Establish a company in Vietnam

In this article, GTax sets out the different options businesses have for entering the Vietnamese market and an overview of entity types, requirements and processes as well as some key considerations that will help ensure the company is built to succeed.

Besides, we also have advice on procedures such as: if you want to be present in Vietnam without first establishing a legal entity, registering a business address, deciding on the head of the business, contributed capital , types of businesses allowed to be established in Vietnam.

Choose a company structure

Vietnam permits 100% foreign ownership of a business for most sectors. Yet before choosing which type of company to open in Vietnam, it is important to consider different aspects of the target entity types, such as differences in structure, legal liability, statutory compliance requirements, time required to establish it, what types of activities it can engage in, and more. These considerations help to identify the appropriate business constraints, costs, requirements and risks, necessary to enable the company’s future targeted capabilities, developments, and growth.

There are several types of foreign-invested enterprises in Vietnam, the 3 more common of which are: Representative office (RO); Branch Office(BO); 100% Foreign-Owned Enterprise(LLC).

Company set up process

An LLC, or 100% Foreign-Owned Enterprise, generally requires 3 to 4 months to establish in Vietnam. A Representative office can generally be set up in half that time.

For LLCs, while some sectors may require a ‘Pre-Investment Approval’, most skip to their service provider directly applying for the required Investment Registration Certificate (IRC), which requires 15 working days, unless the sector of intended operation is not governed by the WTO, in which case it may take longer.

With the IRC in hand, an organization may pursue the subsequent steps, including securing a physical business address, applying for an Enterprise Registration Certificate (sometimes referred to as a Business Registration Certificate).

There are 4 steps to starting a business in Vietnam as follows:

Step 1 : Preparation of required documents

When establishing a new company in Vietnam, you must prepare the following documents (*) and information:

  • ID card/Passport of capital contributing members;
  • Company name and form of company expecting to be established;
  • Lease agreement and head office address of company expecting to be established;
  • Business line for the company expecting to be established;
  • The legal representative of the company expecting to be established;
  • Contribution capital to the company, the type of contribution capital;
  • Capital contribution members, capital contribution ratio of members;
  • Proof of financial capacity;
  • Investor documents;

(*) Any foreign documents will need to be notarized, legalized by consular officials, and translated into Vietnamese by competent authorities.

     (From 15 working days)

Step 2 : Investment registration certificate application

The first step in the process of establishing a business in Vietnam is to apply for an Investment Registration Certificate (IRC). The resulting IRC allows foreign investors to start establishing their companies in Vietnam. This is mandatory for all foreign investment projects.

     (From 15 – 20 working days) Except for some special cases.

Step 3 : Enterprise registration certificate application

The Enterprise Registration Certificate (ERC) is required for all projects that want to establish a new legal entity in Vietnam. When obtained, the ERC will be accompanied by a number that will double the entity’s tax registration number.

     (From 4 working days)

Step 4 : Initial registration after incorporation

Once the IRC and ERC have been issued, additional steps have to be taken to complete the procedure and start business operations. This includes: 

  • Seal carving;
  • Appoint chief accountant;
  • Drafting decision of appointment of the general director/director;
  • Bank account opening;
  • Business license tax payment;
  • Labor registration;
  • Charter capital contribution; and
  • Public announcement of company establishment

Requirements for setting up a business

Minimum capital requirements

For most industries and businesses, Vietnam does not require minimum capital. However, the registered capital will be assessed by the Department of Planning and Investment (DPI) as whether it is enough to cover the business’s expenses until it generates enough revenue to cover expenses. 

Charter capital and total investment capital

Charter capital is the total value of capital and other assets that the company owner will contribute when establishing the company. The company’s total investment capital can combine both charter capital and loan capital. The charter capital and total investment capital, including shareholder loans or third-party financing, as well as the company charter must be registered with Vietnamese licensing authorities.

Capital contribution schedules

According to Vietnamese law, investors must contribute capital within 90 days from the date of issuance recorded on the Business Registration Certificate, unless otherwise approved by the licensing agency.

Transferring capital to the FIE

To transfer capital into Vietnam, after setting up the 100% Foreign-Owned Enterprise, foreign investors must open a capital bank account in a legally licensed bank. A capital bank account is a special purpose foreign currency account designed to enable tracking of the movement of capital flows in and out of the country. 

Registered address and resident director

Company registered address

A business requires a legal address in Vietnam in order to incorporate a company in the country. Most businesses require that it have its own physical location, such as an office or building leased or acquired. In addition, you can also use virtual office services, shared offices,… (Read more)

Company resident director

A company is required to have a Resident Director – and may have one or more. A qualifying resident director requires a residential address in Vietnam. The residency status of the resident director is preferable but should not be a qualifying requirement during the incorporation process; Their residency status may be addressed separately.

Business compliance requirements

Accounting and Tax Compliance

Maintaining the company’s accounting and tax compliance and reporting includes annual and quarterly filings relating to corporate income tax, as well as value-added tax, and personal income tax, according to Vietnam’s accounting standards. In many cases, there shall arise ad-hoc or periodic fillings relating to import and export tax and business license tax. Your business can also outsource tax & accounting services or chief accountant services.

Annual Audit Compliance

Annual Audit reports must be filed on time within Vietnam’s set annual finalization calendar by LLC and Representative offices alike, although the audit requirements for RO are easier. An independent Vietnamese auditing company must review your financial statements at the end of each fiscal year.

Employment Compliance

Employing people under your company, requires that you remain in compliance with Vietnam’s HR and employment laws, and following Vietnam’s national public holidays.

There are numerous requirements, such as limitations to the types and quantities of employees, ensuring that foreign employees receive and maintain the necessary work permits and visas, and registering and paying employees social insurance as a component of payroll.

Business License Tax and Special License Compliance

Annual business license tax payment, beginning in a company’s second business year. Compliance and renewals may also apply for required special business licenses.

Foreign Investment Report Compliance

Foreign investment reports are required to be submitted in quarterly, semi-annual and annual basis, including the Report on Investment Implementation (quarterly and annually), and the Report on Investment Supervision and Assessment (semi-annually and annually).


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