanmar.	✅ Local point of contact for regulatory and administrative purposes.✅ Register with MyCO
Requirement #4: Foreign investors can own up to 35% of a local company without changing its status as a Myanmar entity.	*Any changes to the company’s structure or ownership must be notified to DICA to maintain compliance with the law.

By meeting these requirements, businesses complete the legal registration process, though success in operations remains heavily dependent on navigating the complex and challenging business environment.

Company Registration Fees and Costs

Fees and costs for registering a company in Myanmar vary depending on the type of company and services required. For a private company, the registration fee is MMK 250,000 (approximately USD 180). For a public company, it’s MMK 500,000 (approximately USD 360). These fees cover the basic registration with DICA. Besides the registration fees, there are other costs to consider. These include the cost of industry specific licenses and permits which are required for legal compliance and operational authorization. Companies also need to register for tax and get a Taxpayer Identification Number (TIN) which involves additional costs.

For foreign investors, the cost of business visa is another consideration. The total cost of registering a company in Myanmar can range from MMK 500,000 to MMK 2,000,000 (approximately USD 360 to USD 1,440) or more depending on the complexity of the registration process and the business requirements.

Given the many costs involved, it is highly recommended to seek the advice of a legal professional. Legal experts can guide you on how to meet all requirements efficiently and navigate the registration process to ensure all necessary steps are completed correctly and on time.

Registration Timeline and Processing Time

The registration timeline for a company in Myanmar varies depending on the type of company and the complexity of the registration process. For a private company, the administrative processing time by DICA via MyCO is typically around 1-2 weeks once all correct documentation is submitted. For a public company, this process usually takes longer, around 4-6 weeks, due to their more complex structure and often larger capital investment.

The registration process involves submitting applications through the MyCO system, which allows for efficient submission and tracking. Once DICA approves the application, companies then proceed to register for tax and obtain a TIN.

While MyCO has streamlined the administrative registration process, companies must still comply with all relevant laws and regulations, including the MCL 2017 and MFIL. However, it's important to note that despite administrative efficiencies, external factors related to the current political and economic situation may still impact the overall time and ease of starting operations.

Business Location and Registration

Business location is a key consideration when registering a company in Myanmar. The registered office address must be within the country and businesses can choose from various locations including Yangon, Mandalay and Naypyidaw. DICA has offices in these locations making it easier for businesses to register and access company documents. By choosing a strategic business location, companies can leverage local resources, infrastructure and talent. This decision can impact operational efficiency and market reach of the business making it a critical consideration during the registration process.

Limited Liability and Protection

One of the main benefits of registering a company in Myanmar is the limited liability protection it offers under the law. MCL 2017 states that the liability of shareholders is limited to the amount of their share capital, thus protecting their personal assets in case the company incurs debts or liabilities. This applies to local and foreign shareholders, providing a foundational legal safeguard for their investments. However, the practical extent of this protection may be impacted by broader political and economic instability. DICA also provides comprehensive guidance on company administration, including requirements for holding annual general meetings, filing annual returns, and notifying company structure changes. Compliance with these requirements ensures businesses remain compliant with local laws and regulations within the existing operational framework.

Compliance Pitfalls

Annual filings

ARs and financial statements must be filed with DICA. Technology integration in delivering legal services means efficiency and cost effectiveness. Late submission penalties apply. Audit requirements trigger for larger entities.

Foreign entity taxation

Key taxes are corporate income tax and commercial tax. While tax incentives are available for foreign entities under the Myanmar Investment Commission (MIC), it's important to consider that the prevailing political and economic risks significantly outweigh these incentives for many potential substantial investments. Double Taxation Agreements (DTAs) can provide relief on withholding taxes. Commercial Tax applies to goods and services.

SME mistakes

Common errors include not updating DICA information timely, misclassifying business activities or overlooking labor compliance. For various types of companies, it is important to understand financial requirements including foreign companies need to submit minimum capital in installments. Regular internal reviews are the fix.

Strategic Long-Term Success

Scaling: governance

Set up a solid board structure from the beginning. Paid up capital is important for operational needs, as advised by consulting firms like FocusCore. Use robust shareholder agreements, especially important in Myanmar. Plan for conflict resolution, often via arbitration. My extensive ASEAN experience underscores these governance foundations.

Market-readiness

Focus on localizing your branding and digital strategy. Effective Human Resources for local hiring, payroll and retention is key. Protect your Intellectual Property through local registration. Understand the difference between general trade license and industry specific special permits.

Business Association and Networking

While registering a company in Myanmar provides a formal entry point into the market, the landscape of business associations and networking opportunities has significantly shifted since 2021. MIC and DICA remain the official government bodies for investment and company administration, providing guidance and resources as per their mandates.

Joining business associations and chambers of commerce can offer networking, though the scope and effectiveness are impacted by the current environment. The Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) is the main business association representing the private sector in Myanmar.

Industry-specific associations also exist to provide sector-specific information. Engaging with these entities can still provide connections and insights, but businesses must manage expectations regarding the current operational environment and the limited advocacy for a 'business-friendly environment' given the ongoing crisis. Leveraging these resources can help businesses navigate local business opportunities and mitigate risks.

Expert Myanmar Setup Support

Why local guidance is vital

Navigating local legal nuances and language barriers is smoother with local guidance. Registering an overseas corporation in Myanmar involves understanding the different company formats permitted under Myanmar Companies Law and the conditions under which foreign entities must register, especially if they intend to do business in Myanmar. Effective liaison with DICA, MIC, and banks is crucial. This approach helps in understanding and mitigating the inherent risks in the current market.

Viettonkin’s edge

While Myanmar holds long-term potential, success in the current climate depends heavily on realistic risk assessment, smart structuring, and diligent compliance. With us at Viettonkin, your business gets support to navigate the complexities and challenges of the Myanmar market. Thorough due diligence and a cautious approach are paramount for any investment decision.

As your partner, we offer setup, company secretarial, and ongoing compliance services. You get our ASEAN-wide practice expertise built on over 2,000 projects across APAC. The company registration procedures through the Myanmar Companies Online platform are administratively streamlined, outlining the types of companies that can be registered and the requirements for foreign ownership and director residency. Contact us now for a consultation!

Cambodia has a favorable investment environment in Southeast Asia. The topic of incorporating a company in Cambodia is receiving increasing attention nowadays because of the investment incentives granted to a Qualified Investment Project, easy foreign currency remittances and competitive tax rates. 

To form a business in Cambodia, there are three main phases that investors have to go through, including pre-incorporation, incorporation and post-incorporation. These phases will be discussed in detail in this article. 

