Are you planning to set up company in Vietnam but are unsure about the necessary procedures and documents? Understanding each step, from obtaining licenses and preparing legal documents to completing administrative procedures, can save you time, reduce risks, and ensure your business operates legally. This guide provides a detailed walkthrough of the steps to help you setup company successfully and efficiently.
Basic conditions for foreigners to set up company in Vietnam
Before establishing a company in Vietnam, foreign investors must meet certain legal requirements to ensure compliance with Vietnamese law and international agreements.
Requirements for the applicant
Foreigners are allowed to establish a company in Vietnam if they meet the following conditions:
- Possess full civil legal capacity
- Hold nationality(for individuals) or have the head office address (for organizations) in a country that is a member of the WTO
- The registered business sector must not fall under the prohibited investment sectors
Investment sectors
Unlike Vietnamese citizens and organizations who are free to conduct business in all goods and services not prohibited by law, foreign investors are only allowed to conduct business in goods and services committed under Vietnam’s WTO Schedule and in sectors/industries where Vietnam permits market access. However, such access remains restricted.
Vietnamese law clearly stipulates:
- 26 sectors/industries in which foreign investors are not allowed market access
- 59 sectors/industries in which foreign investors are allowed conditional market access
The conditions for market access for foreign investors, as provided in the List of sectors and industries with restricted market access, may include:
+ The percentage of charter capital ownership of foreign investors in economic organizations;
+ Forms of investment;
+ Scope of investment activities;
+ Capacity of the investor; partners participating in the investment activities.
Basic conditions for foreigners to set up a company in Vietnam
Market access conditions for foreign investors
To set up company in Vietnam, foreign investors must comply with international commitments, such as Agreement 318/WTO/CK, regarding allowed business activities and services.
If the business sector is on the restricted market access list, specific conditions must be met, including ownership ratio, investment form, and business scope.
Examples:
Packaging printing services:
- Foreign ownership cannot exceed 51%
- Investment form: joint venture with a domestic partner
Construction services:
- Foreign investors must be legal entities from WTO or ASEAN member countries
- Business scope includes high-rise building construction, civil engineering works, installation, finishing, and related construction activities
Example: A Japanese investor wants to register a foreign company in Vietnam to operate in the construction sector in Hanoi. In this case, the investor must establish a joint venture with a local partner, meet the statutory capital requirements for the construction industry, and allow 20–25 working days to complete the procedures for obtaining the IRC (Investment Registration Certificate) and ERC (Enterprise Registration Certificate).
Comparison: 100% Foreign-Owned Company vs. Joint Venture Company
| Criteria | 100% Foreign-Owned Company | Joint Venture Company |
| Capital Ratio | 100% owned by the foreign investor | Shared between the foreign investor and a Vietnamese partner |
| Decision-making Power | Full management and control by the foreign investor | Shared management based on ownership ratio and charter agreement |
| Business Sectors | Allowed only in sectors open under Vietnamese law | Easier access to conditional sectors via the local partner |
| Advantages | Full independence, no reliance on local partners | Easier to enter conditional sectors, leverage partner’s expertise |
| Limitations | Restricted in some sectors; more complex procedures | Profit-sharing; potential management conflicts |
What is setting up a company in Vietnam?
Steps to set up a company in Vietnam
Foreigners who want to set up company in Vietnam need to follow these main steps:
Step 1: Obtain an investment registration certificate
Before applying, investors must declare their project information online on the National Foreign Investment Information System.
Required documents
- Written application for the investment project
- Copy of the foreign investor’s passport
- Investment project proposal
- Bank confirmation of the corresponding investment capital
- Land use documents (if the project does not require land allocation or lease by the State)
- Explanation of the technology used (for projects subject to technology appraisal under the technology transfer law)
- Other documents related to the project and the investor’s capacity (if any)
Processing time
- Within 15 days from the submission date of the valid application, the investment authority issues the Investment Registration Certificate
- If rejected, the authority must notify in writing and explain the reason
Issuing authority
- Management Boards of industrial zones, export processing zones, hi-tech zones, and economic zones: for projects within these zones
- Department of Planning and Investment: for projects outside these zones, projects in multiple provinces, or projects in zones without a Management Board
Steps to setting up a company in Vietnam
Step 2: Obtain an enterprise registration certificate
To set up company in Vietnam, investors must complete the enterprise registration process with the Department of Planning and Investment.
Procedure
- Apply online through the National Information System on Enterprise Registration
- The department reviews and issues the Enterprise Registration Certificate
- After issuance, the company registers a corporate seal and completes post-establishment procedures
Basic documents required
- Enterprise registration application
- Company charter
- List of founding shareholders
- Copies of passports/IDs of individuals or equivalent documents with authorization letter (if an organization)
- Copy of the issued Investment Registration Certificate
- Power of attorney for legal consultants (if any)
Note: Processing time: About 3-5 working days from the submission of a complete and valid application
Important notes when setting up a company in Vietnam
When foreign investors establish a company in Vietnam, regardless of the type of company, they must comply with specific mandatory regulations to ensure that the company operates legally.
Capital transfer from a Vietnamese-owned company
- Joint-stock company: Individuals transferring shares must submit a personal income tax (PIT) declaration to the tax authority within 10 days after completing the transfer. The PIT payable is 0.1% of the total transfer value
- Limited Liability Company (LLC): Individuals transferring capital only need to submit a PIT declaration within 10 days after completing the transfer process
100% foreign-owned company
- For companies engaging in retail distribution, a license from the Ministry of Industry and Trade is required
- After establishment, the company must open a direct investment capital account to deposit the investor’s contributed capital
Important notes when set up a company in Vietnam
Finding a reliable and affordable translation service
When setting up a company in Vietnam, foreign investors must prepare and submit various documents, such as investment registration files, enterprise registration certificates, capital contribution agreements, company charters, and other relevant documents.
These documents must be translated into Vietnamese and officially certified to meet the requirements of Vietnamese authorities. Selecting a trustworthy and cost-effective translation service is crucial to ensure your documents are accurate, legally compliant, and submitted on time.
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For foreign investors wondering how to open a company in Vietnam, FAQTrans offers tailored language solutions to support every step of your business setup. From translating applications for set up company in Vietnam to legal contracts and compliance papers, our team guarantees precise and reliable translations.
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FAQ – Set up company in Vietnam
Below are some frequently asked questions from foreign investors about the company registration process in Vietnam:
What is the minimum capital required to set up a company in Vietnam?
Currently, Vietnamese law does not impose a universal minimum capital requirement for foreign-invested enterprises. However, the registered capital must be reasonable and aligned with the company’s scale and business activities. Certain sectors have statutory capital requirements (e.g., real estate: from VND 20 billion, banking, insurance, etc.).
How long does it take to establish a 100% foreign-owned company?
On average, it takes around 20 – 25 working days to complete the IRC (Investment Registration Certificate) and ERC (Enterprise Registration Certificate) for a wholly foreign-owned company.
Can a foreign-invested company open a retail store in Vietnam?
Yes. However, if the company engages in retail activities, in addition to the IRC and ERC, it must obtain a Business License (Retail License) from the Ministry of Industry and Trade.
What should investors do after setting up a company in Vietnam?
After company establishment, investors need to proceed with post-licensing tasks such as tax registration, seal registration, opening a bank account, and labor registration. Foreign employees must obtain a work permit unless exempted (e.g., experts entering Vietnam for less than 30 days).
To set up company in Vietnam, investors need careful preparation of documents and a clear understanding of legal procedures. By understanding each step in the process and preparing all required paperwork in advance, you can ensure full compliance with Vietnamese legal regulations.
