A Comprehensive Step-by-Step Guide to Company Formation in Vietnam for Foreign Investors

• Introduction: Navigating Business Setup in Vietnam

• Vietnam as an Investment Destination: A Brief Overview

• Vietnam has emerged as an increasingly attractive destination for foreign investment, propelled by a dynamic, youthful, and progressively tech-savvy population. The nation's rapidly developing digital infrastructure, coupled with proactive government initiatives aimed at encouraging foreign capital inflows through tax incentives and regulatory reforms, further enhances its appeal.1
• These governmental efforts are reflected in tangible improvements in the ease of doing business. The Global Business Complexity Index (GBCI) 2024 ranked Vietnam 49th globally, a notable advancement from its 46th position in 2023 and 42nd in 2022. This progression signifies a reduction in procedural complexity, with reports indicating that establishing a business now involves fewer administrative steps and a condensed timeline for standard business activities.2

• Purpose and Structure of this Guide

• This guide is meticulously designed to serve as a comprehensive, step-by-step manual for foreign investors intending to establish a company in Vietnam. It aims to demystify the process by covering the critical phases of pre-registration planning, the core registration procedures for obtaining essential licenses, vital post-registration actions, and key operational considerations. This includes an examination of potential challenges, estimated costs, and realistic timelines associated with company formation.
• The emphasis throughout this report is on providing practical, actionable information. The objective is to empower investors with the knowledge required to make well-informed decisions and navigate the Vietnamese regulatory landscape with greater clarity and confidence.

• The Vietnamese government's active promotion of foreign direct investment (FDI) through a variety of incentives and ongoing reforms paints an inviting picture for international businesses.1 However, this welcoming stance coexists with a regulatory environment that, while improving, remains intricate. The actual process of establishing a company involves navigating multiple administrative layers, adhering to specific legal nuances, and preparing extensive documentation.2 This duality—an officially supportive investment climate alongside a demanding administrative framework—means that while the governmental intent to attract investment is evident, the practical journey of setting up a business necessitates careful planning and execution. Investors should therefore approach Vietnam with a blend of optimism regarding its growth potential and supportive policies, and a pragmatic preparedness for a rigorous setup process. This underscores the critical importance of thorough due diligence and, in many cases, seeking professional legal and business advisory services to effectively manage the inherent complexities. A strategy that relies solely on the allure of incentives without a realistic assessment of the operational and administrative efforts required may encounter unforeseen obstacles.

• Section 1: Pre-Registration Planning and Key Considerations

• Understanding Vietnam's Legal Framework for Foreign Investment

• The legal bedrock for foreign investment in Vietnam is principally formed by two landmark pieces of legislation: the Investment Law 2020 (Law No. 61/2020/QH14) and the Enterprise Law 2020 (Law No. 59/2020/QH14). Both laws became effective on January 1, 2021, ushering in significant modernizations and an easing of some prior restrictions, thereby aiming to create a more accessible and transparent environment for foreign investors.3
• These primary laws are complemented and further detailed by key governmental decrees. Among the most important are Decree 31/2021/ND-CP, which provides specific guidance on the implementation of the Investment Law, and Decree 01/2021/ND-CP, which elaborates on the procedures for enterprise registration.3
• Together, this comprehensive legal framework delineates the conditions under which foreign entities can operate in Vietnam, establishes the standards for business practices, and defines the market access conditions applicable to various economic sectors.3
• Investors must also remain cognizant of recent legal updates that may impact specific industries. For instance, the Law on Real Estate Business No. 29/2023/QH15 and the Law on Housing No. 27/2023/QH15, both scheduled to take effect from January 1, 2025, introduce new regulations pertinent to foreign-invested enterprises operating in the real estate and housing development sectors.4

• Choosing the Optimal Business Entity:

• Vietnam offers foreign investors a range of legal structures for their business operations. The selection of the most appropriate entity is a crucial strategic decision, as it carries significant implications for liability, capital requirements, operational scope, governance, and taxation.
• Limited Liability Company (LLC)

• The LLC is the most prevalent corporate form chosen by foreign investors in Vietnam. Its popularity stems from the key advantages of limited liability for its owners (members) and generally more flexible capital requirements compared to other structures like Joint Stock Companies.5
• In a vast number of business sectors, LLCs can be established as 100% Foreign-Owned Enterprises (FOEs), granting foreign investors full control over their operations.4
• An LLC can be structured either as a single-member LLC, owned by one individual or organization, or as a multiple-member LLC, which can have between two and fifty members.5
• The corporate governance framework for an LLC is typically simpler than that of a JSC, especially for single-member LLCs or those with a small number of members. The establishment process for an LLC may also be perceived as slightly less complex and quicker than for a JSC.6
• The liability of the members of an LLC is limited to the extent of their capital contribution to the company's charter capital.8
• Transferring ownership stakes (capital contributions) in an LLC is generally more complex than in a JSC, often requiring the consent of the other existing members or adherence to pre-emptive rights stipulated in the company charter and law.8

• Joint Stock Company (JSC)

• A JSC is typically more suitable for larger-scale businesses, particularly those anticipating the need for significant capital investment from multiple sources or those that have long-term plans for a public listing on a stock exchange.6
• A JSC must have a minimum of three shareholders, with no prescribed maximum limit on the number of shareholders.8
• A key characteristic of a JSC is its ability to issue various types of shares (e.g., ordinary shares, preference shares) to raise capital. JSCs can also be listed on Vietnamese stock exchanges, such as the Hanoi Stock Exchange (HNX) or the Ho Chi Minh City Stock Exchange (HOSE), provided they meet specific conditions, including a minimum charter capital threshold (e.g., at least VND 10 billion for listing).6
• The corporate structure of a JSC is inherently more complex than an LLC, involving a General Meeting of Shareholders, a Management Board (Board of Directors), a Director or General Director, and, in many cases (e.g., if having more than 11 individual shareholders or a corporate shareholder owning over 50% of shares, or for public companies), an Inspection Committee (Supervisory Board).6
• The liability of shareholders in a JSC is limited to the value of the shares they hold in the company.8
• The transfer of shares in a JSC is generally easier and more flexible compared to an LLC, especially if the company's shares are publicly traded. However, transfers of shares by founding shareholders may be subject to certain restrictions or require approval from other founding shareholders during the first three years of the company's operation.8

• Branch Office (BO)

• A Branch Office in Vietnam is legally a dependent unit of its foreign parent company. It is authorized to conduct direct commercial business activities, including representative functions, within the scope of activities permitted to its parent company.9
• The registered business lines of the branch must be consistent with the business lines of its foreign parent company.9
• The establishment of a branch by a foreign company is typically limited to certain specific service sectors, such as finance, banking, insurance, securities, legal services, and some specialized technical or consulting services, often governed by specific international commitments or Vietnamese regulations.5
• A BO is considered a Vietnamese taxpayer and is subject to applicable taxes, including business license tax, Value Added Tax (VAT) on its revenue-generating activities, and Corporate Income Tax (CIT) on its profits derived in Vietnam.9
• Establishing a BO requires an establishment license from the relevant Vietnamese authorities. The BO must also appoint a resident individual as its branch manager.5 The foreign parent company bears unlimited liability for all debts and obligations of its Branch Office in Vietnam.

• Representative Office (RO)

• A Representative Office, like a Branch Office, is a dependent unit of a foreign parent company. However, its permitted scope of activities is significantly more restricted. An RO is primarily established for non-commercial purposes, such as conducting market research, acting as a liaison office for its parent company, promoting the parent company's products or services, and facilitating trade and investment opportunities. Crucially, an RO is strictly prohibited from engaging in direct profit-generating business activities in Vietnam, such as signing commercial contracts in its own name, issuing invoices, or directly receiving payments for goods or services.5
• Due to its non-commercial nature, an RO is generally not subject to business license tax, CIT, or VAT on its operational expenses. However, it is responsible for Personal Income Tax (PIT) for its employees (both local and expatriate) and may be liable for other taxes or fees it incurs (e.g., import duties on office equipment if not exempted).9
• An RO is often considered a lower-cost and administratively simpler entry strategy for foreign companies wishing to explore the Vietnamese market, build relationships, and establish a preliminary presence before committing to a larger investment.5 There is typically no statutory registered capital requirement for an RO.5

• Other Structures:

• Joint Venture (JV) Enterprise: This legal form involves a partnership between one or more foreign investors and at least one Vietnamese individual or company, or it can be a venture between multiple foreign entities. Forming a JV is mandatory for foreign investors wishing to enter certain restricted or conditional business sectors in Vietnam, such as some advertising services, specific telecommunication services, certain transportation services, and others as defined by law and international commitments.4 Foreign ownership limitations (FOLs) may apply in JVs depending on the specific sector and the provisions of Vietnam's WTO commitments or other Free Trade Agreements (FTAs).5
• Business Cooperation Contract (BCC): A BCC is a contractual form of investment cooperation between foreign and Vietnamese partners (or solely among foreign investors, or solely among domestic investors) to jointly conduct specific business activities and share profits or products, without creating a new, separate legal entity. This model allows for collaboration on projects while the participating partners maintain their distinct legal statuses and manage their respective responsibilities as outlined in the contract.4
• Public Private Partnership (PPP): This investment model involves a contractual partnership between a foreign or domestic private enterprise and the Vietnamese government (or an authorized state agency) for the purpose of developing, financing, constructing, and/or operating key public infrastructure projects or providing public services. Vietnam has been actively encouraging PPPs to mobilize private sector capital and expertise for its infrastructure development needs.5

• Comparative Analysis (Pros, Cons, Suitability)

• The selection of an appropriate legal entity is a pivotal decision that should align with the investor's specific business objectives, scale of operations, risk appetite, capital availability, and long-term strategy in Vietnam. A comparative overview can aid in this decision-making process.

