How to Set Up a Company in Vietnam for Foreigners (2026 Complete Guide)

Introduction

Vietnam has steadily positioned itself as one of Southeast Asia’s most attractive destinations for foreign direct investment. With consistent GDP growth, a young workforce, expanding middle class, and a wide network of free trade agreements such as the World Trade Organization commitments and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the country offers a compelling environment for international investors. In recent years, the Vietnamese government has also accelerated administrative reforms and digitalisation, making the company formation process more transparent and accessible.

For foreign investors, however, setting up a company in Vietnam still requires navigating a structured legal framework governed primarily by the Law on Investment 2020 and the Law on Enterprises 2020, along with various implementing decrees such as Decree 31/2021/ND-CP and Decree 01/2021/ND-CP. Understanding these regulations is critical for a smooth and compliant market entry.

This article provides a comprehensive, up-to-date guide for foreigners who want to establish a company in Vietnam, covering legal structures, documentation, procedures, costs, and strategic considerations.

Choosing the Right Business Structure

Before starting the incorporation process, foreign investors must determine the most appropriate business structure. The choice depends on business objectives, scale, and whether revenue-generating activities will be conducted in Vietnam.

A Representative Office is the simplest form of presence. It is not considered a legal entity that can conduct profit-generating activities. Instead, it serves as a liaison office, allowing foreign companies to conduct market research, promote their business, and oversee contracts. Under Vietnamese law, representative offices are governed by the Commercial Law 2005 and subsequent regulations. This structure is ideal for companies exploring the Vietnamese market before making a larger investment commitment.

A Branch is more complex and allows foreign companies to conduct commercial activities directly in Vietnam. However, branches are only permitted in certain sectors such as banking, legal services, and some trading activities. The regulatory approval process is stricter, and not all industries are open to this model.

A Company, typically in the form of a foreign-invested enterprise (FIE), is the most common structure for serious investors. It can be established as a limited liability company or joint stock company under the Law on Enterprises 2020. This structure allows full business operations, revenue generation, hiring employees, and signing contracts. Foreign investors can own up to 100% of the company in many sectors, although some industries impose ownership limits or require joint ventures with Vietnamese partners.

Required Documents to Set Up a Company in Vietnam

Vietnamese authorities require a well-prepared set of documents to assess the legitimacy and feasibility of the investment project. The process is document-intensive, and compliance with notarisation and legalisation rules is essential.

Foreign individual investors must provide valid passports, while corporate investors must submit their business registration certificates issued in their home country. These documents must be consularly legalised in accordance with Vietnamese regulations unless exempt under international treaties.

Proof of financial capacity is another critical requirement. Authorities typically expect bank statements, audited financial reports, or financial guarantees to demonstrate that the investor can fund the proposed project. The evaluation is not merely formal; regulators assess whether the capital is sufficient for the business scope.

An investment proposal is also required, outlining the business objectives, scale, location, capital structure, and implementation timeline. This document is particularly important when applying for the Investment Registration Certificate, as it forms the basis for approval.

All foreign-issued documents must be notarised and legalised before submission in Vietnam. This process ensures authenticity and compliance with Vietnamese administrative standards. Improperly prepared documents are one of the most common causes of delays.

Process to Open a Company in Vietnam

The company formation process for foreign investors involves multiple stages, each governed by specific regulations.

The first step is defining business lines and checking conditions. Vietnam maintains a list of conditional business sectors under the Law on Investment 2020. These include industries such as education, logistics, healthcare, and real estate. Foreign investors must verify whether their intended business is permitted and whether any additional licences or approvals are required.

The second step is obtaining the Investment Registration Certificate. The IRC is mandatory for foreign-invested projects and is issued by the Department of Planning and Investment. According to Decree 31/2021/ND-CP, the processing time typically ranges from 15 to 30 working days, although complex projects may take longer. The IRC outlines key details such as investment capital, objectives, and duration.

The third step is obtaining the Enterprise Registration Certificate. Once the IRC is issued, the investor can proceed to register the company under the Law on Enterprises 2020. The ERC serves as the company’s official business licence and includes information such as company name, address, legal representative, and charter capital.

