Choosing a business vehicle: single-member and multi-member LLC, joint stock company, partnership, private enterprise, branch and representative office

The structures available

Law No. 59/2020/QH14 on Enterprises provides five forms of enterprise. The single-member limited liability company has one owner, an organisation or an individual. The multi-member limited liability company has two to 50 members. The joint stock company has at least three shareholders and no maximum. The partnership has at least two individual general partners with unlimited joint liability and may have limited partners. The private enterprise is owned by one individual who is personally liable and may own only one. Vietnamese citizens may also register a business household with the commune-level authority under Decree No. 168/2025/ND-CP, an unincorporated form not open to foreigners. A foreign company may instead establish a representative office or, in limited sectors, a branch under the Commercial Law, or invest through a business cooperation contract without any entity (Forms of investment). All five enterprise forms are open to foreign investors on the same terms as Vietnamese investors, subject to the market access rules in Chapter 1.

Limited liability company

The LLC is the default vehicle for foreign investors and for most Vietnamese businesses. Members' liability is limited to the capital they have contributed; there are no shares, each member holding a percentage of the charter capital recorded in the charter and the register of members; and the governance can be as simple as an owner, a chairman and a director. An LLC may issue bonds but may not issue shares or make a public offering of equity.

The single-member LLC suits a wholly owned subsidiary. Where the owner is a company, it appoints either a chairman of the company or a members' council of three to seven authorised representatives, plus a director or general director; where the owner is an individual, the owner is chairman and may also be director. Decisions on the charter, capital, restructuring, major transactions and distributions are the owner's, taken by written resolution, which makes the single-member LLC the lightest form to run from abroad.

The multi-member LLC suits a joint venture or a small group of investors. All members sit on the members' council, which votes by capital contribution: 65% of the capital of those attending for ordinary resolutions and 75% for the sale of assets worth half or more of total assets, charter amendments, reorganisation and dissolution, unless the charter sets different thresholds; written resolutions require 65% of total charter capital. A member who wishes to sell to an outsider must first offer the stake to the other members pro rata on the same terms, which gives every member a built-in protection against an unwanted new partner. A supervisory board is compulsory only for State enterprises and their subsidiaries. The 50-member ceiling and the absence of shares make the multi-member LLC unsuitable for businesses planning employee equity or outside investors beyond a handful.

Joint stock company

The joint stock company (công ty cổ phần, JSC) is Vietnam's corporation: capital divided into shares of equal nominal value, at least three shareholders, free transferability subject to the charter and to the three-year restriction on founding shareholders transferring ordinary shares to non-founders without the general meeting's approval. Its organs are the general meeting of shareholders, a board of directors of three to eleven members and a director or general director, together with either a supervisory board or at least 20% independent directors with an audit committee under the board (Legal representative and governance). It is the only form that may offer shares to the public, list on a stock exchange or issue preference shares (voting, dividend and redeemable preference shares), and the only form in which an employee share scheme is practical. Founding shareholders must together subscribe for at least 20% of the ordinary shares offered at registration. The price of these advantages is heavier governance, more formal meeting procedures, more filings and, for public companies, the securities-law disclosure regime. Law No. 76/2025/QH15 capped private bond issues by non-public joint stock companies at five times owners' equity and made explicit that a JSC that falls below three shareholders for six consecutive months without converting must dissolve.

Partnership and private enterprise

A partnership (công ty hợp danh) requires at least two individual general partners with unlimited joint and several liability for the partnership's obligations, and may admit limited partners who contribute capital and are liable only to that extent. It is used for professional practices where the sector law requires it, notably law firms (Vietnamese law firms may be partnerships or LLCs) and audit firms, and rarely otherwise. A private enterprise (doanh nghiệp tư nhân) is a sole proprietorship: the owner is personally liable without limit, may own only one private enterprise and may not simultaneously own a business household or be a general partner, and the enterprise may not issue securities or contribute capital to other companies. A foreign individual would in every ordinary case choose a single-member LLC instead.

Branch and representative office of a foreign trader

Neither is a Vietnamese legal entity. A branch of a foreign trader may conduct business in Vietnam only in the sectors Vietnam's treaty commitments have opened to branches; its licence comes from the Ministry of Industry and Trade under Decree No. 07/2016/ND-CP, the parent must have operated for at least five years, and the parent is directly liable for everything the branch does. Branches are used mainly in regulated sectors such as banking, insurance, securities and legal services under the sector regulator's licence. A representative office, licensed by the provincial Department of Industry and Trade after one year of parent operation, may do liaison, market research and promotion but may not earn income or sign the parent's contracts without a specific power of attorney. Both are covered in Branches and representative offices.

Conversion between forms

The Law on Enterprises allows conversion between an LLC and a JSC, between single-member and multi-member LLCs, and of a private enterprise into an LLC, JSC or partnership, by a registered procedure in which the converted company inherits the rights and obligations of the old one. Conversion is not costless: the IRC, the sector licences, the tax registration, the land lease and the bank accounts all have to be updated, a conversion that changes the owners triggers the Article 21 and beneficial-ownership filings, and a conversion of an LLC into a JSC to admit investors requires the valuation of the existing members' stakes and the issue of shares. Because of that, the choice of vehicle should anticipate the fundraising and exit plan for the first five to seven years rather than the first year.