Table 1: Comparison of Key Business Entities in Vietnam for Foreign Investors

**This table provides a general overview. Specific requirements can vary. Consultation with legal experts is recommended.*
***Permitted, Restricted, and Conditional Business Lines for Foreign Investment**
    * Vietnam's Investment Law 2020 adopts an approach where foreign investors are, in principle, permitted to invest in all sectors and business lines that are not explicitly prohibited by law.[14] However, the framework distinguishes between prohibited sectors and those where investment is conditional.
    ***Prohibited Sectors:** Article 6 of the Investment Law 2020, in conjunction with Annex I (Part A) of Decree 31/2021/ND-CP, enumerates specific business lines in which foreign investment is entirely disallowed. These typically encompass activities deemed detrimental to national defense and security, social order and ethics, historical and cultural traditions, public health, or environmental protection. Concrete examples include trading in narcotic substances, engagement in prostitution or human trafficking, provision of commercial debt collection services, and business activities involving certain specified toxic chemicals or endangered wild flora and fauna.[3, 4, 11, 14, 15, 16] Decree 31/2021/ND-CP lists approximately 25 such business lines.[11]
    ***Conditional Sectors:** The Investment Law and Decree 31/2021/ND-CP (specifically Annex I, Part B, and Appendix IV of the Investment Law) identify a significant number of business lines [15, 16] where foreign investment is permitted but is subject to specific conditions being met. These conditions can vary widely and may include limitations on the percentage of foreign ownership (Foreign Ownership Limits - FOLs), requirements regarding the specific form of investment (e.g., a mandatory joint venture with a Vietnamese partner), restrictions on the scope of investment activities, specific qualifications or experience requirements for the foreign investors or their local partners, and the need for additional sector-specific approvals or sub-licenses from relevant ministries or regulatory bodies.[3, 14, 15, 16]
        *   Common examples of sectors often subject to conditional investment include advertising services, various educational services (from K-12 to vocational training), real estate business, legal services, tourism and travel agency services, logistics services (especially specific sub-sectors), and certain financial services.[5, 11, 15]
    *   **Market Access Conditions:** Foreign investors must rigorously comply with all market access conditions as stipulated in Vietnam's domestic laws and its binding international commitments, particularly those made under the World Trade Organization (WTO) and various Free Trade Agreements (FTAs) to which Vietnam is a signatory. These conditions are further detailed in the Investment Law 2020 and Decree 31/2021/ND-CP.[3]
    *   **Foreign Ownership Limits (FOLs):** FOLs represent the maximum percentage of equity a foreign investor can hold in a Vietnamese enterprise in a particular sector. These limits vary significantly. While many sectors like general manufacturing or IT services may be open to 100% foreign ownership, others have specific caps. For instance:
        *   Banking: Total foreign ownership in a Vietnamese joint-stock commercial bank is generally capped at 30%.[4, 11]
        *   Aviation: Foreign ownership in airlines or companies providing certain aviation services might be capped at 34%.[11]
        *   Land Transportation: Passenger transport services may have a 49% FOL, while goods transport services might allow up to 51%.[11]
        *   Logistics: Container handling services may be capped at 50% foreign ownership, while customs clearance and brokerage services might have no cap but could require a joint venture with a Vietnamese partner.[5, 11]
        *   Publicly Traded Companies: A general FOL of 49% often applies to most publicly traded Vietnamese companies, although legal mechanisms exist for these companies to seek approval to increase this limit or remove restrictions entirely, subject to the consent of the State Securities Commission (SSC).[11]
        *   A critical consideration for investors is that if a company registers to operate in multiple business lines, and these lines are subject to different FOLs, the most restrictive (i.e., the lowest) FOL applicable to any of its registered business lines will apply to the entire company. This can necessitate careful planning of registered business activities or potential corporate restructuring to accommodate desired foreign ownership levels.[11]
    *   **Checking Specific Sector Regulations:** To ascertain the precise conditions, FOLs, and any other restrictions applicable to a particular business line, investors must undertake a thorough review of a hierarchy of legal documents. This includes: Vietnam’s international treaty commitments (such as its WTO Accession Protocol and schedules of specific commitments in services, as well as FTA provisions); the domestic Investment Law 2020 and Enterprise Law 2020; their guiding decrees (especially Decree 31/2021/ND-CP, including its detailed annexes listing restricted and conditional sectors); and any specialized laws or regulations that govern the specific sector of interest (e.g., Law on Education, Law on Credit Institutions, Law on Tourism).[11, 15] Due to the complexity and potential for updates, seeking expert legal advice is highly recommended.
*   **Minimum Capital Requirements: General vs. Sector-Specific**
    *   **General Principle:** For a majority of general business activities, Vietnamese law does not impose a fixed, universally applicable minimum capital requirement for foreign investors establishing an LLC or a JSC.[5, 12, 13, 17, 18] This principle, however, requires careful interpretation as it does not imply that any nominal amount of capital will be accepted.
    *   The Department of Planning and Investment (DPI), during its review of the Investment Registration Certificate (IRC) application, is tasked with assessing whether the charter capital proposed by the investor is "adequate." This adequacy is judged in relation to the company's intended business activities, the scale of its operations, and its projected initial operational expenses until it can achieve financial self-sufficiency through revenue generation.[5, 17, 18] This assessment introduces a degree of subjectivity and necessitates a well-justified capital amount in the investment proposal.
    *   **Indicative Figure / Practical Minimum:** While not a formal legal mandate for all sectors, a figure of approximately USD 10,000 is frequently cited by business consultants and is often observed in practice as a typical or average minimum paid-up capital amount that licensing authorities generally find acceptable for basic service-oriented LLCs, trading companies, or IT service providers.[12, 13, 19, 20, 21] Some advisory sources may suggest a slightly higher range, such as USD 10,000 - USD 15,000 [17], or even recommend planning for at least USD 20,000 [19] to ensure a smoother approval process, particularly if the business plan involves more substantial initial setup costs or a period before profitability.
    *   **Sector-Specific Requirements (Legal Capital):** In contrast to the general flexibility, certain "conditional" business lines are subject to mandatory minimum legal capital requirements. These amounts are explicitly stipulated by specialized laws or regulations governing those sectors and are non-negotiable prerequisites for obtaining the necessary operating licenses.[5, 12, 16, 17, 18] Investors in these fields must ensure their contributed capital meets or exceeds these statutory thresholds. Examples include:
        *   Financial services (e.g., banking, insurance, securities, fin-tech).[5, 12, 17]
        *   Educational services (e.g., language centers, vocational training schools, international schools).[5, 12, 17, 18]
        *   Real estate business (one source cites a figure around USD 250,000 [18]; other regulations may specify amounts like VND 20 billion for certain real estate activities, though this can vary based on the scope and nature of the business).
        *   Security services (where foreign investors contribute capital to Vietnamese security service enterprises): a minimum legal capital of VND 1 billion is required.[16]
        *   Airport operation enterprises: minimum capital of VND 100 billion for domestic airports and VND 200 billion for international airports.[16]
        *   Joint Stock Companies (JSCs) that intend to be listed on Vietnamese stock exchanges must meet a minimum charter capital requirement, typically at least VND 10 billion.[8, 12]
    *   **Charter Capital:** This term refers to the total value of assets (which can be in the form of cash, machinery, equipment, intellectual property rights, or other assets valued in Vietnamese Dong) that the members (for an LLC) or shareholders (for a JSC) commit to contribute to the company within a specified period upon its establishment. The amount of charter capital is officially recorded in the company's Enterprise Registration Certificate (ERC) and its charter (Articles of Association). This committed charter capital must be fully paid up by the investors, typically within 90 days from the date of issuance of the ERC.[7, 12, 17, 22]
*   **Registered Business Address: Regulations and Options**
    *   A legally valid registered head office address located within Vietnam is an indispensable requirement for the registration of any company.[7, 13, 18, 23] This address serves as the official point of contact for the company and will be recorded on all official company documents, including the Business License or Enterprise Registration Certificate (ERC). Government agencies will use this address for all official correspondence and notices.[24]
    *   The chosen address must be a clearly defined, verifiable physical location. Critically, Vietnamese regulations generally require that the registered address be situated in a commercial building or a property that is legally designated and permitted for business or office use. The use of residential addresses, such as private houses or apartments in residential buildings, as the official registered business address for a company is typically not permitted.[7, 13]
    *   **Available Options for Securing a Registered Address:**
        *   **Owned Property:** If the investing entity or its principals own a suitable commercial property in Vietnam that complies with zoning and usage regulations, this property can be used as the company's registered address. This option offers long-term stability and control over the premises but involves a substantial upfront financial investment and may be subject to potential restrictions on foreign ownership of property in certain designated areas.[24]
        *   **Rented Office Space:** Renting commercial office space is a very common and flexible option for most new businesses. When choosing this route, it is essential that the lease agreement clearly states that the premises are permitted to be used for business registration purposes. The lessor (landlord) should also be able to provide the necessary supporting documentation, such as their own certificate of land use rights, building ownership certificate, or business registration certificate if they are in the business of leasing office space, to validate the legitimacy of the address for registration.[24, 25]
        *   **Coworking Spaces / Serviced Offices:** These shared office solutions have gained significant popularity, particularly among startups, SMEs, and foreign investors seeking a cost-effective and flexible entry point. A dedicated desk or private office within a reputable coworking space or serviced office center can often serve as a legitimate registered business address. The operator of the space must be able to provide the necessary documentation confirming the company's tenancy and the permissibility of using their address for official business registration.[24]
        *   **Virtual Office Address:** Some specialized service providers offer virtual office packages. These typically provide a legal registered address in a recognized commercial building, primarily for the purpose of receiving mail and official documents, without the company physically occupying the office space. While virtual office addresses are generally accepted for company registration in many instances, particularly for service-based businesses with no specific physical operational requirements [7, 13, 24], it is crucial for investors to ensure that the chosen provider is reputable and that this option remains compliant with all local regulations, especially considering the specific nature of the intended business activities. For example, if the business later requires sub-licenses that necessitate physical inspection of the premises (e.g., certain retail operations, food and beverage establishments, or educational facilities), a virtual office address alone may not suffice.
    *   The choice of business address also has administrative implications, as it determines the local administrative jurisdiction (e.g., the specific district-level tax office, labor office, and other local authorities) to which the company will be primarily accountable for certain ongoing compliance matters and reporting.[24]

