Vietnam is one of the fastest-growing economies in the world. The low cost of living and highly qualified population make it an ideal location for foreign companies who are looking to branch out and invest. However, expanding internationally has its disadvantages as well. Not knowing the local laws and regulations makes it a thousand times harder to open a company overseas.
Set up a company in Vietnam: foreign investors generally follow a multi-step process that involves obtaining two main certificates: the Investment Registration Certificate (IRC) and the Enterprise Registration Certificate (ERC). The most common entity type for foreign ownership is a Limited Liability Company (LLC). Setting up a company in Vietnam as a foreign investor involves a multi-step process that requires careful planning and adherence to legal procedures. Here is a general guide to the key requirements and steps.
Before starting the application, you must prepare several key items:
Company Name: You must choose a name that is not already taken or confusingly similar to another registered name in Vietnam.
Registered Address: You must have a legal physical address in Vietnam. This cannot be a virtual office for the initial registration; a valid lease agreement is required.
Business Lines: You must clearly define the business activities your company will engage in. Some sectors are "conditional" and require special licenses or approvals.
Legal Representative: The company must appoint at least one Legal Representative (e.g., Director or General Director). This person can be Vietnamese or foreign, but if they reside outside Vietnam, you may need to appoint a resident authorized representative.
Proof of Financial Capacity: Investors must prove they have sufficient funds to cover the proposed charter capital. This is typically done with a bank statement from the investor's home country, which must be legalized.
The formal process of establishing an FDI company in Vietnam involves a two-phase licensing procedure, followed by critical post-establishment steps. Understanding the requirements, timelines, and costs for each phase is essential for effective project planning.
| No | Filename | Amount | Notarization in foreign countries | Request for consular legalisation | Made in Vietnam |
| 1. | Certificate of establishment / Business license for institutional investor
Passport/identity card for investors is and notarised |
02 | Have | Have | Translated into Vietnamese, Notarised |
| 2. | Audited financial statements for the last 2 years of the investor, or the parent company’s financial support commitment, or a financial institution’s commitment to financial assistance, or a guarantee for the investor’s financial capacity, or confirm the investor’s bank account balance relative to the intended capital to invest in Vietnam. | 01 | Have | Are not | Translated into Vietnamese, Notarised |
| 3. | Passport / ID card notarised representative of the company law in Vietnam | 02 | Have | Have | Translations into Vietnamese, the c hun g |
| 4. | Office lease contract, Document proving the lessor’s right to lease in Vietnam (Land use right certificate, Construction permit, Business registration certificate with real estate business function of the lessor or equivalent documents ) | 01 | Notarized | ||
| 5. | Legal investors need to provide:
– Passport of the investor’s legal representative. |
01 | Have | Have | Translated into Vietnamese, Notarised |
Navigating Vietnam's capital requirements involves understanding the distinction between different capital types and the practical expectations of the licensing authorities.
Distinguishing Capital Types:
Investment Capital: This is the total fund registered in the IRC, encompassing both the investor's equity (charter capital) and any planned debt financing (loans) for the project.
Charter Capital: This is the equity portion of the investment capital that investors commit to contribute. It is recorded in the ERC and must be fully paid within 90 days of the ERC's issuance. The amount of charter capital also determines the annual business license tax rate.
Legal Capital: For certain conditional business lines (e.g., banking, insurance, securities, real estate), the law prescribes a minimum amount of charter capital that the company must have. This is known as legal capital.
Determining a "Reasonable" Capital Level: For the majority of business lines that do not have a specific legal capital requirement, the law does not set a minimum capital amount. However, this does not mean investors can register a nominal amount. The DPI will assess the "reasonableness" of the proposed charter capital in relation to the business plan, projected operational expenses, and the scale of the project. A capital amount deemed insufficient to sustain the business may lead to questions or delays in the approval process.
Practical Advice: As a general guideline, investors should register a charter capital amount sufficient to cover projected operational expenses for at least the first 12 to 24 months. While it is technically possible to register a services company with as little as US$10,000 is often recommended. This amount is generally accepted by authorities as credible for a serious business venture and can also facilitate the subsequent application for long-term visas or temporary residence cards for the foreign investor.
For foreign investors, the two most common types of companies are:
Limited Liability Company (LLC): This is the most popular choice.
Single-Member LLC: Owned by one organization or individual.
Multi-Member LLC: Owned by 2 to 50 members.
