Vietnam is accelerating its transformation into a regional innovation powerhouse. With the issuance of Resolution No. 57-NQ/TW in December 2024, the country has committed to a bold, strategic overhaul of its science, technology, and innovation (STI) ecosystem. For foreign direct investors (FDIs), this resolution is more than a policy document—it’s a roadmap to a more […]
Vietnam is accelerating its transformation into a regional innovation powerhouse. With the issuance of Resolution No. 57-NQ/TW in December 2024, the country has committed to a bold, strategic overhaul of its science, technology, and innovation (STI) ecosystem. For foreign direct investors (FDIs), this resolution is more than a policy document—it’s a roadmap to a more […]
Struggling to navigate the complexity of setting up your business in Vietnam? You’re not alone. Many pioneering companies see the massive potential but are unsure how to get started. This guide will demystify the process, highlight common pitfalls to avoid and show how expert support can help you launch your Vietnamese venture faster and safer. Let’s get started and see how strategic insight can be your next big win.
Here are your key takeaways for a smoother market entry:
Vietnam offers economic incentives and a strategic ASEAN location, making it a prime target for foreign direct investment (FDI).
Understanding the difference between Limited Liability Companies (LLCs) and Joint Stock Companies (JSCs) is crucial to choosing the right legal structure.
The company setup process involves getting an Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC), among others.
With over two decades of experience guiding businesses through the FDI landscapes of dynamic markets like Vietnam, China and Malaysia, I’ve seen firsthand how a well-planned market entry can be a game-changer. My focus has always been on turning regulatory mazes into clear pathways for growth, especially in FDI-driven sectors and manufacturing.
Setting up a Company in Vietnam
Setup foreign company in Vietnam can be a complex process but with the right guidance, it can be a fun experience. Vietnam has become an attractive destination for foreign investors due to its strategic location, skilled workforce and business friendly environment. The country has various types of companies, including limited liability companies, joint stock companies and representative offices. Foreign investors can choose the most suitable type of company based on their business needs and goals. It’s essential to understand the Vietnamese company law, registration process and licensing requirements to ensure a smooth setup.
Vietnam’s Foreign Investment Landscape
For those of you who are new to Vietnam, the “why Vietnam?” question has great answers. The country actively encourages foreign investment through various mechanisms. Key economic incentives often include preferential tax rates, import duty exemptions for certain goods and streamlined administrative procedures in designated economic zones. Plus its strategic location within ASEAN provides a gateway to a growing regional market, acting as a key hub in many international supply chains.
Foreign citizens looking to set up a business in Vietnam must meet certain requirements, including getting an investment certificate, which is required for setting up legal operations and compliance with local regulations.
Economic Incentives for Foreign Investors
Vietnam offers many benefits to foreign investors. These include tax holidays, reduced corporate income tax rates and import duty exemptions for certain goods and machinery for certain projects. Companies in high-tech, environmental protection and education sectors can get more incentives. Understanding these incentives can make your investment more financially viable.
Strategic Location Advantages
Located in the heart of Southeast Asia, Vietnam is a strategic gateway to the ASEAN market. With free trade agreements such as CPTPP and EVFTA, Vietnam has better access to global markets. This makes it an attractive destination for businesses looking to expand.
When planning your business structure in Vietnam, choosing the right legal entity is the first step. The two most common forms for foreign investors are Limited Liability Company (LLC) and Joint Stock Company (JSC). LLC can be single-member or multiple-member and is often preferred for its simpler corporate structure. JSC can issue shares and is chosen by larger companies or those who want to list on the stock exchange. Representative Offices (ROs) and Branch Offices (BOs) serve different purposes: ROs are for market research and liaison activities without conducting profit-generating activities, while BOs can conduct commercial activities but within the scope permitted by their parent company’s license in Vietnam.
1. Limited Liability Company (LLC)
LLC is a popular choice for foreign investors due to its flexible structure and limited liability protection. Listing company members is an important part of the documentation required for setting up an LLC. It can be established with one or more members and does not require a board of directors. This simplicity makes it ideal for small to medium-sized enterprises looking to operate efficiently. The company’s management responsibilities can be handled by legal representatives, who may also be foreign citizens eligible to obtain necessary work and residence permits.
💡An LLC allows 100% foreign ownership, giving more control over operations and strategy. A Joint Venture (JV) on the other hand involves partnering with a local Vietnamese entity, providing valuable local market knowledge and networks. The choice depends heavily on your business goals, the industry and regulatory requirements.
2. Joint Stock Company (JSC)
JSC is suitable for larger companies or those who want to raise capital through public offerings. It allows for share issuance and requires a minimum of three shareholders. JSC is often chosen by companies who want to list on the stock exchange, providing more opportunities for capital mobilization.
