Setting up Business in Vietnam - Incorporation Process, Entity Options & Regulatory Guide

Vietnam the Right Choice for your Business

Vietnam has become one of the Asia’s most dynamic and promising business destinations. With economy growing steadily, a young workforce and an open and promoting investment environment, the country has become a destination for manufacturing and service hub in Asia region.

Corporate income tax in Vietnam stands at 20%. Vietnam has also signed over 80 double taxation agreements, including with India, ensuring efficient tax structuring for cross border operations.

Located in Southeast Asia, Vietnam offers access to major markets such as China, Thailand and Singapore. Vietnam is also a part of major trade pacts like the CPTPP, RCEP, and EU–Vietnam Free Trade Agreement (EVFTA).

Process of Setting Up a Company in Vietnam

Setting up a business in Vietnam involves a structured and well-defined process. While specific procedures can vary depending on the type of entity and location, the general steps remain similar across the country.

1. Choose Legal Form and Business Name

• Decide on the appropriate legal entity — typically a Limited Liability Company, Joint Stock Company, Representative Office, or Branch Office.
• The proposed company name must be checked and approved by the Department of Planning and Investment to ensure compliance and uniqueness.

2. Prepare Charter and Incorporation Documents

• Draft the Company Charter, list of shareholders or members, and appointment of legal representatives.
• Foreign investors must obtain an Investment Registration Certificate before company establishment.

3. Apply for Enterprise Registration Certificate

• Submit incorporation documents to the local DPI to obtain the Enterprise Registration Certificate, which legally establishes the company.

4. Register a Business Bank Account and Deposit Capital

• A local bank account in Vietnam must be opened to deposit the charter capital as stated in the company charter.
• Capital must typically be contributed within 90 days from the date of incorporation.

5. Obtain Business Licenses or Sectoral Approvals

• There might be certain industries such as logistics, education, healthcare, and finance that may require additional licenses from authorities before initiating operations.

6. Register for Tax and Social Insurance

• Companies must register themselves for corporate tax code, VAT, and social insurance with the tax department.
• Digital tax declarations are mandatory and can be done through the government’s online system.

7. Post-Incorporation Setup

• Implement accounting systems, labour registration, and internal compliance policies.
• Many foreign companies appoint local service providers for payroll, bookkeeping, and statutory filings to ensure full compliance.

Timeline

Total estimated duration: 4–8 weeks from planning to full operation.

 

Business Structures in Vietnam — Finding the Right Fit

Foreign investors can choose from several types of business entities in Vietnam depending on the scale, ownership, and purpose of their operations.

Limited Liability Company (LLC)

• Minimum capital: There is no fixed statutory minimum capital, but it must be sufficient to cover the planned operations. Certain regulated sectors (e.g., finance, real estate, education) may require higher capital as defined by specific laws.
• Liability: Limited to contributed charter capital.
• Governance: Managed by members and a legal representative (who may be a foreigner or Vietnamese resident).
• Suitability: Most common form for small and medium-sized enterprises and wholly foreign-owned entities. Simple structure and flexible management.

Joint Stock Company

• Minimum capital: There is no fixed minimum capital but typically starts from VND 10 billion (USD 400,000) for larger and regulated sectors. They must have at least three shareholders.
• Liability: It is limited to the amount of capital contributed.
• Governance: Managed by a Board of Management, Supervisory Board (if required), and a Legal Representative.

Sole Proprietorship

• Capital: There is no minimum capital requirement.
• Liability: Unlimited liability as the owner is personally responsible for all obligations and debts which may arise.
• Registration: Must get the business registered at the local Department of Planning and Investment.

Representative Office

• Capital: No such capital requirement.
• Liability: Parent company must remain fully liable.
• Governance: Must appoint a Chief Representative who can be a foreigner or Vietnamese resident.

Branch of a Foreign Company

• Capital: No separate capital required, but the parent company must show financial capability to support branch operations.
• Liability: Parent company is fully liable for branch obligations.
• Governance: Must appoint at least one authorized representative residing in Vietnam.

 

Few Important Points to Consider

When setting up a business in Vietnam, there are additional points which needs to be considered.

Foreign Ownership and Investment Incentives

Most sectors in Vietnam allow 100% foreign ownership but there are certain industries such as logistics, media or education which may require a local partner or joint venture structure. Vietnam has high-tech zones, industrial parks and economically disadvantaged areas and for projects located in them offers corporate tax holidays, reduced tax rates and import duty exemptions.

Residency and Legal Representation

Every company must appoint atleast one legal representative who resides in Vietnam. For wholly foreign owned entities, having a local representative helps ensure compliance with ongoing administrative requirements.

Accounting and Compliance

All companies are required to maintain accounting records under Vietnam Accounting Standards (VAS) and file annual financial statements which should be audited by a licensed auditor.

How Our Firm Can Help You

With our extensive experience in helping international businesses, our firm is well-equipped to support your expansion plans in Vietnam. We can help you in:

Market Study & Feasibility: Assess opportunities and viability for your business in Vietnam and help you build a tailored market entry roadmap.

Partner & Investor Search: Identify local partners, distributors, or collaborators to accelerate growth.

Incorporation & Compliance: Assistance with setting up a subsidiary or branch, opening bank accounts, providing registered office and resident director services, VAT registration, bookkeeping, and statutory filings.

Tax & Regulatory Strategy: Choose the best canton, plan cross-border taxes efficiently, and obtain sector-specific regulatory approvals.

Ongoing Legal Support: From corporate governance, contracts, and dispute resolution to intellectual property protection, employment law, and immigration support, we ensure your business operates smoothly.

Vietnam offers a strategic location, favourable tax framework, and strong business ecosystem for international companies. Let’s explore how your company can succeed in Vietnam!