Step 1: Pre-Incorporation procedure

Investment registration

According to Law on Investment, any person who wishes to implement  Investment Projects (refers to a Qualified Investment Project, an Expanded Qualified Investment Project or a Guaranteed Investment Project must go through an investment registration process with the The Council for the Development of Cambodia (CDC) or the Provincial/Municipal Investment Sub-Committee (PMIS) in order to be eligible for investment incentives. The Investment Project Application may be made through information technology platforms.

In accordance with the criteria outlined in the Investment Law, the CDC evaluates investment applications and offers concessions to investors and investment projects. Before or after incorporation or registration with the MoC, the investor may apply for investment registration.

The CDC or PMIS must receive an investment proposal together with a one-time application fee (KHR 15 million). Once you submit an Investment Proposal to the CDC, the result shall be in after 3 working days. 

If your proposal is approved, you will receive a Conditional Registration Certificate in response and a Final Registration Certificate 20 (twenty) working days later. The whole process will take you 31 days if you successfully submit an Investment Proposal to the CDC.

If, on the other hand, the response is a Letter of Non-Compliance, you have unfortunately failed to register investment and must re-submit the proposal once the shortcomings are addressed. Your investment proposal may have fallen into one of these categories: (i) the investment proposal does not contain all the required information; (ii) the investment proposal falls under the Negative List or (iii) the proposed investment is merely an extension or expansion of a previous or current QIP.  

Step 2: Incorporation procedures

Open a bank account and deposit at least 25% of registered capital

The required initial capital must be deposited in a business bank account in Cambodia. You will receive documentation of this deposit from the bank, which you should maintain and present to Cambodian authorities during the incorporation procedure.

Reserve a business name and get approval of name from Business Registration Department of MoC (BRD)

First, decide what kind of business you are in, then begin to reserve a name from online services. The proposed name is to be filled in both Khmer and English along with the entity type, partnership type, and company type on the reserve name page.

When you pay for your name reservation application, the name is considered "reserved" until the official reviews it internally. No other person may use the same name on a new name reservation application during this time. 

Once the name reservation application is approved, the name is reserved for 3 months before expiring. You can make the second payment to extend your reserved name for an additional three months if you wish to do so.

Submit registration documents online

For Certificate of Incorporation (business registration), you can register your certificate through the following link: www.registrationservices.gov.kh or you can go to the Department of Business Registration/Provincial Department of Commerce to assist you in business registration. Online business registration requires you to complete the necessary forms, pay the relevant registration cost, and submit your application to the official in charge of business registration. The company will be promptly incorporated and a certificate of incorporation will be issued upon approval of the application.

The documents required varies based on different types of businesses; however, these are some of the mandatory documents that must be uploaded when registered with the Ministry of Commerce:

• Land title or lease agreement of the enterprise’s location
• Current photo of no longer than three months of director, shareholder (if the shareholder is a physical person) and/or representative (if the shareholder is a legal entity) with white background

• National identification card or passport of director, shareholder (if the shareholder is a physical person) and/or representative (if the shareholder is a legal entity)
• Articles of incorporation in both English and Khmer
• Reference document (can be a letter specifying an already-existing company’s permission to use a similar company name, special licenses and related documents)
• Authorization letter if the one who fills out the application is your representative

After your application is successfully reviewed and approved, you will receive a notification email to extract an electronic certificate, which contains an electronic stamp, QR code and signature.

Make a company seal

You will obtain a company seal and a certification of registration once you have received the Ministry of Commerce's approval. If everything goes according to plan, the company seal and registration certificate will be issued on average one business day after approval.

Have registration documents stamped and approved (including the Memorandum and Articles of Association and the Certificate of Incorporation)

The business and its operations are outlined in the Memorandum and Articles of Association and the Certificate of Incorporation, which must adhere to the requirements set by the Ministry of Commerce. The following details should be included in these documents: (i) a description of the company structure; (ii) the title of your business; (iii) the objectives of your company; (iii) how long the company will be open for business; (iv) information about the registered office; (v) address, nationality, and complete name of each shareholder and director; (vi) the capital and shares of the corporation are expressed in Cambodian riel.

Step 3: Post-incorporation procedures

Register for TIN, Patent Tax, and VAT Tax

After registering with the MoC, businesses have 15 days to register with the Department of Taxation as well in order to obtain a Taxpayer Identification Number (TIN) and register to pay Value Added Tax (VAT).

The registration can be completed online through the General Department of Taxation's (GDT) website or in person at the Tax Administration. The business must pay an annual business registration tax, often known as a patent tax, for its first year of operation in addition to registering for the TIN.

Notify the Ministry of Labor of enterprise opening, hiring of employees, payroll ledger, declaration of personnel

All businesses are required to file a written declaration to the Ministry of Labor and Vocational Training prior to beginning company activities.

Companies with at least eight employees are required to have internal policies that adapt the general requirements of the labor law, including hiring requirements, wage payment, benefits, work hours, health and safety precautions, and personal leave policies. After the company is incorporated, the internal regulations must be submitted within three months.

Submit Company original Statutes and capital deposit evidence at the Business Registry 

Within 30 days of the day a business registration certificate is issued, the company must submit two copies of the original form of its statute together with a statement of bank account to the Department of Business Registration.

The Ministry of Commerce reserves the power to deny the company's registration and completely remove it from its database within this time if the Department of Business Registration does not receive the original copy of the statute from the applicant.

Create and submit company bank account via the system

For you to have a properly-setup company, you are required to have a company’s bank account. Your personal bank account that has been renamed to the company name is not counted as a company bank account. Each bank has its own policy and criteria, so contacting the bank whose service you would like to use and asking for the details and required documents could be helpful. Upon the completion of the opening of your company account, you are obliged to update your bank account details into the Online Business Registration Platform within 15 working days after the approval date of the General Department of Taxation on your application.

File Annual Declaration in the online business registration

The MoC receives the Annual Declaration of Commercial Enterprise annually as of the date of online re-registration for each year. It is now possible to confirm the company's current directors, shareholders, and capital on the MOC website.

Conclusion

Company incorporating requires investors to go through different legal procedures. This may be challenging for not only new-comers, but also seasoned investors. Yet, to avoid legal non-compliance that leads to unexpected failures, advice should be sought from top-notch experts with the right local expertise. Viettonkin is one of the leading professional firms with more than 12-year experience in diverse industries and majors. Our team of well-informed professionals in Vietnamese markets and legal systems are capable of assisting you navigate through the process of establishing a new business in Vietnam. With us by your sides, you can focus on what really matters to you. Let us be your trustworthy partner! 

There are the 5 main types of business entities available in Malaysia.

