About This FAQ Hub
International investors entering Vietnam encounter a large volume of legal and regulatory questions across multiple systems. This hub consolidates the most consistently recurring questions — drawn from ECOVIS Vietnam Law’s advisory work with manufacturing investors, technology companies, M&A acquirers, trading companies, and service providers from across the G20 and beyond.
The hub is organized by topic area. For investors with questions on a specific area, each section covers the core questions for that topic. Where deeper guidance is available in a dedicated article, a link is provided.
Company Establishment and Licensing
What is the difference between the IRC and ERC?
The Investment Registration Certificate (IRC) is issued by the investment registration authority and records the approved investment project — investor identity, investment scope, charter capital, and timeline. The Enterprise Registration Certificate (ERC) is issued by the enterprise registration authority and records the company as a legal entity — name, address, legal representative, business lines, and capital. Both are required for a foreign-invested company; both must be kept current and consistent with each other.
How long does it take to establish a foreign-invested company in Vietnam?
Under the Law on Investment 2025 (Law No. 143/2025/QH15, effective 1 March 2026), the IRC application is now filed first, before the ERC. IRC processing time is 15 working days for standard projects, and longer for conditional sector projects requiring additional approvals or pre-licensing consultation. ERC processing typically takes 3–5 working days after IRC approval. Practical timeline from first documentation to receiving both certificates: 4–8 weeks for straightforward structures, 2–4 months for projects in conditional sectors.
Can a foreign company own 100% of a Vietnam subsidiary?
Yes — in most sectors, 100% foreign ownership is permitted. The principal exceptions are sectors listed in Vietnam’s Schedule of Specific Commitments in Services (under WTO, AFAS, and bilateral FTAs), conditional investment sectors requiring partnership or limited foreign ownership, and specific restrictions applicable to certain regulated activities. Foreign investors should verify the ownership cap applicable to their specific sector before structuring the investment.
What sectors require special approval or a lower foreign ownership cap?
Conditional investment sectors under the Law on Investment 2025 require additional licensing, partnership conditions, or authority approval beyond the standard IRC/ERC process. These include financial services, telecommunications, media and broadcasting, logistics, certain education and healthcare activities, real estate, and others. The specific conditions depend on the sector and the applicable treaty commitments. ECOVIS Vietnam Law advises investors on the sector-specific entry conditions before the investment structure is finalized.
Tax and Accounting
What is the corporate income tax rate for FDI companies in Vietnam?
The standard corporate income tax (CIT) rate is 20%. Investment incentives — reduced rates (typically 10% for prioritized sectors) and tax holidays (typically 2–4 years of 0% CIT followed by a reduced rate period) — are available for investments in high-tech sectors, industrial zones, economic zones, and remote or economically disadvantaged areas. Incentive conditions must be met and tracked throughout the incentive period.
What is the Value Added Tax regime for FDI companies?
FDI companies conducting taxable activities in Vietnam are subject to VAT. The standard rate is 10%; a reduced rate of 5% applies to specified categories (including certain agricultural products and educational materials). Exports are generally zero-rated. Export Processing Enterprises (EPEs) operating in export processing zones have a separate customs-based VAT regime. Monthly VAT declarations are required for most FDI companies (quarterly for qualifying smaller companies).
What is Foreign Contractor Tax and when does it apply?
Foreign Contractor Tax (FCT) applies when a Vietnamese company makes payments to a foreign entity for services provided in or to Vietnam. FCT has two components: a VAT component and a CIT component, with rates depending on the nature of the services. FCT is typically withheld by the Vietnamese paying company and remitted to the tax authority. It is one of the most commonly misunderstood tax obligations for FDI companies making payments to foreign group companies or suppliers.
When must the annual tax finalization be filed?
The annual CIT finalization return and annual financial statements must be filed within 90 days after the end of the fiscal year. For companies on a calendar year (January–December), this is 31 March. Annual PIT finalization for employees is also due by the same deadline. Annual financial statements must be audited by a licensed Vietnamese audit firm before the CIT finalization is filed.
Manufacturing and Factory Setup
What legal structure is best for a manufacturing operation in Vietnam?
