Legal framework note (updated July 2025): References in this page to the Law on Enterprises 2020 and the Law on Investment 2020 should be read as references to those laws as amended and supplemented by subsequent legislation, including the 2025 amendments effective from 1 July 2025. Investors should verify the applicable licensing route, authority and documentation requirements based on the current amended laws and implementing regulations at the time of filing.
Attorney Vu Manh Quynh is the Managing Partner of ECOVIS Vietnam Law, advising international investors on Foreign Direct Investment (FDI) and corporate governance in Vietnam.
Last reviewed: 30 June 2026
Investor Context
Vietnam remains one of Southeast Asia’s most active destinations for foreign direct investment, particularly in manufacturing, technology, logistics, renewable energy, business services and export-oriented production. For many investors, Vietnam is no longer only a low-cost production base. It is now part of a broader China+1, ASEAN supply-chain, and regional market-entry strategy.
The legal issue is not simply whether a foreign investor may enter Vietnam. The more important question is whether the investment structure can be licensed, funded, governed, operated and expanded predictably.
This is why investors should treat Vietnam FDI law as an implementation framework, not only an incorporation procedure. A Vietnam market-entry project normally involves investment licensing, enterprise registration, foreign exchange control, tax registration, land or lease arrangements, labour planning, sector approvals and post-licensing reporting.
1. Current Legal Framework for FDI in Vietnam
As of 2026, Vietnam’s foreign investment framework is governed primarily by:
- Law on Investment 2025, Law No. 143/2025/QH15, effective from 1 March 2026.
- Decree No. 96/2026/ND-CP, effective from 31 March 2026, guiding the Law on Investment 2025.
- Law on Enterprises 2020, as amended by Law No. 76/2025/QH15, effective from 1 July 2025.
- Decree No. 168/2025/ND-CP and Circular No. 68/2025/TT-BTC, updating enterprise registration and beneficial ownership declaration requirements.
- Sector-specific laws, including land, real estate, construction, environment, labour, tax, customs, foreign exchange and industry-specific licensing rules.
Investment planning should now be anchored in the 2025 Investment Law and Decree 96/2026/ND-CP. The 2020 investment framework should no longer be treated as the lead legal basis for new FDI analysis.
2. Market Access for Foreign Investors
Before entering Vietnam, foreign investors should confirm whether their intended business activity is open to foreign investors; subject to market-access conditions; restricted by foreign ownership limits; subject to special licensing or sub-licensing; or sensitive because of land location, national defence, security, data, technology, environment or sector regulation.
Vietnam uses a market-access approach based on negative lists and conditional sectors. Investors should not assume that company incorporation alone gives the right to conduct all intended activities.
For foreign manufacturers, the market-access review should be connected with industrial land, factory lease terms, environmental requirements, fire safety, construction, import of machinery, labour recruitment and tax planning.
3. IRC and ERC: Investment Registration and Enterprise Registration
Foreign investors commonly encounter two key licensing documents: the Investment Registration Certificate (IRC), which records the investment project, and the Enterprise Registration Certificate (ERC), which establishes the Vietnamese legal entity.
Under Vietnam’s FDI framework, many foreign-invested projects still require an IRC before the investor can implement the project. The 2025 Investment Law and Decree 96/2026/ND-CP introduce more flexible sequencing in certain cases — a foreign investor may be able to establish an economic organization before completing investment registration, provided market-access conditions are satisfied and the investment registration is completed within the applicable statutory timeline.
This flexibility can be useful, but investors still need to coordinate licensing, banking, charter capital, foreign exchange control, tax registration, business lines and operational permits. A fast ERC without a clear investment and compliance roadmap may create problems when the company opens bank accounts, contributes capital, leases land, imports machinery or applies for sector approvals.
4. Competent Licensing Authorities
Depending on the project location and nature, licensing may involve the provincial Department of Finance for many projects outside industrial zones; the relevant Industrial Zone, Export Processing Zone, High-Tech Zone or Economic Zone Management Board for projects inside such zones; the provincial People’s Committee or higher-level authorities for projects requiring investment policy approval; and sector regulators for conditional business activities. The exact licensing route should be checked at project level, especially for industrial, real estate, energy, education, healthcare and technology projects.
