How to Set Up a Foreign-Owned Company in Vietnam
Vietnam continues to be one of the most attractive destinations in Southeast Asia for foreign investors, entrepreneurs and international companies. However, setting up a foreign-owned company in Vietnam is not merely an administrative company registration process. Foreign investors need to consider market access conditions, foreign ownership limits, investment registration, enterprise registration, business lines, capital contribution, licensing, tax and ongoing compliance.
1. What is a foreign-owned company in Vietnam?
A foreign-owned company in Vietnam generally refers to a company established or invested in by one or more foreign investors. A foreign investor may be a foreign individual, a foreign company or organization, a foreign investment fund, or a foreign parent company setting up a subsidiary in Vietnam.
A foreign-owned company may be structured as a 100% foreign-owned company, a joint venture between foreign and Vietnamese investors, a Vietnamese company receiving foreign investment through capital contribution or share purchase, or a project company established to implement an investment project in Vietnam.
In practice, most foreign investors choose either a limited liability company or a joint stock company, depending on ownership structure, investment plan, fundraising strategy and corporate governance needs.
2. Main ways for foreign investors to enter Vietnam
Foreign investors can enter Vietnam through different legal structures. The right option depends on the business model, sector, ownership plan and licensing requirements.
3. Common legal forms for a foreign-owned company in Vietnam
Single-member limited liability company
Owned by one investor — a foreign individual or a foreign company. This form is suitable for a wholly-owned subsidiary where the investor wants full control.
Multi-member limited liability company
Has from two to fifty members. Members are liable for the company’s obligations within the amount of their contributed capital. This form is suitable for joint ventures or small groups of investors.
Joint stock company
Has at least three shareholders and may issue shares. This structure is often preferred where the company may raise capital from multiple investors or prepare for future share transfers, investment rounds or corporate restructuring.
Which structure should foreign investors choose?
There is no universal answer. The choice depends on the number of investors, whether future fundraising is expected, governance structure, transfer flexibility, regulatory requirements, tax considerations and long-term exit strategy. Before choosing the legal form, foreign investors should first define the business model and investment plan.
4. Step-by-step guide to setting up a foreign-owned company in Vietnam
Define the business model
Before preparing any application, clearly define the intended business activities. Key questions include what products or services the company will provide, whether the company will import or export, whether licenses will be required, and whether the company will collect personal data. A common mistake is registering broad or generic business lines without checking whether those lines are open to foreign investors or require additional licenses.
Check market access conditions for foreign investors
Foreign investors should check whether their proposed business sector is open to foreign investment and whether any conditions apply — including foreign ownership limits, requirement to have a Vietnamese partner, minimum capital, professional conditions, licensing conditions, restrictions under specialized laws, or conditions under Vietnam’s WTO commitments or free trade agreements.
Choose the investment structure
After confirming the business model and market access conditions, choose the investment structure — 100% foreign-owned company, joint venture, acquisition or other structure. The investment structure should also consider control, capital contribution, banking and foreign exchange rules, licensing timeline, tax compliance, employment needs and future exit.
Prepare investor documents
For individual investors: passport, proof of residential address, bank balance confirmation and power of attorney. For corporate investors: certificate of incorporation, company charter, financial statements, corporate approval for Vietnam investment and appointment of authorized representative. Foreign corporate documents usually need to be legalized and translated into Vietnamese — this step may take time and should be planned early.
Select a suitable company address or project location
A foreign-owned company must have a registered address in Vietnam. Investors should check whether the address can be used for company registration, whether the building permits the intended business activity, whether the landlord can provide valid leasing documents, and whether any licensing conditions apply to the location. Foreign investors should avoid signing a long-term lease before checking legal suitability.
Apply for the Investment Registration Certificate (IRC)
In many cases, a foreign investor establishing a new company in Vietnam will need to apply for an Investment Registration Certificate (IRC). The IRC records key information about the investment project, including investor information, project name, location, objectives, investment capital, project duration and implementation schedule. The licensing authority may review whether the project is consistent with market access conditions, planning, location, capital and sector-specific requirements.