Most manufacturing investors establish a single-member limited liability company (SMLC) or a multi-member LLC, depending on the investor structure. For export-oriented manufacturing, Export Processing Enterprise (EPE) status within an Export Processing Zone or designated industrial zone provides customs advantages — duty-free import of raw materials and equipment, simplified export procedures. The choice between EPE and standard FDI manufacturing status depends on the ratio of domestic vs. export sales and the availability of a suitable EPE zone.
How are manufacturing companies taxed on imported raw materials?
Standard FDI manufacturers are subject to import duties on raw materials (subject to applicable FTA duty rates) and may claim VAT refunds on raw material imports used in export production. EPE companies import raw materials duty-free and VAT-free, with customs accounting for materials through a raw material account. Resolution 19/2025 introduced adjustments to the EPE customs regime for certain chemical and intermediate inputs — manufacturing investors should verify the current applicable rates for their specific raw materials with a customs advisor.
What are the main labor law obligations for a manufacturing company?
Manufacturing companies must: execute compliant labor contracts with all employees; register with the social insurance authority and enroll employees in compulsory social, health, and unemployment insurance; comply with the Labor Code’s provisions on working hours, overtime limits, and annual leave; post and register internal labor regulations with the district labor authority; and comply with applicable collective bargaining and minimum wage requirements. Overtime in manufacturing is subject to caps and premium rates. Strike risk and labor dispute management is a practical consideration for larger manufacturing operations.
Customs and Supply Chain
What customs documentation is needed to import goods into Vietnam?
Standard import documentation includes: a commercial invoice; a packing list; a bill of lading or air waybill; the import contract (where required by customs); a certificate of origin (where preferential tariff rates are claimed under an FTA); and any product-specific certificates required for the goods (technical standards certificates, food safety certificates, etc.). The customs declaration is filed electronically through the VNACCS system.
How does Vietnam’s FTA network affect import duties for manufacturing inputs?
Vietnam is party to multiple FTAs including CPTPP, EVFTA, RCEP, and bilateral agreements with Japan, Korea, and others. Preferential tariff rates under these agreements can significantly reduce import duties on manufacturing inputs, depending on the country of origin and the applicable rules of origin. The most favorable rates available depend on the specific HS code of the goods and the investor’s country of origin for the inputs. A customs advisor should map the applicable rates before the supply chain is finalized.
Can FDI companies import goods for domestic sale in Vietnam?
FDI companies with import trading rights — reflected in the IRC and ERC — can import goods for domestic sale. The scope of the import trading right and any applicable import licensing requirements (for regulated product categories) are determined at the IRC application stage. Companies that want to expand their import trading activities after establishment need to assess whether an IRC amendment is required to expand the approved investment scope.
M&A and Joint Ventures
Can a foreign investor acquire an existing Vietnamese company?
Yes — acquisition of existing Vietnamese companies by foreign investors is permitted, subject to sector-specific foreign ownership caps and applicable M&A approval requirements. For acquisitions in unconditional sectors, the process involves registration of the capital contribution or share transfer at the investment registration authority and enterprise registration authority. For acquisitions in conditional sectors or acquisitions that result in foreign ownership above the applicable cap, additional approvals are required. Economic concentration rules under the Competition Law 2018 apply to transactions above specified thresholds.
What is the difference between acquiring shares and acquiring assets in Vietnam?
A share acquisition results in the foreign investor becoming a shareholder of the existing Vietnamese entity, which retains all its existing licences, contracts, liabilities, and compliance history. An asset acquisition involves the foreign investor establishing a new entity (or using an existing entity) and purchasing specific assets from the Vietnamese company — typically business assets, equipment, or real property — without assuming the seller’s liabilities or regulatory history. The choice between structures has significant tax and legal implications; most manufacturing acquisitions in Vietnam use a combination of approaches.
What are the typical due diligence issues in Vietnam M&A?