Joint-Stock Company (JSC): This requires at least three shareholders and is the only type of company that can issue shares to the public.
Other less common forms include Representative Offices (which cannot conduct profit-making activities) or Branch Offices (which are extensions of a foreign parent company).
|
Key Consideration |
Details |
|
Most Common Entity |
Limited Liability Company (LLC) is the most popular and flexible structure for foreign investors. |
|
Foreign Ownership |
100% foreign ownership is permitted in most business sectors. |
|
Minimum Capital |
No legal minimum for most business lines, but capital must be adequate to cover expenses. A common starting point is USD 10,000. |
|
Key Licenses Required |
Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC). |
|
Standard Corporate Tax |
20%. |
|
Resident Director |
At least one legal representative is required to reside in Vietnam. |
|
Registration Timeline |
Approximately 3 to 4 months for a fully foreign-owned company. |
|
Visit Required? |
No, the process can be completed by appointing a local representative. |
During the process of establishing a business, the creation of essential documents is a critical stage. An effective approach is to engage the Company Registration service for FDI enterprise in Vietnam. This involves partnering with experienced experts in company formation procedures. A legal team can assist in composing the necessary documentation in compliance with legal requirements, ensuring the accuracy and completeness of all information in the documents. Thus, facilitating a smooth processing.
Following the assembly of documents in accordance with guidance and drafting by LHD Law Firm, the subsequent phase involves submitting the registration application to the authorized office. The following steps are involved in this process:
The IRC is the foundational license for any foreign investment project. It is an approval of the project itself, granted by the state, and precedes the formation of the legal entity.
Application Dossier: A comprehensive dossier must be submitted, including:
The formal application form for the investment project.
Legal documents of the investor(s), such as the Certificate of Incorporation and company charter for a corporate investor, or a passport for an individual investor. All foreign-issued documents must be consular legalised in the investor's home country and then translated into Vietnamese by a certified translator.
A detailed investment project proposal outlining objectives, scale, capital, and implementation schedule.
Documents proving the investor's financial capacity. This typically includes audited financial statements for the last two years for corporate investors or a bank statement confirming a balance equal to or greater than the proposed contribution for individual investors.
An in-principle office lease agreement or a Memorandum of Understanding (MOU) for the proposed head office or project location.
Licensing Authority: The application is submitted to the Department of Planning and Investment (DPI) of the province or city where the project will be located. If the project is situated within an industrial zone (IZ), export processing zone (EPZ), or high-tech zone (HTZ), the application is typically handled by the management board of that zone.
Statutory Timeline: The legal processing time for an IRC application is 15 working days from the date a complete and valid dossier is received.
Once the IRC is issued, the investor can proceed to establish the Vietnamese legal entity by applying for an ERC.
Application Dossier: The key documents for the ERC application include:
The formal application for enterprise registration.
The draft Charter (equivalent to Articles of Association) of the new company.
A list of members (for an LLC) or founding shareholders (for a Joint Stock Company).
A list of the company's Ultimate Beneficial Owners (UBOs), a new mandatory requirement from July 1, 2025.
Notarised copies of the personal identification documents (e.g., passport) of the company's legal representative and all individual members/shareholders.
A copy of the newly issued IRC.
Licensing Authority: The application is filed with the Business Registration Office, a division of the provincial DPI.
Statutory Timeline: The legal processing time for an ERC is significantly shorter, at just 3 working days from the submission of a valid application.
The statutory timelines for licensing are often shorter than the practical reality. A realistic assessment of the time and cost involved is crucial for effective project management.
| Step | Activity | Statutory Timeline | Practical Timeline | Key Considerations & Dependencies |
| 1 | Pre-Application Preparation | N/A | 2 - 4 weeks | This phase includes document collection, consular legalisation, certified translation, office location search, and drafting the project proposal. The legalisation process can be a significant bottleneck. |
| 2 | IRC Application & Issuance | 15 working days | 4 - 6 weeks |
This assumes a complete and valid dossier. The authorities may request additional information or clarification, which can reset the processing clock. |
| 3 | ERC Application & Issuance | 3 working days | 1 - 2 weeks |
This step is generally straightforward once the IRC has been successfully obtained. |
| 4 | Post-Licensing Procedures | N/A | 2 - 4 weeks |
This includes carving the company seal, opening bank accounts, initial tax and labour registrations, and VNeID registration for the legal representative. |
| Total | End-to-End Process | ~4 weeks | 2 - 4 months | The total time is highly dependent on the complexity of the project, the investor's home country's legalisation procedures, and the thoroughness of the initial application. |
Starting July 1, 2025, all businesses in Vietnam must transition to using a corporate electronic identification (e-ID) account for handling online administrative procedures. Existing corporate accounts on the National Public Service Portal or provincial-level portals will expire on June 30, 2025, in line with Decree No. 69/2024/ND-CP. The new system is designed to standardize digital authentication, enhance security, and streamline access to government services.
