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Sohaib Ikram
Sohaib Ikram serves as the Director of Emerhub in Malaysia.
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Andi Refandi
Andi serves as a Senior Account Executive on Emerhub’s global team.
As one of the fastest-growing economies in Southeast Asia. In Q3 of 2025, the country’s Foreign Direct Investment (FDI) surged 15.6% compared to the same period last year, bringing US$31.52 billion. Thanks to initiatives from the government and reforms brought on by the Law on Investment and Law on Enterprise in 2020, many foreign investors are establishing their own companies in Vietnam.
However, navigating the legal and administrative landscape can be complex as a foreigner. You need to liaise with multiple government agencies, prepare extensive documentation, and meet ongoing compliance requirements.
In this article, we will walk you through how to set up a foreign company in Vietnam. We will cover foreign ownership regulations, requirements, and government mandated registrations.
Pre-registration: What You Need Before Starting a Company in Vietnam
The Law on Enterprise serves as the legal basis for company registration in Vietnam. Registration is primarily governed by the Business Registration Office (BRO) under the provincial Department of Planning and Investment (DPI).
Before starting a business in Vietnam, you need to decide on a legal entity as well as understand foreign ownership restrictions in Vietnam. You are also required to prepare the needed documents to streamline the registration process.
Foreign Ownership Restrictions and Regulations
Under the Law of Investment in Vietnam, you can now have 100% foreign ownership of a company in major sectors. This includes manufacturing, information technology, consulting, and education. However, certain industries remain partially restricted or “conditional” due to national security or regulatory concerns.
In some cases, the allowed percentage of foreign participation depends on your business activity under Vietnam Standard Industrial Classification (VSIC) code. These sectors often have longer review timelines and additional documentation requirements.
Here are some examples of restricted or conditional sectors in Vietnam:
- Logistics and transportation: Often capped at 49% to 51% foreign ownership.
- Advertising, telecommunications, and publishing: Requires a joint venture with a local partner.
- Real estate development and trading: Allowed only for approved project types.
- Retail and distribution: Subject to an Economic Needs Test (ENT) before opening multiple outlets.
You must confirm your specific business line’s status. If your sector falls outside the official list of prohibited or conditional business lines, you are generally entitled to the same market access conditions as a domestic Vietnamese investor, allowing for 100% foreign ownership.
Choosing a Business Entity
Choosing the right legal structure is a crucial step when establishing a foreign presence in Vietnam. This choice determines not only your ownership flexibility and compliance obligations but also your ability to expand, raise capital, and manage liability. Below are the primary entity types available to foreign investors:
- Limited Liability Company (LLC): the most common legal structure for investors seeking full control and a straightforward structure in Vietnam. It provides flexibility, legal protection, and operational independence from your parent company. There are two types of LLCs in Vietnam:
- Single-Member LLC (SMLLC), which requires only one foreign investor (individual or corporate).
- Multi-Member LLC (MMLLC), which can have 2 to 50 investors.
- Joint Stock Company (JSC): a more complex and scalable structure designed for larger enterprises or those planning future fundraising. It operates as a separate legal entity and divides its capital into shares, which can be freely transferred. However, it requires a higher level of compliance, which includes submitting annual audited financial statements, conducting annual general meetings, and board resolutions.
- Representative Office (RO): Not a distinct legal entity and is strictly prohibited from conducting profit-generating activities (like signing contracts or issuing invoices). It can only perform market research, liaison activities, and support its parent company. It is low risk, quick setup with minimal tax exposure, but your parent company must be operating for at least 1 year before establishment.
- Branch Office: Like an RO, it is not a separate legal entity but can issue invoices, sign contracts, and operate under the same name as the parent company. This model is suitable for businesses in restricted industries such as banking, insurance, law, auditing, or education. However, a branch office is subject to tighter compliance obligations than a representative office.
Key Requirements for Setting Up a Foreign Company in Vietnam
Another key step of the pre-registration process is to prepare all the necessary documents for submission to the BRO. Key requirements include proof of financial capacity, a Vietnamese office lease, and notarized documents. Here’s what you would need:
- Charter Capital (Investment Capital): Vietnam does not have a fixed minimum capital requirement for most sectors. However, the licensing authorities will assess your proposed capital to ensure it is sufficient to cover operational expenses and execute your stated investment project before the company can generate revenue. Be prepared to justify your capital amount in your business plan.
