Company Setup in Vietnam: Step-by-Step Process and Requirements

Establishing a company in Vietnam can be a promising venture for foreign business owners and investors. With its rapidly growing economy and investor-friendly policies, Vietnam offers an ideal environment for business expansion. This guide covers the Vietnam company registration process and requirements, helping investors understand how to register a company and navigate the business registration procedures efficiently.

Setting up a business in Vietnam involves several critical steps, from securing necessary permits to ensuring compliance with local regulations. Understanding the specific requirements for company registration in Vietnam is essential for foreign investors aiming to establish a strong market presence. This guide provides a comprehensive overview of the company registration and formation process, addressing the key stages involved, such as acquiring an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC).

Detailed Step-by-Step Process

Pre-Investment Approval

Certain industries require foreign investors to obtain pre-approval before initiating business setup. This is crucial for sectors like finance, real estate, and telecommunication, where additional scrutiny is involved. Investors should verify whether their business falls into such categories to ensure they meet the required preconditions.

Investment Registration Certificate (IRC)

Foreign investors need an IRC to officially invest in Vietnam. The IRC acts as an authorization for capital contribution and project implementation. The application process involves submitting necessary documents like:

Certificate of Incorporation.
Financial Proof (Bank statements or letters).
Proposed Business Plan.
Land or Lease Agreements.

The standard processing time for an IRC is approximately 15 working days, depending on the complexity of the investment.
Learn how to apply for IRC here.

Enterprise Registration Certificate (ERC)

Once the IRC is secured, investors must apply for an ERC, which is the company's official business registration certificate. It signifies the establishment of the business as a legal entity in Vietnam. Required documentation includes:

Company Charter.
Application Form.
List of Members and Legal Representatives.

The ERC is typically processed within three working days.
Learn how to apply for ERC here.

Post-Licensing Requirements

After acquiring both the IRC and ERC, several other steps must be completed:

Public Announcement: The company establishment must be publicly announced to confirm its legal status.
Seal Registration: Register the company seal and notify authorities.
Bank Account Opening: Set up a corporate bank account for capital and business transactions.
Tax Registration: Purchase a digital token and register with the tax department.
Labor Registration: Register employees with the Department of Labor, Invalids, and Social Affairs.

Key Considerations

Minimum Capital Requirements

Vietnam does not have a uniform minimum capital requirement for all industries. However, adequate capital should be allocated to cover the initial costs. Sectors such as finance, insurance, and real estate may have higher capital requirements, which must be met before registration.

When establishing a Foreign-Invested Enterprise, there may be implicit capital requirements based on the scope, size, and nature of the business. The authorities will evaluate the proposed capital to ensure it aligns with the intended project.

Some industries require the investor to obtain special licenses or approvals, which may involve additional capital requirements.

Industries That Require Minimum Capital in Vietnam

Certain industries in Vietnam have set minimum capital requirements. Below is a list of some of the main industries with specified minimum capital:

No.	Sector	Business Activity	Capital Requirement / Deposit (VND)	Capital Requirement / Deposit (USD)	Regulation Reference
2	Commerce	Multi-level marketing business	10 billion VND	$408,163.27	Article 7, Decree 40/2018/N?-CP
3	Commerce	Commodity Exchange	150 billion VND	$6,122,448.98	Article 1, Decree 51/2018/N?-CP
4	Commerce	Commodity Exchange Member (Broker)	5 billion VND	$204,081.63	Article 1, Decree 51/2018/N?-CP
	Commerce	Commodity Exchange Member (Trading)	75 billion VND	$3,061,224.49	Article 1, Decree 51/2018/N?-CP
5	Commerce	Temporary import and re-export of used goods	Deposit of 7 billion VND	$285,714.29	Article 25, Decree 69/2018/N?-CP
6	Commerce	Temporary import and re-export of goods subject to special consumption tax	Deposit of 7 billion VND	$285,714.29	Article 24, Decree 69/2018/N?-CP
7	Commerce	Temporary import and re-export of frozen food products	Deposit of 10 billion VND	$408,163.27	Article 23, Decree 69/2018/N?-CP
8	Education	Establishment of private university	Minimum investment of 1,000 billion VND	$40,816,326.53	Article 87, Decree 46/2017/N?-CP
9	Education	Establishment of a private university branch	Minimum investment of 250 billion VND	$10,204,081.63	Article 91, Decree 46/2017/N?-CP
10	Education	Establishment of private pedagogical college	Minimum investment of 100 billion VND	$4,081,632.65	Article 78, Decree 46/2017/N?-CP
11	Education	Establishment of private vocational school	Minimum investment of 50 billion VND	$2,040,816.33	Article 78, Decree 46/2017/N?-CP
12	Education	Establishment of foreign-invested education institution	Investment of 30 million VND/child (preschool)	$1,224.49 per child	Article 35, Decree 86/2018/N?-CP
13	Education	Establishment of branch of a foreign-invested university	Minimum investment of 250 billion VND	$10,204,081.63	Article 35, Decree 86/2018/N?-CP
14	Transport	Air transport services (international, up to 10 aircraft)	700 billion VND	$28,571,428.57	Article 8, Decree 92/2016/N?-CP
15	Transport	Airport business (international)	200 billion VND	$8,163,265.31	Article 14, Decree 92/2016/N?-CP
16	Transport	Aviation services at airports	30 billion VND	$1,224,489.80	Article 17, Decree 92/2016/N?-CP
17	Transport	General aviation business	100 billion VND	$4,081,632.65	Article 8, Decree 92/2016/N?-CP
18	Transport	Import of used ships for dismantling	50 billion VND	$2,040,816.33	Article 2, Circular 37/2015/TT-BGTVT
19	Transport	International maritime transport business	5 billion VND	$204,081.63	Article 3, Decree 147/2018/N?-CP
20	Labor, War Invalids, and Social Affairs	Labor lease service business	2 billion VND	$81,632.65	Article 6, Decree 55/2013/N?-CP
21	Labor, War Invalids, and Social Affairs	Employment service business	Deposit of 300 million VND	$12,244.90	Article 7, Decree 52/2014/N?-CP
22	Education	Establishment of vocational education centers	5 billion VND	$204,081.63	Article 3, Decree 143/2016/N?-CP
23	Education	Establishment of vocational high schools	50 billion VND	$2,040,816.33	Article 3, Decree 143/2016/N?-CP

