FDI & Market Entry
Market Entry in Vietnam
Legal structures, licensing and procedures for foreign investors entering the Vietnamese market.
Summary
Entering Vietnam means choosing a legal structure, completing investment and enterprise registration, and building a compliant operating framework. Five structures are available — a wholly foreign-owned LLC, a joint venture, a representative office, a branch and a business cooperation contract — and each carries different limits on what the entity may lawfully do.
Choosing the entry structure
Vietnamese law offers foreign investors several routes to a business presence. The right one depends on business objectives, operational requirements, sector, capital deployment plans and the long-term Vietnam strategy — not on which is quickest to register.
The five structures below are the ones that matter in practice. The decisive question for each is not cost but capacity: what the entity is permitted to do, and who bears liability for it.
1. Wholly foreign-owned LLC
The most common structure for foreign manufacturing and services investment.
Ownership: 100% foreign-owned — one or more foreign investors hold the entire charter capital.
Liability: limited to the capital contribution.
Governance: a Members' Council (multi-member) or the company owner (single-member), plus a Director or General Director for daily management.
Charter capital: no statutory minimum in most sectors; sector minimums apply in banking, insurance and other regulated industries.
Capital contribution: charter capital must be contributed within 90 days of ERC issuance.
Best for: manufacturing, professional services, technology and trading companies that need direct operational control.
2. Joint venture with a Vietnamese partner
An LLC or joint-stock company established between one or more foreign investors and one or more Vietnamese investors.
Rationale: access to local relationships, supplier networks, distribution channels or regulatory relationships that carry commercial value.
Governance: decision rights, deadlock resolution and exit provisions need careful structuring — especially where the Vietnamese partner holds operational responsibility.
Transfer pricing: related-party transactions between the joint venture and its foreign parents require transfer pricing documentation.
Best for: sectors with ownership restrictions requiring local participation, and projects where local operational relationships are commercially material.
3. Representative office
A dependent unit of a foreign company, permitted to carry out market research, liaison and promotion — and nothing more.
Cannot conduct direct commercial activity, sign contracts in its own name for profit, or generate revenue in Vietnam.
Permitted: market research, liaison with Vietnamese counterparts, promotion of the parent's products and services, and supervision of contracts executed by the parent.
Licensing: by the provincial Department of Industry and Trade; simpler and faster than establishing a company.
Duration: typically five years, renewable.
Best for: initial market exploration before committing to a company, and ongoing liaison for companies that sell into Vietnam by direct export.
4. Branch office
A dependent unit that may trade within the scope of its branch licence — available only in limited sectors.
May conduct commercial activity and sign contracts within the licence scope.
The foreign parent bears direct legal liability for the branch's activities.
Available in banking, insurance, law firms and certain professional services.
Not available for manufacturing investment.
Best for: foreign banks, insurers and law firms permitted by sector rules to operate through a branch.
5. Business cooperation contract (BCC)
A contractual cooperation between a foreign investor and a Vietnamese counterpart for specific activities, without creating a new legal entity.
No company is created; the cooperation is governed by a BCC registered with the investment authority.
Profit and loss sharing, management responsibilities and contribution obligations are defined in the contract.
Used mainly where foreign ownership is capped — telecommunications, certain media activities — or where a joint venture is commercially impractical.
Best for: project-based cooperation and capped sectors where a formal joint venture does not work.
The registration process, step by step
Step 1 — Investment Registration Certificate (IRC). Most investors establishing a new entity, or contributing capital to an existing Vietnamese company, must first obtain an IRC from the competent investment authority. The IRC approves the project, fixes its scope and objectives and determines the applicable incentives. Processing takes 15–30 working days inside industrial zones and up to 35 working days outside them, for standard projects that do not require in-principle approval.
Step 2 — Enterprise Registration Certificate (ERC). After the IRC, the company is registered with the business registration authority — since the 2025–2026 institutional reform, the provincial Finance Department, which absorbed the former Department of Planning and Investment function. The ERC establishes the entity, its charter capital, governance, registered address and legal representative, and issues within 3–5 working days of a complete application.
Step 3 — post-registration. Several steps must be completed before operations begin, and they are where most schedules slip.
Application form, project proposal (objectives, scale, location, schedule, capital structure) and the investor's corporate documents.
Financial capability evidence — audited financial statements or a bank confirmation letter.
Location documents — industrial land lease, confirmation from the zone developer, or land-use rights documentation.
Tax registration and tax code, usually simultaneous with the ERC; bank account opening; charter capital contribution within 90 days.