3. Representative Offices and Branch Offices
Representative Offices are suitable for foreign companies who want to explore the Vietnamese market without engaging in direct business activities. They focus on market research and building relationships. Branch Offices, however, can conduct commercial activities and are an extension of the parent company, providing a more direct presence in Vietnam. A branch is an authorized representative of the enterprise, performing the functions of a legal entity within the corporate structure.
Vietnam Company Setup Process (Step-by-Step)
For your compliance teams, understanding the full incorporation process is key. The process starts with the Investment Registration Certificate (IRC), which checks the foreign investor and the proposed investment project. Then the Enterprise Registration Certificate (ERC) is required, which officially registers the company as a legal entity in Vietnam.
As ASEAN Briefing explains in their guide on Business Registration Certificates in Vietnam, these are two separate but consecutive licensing steps. Depending on the industry, specific sub-licenses or permits may be required and there are minimum capital requirements for certain sectors. Foreign investors must also comply with local laws and regulations which may include restrictions on foreign ownership in certain business lines. A comprehensive business plan is necessary to outline your investment capital, business activities and projected financial statements to meet the competent authority’s requirements.
According to the Enterprise Law, charter capital must be fully contributed to a bank account within 90 days from the date of ERC issuance. Within 10 days after fully contributing capital, carry out the procedure for changing the business registration – at the Business Registration Office – to update the new charter capital.
Once all necessary licenses and permits are obtained, the next steps are to set up a registered office address, open a corporate bank account and appoint a legal representative to manage the business. Partnering with a local law firm or professional services can help streamline the registration process and navigate Vietnam’s regulatory landscape.
Minimum Capital Requirements
The minimum charter capital requirements for setting up a company in Vietnam vary significantly depending on the specific business line and industry. For most common business sectors, there is no fixed minimum charter capital required by law for Limited Liability Companies (LLCs) or Joint Stock Companies (JSCs). Instead, the charter capital declared by the founders must be deemed sufficient to cover the initial operational expenses and the scope of the proposed business activities, as assessed by the licensing authorities. However, certain regulated industries (e.g. real estate, banking, finance, education, specific services) do have explicit and often substantial minimum requirements.
1. Bank Account Setup
Setting up a bank account is an important step in the company registration process in Vietnam. The company must open a capital bank account to deposit the charter capital and a corporate bank account for daily business operations. Foreign investors can choose from various banks in Vietnam, including local and international banks. It’s recommended to work with a bank that has experience in handling foreign transactions and has a good reputation. The bank account setup process takes a few days to a week depending on the bank and the complexity of the application.
2. Business Licensing and Registration
Business licensing and registration are key steps in setting up a company in Vietnam.
⚠️ Business registration and licensing for certain business sectors (such as finance, insurance, telecommunications services, science and technology) are carried out at specialized management agencies of relevant ministries and sectors. Contact us for tailored advice!
The company must also register for tax and get a tax identification number. The company must also comply with post-licensing procedures such as registering with the local authorities and obtaining necessary permits.
3. Vietnamese Company Law
The Vietnamese company law is governed by the Enterprise Law which provides the framework for company establishment, operation and management. The law applies to all companies in Vietnam, including foreign-invested companies. The law requires companies to have a company charter which outlines the company’s purpose, structure and management. The company must also have a legal representative who is responsible for the company’s operations and decision-making. Foreign investors should note that the Vietnamese company law is subject to change and it’s important to work with a law firm or professional assistance to ensure compliance with the latest regulations. The law also provides for joint ventures which are popular among foreign investors. A joint venture company is a company that is owned by two or more parties including foreign investors and local partners. The company must have a joint venture agreement which outlines the terms and conditions of the partnership.
Post-Incorporation Essentials
Once your company is officially incorporated, the work for your CFOs and operations teams begins in earnest. Key post-incorporation steps include registering for a tax identification number, obtaining the official company seal (a legal requirement for validating official documents) and completing labor registrations for your initial employees. Also, companies are required to file audited financial statements annually. DLA Piper Intelligence notes in their Vietnam corporate guide that setting up corporate bank accounts is another immediate priority to manage capital contributions and operational finances.
Understanding and complying with local regulations including tax obligations is crucial to avoid potential penalties or closure.
Managing Financial Operations
Setting up corporate bank accounts is important for managing your company’s financial operations efficiently. Bank account opening is a critical step in the process of setting up a company in Vietnam, necessary for fulfilling legal and operational requirements. This involves selecting a bank that aligns with your business needs and understanding the requirements for account opening such as providing necessary documentation and fulfilling minimum deposit requirements. A well-managed financial operation ensures smooth capital contributions and operational transactions providing a strong financial foundation for your business.
