Setting Up a Company in Vietnam

The "ERC-First" Breakthrough: A Step-by-Step Guide

The most significant change in 2026 is the ability for select "non-sensitive" sectors to apply for their Enterprise Registration Certificate (ERC) before their Investment Registration Certificate (IRC). This allows you to secure your Tax ID and legal status in weeks.

Step 1: Market Access & Negative List Check

Before spending a cent, we must check Decree 96/2026/ND-CP. If your sector is "unrestricted," you are treated like a local investor. If it’s "conditional," you must meet specific capital or licensing requirements.

Step 2: The IRC (Investment Registration Certificate)

For traditional FDI projects, this is your "project license." It outlines:

• Total investment capital vs. Charter capital.

• Project duration (usually 50 years, extendable to 70 in industrial zones).

• Location (a valid lease agreement or Memo of Understanding is mandatory).

Step 3: The ERC (Enterprise Registration Certificate)

This is your "birth certificate." Once issued, you have a Tax ID and a legal persona.

• Timeline: 3–5 working days post-IRC.

• 2026 Requirement: At least one Legal Representative must reside in Vietnam to manage the mandatory digital signature (Chữ ký số).

Step 4: Post-Licensing & The 90-Day Rule

The clock starts the moment your ERC is issued.

• Capital Contribution: You have exactly 90 days to inject your charter capital into the DICA (Direct Investment Capital Account). Failure to do so results in heavy fines and potential license revocation.

• Public Announcement: You must publish your registration on the National Portal.

• Seal & Signage: Order your company seal and hang your sign. Yes, physical signs are still a legal requirement in 2026.

Taxation: The 2026 Fiscal Reality

Vietnam’s tax system is transitioning to a "Post-Inspection" (Hậu Kiểm) model. The government lets you operate freely but punishes non-compliance during annual audits.

Corporate Income Tax (CIT)

The standard rate is 20%. However, 2026 offers aggressive incentives for:

• High-Tech & Semiconductors: 10% for 15 years, with 4 years of tax holiday.

• Green Economy: Projects involving circular economy models (Decision 687/QD-TTg) receive significant land-rent exemptions.

Value Added Tax (VAT)

Standard rate is 10%. In 2026, the threshold for non-cash payments has been lowered to 5 million VND. Any expense above this paid in cash is not tax-deductible.

Protecting Your Assets: The Copyright Holder's Perspective

As a professional copyright holder, this is where I get passionate. In May 2026, Vietnam launched its largest-ever National IP Enforcement Campaign (Official Telegram No. 38/CĐ-TTg). This is a direct response to Vietnam being named a "Priority Foreign Country" by the USTR.

What This Means For You:

1. Software Licensing: If your company uses unlicensed software, you are at high risk of a raid this month.

2. The 2025 IP Law: It introduces a "Fast-track" for trademarks and patents. If you are a tech firm, register your IP before you register your company.

3. Digital Platform Liability: If your business operates a platform (e-commerce, SaaS), you are now legally responsible for the IP infringements of your users under the new "Safe Harbor" rules.

Recent regulatory change to note

• Revised Law on Investment (effective 1 March 2026) emphasises quality screening of foreign investors and tighter ongoing supervision; plan for enhanced disclosure and compliance expectations.

Risks, traps, and lawyerly tips

• Do not assume sector openness — always verify the current conditional list before committing funds.

• Local approvals vary by province — timelines and additional requirements can differ; use a local legal representative in Ho Chi Minh City to speed processing.

• Protect IP and contracts — draft shareholder agreements, IP assignments, and exit clauses in Vietnamese and English.

• Tax planning — register VAT and corporate income tax early; noncompliance triggers fines and delays.

Next steps (recommended)

• Book a consultation with LHD Law Firm to review your business plan, confirm sector eligibility, and prepare IRC/ERC filings.

• Gather corporate documents and an English‑Vietnamese set of contracts for immediate submission.

If you’d like, I can draft a tailored incorporation checklist for your specific industry and investment size and estimate a realistic timeline for Ho Chi Minh City.

Why choose LHD Law Firm

• Local experience since 2007, recognised in Vietnam legal directories and with a track record advising foreign investors on company formation, M&A and compliance.

• End‑to‑end service: from pre‑investment screening and IRC/ERC filings to tax registration, employment compliance and dispute prevention.

Common Pitfalls: The "Lawyer’s Grave"

Having seen hundreds of companies fail before they even start, avoid these 2026 traps:

• The "Nominee" Trap: Using a local "friend" to hold 100% of the shares to bypass foreign restrictions. In 2026, the authorities have advanced data-matching tools to spot "hidden" FDI. If caught, your assets can be frozen.

• Incorrect DICA Flow: Capital must flow from the investor's overseas account into the DICA, and then into the operating account. Any deviation makes it impossible to repatriate profits later.

• Lease Validity: Ensure your landlord has the legal right to lease. If the building doesn't have a Construction Permit or a Fire Safety Certificate, your IRC application will be rejected.