A Practical Legal & Compliance Roadmap for Foreign Companies
Company incorporation in Vietnam is a regulated, document-driven process. While Vietnam welcomes foreign investment, authorities require clear structure, compliant documentation, and sector alignment from the outset.
This guide explains how to incorporate a company in Vietnam step by step, what approvals are required, typical timelines, costs, and common mistakes foreign companies should avoid.
Can Foreign Companies Set Up a Company in Vietnam?
Yes. Vietnam allows foreign ownership in most sectors, including technology, services, manufacturing, trading, and consulting.
However:
- Some industries are conditional or restricted
- Approval processes vary by structure and sector
- Compliance obligations begin immediately after incorporation
Choosing the right structure and sequence is critical.
Step 1: Confirm Your Business Scope & Ownership Structure
Before any filing, you must define:
- Business activities (Vietnam industry codes)
- Ownership structure (100% foreign-owned vs joint venture)
- Capital structure
- Location of the registered office
📌 Business scope drives approvals.
Incorrect or vague scope descriptions are a leading cause of rejection.
Step 2: Check Sector Restrictions & Licensing Requirements
Vietnam classifies industries as:
- Open
- Conditional
- Restricted
Conditional sectors may require:
- Additional licenses
- Local partner participation
- Minimum capital thresholds
- Professional qualifications
Examples include:
- Education
- Logistics
- Distribution
- Advertising
- Certain professional services
📌 Always confirm sector eligibility before proceeding.
Step 3: Apply for the Investment Registration Certificate (IRC)
The Investment Registration Certificate (IRC) is required for most foreign-invested companies.
What the IRC Covers
- Investor information
- Investment capital
- Business activities
- Project location
- Project duration
Documents Typically Required
- Investor corporate documents
- Financial capacity evidence
- Lease agreement (registered address)
- Project explanation
⏱ Typical processing time: 2–4 weeks
📌 This is the most scrutinized stage.
Step 4: Apply for the Enterprise Registration Certificate (ERC)
Once the IRC is approved, you apply for the Enterprise Registration Certificate (ERC).
ERC Includes
- Company name
- Legal representative
- Charter capital
- Shareholders / members
- Business lines
⏱ Processing time: 3–5 working days
📌 The ERC legally creates your company.
Step 5: Post-Incorporation Setup (Mandatory)
After receiving the ERC, several steps must be completed before operations begin.
Key Post-Setup Tasks
- Company seal creation
- Tax registration
- Corporate bank account opening
- Capital contribution registration
- Digital signature setup
- Accounting system setup
📌 Failure to complete these steps can trigger penalties even if no revenue is generated.
Step 6: Capital Contribution Requirements
Foreign investors must:
- Contribute charter capital within the approved timeline
- Use the correct capital account
- Provide bank confirmation
There is no universal minimum capital, but authorities assess:
- Business scope
- Operational scale
- Credibility of the project
📌 Under-capitalization can cause compliance and renewal issues.
Step 7: Apply for Sub-Licenses (If Required)
Certain businesses require additional operating licenses, such as:
- Trading licenses
- Education permits
- Logistics licenses
- Professional practice licenses
These are applied after incorporation, but may delay operations if not planned early.
Step 8: Register for Tax, Accounting & Labor Compliance
Once incorporated, companies must comply with:
- Monthly or quarterly tax filings
- Accounting standards
- Payroll and labor law
- Social insurance registration
- Annual statutory audit
📌 Compliance obligations apply even with no revenue or employees.
Typical Timeline for Company Incorporation
| Stage | Estimated Time |
|---|---|
| Planning & structuring | 1–2 weeks |
| IRC approval | 2–4 weeks |
| ERC issuance | 3–5 days |
| Post-setup registration | 1–2 weeks |
| Total | 4–8 weeks |
Timelines vary by:
- Sector
- Ownership structure
- Documentation quality
Typical Costs to Incorporate a Company in Vietnam
Costs vary based on:
- Business scope
- Legal complexity
- Licensing requirements
- Advisory support level
Cost categories include:
- Government fees
- Legal and advisory fees
- Translation and legalization
- Accounting and compliance setup
📌 Ongoing compliance costs often exceed setup costs over time.
Common Incorporation Mistakes Foreign Companies Make
❌ Choosing the wrong entity type
❌ Overly broad or incorrect business scope
❌ Ignoring conditional licensing
❌ Underestimating compliance obligations
❌ Delaying capital contribution
❌ Using overseas templates for Vietnam law
These mistakes often require costly restructuring later.
Alternative: Incorporation vs Employer of Record (EOR)
Some companies incorporate too early.
If you only need to:
- Hire staff
- Test the market
- Build a sales or tech team
👉 Employer of Record (EOR) may be a faster, lower-risk first step.
Many companies use:
EOR → Incorporation → Expansion
How BusinessPartner.vn Supports Company Incorporation
BusinessPartner.vn supports foreign companies with:
- Incorporation planning and feasibility
- IRC & ERC applications
- Licensing and regulatory approvals
- Post-setup compliance
- Accounting, tax, and payroll
- EOR → entity transition
👉 Talk to our Vietnam incorporation advisors to assess the right setup path.
Recommended Reading
How to Enter the Vietnam Market as a Foreign Company
EOR vs Company Setup in Vietnam