· Sole Proprietorship
· Partnership
· Sendirian Berhad (Sdn Bhd): Private limited company limited by shares
· Berhad (Bhd):

• Unlisted Public Company
• Listed Public Company
• Company Limited by Guarantee

· Limited Liability Partnership (LLP): Mix of traditional partnership and Sdn Bhd company

During the progress, simple procedures that can be finished include incorporating a business in Malaysia and creating a corporate bank account. If a Power of Attorney is granted to the Malaysia incorporation agent, who will then carry out all procedures on his behalf, Our Client won't need to travel to the nation. The following steps are as below:

Requirements

After deciding on the business entity type, to set up a company in Malaysia, the following requirements shall be met:

· Minimum of 1 shareholder
· Minimum of 1 local resident director
· Minimum of 1 local resident company secretary
· Minimum of RM1.00 initial paid-up capital
· A local registered address

Pre-incorporation planning

• Before Viettonkin Consulting moves forward with the establishment of a Malaysian business, our firm demands that our Client shall:

i) pay the engagement fees that are due,
ii) sign our engagement letter, and email it back to us;
iii) each shareholder, director, and the corporate beneficial owner shall deliver to us all requested due diligence papers such as:
Copy of Identification Card (IC) or Passport
Copy of residential proof address or bank statements

• The Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia – SSM) is searched by Viettonkin Consulting's Malaysia Incorporation Team for company names. If the name is available, we fill out Form PNA 42 on your company's behalf to reserve it. SSM typically takes 1 to 3 working days to approve a name reservation.
• For our Client, Viettonkin Consulting creates a thorough engagement strategy for the creation of a Malaysian Company that includes the requirements for creating a corporate bank account. In order to maximize openness and ensure that our Client's expectations will be met throughout the project, this engagement project plan outlines, week by week, each stage to engagement completion;

Incorporation procedure

• Viettonkin Consulting will complete the incorporation of Form A for our Client's signature and courier return once the corporate structure has been decided upon with our Client. After that, we create the corporate documents for the company incorporation.
• To our client for his signature and courier return to us, our team emails the Memorandum and Articles of Association, as well as the director and shareholder consent forms. Viettonkin Consulting' Incorporation Team works with the SSM to finalize business incorporation in Malaysia, provided our Client gives us the original signed documents in a timely way;
• The Certificate of Incorporation from the Malaysia SSM is sent to Viettonkin Consulting via email, and our staff quickly forwarded it to the Client;
• The Viettonkin Consulting Malaysia incorporation team submits to the SSM a register of the company's shareholders, directors, managers, and secretaries on behalf of the client.

Post-incorporation

• By filling out and submitting Form CP 600C to the Inland Revenue Board of Malaysia, Viettonkin Consulting registers our Client's business for corporate tax;
• Together, the Banking Team at Viettonkin Consulting opens a corporate bank account for our Client in Malaysia with top-notch multi-currency internet banking capabilities. For the purpose of offering corporate bank account services, we collaborate with locally-based Maybank, Public, CIMB, and RHB banks as well as globally renowned institutions like HSBC, Standard Chartered, and Citibank.
• In order to avoid our Client having to go for a bank account opening interview, Viettonkin Consulting's Banking Team will also communicate with the bank. Our Client is obliged to deposit the proposed share capital of the company as soon as the bank account is opened. The board resolution to move forward with creating a bank account will be sent by our company secretary together with all approved corporate documentation;
• Following the conclusion of the engagement, Viettonkin Consulting couriers a company kit folder containing the following corporate documents, including original corporate documents, bank correspondence, and a client feedback survey to evaluate the quality of our Malaysia company incorporation services, to our Client's preferred international address;
• All foreigners wishing to work lawfully in Malaysia must first get a working visa in Malaysia. There are 2 main types of work passes available in Malaysia:

· Employment Pass
· Professional Visit Pass
Viettonkin Consulting will assist clients in applying for a working visa for foreigners working in Malaysia

Conditional business sectors in Malaysia

The following commercial activities call for a license for foreign investors when forming a company in Malaysia:

(i) manufacturing;
(ii) banking;
(iii) construction projects;
(iv) oil, gas,
(v) both retail and wholesale.

See this page for more information;

Malaysia local business industry licenses are as follows:

Business Type	Type of Business License
Education of all types	Universities,Colleges,Schools,Tuition Centre,Kindergarden,Language Centre
Tourism	Inbound,Outbound and Ticketing
Transportation	Car Rental
Publishing of Books,Magazine	Publication
Broadcasting to the Public	TV,Radio, and Music
Distributive,Import/Exports/Trading	Wholesale Retail Trade (WRT) License for Trading,Import,Export,Restaurant
Manufacturing	Factories of all kinds
Hospitality	Luxury Hotel,Budget Hotel
Construction and Builder	Construction Industrial Development Board and Engineering
ICT and E-commerce	Multi-Super Corridor (MSC)
Direct Selling and Multi Level Marketing	MLM License
Banking	Central Bank of Banking and Financing
Tax Advisory and Consultancy	Inland Revenue Board
Audit and Account Service	Malaysia Institute of Accountant
Insurance	Insurance Agent/Broker/Underwriter
Shipping	Maritime License
Franchising	Franchise License of all types
Hire Purchase/Leasing Business	Leasing
Legal Service/Litigation/Advocate	Lawyer
HR Recruitment and Placement	Recruitment License

Compliance under Malaysian regulations

The following post-incorporation compliance factors for our Client's Malaysian company:

• Our Client is required to appoint Malaysian auditors six months before the required Annual General Meeting;
• The Annual General Meeting (AGM) must be convened 18 months after incorporation, and the Annual Return must be filed within 14 days of the AGM;
• Our Client must finish Employee Provident Fund (EPF) registration within a week after formally hiring the first employee, and within a month, register with Social Security Organization (SOCSO);
• Our Client must register for GST with the Royal Malaysia Customs Department and submit quarterly reporting if annual sales exceed US$121,000 (RM500,000).

The government of Brunei, the Islamic Kingdom in Southeast Asia, wants to diversify its economy and increase foreign investment, therefore it has implemented a number of initiatives to draw in investors from across the world, including Vietnam. If you wish to start a business in Brunei but are unsure how to do so, read our article below for more details.

I. Procedure to apply for a Vietnam external investment certificate

The first step in forming a company in Brunei is to apply for an offshore investment certificate from a Vietnamese authorized body. Follow these steps to carry out this procedure:

STEP 1: CREATE DOCUMENTATION FOR OFFSHORE INVESTMENTS

The following documents must be prepared:

Offshore Investment Registration Document (made according to the form)

Among the documents demonstrating legal status are:

• For individual investors, a copy of an identity card, passport, or identity card
• For institutional investors: a copy of the Certificate of Establishment or other comparable document establishing the investor's legal existence as an organization, such as the Investment License; Decide to establish; obtain a certificate of business registration;

The following are the main sections of the investment project proposal: project implementation status, investment stages (if any), the form, goal, size, and location of the investment; preliminary capital determination; capital mobilization strategy; and capital structure preliminary evaluation of the project's investment effectiveness

One of the following documents is among the ones demonstrating the investor's financial capability:

• Investors' most recent two years' worth of financial statements
• Dedication to providing a financial institution with funding
• A promise of the investor's financial strength
• Further records attesting to the investor's financial stability

— A formal agreement to arrange for investors of an approved credit institution to receive foreign currency or a commitment to self-balancing foreign currency sources.