- Project details: Investment proposal, business plan, office lease agreement or MOU, company charter, list of members/directors, and legal representative details (must have a Vietnam residential address; foreigners need work permit or residence card).
- Registered Address: A physical address in Vietnam is mandatory. You must have a valid lease agreement, as virtual offices are generally not accepted for foreign-invested enterprises (FIEs).
- Legal Representative: You must appoint at least one legal representative who has a legal residence in Vietnam. If this is a foreigner, they will need the appropriate visa, work permit, or Temporary Residence Card.
Preparation is a crucial step when setting up a foreign company in Vietnam. With our end-to-end service, we will make sure that you have everything you need for registration
The Foreign Company Incorporation Process in Vietnam
The formal process for a foreign investor to set up a new company is a two-stage application procedure: securing the Investment Registration Certificate (IRC) first, followed by the Enterprise Registration Certificate (ERC).
IRC Application in Vietnam
The IRC is the primary approval for your investment project in Vietnam. This step is mandatory for all new foreign-invested companies. Applications are processed through the DPI in the city or province where your business will be located. Here’s what you need to apply for an IRC:
- Investment project proposal
- Proof of financial capacity (such as bank statements or financial guarantees)
- Copies of investor IDs or company legal documents
- Any joint venture contracts if applicable.
Upon submission, you will receive a Notice on Submission and Result Return. The DPI will review your application within 15 working days (but can take longer depending on the industry) and may request additional documentation. Once approved, the DPI will issue an IRC to legally authorize your investment project in Vietnam.
Crucial Tip: All foreign-issued documents (like corporate registration certificates or passports) must be consularly legalized in your home country and officially translated into Vietnamese by a competent authority in Vietnam.
ERC Application in Vietnam
Once an IRC is issued, you can then proceed with an ERC application. This is the official business license confirming your company’s legal status in Vietnam. Your company will receive its Business Registration Number, which serves as your tax ID. Here’s what you need:
- Enterprise registration application form
- Articles of Association
- List of members/shareholders with ownership percentages and identification documents (notarized/legalized passports for foreigners).
- Copy of IRC (mandatory for foreign-owned entities).
- Details of legal representative(s), including appointment letters and Vietnam residential address.
Post-licensing Procedures
Newly-established companies in Vietnam must complete post-compliance procedures within 30 days of receiving the Enterprise Registration Certificate (ERC) to legally operate, including public announcements, seal registration, tax setups, and capital contributions.
- Public Announcement: Announce company details (e.g., name, address, business lines, shareholders) on the National Business Registration Portal within 30 days; pay associated fees.
- Company Seal: Design, engrave, and register the seal (quantity, form, content) via the National Portal and obtain registration confirmation.
- Bank Account and Capital: Open a corporate bank account and contribute full charter capital within 90 days, verified by the bank.
- Initial Tax Registration: Submit forms to the local Tax Department for VAT, tax code activation (ERC serves as initial code), e-invoice registration (select provider, takes 3-5 days), and purchase tax token for online filings.
- Labor and Insurance: Register as an employer with social insurance, health insurance, and unemployment funds if hiring staff.
- Enterprise Survey: Complete initial economic survey via the National Portal within 30 days.
Emerhub’s incorporation experts simplify every step with practical and compliant support. On average, a standard incorporation process takes around 6 to 10 weeks to complete, depending on the sector and approvals required.
Ready to set up your company in Vietnam? Reach out to our consultants for tailored support on incorporation, licensing, and long-term compliance for your business.
FAQs on Setting Up A Foreign Company in Vietnam
Yes, a foreign company can establish multiple branches, but each branch requires separate registration with the DPI in its respective province. Each branch must have a local legal representative and comply with local tax and labor requirements.
Foreign companies can freely repatriate profits, dividends, and capital after fulfilling tax obligations. The repatriation process requires documentation such as audited financial statements, tax finalization reports, and proof that all tax liabilities have been paid. Funds are transferred via a designated foreign-invested capital account.
Yes, a foreign-owned company can register multiple business lines under one IRC, provided these business lines are clearly listed in the IRC application. Highly regulated sectors may require separate approvals or licenses, and unrelated sectors may need multiple IRCs.
Yes, Vietnam allows companies to carry forward CIT losses for up to 5 consecutive years. These losses can be offset against future taxable profits, but carryback is not permitted.
No, licenses are issued for the specific province where each business or branch is registered, and they are not transferable between provinces. Opening in a new province requires a separate registration and license for that location.
