Vietnam Company Setup Guide: 8 Key Points Guide for Foreign Investors

Vietnam has become one of the most attractive destinations for foreign investment in Southeast Asia, thanks to its sustained economic growth, competitive labor costs, strategic location, and business-friendly policies. Investors looking to enter the Vietnamese market can benefit from a well-structured regulatory framework, tax incentives, and an expanding consumer base. However, navigating the complexities of business incorporation requires a deep understanding of the legal, financial, and operational aspects of setting up a company in Vietnam.

This Vietnam company setup guide serves as a complete roadmap for foreign investors, covering business structures, ownership rules, capital requirements, taxation, labor compliance, work permits, and common challenges. Whether you’re a startup founder, a multinational corporation expanding in Vietnam, or an entrepreneur looking to explore opportunities, this guide will help you establish your company with confidence.

Why Invest in Vietnam?

Vietnam’s rapid economic transformation has positioned it as a leading investment hub in Asia. Key reasons why businesses choose to set up in Vietnam include:

1. Strong Economic Growth

Vietnam’s GDP growth rate has consistently outperformed regional averages, averaging between 6% and 7% annually in recent years. The country benefits from a stable political climate, low inflation, and increasing foreign direct investment (FDI).

2. Strategic Location

Vietnam’s proximity to major markets such as China, Japan, South Korea, and ASEAN nations makes it an ideal manufacturing and logistics hub. The country also has multiple deep-sea ports, international airports, and an improving transportation infrastructure.

3. Competitive Labor Market

Vietnam offers a young, skilled, and cost-effective workforce. With rising education standards and a strong technical talent pool, Vietnam is particularly attractive for manufacturing, IT, and service industries.

4. Free Trade Agreements (FTAs)

Vietnam is part of multiple trade agreements, including:

• CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership)
• EVFTA (EU-Vietnam Free Trade Agreement)
• ASEAN Free Trade Agreements

These agreements allow businesses in Vietnam to enjoy preferential tariffs, enhanced market access, and investment protections.

Choosing the Right Business Structure

Selecting the appropriate legal entity is the first step in your Vietnam company setup guide. Investors can choose from various company structures based on their business goals.

1. Limited Liability Company (LLC)

A Limited Liability Company (LLC) is the most common business structure for foreign investors due to its simplicity and flexibility. It comes in two forms:

• Single-member LLC (owned by one individual or entity).
• Multi-member LLC (can have 2 to 50 members).

Key Benefits:

• Easy to set up and manage.
• Limited liability protection for owners.
• No requirement to issue shares.

2. Joint-Stock Company (JSC)

A Joint-Stock Company (JSC) is ideal for businesses planning to raise capital through public or private investment.

Key Features:

• Requires a minimum of three shareholders.
• Can issue shares to attract investment.
• Suitable for larger businesses, particularly in finance, manufacturing, and banking.

Foreign Ownership & Industry Restrictions

Vietnam maintains an open investment policy, but some industries have foreign ownership restrictions:

100% Foreign Ownership Allowed:

• Manufacturing
• IT and software
• Trading and consulting
• Export-import businesses

Requires a Local Partner:

• Logistics
• Advertising
• Tourism
• Education

 Restricted/Prohibited Sectors:

• National defense and military-related activities
• Media and press
• Certain real estate projects

Foreign investors should review Vietnam’s WTO commitments and local regulations to determine ownership restrictions before proceeding with company registration.

Capital Requirements

Unlike some countries, Vietnam does not impose a universal minimum capital requirement for all businesses. However, the capital requirements vary by industry:

• General business activities: No fixed minimum, but must show sufficient capital to sustain operations.
• Real estate, finance, and education sectors: Require proof of minimum capital.
• Manufacturing companies: Must allocate enough capital to cover equipment, factory setup, and operational expenses.

It is advisable to commit an appropriate capital amount to demonstrate financial stability to regulators.

Step-by-Step Company Registration Process

Phase 1: Investment & Business Registration

1. Choose a business structure and select a company name.
2. Prepare necessary documents, including:

• Business plan
• Investment registration application
• Company charter
• Shareholder details

3. Apply for an Investment Registration Certificate (IRC) – mandatory for foreign-owned companies.
4. Obtain a Business Registration Certificate (RC) – issued by the Department of Planning and Investment.

Phase 2: Post-Registration Compliance

5. Register for taxation and obtain a corporate tax code.
6. Open a corporate bank account and deposit capital.
7. Apply for additional business licenses & sector-specific permits (if required).
8. Hire employees and register for social insurance.

Taxation & Financial Compliance

Corporate Taxation

• Corporate Income Tax (CIT): Standard rate of 20%.
• Value-Added Tax (VAT): Typically 10%, with some goods/services taxed at 5% or 0%.
• Personal Income Tax (PIT): Progressive rate up to 35%.

Financial Reporting Obligations

• Foreign-invested companies must submit annual financial statements.
• Companies must comply with Vietnamese Accounting Standards (VAS).
• Audits are mandatory for certain entities.

Work Permits & Investment Visas

Foreign investors and employees must obtain work permits and visas to operate legally in Vietnam.

Investment Visas (DT Visas)

• DT1 Visa (5 years) – For investments over VND 100 billion.
• DT2 Visa (5 years) – For investments between VND 50-100 billion.
• DT3 Visa (3 years) – For investments between VND 3-50 billion.
• DT4 Visa (12 months) – For investments under VND 3 billion.

Temporary Residence Card (TRC)

• Available for DT1, DT2, and DT3 visa holders.
• Valid for 1 to 10 years, depending on investment size.

Common Challenges & Risks

Despite Vietnam’s business-friendly environment, investors should prepare for:

• Administrative Delays: Registration processes can take longer than expected.
• Regulatory Changes: Investors must stay updated on new laws.
• Language Barriers: Vietnamese is the official business language, requiring proper translation of legal documents.

Setting up a business in Vietnam offers immense opportunities, but investors must carefully navigate legal, financial, and compliance requirements. By following this Vietnam company setup guide, entrepreneurs can establish a strong business foundation and take advantage of Vietnam’s thriving economic landscape.

With the right strategy, Vietnam remains an attractive destination for startups, multinational corporations, and global investors looking to expand in Southeast Asia.

About ANT Consulting and Market Entry Services in Vietnam

ANT Consulting is here to assist you from the outset; providing intelligence, information, advisory, management or support services that assist market entrance, and ensure efficient business start-up operation.

Research Service
Company Profiling and Due Diligence
Policy and Regulatory Research
Assistance in Setting-up Business Venture
M&A Origination & Execution

For legal advise, consult with ANT Lawyers

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