1. General rule: 100% foreign ownership is possible in many sectors

Vietnam generally allows foreign investors to establish and own companies in many sectors, including various service, consulting, technology, manufacturing, import-export and other business activities. A foreign investor may own 100% of the charter capital of the Vietnam company in many cases.

A foreign-owned company may be structured as a single-member limited liability company owned by one foreign investor, a multi-member limited liability company owned by two or more investors, a joint stock company with foreign shareholders, a subsidiary of a foreign parent company, or a joint venture between foreign and Vietnamese investors.

2. When may 100% foreign ownership be restricted?

100% foreign ownership may be restricted where the business sector is subject to foreign ownership limits, market access conditions or specialized licensing requirements. Restrictions may arise from:

• Vietnam’s WTO commitments;
• Free trade agreements;
• Investment law and guiding regulations;
• Specialized laws governing specific sectors;
• Licensing practice of competent authorities;
• National security, land, media, education, logistics, distribution, telecom, finance or other regulated sectors;
• Conditions applicable to specific business activities.

Some sectors may be fully open. Some may allow foreign investment only under conditions. Some may require a Vietnamese partner. Others may not be accessible to foreign investors. Before setting up a company, the investor should identify the exact business activities and check the applicable foreign ownership rules.

3. Market access conditions: the real issue for foreign investors

Market access conditions determine whether a foreign investor may enter a business sector and under what conditions. These conditions may include foreign ownership ratio, form of investment, scope of investment activities, investor qualifications, minimum capital, business experience, licensing requirements, location requirements, operational conditions and other sector-specific conditions.

If a business sector is not restricted, foreign investors generally receive market access similar to domestic investors. If the sector is conditional, the investor must satisfy the applicable conditions. This is why a legal feasibility review should be conducted before incorporation.

4. 100% foreign-owned company vs joint venture

5. Can foreigners own 100% of a trading company in Vietnam?

In some trading and distribution sectors, 100% foreign ownership may be possible, but the company may need additional licenses before conducting business. Foreign investors should check:

• Import rights;
• Export rights;
• Wholesale distribution rights;
• Retail distribution rights;
• Whether a Business License is required;
• Whether a Retail Outlet License is required;
• Product registration or labeling requirements;
• E-commerce notification or registration if selling online.

A foreign investor may establish a company, but the company may still need additional approvals before selling goods in Vietnam.

6. Can foreigners own 100% of a service company in Vietnam?

Many service businesses may be 100% foreign-owned, depending on the exact service. Examples may include certain consulting, management, technology, marketing support, software, business services and other service sectors. However, some services may be conditional or restricted, such as:

• Education and training;
• Logistics;
• Advertising;
• Employment services;
• Real estate services;
• Travel services;
• Financial services;
• Healthcare-related services;
• Telecommunications and platform-based services.

Foreign investors should avoid using broad descriptions such as “consulting services” without identifying the actual service scope.

7. Can foreigners own 100% of a manufacturing company in Vietnam?

Manufacturing projects are often open to foreign investors, and 100% foreign ownership may be possible in many cases. However, the investor should check project location, industrial zone or factory lease, environmental conditions, fire prevention and safety requirements, construction or renovation approvals, import of machinery, labor plan, product standards, investment incentives and land and infrastructure issues.

For manufacturing projects, the key issues are often location, land/factory documents, environment, construction, incentives and project scale.

8. Can a foreigner own 100% of a Vietnamese company through share acquisition?

Foreign investors may acquire shares or capital contribution in an existing Vietnamese company. After the transaction, the company may become partially or wholly foreign-owned. However, the investor must check:

• Whether foreign ownership is allowed in the target sector;
• Whether foreign ownership approval is required;
• Whether the target company has conditional business lines;
• Whether existing licenses remain valid after foreign ownership changes;
• Whether the transaction must be registered with authorities;
• Whether tax obligations arise from the share transfer;
• Whether foreign exchange rules apply;
• Whether legal due diligence reveals hidden liabilities.

Acquiring an existing company may be faster than incorporating a new company, but it carries due diligence risks.

9. Nominee structures: why foreign investors should be careful

Some foreign investors consider using a Vietnamese individual or company to hold shares on their behalf, especially where they believe 100% foreign ownership is difficult. This nominee structure may create serious legal and commercial risks, including:

• Loss of control over the company;
• Difficulty proving beneficial ownership;
• Disputes with nominee shareholders;
• Tax and accounting risks;
• Licensing risks;
• Banking and foreign exchange issues;
• Problems during future investment or sale;
• Difficulty enforcing side agreements.

10. What should foreign investors check before deciding ownership structure?

Before deciding whether to set up a 100% foreign-owned company or joint venture, investors should check business sector, market access conditions, foreign ownership limits, licensing requirements, minimum capital if any, business lines, import/export or distribution rights, retail or e-commerce requirements, product-specific regulations, location requirements, work permit and visa needs, foreign exchange and capital contribution rules, tax and accounting implications, and future fundraising or exit plan.

Ownership structure should be designed based on the business model, not only legal form.

11. How First Counsel Law Firm can assist

First Counsel Law Firm supports foreign investors with market entry, ownership structure and company setup in Vietnam.

12. Frequently Asked Questions