Vietnam has risen as one of Southeast Asia’s most dynamic investment destinations. A young workforce, competitive operating costs, and strategic positioning along global supply chains make it an appealing launchpad for companies of all sizes. Starting a business, however, requires navigating a clear regulatory process and understanding which structures best match your goals. This guide walks you through the major decisions and steps involved in setting up a business in Vietnam.
WHY VIETNAM ATTRACTS INVESTORS
Foreign entrepreneurs and expanding companies continue to choose Vietnam due to several compelling advantages:
• Strong economic growth supported by manufacturing, tech, and services
• Trade agreements with major markets, including the EU and Asia-Pacific partners
• A rapidly urbanizing population with rising purchasing power
• Business-friendly reforms and improving administrative procedures
To take advantage of these trends, you must choose the right legal structure and follow required registrations.
COMMON MARKET ENTRY STRUCTURES
Foreign-owned companies in Vietnam typically operate under three major formats:
Wholly Foreign-Owned Enterprise (WFOE)
Known locally as a Foreign-Owned Enterprise (FOE), this entity provides complete foreign ownership and control. It can sign contracts, hire local staff, conduct commercial activities, and reinvest earnings. It is the most widely used model in services, trading, manufacturing, and tech.
Joint Venture (JV)
A JV pairs a foreign investor with a Vietnamese partner. It may be required in certain regulated sectors, such as logistics segments, education, or specialized services. JVs often provide local expertise, supplier relationships, and market access, though decision-making is shared.
Representative Office (RO)
An RO is a presence for market study, relationship development, and coordination. It cannot invoice customers, generate revenue, or engage in direct trade. It is ideal for companies exploring Vietnam before committing capital.
DEFINING YOUR BUSINESS LINES
Vietnamese companies must specify their intended activities based on standardized business line codes. These determine what operations are legally permitted and whether special licenses are required.
Common lines include:
• Consulting and advisory services
• Import-export and distribution
• Manufacturing and assembly
• Market research or sourcing support
Changes in activity later require an amendment filing with authorities.
CAPITAL REQUIREMENTS AND CONDITIONAL SECTORS
While many services no longer require a fixed minimum capital contribution, practical capitalization levels must reflect business needs. Certain conditional or regulated sectors impose higher thresholds or mandatory feasibility reviews.
Examples of conditional industries:
• Education and training
• Travel services
• Logistics and warehousing segments
• Food and beverage production
• Medical and healthcare operations
Sector-specific licenses and foreign investment approvals may apply in these areas.
CHOOSING WHERE TO REGISTER
Provincial authorities administer business licensing, taxation, and labor compliance. The choice of location often shapes cost structure and partner networks.
Popular investment hubs include:
• Ho Chi Minh City: financial center and commercial hub
• Hanoi: government, diplomacy, and corporate head offices
• Da Nang: IT outsourcing and central Vietnam operations
• Binh Duong, Long An, Dong Nai: manufacturing and industrial parks near ports and borders
Industrial parks offer ready-built facilities, simplified environmental assessment, and supply chain connectivity.
STEP-BY-STEP REGISTRATION PROCESS
While timelines vary by activity and province, foreign businesses usually follow these steps:
Investment Registration Certificate (IRC)
Foreign-owned enterprises typically apply for an IRC to confirm that the investment is permitted and complies with planning rules.
Enterprise Registration Certificate (ERC)
Once an IRC is granted, the investor applies for an ERC, which officially establishes the company and outlines ownership and business details.
Company Seal and Public Disclosure
New entities issue a company seal and publish their registration details in the national business register.
Banking Setup
Enterprises must open a capital account to receive investment funds and an operational account for ongoing transactions. Funds must be transferred within required timelines.
Tax and Invoicing Registration
Register with the tax authority to establish VAT and corporate tax status and apply for electronic invoicing rights (e-invoices are mandatory nationwide).
Post-Licensing Filings
Depending on activities, additional steps may include:
• Custom code registration for import/export
• Environmental impact evaluation for manufacturing
• Social insurance registration for staff hiring
• Work permits and visas for foreign managers
TIMELINE AND DOCUMENTATION NOTES
A straightforward foreign-owned services business typically requires 6–10 weeks for registration. Manufacturing or specialized services may require months due to land, environmental, or conditional approvals. Preparation of notarized and legalized documents from abroad often affects timing.
Proactive planning with experienced legal, accounting, or consulting firms can minimize rejections and delays.
UPFRONT COMPLIANCE REQUIREMENTS
Companies should expect:
• Bookkeeping under Vietnamese accounting standards
• Monthly or quarterly VAT filings
• Year-end audits for all foreign-owned entities
• Tracking and reporting of capital contributions
• Mandatory e-invoices for sales transactions
Failure to meet timelines may lead to penalties or restrictions on invoicing.
CONCLUSION: SUCCESS THROUGH PREPARATION
Vietnam offers immense opportunity for companies willing to understand the rules and plan ahead. Selecting the proper entity type, defining business activities carefully, and completing regulatory steps in order prevents delays and ensures smooth expansion. With the right groundwork, Vietnam can serve as a foundation for regional growth in ASEAN and beyond.
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