*   The initial planning phase for establishing a company in Vietnam reveals a landscape where legal frameworks directly shape strategic business decisions. The choice of a business entity, for instance, is not merely an administrative formality but a decision with long-term consequences for governance, liability, and capital-raising capabilities. An investor aiming for a future public listing would be guided by the Enterprise Law towards a Joint Stock Company (JSC) structure, which inherently demands a higher minimum number of shareholders, potentially more substantial capital, and a more complex governance apparatus compared to a Limited Liability Company (LLC).[6, 8] Similarly, if the intended business activities fall within Vietnam's list of "conditional" sectors [15], the Investment Law might necessitate forming a Joint Venture (JV) with a local partner or impose strict foreign ownership limits.[5, 11] Such conditions invariably lead to heightened scrutiny by the Department of Planning and Investment (DPI) regarding the adequacy and sources of the proposed investment capital. This interconnectedness means that pre-registration planning is not a sequential checklist but an iterative process where decisions about entity type, sector of operation, and capital structure must be weighed concurrently against the legal and regulatory backdrop.[3, 4]

    Furthermore, the common assertion that Vietnam has "no fixed minimum capital" for most businesses [5, 12, 13] requires careful, nuanced interpretation. While technically true for many general business lines, the DPI is legally mandated to assess the "adequacy" of the proposed capital in relation to the company's business plan, operational scale, and projected initial costs.[5, 17, 18] This introduces a subjective evaluation. In practice, an informal benchmark of approximately USD 10,000 often emerges as a de facto minimum for basic service or trading companies to ensure a smoother approval process.[12, 13, 21] This "soft" minimum contrasts sharply with the "hard," legally mandated minimum capital requirements for specific licensed sectors like finance, education, or real estate, which are often significantly higher and non-negotiable.[12, 16] Misjudging this aspect, either by proposing an unrealistically low capital for a general business or by failing to meet the statutory minimum for a conditional sector, is a common pitfall that can lead to application delays or outright rejection by the DPI.[26] Thus, investors must look beyond the literal phrasing of the law and prepare for a capital commitment that is both credible for their business plan and compliant with any sector-specific mandates.

    Even a seemingly straightforward decision, such as choosing a registered business address [13, 24], can have downstream consequences. While a virtual office might suffice for the initial company registration for certain types of businesses, if the company's activities later require specific sub-licenses that mandate physical inspection of the operational premises (e.g., for some retail outlets, food and beverage establishments, educational facilities, or manufacturing plants), a compliant physical office or operational space will become essential. This highlights the need for foresight in address selection, aligning it not just with immediate registration needs but also with the full spectrum of intended future operations and associated licensing requirements.

• Section 2: The Core Registration Process: Step-by-Step

• General Overview: For the majority of foreign investors, the pathway to establishing a legal business presence in Vietnam involves securing two principal certificates in a sequential manner. The first is the Investment Registration Certificate (IRC), which approves the investment project itself. Following the issuance of the IRC, the investor then proceeds to obtain the Enterprise Registration Certificate (ERC), which formally establishes the company as a legal entity.1 A notable exception to this dual-certificate process applies to "innovative start-up Small and Medium-sized Enterprises (SMEs)" that meet specific criteria defined by Vietnamese law. Such enterprises may be exempt from the requirement to obtain an IRC for the purpose of company establishment. However, it is important to note that even if exempt from the IRC for establishment, these innovative start-up SMEs might still find it necessary or advantageous to obtain an IRC to become eligible for certain tax incentives or other forms of government support.1
• Step 1: Obtaining the Investment Registration Certificate (IRC)

• Purpose: The IRC serves as the official approval from the Vietnamese government, specifically the relevant licensing authority, for a foreign investor to implement a particular investment project within Vietnam. It is a foundational document and a mandatory prerequisite for most foreign-invested projects before they can proceed to the enterprise registration stage (i.e., obtaining the ERC).1 The IRC is typically issued by the Department of Planning and Investment (DPI) of the province or city where the investment project is to be located. If the project is situated within an Industrial Park, Export Processing Zone, High-Tech Zone, or Economic Zone that has its own Management Board, then this Management Board is usually the competent authority for issuing the IRC.3
• Eligibility Criteria and Conditions for Foreign Investors (as per Investment Law 2020, Article 38; Decree 31/2021/ND-CP, Article 36): To be granted an IRC, both the proposed investment project and the foreign investor(s) must satisfy a number of conditions stipulated by Vietnamese law. These generally include 3:

• The investment project's objectives and business lines must not fall within the list of sectors where investment is prohibited for foreign investors (or for all investors generally).3
• The investor must demonstrate that they have a clear and legitimate location for the implementation of the project. This is typically evidenced by submitting documents such as a valid land use rights certificate, a legally binding land lease contract, or other official documents that confirm the investor's right to use the specified location for the investment project.3
• The proposed investment project must be in compliance with all relevant national, regional, urban, and specific economic zone planning regulations, where applicable.3
• The project may need to meet specific investment ratio requirements per unit area of land, as determined by the Provincial People's Committee and approved by the Provincial People's Council, based on local conditions (if such requirements are in place).3
• The project must ensure that it will meet the required conditions regarding the quantity and quality of labor to be employed, in accordance with Vietnamese labor laws and any sector-specific requirements.3
• Crucially, the investment project and the foreign investor must comply with all applicable market access conditions. This is particularly stringent for sectors that are listed as "conditional" or "restricted" for foreign investment under Vietnam's laws and international commitments.3

• Required Documentation (for individual and corporate investors, including notarization and consular legalization procedures): The application dossier for an IRC is comprehensive and demands meticulous preparation. All documents issued by foreign authorities or created abroad must typically undergo a process of notarization in the country of origin, authentication by the relevant foreign state department (e.g., Ministry of Foreign Affairs), and finally, consular legalization by the Vietnamese Embassy or Consulate in that foreign country. Furthermore, all foreign language documents must be translated into Vietnamese by a competent translator, and these translations often also require notarization in Vietnam.2 Key documents generally include 3:

• For Both Individual and Corporate Investors:

• A formal written request (application form) for the implementation of the investment project, following the prescribed template.25
• An investment project proposal or a detailed feasibility study. This document is central to the application and must clearly outline: the investor(s) involved; the specific investment objectives and intended business lines; the proposed scale of the investment; the total investment capital, sources of capital (equity, loans), and a capital contribution schedule; the precise location and land area to be used for the project; the projected duration of the project; the anticipated labor demand (number of local and foreign employees); any proposals or requests for investment incentives (if applicable); and a thorough assessment of the project's potential socio-economic impacts.3
• Documents evidencing a legitimate project location. This typically includes a notarized copy of an office lease agreement, a Memorandum of Understanding (MOU) for a future lease, or documents proving land use rights for the proposed site.4 The preliminary nature of an MOU is often accepted at this stage, given the risk of entering a binding lease before investment approval.
• An explanation of the technology to be used in the project, especially if it involves technologies that are subject to appraisal, consultation, or are on the list of restricted technologies under the Law on Technology Transfer.16

• Specific Documents for Individual Investors:

• A notarized and consular legalized copy of their valid passport or other officially recognized personal identification document.25
• Documents demonstrating their financial capacity to implement the project. This usually involves a bank account balance confirmation (which must be notarized and consular legalized if issued by a foreign bank) showing funds corresponding to the proposed investment capital, or other relevant financial statements.4

• Specific Documents for Corporate Investors:

• A notarized and consular legalized copy of the Certificate of Establishment, Certificate of Incorporation, Business Registration Certificate, or an equivalent document that confirms the legal status of the foreign investing organization.25
• A notarized and consular legalized copy of the foreign company's Charter or Articles of Association.25
• Documents demonstrating the corporate investor's financial capacity. This can include: audited financial statements for the last two fiscal years (notarized and consular legalized); a formal commitment from the parent company to provide financial support to the project in Vietnam; a commitment letter from a reputable financial institution to provide funding; a bank guarantee for the investor's financial capacity; or other relevant financial proofs, all appropriately legalized.4
• A letter of appointment for the authorized representative who will act on behalf of the corporate investor in Vietnam, along with a notarized and consular legalized copy of their passport or ID.17

• Application Process: Submission to Department of Planning and Investment (DPI), Online Portals, and Typical Timelines:

• Submission: The complete IRC application dossier is submitted to the DPI of the province or city where the investment project is intended to be located.3 If the project is situated within an industrial park, export processing zone, high-tech zone, or economic zone that has an established Management Board, the application is typically submitted to that Management Board.3
• Online Declaration: In many cases, investors are required to first declare information about their investment project online through the National Foreign Investment Information System (often accessible via the MPI or DPI portals). After this online submission, the physical application dossier is then submitted to the relevant authority.29 The investor may be provided with an online account to track the processing status of their application.
• Investment Evaluation (for specific projects): Investment projects with a total invested capital exceeding a certain threshold 14 or those falling within conditional investment sectors often undergo a more rigorous "investment evaluation" process. This may require the investor to submit a detailed economic-technical explanation of the project and demonstrate full compliance with all specific conditions. The licensing authority may consult with other relevant ministries or central government agencies during this evaluation.14 The statutory time limit for this evaluation can be up to 30-45 days.14
• Investment Policy Approval (for certain large-scale or sensitive projects): Some investment projects, due to their large scale, use of significant land resources, environmental impact, or location in sensitive areas, may require an "Investment Policy Approval" from higher-level authorities, such as the Provincial People’s Committee, the Prime Minister, or even the National Assembly, before an IRC can be issued. This approval process can significantly extend the overall timeline.3 For instance, if approval from the Provincial People’s Committee is required, this stage can take around 35 days, after which the IRC is typically issued within 5 working days.3
• Typical Timelines for IRC (for standard projects not requiring higher-level policy approval or extensive evaluation):

• The statutory processing time for a standard IRC application, once a complete and valid dossier is received, is often stated as 15 working days.3
• However, some sources indicate that the review period by the DPI can range from 15 to 45 working days, depending on the project's complexity and the workload of the authorities.27
• Consultancy firms often provide practical timeline estimates: Acclime suggests a statutory time of 3 weeks 22; Healy Consultants estimates around 2 months for the IRC component for a foreign-owned company 21; Viettonkin Consulting suggests the overall IRC process can take up to one month 18; while InCorp Asia notes that registration for foreign investors can span from 30 to 60 working days, which likely includes the IRC stage.19 These variations highlight that while statutory timelines exist, practical processing times can differ.

• Step 2: Obtaining the Enterprise Registration Certificate (ERC)

• Purpose: Once the IRC has been successfully obtained (for projects requiring it), the next crucial step is to apply for an Enterprise Registration Certificate (ERC). The ERC formally establishes the legal entity of the company in Vietnam (e.g., LLC, JSC). The ERC number assigned to the company also serves as its official tax identification number (tax code).3 The ERC is issued by the Business Registration Office, which is a division of the provincial-level Department of Planning and Investment (DPI).3
• Required Documentation Post-IRC (as per Enterprise Law 2020, Article 26): The application dossier for an ERC is generally less complex than that for an IRC, as the investment project itself has already been vetted. Key documents typically include 3:

• An application form for enterprise registration, following the prescribed template.18
• The Company Charter (also known as Articles of Association or Constitution), duly drafted and signed by the founders/members/shareholders in accordance with the Enterprise Law.17
• A list of members (for a multi-member LLC) or a list of founding shareholders (for a JSC). This list must include details such as names, addresses, nationalities, ID/passport information, capital contribution amounts or number of shares subscribed, and ownership percentages for each member/shareholder.18 For a single-member LLC, information about the sole owner is required.
• Notarized copies of valid passports or other personal identification documents for individual members/shareholders.18
• For corporate members/shareholders: notarized and consular legalized copies of their Certificate of Establishment/Incorporation or equivalent legal status documents; a letter of authorization appointing an individual to represent the corporate member/shareholder in Vietnam; and a notarized copy of the authorized representative's passport or ID. If the corporate member is a foreign organization, its legal status documents must be consular legalized.29
• A valid copy of the Investment Registration Certificate (IRC) previously issued for the investment project.18
• A Power of Attorney, if the application is submitted by an authorized representative on behalf of the investors/founders.29

• Application Process: Submission to DPI, National Business Registration Portal, and Typical Timelines:

• Submission: The complete ERC application dossier can be submitted directly to the Business Registration Office of the DPI in the province/city where the company's head office will be located.3 Alternatively, and increasingly common, the application can be submitted online through Vietnam's National Business Registration Portal (NBRP), often accessible at dangkykinhdoanh.gov.vn or biz.gov.vn.29
• DPI Evaluation: The Business Registration Office will review the submitted dossier for completeness, accuracy, and compliance with the provisions of the Enterprise Law and other relevant regulations. They will also verify that the information in the ERC application aligns with the details approved in the IRC.30
• Typical Timelines for ERC:

• The statutory processing time for an ERC application, after a complete and valid dossier (including the IRC) has been submitted, is typically very short, usually around 3 to 5 working days.4
• Consultancy firms often confirm this rapid turnaround, with Acclime suggesting a statutory time of 1 week 22, and some sources mentioning 5 working days.19
• Healy Consultants' estimate of 2 weeks for a local company or 2 months for a foreign-owned company 21 might refer to the entire incorporation process or include additional complexities, as the ERC issuance itself is generally swift post-IRC.

• Table 2: Checklist of Key Required Documents for IRC and ERC Applications

*   The Investment Registration Certificate (IRC) process functions as the primary regulatory checkpoint for foreign direct investment in Vietnam. It is at this stage that the Vietnamese government meticulously scrutinizes the proposed investment project's viability, its alignment with national and local socio-economic development plans, its financial backing, and its compliance with environmental and other statutory conditions, particularly for larger-scale projects or those entering conditional sectors.[3, 14] The Enterprise Registration Certificate (ERC), obtained subsequently, is by comparison a more administrative step, focusing on the formal establishment of the legal entity once the underlying investment project has received the IRC's green light. This phased approach—IRC first, then ERC—demonstrates a system where the investment itself is vetted before the corporate vehicle is officially created, granting authorities significant control over the nature and quality of FDI inflows.

    A practical challenge often encountered during the IRC application pertains to securing the project location. Investors are required to provide evidence of a "clear project location," such as a land use rights certificate or a lease contract.[3, 27] However, committing to a binding, long-term lease agreement before obtaining investment approval carries considerable financial risk for the investor. To address this potential impasse, Vietnamese authorities often accept a Memorandum of Understanding (MOU) or a preliminary lease agreement at the IRC application stage.[17] This pragmatic approach allows investors to demonstrate a credible plan for their project location without premature full financial commitment, with the formal, binding lease agreement typically finalized after the IRC and/or ERC are secured.

    Furthermore, the consistent and rigorous requirement for notarization and consular legalization of all foreign-issued documents is a critical, non-negotiable aspect of the preparation process that can significantly influence the overall timeline.[3, 17, 25, 28] This multi-step procedure, involving authorities in the investor's home country (notary public, state department/foreign ministry) and the Vietnamese diplomatic mission abroad [28], is inherently time-consuming and can become a major bottleneck if not initiated early and managed diligently. Delays in document legalization can cascade, pushing back the entire company setup schedule. This reliance on authenticated physical documentation, even in an era of increasing digitalization with online submission portals, highlights a hybrid administrative system that still places substantial emphasis on traditional, verifiable paper trails for foreign investment applications.

• Section 3: Essential Post-Registration Procedures

• The issuance of the Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC) marks the legal birth of the company but does not signify the end of the setup process. Several crucial post-registration procedures must be diligently completed for the company to become fully operational and compliant with Vietnamese law.
• Making and Registering the Company Seal (under Enterprise Law 2020)

• Under the Enterprise Law 2020, enterprises in Vietnam have been granted greater autonomy regarding their company seals. The company itself (through its owners or authorized management body as defined in its charter) now decides on the number of seals it requires, as well as the form (shape, size) and content of these seals.33
• While companies have this freedom, the content of the seal must typically include the company's official registered name and its unique tax code.33 The design must not incorporate prohibited elements, such as national emblems, flags, or symbols of state agencies, or content that violates historical, cultural, or ethical norms of Vietnam.33
• A significant change introduced by the Enterprise Law 2020 is that companies are no longer required to notify or register their seal sample with the business registration authority (DPI) before putting it into use. This simplifies a previous administrative step.3 Prior to this law, companies had to submit their seal sample for public announcement on the National Business Registration Portal.34
• The law also recognizes the validity of a digital signature, conforming to regulations on electronic transactions, as an equivalent to the physical company seal for many purposes.33
• Despite the removal of the pre-use registration requirement, arranging for the company seal is still universally listed as a key post-licensing procedure that needs to be addressed promptly after ERC issuance.17

• Opening Corporate Bank Accounts:

• Establishing appropriate bank accounts in Vietnam is a critical step for managing finances, receiving investment capital, and conducting operations.3 Foreign-invested enterprises (FIEs) typically need to open at least two types of accounts:
• Direct Investment Capital Account (DICA):