5. Investment Policy Approval
Some projects require investment policy approval before the IRC is issued. This may apply where the project involves large-scale land use; sensitive locations; residential or real estate development; industrial infrastructure; energy or natural resources; major environmental impact; sectors subject to special state management; or projects requiring approval by the National Assembly, Prime Minister or provincial People’s Committee.
The practical point is sequencing: investors should not sign binding land, factory, construction, financing or equipment commitments before confirming the required approvals and realistic licensing timeline.
6. Capital Contribution and Foreign Exchange Compliance
After licensing, foreign investors must contribute capital in accordance with the registered charter capital and investment capital schedule. Foreign capital contribution is normally made through a Direct Investment Capital Account (DICA) at a Vietnamese commercial bank.
Key issues include correct use of the DICA; currency and remittance procedures; timing of charter capital contribution; supporting documents for inbound capital; shareholder loan registration where applicable; profit repatriation after tax and financial obligations are met; and consistency between the IRC, ERC, charter, bank documents and accounting records.
Capital contribution errors can create banking, tax, accounting and compliance issues — and affect future M&A, profit repatriation, capital increase, restructuring or dissolution. For CFOs, the main risk is whether the Vietnam entity’s capital history is clean enough to support audit, financing, dividend distribution, group reporting and future exit.
7. Beneficial Ownership Disclosure
From 1 July 2025, Vietnam’s enterprise registration framework includes beneficial ownership disclosure obligations under amendments to the Law on Enterprises and implementing registration rules. Companies should collect, update and retain information on beneficial owners where required.
For foreign investors using holding companies, nominee layers, funds, trusts, SPVs or offshore group structures, beneficial ownership compliance should be reviewed before incorporation, M&A, restructuring or capital transfer. This is increasingly relevant for banks, licensing authorities, tax authorities, auditors and counterparties conducting compliance checks.
8. M&A and Share Acquisition by Foreign Investors
Foreign investors may enter Vietnam by setting up a new company or acquiring shares or contributed capital in an existing Vietnamese company. M&A registration may be required where the transaction increases foreign ownership in a conditional sector; results in foreign investors holding controlling or significant ownership; involves land-use rights in sensitive locations; or triggers competition, securities, real estate, banking, insurance or other sector-specific approvals.
Investors should conduct legal due diligence before signing or closing. Key areas include corporate authority, land and lease rights, tax exposure, labour compliance, environmental permits, business lines, foreign ownership conditions, related-party transactions, debts, litigation, contracts and hidden licensing issues.
9. Land, Factory and Real Estate Issues
Vietnam’s land and real estate framework affects how foreign-invested enterprises may lease land, sublease industrial land, use ready-built factories, acquire real estate projects or participate in property-related business. Relevant laws include the Land Law 2024, Housing Law 2023 and Real Estate Business Law 2023, effective from 1 August 2024.
For manufacturing projects, investors should check whether the industrial park is properly licensed; whether the landlord has the right to lease or sublease; permitted land-use purpose; lease term and renewal risk; infrastructure commitments; environmental conditions; construction and fire safety obligations; handover conditions for ready-built factories; and whether the intended manufacturing activity matches the project approvals.
Land due diligence is often one of the highest-risk areas in Vietnam FDI projects because a licensing issue can become an operational delay, not merely a legal technicality.
10. Tax, Accounting and Post-Licensing Compliance
After incorporation, foreign-invested companies must comply with tax, accounting, labour, reporting and corporate governance obligations. Common post-licensing obligations include tax registration and e-tax setup; VAT, corporate income tax and withholding tax compliance; labour contracts and internal labour rules; social insurance registration; work permits or work permit exemptions for foreign employees; investment project reporting; annual corporate compliance; beneficial ownership recordkeeping; and changes to registered business lines, capital, address, legal representative or project scope.
A common investor mistake is to view Vietnam company setup as complete once the IRC and ERC are issued. In reality, the first 90 to 180 days after licensing often determine whether the entity can operate cleanly.
