Guide to FDI Company Formation in Vietnam

A Foreign Direct Investment (FDI) company formation in Vietnam allows foreign investors to own a business, either fully or with a local partner, giving you a direct legal presence in the market.

While Vietnam presents many opportunities, setting up an FDI company involves navigating specific regulations and procedures. This guide will explain the types of FDI companies, what you’ll need, and how the setup process works, so you can plan your investment effectively.

Types of FDI Companies in Vietnam

1. 100% Foreign-Owned Company (WFOE)

A wholly foreign-owned enterprise (WFOE) is a type of FDI company where foreign investors have 100% ownership and control of the company. Under Vietnamese law, you typically establish it as a limited liability company (LLC), either as a single-member or multi-member entity.

This structure provides foreign investors with direct access to the Vietnamese market without depending on any local intermediaries, offering maximum autonomy in operations and decisions.

To establish a wholly foreign-owned enterprise in Vietnam, you must secure the Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC) from the relevant authorities. Additionally, you will need to open a Direct Investment Capital Account (DICA) for capital investment. 

While setting up a WFOE gives you full control, the application process for the IRC and ERC requires careful preparation of documents to meet specific Vietnamese standards. Our team at Emerhub will manage the entire process for you, ensuring accurate paperwork submission and timely approval.

This structure is popular in sectors like tech, manufacturing, consulting, and exports, where flexibility and control are important. You decide how much capital to invest and how to run the business, though you must, of course, operate in full compliance with Vietnamese laws and regulations. 

2. Joint Venture (JV) with Local Partner

The second type of FDI company is a Joint Venture (JV) where foreign investors partner with Vietnamese individuals or legal entities. The foreign ownership in a JV can range from 1% to 99%, depending on your business goals and specific sector regulations, some of which may stipulate foreign equity limits.

This model is common in sectors like education, logistics, media, and real estate, where foreign investors benefit from local expertise or where a local partner can facilitate the approval process. While a JV can unlock access to restricted sectors or leverage local expertise, finding the right partner and structuring the agreement are critical for long-term success.

If you decide to set up a joint venture in Vietnam, it is advisable to have a clear agreement that outlines decision-making, responsibilities, and profit sharing to avoid any conflicts in the future. Our incorporation experts at Emerhub help prepare these agreements and handle the incorporation process on your behalf to ensure timely approvals and protect your interests.

3. Joint Stock Company (JSC)

If you’re planning a larger operation, want to attract multiple investors, or eventually aim for a public listing, a Joint Stock Company (JSC) is a common choice for FDI company formation in Vietnam. This structure allows multiple shareholders and lets you issue shares to raise capital.

A JSC operates in most sectors and is necessary for regulated industries like banking, insurance, and securities. Compared to an LLC, a JSC offers formal governance with a board of directors and better funding options. However, it comes with stricter reporting requirements as well as mandatory audits to ensure transparency. 

Choosing a JSC structure involves more complex corporate governance and compliance. It is important to weigh these factors against the benefits of easier capital raising.

4. Representative Office

For those who are not ready to set up full operations in Vietnam, setting up a Representative Office (RO) is often recommended. It is an extension of your existing company back home rather than a separate legal entity, meaning the parent company bears full liability for the RO’s activities.

However, with a Representative Office, you will not be able to earn revenue, sign contracts, or issue invoices. Instead, this structure is usually for conducting market research, building relationships, and promoting your brand. It is a suitable setup for testing the waters or establishing a local presence without full investment commitment. 

While an RO cannot conduct profit-generating activities, it can be a cost-effective first step for market exploration.

Key Requirements for Foreign Investors to Set Up An FDI Company

To set up an FDI company in Vietnam successfully, you’ll need to meet several key requirements. Being prepared for these will help make the registration process smoother and faster:

A. Capital Investment 

There is no official minimum capital requirement for most sectors, but in practice, authorities assess whether the proposed capital is adequate for the business to cover its initial expenses and support its business plan.

For service-based businesses, this is often around USD 10,000 to USD 15,000. It’s advisable to propose a capital amount that genuinely reflects your initial operational needs, as this is reviewed by the authorities. Our team can offer guidance on what’s typically considered appropriate for your sector.

B. Alignment with Laws 

The business must align with Vietnam’s WTO commitments and local laws. This includes verifying if your intended business lines are fully open to foreign investment and if any specific conditions apply.

C. Registered Business Address 

A legal, registered business address in Vietnam is mandatory. Remember, this needs to be a physical address or a qualified virtual address, depending on your planned business activities.

D. Legal Representative 

Every company must have at least one legal representative who resides in Vietnam. This person can be a foreigner or a local, but must have a residential address in Vietnam and be registered with the company.

Industry-Specific Considerations for Establishing An FDI in Vietnam

It’s important to know that some business sectors in Vietnam have specific rules or conditions for foreign investment. Planning for these early on can save you time and prevent issues:

• Tech and software development: Generally open to full foreign ownership and relatively straightforward to set up.
• E-commerce and digital services: May involve compliance with evolving regulations around data localization laws (like Decree 53), personal data protection (PDPD), or cross-border data transfer rules.
• Education, logistics, and media: These sectors often require special permits, higher capital, specific facility standards, or a joint venture with a local partner.

Since regulations can change and vary for other sectors like healthcare or finance, it is always best to get up-to-date advice for your specific industry. You can schedule a free consultation with our consultants to discuss this.

Step-by-Step Guide to Establishing an FDI Company in Vietnam

Setting up an FDI company in Vietnam can be challenging, especially if you’re new to the market. Emerhub can assist you through each step of the process, handling paperwork and ensuring you remain compliant with local regulations. Here’s how it works:

1. Pre-Licensing Stage 

We’ll start by helping you understand the market, choose the best business structure, and secure a compliant office address. Our team also prepares all the required documents, ensuring everything is in order before submission. Getting this initial stage right is vital. Accurate and complete documents, including any necessary notarization and legalization of foreign documents, are key to avoiding early delays in the approval process. Emerhub ensures your application package meets all local requirements.

2. Obtain the Enterprise Registration Certificate (ERC) 

Under the  Investment Law 2025 (Law No. 143/2025/QH15), foreign-owned companies can now establish a legal entity without an Investment Registration Certificate (IRC) starting March 1, 2026.

We’ll file for the ERC with the Business Registration Office. After approval, we arrange for your official company stamp, a required tool for signing contracts and legal documents in Vietnam. This certificate officially creates your legal entity.

3. Open A Corporate Bank Account 

We’ll assist in opening a corporate bank account and guide you through the capital contribution process. Our team will ensure your capital deposit is on time, typically within 90 days of registration.

4. Post-Registration Compliance 

After we register your company, we’ll handle these post-registration tasks to ensure compliance with local laws:

• Publishing your business registration on the National Business Registration Portal.
• Registering for taxes, e-invoicing, and social insurance.
• Securing any additional licenses or permits required for your industry.

Completing these initial post-registration tasks correctly sets your company up for ongoing compliance and smooth operations from day one. Emerhub can also assist with ongoing accounting and compliance needs if required.

Looking to set up an FDI company in Vietnam? Fill out the form below, and our local Emerhub advisors will provide a free consultation to discuss your business goals and guide you through the best setup options.