The investor must provide written permission from a competent state agency on the satisfaction of the conditions for outward investment for projects involving outward investment in industries and trades subject to conditional outward investment. in compliance with applicable laws when overseas (if any)

— A statement from the taxing authority attesting to the investor's compliance with tax responsibilities

STEP 2: APPLY FOR AN OFFSHORE INVESTMENT CERTIFICATE IN TWO STEP

— Apply at the Ministry of Planning and Investment for an offshore investment certificate.

— The Ministry of Planning and Investment shall deliver the dossiers for the evaluation views of pertinent state agencies within three working days of the date of receipt of complete dossiers.

— You will receive an offshore investment certificate if you fully satisfy the requirements following the application review period.

II. Steps to establish a business in Brunei

STEP 1: PRE-INCORPORATION

• Consultation phase: We discuss our Client's needs and goals for the new company before incorporating a Brunei resident company. The best corporate structure for the prospective business is then planned;
• Due diligence and dedication on the part of the client: i) pays the engagement costs owed to Viettonkin Consulting in Brunei; ii) returns our client engagement letter signed by them; iii) gives us all the documentation necessary for our due diligence;
• Planning phase: Viettonkin Consulting creates a thorough project plan for our Client's engagement that includes i) procedures for obtaining a corporate bank account; ii) procedure of incorporation. This project plan outlines each stage to the completion of the engagement week by week, maximizing openness and establishing client expectations;
• Customers provide three distinct company names in order of preference for a name availability check. Viettonkin Consulting then i) on behalf of your business, inquiries the Brunei Registrar of Companies about the availability of the company name; ii) informs the customer of the availability;
• Document preparation: Following the agreement with our client on the organizational structure, Viettonkin Consulting will draft incorporation documents for that client's signing and courier return.

STEP 2: INCORPORATION PROCEDURE

• Viettonkin Consulting will be used as an example i) the Brunei Registrar of Companies, and register our Client's business there and ii) pay the registration money on behalf of our client;
• Approval of incorporation: After registration is accepted, Viettonkin Consulting emails our Client i) public perception of the business, ii) company certificate, and iii) a seal is acquired for the company;
• Additional requirements: In order to register a corporation in Brunei, you need an address there. Viettonkin Consulting gives our Client, upon request, a Brunei business address for the purpose of billing. In addition, after the establishment of the firm, clients can ask for a phone, fax, and email support for their business.

STEP 3: POST-INCORPORATION

• Additional licenses: Depending on the nature and type of business activity, you may require an approval or clearance from a specific regulating agency. Viettonkin Consulting, if necessary i) requests a variety of licenses from the Municipal Board and ii) secures the Ministry of Health's and the closest fire department's approval for such a license;
• Opening a corporate bank account is something Viettonkin Consulting helps our Clients with after receiving the certifications. Most of our clients opt for a business bank account in either Singapore or Malaysia, because i) efficiency in taxes and transfers; ii) considering that both jurisdictions are important financial centers; iii) multi-currency accounts and top-notch Internet banking services are offered by banks in both countries;
• Following the conclusion of the engagement, Viettonkin Consulting sends our client a complete business kit that includes the original Brunei corporate documents, untouched bank correspondence, and a client satisfaction survey about the caliber of our Brunei incorporation services.

Conditions for set up business in Vietnam for providing secretarial services

Foreign entrepreneurs who want to set up business in Vietnam for providing secretarial services need to settle down and live. If an entrepreneur is living in a foreign country, he/she must have nationality from countries that are members of the WTO.

Foreign entrepreneurs need to pay attention to the following requirements when setting up a business in providing secretarial services:

• Carry out business registration according to the regulations on setting up business.
• Business license recognizes an enterprise providing secretarial services.

Type of business: an enterprise providing secretarial services may choose one of the following types of business: joint-stock company, single-member limited liability company, partnership, private company or private enterprises, etc.

Conditions for charter capital: Enterprises may register their own charter capital because the Enterprise Law does not stipulate a minimum capital level to set up business in Vietnam.

Conditions for company name: The company name is written in capital letters in Vietnamese and must not be duplicated or confused with those already present in the market. The company name is displayed at the head office, branch, representative office and printed on the papers, transaction records, publications and documents issued by the enterprise as well.

Sequence and procedures to set up business in Vietnam for providing secretarial services:

To set up business in providing secretarial services, it is necessary to prepare and submit documents at the Business Registration Office in the place where the head office is located, including:

• A valid enterprise registration application according to the prescribed form.
• Company’s Articles of Association.
• Copies of documents of the owner or legal representative: copy of identity card or citizen’s identity card, passport, copy of certificate of establishment of the company, decision to establish the company or other similar documents.
• Especially, foreign investors need to obtain an investment registration certificate as prescribed in the Investment Law and accompanying documents.

An enterprise is eligible to set up business in providing secretarial services when the following documents are presented: Secretarial service practice certificates or related certificates of personnel. Copies of the labor contracts between the enterprise and its employees who are working for the enterprise providing secretarial services. Certificate of eligibility to set up business in providing secretarial services.

Some notes for foreign employees:

Foreign employees need to have a labor contract with the enterprise and have a work permit in Vietnam issued by a competent authority according to regulations.

Employees must have good health and professional qualifications in the field of secretarial services.

Foreign employees must ensure compliance with Vietnamese labor laws, international treaties and other provisions of Labor Law.

Foreign employees are entitled to participate in compulsory social insurance according to state regulations.

To save time, avoid repeated travel for foreign entrepreneurs, Viettokin will support and accompany them throughout the process of solving arising problems about documents and procedures to set up a business Vietnam for providing secretarial services, thereby enterprises feel secure to build and develop their own business. Owning staff of many years of experience in Vietnam, Viettokin offers quality services worthy of the trust of partners.

Vietnam’s aviation market has seen a robust development in the recent decade. This development can be attributed to Vietnam’s strong economic growth, a growing tourism industry and an increasing middle class population. Additionally, low-cost airlines have emerged in recent years to make air travel more affordable. 

Due to the quick recovery after the pandemic, this market is now attracting foreign newcomers to do business again. In today’s article, Viettonkin will provide you with up-to-date information related to setting up an air transport company in Vietnam. 

Vietnam’s aviation is a promising market in recent years

The aviation industry has garnered much interest among investors during the past 5 years. Sectors that have drawn the most attention are airport construction, airlines, and aviation services. In 2019, according to the International Air Transport Association (IATA), Vietnam was the world’s seventh fastest-growing aviation market.  