• This is a mandatory special-purpose bank account that FIEs must open at an authorized commercial bank in Vietnam. The DICA is used for all transactions related to the foreign direct investment capital, including receiving charter capital contributions from foreign investors, disbursing foreign loans, and remitting profits and original capital abroad.17 It can be denominated in a foreign currency or Vietnamese Dong.
• The DICA must generally be opened within 90 days of the ERC issuance, as capital contribution is tied to this timeline.39
• This account allows regulatory authorities to track capital flows in and out of Vietnam related to the FIE.17

• Current Account (Transaction Account):

• In addition to the DICA, the company will need a regular current account (often denominated in Vietnamese Dong) for handling its day-to-day operational transactions within Vietnam, such as paying suppliers, salaries, and receiving payments from local customers.17

• Documents Required (General): To open corporate bank accounts, banks will typically require copies of the ERC, the IRC (if applicable), the company charter, personal identification documents of the legal representative and any other authorized signatories, the company seal, and possibly the office lease agreement as proof of address. A power of attorney will be needed if signatories are not the legal representative.3 Specific banks may have additional documentary requirements or forms.38
• Timeline: The process of opening corporate bank accounts can take from a few days to a couple of weeks, depending on the chosen bank and the completeness of the documentation provided.38

• Initial Capital Contribution: Procedure, Deadlines, and Bank Verification

• Deadline: A cornerstone of post-registration compliance is the timely contribution of the registered charter capital. Investors are legally obligated to fully contribute their committed charter capital within 90 days from the date of issuance of the Enterprise Registration Certificate (ERC).7
• Procedure: The capital contribution (whether in foreign currency or Vietnamese Dong, as registered) must be transferred by the investors into the company's Direct Investment Capital Account (DICA) opened at an authorized bank in Vietnam.17
• Bank Verification: The authorized bank managing the DICA plays a role in verifying the capital contribution, ensuring it aligns with the registered amounts and complies with foreign exchange control regulations. While the specific internal verification processes of banks are not detailed, they are responsible for reporting capital inflows.
• Consequences of Non-compliance: Failure to contribute the charter capital in full and on time can lead to serious consequences. These may include administrative penalties, the company being forced to amend its registered charter capital downwards to reflect the actual amount contributed, or, in severe cases, potential forced dissolution of the company.7 It is therefore imperative that investors have their funds prepared and banking arrangements finalized promptly after receiving the ERC.

• Tax Registration: Obtaining a Tax Code and Initial Compliance

• Tax Code: Upon issuance, the Enterprise Registration Certificate (ERC) number also serves as the company's unique tax identification number (often referred to as the tax code).3 This dual-purpose number streamlines the initial step of obtaining a tax identity.
• Initial Tax Declaration/Registration: Despite the ERC number functioning as the tax code, newly established companies are still required to complete initial tax registration procedures with the local tax authority managing their jurisdiction (usually the district-level Tax Department or, for larger enterprises, the provincial Tax Department, under the General Department of Taxation - GDT).3 This typically involves submitting a tax registration declaration form along with copies of the ERC, IRC (if applicable), and the company charter.40 Online registration for some tax procedures is possible via the GDT portal, but companies with complex structures or significant foreign ownership might need to finalize certain aspects in person at the local tax office.40
• Initial Compliance Obligations: Key initial tax compliance steps include:

• Paying the annual Business License Tax (also known as business registration fee or excise tax). The amount varies based on registered capital and is typically due early in the operational year, or within 30 days of ERC/BRC issuance for new companies (approx. USD 90 is a commonly cited figure for a component of this).3
• Understanding the applicable tax year (Vietnam generally follows the calendar year, but companies can apply for an alternative fiscal year).40
• Registering for Value Added Tax (VAT) and determining the VAT declaration method (deduction method or direct method).
• Making quarterly provisional Corporate Income Tax (CIT) payments and preparing for annual CIT finalization and filing.3

• Public Announcement of Company Establishment: Requirements and Procedures

• Making a public announcement of the company's establishment is a mandatory legal step that must be completed after the Enterprise Registration Certificate (ERC) has been issued.17
• Where to Announce: The public announcement must be made on the National Business Registration Portal (NBRP) of Vietnam.29
• When to Announce: This announcement must be completed within 30 days from the date of issuance of the ERC.29
• Content of Announcement: The information to be publicly disclosed typically includes: the official name of the company, its registered head office address, its business lines/objectives, the amount of its charter capital, the full name and contact details of its legal representative(s), the ERC number and date of issuance, and information about its founding members/shareholders as required by law.18

• Identifying and Obtaining Necessary Sub-Licenses and Permits (with examples for common sectors)

• For companies planning to operate in "conditional" business lines, obtaining the IRC and ERC is often just the first layer of licensing. Many such sectors require additional specific permits, commonly referred to as "sub-licenses" or "business eligibility certificates," from relevant specialized state management agencies before the company can legally commence those particular activities.17
• Definition: A sub-license is a specific authorization granted by a competent government authority that allows an enterprise to operate in a particular business sector subject to specific regulatory requirements beyond general enterprise registration. These can take various forms, such as certificates, written confirmations, official approvals, or decisions.41
• Examples of Business Lines Requiring Sub-Licenses 25:

• Retail/Trading: Companies involved in direct retail sales to consumers, or import/export and distribution of certain goods, may require a Business License (for trading activities) or a retail outlet establishment license.25
• Security Services: Requires a Certificate of Satisfaction of Security and Order Conditions, typically issued by police authorities.
• International Travel Agency Services: Requires an International Tour Operator License from the Department of Culture, Sports and Tourism.
• Restaurant/Food Services: Often requires a Certificate of Food Safety and Hygiene Eligibility, and potentially fire prevention inspection minutes.
• Cosmetics Manufacturing/Trading: May require product registration and circulation announcements from health authorities.
• Educational Services (e.g., language centers, schools): Requires specific licenses from the Department of Education and Training.
• Healthcare Services (e.g., clinics, hospitals): Requires licenses from the Department/Ministry of Health.
• Legal, Auditing, Financial Services: Require specialized professional practice licenses.
• Alcohol Wholesale/Retail: Requires specific licenses from the Department of Industry and Trade.

• General Application Process for Sub-Licenses 41: While the specifics vary greatly by sector and issuing authority, a general process can be outlined:

1. Identify the Relevant Authority: Determine the specific ministry, department, or local agency responsible for issuing the sub-license for the intended business line (e.g., Ministry of Health for medical licenses, Department of Culture for tourism licenses).
2. Understand Specific Requirements: Thoroughly research the laws, decrees, and circulars governing the specific conditional business line to understand all eligibility criteria, conditions, and required documentation.
3. Prepare the Application Dossier: Compile all necessary documents, which may include: the application form for the sub-license; explanations and evidence of how the company meets the specific business conditions (e.g., financial capacity, facilities, qualified personnel); copies of the IRC and ERC; personal papers of key managers and specialized staff (e.g., qualifications, criminal records if required); and any other documents mandated by the specific regulations.
4. Submit the Application: Lodge the complete dossier with the identified competent authority.
5. Processing and Evaluation: The authority will review the application, potentially conduct site inspections, and evaluate whether the company meets all stipulated conditions. Processing times can vary significantly, from a few days or weeks for simpler licenses to several months or even longer for more complex ones.41
6. Receive the Sub-License: If the application is successful, the authority will issue the sub-license, certificate, or approval.
7. Ensure Ongoing Compliance: Obtaining the sub-license is not a one-time event. The company must continuously comply with all conditions and regulations associated with that license throughout its operations.

• Table 3: Overview of Key Post-Registration Obligations and Deadlines

*   The post-registration phase is characterized by a series of interconnected and time-sensitive obligations. For instance, the Direct Investment Capital Account (DICA) must be operational before the charter capital can be formally contributed.[17, 39] The tax code, which is the ERC number [30], is required for imprinting on the company seal.[33] Furthermore, the ability to legally operate in many conditional sectors hinges on obtaining specific sub-licenses, which themselves may require evidence of a compliant operational setup, including a physical address and potentially proof of contributed capital. This cascade of dependent activities, many with tight statutory deadlines (e.g., 90 days for capital contribution from ERC issuance [30], 30 days for public announcement from ERC [29]), necessitates meticulous project management by the newly formed enterprise.

    A noteworthy development in streamlining administrative procedures is the change in company seal regulations under the Enterprise Law 2020. This law granted companies significantly more autonomy in determining the design and number of their seals and, crucially, removed the previous requirement for prior registration or notification of the seal sample to the business registration authorities before use.[33] This is a tangible example of Vietnam's efforts to reduce bureaucratic hurdles for businesses, empowering them with more self-determination in certain procedural aspects.

    While the IRC and ERC grant the general right to invest and exist as a legal entity, sub-licenses [41] function as a secondary, more granular layer of regulatory control, particularly for business activities in conditional or sensitive sectors. These specialized permits, issued by various ministries or departments relevant to the specific industry (e.g., Ministry of Health for healthcare, Department of Culture, Sports and Tourism for international travel agencies [41]), ensure that companies meet specific operational standards, safety protocols, environmental protections, and personnel qualification requirements *after* the company has been legally formed. This creates a two-tiered approval system: a general investment and enterprise registration approval, followed by specific operational approval for regulated activities, allowing for more specialized oversight by competent authorities. The 90-day deadline for capital contribution is particularly critical; failure to meet this can lead to significant penalties, including forced amendment of capital or even dissolution [7, 30], underscoring the need for investors to have their financial arrangements and banking procedures well-organized immediately following ERC issuance. Similarly, the public announcement requirement, though it may seem like a minor formality, is a legal obligation contributing to corporate transparency.

