BASIC FORMS OF ENTERPRISES IN VIETNAM

1. Limited Liability Company

A limited liability company is a legal entity established by its members by way of capital contribution to the limited liability company. The capital contribution of each member is treated as equity. The members of a limited liability company are liable for the financial obligations of the limited liability company to the extent of their capital contributed or undertaken to be contributed to the limited liability company. The management structure of a limited liability company comprises the members’ council, the chairman of the member’s council, the (general) director and a board of supervision (where the limited liability company has more than 10 members).

A limited liability company established by one or more foreign investors (from 2 to 50 members) may take the form of either a 100%-FOE (where all members are foreign investors) or of a foreign-invested joint venture enterprise between one or more foreign investors and one or more domestic investors.

2. Joint Stock Company

A joint stock company is a legal entity established by its founding shareholders on the basis of their subscription of shares of the joint stock company. The charter capital of a joint stock company is divided into shares and each founding shareholder holds a number of shares corresponding to their subscribed and paid-up shares in the joint stock company.

A joint stock company is required to have at least three shareholders (with no maximum number of shareholders). The management structure of a joint stock company comprises of the general meeting of shareholders, the board of management, the chairman of the board of management, (general) director and a board of supervision (where the joint stock company has more than 10 individual shareholders or if a corporate share-holder holds more than 50% of the shares of the joint stock company).

A joint stock company may take the form of a joint venture between foreign investors and domestic investors.

3. Partnership

A partnership may be established between an individual or a legal entity and the general partner who is required to be an individual. The general partner has unlimited liability for the operations of the partnership.