At present, Vietnam has 22 airports, including 12 international airports and 10 domestic one. Vietnam has made investing in airport infrastructure a top priority. The Government set a goal to construct 6 new airports and upgrade most tourism hub airports by 2030, with a total investment of approximately $17.68 billion.

This market was on the rise and the growth attracted numerous start-up airlines. Several foreign new carriers were set up. However, the Covid-19 pandemic forced the aviation industry to freeze in the past 2 years. 

After the pandemic, the aviation market in Vietnam is now vibrant again. Vietnam is the world’s fastest recovering domestic aviation market, according to IATA. In the first 6 months of 2022, the market saw a growth rate of 123% compared to the same period of 2019. Experts said this year the total number of passengers would likely reach 87.8 million, up 190% compared to 2021.

Conditions to set up an air transport business in Vietnam

In general, air transportation means the transportation of passengers, baggage, cargo, parcels and mail by air. According to Law on Investment 2014, air transport business is a conditional business, so that enterprises must have a license when setting up their business.

The Law on Civil Aviation of Vietnam 2006 (amended in 2014) stipulates conditions for granting air transportation business license, as followed:

• Enterprise has a Business Registration Certificate indicating that its main scope of business is air transportation;
• It has a plan of acquiring aircraft;
• It has an appropriate organizational structure and personnel who are suitably certified to ensure the operation of aircraft and air transportation business;  
•  It has sufficient capital as specified by the Government;
• It has a business plan and strategy for the development of air transport products in line with the market’s demands and the civil aviation industry planning
•  It has a principal office and place of business in Viet Nam.

In addition to these above conditions, a foreign-invested enterprise shall be granted with air transport business permission if it meets the following conditions:

• The ratio of foreign-invested capital is in conformity with the stipulations by the Government;
• Legal representative of the foreign-invested enterprise shall be a Vietnamese national and foreign nationals shall not account for more than one third of the management machinery.
• The air transportation business permission shall be granted by the Minister of Transport upon the approval of the Prime Minister.
• An enterprise applying for air transportation business permission shall pay fees.
• The Government shall specify specific conditions, procedures, and formalities for granting the air transportation business permission.

The most noteworthy point is the conditions regarding the ratio of capital to start an air transport business in Vietnam. To attract more foreign newcomers, the Government has amended the regulation several times in recent years.

Relaxed requirements regarding charter capital 

The latest regulation is Decree 89/2019/ND-CP coming into force on January 1, 2020. By issuing Decree 89, the Government amended and supplemented some articles of Decree 92 in 2016 on conditional business lines or activities in the civil aviation industry. They aim to create favorable conditions for enterprises to set up airlines and attract foreign investment.

Here are the key amendments that can benefit enterprises:

Decree 92/2016/ND-CP

Decree No.89/2019/ND-CP (new)

Airlines with a maximum of 10 aircrafts must have a charter capital of at least VND 700 billion to operate international flights and VND 300 billion for enterprises only in domestic air transportation. Airlines with 11-30 aircrafts must have at least VND 1 trillion to provide international services or at least VND 600 billion to operate domestic flights. With 30 aircrafts, the amount is VND 1.3 trillion and VND 700 billion, respectively.

Airline transport business exploiting 10 aircrafts must have a charter capital of at least VND 300 billion ($13 million). Airlines with 11-30 aircrafts must have at least VND 600 billion ($26.1 million). Airlines with more than 30 aircrafts must have at least VND 700 billion ($30.43 million).

It can be seen that the Government has significantly reduced the amount of charter capital and eliminated the capital gap between exploiting international and domestic flights. 

However, foreign-capital-invested air transport businesses must satisfy 3 further conditions. First, the foreign ownership must not exceed 34% of the charter capital, which is higher than  that of the old regulation (30%). Second, foreign enterprises must have at least one Vietnamese individual or a Vietnamese legal entity holding the largest portion of charter capital. Third, in case the Vietnamese legal entity has grown owned capital, the foreign capital contribution shall not exceed 49% of the charter capital of the Vietnamese.

Moreover, the Government eliminates the condition that two years after an airline obtains an air transport license, ownership of the company must be transferred to foreign investors. 

Requirement on the age limit for used aircraft imported in Vietnam is another important point that foreign enterprises should pay attention to. A used passenger transport aircraft must be older than 10 years, measured from the date of release to the date of importation in Vietnam, or not exceed 20 years from the release date to the time of expiration of the hire contract.  The age of used helicopters must not exceed 25 years.

Though Vietnam’s aviation market can produce lucrative opportunities, the regulatory complexity can pose a big challenge to foreign enterprises hoping to start business in this market. With insightful knowledge into the aviation market and its related regulatory framework, Viettonkin can provide valuable guidelines for our partners and help you concentrate your power on your business. Let’s work together!

The Cayman Islands began developing into a major international financial centre in the 1960’s, and now has over 100,000 companies registered with the Registry of Companies. The Companies Registry has played an integral part in the development of the Cayman Islands as a highly ranked financial centre in the international business community. The growth continues at a steady pace with an average of 10,200 new companies registered each year over the past ten years. The registration and control of companies is governed by the Companies Law, the Limited Liability Companies Law and the Foundation Companies Law. Its administration is conducted by the Registrar of Companies and staff. The shareholders or members of companies may have limited or unlimited liability (1).

PRE-INCORPORATION 

1. Advisory stage: the requirements and features of the Client are discussed i) using an exempt business, a regular non-resident corporation, or another corporate structure ii) any possible license requirements, and iii) whether it would be wise to change the model articles of association;

2. Picking a name: Our Client selects three company names to submit applications for at the registrar of companies. Every limited liability company shall have a name which may, but need not, contain as a suffix the words “Limited Liability Company” or the abbreviation “L.L.C.” or “LLC”

3. Company constitution: The Cayman Islands Companies Law's model Memorandum of Association, Articles of Association are used by the majority of our clients.

4. Share distribution: Verify i) the shareholders' identity (s) ii) The share capital's currency; and iii) The quantity, distribution, and price of the shares that will be issued To reduce the number of government fees owed, we advise having a share capital of less than $50,000 USD;

5. Director choice: Appoint a director at a minimum. Companies based in the Cayman Islands may have corporate directors. To serve as a director of the corporation, each director must sign a paper;

6. Registered address: Our incorporation service plan permits the use of our Cayman Islands registered address;

7. Planning stage: The procedure is then broken down into week-by-week sections in a detailed engagement plan, including i) the incorporation and business registration process. ii) the need for supporting documentation; iii) tax ramifications, and iv) getting any required licenses. By doing this, transparency is maximized, client expectations are established, and the engagement is executed effectively.