Real Estate Trading
- Minimum Capital: 20 billion VND (~850,000 USD).
- Applies to businesses involved in property leasing, buying and selling of property, or acting as intermediaries in real estate transactions.
Financial Services(Banks, Securities, and Insurance)
- Minimum Capital for Commercial Banks: 3,000 billion VND (~128 million USD).
- Minimum Capital for Securities Companies: 25 billion VND (~1.06 million USD) for advisory services; up to 100 billion VND (~4.25 million USD) for dealing and brokerage activities.
- Minimum Capital for Insurance Companies: 300 billion VND (~12.8 million USD) for life insurance; varies based on product offerings.
Logistics Services
- Minimum Capital: Depending on specific services, such as shipping agency, container loading/unloading, etc. Typically ranges between 5 to 10 billion VND (212,000 to 425,000 USD).
Education and Training
- Minimum Capital: 20 million VND (~850 USD) per student, based on projected number of students for private and foreign-invested educational institutions.
Retail and Distribution
- Minimum Capital: Not strictly defined, but foreign investors must go through an Economic Needs Test (ENT) if planning to open more than one retail outlet.
Telecommunications Services
- Minimum Capital: Varies depending on service type and coverage area. 20 billion VND (~850,000 USD) for basic telecom services.
Shipping and Aviation
- Minimum Capital for Domestic Air Carriers: 300 billion VND (~12.8 million USD) for carriers with up to 10 aircraft; higher amounts for larger fleets.

Setting Aside Capital

Registered Capital: The amount of capital declared in the business registration certificate. It represents the total investment required for the business to operate and can be used to finance the company’s activities.
Contributed Capital: The actual amount transferred into the business’s bank account in Vietnam. This must be fully contributed within a specific period (usually 90 days) after receiving the Investment Registration Certificate (IRC).

Choosing a Business Address and Legal Representative

All businesses must have a registered local address in Vietnam. Additionally, a legal representative must reside in Vietnam and be responsible for the company’s operations. Foreign nationals can act as legal representatives but will need to secure the necessary work permits.

1. Business Address Requirements

A valid business address is mandatory for establishing a company in Vietnam. This address serves as the company’s registered location and must comply with specific regulations:

Registered Office Location: The business address must be a physical location within Vietnam. It can be:
- A commercial office building,
- A business center,
- A rented office space, or
- The investor’s own property.
Restrictions:
- Virtual offices or PO boxes are not accepted as registered business addresses.
- Certain residential buildings may have restrictions on being used as business addresses depending on local regulations.
Required Documents: A lease agreement or property ownership certificate is required to prove the use of the address. This document must be submitted along with the business registration application.
Location Zoning Requirements: Depending on the type of business, there may be specific location requirements or zoning restrictions. For example:
- Manufacturing businesses must be located in industrial zones.
- Real estate and consulting firms may operate from commercial buildings.

