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.

For every foreign manufacturer establishing a factory in Vietnam, the investment registration sequence begins with two foundational documents: the Investment Registration Certificate (IRC) and the Enterprise Registration Certificate (ERC). Understanding the distinction between these two instruments — and the precise sequence in which they must be obtained — is the most important regulatory knowledge for any investor at the start of a Vietnam manufacturing project.

This article addresses the 10 most frequently asked questions about IRC and ERC registration, charter capital, legal representative requirements, and corporate governance obligations for foreign-invested limited liability companies.

The IRC–ERC Distinction: Why It Matters for Foreign Manufacturers

The critical distinction is often misunderstood: the IRC and ERC are not interchangeable documents that can be obtained in either order. They perform entirely different functions, and the sequence is legally mandated. Getting this sequence wrong — or failing to maintain the distinctions between the two in subsequent filings — is one of the most common and costly early mistakes in a Vietnam manufacturing project.

Q11. What is the difference between an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC)?

The IRC (Giấy chứng nhận đăng ký đầu tư) is the investment authorisation issued by the Department of Planning and Investment (DPI) or the Industrial Park Management Authority (IPA). It is a project-level document: it authorises the investment, defines the scope, total capital (charter capital plus loans), implementation schedule and location. Without an IRC, no foreign investment project legally exists in Vietnam.

The ERC (Giấy chứng nhận đăng ký doanh nghiệp) is the corporate registration certificate issued by the Business Registration Office. It creates the legal entity — the company. It confirms the legal name, registered address, charter capital, legal representative, and ownership structure of the Vietnamese enterprise.

The key rule: For foreign investors establishing a new entity in Vietnam, the IRC must be issued before the ERC application can be filed. The IRC is the prerequisite; the ERC is the result.

This is the opposite of the domestic company formation process, where Vietnamese investors need only the ERC and no IRC is required.

Q12. When must the IRC be obtained before the ERC?

Under Investment Law 2020 (Law No. 61/2020/QH14) and its implementing 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 absolute — there are no exceptions for project scale or sector (though the issuing authority and process vary).

The IRC application requires the investor to define:

• The investment project objectives and scope
• Total investment capital (including both charter capital and loan financing)
• Investment location (confirmed by a land commitment letter from the industrial park developer)
• Implementation schedule (phased milestones from capital contribution to production start)
• Technology and environmental approach

Only after IRC issuance — which confirms that the investment project is authorised — can the investor proceed to ERC registration. The ERC application uses the IRC as a supporting document.

Practitioner note: For projects in conditional sectors (listed in Appendix IV of the Investment Law), a sector-specific ministry-level opinion must be obtained before the IRC application can be accepted. This adds an additional pre-IRC phase that most deal timelines fail to account for.

Q13. What legal entity types are available to foreign manufacturers in Vietnam?

The two principal entity types for foreign-invested manufacturing companies are:

Limited Liability Company (Công ty TNHH — LLC): The most common structure for 100% foreign-owned subsidiaries. May have one member (single-member LLC, the standard structure for wholly-owned foreign subsidiaries) or multiple members (multi-member LLC, where ownership is shared between two or more investors or the parent and local partner). Members’ liability is limited to their registered charter capital contribution. The LLC is governed by a Members’ Council (or by the sole owner in a single-member LLC) and managed by a Director or Board of Directors.

Joint-Stock Company (Công ty cổ phần — JSC): Preferred when the company has multiple shareholders or when share issuance is planned. A JSC is governed by a General Meeting of Shareholders and a Board of Directors. It is more complex to establish and maintain than an LLC but is the required structure for public listing on Vietnamese stock exchanges.

Branch offices may be established by foreign companies but carry higher liability risk (the parent company is directly liable for the branch’s obligations) and cannot hold assets independently. For manufacturing projects requiring factory ownership, branches are generally not appropriate.

Q14. What charter capital amount should a foreign-invested manufacturing company register?

Vietnamese law does not prescribe a minimum charter capital for most manufacturing sectors (sector-specific capital requirements exist for banking, insurance, telecommunications and a few other regulated sectors, but not for general manufacturing).

