Guide to Setting Up A Company in Vietnam

Vietnam is one of Southeast Asia’s most popular destinations for foreign businesses. It’s a hub for startups known for its young, skilled workforce, and a fast-growing economy. The country also has plenty of trade agreements that have made market entry more accessible, in contrast to its neighbors. 

But before you commit to incorporating your business, you should understand how the process works, the legal structures, and foreign ownership rules. In this article, we will also discuss key alternatives to setting up a company in Vietnam as a foreigner. 

Overview of Foreign Ownership Rules and Restrictions in Vietnam

Vietnam's investment framework operates under a Negative List. Business sectors in Vietnam are grouped into three tiers: fully open, conditional, and prohibited. To identify sectors, the country uses a classification system or a VSIC (Vietnam Standard Industrial Classification) code, with each belonging to a specific category in the Negative List. 

Most mainstream business activities are accessible to foreign investors in Vietnam, either with full ownership or through a conditional pathway. The key is verifying your specific VSIC code and business activities before committing to a structure.

Fully Open Sectors (100% Foreign Ownership Permitted)

If your business falls outside Vietnam's list of prohibited and conditional sectors, you're entitled to the same market access as a domestic investor. Companies open in fully open sectors enjoy 100% foreign equity without the need for a partner. 

The following sectors are broadly open to full foreign ownership:

• Manufacturing and processing
• Information technology and software development
• E-commerce
• Consulting and market research
• Wholesale and retail trading (subject to licensing for multiple outlets)
• Education services (excluding higher education and some specialised training)
• Hospitality (restaurants, cafes, hotels, and accommodation)
• Logistics and freight forwarding (though some sub-sectors have caps)
• Construction and real estate development (for approved project types)

Conditional Sectors (Additional Requirements Apply)

Conditional sectors are those where foreign investment is permitted, but subject to ownership caps, mandatory joint ventures, specific licences, or government approval before you can operate. As of 2026, there are around 196 conditional business lines in Vietnam. Common examples include:

• Telecommunications: Foreign ownership is capped and subject to national security review. Specific caps vary by type of telecom activity and typically require government approval.
• Banking and financial services: Foreign ownership in commercial banks is generally capped at 30%, or up to 49% with government approval. Non-bank credit institutions allow up to 50%.
• Real estate trading: Foreign investors can participate in approved project types but cannot own land outright (land in Vietnam is only leased, not owned). Condominiums are capped at 30% foreign ownership per project.
• Retail distribution (multiple outlets): Subject to an Economic Needs Test (ENT) before a foreign investor can open a second or subsequent retail location.
• Media, publishing, and broadcasting: Typically restricted or requires a local partner. Foreign ownership of content platforms and publishers remains tightly controlled.
• Education (higher and specialised): Permitted with conditions and specific licensing requirements from the Ministry of Education and Training.
• Healthcare and pharmaceuticals: Permitted but subject to additional licences and compliance requirements from the Ministry of Health.
• Data-related services: Added to the conditional list under the Law on Data 2024 (effective July 2025). Covers data intermediary services, data analysis and aggregation platforms, and data trading services.

Trade agreements can improve your access in conditional sectors. The CPTPP and the EU-Vietnam Free Trade Agreement (EVFTA) provide preferential treatment for eligible investors. Benefits include reduced ownership caps, simplified licensing, and faster approvals in sectors like retail, IT, and professional services.

Prohibited Sectors (Off-Limits to All Investors)

Certain activities are completely banned from both local and foreign investment under Vietnamese law. These are set out in Article 6 of the Law on Investment and include:

• Trading in narcotics
• Trading in hazardous chemicals, minerals, and wildlife specimens covered under CITES
• Prostitution
• Human trafficking and trade in human tissues, organs, or fetuses
• Human cloning
• Trading in firecrackers
• Provision of debt collection services
• Production and trade of e-cigarettes and heated tobacco products (banned as of January 2025)

Popular Legal Structures for Company Setup in Vietnam

Choosing the right structure is one of the most consequential decisions you'll make when setting up in Vietnam. Here's a breakdown of your main options:

• Limited Liability Company (LLC): Offers full ownership flexibility (up to 100% foreign), straightforward governance, and limited liability protection. It comes in two forms:
• Joint Stock Company (JSC): Ideal for raising capital or significant future expansion. Unlike other company types, a JSC can issue shares to multiple investors, making it easier to attract funding from venture capital, private equity, or through a public listing. However, it's more complex to manage with annual audits, shareholder meetings, and board resolutions.
• Representative Office (RO): Considered as an extension of a parent company. An RO is a low-risk, low-commitment structure designed for market research, provide support to a parent company, and maintain a local presence. However, it cannot generate revenue, sign commercial contracts, or issue invoices. 
• Branch Office: Like an RO, a branch office is an extension of a parent company but it can conduct commercial activities. However, it is limited to sectors where branch operations are permitted such as banking, legal services, and certain professional services. Unlike an LLC, it's not a separate legal entity, so the parent company bears full liability.

For most foreign investors, an LLC hits the right balance of simplicity, flexibility, and control. If you're unsure which structure fits your specific situation, Emerhub can map out the best structure aligned with your goals.

