Setting up a company in Vietnam
Last updated
Last updated
Vietnam has emerged as a top destination for foreign investors due to its dynamic economy, strategic location, and favorable business environment. Whether you are a startup, an SME, or a multinational corporation, setting up a company in Vietnam can be a strategic move. This guide will provide you with a step-by-step overview of how to establish a business in Vietnam, including legal requirements, types of business entities, and practical considerations.
Vietnam is situated in Southeast Asia, offering easy access to major markets such as China, ASEAN countries, and beyond. The country also has a long coastline and multiple international ports, making it a hub for trade and logistics.
Vietnam has consistently recorded strong GDP growth over the past decade. With a rapidly growing middle class, increasing consumer demand, and a strong export sector, the country presents numerous business opportunities.
The Vietnamese government has introduced several policies to encourage foreign direct investment (FDI), including tax incentives, trade agreements, and investment-friendly regulations.
Vietnam offers a young and highly skilled workforce at competitive labor costs compared to neighboring countries like China and Thailand.
Foreign investors can choose from several types of business entities when setting up a company in Vietnam:
Most common structure for small and medium-sized enterprises (SMEs).
Can be a single-member or multiple-member LLC.
Limited liability protection for owners.
Suitable for larger enterprises looking to raise capital.
Requires at least three shareholders.
Can issue shares and be publicly listed.
Suitable for foreign companies that want to explore the market.
Cannot conduct direct business activities or generate revenue.
Ideal for market research and liaison purposes.
Allows foreign companies to conduct commercial activities in Vietnam.
Subject to stricter regulations than a local LLC or JSC.
The choice of business entity depends on your industry, business goals, and investment plans. Most foreign investors opt for an LLC due to its flexibility and ease of setup.
Foreign investors must apply for an Investment Registration Certificate (IRC) from the Department of Planning and Investment (DPI). This step is mandatory for foreign-owned businesses.
Once the IRC is approved, the next step is to apply for an Enterprise Registration Certificate (ERC), which legally establishes your company in Vietnam.
Your company must have a registered office address in Vietnam. Additionally, you need to obtain a corporate seal, which is required for official transactions.
A local corporate bank account is required to conduct financial transactions, receive investment capital, and process employee salaries.
Depending on the nature of your business, you must register for Value Added Tax (VAT), Corporate Income Tax (CIT), and other applicable taxes. Some industries also require special business licenses.
If you plan to hire employees, you must register with the Vietnam Social Insurance Agency and comply with labor laws.
Standard Corporate Income Tax (CIT) rate: 20%
Preferential rates available for certain industries and regions.
Standard VAT rate: 10%
Reduced rates (5% or 0%) apply to certain goods and services.
Progressive tax rates from 5% to 35% for employees.
Certain industries, such as banking and telecommunications, have foreign ownership restrictions. Investors should check the specific industry regulations before proceeding.
Navigating Vietnam’s legal and administrative procedures can be complex. Hiring a local business consultant or legal expert can streamline the process.
Most official documents are in Vietnamese. Working with bilingual professionals can help overcome language challenges.
Foreign businesses must stay updated with regulatory changes. Engaging a local accounting and legal firm can ensure compliance with tax and business laws.
offers exciting opportunities for foreign investors. With the right approach and local expertise, you can navigate the legal framework, establish your business successfully, and take advantage of Vietnam’s growing economy. Whether you are looking to start an LLC, JSC, or a representative office, proper planning and compliance with local regulations will set you up for success in this dynamic market.