INCORPORATION PROCEDURE

8. Document submission: We submit the applications for certificate of registration after all of the necessary paperwork is in place;

9. Incorporation approval: The incorporation of the business will take place in 4 days after the documents are submitted. Following approval, we provide the certificate of registration and other company documents to our client through email right away. The director's consent documents are now submitted to the client for their signature.

POST-REGISTRATION

10. Opening a corporate bank account: After receiving the company's corporate documents, we help our Client with this process. We can help clients open a corporate bank account for their Cayman Islands business either domestically or abroad;

11. Additional registrations: At this stage, we will apply for a Tax Exemption Certificate if our Client requests one. The TEC is given out by the Cayman Islands Cabinet Office in around 3 weeks. Now is the time to submit an application for any licenses or government registrations required for the company's selected business operations, such as those for excluded person status.

12. After the completion of the engagement, we courier to our client a complete company kit that includes the original corporate documents, unopened bank correspondence, and a client satisfaction survey.

Advantages of registering a business in the Cayman Islands

• If organized appropriately, a Cayman Islands business can legally hold profits from abroad while paying the least amount of taxes abroad;
• A Cayman Islands corporation has a legal corporate structure and is not required to audit or publish financial information on an annual basis;
• A Cayman Islands business can be formed with just one shareholder and director. The shareholder and director may share the same legal entity, be a corporation, and be wholly owned by a foreign entity;
• A 20-year government promise against the imposition of taxes can support the total absence of direct taxes. Our Clients must apply for a Tax Exemption Certificate in order to receive this guarantee. This entails a complete absence of all corporations, capital gains, payroll, property, and withholding taxes. There are no minimum capital requirements, however, Tax Exemption Certificates are only given to exempted corporations. An exempt Cayman Islands business does not need to maintain a record of members that is available for public inspection; Government registration costs rise in proportion to the amount of issued share capital; The entity can be managed from any location in the world after the exempt company establishment, and AGMs are not required. The same freedom is not available to regular non-resident firms;
• Due to the effectiveness of the local tax and regulatory systems, the Cayman Islands are a well-known global hub for financial services. The value of the local currency is fixed to the US dollar, making it easily convertible. Cayman Islands dollars are equal to 1 US dollar. Since the Cayman Islands are a British Overseas Territory, local laws are based on English law, and the majority of business conducted via them is done in USD. Due to their familiarity with Commonwealth legal systems, clients find it simple to conduct business through the Cayman Islands;
• To facilitate the incorporation of a firm, it is simple to open a global corporate bank account.
• Foreigners with a net worth of US$7.3 million (KYD6 million) can now apply for a Residential Certificate for Investment after the Cayman Islands government enacted an amended bill. The holder of this certificate is granted permission to live in the Cayman Islands for a period of up to 25 years, but they are required to abide by a number of rules, including:

1. Investing US$2.9 million (KYD2.4 million) in companies with a minimum of 50% Caymanians as employees;
2. Passing frequent examinations to verify their enterprises' financial viability and their executive roles within those organizations;

• The Cayman Islands has a supportive and favorable business climate for its investors due to its i) stable macro-economic and political environment contributing to low rates of inflation, ii) world-class infrastructural facilities and iii) excellent communications system along with a secure fiber-optic network; 
• Once the incorporation forms are submitted, we will receive the corporate documents within a week.

Disadvantages of registering a business in the Cayman Islands 

Internationally, the Cayman Islands are viewed as an offshore tax haven. In order to combat tax evasion, the Cayman Islands were added to the European Union's (EU) blacklist of tax havens in February 2020 for failing to impose "economic substance" standards on local businesses;

• A Cayman Islands-based client cannot do business with an exempt corporation there. Exempted businesses, however, are permitted to do worldwide commerce through a local operation;
• Only through a regular non-resident corporation, not through an exemption company, may foreigners purchase Cayman property. This raises the administrative burden of owning property in the Cayman Islands;
• The Cayman Islands have not signed numerous double taxation avoidance agreements because they do not have any internal taxes. As a result, holding corporations from the Cayman Islands are not always the most tax-efficient holding businesses;
• The Cayman Islands are raising fees and taxes in response to pressure from the United Kingdom after obtaining assistance for its capital deficit and economic recession. It is anticipated that annual company fees (for both domestic and foreign businesses), general register costs, import tariffs, and work permit fees will increase;
• The Organization for Economic Cooperation and Development (OECD) designated the Cayman Islands as a "cooperative jurisdiction" in the exchange of information on taxes in June 2000. 12 Tax Information Exchange Agreements (TIEAs) have been struck by the Cayman Islands with nations such as Denmark, Faroe Islands, Finland, France, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Sweden, and the United States;
• When registered under the Banks and Trust Firms Law of 1995, banks and trust companies must pay annual fees;
• It is crucial that our clients are aware of their yearly tax requirements, both personally and corporately.
• The population of the Cayman Islands is only 62,585 people. The banking sector, as well as tourism, are important drivers of the economy. Therefore, it is very difficult for companies in other areas to have i) a large customer base and ii) hire skilled laborers in the Cayman Islands;
• The Cayman Islands revised their FATCA and CRS regulations for businesses that trade and manage securities in November 2018. Such businesses will have to register with the Cayman Islands Tax Information Authority (TIA) in order to comply with FATCA or CRS requirements;
• Additionally, new regulations from the Cayman Islands Monetary Authority (CIMA) mandate the adoption of AML and KYC policies by all businesses. instances of similar policies can be found here;
• It took roughly 3 weeks for CIMA to complete the incorporation forms procedure and verify that all documents were certified.

Source : Healy

In Indonesia, prospective business owners can start any company of any sort as long as they have fulfilled all the necessary criteria and regulations. Two of the most important and well-known business entities in Indonesia are Perseroan Terbatas (PT) and Perseroan Terbatas Penanaman Modal Asing (PT PMA). PTs or PT PMAs can be found all over the country. They form a large part of Indonesia's economic backbone and contribute to the country's corporate success. This article, consisting of two parts, is dedicated to providing all you need to know about local PT and PT PMA. 

Part One: Local PT

What is a Local PT?

PT is the abbreviation of Perseroan Terbatas, a limited-liability company whose capital is divided into shares and the responsibility of shareholders is based on the number of shares that he or she has.

The Indonesian government, through Presidential Regulation No. 10 of 2021, which contains a Positive Investment List, has made the investment process easier for foreign investors. However, there are several business fields that are closed off to foreign ownership. The only alternative for foreign investors to operate within these business lines is to establish a local PT.

As the name suggests, local PT companies are for Indonesian citizens, with 100% local ownership. The general requirements for establishing a local PT company are as follows:

• 2 local shareholders;
• 1 local director;
• 1 local commissioner.

