Attorney Vu Manh Quynh is the Managing Partner of ECOVIS Vietnam Law, advising international investors on Foreign Direct Investment (FDI), corporate governance, and regulatory compliance in Vietnam.

The legal structure and incorporation phase sets the foundation for every subsequent regulatory obligation the factory will face. Getting the IRC/ERC sequence right, registering the correct charter capital, and understanding the governance obligations that attach from day one of ERC issuance are the most important legal decisions in the project’s early phase. Errors at this stage — particularly around capital contribution timing and IRC scope — create compliance problems that persist throughout the company’s operational life.

This article is Section II of the 100 FAQ about Factory Setup Vietnam series. It covers questions Q11–Q20.

What is the difference between an IRC and an ERC in Vietnam?

The IRC (Giấy chứng nhận đăng ký đầu tư) is the investment authorisation issued by the DPI or IPA — it authorises the project, defines scope, total capital and implementation schedule. The ERC (Giấy chứng nhận đăng ký doanh nghiệp) is the corporate registration certificate that creates the legal entity. For foreign investors, the IRC must be obtained first; the ERC follows. Both are required before the company can operate legally in Vietnam.

When must the IRC be obtained before the ERC in Vietnam?

Under Investment Law 2020 and Decree 31/2021/ND-CP, all foreign investors establishing a new entity in Vietnam must obtain the IRC before applying for the ERC. This is an absolute sequential requirement. The IRC application requires the investor to define project scope, capital, location and implementation schedule. Only after IRC issuance can the investor proceed to ERC registration and formal entity creation.

What legal entity types are available to foreign manufacturers in Vietnam?

Foreign-invested manufacturers typically establish either a Limited Liability Company (Công ty TNHH — LLC) or a Joint-Stock Company (Công ty cổ phần — JSC). An LLC — with one or multiple members — is the most common structure for 100% foreign-owned subsidiaries. A JSC is preferred when multiple investors are involved or when share issuance is planned. Both structures provide limited liability protection. Branches carry higher liability risk and cannot hold manufacturing assets independently.

What charter capital amount should a foreign-invested manufacturing company register?

Vietnamese law prescribes no minimum charter capital for most manufacturing sectors. In practice, DPI authorities expect charter capital to represent 20–30% of total investment capital. Registering capital significantly below or above this ratio can trigger scrutiny. Investors typically register charter capital equal to 20–30% of total investment, with the balance financed through shareholder loans or bank borrowing. Charter capital must be contributed in full within 90 days of ERC issuance.

What is the 90-day capital contribution deadline and what happens if it is missed?

Under Enterprise Law 2020 (Law No. 59/2020/QH14), LLC members must contribute their full charter capital within 90 days of ERC issuance. If missed, the charter capital must be reduced to the amount actually contributed and the Business Registration Office notified. Both failure to contribute and failure to notify are administrative violations. This is one of the most commonly missed first-year obligations — the bank account opening and international wire process often consumes most of the 90-day window.

Can a foreign company appoint a foreign national as legal representative in Vietnam?

Yes. A foreign national may serve as legal representative (người đại diện theo pháp luật) of a Vietnamese company, provided they hold a valid work permit (unless exempt under Decree 152/2020) or Temporary Residence Card. The legal representative bears personal legal responsibility for certain compliance failures and their information is registered publicly in the ERC. Many companies appoint both a foreign legal representative and a locally-resident authorised signatory for day-to-day administrative dealings.

What are the governance requirements for a foreign-invested LLC in Vietnam?

A single-member LLC (100% foreign-owned) is governed by the sole owner, who may delegate management to a Director or Board of Directors. A multi-member LLC is governed by a Members’ Council. All LLCs must maintain a company charter consistent with the Enterprise Law 2020, filed with the Business Registration Office. Major decisions must be documented in Members’ Council resolutions. Changes to the legal representative, directors or charter must be notified within 10 days of the resolution.

Can a single foreign investor own 100% of a Vietnamese manufacturing company?

Yes, in manufacturing sectors not listed as conditional in Appendix IV of the Investment Law 2020. This covers electronics, machinery, consumer goods, textiles, footwear, furniture, food processing and most other manufacturing categories. No Vietnamese nominee shareholder is required in non-conditional sectors. The investor registers as the sole member of a single-member LLC on both the IRC and ERC. Using unnecessary nominee arrangements creates legal complexity without regulatory benefit.

What is the procedure for amending the IRC after the company is established?

IRC amendments are required when an investor changes the investment scope, total capital, implementation location, business objectives or implementation schedule. The amendment application is submitted to the original issuing authority (IPA or DPI). Required documents include a Members’ Council resolution, updated project description and supporting evidence. Processing time is 10–15 working days (statutory), 3–4 weeks in practice. Operating outside the approved IRC scope before an amendment is issued is a violation of the Investment Law.

What ongoing corporate governance obligations does a foreign-invested manufacturing company have?

Annual obligations include: audited financial statements (due 31 March); annual CIT finalisation return (due 31 March); annual DPI investment implementation report (due 31 January); transfer pricing disclosure (filed with CIT return); and annual social insurance and PIT reconciliations. Event-triggered obligations include: notifications of changes to legal representative, directors or charter (within 10 days); IRC amendment before material project changes; and foreign loan registration with SBV before drawdown. The annual DPI report is the single most commonly missed obligation.