Apply for the Enterprise Registration Certificate (ERC)
After the investment registration stage, the investor applies for an Enterprise Registration Certificate (ERC). The ERC establishes the legal entity in Vietnam and records key corporate information including company name, enterprise code, head office address, charter capital, legal representative, type of enterprise, and owner or members. After the ERC is issued, the company legally exists as a Vietnamese enterprise.
Prepare company charter and internal corporate documents
Key documents may include the company charter, members’ council or shareholders’ meeting documents, appointment of legal representative and general director, internal approval matrix, capital contribution records, register of members or shareholders, and internal governance rules. For a joint venture, the parties should also consider a shareholders’ agreement covering capital contribution, voting rights, reserved matters, management appointment, profit distribution, transfer restrictions, deadlock resolution and exit rights.
Contribute charter capital
Foreign investors must contribute capital in accordance with the registered charter capital and applicable timeline. Capital contribution is connected to banking, accounting, tax and foreign exchange compliance. Capital should be transferred through the correct bank account, made within the required deadline, and properly documented. Improper capital contribution may create issues when the company later adjusts capital, transfers shares, remits profits or applies for loans.
Open bank accounts and manage foreign exchange compliance
Foreign-owned companies in Vietnam are subject to foreign exchange rules. Depending on the investment structure, the company may need to open a direct investment capital account. Foreign investors should carefully manage capital contribution, share transfer payments, foreign loans, cross-border service payments, profit remittance and supporting documentation. A common mistake is transferring investment money into the wrong account or using informal payment routes before the company is properly established.
Complete tax and accounting setup
After incorporation, the company must complete tax and accounting setup including tax registration, e-invoice registration, accounting system, value added tax, corporate income tax, personal income tax for employees, and foreign contractor tax for payments to foreign service providers. Foreign-owned companies should set up accounting and tax compliance properly from the beginning — poor early setup creates problems during tax inspection, profit remittance or due diligence.
Apply for additional business licenses if required
An ERC does not always mean that the company can immediately conduct all business activities. Depending on the sector, a foreign-owned company may need additional licenses such as a Business License for trading and distribution, retail outlet license, e-commerce website notification, education licenses, food safety certificates, product registration, cosmetics notification, advertising compliance or work permits for foreign employees. Foreign investors should identify these licenses before incorporation.
Prepare employment and immigration documents
If the company plans to hire employees, it should prepare proper labor documents including labor contracts, internal labor regulations, confidentiality agreements and personal data notices for employees. If the company will employ foreign managers, specialists or technical workers, work permit and visa issues should be planned early. Foreign employees may need a work permit or work permit exemption certificate, proper entry visa and temporary residence card.
Prepare commercial contracts and operational documents
A newly established foreign-owned company should not begin operations using only informal documents or overseas templates. Depending on the business model, the company may need customer contracts, service agreements, distribution agreements, supplier contracts, non-disclosure agreements, website terms of use, privacy policy, data processing agreements and employment contracts. Contracts used in Vietnam should be adapted to local law, tax, invoicing, payment, language, dispute resolution and enforcement considerations.
5. Common mistakes foreign investors make when setting up a company in Vietnam
6. Estimated timeline for setting up a foreign-owned company in Vietnam
The timeline depends on the business sector, investor documents, licensing authority, project location and whether additional approvals are required.
| Stage | Estimated Duration | Notes |
|---|---|---|
| Document preparation | 1–4 weeks | Legalization and translation of foreign corporate documents adds time |
| IRC application | Several weeks | Subject to project type, sector and authority review |
| ERC application | Typically faster | Once investment registration is completed |
| Post-incorporation setup | Additional time | Tax, banking, accounting, internal documents |
| Additional business licenses | Varies by sector | May significantly extend the overall timeline |
For conditional sectors or projects requiring in-principle approval, the timeline may be longer. Foreign investors should prepare a realistic timeline and avoid making commercial commitments before licensing feasibility is confirmed.