Sizes of local PT company

After you've learned what a local PT is, you should also be aware that starting a local PT in Indonesia will require some financial resources as your business capital. The amount varies, but usually it starts from IDR50 million to more than IDR10 million. Based on this amount of capital, local PTs in Indonesia are categorized into three sizes:

Size	Minimum Investment Value
Small-Scale	IDR 50 million
Medium-Scale	IDR 500 million
Large-Scale	IDR 10 billion

You can easily obtain additional funding and capital from a local PT company by issuing new shares, among other methods.

Procedures for establishing a PT Company in Indonesia

According to the Indonesian Ministry of Investment, setting up a company in Indonesia requires several procedures to be followed, which include:

• All founders, or one of the authorized founders, must submit the application for the establishment of a Limited Liability Company to the Notary by bringing the completeness of the company’s articles of association and the requirements required for the Deed of Establishment and Limited Liability Company.
• The Notary will make minutes of copies of the same limited company statement with a deed of incorporation to be signed by the founders.
• If there is a mistake in writing, the founders or the power of attorney are allowed to make corrections.
• After the minutes or copies of the company’s articles of association have been signed and submitted to the Notary, an Authentic Deed of Limited Liability Company Certificate will be issued, signed, and stamped by the Notary.
• As evidence of the company’s establishment, the deed of the establishment must include a  written day, date, month, and year.
• The Notary will submit the Deed of Establishment containing the articles of association of a Limited Liability Company to the Minister to obtain its legalization as a Legal Entity.
• After the issuance of the Decree of the Minister of Law and Human Rights of the Republic of Indonesia, the Limited Liability Company will obtain status as a Legal Entity.
• Once the Deed of Establishment and Ratification of the Company’s Articles of Association is completed, your business has been established in the form of the Limited Liability Company (PT).

Considerations for Foreign Investors

A local PT company can hire foreign employees. However, the hiring is done via the Special Purpose Vehicle Company, and the required company size is Medium. 

Furthermore, for foreign investors, a local nominee arrangement is required to reap the benefits of a local PT company. This means that the company will be set up by a local nominee director, and the local nominee director will have full legal ownership of the company. 

The most viable way for foreign investors to gain control of a local PT company in Indonesia is by setting up the company’s bank account in Indonesia. Despite the fact that you will not have legal ownership of the company, you can still manage the bank account and transactions to gain control of its funds.

To summarize, local PT provides a common and easy approach for your investment plan in Indonesia, thanks to several advantages like lower paid-up capital requirement or wider range of business opportunities. However, finding a trustworthy local partner to be the legal owner of the  company is still considered the biggest challenge for foreign investors. Additionally, the intricate system of Indonesian laws and regulations also makes it quite tricky for foreign investors who do not have connections in this country. These problems call for a reliable local firm that is recognized by the authorities and can deliver quick solutions.

Those who are uncomfortable with giving another person or entity full legal ownership of their business should consider forming a PT PMA company instead.

Part Two of the article focuses on the Indonesian business entity known as Perseroan Terbatas Penanaman Modal Asing (PT PMA) and issues related to its establishment.

Part Two: PT PMA

What is a PT PMA?

PMA Indonesia (Penanaman Modal Asing) or PT PMA (Perseroan Terbatas Penanaman Modal Asing) is also known as a Foreign-Owned Company - the legal entity through which a foreign person, foreign company, or foreign government body can conduct business (generating revenue streams and profit) in Indonesia.

The establishment of a PT PMA is regulated by Law No. 40/2007 regarding Limited Liability Companies (Company Law). Such an entity can be entirely or partially owned by foreign investors.

In general, a PT PMA company must consist of at least:

• 1 director: a foreigner who can work as a director in a PT PMA and obtain a KITAS (stay permit).

• 1 commissioner: the commissioner can be either a local citizen or a foreigner. The main duty of a commissioner is to supervise and monitor the work of the directors in the company and to ensure that every activity commenced by the company is in order and consistent with the objectives of the company;

• Every PMA company should have at least 2 shareholders, be it an individual or a legal entity.

The minimum authorized and paid-up capital requirement to start a PT PMA is IDR 10 billion, or roughly USD 700,000. The paid-up capital does not have to be fully in cash. It can be in the form of pre-incorporation asset purchases and expenditures shown on a balance sheet. Something to keep in mind is that you may start a lower-scale company and upgrade it once you have more capital, but upgrading your company and making changes to the company’s capital is a complicated and costly thing. It is recommended to start your company with higher capital instead.

Business sectors in Indonesia

When you want to establish a PT PMA in Indonesia, your field of industry and business activities must be clear. It's important to note that foreign investment is prohibited in a number of sectors in Indonesia. The Indonesia Investment Coordinating Board (BKPM) compiles and regularly updates the Negative Investment List (Daftar Negatif Investasi) to determine which sectors are open to foreign investment.

Business sectors in Indonesia can be divided into three categories based on how open they are to the entry of PMAs. Business sectors are divided into open sectors, open sectors with conditions, and closed sectors.

Open sectors are business sectors in Indonesia that allow completely foreign-owned companies to exist and conduct business. There are no prerequisites for those planning to start a PMA in this sector. Bars, gyms, restaurants, sports fields, and swimming pools are examples of businesses in Indonesia that fall into this category.

Open sectors with conditions are those that allow foreign-owned businesses and foreign investment in those businesses if certain criteria are met. The amount of foreign capital in this sector varies. The foreign capital in most of these companies, however, will range from 49% to 70%. This is the largest of Indonesia’s three categories of business sectors. Energy companies, mining companies, hospitality companies, and sports facilities that are not classified as open-sector businesses are some of the businesses that fall under this category.

Closed sectors are sectors that disallow the involvement of any private businesses. The Indonesian government has complete control over the classification of closed-sector businesses. These businesses may not be started by foreigners; only Indonesian citizens may do so. Among the businesses in this category are certain companies related to travel, including some tour guide agencies. The Negative Investment List specifies which business sectors are classified under each category.

Considerations for Foreign Investors

With the help of an agency in Indonesia, it will usually take 2.5 to 3 months to set up the company and obtain all of the necessary licenses. PT PMA is fully established and legal to operate once it has its deed of establishment from a notary, Ministry Approval (SK Kemenkumham), Business License Number (NIB) from the Online Single Submission (OSS) system, Tax Number (NPWP), Business Operational License (Ijin Usaha) and Domicile Letter. Although the registration process can be quite simple thanks to the constant updates from the BKPM, it is not advised for foreign investors to do it on their own. There are so many documents and permits that you have to prepare to register your company, and making all of them by yourself will be a daunting task. Don’t risk having your application refused or delayed just because of your lack of understanding.

Speaking of hiring a local agency, you need to make sure that the local agent you use is  Indonesian-owned. The BKPM issued a new regulation that only a locally owned agent or at least a local entity can help with the registration process of PT PMA. You must also be sure that the agent must also be certified by BKPM, as only a certified agent is able to help you with your PT PMA registration.