Common due diligence findings in Vietnam M&A transactions include: inconsistencies between the target’s IRC and ERC (capital figures or business lines not matching); incomplete capital contribution history; outstanding tax filings or unpaid tax liabilities; labor compliance gaps (unregistered employees, unfiled social insurance); environmental permit status for manufacturing operations; intellectual property ownership and chain of title; and undisclosed related-party transactions. ECOVIS Vietnam Law conducts legal and regulatory due diligence for Vietnam M&A transactions across all major sectors.
Corporate Governance and IP
What are the governance requirements for a foreign-invested LLC in Vietnam?
A single-member LLC has a simpler governance structure: the sole member (the foreign investor) holds all decision-making authority, exercised through the member or through a Member’s Council if structured with a delegated governance body. A multi-member LLC has a Member’s Council as the highest governance body. Both forms must have a legally registered legal representative who is authorized to sign on the company’s behalf and who must hold a valid work permit. The company charter defines the governance structure and authority limits.
Can a foreign company register its trademark in Vietnam?
Yes — foreign companies can register trademarks in Vietnam directly or through the Madrid Protocol, of which Vietnam is a member. Vietnamese trademark registration provides exclusive rights in Vietnam for 10 years, renewable. Common issues include prior conflicting registrations, descriptive or generic marks failing the distinctiveness requirement, and delays in examination at the National Office of Intellectual Property. Companies planning to use their global brand in Vietnam should file for trademark registration early — ideally before the first commercial activity in Vietnam.
Post-Licensing Compliance
What are the most common post-licensing compliance failures for FDI companies?
The most consistently observed post-licensing failures are: failing to update the ERC after an IRC amendment; not updating the company charter after an ERC amendment; delaying the DICA opening; missing monthly VAT or quarterly CIT payment deadlines; not tracking work permit and TRC renewal dates for the legal representative; missing the annual investment monitoring report; and allowing banking documentation to become outdated after corporate changes. Each of these creates operational disruption that is far more costly to remediate than to prevent.
When can the company remit profit to the foreign investor?
Profit remittance requires: annual financial statements audited by a licensed Vietnamese audit firm; and confirmation from the tax authority that all CIT and other tax obligations for the relevant year are settled. The remittance is processed through the DICA or the company’s foreign currency account. Companies with outstanding tax obligations — including unfiled declarations or unpaid tax arrears — cannot complete a compliant profit remittance until those issues are resolved.
Country-Specific Questions
Are there specific tax treaty benefits for investors from Germany, Japan, Korea, Australia, or the US?
Vietnam has double taxation agreements with Germany, Japan, Korea, Australia, and many other countries. These treaties provide reduced withholding tax rates on dividends, royalties, and service fees paid from the Vietnam entity to the investor’s home country, as well as clarifying the tax treatment of permanent establishments and capital gains. The specific treaty rates and conditions vary by country and by type of payment. Investors should confirm the applicable treaty rates with their tax representative before structuring intercompany payments and profit distributions.
Is there preferential treatment for investors from ASEAN countries?
Vietnam’s commitments under the ASEAN Free Trade Area (AFTA/ATIGA) and the ASEAN Investment Area provide certain preferential conditions for investors from ASEAN member states, including on tariffs for goods traded within ASEAN. For investment structuring, investors from outside ASEAN sometimes consider ASEAN holding structures (Singapore is the most common) to access ASEAN treaty benefits. The substance requirements for treaty access under Vietnam’s anti-avoidance framework must be satisfied for these structures to be effective.
ECOVIS Vietnam Law — Advisory Services
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. ECOVIS Vietnam Law provides market-entry advisory, post-licensing compliance, M&A due diligence and structuring, tax advisory, and integrated corporate maintenance for foreign investors across manufacturing, technology, services, and consumer sectors.
Have a question not answered in this hub? ECOVIS Vietnam Law advises international investors on the full range of Vietnam FDI legal and compliance questions. Contact Attorney Vu Manh Quynh. Email: [email protected] | Website: www.ecovislaw.vn
This content is provided for general information only and should not be treated as legal, tax, accounting, banking, labor, immigration or investment advice. Requirements may change depending on current regulations, authority practice, and the company’s licensing history. Companies should obtain case-specific advice before taking action.
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. Email: [email protected] | Website: www.ecovislaw.vn
