Vietnam has become an increasingly attractive destination for foreign entrepreneurs, thanks to its rapidly growing economy, strategic location in Southeast Asia, and welcoming environment for foreign direct investment (FDI). As of 2024, the country continues to see significant inflows of FDI, with $18 billion in foreign investment capital reported in the first seven months of the year alone. This blog provides a comprehensive, step-by-step guide for foreign entrepreneurs looking to register a company in Vietnam, supported by the latest data and insights.

Why Vietnam?

Vietnam's economic landscape is vibrant and growing, with the government actively encouraging foreign investment through various incentives and an open regulatory environment. The country is expected to welcome over 230,500 new enterprises in 2024, indicating a thriving market with ample growth opportunities. Additionally, Vietnam’s strategic location, competitive labour costs, and integration into global trade agreements such as the CPTPP and EVFTA make it an ideal base for businesses looking to expand in Asia.

Key Considerations Before Starting

Before diving into the registration process, consider the following:

Understanding the Market: Conduct thorough market research to understand the local business environment, consumer behaviour, and competition. This will help tailor your business strategy to the Vietnamese market.
Legal Requirements: Familiarize yourself with Vietnam’s legal framework, especially regarding foreign ownership. In many sectors, foreign investors are allowed to own 100% of a business, but there are restrictions in certain industries like telecommunications and transportation.
Choosing the Right Business Structure: The most common business structures for foreign investors in Vietnam include Limited Liability Companies (LLC), Joint Stock Companies (JSC), and Representative Offices. Each has its own legal implications, tax obligations, and operational flexibility.

Step 1: Investment Registration Certificate (IRC)

The first official step in setting up a company in Vietnam is obtaining an Investment Registration Certificate (IRC). This certificate is required for foreign-owned businesses and grants approval for foreign investment in Vietnam.

Process:
- Prepare Required Documents: These include your business plan, financial statements, passport copies of the investors, and the proposed company charter.
- Submit to the Department of Planning and Investment (DPI): The IRC application is submitted to the DPI in the province where your company will be located.
- Processing Time: Typically 15 working days, provided all documents are in order.
Latest Data: The General Statistics Office of Vietnam reported a 9.6% increase in realized foreign direct investment capital in January 2024 compared to the previous year, reflecting strong interest from foreign investors.

Step 2: Enterprise Registration Certificate (ERC)

Once you have the IRC, the next step is to obtain an Enterprise Registration Certificate (ERC), which legally establishes your company in Vietnam.

Process:
- Prepare Required Documents: This includes the company charter, list of shareholders or members, passport copies of founders, and proof of the IRC.
- Submit to the Business Registration Office: The application for the ERC is submitted to the Business Registration Office under the DPI.
- Processing Time: The ERC is usually issued within 3-5 working days after submission.
Insight: In 2024, Vietnam is expected to see over 65,000 new firms entering the market in just the first five months, a record high, indicating a favourable business environment.

Step 3: Post-Registration Procedures

After obtaining the ERC, there are several post-registration procedures to complete before your company can commence operations.

Seal Carving: Your company must obtain an official seal, which is required for signing contracts and other official documents.
- Timeframe: This process typically takes 1-2 working days.
Tax Registration: Register your company with the local tax office. You will need to obtain a tax identification number (TIN) and register for value-added tax (VAT) if applicable.
- Latest Update: In 2024, Vietnam continues to simplify tax registration processes as part of its efforts to improve the ease of doing business.
Opening a Bank Account: Open a corporate bank account in a local bank to manage your business transactions. You will need your ERC, TIN, and the company seal for this process.
Capital Contribution: The registered capital must be fully contributed within 90 days from the date of issuance of the ERC.

Step 4: Licensing and Special Permits

Depending on the nature of your business, you may need additional licenses or permits to operate legally in Vietnam.

Industry-Specific Licenses: Some industries, such as manufacturing, food and beverage, and education, require special licenses.
Environmental Impact Assessment: If your business has the potential to affect the environment, you may need to conduct an environmental impact assessment and obtain the necessary approvals.
Trend Insight: Vietnam’s Ministry of Planning and Investment continues to streamline licensing processes, particularly in sectors crucial to the country’s economic development, such as renewable energy and high-tech manufacturing.

Step 5: Hiring and Compliance

Once your company is registered and licensed, you can begin hiring staff and setting up operations. Vietnam has a young, skilled, and competitive workforce, making it an attractive destination for labour-intensive industries.

Hiring Employees: Vietnam’s labour laws require that employment contracts be in writing, and all employees must be registered with the social insurance office.
- Data Insight: The 2024 labour market trends indicate a growing demand for skilled labour in the tech and manufacturing sectors, driven by increased foreign investment.
Compliance with Labor Laws: Ensure compliance with Vietnam’s labour laws, which include regulations on working hours, wages, and social insurance contributions.
Ongoing Compliance: Stay compliant with tax filings, annual financial statements, and corporate governance requirements. Non-compliance can result in penalties or suspension of business operations.

Challenges and Opportunities

While Vietnam offers many opportunities for foreign entrepreneurs, there are also challenges to be aware of:

Regulatory Changes: Vietnam’s regulatory environment is dynamic, and staying up-to-date with changes is crucial for compliance.
- Opportunity: The government’s push for digital transformation and Industry 4.0 presents opportunities for businesses in technology, e-commerce, and renewable energy sectors.
Cultural Differences: Understanding and adapting to local business practices and culture is essential for success in Vietnam.
- Opportunity: Building strong relationships with local partners and stakeholders can facilitate smoother business operations.

Conclusion

Vietnam company registration as a foreign entrepreneur is a straightforward process but requires careful planning and adherence to the country’s legal requirements. By following this step-by-step guide, you can navigate the complexities of Vietnam’s business registration process and position your company for success in one of Asia’s most dynamic markets.

As Vietnam continues to grow and attract foreign investment, the opportunities for entrepreneurs are vast. With the right preparation and understanding of the local business environment, your venture in Vietnam can thrive and contribute to the country’s ongoing economic development.

A Step-by-Step Guide to Vietnam Company Registration