7. Documents foreign investors should prepare
Individual investors
- Passport
- Bank balance confirmation or financial capacity document
- Residential address information
- Proposed company information
- Power of attorney
- Other supporting documents depending on the project
Corporate investors
- Certificate of incorporation
- Company charter or equivalent document
- Financial statements or bank confirmation
- Corporate approval for Vietnam investment
- Appointment of authorized representative
- Passport of authorized representative
- Power of attorney
- Legalized and translated documents
For the Vietnam company
- Proposed company name
- Registered office address and lease documents
- Business lines
- Investment capital and charter capital
- Information of legal representative
- Project description and implementation schedule
- Labor plan if required
- Other sector-specific documents
8. Post-incorporation compliance checklist
After the company is established, foreign investors should complete a post-incorporation compliance review.
- Open required bank accounts
- Contribute charter capital on time
- Register tax and e-invoices
- Set up accounting records
- Prepare company charter and internal registers
- Issue internal appointment decisions
- Prepare labor contracts
- Review work permit needs
- Review business license requirements
- Prepare commercial contract templates
- Prepare privacy policy and data protection documents
- Check foreign exchange compliance
- Maintain legal and accounting records
- Create a compliance calendar
9. Frequently Asked Questions
Can a foreigner own 100% of a company in Vietnam?
Yes, in many sectors, foreign investors may own 100% of a company in Vietnam. However, some sectors have foreign ownership limits, market access conditions or licensing requirements. The specific business sector should be reviewed before incorporation.
What is the difference between an IRC and an ERC in Vietnam?
The Investment Registration Certificate (IRC) records the investment project — investor information, project objectives, capital, duration and implementation schedule. The Enterprise Registration Certificate (ERC) establishes the Vietnamese company as a legal entity — recording company name, enterprise code, head office address, charter capital and legal representative. In many foreign investment projects, both documents are required.
How much capital is required to set up a foreign-owned company in Vietnam?
There is no single minimum capital amount for all sectors. The appropriate capital depends on the business model, project scale, operating costs, licensing requirements and financial capacity of the investor. Some conditional sectors may require minimum legal capital.
Can a foreign-owned company trade and distribute goods in Vietnam?
Yes, but trading and distribution activities may require additional licenses depending on the scope of activities, goods and retail model. Foreign investors should check licensing requirements before incorporation.
Can a foreign director work in Vietnam after the company is established?
Not automatically. A foreign director, manager, specialist or technical worker may need a work permit or work permit exemption, as well as a proper visa or temporary residence card. Immigration compliance should be planned early — owning or managing a Vietnam company does not automatically allow a foreign individual to work in Vietnam without immigration compliance.
Can a foreign investor use a virtual office in Vietnam?
It depends on the business activity and licensing authority practice. Some businesses may use a serviced office, but certain sectors require a physical location, warehouse, retail outlet, training facility or specialized premises. The proposed address should be reviewed before filing.
How long does it take to set up a foreign-owned company in Vietnam?
The timeline depends on the sector, investor documents, location, licensing authority and whether additional approvals are required. Document preparation may take 1–4 weeks; IRC application may take several weeks; ERC application is typically faster. Additional business licenses may significantly extend the overall timeline.
What happens after the company receives its ERC?
After receiving the ERC, the company should complete tax setup, open bank accounts, contribute capital, prepare internal records, register e-invoices, prepare labor documents and apply for additional business licenses if required. Incorporation is only the beginning of the compliance journey.
10. How First Counsel Law Firm can assist
First Counsel Law Firm supports foreign investors, foreign companies, founders and international businesses setting up and operating companies in Vietnam. We provide practical, clear and business-oriented legal advice to help foreign investors enter Vietnam with the right structure and operate with confidence.
- Legal assessment of market entry options
- Advice on foreign ownership and investment conditions
- Incorporation of foreign-owned companies
- IRC and ERC application support
- Business license advice
- Retail and distribution licensing
- Review of office lease and business location
- Drafting company charter and internal corporate documents
- Commercial contract drafting and review
- Employment and work permit advice
- Personal data protection compliance
- Post-incorporation compliance review
- Legal retainer services for foreign-invested companies
Planning to set up a foreign-owned company in Vietnam?
Before choosing a structure or filing incorporation documents, foreign investors should first check market access conditions, licensing requirements, capital contribution rules and post-incorporation obligations.
Legal advice should begin before documents are filed — not after problems arise. Contact First Counsel Law Firm to speak with a Vietnam lawyer about your business model and investment plan.
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