By Lawyer Le Phuong Thanh – UniLaw LLC

Open a Business in Vietnam: A Comprehensive Guide

Entering the Vietnamese market is a strategic move for many global investors, but navigating the local vietnam corporate law requires precision and experienced legal service in vietnam. This guide explores the essential steps, legal frameworks, and practical challenges of setting up an entity in one of Southeast Asia’s most dynamic economies.

Real-Life Success Story: Navigating Logistics Barriers in Vietnam

To understand the practicalities of vietnam enterprise law, let us examine a real-life case handled by Unilaw involving a foreign logistics group (referred to here as “The Logistics Group”) from Austria and their Vietnamese partner. In late 2012, these two entities decided to establish a joint venture in Ho Chi Minh City to provide freight forwarding, customs clearance, and warehousing services.

The process was not without hurdles. During the appraisal of their application, the Ho Chi Minh City Department of Planning and Investment (DPI) and the Ministry of Industry and Trade raised several concerns. Firstly, the authorities questioned the capacity and experience of the Vietnamese partner, which was a newly established firm at the time. Secondly, the proposed charter capital was deemed “unsuitable” for the scope of a logistics project, and the proposed company name was initially rejected for failing to comply with local naming conventions.

Unilaw provided a comprehensive legal service in vietnam to overcome these barriers. Our vietnam corporate lawyer drafted detailed explanations highlighting the global experience of the Austrian parent company, including its massive revenue and existing warehouse infrastructure. We successfully argued that freight forwarding services do not have a statutory minimum capital requirement under Vietnam’s WTO commitments. Furthermore, we secured a formal authorization from the Austrian parent company to allow the joint venture to use its protected global brand name in Vietnam.

The Result: On June 19, 2013, the People’s Committee of Ho Chi Minh City officially issued the Investment Registration Certificate (IRC) for the joint venture. The company was authorized to operate for 50 years with a total investment capital of approximately 145,000 USD, successfully establishing its presence in the Vietnamese market. This case demonstrates that while the vietnam company law framework can be rigid, specialized legal advocacy can clear the path for entry.

Foundational Principles of the Vietnam Investment Law

The primary statute governing the entry of foreign capital is the Law on Investment. This law sets the “rules of the game” for who can invest and what sectors are open. According to Article 1 of the Law on Investment 2020 (as updated in 2025):

“Article 1. Scope of regulation. This Law prescribes business investment activities in Vietnam and business investment activities from Vietnam to foreign countries.”

Layperson explanation: This article clarifies that the law covers both foreign investors coming into Vietnam and Vietnamese companies looking to expand their business abroad.

Investors must also understand the legal definition of “Investment Projects” and “Business Investment” to align their expectations with the law. Article 3 provides these definitions:

“18. Investment project means a collection of proposals for medium or long-term capital contribution to carry out business investment activities in a specific area within a specified period of time.”

Layperson explanation: An investment project is essentially your business plan and capital commitment for a specific location and duration in Vietnam.

“22. Business investment means the investor’s contribution of investment capital to carry out business activities.”

Layperson explanation: This is the actual act of putting your money or assets into a venture to make a profit.

Choosing the Right Corporate Structure under Vietnam Company Law

Selecting the correct legal entity is a critical decision. The Law on Enterprises 2020 (and the 2025 updates) provides several options, including Limited Liability Companies (LLC) and Joint Stock Companies (JSC). For most foreign investors, the LLC is the preferred choice due to its simpler management structure. Article 46 defines the multi-member LLC:

“Article 46. Limited liability company with two or more members. 1. A limited liability company with two or more members is an enterprise in which: a) Members are organizations and individuals; the number of members does not exceed 50; b) A member is liable for the debts and other property obligations of the enterprise within the scope of the amount of capital contributed to the enterprise…”

Layperson explanation: This is a company with 2 to 50 owners where your personal assets are protected; you only risk the money you actually put into the company.

For larger ventures or those planning to go public, the JSC is more appropriate. Article 111 describes this form:

“Article 111. Joint stock company. 1. A joint stock company is an enterprise in which: a) Charter capital is divided into many equal parts called shares; b) Shareholders can be organizations or individuals; the minimum number of shareholders is 03 and there is no limit on the maximum number…”

Layperson explanation: A JSC divides its ownership into shares and must have at least three owners, making it suitable for businesses that want to raise capital from many investors.

Market Access Restrictions for Foreign Investors

One of the most complex aspects of vietnam corporate law is determining whether your specific business line is restricted. Vietnam maintains a “Negative List” approach, where all sectors are open unless specifically restricted for foreign investors. Article 9 of the Law on Investment explains the conditions for market access:

“Article 9. Market access sectors and conditions for foreign investors. 1. Foreign investors shall be applied market access conditions as prescribed for domestic investors, except for the cases regulated in Clause 2 of this Article. 2. Based on laws, resolutions of the National Assembly, ordinances… the Government shall announce the List of sectors with restricted market access for foreign investors, including: a) Sectors not yet open for market access; b) Sectors with conditional market access.”

Layperson explanation: Generally, foreigners are treated like locals unless they are entering a “restricted” industry, which might have limits on how much of the company they can own.

For example, in the advertising industry, foreign investors are permitted to establish joint ventures or business cooperation contracts with Vietnamese partners who are already authorized to provide such services. According to Unilaw’s legal research for DaikoVN, there is no limit on the percentage of foreign ownership in advertising, but the form of investment must be a joint venture or a contract with a local partner.

