Last reviewed October 7, 2026 · By the NYBACS advisory team
Short answer
Foreign investors usually set up in Vietnam through a foreign-invested limited liability company or joint stock company. Traditionally this meant an Investment Registration Certificate (IRC) for the project first, then an Enterprise Registration Certificate (ERC) for the company. Under the Law on Investment 2025, effective 1 March 2026, eligible investors can obtain the ERC first, but must complete the IRC within 12 months and cannot implement the project until they do.
Key takeaways
- Two certificates matter: the IRC for the investment project and the ERC for the company itself.
- The Law on Investment 2025 (effective 1 March 2026) and Decree 96/2026 allow an ERC-first sequence for eligible investors, with the IRC due within 12 months.
- Licensing sits with provincial Departments of Finance, which absorbed the former Departments of Planning and Investment in 2025, or with industrial and economic zone management boards.
- Foreign investors must meet market access conditions, which can cap ownership or impose conditions in some sectors.
- Charter capital is contributed through a direct investment capital account (DICA), traditionally within 90 days of the ERC.
Vietnam at a glance
| Common entity for foreign owners | Single- or multi-member LLC, or joint stock company; representative office for liaison only |
|---|---|
| Company registry | Provincial Department of Finance (business registration) or industrial/economic zone management boards for the IRC |
| Foreign ownership | Up to 100% in many sectors; market access conditions cap or restrict some business lines |
| Local director / resident requirement | At least one legal representative must reside in Vietnam; foreign representatives need a work permit and residence status |
| Registered office | Vietnamese head office address with a valid lease |
| Key tax registrations | Tax code via the ERC; corporate income tax, VAT and e-invoicing; foreign contractor tax on cross-border payments |
| Recurring compliance | Audited annual financial statements, CIT finalisation, investment reports, beneficial-owner updates, VAT and payroll filings |
| Typical setup timeline (indicative) | Around one to two months for straightforward cases; longer for conditional sectors or investment policy approval |
Indicative only. Rules, filings, fees, ownership restrictions and timelines vary and change — confirm the current position before acting.
LLC, joint stock company, branch or representative office?
| Form | Suited to | Key features |
|---|---|---|
| Single-member LLC | A wholly owned subsidiary of one parent or individual | Simplest governance; owner appoints chairman and director |
| Multi-member LLC | Two to 50 members, such as joint ventures | Members' council governance |
| Joint stock company (JSC) | Larger ventures, at least three shareholders, future fundraising | Can issue shares; heavier governance |
| Representative office | Market research and liaison only | Cannot trade or invoice |
| Branch | Limited to specific sectors under Vietnam's commitments | Less common for SMEs |
Most foreign SMEs choose a single-member LLC. Before choosing, check the market access rules for each business line: some are open without conditions, some require minimum Vietnamese participation or a joint venture, and some are closed to foreign investors.
Step-by-step: from investment registration to an operating company
- Confirm market access and business lines, using Vietnam's industry codes and its international commitments.
- Choose the sequence. Under the traditional route, apply for the IRC first with a project proposal, proof of financial capacity and an office lease, then the ERC. Under the Law on Investment 2025, eligible investors may obtain the ERC first, with an undertaking that they meet market access conditions, and then complete the IRC within 12 months.
- IRC application to the provincial Department of Finance or the zone management board. Projects needing investment policy approval follow a longer process.
- ERC application for the company, including the charter and the list of members or shareholders.
- Company seal and public announcement of the registration.
- Open a DICA at a licensed bank and contribute charter capital on time.
- Tax set-up: register for electronic invoices, digital signature and tax declarations; register employees for social insurance; obtain work permits for foreign staff.
Indicatively, a straightforward case can complete IRC and ERC within one to two months of a complete file; conditional sectors take longer.
Documents and legalisation for foreign investors
Corporate investors usually provide a certificate of incorporation, charter, the latest audited financial statements or bank confirmation as proof of financial capacity, a board resolution approving the investment, and passports for the legal representative and authorised persons. Individual investors provide passports and bank statements.