• Section 4: Key Operational and Compliance Aspects

• Overview of Corporate Tax Obligations (CIT, VAT, etc.)

• Once established, foreign-invested enterprises in Vietnam are subject to several types of taxes. Key obligations include:

• Corporate Income Tax (CIT): The standard CIT rate in Vietnam is generally 20% on taxable profits.20 Companies are required to make provisional CIT payments on a quarterly basis, with an annual finalization and tax return filed after the end of the fiscal year.26
• Value Added Tax (VAT): VAT is applicable to most goods and services consumed in Vietnam. Businesses act as collection agents for the government. VAT is typically declared and paid on a monthly or quarterly basis, depending on the company's revenue levels and declaration method (deduction or direct method).26
• Business License Tax (or Business Registration Fee): This is an annual tax paid by enterprises, the amount of which usually depends on the registered charter capital of the company. It is payable at the beginning of each operational year.3
• Personal Income Tax (PIT): Companies are responsible for withholding PIT from the salaries and other taxable income of their employees (both Vietnamese and expatriate) and remitting this to the tax authorities on a monthly or quarterly basis.26
• Other Potential Taxes: Depending on their specific business activities, companies may also be liable for other taxes such as Foreign Contractor Tax (FCT - applicable to payments made to foreign entities without a licensed presence in Vietnam for services rendered or goods supplied in Vietnam), Special Consumption Tax (SCT - on specific goods like alcohol, tobacco, automobiles), import and export duties, natural resource tax, and environmental protection tax.18

• A critical aspect of tax compliance is that all accounting records, financial statements, and tax returns must be maintained and filed in the Vietnamese language, and must adhere to Vietnamese Accounting Standards (VAS).2 This often requires specialized local accounting expertise or significant adjustments to global reporting systems for multinational companies.

• Understanding Tax Incentives (e.g., for innovative SMEs, specific locations/sectors)

• Vietnam offers a range of tax incentives to attract investment in priority sectors and regions, and to encourage innovation.
• Innovative Start-up Small and Medium-sized Enterprises (SMEs): The Law on Support for SMEs indicates that CIT incentives are applicable for qualifying "innovative start-up SMEs." However, as of early 2024, the specific provisions for these incentives were still pending full integration into the Corporate Income Tax Law, with a revised CIT Law anticipated for submission in late 2024 and potential approval in 2025.1 To qualify as an innovative start-up SME eligible for support, an enterprise generally must have been in operation for no more than 5 years from its initial ERC issuance, not have conducted an Initial Public Offering (for JSCs), meet the general SME criteria (e.g., total capital not exceeding VND 100 billion or preceding year's total revenue not exceeding VND 300 billion, and specific employee thresholds), and satisfy criteria related to innovation (e.g., based on exploitation of intellectual property, technology, new business models with rapid growth potential).1 It is often recommended that even if an innovative start-up SME is exempt from needing an IRC for establishment, it should consider obtaining one to better secure eligibility for CIT incentives once they are fully legislated.1
• Incentivized Locations and Sectors: Vietnam provides significant CIT incentives for projects in specific geographical areas or engaged in encouraged sectors. These incentives often include preferential CIT rates (lower than the standard 20%), tax holidays (periods of full CIT exemption), and periods of reduced CIT liability (e.g., 50% reduction).1

• Locations: Areas with particularly difficult socio-economic conditions, designated economic zones, and high-tech zones often benefit from the most favorable incentives. For example, projects in these areas might receive a CIT rate of 10% for 15 years, a CIT exemption for 4 years, and a 50% CIT reduction for the subsequent 9 years. Areas with difficult (but not "particularly difficult") socio-economic conditions might receive a preferential CIT rate of 17% for 10 years, a 2-year exemption, and a 4-year 50% reduction.1 Industrial parks (with some exclusions for those in major urban centers) may also offer incentives.
• Sectors: Specific sectors are also targeted for incentives. For example:

• Science and Technology Enterprises: May receive a CIT exemption for 4 years, followed by a 50% CIT reduction for the subsequent 9 years.1
• Enterprises holding a High Technology Enterprise Certificate or a High-tech Application Enterprise Certificate: May be eligible for a 10% CIT rate for 15 years, a 4-year CIT exemption, and a 50% CIT reduction for the subsequent 9 years.1

• Labor Registration and Employment Compliance

• Compliance with Vietnam's labor laws is crucial for all employers. Key requirements include:

• Labor Registration: Companies must register their employees with the local Department of Labor, Invalids and Social Affairs (DOLISA) or relevant labor management agency. This often involves declaring the company's labor usage plan and salary scales.3
• Compliance with Labor Code: All employment practices must adhere to the provisions of the Labor Code 2019 and its guiding documents. This covers aspects such as employment contracts, working hours, overtime, leave entitlements, labor discipline, and termination procedures.3
• Social Insurance Contributions: Employers are required to make mandatory contributions for their employees to social insurance, health insurance, and unemployment insurance funds. Employees also contribute a portion of their salaries.3
• Work Permits for Foreign Employees: Foreign nationals working in Vietnam generally require a work permit, unless they fall under specific exemption categories. Employers must typically prioritize the recruitment of Vietnamese workers and can only hire foreign employees for positions requiring specialized skills or expertise not readily available in the local labor market. The process for obtaining work permits can be complex and involves demonstrating the necessity of hiring foreign personnel.26
• Sector-Specific Labor Regulations: Conditional business lines may have additional labor regulations, such as specific minimum wage requirements beyond the regional general minimum wage, mandatory training and qualification standards for employees, particular hiring restrictions, or more stringent rules on working hours and overtime.41

• The Vietnamese tax system, while undergoing reforms aimed at simplification and alignment with international practices (such as the implementation of electronic invoicing and declarations 2), presents a dynamic landscape for investors. A case in point is the area of tax incentives for "innovative start-up SMEs." Although the Law on Support for SMEs (effective 2018) introduced this category and signaled the availability of CIT incentives 1, the detailed provisions and mechanisms for these specific incentives were, as of early 2024, still awaiting full integration into the Corporate Income Tax laws. A revised CIT law addressing this was anticipated for submission to the National Assembly in late 2024 with potential approval in 2025.1 This situation implies a period where policy intent is somewhat ahead of detailed legislative execution, potentially creating a degree of uncertainty for investors specifically targeting these innovation-focused incentives in the interim. This highlights the practical recommendation found in some analyses 1 that even if an innovative start-up SME is technically exempt from needing an Investment Registration Certificate (IRC) for its establishment, it should strongly consider obtaining one. The IRC can serve as a crucial document to substantiate eligibility and secure CIT incentives once the relevant tax laws are fully updated and aligned with the SME support policies.
  Beyond the headline tax rates, which can be competitive (a standard CIT of 20%, with lower preferential rates available through various incentive schemes 1), foreign companies must be prepared for the operational demands of tax compliance in Vietnam. The requirements for all accounting records, financial statements, and tax returns to be maintained in the Vietnamese language and to strictly adhere to Vietnamese Accounting Standards (VAS) 2 represent a significant compliance layer. This often necessitates engaging local accounting professionals or investing in robust internal systems and training to ensure that global reporting practices are reconciled with local statutory requirements. The regular filing obligations for various taxes (quarterly provisional CIT, monthly/quarterly VAT, PIT withholdings) also demand diligent financial administration. Therefore, a comprehensive assessment of the tax environment should extend beyond comparing nominal rates to include a realistic evaluation of the resources and expertise needed to navigate these procedural and linguistic compliance burdens effectively.

