Vietnam’s stable economy and investment-friendly policies have positioned the country as one of Southeast Asia’s most promising markets. For international entrepreneurs, Vietnam company formation is a strategic move to expand operations, access new markets, and capture growth potential.
However, the establishment process can be complex. Regulations surrounding investment sectors, business structures, charter capital, and administrative procedures must be carefully navigated to avoid costly mistakes, delays, or operational challenges.
In this article, we break down the essentials of Vietnam business registration, including ownership options, company structure types, and the key steps to ensure a smooth, efficient, and legally compliant setup.
What is a Foreign-Invested Company?
A foreign-invested company is a business established with capital from foreign investors. In recent years, demand for Vietnam company formation has grown rapidly with the country attracting US$31.52 billion in foreign direct investment (FDI) during the first 10 months of 2025, reporting a 15.6 percent year-on-year increase. This demonstrates the significant benefits that investing in Vietnam brings to investors, including:
- Socioeconomic stability: The nation boasts one of the region’s fastest GDP growth rates, with a government committed to strengthening the investment climate.
- Competitive labor costs: The country offers a young and skilled workforce at lower costs compared to neighboring countries
- Strategic location: Positioned near major Asian economies (China, Japan, South Korea), Vietnam is a hub for trade and manufacturing
- Tax incentives: Foreign investors can benefit from reduced corporate income tax rates, tax holidays, and exemptions in priority sectors like high-tech, renewable energy, and manufacturing
- Growing consumer market: With a population of nearly 100 million, rising incomes, and a young demographic, Vietnam offers strong demand for goods and services
Ownership Structures for Company Formation in Vietnam
Depending on ownership structure, the foreign-invested company typically falls into one of two categories:
- Wholly foreign-owned company: The entire charter capital is contributed by foreign investors. This structure allows the company to operate independently, giving investors full control over all business decisions.
- Joint venture company: Formed through capital contributions from both foreign and Vietnamese investors. The ownership ratio varies depending on the industry and the terms agreed upon by the parties involved.
So which should you choose? Let’s find out the differences, advantages, and considerations of each option to help you make the right decision for your investment in Vietnam.
| Criteria | Wholly Foreign-Owned Company | Joint Venture Company |
| Ownership | 100% of the capital is owned by foreign investors | Capital is shared between foreign investors and Vietnamese partners |
| Business licensing | Some sectors only allow joint ventures or limit foreign ownership | Easier access to sectors that require a Vietnamese partner |
| Capital withdrawal | Simpler and more convenient if foreign exchange regulations are followed | Must comply with the joint venture agreement, which can be more complex |
In general, a wholly foreign-owned company is suitable for investors who want full control and technology confidentiality, while a joint venture is advantageous for leveraging local relationships and resources.
Types of company structures in Vietnam
Once the investment type has been determined, foreign investors must select the appropriate company structure. This decision will define the distribution of shares/capital, the number of shareholders or members and the company’s legal responsibilities.
1. Limited Liability Company (LLC)
A limited liability company is a type of business in which the owners are only responsible for the company’s debts and obligations up to the amount of capital they have contributed. This structure is ideal for foreign investors who want to maintain tight control over business operations while limiting financial risk.
| Characteristic | Description |
| Number of members/shareholders | 1 owner (single-member LLC) or 2–50 members (multi-member LLC) |
| Scope of operations | Allowed to conduct business but not permitted to issue shares |
| Investment structure | Can be 100% foreign-owned or a joint venture with a Vietnamese partner |
| Organizational structure | Owner/Members’ council/Director/General Director |
2. Joint Stock Company
A joint stock company is a type of enterprise in which charter capital is divided into equal portions called shares. Shareholders are only liable for the company’s debts and obligations within the scope of their contributed capital. This structure is suitable for investors or corporations planning to raise capital, expand operations, or pursue a future listing.