Vietnam joined the Apostille Convention with effect from 11 September 2026, but some existing Convention states objected to its accession, and the apostille does not operate between Vietnam and an objecting state. Check your home country's position; otherwise use consular legalisation. All foreign documents need certified Vietnamese translations.
Tax, invoices and labour registrations
The enterprise code on the ERC doubles as the tax code. Standard corporate income tax is 20%, with incentives for qualifying sectors and locations. VAT is generally 10%, with reduced rates for some goods and services and temporary reductions that Vietnam has extended in recent years. Businesses issue electronic invoices through the tax authority's system.
Foreign employees need work permits or exemption certificates, and Vietnamese and eligible foreign employees are enrolled in social, health and unemployment insurance. Payments to foreign suppliers can trigger foreign contractor tax withholding.
Capital accounts and banking realities
Foreign capital must flow through the direct investment capital account (DICA), opened in the company's name at a licensed bank. Contributions, loans from the parent and profit repatriation are tracked through it, so mistakes here create problems with the State Bank of Vietnam's foreign exchange rules. Commentators note practical uncertainty about opening a DICA before the IRC under the new ERC-first route, so confirm with the bank first. Banks will ask for the IRC, ERC, charter, legal representative identification and beneficial-ownership details.
Ongoing compliance and whether Vietnam is the right destination
Foreign-invested enterprises must have annual financial statements audited and filed within 90 days of year-end, file the annual corporate income tax finalisation, submit periodic investment reports through the national investment information system, report beneficial-owner information, and file monthly or quarterly VAT and payroll returns.
Vietnam suits manufacturing, sourcing, software development and consumer businesses seeking cost-competitive operations. Thailand offers deeper supply chains and BOI incentives. China remains larger but carries a different regulatory and geopolitical profile. Many investors hold the Vietnamese company through a Singapore holding company.
Common mistakes to avoid
- Choosing business lines that do not match the real activity, requiring amendments to the IRC and ERC later.
- Using the ERC-first route without a plan to obtain the IRC within 12 months.
- Sending capital to an ordinary account instead of the DICA.
- Missing the charter capital contribution deadline and being forced to reduce registered capital.
- Assuming an apostille will be accepted without checking whether your country objected to Vietnam's accession.
- Overlooking foreign contractor tax on payments to the parent or overseas suppliers.
Documents and records to prepare
- Parent certificate of incorporation and charter, apostilled or legalised
- Proof of financial capacity (audited financial statements or bank balance confirmation)
- Board resolution approving the investment and appointing the legal representative
- Passports of the legal representative and authorised persons
- Office lease and landlord documents
- Investment project proposal
- Certified Vietnamese translations
NYBACS 360° support
How NYBACS helps
- Checks market access for your business lines and compares LLC, JSC and representative office options.
- Advises on whether the traditional IRC-first or new ERC-first sequence fits your timeline.
- Coordinates our Vietnamese partner on IRC, ERC, seal, tax and e-invoice registrations.
- Plans the DICA, capital contribution timing and banking KYC.
- Sets up the audit, CIT finalisation and investment-reporting calendar.
Frequently Asked Questions
Can a foreigner own 100% of a Vietnamese company?
Yes, in many sectors. Some business lines carry foreign ownership caps or conditions under Vietnam's market access rules, so check each line before applying.
What changed under the Law on Investment 2025?
From 1 March 2026, eligible foreign investors can obtain the ERC before the IRC. The company must then obtain the IRC within 12 months and cannot implement the project or amend its registration in the meantime.
Is there a minimum charter capital?
There is no general minimum, but some conditional sectors have legal capital requirements, and authorities expect capital that is realistic for the project. Under-capitalised applications attract questions.
Does the legal representative need to live in Vietnam?
At least one legal representative must reside in Vietnam. A foreign legal representative will need a work permit and residence status.
Do small foreign-invested companies need an audit?
Yes. Annual financial statements of foreign-invested enterprises must be audited, regardless of size.