However, several practical considerations drive the charter capital decision:

• DPI/IPA credibility: The IRC authority assesses whether the stated capital is sufficient to execute the described project. Registering unusually low charter capital relative to the project scope may trigger DPI scrutiny or IPA queries.
• Bank financing: Vietnamese banks assess creditworthiness in part on registered charter capital. Companies with very low charter capital may face limitations on local borrowing.
• Obligation risk: Registering charter capital significantly higher than the investor’s actual capacity to contribute creates obligation risk — the 90-day contribution requirement under the Enterprise Law applies to the full registered amount.
• Total investment ratio: In practice, DPI authorities expect charter capital to represent approximately 20–30% of the total investment capital. The balance is typically financed through shareholder loans or external bank borrowing.

For a typical SME manufacturing factory (total investment USD 5 million), a charter capital of USD 1–1.5 million with the balance financed through shareholder loans is a common and accepted structure.

Q15. What is the timeline for capital contribution after receiving the IRC?

This is one of the most frequently misunderstood obligations in Vietnam company law — and one of the most common first-year compliance failures.

The rule: Under Enterprise Law 2020 (Law No. 59/2020/QH14), members of an LLC must contribute their charter capital in full within 90 days of ERC issuance — not 90 days from IRC issuance, and not 90 days from the signing of the investment agreement.

The 90-day clock runs from the date on the ERC. Charter capital contribution must be:

• Made in the form agreed in the company charter (cash, assets or intellectual property)
• Transferred through the company’s designated capital contribution bank account (for cash contributions)
• Documented with bank transfer records that match the contribution amount on the ERC

If the deadline is missed: The company must reduce its registered charter capital to the amount actually contributed, notify the Business Registration Office, and amend the ERC accordingly. Failure to make the contribution AND failure to notify and amend are both administrative violations, each subject to fine.

Practitioner note: The 90-day deadline often catches investors off-guard because the IRC processing period and the post-IRC setup period (tax registration, bank account opening, recruitment) typically consume most of the available window. Investors should plan capital contribution logistics from day one of ERC issuance, not as an afterthought.

Q16. Can a foreign company appoint a foreign national as legal representative in Vietnam?

Yes. There is no legal prohibition on a foreign national serving as the legal representative (người đại diện theo pháp luật) of a Vietnamese company. The legal representative is the person with the authority to sign contracts and documents on behalf of the company, and whose name and passport information is registered in the ERC.

However, a foreign national serving as legal representative must:

• Hold a valid work permit (unless exempt under Decree 152/2020/ND-CP — exemptions apply to certain owner-managers and specific roles)
• Hold a Temporary Residence Card (TRC) — or maintain legal residence status in Vietnam
• Be physically present in Vietnam to execute documents in person (or grant specific powers of attorney for individual transactions when travelling)

Practical arrangement: Many foreign-invested companies appoint a foreign national as legal representative for corporate governance authority, while also designating a locally-resident deputy director or authorised signatory to handle day-to-day dealings with Vietnamese tax authorities, banks and government offices. This dual arrangement avoids the practical friction of requiring an overseas-based legal representative to physically sign routine Vietnamese administrative documents.

Risk note: The legal representative bears personal legal responsibility for certain compliance failures. If the company violates Vietnamese law, the legal representative may be named in enforcement actions, fined or — in serious cases — barred from departure from Vietnam pending investigation. This risk should be clearly understood by any foreign national accepting the legal representative role.

Q17. What are the governance requirements for a foreign-invested LLC in Vietnam?

