Starting a business in Vietnam can be complex, especially for those unfamiliar with the local language, culture, and legal system.
This comprehensive guide walks you through the step-by-step process of establishing a foreign-owned company in Vietnam — from initial planning to full operational readiness.
1. Understand the Requirement for a Specific Project
To form a company in Vietnam, foreign investors must have a specific investment project they intend to implement.
This project must be approved by the government before the company can be officially registered.
To simplify the process, several preparatory steps can be taken before developing the full project plan — such as checking foreign ownership limits, business conditions, and location options.
2. Check Foreign Ownership Limits
Vietnam maintains foreign ownership restrictions in certain industries, depending on their importance to the national economy.
For example:
- The financial sector, especially banking, has some of the most stringent foreign ownership limits.
- The manufacturing sector is largely open to foreign investors, though restrictions may apply depending on the products being made.
These limits are defined under Decree 31/2021/ND-CP, which clarifies and expands upon the Law on Investment 2020.
In total:
- 25 business lines prohibit foreign investment entirely.
- 59 business lines allow foreign investment but with restrictions.
The exact ownership ratio depends on:
- WTO Most-Favoured Nation (MFN) rules,
- Vietnamese investment laws, and
- Free Trade Agreements (FTAs) that Vietnam has signed.
Before registering, ensure your intended business activity is not restricted or prohibited. If it falls under a conditional category, special licenses or approvals may be required.
3. Check Business Conditions
Once ownership eligibility is confirmed, the next step is to review any specific conditions for your chosen business line.
All businesses in Vietnam must have:
- A registered business address, and
- A resident legal representative.
In addition, some industries have conditional requirements, such as:
- A minimum capital amount,
- A maximum foreign ownership cap, or
- Professional qualifications for the company’s founders or managers.
Understanding these conditions early helps avoid delays during licensing.
If you’re unsure, consult a professional advisor for clarification.
4. Obtain a Business Address
Most general business lines allow the use of a virtual office as a registered address.
However, some conditional sectors — such as manufacturing or training — require a physical office that meets minimum space, safety, and lease term requirements.
⚠️ Important: Residential addresses (homes or apartments) cannot be used for company registration.
If needed, Metasource can assist in arranging both virtual and physical offices that comply with local regulations.
5. Appoint a Resident Legal Representative
Every company in Vietnam must have at least one legal representative residing in Vietnam, who can be Vietnamese or foreign.
If the legal representative is non-Vietnamese, they will later need a work permit.
This person must:
- Provide a permanent Vietnamese address, and
- Spend at least 183 days per year in Vietnam to maintain residency.
A temporary representative can be appointed to complete the registration, and replaced later with a permanent one if needed.
6. Apply for the Investment Registration Certificate (IRC)
Once all conditions are met, the company can begin the two-step registration process:
1️⃣ Investment Registration Certificate (IRC)
2️⃣ Enterprise Registration Certificate (ERC)
At the IRC stage, the investor must prove the feasibility and benefit of the project for Vietnam.
The Department of Planning and Investment (DPI) will review and approve the project, issuing the IRC upon acceptance.
⏱️ Processing time: 3–5 weeks
📄 Language: All documents must be in Vietnamese or officially translated.
Although online applications are available, much of the process is still manual — local assistance is strongly recommended.
7. Apply for the Enterprise Registration Certificate (ERC)
After obtaining the IRC, submit an application for the ERC (also known as the Business License).
⏱️ Processing time: 7–10 working days
Once issued, your company officially becomes a legal entity and may start business operations.
8. Create the Company Seal (Stamp)
After obtaining the ERC, the next step is to make the company seal.
Together with the legal representative’s signature, the seal validates all official company documents.
⏱️ Processing time: 2–5 days
9. Open Company Bank Accounts
Once the seal is ready, the company can open bank accounts at any commercial bank operating in Vietnam.
Two accounts are typically required:
- Capital Account – used exclusively for capital contributions.
- Current Account – used for daily transactions and operational expenses.
Funds transferred to the capital account must later be moved to the current account, as expenses cannot be paid directly from the capital account.
10. Inject the Registered Capital
Investors have 90 days after the company’s establishment to fully inject the registered capital.
Partial contributions are allowed, but the total amount must be completed within this period to avoid penalties or revocation of the license.
All capital must be transferred via bank wire to the company’s capital account.
11. Complete Tax Registration
Your Business License number also serves as your Tax Identification Number (TIN).
To activate tax compliance:
- Register for the online tax filing system.
- Obtain an e-signature token.
- Register with the local Tax Department.
This enables your company to submit electronic tax reports and pay taxes online.
12. Post-Establishment Operations
Once all registrations are complete, your company is fully operational.
Next, focus on:
- Hiring staff and registering for social insurance,
- Setting up accounting and reporting systems, and
- Managing monthly tax declarations and annual audits.
Many foreign investors choose to outsource accounting, HR, and payroll to local service providers to save time and ensure compliance.
Conclusion
Forming a foreign-owned company in Vietnam requires careful preparation and understanding of local regulations, but with proper planning and guidance, the process is straightforward.
If you need professional assistance, our consultants at Metasource can guide you through every step — from checking investment eligibility to handling business licenses, tax registration, and visa applications.
