⚙️ LLC Operation

Payroll and Accounting Service
These two functions will probably be outsourced at the start of operations because for LLCs with less than ten employees it will likely be uneconomical to set up an internal accounting department. However, as companies grow they tend to internalize payroll and accounting. There are numerous providers for these services in the market. We are aware that many investors favor working with just one partner for legal and payroll/accounting. However, many lawyers do not offer payroll/accounting and many accounting firms will not offer legal counselling. So, it might be necessary to split these services between a lawyer and an accounting firm.

• Lawyers: A list of German law firms can be found here

• Accounting companies: European partners may be Roedl & Partner (see German lawyers list), TMF and mazars. But there are plenty other local and international firms available.

💸 Cost: EUR 800 per month (if one staff member is employed)

Nominee Director/Proxy @ Legal Partner
We have discussed this here. For many young and/or small ROs it might be necessary/wise to appoint a nominee director/proxy to act as "Legal Representative" through a legal firm.
💸 Cost: EUR 900 per month

Secure LLC Chop @ Legal Partner
Same as above, it might be necessary/wise to entrust the chop (stamp) to a lawyer.
💸 Cost: EUR 100 per month (invoiced annually)

 

Audit Fee

LLCs are obligated to present an audited year-end report to relevant authorities. Many international companies will work with "Big 4" companies. But there are many other local and international choices in the market.

💸 Cost: EUR 350 per month (invoiced annually)

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Salary

The expectations for remuneration vary widely depending on qualification and position as displayed here. However, most likely, in a (small) LLC there will be at least one high-skilled and experienced "Country Head" (not necessarily the legal representative, see above). Hence, if just one person is employed, planning at least the following Total Employment Costs (including PIT/SHUI and others mentioned here) might be prudent.

💸 Cost: EUR 2,700 per employee per month

Office @ Co-Working Space
Many LLCs will be "spawned" 👾 at co-working spaces. Renting a small furnished office there with the purpose of LLC registration may be a cost-effective alternative to renting a private office (which has to be fitted out). Depending on the co-working space prices may vary heavily. More info on office space here. Please note that some lawyers may be able to offer more reasonable solutions to register an LLC than a "full-fledged" office.
💸 Cost: EUR 700 per month

Calculative Cost for the "Leading Employee"
One employee will have to take over certain administrative tasks regarding planning and administration, even if a payroll, accounting and proxy provider shoulders contact to authorities. These tasks will likely be done by the highest qualified and hence most expensive person in the team. When fulfilling them, this employee will not be able to focus on her primary job, e.g. doing sales. While there will not be "concrete" costs, there will be "calculative" (or opportunity) costs incurred. We assume that for an LLC, 20% of the time of the "leading employee" depending on the external support given may be spent on such planning/admin tasks. These should be counted as costs of operating a company in Vietnam.
💸 Cost: EUR 550 per month



🏁 Conclusion
Operating an LLC with the above-mentioned costs may add up to EUR 6,000 per month or EUR 86k for the first year of operation (including LLC setup) if one staff member is employed to it.  Some costs can be internalized (such as proxy, chop or even accounting/payroll) but would then lead to more calculative costs (if an ordinary staff member does them) or to more actual costs (e.g., if an admin assistant will be employed).

Overview: Overall costs of an LLC (incl. 10% VAT)