Key Requirements for Setting Up a Company in Vietnam

Aside from choosing the right business structure, you must meet several key requirements that can help you navigate the registration process more smoothly:

• Charter Capital: Vietnam doesn't impose a universal minimum capital for most sectors. However, licensing authorities will assess whether your proposed capital is sufficient to execute your business plan and sustain operations until the company can generate revenue. Typical benchmarks range from around USD 10,000 to USD 40,000, depending on your industry and location. 
• Shareholders and Directors: Must have at least one shareholder (individual or corporate entity) and at least one director.
• Legal Representative: Vietnamese law requires at least one legal representative who resides in Vietnam. If this person is a foreigner, they'll need a valid work permit or Temporary Residence Card. If the representative is absent from Vietnam for more than 30 days, they must delegate authority in writing to a resident.
• Registered Business Address: Every company must have a physical registered address in Vietnam. This is where official correspondence is sent and where your business is legally domiciled. A valid lease agreement is typically required. Virtual offices are generally not accepted for foreign-invested enterprises.

Documents Needed for Registration

As a foreigner, you will need to obtain the following to submit your incorporation application successfully:

• Proof of Financial Capacity: Bank statements or financial records verifying you have sufficient capital (financial statements from the past two years for existing companies, or bank statements for individual investors).
• Identification Documents: Notarized/legalized passports and IDs of all founders, shareholders, and legal representatives.
• Lease Agreement or MOU: Proof of your registered business address.
• Company Charter: The governance document for your business.

How to Register a Company in Vietnam

Company registration is managed by Vietnam’s Department of Planning and Investment (DPI) where your company will be located. As noted above, you are no longer required to obtain an IRC before you can register a company. 

Step 1: Reserve Your Business Name

The registration process begins with securing approval for the proposed company name through the DPI. Once approved, the name is reserved exclusively for the company until the business registration is finalised.

Step 2: Obtain the Enterprise Registration Certificate (ERC)

An ERC formally establishes your company as a legal entity in Vietnam. It includes your business name, registered address, legal representative details, and your Business Registration Number (which also serves as your tax ID). Processing takes around 3 to 5 working days after submission of a complete dossier.

Here’s what you need to apply for an ERC:

• Enterprise registration application form
• Articles of Association
• List of members/shareholders with ownership percentages and identification documents (notarized/legalized passports for foreigners).
• Details of legal representative(s), including appointment letters and Vietnam residential address.​

Step 3: Complete Post-Registration Requirements

After registration, you must complete post-compliance procedures within 30 days of receiving an ERC. Here’s what you need to do:

• Public Announcement: Publish your company details (name, address, business lines, shareholders) on the National Business Registration Portal.
• Company Seal: Design, engrave, and register your official company seal.
• Corporate Bank Account: Open a business account and contribute your full charter capital within 90 days.
• Tax Registration: Activate your VAT code, register for e-invoicing, and set up your tax filing access.
• Social Insurance Registration: If you're hiring employees, register as an employer with the social, health, and unemployment insurance funds.

Step 5: Apply for Sector-Specific Licences (if applicable)

Depending on your industry, you may need additional permits. If your business falls under conditional sectors, you’ll need one or more sub-licenses before you can start operations. These licenses are issued by relevant agencies. 

Here are the most common sub-licenses you need depending on your core busines activity:

• Food Safety Certification
• E-Commerce Licence
• Environmental Permit
• Telecommunications Sub-Licence
• Healthcare and Pharmaceutical Licences
• Trading and Distribution Licence (Retail)
• Education Operating Licence
• Security Services Licence
• Financial Services Licences
• Professional Licences

Step 6: Hire and Manage Your Team

After setting up your company, you can start hiring employees in Vietnam. To do so, you must follow Vietnam’s Labour Code by signing contracts, registering employees for social insurance, managing payroll, and securing work permits for foreign staff. 

Here are some things you need to keep in mind when hiring foreign staff: 

1. Issue compliant employment contracts that outlines scope of work, location, working hours, salary, social insurance details, and occupational health and safety conditions. 
2. Follow standard working hours and compensate for overtime. 
3. Contribute to social security contributions for all employees (local and foreign). 
4. Provide annual leave benefits for employees who had worked for >12 months. 
5. Adhere to termination procedures as outlined by the Labor Code in Vietnam. 
6. Provide work permits and visa sponsorship for foreign employees. 
7. Withhold Personal Income Tax (PIT) for your employees. 

An Alternative to Setting Up a Business

Setting up a legal entity in Vietnam is a long-term commitment which takes capital and compliance management. If you want to start hiring and operating in Vietnam without going through the full incorporation process, RecruitGo's Employer of Record (EOR) service is built for exactly that.

As your EOR in Vietnam, RecruitGo acts as the legal employer on your behalf. That means you can:

• Hire local talent compliantly without needing a registered entity
• Get your team onboarded in days, not months
• Stay fully compliant with Vietnamese labour law, tax regulations, and social insurance requirements without building that expertise in-house
• Scale up or down flexibly, without the fixed overhead of a local entity

Working with RecruitGo’s EOR allows you to run a lean remote team and test the market before starting a company. You can request a free consultation to discuss your planned business activities and long-term goals with our experts. We will reach out to discuss how we can help you set up and manage your operations in Vietnam.