Practical Implementation Steps
- Define the intended business model, revenue flows, location and ownership structure.
- Conduct market-access and sector-licensing review.
- Confirm whether investment policy approval is required.
- Decide the correct IRC/ERC sequencing.
- Prepare investment, corporate and beneficial ownership documentation.
- Open appropriate capital accounts and plan capital contribution.
- Complete tax, accounting, labour and operational registrations.
- Review land, factory, lease, construction and environmental requirements.
- Build a post-licensing compliance calendar.
- Re-check the structure before expansion, M&A, capital increase or profit repatriation.
Common Mistakes by Foreign Investors
- Choose business lines that do not match the real operating model.
- Sign leases before checking land-use and project approvals.
- Underestimate sector-specific licensing requirements.
- Contribute capital through the wrong bank account.
- Miss charter capital contribution deadlines.
- Fail to update beneficial ownership information.
- Appoint legal representatives without governance controls.
- Assume the ERC alone authorizes all business activities.
- Ignore labour, work permit and tax setup after incorporation.
- Use templates that do not reflect the 2025 Investment Law framework.
Frequently Asked Questions
What is the main FDI law in Vietnam in 2026?
The main law is the Law on Investment 2025, Law No. 143/2025/QH15, effective from 1 March 2026, together with Decree No. 96/2026/ND-CP, effective from 31 March 2026.
Does every foreign investor need an IRC?
Many foreign-invested projects require an IRC, but the exact requirement depends on the investment route, business activity, ownership structure and project location. Investors should check the licensing route before incorporation.
What is the difference between an IRC and an ERC?
The IRC records the investment project. The ERC establishes the Vietnamese enterprise. Both may be required for a foreign-invested company, though the 2025 framework introduces more flexible sequencing in certain cases.
Can a foreign investor establish a company before obtaining an IRC?
In certain circumstances, yes. However, investors must still satisfy market-access rules and complete required investment registration procedures within the applicable statutory timeline.
What changed for beneficial ownership disclosure?
From 1 July 2025, Vietnam’s enterprise registration framework includes beneficial ownership disclosure and recordkeeping obligations. Foreign investors using multi-layered holding structures should review compliance carefully.
Can a foreign investor acquire a Vietnamese company instead of setting up a new one?
Yes. However, M&A registration or sector approval may be required depending on foreign ownership, business sector, land-use issues and other regulatory conditions. Legal due diligence is strongly recommended before signing.
What is the biggest practical risk in Vietnam FDI setup?
The biggest risk is usually poor sequencing. Licensing, capital, banking, tax, land, labour and operational approvals must be coordinated from the beginning. A fast registration without a clear implementation plan creates problems in the operational phase.
Implementation Checklist
- Market access conditions and foreign ownership limits confirmed.
- Investment policy approval requirements assessed.
- IRC and ERC procedure and sequencing determined.
- Business lines and sector permits identified.
- Beneficial ownership disclosure obligations reviewed.
- Capital account and contribution timeline planned.
- Land, factory or office lease legality confirmed.
- Tax and accounting setup completed.
- Labour and work permit requirements assessed.
- Reporting and post-licensing obligations calendared.
- Governance controls for legal representatives and management established.
ECOVIS Vietnam Law Support
ECOVIS Vietnam Law supports international investors with Vietnam market-entry structuring, investment registration, enterprise establishment, M&A approval, industrial project setup, corporate governance, tax coordination and post-licensing compliance.
For foreign investors, the objective is not only to obtain incorporation documents. The objective is to build a Vietnam structure that can be licensed, funded, governed and operated predictably.
Contact Attorney Vu Manh Quynh at ECOVIS Vietnam Law for a consultation on your Vietnam investment structure. Email: vietnam@ecovislaw.vn | Website: www.ecovislaw.vn
Attorney Vu Manh Quynh is the Managing Partner of ECOVIS Vietnam Law, advising international investors on Foreign Direct Investment (FDI) and corporate governance in Vietnam.
This material is for general informational purposes only and does not constitute legal, tax or professional advice. Investors should seek specific advice based on their business sector, ownership structure and investment location in Vietnam.