A Vietnamese LLC is governed under the Enterprise Law 2020. The governance structure depends on whether the LLC is single-member or multi-member:

Single-member LLC (100% foreign-owned):

• The sole owner (the foreign parent company) exercises all members’ rights
• The owner may delegate management to a Director or Board of Directors
• Major decisions (capital increase, charter amendment, dissolution) must be documented in resolutions of the sole member
• An inspection committee or external auditor must be appointed

Multi-member LLC:

• Governed by a Members’ Council (Hội đồng thành viên) composed of all members
• The Members’ Council elects a Chairperson and appoints a Director or Board of Directors
• Quorum and voting rules for Members’ Council resolutions must be defined in the company charter
• Matters requiring unanimous vote (vs. simple majority) must be clearly specified

All LLCs must maintain:

• A company charter (điều lệ) consistent with the Enterprise Law — filed with the Business Registration Office at incorporation and updated with each amendment
• Minutes of Members’ Council meetings (or resolutions of the sole owner) for all major decisions
• A register of members and their capital contributions
• Notification to the Business Registration Office of any changes to the legal representative, directors, charter capital or company charter within 10 days of the resolution

Q18. Can a single foreign investor own 100% of a Vietnamese manufacturing company?

Yes, in all manufacturing sectors not listed as “conditional” in Appendix IV of the Investment Law 2020. This covers the vast majority of manufacturing activities that foreign investors pursue in Vietnam: electronics assembly, machinery manufacturing, consumer goods, textiles, footwear, furniture, food and beverage processing, automotive parts, and industrial equipment.

A single foreign investor — whether a corporate entity or an individual — registers as the sole member of the single-member LLC on both the IRC and the ERC. The investor’s full ownership is recorded in the company’s capital contribution register.

Conditional sectors note: For sectors listed as conditional in Appendix IV, a foreign ownership cap may apply (e.g., 49%, 51%), or a joint venture with a Vietnamese partner may be required. Investors should confirm whether their specific manufacturing activity falls within a conditional sector before structuring the investment.

Common misconception: Some investors believe that a Vietnamese nominal shareholder (often called a “nominee”) is required for all foreign investments. This is incorrect for non-conditional sectors. A 100% foreign-owned LLC in a non-conditional manufacturing sector requires no Vietnamese shareholder. Using unnecessary nominee arrangements creates legal complexity without regulatory benefit.

Q19. What is the procedure for amending the IRC after the company is established?

The IRC is a living document that must reflect the current state of the investment project. Amendments are required whenever there is a change to any of the key parameters specified in the original IRC. Common amendment triggers include:

• Increase in total investment capital (most common — required before actual capital increase)
• Expansion of production scope (new product lines, higher production capacity)
• Change in implementation schedule (extension of milestones)
• Change in investor identity (when shares are transferred or the parent entity restructures)
• Change in implementation location (adding a new production site or relocating)

The amendment procedure: Submit an IRC amendment application to the original issuing authority (IPA for in-park projects, DPI for out-of-park projects). Required documents include: the amendment application form (per Decree 31/2021 Annex II-7); a Members’ Council resolution approving the change; updated project description; and any supporting documents specific to the amendment type (e.g., financial statements for a capital increase).

Processing time: 10 working days (statutory) for standard amendments not requiring sector-specific approval. In practice, allow 3–4 weeks for a straightforward amendment in a well-run industrial park.

Critical rule: Operating outside the approved IRC scope before the amendment is issued is a violation of the Investment Law — even if the amendment application has been submitted. The amendment must be approved and issued before the expanded activity commences.

Q20. What ongoing corporate governance obligations does a foreign-invested manufacturing company have?

Corporate governance obligations for foreign-invested manufacturers are substantial and ongoing. The following are the most frequently missed:

Annual obligations:

• Annual investment project implementation report to the DPI/IPA (due 31 January each year for the prior calendar year)
• Annual audited financial statements (due 31 March)
• Annual CIT finalisation return (due 31 March)
• Annual personal income tax finalisation for employees (due 31 March)
• Annual transfer pricing disclosure (Appendix I to Decree 132/2020, filed with the CIT return)

Event-triggered obligations:

• Notification of changes to the legal representative, directors or charter (within 10 days)
• IRC amendment before any material project change
• Foreign loan registration with SBV before drawdown of medium/long-term loans
• Notification of capital contribution completion (or reduction) to the Business Registration Office

The most overlooked obligation: The annual DPI investment implementation report is the single most commonly missed compliance requirement among foreign-invested factories. Many foreign companies are unaware that this report exists, separate from their tax filings. Failure to file accumulates fines and can jeopardise IRC amendment applications and investment incentive maintenance.