• Section 5: Navigating Challenges and Ensuring a Smooth Setup

• Establishing a company in a new market invariably presents challenges. Foreign investors in Vietnam often encounter a specific set of hurdles that require proactive strategies and careful navigation.
• Common Challenges Faced by Foreign Investors:

• Legal and Regulatory Complexity: Despite ongoing reforms, Vietnam's legal and regulatory framework can appear complex to foreign investors. Understanding the nuances of the Investment Law, Enterprise Law, tax regulations, labor laws, specific requirements for policy changes, and the array of industry-specific licenses and permits can be daunting.2 Vietnam's ranking in the Global Business Complexity Index, while improving, still reflects this inherent intricacy.2
• Bureaucracy and Reporting Requirements: The administrative processes can be time-consuming. A significant challenge is the requirement for extensive paperwork to be prepared and submitted in the Vietnamese language. Foreign-issued documents typically require certified translations, notarization in the country of origin, and consular authentication by the Vietnamese embassy or consulate.2 Furthermore, mandatory investment statistics reports and other compliance reporting add to the administrative load, with penalties for violations.2
• Capitalization Issues: A common misstep is under-allocating capital for the Vietnamese entity or misunderstanding the distinction between the general principle of "no fixed minimum capital" and the DPI's assessment of "capital adequacy" for the proposed business scope, as well as failing to meet specific minimum capital requirements for conditional business lines.26 Insufficient capital can lead to registration rejection or operational difficulties.
• Language Barriers: While English proficiency is growing in major business centers, Vietnamese remains the official language for all government administration, legal documents, and for effective communication with the broader local workforce and customer base. This can pose significant challenges in understanding regulations, negotiating contracts, and managing daily operations.2
• Market Understanding and Competition: Some investors may underestimate the sophistication of local competitors or misjudge local consumer behavior and preferences if they enter the market without conducting thorough market research. Applying assumptions from their home market without adaptation can lead to strategic errors.26
• Local Partnerships (if applicable): For investors pursuing a Joint Venture or relying on local partners for other strategic reasons, selecting an unreliable or incompatible partner can lead to significant operational disputes, financial losses, and legal complications.26
• Currency Regulations: The Vietnamese government maintains regulations over foreign currency transactions, particularly concerning the outflow of funds (e.g., profit repatriation, loan repayments abroad), which can sometimes be perceived as cumbersome.2

• Practical Solutions and Best Practices for Overcoming Hurdles:

• Thorough Due Diligence: Before committing to investment, conduct comprehensive due diligence on the legal and regulatory environment, market conditions, specific sector requirements, and potential competition.26
• Seek Professional Local Advice: Engaging reputable local legal counsel, tax advisors, and business consultants is highly recommended. These professionals can provide invaluable assistance in navigating the legal complexities, preparing documentation, liaising with authorities, and ensuring compliance.3
• Proper Capital Planning: Carefully assess and allocate sufficient capital that not only meets any legal minimums for conditional sectors but is also demonstrably adequate for the proposed business plan and initial operational phase. This should be clearly justified in the investment proposal.22
• Address Language Barriers Proactively: Invest in professional translation services for all legal and official documents. Consider hiring bilingual local staff, especially for key liaison and administrative roles, or provide Vietnamese language training for key expatriate personnel.2
• Comprehensive Market Research: Invest time and resources in understanding the local market dynamics, consumer needs, distribution channels, and the competitive landscape before finalizing business strategies.26
• Careful Partner Selection and Due Diligence (if forming a JV): If a local partner is required or desired, conduct thorough due diligence on potential candidates, verifying their business history, financial standing, reputation, and ensuring alignment of strategic goals. Formalize the partnership with clear, legally sound agreements that outline roles, responsibilities, profit-sharing, dispute resolution mechanisms, and exit strategies.26
• Stay Updated on Regulatory Changes: The legal and regulatory environment in Vietnam can evolve. Establish mechanisms to stay informed about relevant policy changes and updates that may affect the business.26
• Meticulous Document Preparation and Planning: Allow ample time in the project schedule for the preparation, translation, notarization, and consular legalization of all required documents, as these processes can be lengthy.2

• Successfully navigating the Vietnamese business landscape often hinges significantly on the "human element." While robust legal frameworks and technological advancements play their part, many of the common challenges—such as language barriers 26, the selection of reliable local partners 26, and gaining a deep understanding of nuanced market conditions 26—are best addressed through skilled local expertise and trustworthy local personnel. The effective interpretation of regulations, negotiation with authorities, and day-to-day operational management frequently rely more on experienced individuals than on codified procedures alone. This implies that foreign direct investment success is not solely a function of adequate capital and a sound business plan, but also critically depends on building the right local team, engaging knowledgeable consultants 26, and fostering strong local networks.
  Furthermore, the consistent emphasis across various advisory sources on understanding intricate regulations, staying abreast of policy shifts, and adhering to meticulous reporting requirements 2 points towards a crucial best practice: proactive compliance should be viewed not merely as a legal obligation but as a fundamental risk mitigation strategy. The potential for administrative penalties for non-compliance (e.g., with investment statistics reporting 2 or capital contribution rules 26) is tangible and can lead to significant operational disruptions, financial costs, or even, in extreme cases, business suspension. Therefore, embedding a culture of compliance from the outset, supported by appropriate internal controls and external expertise where necessary, is essential for sustainable operations in Vietnam. For many foreign investors, particularly small to medium-sized enterprises or those new to the complexities of Asian markets, attempting a "do-it-yourself" approach to company setup and ongoing compliance in Vietnam carries substantial risks. The cost of professional advisory services should therefore be factored into the initial investment budget not as an optional expense, but as a crucial enabler of a smoother market entry and a more secure long-term presence.

• Section 6: Estimated Costs and Timelines for Company Formation

• Understanding the potential financial outlay and time commitment is crucial for planning a successful market entry into Vietnam. While exact figures can vary based on the specifics of the investment, the chosen service providers, and the complexity of the business, this section provides an overview of typical costs and timelines.
• Breakdown of Potential Costs:

• Government Fees:

• IRC/ERC Registration Fees: Official government fees for the issuance of the Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC) are generally modest. One service provider, OneIBC, mentions a combined "Government fee & Service charged" of USD 199 for LLCs, which bundles state fees with some of their own charges.20 Other sources confirm that official registration fees are a component of overall costs but do not always isolate them.3 The primary cost driver in a professionally assisted setup is usually not the direct government charges for these certificates.
• Public Announcement Fee: The fee for making the mandatory public announcement of company establishment on the National Business Registration Portal is typically minimal and often included within broader registration service packages.
• Business License Tax: This is an annual tax, with the amount often varying based on the company's registered charter capital. For newly established companies, it's payable shortly after obtaining the ERC. A commonly cited approximate figure for a component of this tax is around USD 90 per year.3

• Consultant Service Fees: This is often the most significant variable cost component. Fees charged by legal and business consulting firms for assisting with the entire company registration process (from IRC application to ERC issuance and initial post-registration steps) can differ widely:

• Emerhub quotes starting fees of approximately USD 3,500 for registering an LLC or JSC, and around USD 2,500 for a Representative Office.42
• InCorp Asia suggests an approximate cost of USD 2,950 for company registration, including government fees and associated expenses.19
• OneIBC presents a different model, with service fees for the first year for an LLC ranging from USD 519 to USD 649, plus the aforementioned USD 199 government/service charge.20
• These fees typically cover professional guidance, document preparation and review, submission to authorities, and support with initial post-registration compliance tasks. The scope of services included can vary significantly between providers.

• Notarization and Translation Fees: The cost of notarizing documents in the investor's home country and in Vietnam, consular legalization of foreign documents, and official translation of all foreign documents into Vietnamese can accumulate. These costs are variable, depending on the volume and complexity of the documentation and the fees charged by notaries and translation agencies.2
• Office Rental / Virtual Office Costs:

• Physical Office Space: Rental costs for commercial office space vary dramatically depending on the city (e.g., Ho Chi Minh City, Hanoi, Da Nang), specific location within the city, size, and quality of the premises.23
• Virtual Office: For companies that can utilize this option, a virtual office providing a registered address can cost around USD 1,200 annually, according to one provider.42

• Minimum Capital Contribution: While not a "fee," the actual charter capital that needs to be injected into the company (discussed in Section 1.4) represents a significant initial financial commitment.

• Typical Timelines for Each Stage of the Company Setup Process:

• Overall Timeframe for Foreign-Invested Enterprise (FIE) Setup:

• Generally, the entire process from initial planning and document preparation to having a fully operational FIE can take anywhere from 2 to 4 months, and sometimes longer for complex projects.17
• Healy Consultants suggests a minimum of 4 months for completion, with total engagement periods ranging from 5 to 8 months depending on the chosen entity type and project specifics.21
• It's important to note that registration for local Vietnamese investors is significantly faster, often completed within 5 to 7 working days, highlighting the additional layers of scrutiny and procedure for foreign investments.19

• Investment Registration Certificate (IRC) Application:

• Statutory Processing Time: Once a complete and valid application dossier is submitted, the standard statutory processing time by the DPI or relevant Management Board is often cited as 15 working days (which equates to approximately 3 weeks).3
• Practical Time & Potential Extensions: However, this statutory timeline can be extended. If the project requires a more detailed "Investment Evaluation" (for large capital projects or those in conditional sectors) or needs higher-level "Investment Policy Approval," the IRC process can take considerably longer, potentially up to 45 days or even several months.14 Some consultants provide practical estimates of around 1 month for the IRC stage for standard projects.18

• Enterprise Registration Certificate (ERC) Application (Post-IRC):

• Statutory Processing Time: Following the issuance of the IRC (where required), the application for the ERC is generally processed much more quickly. The statutory timeline is typically 3 to 5 working days from the submission of a complete and valid ERC application dossier.4

• Post-Licensing Procedures (Company Seal, Bank Account Opening, Tax Registration, Capital Contribution, etc.):

• Initial steps like arranging the company seal and making the public announcement can often be completed within approximately 1 week after ERC issuance.22
• Opening corporate bank accounts (DICA and current account) can take from a few days to a couple of weeks.38
• The critical deadline for the full contribution of charter capital is 90 days from the date of ERC issuance.17

• Factors Causing Delays: Several factors can lead to delays in the overall company setup timeline. These include: incomplete or inaccurate application documents; the complexity of the proposed business lines (especially if they are conditional or new to the market); the need for special approvals or opinions from multiple government agencies; unforeseen delays in the notarization, translation, and consular legalization of foreign documents; issues with the documentation provided by the lessor for the registered office address; and the general administrative workload at the relevant government authorities.22 Projects in conditional investment areas can see the process extend to as many as 60 working days or more just for the initial licensing stages.19

• Table 4: Estimated Cost Breakdown for Company Formation in Vietnam (Illustrative)

**These are illustrative estimates. Actual costs can vary significantly. Obtain detailed quotes from service providers.

****Table 5: Typical Timelines for Company Setup Stages in Vietnam**

*   Analysis of company formation costs in Vietnam reveals a notable variance in consultant service fees. For instance, some providers like OneIBC quote initial year fees for an LLC structure that appear significantly lower (around USD 700-850 including their "government fee & service charged" component) compared to other firms like Emerhub or InCorp Asia, whose starting packages for similar services are in the range of USD 3,000 to USD 3,500.[19, 20, 42] This discrepancy suggests that the scope of services included in these packages can differ substantially. The lower-priced options might cover only the most basic registration filings, while the higher-priced ones could encompass more comprehensive advisory, document preparation, translation, notarization coordination, and initial post-registration support. The actual government-levied fees for licenses like the IRC and ERC seem to be relatively modest [20], implying that the primary cost driver for a professionally assisted company setup lies in the advisory and processing services provided by consultants. Therefore, investors should meticulously compare consultant proposals, clarifying the precise services included and excluded, to make an informed decision based on their needs and budget.