The fourth step involves post-incorporation requirements. These include making a company seal, opening a corporate bank account, registering for tax, and obtaining any sub-licences required for specific industries. Companies must also comply with accounting standards and reporting obligations under Vietnamese law.

The fifth step is E-ID onboarding and digital compliance. Vietnam has increasingly shifted toward digital governance, requiring companies to use electronic tax filing systems and digital signatures. Integration with platforms managed by the General Department of Taxation Vietnam is now a standard requirement.

Restricted Business Sectors for Foreign Investment

Vietnam maintains a Negative List of restricted sectors under the Law on Investment 2020. These include industries where foreign investment is either prohibited or subject to conditions.

Prohibited sectors include activities that are harmful to national defence, security, or public morality. Conditional sectors may impose restrictions such as foreign ownership caps, licensing requirements, or partnership obligations with Vietnamese entities.

For example, in the logistics sector, foreign ownership may be limited depending on the specific service. In education, foreign investors must meet strict requirements regarding facilities, curriculum, and teacher qualifications. These conditions are detailed in various specialised regulations and must be carefully reviewed before proceeding.

Requirements to Establish a Company in Vietnam

Foreign investors must satisfy several key requirements to successfully establish a company.

Investment and business conditions vary depending on the industry. Authorities assess whether the project aligns with Vietnam’s economic development priorities and complies with sector-specific regulations.

Vietnam does not impose a universal minimum capital requirement for most industries. However, the charter capital must be sufficient to cover operational needs. Authorities may reject applications with unrealistically low capital.

Charter capital and total investment capital must be clearly defined. Charter capital represents the equity contributed by investors, while total investment capital includes loans and other funding sources. Investors must contribute capital within the timeline specified in the IRC, typically within 90 days after company registration.

Capital contribution must be made through a direct investment capital account opened at a Vietnamese bank. This ensures transparency and compliance with foreign exchange regulations.

A registered address is mandatory, and it must be a legitimate commercial location. Virtual offices are generally not accepted for foreign-invested companies. Additionally, the company must appoint a legal representative who resides in Vietnam. This person is responsible for the company’s legal obligations and can be a foreigner or Vietnamese national.

How Much Does It Cost to Open a Company in Vietnam?

The cost of setting up a company in Vietnam varies depending on the business type, scale, and location. Government fees for licensing are relatively low, typically ranging from USD 100 to USD 300.

However, the main costs come from professional services such as legal consultation, document preparation, and licensing support. These can range from USD 2,000 to USD 10,000 or more, depending on complexity.

Additional costs include office rental, capital contribution, accounting services, and compliance expenses. Investors should also budget for ongoing operational costs such as payroll, taxes, and reporting.

Important Notes for Foreigners Setting Up a Company in Vietnam

For companies transferred from Vietnamese owners, foreign investors must follow procedures for capital contribution or share acquisition under the Law on Investment 2020. This may require approval from authorities, especially if the company operates in a conditional sector.

For companies with 100% foreign capital from the beginning, the process is more straightforward but still requires strict compliance with licensing procedures. Investors should ensure that their business sector allows full foreign ownership before proceeding.

FAQs About Foreigners Establishing a Company in Vietnam

The incorporation timeline typically ranges from one to three months, depending on the complexity of the project and the completeness of documentation.

Vietnam’s standard corporate income tax rate is 20 percent. However, preferential rates may apply in certain sectors or regions, particularly for high-tech or export-oriented industries.

Foreign investors are not required to stay in Vietnam during the entire setup process. However, they may need to enter the country for certain procedures such as bank account opening or signing documents.

Whether 100% foreign ownership is allowed depends on the business sector. Investors should consult the latest regulations under the Law on Investment 2020 to confirm eligibility.

In many cases, foreigners can fully own a company in Vietnam, especially in manufacturing, IT, and trading sectors. However, careful legal review is essential to avoid regulatory issues.

Conclusion

Setting up a company in Vietnam as a foreigner is a structured but manageable process when approached with proper preparation and understanding of the legal framework. The country continues to improve its business environment, making it increasingly attractive for international investors.

By aligning your investment strategy with Vietnam’s regulatory requirements and economic priorities, you can successfully establish and grow your business in one of Asia’s most dynamic markets.