Aside from the Negative Investment List, Indonesia has a number of other regulations that govern PMAs. Among the most important of these are Law Number 25 of 2007 and the Head of Investment Coordinating Board Regulation Number 14 of 2015. These regulations define a PMA in Indonesia, mention the licenses which may be required by one, and state the fact that a PMA in Indonesia requires a paid-up capital of IDR 10 billion before it can be set up; of this 10 billion, 25% of it must be paid to the Indonesian government prior to registration.

Taxes in Indonesia may also cause trouble for foreign investors and their PT PMAs. It is compulsory that any PT PMA has to pay taxes and report the company’s financial status as per standard accounting in Indonesia, regardless of whether it has already had activities or not. Among them are monthly and annual withholding taxes; monthly and annual income taxes; Value Added Tax (VAT); Luxury Goods Sales Tax (LGST)—if any; along with the company investment plan. These taxes must be paid at the local tax office where the business is located. In Indonesia, late payment of corporate and individual taxes can result in a financial penalty. For late payments, the taxpayer should be charged 2% interest per month.

In addition to paying taxes, a PT PMA’s owner will also need to do a quarterly investment report. This report usually contains the profit and loss statement of your company, information on the number of employees, etc. This report is important as it will show the government that your company is up and running instead of being dormant. Failing to provide such a report will attract the authorities to run an audit of your company.

Local PTs and PT PMAs continue to be Indonesia’s most popular forms of corporate entities, thanks to their unique characteristics and contribution to the economic well-being of the country. Setting up a PT or PT PMA in Indonesia can be quite a challenging experience. It is best to be accompanied by a trustworthy agency, who can provide reliable consultation and help you set up the right company entity based on your needs without wasting time and resources. Here at Viettonkin, we are confident in bringing the ideal solution to our clients who are looking for an investment opportunity in Indonesia. With an office in Central Jakarta, Viettonkin offers a multitude of services, ranging from legal counsel and foreign direct investment strategy to accounting firms and tax services. Contact us now to find out more.

Vietnam joined RCEP after a wave of investment into the distribution sector and export, trading companies in Vietnam maps at AC. After the agreement is signed, electronics, retail, agriculture and fisheries will be very attractive for foreign retailers. For a foreign company that is interested in expanding the business in a new country or region, Vietnam is a promising destination with many business opportunities. This article will provide the guideline to establish company in Vietnam as a trading company.

While Covid-19 disrupted the global supply chain, the trend of protection is emerging, the RCEP was signed to mark an important milestone in the economic integration of the negotiating countries. With the participation of 15 members, it will create a market of 2.2 billion people, equivalent to 26,200 billion USD, creating the largest free trade area in the world. Thanks to the commitment to open markets for goods, services and investments, rules of origin in the RCEP geographic area and trade facilitation measures, this FTA will provide opportunities to develop chains, new supply.

The Agreement also establishes stable and long-term export markets for ASEAN countries in the context of recent supply chain instability. The implementation of the RCEP also creates a binding legal framework in the region on trade policy, investment, intellectual property, e-commerce ... and creates a fair playing field in the region.

So, it can be said that setting up a trading company in Vietnam at this timing, especially after the lock-down is a worthy option.

---

What's a Trading Company?

Trading companies or dealers (formerly known as wholesalers) are businesses that deal with different types of products sold to consumers, for business or for government purposes. Merchants buy a wide range of products, maintain stock or a store, and deliver products to customers.

In order to setting up a company in Vietnam or specifically a trading company in Vietnam investors should comprehensively understand the formality and function of the legal entity to be formed according to Vietnam Law. The consultancy and guidance of skilled and qualified lawyers from top consulting firms in Vietnam throughout the process shall mostly be needed.

A trading company: 

• Engaging in import and export activities as well as domestic distribution.  
• Allowing a business to retain more control over their operations and manage supply chain issues quicker. 
• While there are no minimum capital requirements, you need to review and maintain compliance with regulations for their business activities.

If you wish to engage in import and export activities as well as domestic distribution (i.e., retail, wholesale, and franchising trade activities) in Vietnam, the most common method chosen is to establish a trading company.

Generally, a trading company is inexpensive to establish and can be a great assistance to your enterprise by combining both sourcing and quality control activities, thus providing quicker reactions compared to remotely based.

First of all, you need to decide what type of business in Vietnam will be. Currently, there are different types of businesses in Vietnam, including:

• Joint stock company (JSC)
• One member limited liability company (LLC)
• Limited liability companies with two or more members (LLCs)
• Private company
• Partnerships for establishment registration with state agencies.

Then we will go next to the procedures and compliance step.

---

What do you need to establish a trading company?

#1 Investment license

The first step of registering any foreign business in Vietnam is to obtain an investment license from the Department of Planning and Investment. The investment registration certificate is the primary license necessary for conducting any business in Vietnam.

It usually takes up to one month to acquire it.

#2 Business registration certificate

This step requires an enterprise registration certificate. In general, the Department of Planning and Investment will issue the business registration certificate in one week.

Also, take note that after you have received the certificate, you have 90 days to make the initial capital contribution.

Company registration documents:

• Trade company charter document.
• List of shareholders, members of the same company.
• An application form for an enterprise registration certificate.
• Documents proving the status of individuals and legal entities such as: ID card, citizen identification card, passport, business registration certificate ...

#3 Trading license

The third step of registering a trading company in Vietnam is to get a trading license. This process includes:

1. Sending an application to the Department of International Trade (DIT). The DIT will then give an approval or invite additional documents, if necessary.

2. After a response from the DIT, they're going to prepare a politician Letter and submit it to the Ministry of Industry and Trade (MIT).
3. The MIT will then either confirm your request for the trading license or invite additional documents. If the appliance is approved, the DIT will issue the trading license within one week.

If the application is rejected, then, you need to provide supplementary documents and the DIT will then prepare a new official letter for the MIT.

READ MORE: Franchise Agreement and Business in Vietnam

---

What are the relevant procedures?

After successfully registering the procedures for the establishment of a trading company at the Department of Planning and Investment, the Company Owner is required to:

1. Tax:

Companies will need to declare, report and pay taxes such as value added tax, corporate income tax and license tax.

2. Announcement of company information:

The commercial enterprise will be on the national portal and post company information and publicly and transparently the company registration.

3. Digital signature registration.

Register to buy digital signatures at the tax agency and make online tax payments. 

4. Engrave the company round seal
5. Issue the invoice
6. Open a bank account for transactions
7. Contribute capital to the company on time (if not fully paid).

If you are wishing to set up a trading company and to quickly go into business activities in time, please contact us via Viettonkin Consulting. Here, we are assisting you as well as many other foreign businesses in the process of globalizing and unlocking the potential to expand your enterprises.