Navigating the First Month of Operations
What often gets missed in standard checklists is the real-world experience of the first month of operations. Expect a period of intense activity: finalizing office setups, onboarding initial staff, ensuring all initial tax and social insurance declarations are correctly filed and familiarizing your team with local banking and payment systems. This initial phase is critical for setting the operational tempo.
Legal and Regulatory Challenges
For your legal heads, prevention is better than cure. Common pitfalls for foreign investors lie in labor law compliance, lease agreement complexities (especially land use rights) and ensuring land suitability for the intended business purpose. In M&A, specific clauses related to warranties, indemnities and dispute resolution mechanisms need to be carefully scrutinized to protect your interests.
Compliance with Vietnamese law is crucial to avoid serious legal consequences such as issues arising from using a nominee shareholder or missing deadlines for capital contributions.
Understanding local regulations, especially those related to restricted industries, is key. Certain sectors in Vietnam require foreign businesses to have a local partner due to foreign ownership limitations. Identifying whether a local partner is required for your specific business type can help avoid complications in control and profit distribution.
Managing Compliance
It’s important to proactively manage regulatory compliance to avoid fallout. For foreign investors, obtaining an investment license is essential to set up a company in Vietnam. This means staying updated on changes in legislation, keeping meticulous records and having transparent communication with relevant government authorities. Regular audits and consultations with legal experts can help ensure ongoing compliance and mitigate risks associated with regulatory changes. Legal representatives whether foreign or Vietnamese must have the necessary work permit and residency status to act on behalf of the company legally.
Land Use and Lease Agreements
Navigating lease agreements and land use rights can be complicated for foreign investors. Understanding local regulations and ensuring the land is suitable for your business activities is crucial. Engaging with local legal experts can provide clarity and help negotiate favorable terms, minimize legal disputes and ensure smooth operations.
Working With Local Experts
For decision-makers the question of “why go guided?” often comes down to risk and efficiency. Working with local experts who have deep knowledge of Vietnam’s legal and administrative systems can significantly reduce compliance risks from day one. Such expertise can also reduce setup time by as much as 40% allowing you to focus on your core business activities rather than bureaucratic processes. However, involving a local partner unnecessarily can lead to complications and risks, so it’s important to understand industry specific requirements. ASL Law Firm outlines the process of setting up a foreign company in Vietnam and implies the value of expert guidance through the detailed steps involved. Among the various business structures available such as LLCs, joint ventures, branch offices and Public-Private Partnership (PPP) models, each has different implications for investment time, cost and risk.
The Value of Guidance
The ROI on advisory services becomes clear when you think about the cost of delays, compliance errors or missed strategic opportunities. Expert services don’t just cut through red tape; they provide strategic thinking that can help you optimize your investment structure, anticipate market challenges and ultimately position your business for long term success.
Success with Local Partnerships
Ready to unlock unprecedented growth in one of Southeast Asia’s fastest growing economies? Partner with Viettonkin to turn challenges into wins—because when it comes to your next big breakthrough, there’s only forward! Setting up a compliant and suitable local company structure is key to navigating the complexities and legal hurdles in Vietnam. Let’s make your Vietnam venture a success.
When investors decide to go full-steam into setting up a business in Vietnam, selecting a trading name for the company is the first step. Even though foreign-owned companies are entirely at the discretion of business-owners, they remain subjected to Vietnamese business laws, including business naming regulations. This article provides a starter-pack on company naming regulations in Vietnam.
Things to avoid when naming a company in Vietnam
There are several mistakes that can get your business registration application rejected by the Business registration office:
Using the script of a foreign language in the proper name (Example: Classical chinese script);
Using names that are identical or nearly similar to that of a state agency, organization, or previously registered enterprise in Vietnam (more below on Copyrights of Company names);
Under Circular 10/2014 by the Ministry of Culture, Sport, and Tourism, it is not permitted for companies to use names identical to (1) the name of a historically famous person (Example: Phan Boi Chau Joint Stock Company); (2) Vietnam’s earlier country names (Example: Dai Viet Company Limited); or (3) names of individuals or words/symbols that are deemed offensive to national historical and cultural values.
Reserving a company name
When registering a foreign business in Vietnam, investors must register the company’s Vietnamese name, Foreign language name, and Abbreviated name.
While a Vietnamese name is required for licensing procedures, once registration is approved investors can choose to promote the business under any of the registered names.
Vietnamese name
Type of legal entity + proper name
Types of legal entity are normally abbreviated in Vietnamese:
Limited liability company: Công ty TNHH (Trách nhiệm hữu hạn)
Joint stock company: Công ty CP (Cổ phần)
Partnership: Công ty HD (Hợp doanh)
Private enterprise: DNTN (Doanh nghiệp tư nhân)
Branch, representative office: Chi nhánh or Văn phòng đại diện
The proper name is written using the Vietnamese alphabet, the letters F, J, Z, W, digits and symbols.
