If you want to start a company in Vietnam, you need a place to do your business. This is an important rule. This article explains what you need to know about finding the right place for your company in Vietnam. It talks about the rules and things to consider when picking a location for your business.

Why is the location of a business important?

When starting a new company in Vietnam, it’s not just about deciding what the company will do. Investors also need to think about where the company will be located. This is really important for a few reasons:

Official documents:

The location of the business is written down in important papers called the Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC). These papers show that the company is allowed to operate in Vietnam. We talked about these papers in our previous articles.

Proving the plan:

The government looks at where the business will be to understand if the plan makes sense. This helps them see if the business can really do what it says it will do. For example, if a company wants to make things, the place where it’s located needs to be suitable for making things.

Getting help:

Sometimes, the government gives companies money to help them start or grow. Where the business is located can decide if the company gets this money. If the business is in certain areas like industrial parks or high-tech zones, it might be able to get financial help from the government.

Extra checks:

If the business is going to be close to places that are important for the country’s safety, like borders or shores, the government looks at the company’s plan extra carefully. They might ask for more papers and be very strict about the application.

So, choosing the right place for a business is really important. It’s not just about where the company will be, but also about how it can get support and if there will be any extra challenges.

Choosing a business location for your company: easy steps

Direct approach:

When you start a business, you can get land directly from the government or lease it from them. They’ll give you a certificate saying you can use that land. You need to get the government’s permission first. This is good for building houses or special projects like power plants.

Indirect approach:

You can also rent a place from someone who owns it, like in an industrial area or a building. This is called the indirect way because you won’t get a certificate, but the owner’s name will be on it.

Most people choose the indirect way because it’s easier. The owner already did all the paperwork, so it’s simple to show authorities you can use the place for your business.

Important points for leasing a business space from a landlord

If the investor chooses the indirect approach, there are some important things to think about. Here’s what you should know:

Landlord’s ownership rights:

According to real estate law, a company needs the proper registration to lease or sublease properties in Vietnam. So, it’s really important to make sure that the landlord’s company is doing things the right way. They should be operating within the allowed business categories. Sometimes, landlords rent out properties without the proper permission from the actual owner. To avoid legal problems and expensive court cases, investors need to carefully check if the landlord has the right to rent the property before signing any lease papers.

Type of leased area/space:

There are different kinds of spaces you can rent – like a whole building, a floor in a building, a shared workspace, a standalone house, a factory with some office space, and more. But there are rules. For instance, according to the Housing Law of 2014, you can’t use a room in an apartment building as a business place. The government checks if your chosen space fits the kind of business you want to do. If you’re setting up a business in a commercial building, you won’t usually have problems. But if you’re using a building that’s meant for different things (like offices, shops, and homes), you might need extra paperwork to prove you’re not using it as a home.

Sensitive Business Locations:

If your business spot is close to borders, the sea, or places important for security, the process of getting started will be more complex. You’ll need more documents and the approval process will be tougher.

Remember, before you finalize anything, take your time to understand these points. They can make a big difference in how smoothly your business starts off.

Different types of businesses and how they choose locations in Vietnam

Matching objectives and location:

Businesses have different goals. Some want to make products, while others want to provide services. These goals affect where they should be located. For example, if a company wants to sell to many people, being in a busy city area might be better.

Following the rules:

Every type of business has rules to follow. Some locations might have specific rules that a business must meet based on what they do. It’s important for a business to choose a location that fits these rules.

Learning from others:

Sometimes, other businesses in a certain area can help a new business. If there are a lot of similar businesses in one place, it might be a good idea to be there too.

Getting the right space:

Some businesses need a lot of space, like factories. Others can work in smaller spaces. The type of space a business needs can affect where it should be.

Connecting with customers:

Being close to customers can be important. If a business wants local people to buy from them, being near those people is useful.

Meeting legal needs:

Each business activity might have specific legal requirements. These rules can be different depending on where the business is located. It’s vital for a business to pick a place that lets them do what they need to do legally.

Expert advice

Sometimes, it’s helpful to get advice from experts who know about the area. They can guide a business on where it should set up based on its goals.

The requirements for business locations could vary based on different situations. If you need help with these or any other issues related to investing in Vietnam, MD Law Firm is prepared to collaborate with your company.