Vietnam has emerged as a startup hub, particularly in the technology sector. Driven by a young tech-savvy workforce, increasing digital penetration, and supportive government policies, startups contributed USD 34.3 billion to Vietnam’s GDP in 2023.
This comprehensive guide will explore how to set up a startup in Vietnam, as well as dive deeper into the key considerations and requirements for planning your market entry in the country.
Overview of the Startup Industry in Vietnam
What is considered a startup in Vietnam?
In the Vietnamese context, a startup is typically defined as a newly established small or medium-sized enterprise (SME) that seeks to develop a scalable business model. This classification is crucial for accessing various incentives and support programs designed to foster innovation and entrepreneurship.
To qualify as a startup, an enterprise must fulfill the following conditions:
- Employee Limit – The maximum number of employees for a startup is capped at 200 employees on average per year, who are covered by social insurance. This limit ensures that the business remains classified as an SME, which is essential for eligibility for government support.
- Business Activities – Startups must engage in activities that fall under one of the following categories:
- Production and sale of innovative products including products derived from inventions, useful solutions or new technology.
- Startups can also be involved in producing goods from prototypes or projects that have received recognition or awards.
- Introduce new business models or technology that can increase revenue by at least 20% over two consecutive years
- Ownership structure restrictions – startups cannot be subsidiaries of other companies or joint ventures. Instead, they must be set up as a Limited Liability Company (LLC).
Incentives for Startups in Vietnam
The Vietnamese government actively promotes entrepreneurship through various policies aimed at fostering innovation and attracting foreign investment. There are several incentives available for startups in Vietnam:
- Financial Support for Startup Projects – government programs like the National Innovative Startup Ecosystem provides support to startups by allocating approximately US$42 million to support around 800 startup projects and 200 startups. This initiative aims to stimulate innovation and entrepreneurship across various sectors.
- Tax Incentives – Startups can benefit from reduced corporate income tax rates, such as a 10% tax rate for 30 years from the first year of revenue generation, along with a four-year tax exemption and a 50% discount for the following nine years in designated high-tech zones.
- Land Lease Exemptions – Startups located in high-tech parks can lease land for up to 50 years without paying land rent during the lease term, significantly reducing operational costs.
- Support for Technological Development – startups are eligible for financial assistance covering up to 50% of consultancy fees related to technology searches and evaluations, capped at VND100 million (~USD40,000) per contract. This support encourages technological advancements and R&D activities.
- Incubation and Co-working Space Support – receive support covering 100% of equipment usage costs (up to VND20 million or ~USD780 per year) and 50% of rental costs for incubator and co-working spaces (up to VND5 million or ~USD195 per month) for three years. This initiative helps reduce overhead expenses for new businesses.
- Access to National Innovation Center (NIC) – The NIC facilitates partnerships with international technology firms, providing startups with opportunities for collaboration, mentorship, and access to advanced technologies.
By understanding the nuances of Vietnamese regulations and the startup ecosystem, Emerhub provides tailored solutions to effectively implement these incentives into your startup’s business strategy through our company registration service.
How to Setup a Startup in Vietnam
Key steps for setting up your startup company in Vietnam
If your operations meet the eligibility criteria for setting up a startup in Vietnam, Emerhub can help you navigate the registration process for your new legal entity through our comprehensive company registration service. Our team will handle the following:
- Company Name and Memorandum of Association – To start the process, we can help Draft the Articles of Association based on your provided information. This process can be completed without your physical presence in Vietnam.
- Business Address Registration – We can facilitate registration of your company address in Vietnam, which can be a physical location or a virtual office provided with our service.
- Obtain necessary licenses and permits:
- Investment Registration Certificate (IRC) – required for foreign-owned startups which serves as the official approval from the Vietnamese government to engage in investment activities.
- Enterprise Registration Certificate (ERC) – After obtaining the IRC, submit an application to the Department of Finance for the ERC.
- Tax Identification Number (TIN) – your startup’s tax identification issued by the General Department of Taxation (GDT) for tax compliance.
- Open a Business Bank Account – Emerhub can also assist you in opening a corporate bank account for managing company finances.
How to hire foreign talent to work in your startup in Vietnam?
Vietnam is renowned for its young and tech-savvy workforce. However, depending on your industry, you may still want to sponsor foreign experts to help get your operations running. While Vietnam doesn’t offer a specific visa for startup entrepreneurs, there are several options based on the scope of the sponsored workers activities:
| Type of Work Visa | Duration | Allowed Activities | Not allowed activities |
| DN1 | Valid for up to 12 months | – Business meetings and negotiations – Trade activities (e.g., trade shows) – Providing consultations to Vietnamese businesses – Conducting market research – Business development activities | – Direct employment without a work permit – Activities outside the scope of business |
| DN2 | Valid for up to 12 months | – Providing services under international agreements – Establishing a commercial presence (e.g., branches, representative offices) – Economic or trade activities related to international treaties | – Direct employment without a work permit – Activities not specified in the visa purpose |
| DT Visa | Valid for up to 10 years (DT1), 5 years (DT2), 3 years (DT3), and 1 year (DT4) | – Investment activities in Vietnam – Establishing business entities or contributing capital – Engaging in sectors benefiting from investment incentives | – Non-investment-related work – Activities outside the scope of investment |
Emerhub can provide you with comprehensive support on your new startup venture in Vietnam by helping you manage your employee’s visa and work permit application process. We can also help gather all the necessary documents, coordinate with relevant authorities, and ensure compliance with immigration laws in Vietnam.
Ready for a brand new venture in Vietnam? Emerhub can kickstart your startup with our team of local experts in the country. Fill in the form below!