Company seal and publication; social insurance registration; labour registration (internal labour regulations, salary scale, collective agreement).
Sector sub-licences, environmental filings, and fire-safety and construction approvals for the premises.
Capital contribution and foreign exchange
Charter capital must be contributed in Vietnamese Dong or a permitted foreign currency through a Direct Investment Capital Account (DICA) at a licensed commercial bank in Vietnam. Contributions in machinery, equipment or other assets are permitted, subject to customs and valuation procedures.
All inward contributions and outward profit remittances must pass through the DICA and be documented in line with State Bank of Vietnam foreign exchange rules. A capital history that does not reconcile with the IRC, ERC and accounting records becomes an obstacle at the first dividend, capital increase or exit.
Sector considerations
Manufacturing. Requires IRC and ERC plus industrial land rights, environmental approvals, construction permits, fire-safety certificates and activity-specific operational sub-licences.
Technology and software. May qualify for incentives as a technology enterprise; specific licensing from the Ministry of Science and Technology or the communications regulator can apply to telecommunications-adjacent activities.
Trading and distribution. Foreign-invested trading companies are separately licensed under commercial and retail distribution rules; multi-level distribution carries additional requirements.
Timeline and cost
For a standard wholly foreign-owned LLC inside an industrial zone, allow 3–5 months from application to operational readiness across IRC, ERC and post-registration. Outside industrial zones, 4–8 months depending on complexity and sector approvals.
Government fees for IRC and ERC registration are modest. The material cost of market entry is professional advisory work and the capital contribution itself — which is why the structure decision, not the filing, is where money is saved or lost.
A representative office is a liaison mandate, not a sales channel — the moment staff start negotiating terms or issuing quotations, the parent company should already be planning the move to a licensed entity.
Attorney Vu Manh Quynh, Founder & Managing Partner
Frequently asked questions
What is the fastest way to establish a company in Vietnam as a foreign investor?
A wholly foreign-owned LLC inside an established industrial zone is normally fastest: zone management authorities process IRC applications in 15–30 working days, and the ERC follows within 3–5 working days. Outside zones the process runs through the provincial Finance Department and takes slightly longer. A representative office is quicker still but cannot trade.
Is there a minimum capital requirement for foreign companies in Vietnam?
There is no statutory minimum charter capital for most sectors. Banking, insurance, securities and real estate have sector-specific minimums. For manufacturing, trading and most services the investor sets the figure, which should cover establishment costs and initial working capital — and be credible against the project proposal.
Can a foreign company set up in Vietnam without a local partner?
Yes. Vietnam permits 100% foreign ownership in most sectors, and no Vietnamese partner is required for most manufacturing, trading, technology and professional services investment. Joint ventures are used where local relationships carry strategic value or where sector rules require local participation.
How long does it take to set up a company in Vietnam?
For a wholly foreign-owned LLC in an industrial zone, roughly 3–5 months from application to operational readiness: IRC in 15–30 working days, ERC in 3–5 working days, then post-registration steps — bank account, capital contribution, labour registration and operating licences. Projects needing in-principle approval or sector sub-licences take longer.
What ongoing compliance applies to a foreign-invested company?
Corporate income tax filing and payment; transfer pricing documentation for related-party transactions under Decree 255/2026/ND-CP; labour compliance including contracts, social insurance and internal regulations; environmental obligations; foreign exchange reporting; annual reports to the investment and business registration authorities; and any sector-specific requirements.
Implementation checklist
Entry structure chosen against the real operating model, not the fastest filing.
Sector ownership limits and licensing conditions confirmed.
Project proposal, investor documents and financial capability evidence prepared.
Location documents in place before the IRC application.
IRC filed with the correct authority for the location.
ERC obtained and the 90-day capital contribution deadline calendared.
DICA opened and the contribution route agreed with the bank.
Labour registration, social insurance and internal regulations completed.
Sector sub-licences, environmental, fire-safety and construction approvals identified.
First-year compliance calendar issued to the finance and HR functions.
How we support investors
ECOVIS Vietnam Law advises international companies — German, European and global — on market entry structuring, investment licensing and regulatory compliance in Vietnam.
We prepare the structure decision with the licensing route, the sequence and the timeline attached, so the commercial plan and the regulatory plan are the same document.
This page is general information and not legal advice. Investors should seek advice specific to their sector, ownership structure and intended location in Vietnam. References to the Law on Enterprises 2020 and the Law on Investment 2020 should be read as references to those laws as amended, including the 2025 amendments effective 1 July 2025.
Entering the Vietnamese market?
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