| Characteristic | Description |
| Number of members/shareholders | Minimum of 3, with no maximum limit |
| Scope of operations | Allowed to conduct business and issue shares or bonds to raise capital |
| Investment structure | Can be 100% foreign-owned or established as a joint venture |
| Organizational structure | General Meeting of Shareholders, Board of Directors, Supervisory Board (if applicable), and Director/General Director. |
3. Company Branch
A branch of a foreign company is a dependent unit of the parent company abroad, established and operating in Vietnam to carry out all or part of the parent company’s business functions. Since it does not have independent legal status, a branch is suitable for foreign companies that are already stable and wish to expand their business directly into Vietnam.
| Characteristic | Description |
| Number of members/shareholders | Belongs to the parent company (no limit) |
| Scope of operations | Permitted to conduct business, sign contracts, and generate revenue |
| Investment structure | Can be 100% foreign-owned or a joint venture |
| Organizational structure | Authorized representative of the parent company |
*Note: For foreign investors still in the stage of market research, assessing business potential, and exploring customer demand before launching official operations, establishing a representative office in Vietnam is an optimal choice.
How to set up a company in Vietnam?
After finalizing the investment type and company structure, investors can begin the process of setting up a business in Vietnam.
Step 1: Define your business industry
The first step is to clearly identify the intended business sector. Investors must check whether the sector is permitted, conditional, restricted, or prohibited under Vietnam’s Law on Investment.
Step 2: Apply for the Investment Registration Certificate (IRC) (if required)
At this stage, investors can move forward with applying for the Investment Registration Certificate (IRC). This step is mandatory for foreign-invested projects that involve establishing a new economic organization in Vietnam, or for cases where a foreign investor acquires more than 50% of the charter capital of an existing Vietnamese enterprise.
The process typically takes 15–45 working days from the date the documents are submitted. In certain exceptional cases, such as when the intended business sector is not covered by WTO regulations, the process may take longer.
Step 3: Apply for Enterprise Registration Certificate (ERC)
After securing the IRC, the investor proceeds with applying for the Enterprise Registration Certificate and registering the company seal, officially completing the process to set up a company in Vietnam.
The process takes approximately seven working days. Starting from October 25, 2025, according to Notice 10441/TB-STC, Ho Chi Minh City will no longer issue printed Enterprise Registration Certificates. Instead, certificates will be provided in electronic format.
Step 4: Completing post-registration procedures
Once all documents for Vietnam company formation have been finalized, the business must carry out several additional procedures before officially commencing operations. These include:
- Opening a corporate bank account
- Contributing charter capital as committed in the Investment Registration Certificate and the company’s Charter
- Creating the company’s official seal
- Registering for a tax code and filing initial tax declarations
If the company intends to employ foreign workers, it must also apply for work permits and temporary residence cards for its staff.
Is there a minimum charter capital requirement for Vietnam company formation?
Currently, Vietnamese law does not impose a fixed minimum charter capital for Vietnam business registration. However, certain specific industries still require statutory capital according to their own regulations.
Investors have the right to propose the charter capital amount, but they must ensure the following factors:
- Suitability with the business scale, including office rental, staffing, marketing, production costs, etc.
- Proof of corresponding financial capacity (usually through bank statements, financial reports, etc.)
- Full capital contribution within 90 days from the date of issuance of the Enterprise Registration Certificate
- Capital contribution must be made via an investment capital account opened at a Vietnamese bank, using legally convertible foreign currency
Trusted Vietnam Company Formation Service for Foreign Investors
Establishing a company in Vietnam is a highly legal process that requires careful preparation, from selecting the right industry sector, investment structure to completing administrative procedures and setting up operations. While Vietnam business registration is not overly complicated, each step must be carried out in strict compliance with regulations to ensure long-term legality and efficiency.
For investors seeking Vietnam company registration, FISC is ready to accompany you from the very first steps through to the official launch of your enterprise. Our support helps you save time and minimize legal risks. With over 30 years of experience in investment consulting and corporate legal services, FISC has successfully assisted major projects for global corporations such as VSIP, Red Bull, Philip Morris, and many other international brands.