Foreign language and abbreviated names
The company name in a foreign language is the name translated from Vietnamese into a foreign language that uses the Latin alphabet. When translated, the company’s proper name may be kept unchanged or translated into a foreign phrase (Example: Rong Vang JSC or Golden Dragon JSC).
The abbreviated name of a company can be derived from either its Vietnamese name or foreign name (Example: Công ty CP Viettonkin or Viettonkin JSC).
The foreign name must appear in a smaller size than the enterprise’s Vietnamese name at the company’s headquarter, branches, representative offices, business locations, and on its documents and publications.
Once investors settle on the name of the company, they can reserve the business name by:
Reserve the Vietnamese name and foreign name with the Vietnam Trade Register;
Submit the abbreviated name to the Companies Registry.
The Trade register of Vietnam, referred to as the Business registration office, is the official body providing services for company name reservation and verification, business registration application processing, and company documents issuing. All paperwork regarding the status of businesses is handled and stored at the office.
How can a company change its name?
A change in the company’s name may occur at some point under several circumstances, the most common of which being:
A change of activities or goods and services of the company results in the current name being unable to represent the company
A company undergoing Mergers & Acquisitions takes the name of the taking-over business.
The current name is deemed problematic or causes confusion
Re-branding
When that happens, the company owners must fill out a notification and request to the Trade Register for changing the company names and complete the due procedure, which includes:
Amending the company’s Memorandum and Articles of Association with the new name;
Notifying all relevant authorities regarding the change;
Changing the name on all official documents and the company seal.
Rights to company names
Rights to company names (also referred to as trade names) are automatically protected under Vietnamese IP laws when it is capable of distinguishing the business entity bearing the name from other business entities operating in the same field. A trade name is considered distinctive, thus entitled to copyrights protection, if it comprises a proper name which is NOT:
Identical with or confusingly similar to the trade name of an already registered company within the same field or locality;
Identical with or confusingly similar to another person’s mark or a geographical indication protected by law.
A trade name is considered confusingly similar if :
Either the Vietnamese name, foreign name or abbreviated name is similar.
The proper name of the company is different from the same-type registered company by a cardinal number, ordinal number, symbol, or letter in Vietnamese or English alphabet immediately following the proper name.
Example: “Viettonkin JSC” and “Viettonkin 1 JSC”, “Viettonkin X JSC”, “Viettonkin’ JSC”
The proper name of the company is different from the same-type registered company by the word “New”, “Tan, “Moi”, or “North”, “East”, “South”, “West” or words in a similar vein.
All indications of commercial acts of an enterprise that are not distinctive according to the above criteria will be regarded as infringements of Vietnamese intellectual property rights. In this case, company registration will be rejected by the Business registration office.
To sum up, these are the first guidelines to get you started on your business endeavor in Vietnam. Company name reservation can be a simple and trouble-free process once you understand the basic principles of the Vietnamese company naming regulation. Our legal specialists are always ready to assist you with any procedures of company naming and changing name.
Vietnam is emerging as a prime destination for foreign direct investment (FDI), driven by rapid economic growth, favorable government policies, and an investor-friendly business environment. This eBook provides a deep dive into Vietnam’s economic landscape, highlighting key industries such as manufacturing, real estate, and digital banking that attract FDI. It also explores the government’s proactive measures to streamline investment procedures, improve infrastructure, and offer tax incentives for foreign enterprises. Additionally, it covers crucial insights into market entry strategies, regulatory requirements, and socio-cultural factors that influence business success in Vietnam.
Download the eBook now to gain expert insights into successfully navigating Vietnam’s dynamic investment landscape!
Vietnam is emerging as a prime destination for foreign direct investment (FDI), driven by rapid economic growth, favorable government policies, and an investor-friendly business environment. This eBook provides a deep dive into Vietnam’s economic landscape, highlighting key industries such as manufacturing, real estate, and digital banking that attract FDI. It also explores the government’s proactive measures to streamline investment procedures, improve infrastructure, and offer tax incentives for foreign enterprises. Additionally, it covers crucial insights into market entry strategies, regulatory requirements, and socio-cultural factors that influence business success in Vietnam.
Download the eBook now to gain expert insights into successfully navigating Vietnam’s dynamic investment landscape!
Founded in 2009, Viettonkin Consulting is a multi-disciplinary group of consulting firms headquartered in Hanoi, Vietnam with offices in Ho Chi Minh City, Jakarta, Bangkok, Singapore, and Hong Kong and a strong presence through strategic alliances throughout Southeast Asia. Our firm’s guiding mission is aimed towards facilitating intra-ASEAN investments and connecting investors in Southeast Asia with the rest of the world, thus promoting international business relationships and strengthening inter-nation connections.