A corporate e-ID serves as the official digital identity of an organization, enabling it to verify information and conduct transactions that would normally require paper-based documentation. Registration is carried out by a company’s legal representative, who must first hold a Level 2 personal e-ID. If a company has multiple legal representatives, the applicant must obtain their consent before proceeding.
Key requirements and process highlights include:
Businesses are strongly encouraged to begin preparations early to avoid disruptions in accessing digital government services after June 2025.
Immediately after ERC issuance, the company must arrange for its official seal (company stamp) to be carved and must register the seal sample with the authorities.
Following this, the company must open its bank accounts. This is a crucial step with specific requirements for FDI enterprises. The company must open at least two types of accounts:
Direct Investment Capital Account (DICA): This is a special-purpose foreign currency or VND account that is mandatory for all FDI enterprises. It is used exclusively to receive the charter capital contribution from the foreign investor. Subsequently, all capital-related transactions, such as receiving medium/long-term loans from abroad, and repatriating profits or the original investment capital, must be processed through the DICA. Failure to use a DICA for these transactions is a common and serious compliance violation that can lead to legal risks when transferring funds abroad.
Current Account: A standard VND payment account is also required for conducting day-to-day domestic business transactions, such as paying suppliers, salaries, and taxes.
The strict regulations governing the DICA underscore its function as a primary control mechanism for the State Bank of Vietnam to monitor foreign capital flows. It is more than a simple bank account; it is a regulatory gateway. Any procedural error, such as attempting to contribute capital through a regular payment account, can freeze a company's ability to be properly funded and prevent investors from legally receiving returns on their investment.
Vietnamese law mandates that investors contribute their registered charter capital in full within 90 days from the date the ERC is issued. This contribution must be transferred from the overseas bank account of the investor directly into the newly opened DICA of the Vietnamese company. This deadline is strict and non-negotiable. Failure to contribute the capital on time can result in administrative sanctions, including significant fines and, in severe cases, the potential revocation of the company's IRC and ERC.
The ERC number also serves as the company's tax identification number. Upon establishment, the company must complete several initial tax-related procedures:
Digital Signature and E-invoicing: The company must purchase a digital signature token (also known as a USB token or digital certificate). This is required for electronically signing and submitting tax returns and other official documents online. The company must also register with the tax authorities to use electronic invoices (e-invoices) for all its sales transactions.
Business License Tax: The company must make its first annual payment of the Business License Tax. The deadline for this payment depends on the date of establishment.
To legally hire employees, the new company must register with the local labour authorities, typically by submitting a declaration of labor usage. Concurrently, the company must register with the social insurance agency. This registration is mandatory for making compulsory contributions for all Vietnamese employees under labour contracts, which include social insurance, health insurance, and unemployment insurance.
FDI enterprises are subject to a complex and rigorous system of periodic reporting to various government agencies. Failure to comply can result in fines and increased scrutiny. Key reporting requirements include :
Investment Reports: The company must submit quarterly and annual reports to the DPI (or zone management board) detailing the implementation progress of its investment project. These reports cover aspects like capital disbursement, revenue, employee numbers, and technology usage.
Financial Reports: Annually, the company must have its financial statements audited by a licensed auditing firm in Vietnam. The audited report must then be submitted to the local tax authority, the DPI, and the statistics office within 90 days of the end of the financial year.
Labour Reports: Semi-annual and annual reports on labour utilisation, including details on employee numbers and changes in the workforce, must be submitted to the local labor department.
Sector-Specific Reports: Depending on the company's registered business lines, additional periodic reports may be required. For example, companies with a trading license must submit an annual report to the Department of Industry and Trade.
Establishing a business in Vietnam involves a range of fees and expenses, from company formation to ongoing operations. Let's examine the various cost components in detail:
The initial cost of setting up a company in Vietnam can range from $500, with the entire process typically completed within 10 working days. This fee includes the company formation, ensuring a 100% success rate, and providing dedicated support around the clock.