    Similarly, timelines for company establishment are highly variable and heavily dependent on the investor's preparedness and the specifics of their project. While statutory processing times for certificates like the IRC (e.g., 15 working days for standard projects [22]) exist, the practical overall timeframe from initial planning to operational readiness for a foreign-invested enterprise is often much longer, typically ranging from 2 to 6 months or more.[17, 21] This extended duration is largely attributable to the extensive pre-application document preparation phase (especially the time required for notarization and consular legalization of foreign documents [25, 28]), the potential need for higher-level investment policy approvals for certain projects, and sector-specific complexities or sub-licensing requirements. The stark contrast with the significantly faster setup times for purely local Vietnamese companies (often just 5-7 working days for an ERC [19]) underscores the additional layers of scrutiny and procedural requirements specifically applicable to foreign direct investment. Consequently, an investor's proactiveness, the thoroughness of their documentation, and the inherent complexity of their intended business activities are major determinants of the actual timeline. Investors should therefore adopt a realistic, and potentially conservative, project timeline, particularly if their venture involves conditional sectors, complex international corporate structures, or extensive foreign documentation. "Fast track" solutions might be marketed but could come at a premium or have limitations on the types of businesses they can accommodate.

• Conclusion: Key Takeaways and Strategic Next Steps for Your Vietnam Venture

• Establishing a company in Vietnam as a foreign investor is a multi-stage undertaking that, while offering access to a dynamic and growing market, requires careful navigation of a specific regulatory landscape. The process can be broadly summarized into three core phases: meticulous pre-registration planning, diligent execution of the core IRC and ERC registration procedures, and thorough completion of essential post-registration compliance actions.
• Vietnam's clear intent to attract foreign investment, evidenced by ongoing reforms and available incentives 1, is balanced by a legal and administrative framework that demands precision, comprehensive documentation, and adherence to specific timelines.2 The journey involves understanding complex laws like the Investment Law 2020 and Enterprise Law 2020, choosing an optimal legal entity, ensuring compliance with sector-specific conditions and capital requirements, and fulfilling a series of post-licensing obligations from seal creation to tax registration and potential sub-licensing.3
• Throughout this process, several critical considerations emerge. The importance of thorough due diligence cannot be overstated – this includes understanding market access conditions, foreign ownership limitations, and the practical implications of "no fixed minimum capital" versus actual capital adequacy assessments by authorities. The necessity of professional advice from local legal and business consultants is a recurring theme, particularly given the complexities of document legalization, language barriers, and the nuanced interpretation of regulations.2 Patience and meticulous planning are virtues, as timelines can be variable and influenced by numerous factors.
• Strategic Next Steps for Your Vietnam Venture:

1. In-Depth Market and Sector Research: Conduct detailed research specific to your intended industry in Vietnam. Understand the competitive landscape, consumer demand, supply chains, and any specific regulatory hurdles or incentives applicable to your sector.
2. Preliminary Legal and Business Consultation: Engage with reputable legal and business advisory firms in Vietnam. Discuss your investment plan, proposed business activities, and seek initial advice on the most suitable corporate structure, potential challenges, and a realistic roadmap.
3. Comprehensive Financial Planning: Develop a detailed budget that accounts for all anticipated setup costs (including government fees, consultant fees, notarization/translation, office setup) and, crucially, the initial operational capital required until the business achieves profitability. This must include the committed charter capital.
4. Document Preparation Strategy: Begin identifying and gathering all necessary personal and corporate documents that will require notarization, consular legalization, and translation. Start these processes early, as they are often the most time-consuming pre-application steps.
5. Strategic Partner Identification (if applicable): If your chosen sector or strategy necessitates a joint venture, begin the process of identifying and vetting potential local partners with due diligence.
6. Develop a Realistic Project Timeline: Based on the nature of your investment and professional advice, create a realistic project timeline that accounts for all stages of the setup process, including potential contingencies for delays.

By approaching the company formation process in Vietnam with diligence, preparedness, and expert support, foreign investors can significantly enhance their prospects of establishing a successful and compliant business poised to capitalize on the opportunities within this vibrant Southeast Asian economy.

• Appendix:

• List of Key Government Agencies and Official Portals:

• Ministry of Planning and Investment (MPI): The central government agency overseeing planning, development investment, and providing general advice on socio-economic development strategies. It plays a key role in formulating foreign investment policy.27
• Provincial/City Departments of Planning and Investment (DPI): Local authorities responsible for issuing Investment Registration Certificates (IRCs) for most foreign investment projects and overseeing business registration within their jurisdictions. The Business Registration Office is typically a division of the DPI and issues Enterprise Registration Certificates (ERCs).3
• National Business Registration Portal (NBRP): The official online portal for enterprise registration, public announcement of company establishment, and accessing company information. Key addresses include dangkykinhdoanh.gov.vn 18 and potentially biz.gov.vn (though dangkykinhdoanh.gov.vn is the primary one).31
• General Department of Taxation (GDT): The main tax authority responsible for tax administration, collection, and policy implementation. Local tax departments operate under the GDT.40
• Vietnam Chamber of Commerce and Industry (VCCI): A national organization representing and supporting the business community, providing information, training, and facilitating trade and investment.44
• Specialized Ministries and Local Departments: Depending on the business sector, other ministries (e.g., Ministry of Industry and Trade, Ministry of Health, Ministry of Education and Training, Ministry of Culture, Sports and Tourism) and their local departments will be involved in issuing specific sub-licenses or permits.41

• Glossary of Key Terms:
• BCC: Business Cooperation Contract
• BO: Branch Office
• CIT: Corporate Income Tax
• DICA: Direct Investment Capital Account
• DOLISA: Department of Labor, Invalids and Social Affairs
• DPI: Department of Planning and Investment
• ERC: Enterprise Registration Certificate
• FCT: Foreign Contractor Tax
• FDI: Foreign Direct Investment
• FIE: Foreign-Invested Enterprise
• FOL: Foreign Ownership Limit
• FOE: Foreign-Owned Enterprise
• FTA: Free Trade Agreement
• GDT: General Department of Taxation
• IRC: Investment Registration Certificate
• JSC: Joint Stock Company
• JV: Joint Venture
• LLC: Limited Liability Company
• MOU: Memorandum of Understanding
• MPI: Ministry of Planning and Investment
• NBRP: National Business Registration Portal
• PIT: Personal Income Tax
• PPP: Public Private Partnership
• RO: Representative Office
• SME: Small and Medium-sized Enterprise
• VAS: Vietnamese Accounting Standards
• VAT: Value Added Tax
• VCCI: Vietnam Chamber of Commerce and Industry
• VND: Vietnamese Dong (currency)
• WTO: World Trade Organization

☑ Why Choose LHD Law Firm [Set up company in Vietnam]

Everything we do at LHD Law Firm is focused on assisting your business through our investment law expertise and local business experience in Vietnam.

So that your enterprise can grow and expand quickly and avoiding the costly traps that many start-up investors fall into at the hands of unscrupulous lawyers and agents.

How we accomplish this.

We offer the best investment legal service in Vietnam, as well as a wide choice of INDIVIDUAL AND ECONOMIC EFFECTIVE SOLUTIONS for starting a business in Vietnam or managing an existing one.

⭕ What we can do ...

Senior Attorney in LHD Law Firm

Lawyer: Thanh Thuy (email: all@lhdfirm.com) 

→ Lawyer specializing in advising on setting up foreign capital companies in Ho Chi Minh City

She graduated with a master’s degree in Commercial Law - City Law University of Ho Chi Minh City.

Consultancy language: English and Vietnamese

She is as one of the top 20 lawyers in Vietnam, highly rated by Legal500 and Hg.org → specializes in foreign investment, having realized more than 6800 projects in 15 years...

Lawyer: Phuong Khanh (email: hanoi@lhdfirm.com)

→ Lawyer specializing in advising on setting up foreign capital companies in Hanoi

She has a master's degree in Commercial Law from Hanoi Law University.

The language of consultation is English and Vietnamese

In order to seek further advice or request service Setup company in Vietnam, Contract us by → ☑: all@lhdfirm.com