2. Legal and Local Representative Requirements

Vietnamese law requires each company to appoint a legal representative who holds primary responsibility for the company’s operations and legal matters. This role has specific regulations:

Legal Representative:
- The legal representative is the person authorized to sign documents and make decisions on behalf of the company.
- They can be the owner, a shareholder, or an employee of the company.
- The company can have one or more legal representatives. If there are multiple, it is advisable to clearly define each representative’s responsibilities.
Residency Requirements::
- At least one legal representative must reside in Vietnam. If there is only one legal representative, this person must either be a Vietnamese resident or a foreigner with a temporary or permanent residence permit.
- If the company has more than one legal representative, one can reside outside Vietnam, but a local representative must be present to handle business and legal issues during their absence.
Responsibilities and Powers:
- The legal representative is accountable for the company’s compliance with Vietnamese laws, including tax obligations, labor laws, and business operations.
- They are also the primary contact for government authorities and are responsible for signing contracts, managing assets, and making other legal decisions on behalf of the company.
Changing the Legal Representative::
- Changes to the legal representative must be reported to the Department of Planning and Investment (DPI) and updated in the company’s business registration certificate.
- This process requires a shareholder resolution or approval from the board, and it must be completed within a certain period (typically 10 days).

3. Appointing a Local Representative

If the foreign investor or legal representative does not reside in Vietnam, appointing a local representative is often necessary. This person will:

Serve as a point of contact for government authorities and tax officials.
Ensure the company’s daily operations remain compliant with Vietnamese regulations.
Handle specific administrative functions that require physical presence or local knowledge.

Additional Points to Consider

Power of Attorney: It’s common to provide a power of attorney to the local representative to enable them to sign certain documents on behalf of the company. The scope of this power should be clearly defined.
Qualifications: The legal representative should have a clear understanding of Vietnamese laws and regulations, especially for sectors with complex regulatory requirements.

Corporate compliance regulations

Corporate compliance regulations refer to the legal requirements and standards that companies must adhere to in order to operate lawfully and ethically within a country. These regulations include financial reporting, tax filings, labor laws, and other statutory obligations to ensure transparency and accountability. Here is the list of compliance requirements for corporations in Vietnam:

Compliance Requirement	Description	Frequency
Annual Financial Statements	Prepare and submit audited financial statements to the Department of Planning and Investment (DPI).	Annually
Corporate Income Tax (CIT)	Submit annual CIT declaration and payment; provisional CIT returns quarterly.	Quarterly & Annually
Value Added Tax (VAT)	Submit VAT declaration and payment based on revenue generated.	Monthly or Quarterly
Personal Income Tax (PIT)	Declare and pay PIT for employees based on salary and benefits.	Monthly or Quarterly
Foreign Contractor Tax (FCT)	Applies to payments to overseas contractors for services provided to a Vietnam-based entity.	Per Transaction
Business License Tax	Annual payment required based on registered capital.	Annually
Social Insurance Contributions	Employers must contribute to social, health, and unemployment insurance funds for their employees.	Monthly
Labour Reporting	Submit labor reports to the Department of Labor, Invalids, and Social Affairs (DOLISA).	Biannually
Annual General Meeting (AGM)	Conduct AGM to review financial performance, elect board members, and approve strategic decisions.	Annually
Foreign Investment Reporting	Foreign-invested enterprises (FIEs) must report investment activities to the DPI.	Quarterly & Annually
Changes in Business Registration	Report any changes to company name, address, charter capital, or business activities to the DPI.	Within 10 days of change

What are the ongoing compliance requirements for foreign-owned businesses?

Foreign-owned businesses in Vietnam need to regularly file documents and reports to the authorities. This includes paying taxes (corporate income tax, VAT, etc.), submitting financial statements, reporting employee information, and keeping business licenses updated. Think of it as keeping your business paperwork in order and submitting it on time to avoid penalties.

What are the restrictions on foreign currency use and repatriation of profits?

Foreign businesses in Vietnam can only use Vietnamese Dong (VND) for most local transactions. If you want to send profits back to your home country, you need to do it through an official bank channel, and only after your company has paid all local taxes and complied with regulations. It’s like making sure all bills are paid before transferring money out of your account.

How to navigate changes in investment registration and licensing post-establishment?

After your business is set up, any major changes—like adding a new business activity or changing your office location—must be officially updated in your registration documents. This process involves submitting new paperwork and getting approval from the government. Think of it like updating your business profile whenever there’s a significant change.

What incentives are available for certain industries or regions?

Vietnam offers benefits like tax breaks and reduced fees for businesses in certain industries (like tech or education) or regions (like remote or underdeveloped areas). It’s a way to attract businesses to areas that need development or encourage certain types of industries to grow.

How do the rules differ for setting up in industrial zones versus standard business districts?

Industrial zones have different rules and benefits, such as easier access to land, lower taxes, or ready-built facilities for manufacturing. Standard business districts are more suited for service-oriented companies like consulting or retail. Choosing the right location depends on what your business does—manufacturers prefer industrial zones, while service firms might opt for a central business district for accessibility.