It's important to note that there are no renewal fees for companies incorporated in Vietnam, as long as clients submit the necessary Tax Return forms. One IBC, a service provider, can assist clients with the Tax Return process and provide a Financial Officer for their Vietnam companies, with the option to replace the Financial Officer in the future.
Every Vietnamese company is required to appoint a Chief Accountant when it is established. One IBC can provide clients with a Financial Officer for their companies, and this position can be replaced by another employee in the future. The service fee for the Representative Chief Accountant is $300.
Depending on the business field, companies in Vietnam
In addition to the company formation and licensing costs, there are also fees associated with opening a bank account for the business. These fees can vary depending on the specific bank and the services required.
To ensure compliance with Vietnam's tax regulations, companies may opt for various accounting and auditing services. One IBC offers the following packages:
The specific needs and requirements of the business will determine the appropriate accounting and auditing package.
Based on Vietnam's current economic climate and foreign investment laws, here are 20 promising business ideas for foreigners. These are grouped by sector, ranging from high-growth industries to service-based opportunities.
A quick note on legality: Vietnam's laws permit foreigners to own 100% of their company in many "unconditional" sectors like manufacturing, IT, and consulting. Other "conditional" sectors, such as restaurants or education, may require specific sub-licenses or approvals but are very common for foreign investors.
This is one of the most open and high-growth sectors for foreign investment.
IT & Software Outsourcing: Set up a company to provide software development, app development, or BPO (Business Process Outsourcing) services to clients abroad. Vietnam has a strong, cost-effective talent pool.
FinTech Solutions: Develop solutions for digital payments, P2P lending, or blockchain applications. Vietnam's e-payment market is expanding rapidly.
EdTech Platform: Create an e-learning platform, especially for corporate training, skill development, or language learning (like English or coding).
E-commerce (Niche Market): Instead of competing with giants like Shopee, focus on a niche: selling imported cosmetics, specialty foods, high-end fashion, or eco-friendly products.
Digital Marketing Agency: Service the growing number of both local and foreign businesses in Vietnam that need SEO, content marketing, and social media management.
Vietnam remains a global manufacturing hub, and foreigners can own 100% of a manufacturing or trading enterprise.
Import/Export (Trading Company): A very common and straightforward business. You can source and export Vietnamese goods (like furniture, coffee, textiles) or import foreign products (like wine, machinery, specialty goods) for local distribution.
Electronics & Components: Establish a small-to-medium-sized enterprise (SME) that manufactures or assembles electronic components, circuits, or finished goods, plugging into the massive supply chains of giants like Samsung and LG.
Textile & Garment (High-Value): Focus on high-value or sustainable fashion rather than fast fashion. This could include activewear, technical apparel, or garments made from recycled materials for export.
Furniture Manufacturing: Leverage Vietnam's skilled artisans to produce and export high-quality indoor or outdoor furniture to markets in the US and Europe.
While competitive, the F&B sector is very popular with foreign entrepreneurs. It is a "conditional" business but has a clear path for licensing.
Foreign Cuisine Restaurant: Open a restaurant specializing in a cuisine not widely available, such as authentic Mexican, high-end Italian, Indian, or a specific regional specialty.
Craft Brewery or Cocktail Bar: The demand for craft beer and high-quality cocktails continues to surge in major cities like Ho Chi Minh City and Hanoi.
Coffee Roastery & Cafe: Go beyond a standard coffee shop. Set up a roastery that supplies beans to other cafes and hotels, with a flagship cafe that showcases your products.
Specialty Food Supplier: Import and distribute high-quality food items (like cheese, charcuterie, or specific produce) to hotels, high-end restaurants, and grocery stores.
This is often the easiest sector to enter, with low capital requirements and 100% foreign ownership.
Business & Management Consulting: Use your foreign expertise to help other foreign companies enter the Vietnamese market (market entry consulting) or advise local companies on international standards.
Recruitment Agency (Headhunting): Focus on placing high-skill, executive-level talent (both Vietnamese and expatriate) in multinational companies and large local corporations.
English Language Center: A classic and stable business. You can focus on general English (IELTS/TOEFL) or specialize in "Business English" for corporate clients.
Tourism & Travel Agency (Inbound): Design and sell high-end, specialized tour packages for international tourists coming into Vietnam (e.g., adventure travel, culinary tours, wellness retreats).
Renewable Energy Solutions: This is a key priority for the Vietnamese government. You could start a business that installs and maintains rooftop solar panels for factories and residential buildings.
Logistics & Warehousing: As e-commerce and manufacturing boom, so does the need for modern, efficient warehousing, order fulfillment (3PL), and "last-mile delivery" services.
High-Tech Agriculture (AgriTech): Start a business focused on modern farming, such as hydroponics or organic farming, to supply clean, high-quality produce to urban supermarkets and restaurants.
Would you like me to dive deeper into the specific legal requirements or setup process for any of these particular business ideas?
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 avoid the costly traps that many start-up investors fall into at the hands of unscrupulous lawyers and agents.
How do 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 ...
► Review the documents to be prepared, including LEGAL CONSULTATIONS (LAW, POLICY, TAXES, human resources...)
► After receiving the investment certificate, provide advice on how to obtain the business registration certificate.
► Advice and application for the Enterprise Certificate (ERC) and the Investment Certificate (IRC), in addition to the Business License issued by the Ministry of Industry and Trade (Business License)
► Consultation and production of a seal engraving and report using seal samples
► Regular legal advice after the opening of the business
► Legal advice about taxes, work permit, temporary residence card and child permit (if applicable)
► Support for the registration of trademarks, designs and inventions when required by businesses (LHD Law Firm is a representative of IP No. 146, the National Office of Intellectual Property, NOIP)
►Advice on CIT, PIT, and monthly, quarterly and annual tax returns
►Social insurance consultation, salary calculation (payroll)
►Consulting for personnel selection in Vietnam
►Trademark, Design, and Invention Protection Consulting
►Consultation on labour law, taxation, and contracts in Vietnam
► Virtual office rental for companies with foreign capital to provide invoice redemption.
Meet with an attorney. We get legal advice on the type of business best suited to your situation.
Then find an office space so that your business not only has a place of business but also a specific office address required by the government to apply for a business license. If you are not the legal representative for your business, you need to find a trusted partner.
Prepare all the necessary documents and make sure that you meet all the requirements before applying for a business license. Expect a 15-day waiting period for a Vietnamese-owned company and a 60-day waiting period for a foreign company.
Running your Vietnamese business now can hire employees and enter into business contracts. There are several things you need to do, such as obtaining your company seal, applying for a tax identification number, opening a company bank account, and publicly announcing your incorporation. Periodic duties include employee tax, accounting report and insurance payments.
(In addition to legal advice, we also provide accounting services for companies with foreign capital for these companies)
Lawyer: Thanh Thuy (email: all@lhdfirm.com)
Lawyer specialising in advising on setting up foreign capital companies in Ho Chi Minh City
LHD Law Firm is here to support you through the company registration process in Vietnam with our expertise and knowledge of the regulations and laws involved. Contact us today for more information about business registration in Vietnam. We look forward to hearing from you. Thanks for reading! Contact us now > Free Quotation
The answer is yes. As of 2018, foreigners are allowed to own businesses in Vietnam, with certain restrictions. Foreigners and foreign-owned businesses are subject to a number of regulations and fees, so it's important to understand them before you begin the business registration process.
The business registration process for starting a business in Vietnam as a foreigner is not overly complicated, but it does require knowledge of Vietnamese business laws and regulations. You’ll need to have a clear business plan and understand the different types of businesses you can register in Vietnam. You should also be familiar with the required documents and fees associated with business registration in Vietnam.
Finally, you’ll need to know the Vietnam business registration number format and how to check company registration in Vietnam. It is important to ensure that all business information is accurate, as mistakes can cause delays or even lead to business closure.
Establishing a presence in Vietnam provides foreign entities with numerous options for setting up their business, such as forming a Limited Liability Company (LLC) with one or more members, developing a Joint Stock Company, creating a Partnership, constituting a Branch Office, and/or opening Representative Offices. Additionally, investors can also contribute capital to existing local companies by purchasing shares/stakes in the organization.
The required documents depend on the type of business and whether it is owned by foreign investors. Generally, you will need the following documents when registering your business in Vietnam: enterprise registration application form; Company’s Charter; list of founding shareholders; list of shareholders that are foreign nationals; business registration or equivalent documents; certified copy of the granted investment registration certificate; and authorization letter for LHD Law Firm.
© 2025 LHD Law Firm
Comment