In contrast, certain sensitive sectors like “Debt Collection Services” are strictly prohibited for all investors:

“Article 6. Prohibited business investment sectors. 1. The following business investment activities are prohibited: … h) Debt collection services.”

Layperson explanation: Some businesses are completely illegal in Vietnam, such as debt collection agencies, regardless of whether you are a local or a foreigner.

The Step-by-Step Registration Process

To open a business in vietnam as a foreign investor, you generally follow a two-step licensing process: obtaining an IRC and then an ERC.

Step 1: Obtaining the Investment Registration Certificate (IRC)

The IRC records the details of your investment project. According to Article 38 of the Decree on Investment, foreign investors must perform this step before establishing an enterprise. The application requires proof of financial capacity, such as a bank statement showing a balance higher than the proposed charter capital.

Step 2: Obtaining the Enterprise Registration Certificate (ERC)

Once the IRC is granted, the investor applies for the ERC, which gives the company its legal “birth certificate” and tax ID. The new Decree 168/2025/NĐ-CP provides updated procedures for this. Article 3 defines enterprise registration:

“Article 3. Interpretation of terms. … 10. Enterprise registration means the registration of the business registration contents and tax registration contents of the enterprise to be established… including establishment registration, registration of branches, representative offices, and business locations…”

Layperson explanation: Registering a business now conveniently combines your official business details and your tax registration into one single application.

The dossier for a limited liability company must include:

• An application form for enterprise registration.
• The company’s charter (articles of association).
• A list of members.
• Copies of legal documents of the members (passports for individuals, certificates of incorporation for companies).
• The Investment Registration Certificate (IRC).

Digital Transformation in Business Registration (2025 Updates)

Vietnam is aggressively moving toward digital governance. Under Decree 168/2025, electronic registration is becoming the standard. Article 37 of this decree outlines the online process:

“Article 37. Enterprise registration via electronic information network. 1. Enterprise registration via electronic information network means that the founder or the enterprise performs the enterprise registration through the National Business Registration Portal.”

Layperson explanation: You can now officially set up your company online through a central government website without necessarily visiting an office in person.

Furthermore, the concept of “Electronic Authentication” has been introduced to ensure security and integrity in the registration process:

“Article 3. … 22. Electronic authentication means the activity of authenticating the identity of the submitter… performed through the Electronic Identification and Authentication System… using methods such as One-Time Password (OTP), biometrics, or official phone numbers.”

Layperson explanation: To sign your digital application, the system will verify your identity using modern tech like fingerprints, facial recognition, or an OTP sent to your phone.

Statutory Obligations Regarding Capital and Assets

Once registered, the members must fulfill their capital contribution obligations. Failure to do so is a common source of legal disputes. Article 47 of the Law on Enterprises states:

“Article 47. Capital contribution for company establishment… 2. Members must contribute capital to the company sufficiently and correctly with the type of asset as committed when registering for company establishment within 90 days from the date of issuance of the Enterprise Registration Certificate…”

Layperson explanation: You have exactly 90 days after the company is officially born to put in the money or assets you promised.

If the capital contributed is in a form other than cash (such as machinery or intellectual property), it must be valued by the members or a professional valuer. Article 36 provides the rules for valuation:

“Article 36. Valuation of assets contributed as capital. 1. Assets contributed as capital that are not Vietnamese Dong, freely convertible foreign currency, or gold must be valued by members, founding shareholders, or valuation organizations and expressed in Vietnamese Dong.”

Layperson explanation: If you contribute equipment or a brand name instead of cash, everyone in the company must agree on what it’s worth in VND, or you must hire a professional appraiser.

Understanding Post-Registration Compliance

A vietnam corporate lawyer will tell you that getting the license is only the beginning. Enterprises must maintain ongoing compliance to avoid heavy fines or license revocation. Article 8 of the Law on Enterprises lists the basic obligations:

“Article 8. Obligations of enterprises. 1. Meet all business investment conditions when conducting business in conditional business sectors… and ensure maintenance of those conditions throughout the business operation. 2. Perform fully and timely obligations on enterprise registration… disclosure of information on establishment and operation… 3. Be responsible for the honesty and accuracy of information declared in the enterprise registration dossier…”

Layperson explanation: You must keep meeting the legal requirements for your specific industry, tell the public about your company status, and always tell the truth in your official paperwork.

Specific compliance items often handled by Unilaw’s legal service in vietnam include:

• Company Seal: Enterprises now have the right to decide the type, quantity, and content of their seals, including digital signatures.
• Tax Registration: Companies must declare and pay Business License Tax, Value Added Tax (VAT), and Corporate Income Tax (CIT).
• Labor Regulations: Businesses must register labor internal rules, social insurance, and apply for work permits for any foreign employees.
• Environmental Protection: Manufacturing projects must often submit an Environmental Protection Commitment or an Impact Assessment report.

Market Realities: Representative Offices vs. Branches

For foreign companies not yet ready to establish a full legal entity, vietnam corporate law allows for Representative Offices (RO) or Branches. However, these have strict limitations. According to Article 18 of the Commercial Law:

“Article 18. Obligations of Representative Offices. 1. Not to perform direct profit-making activities in Vietnam. 2. Only to perform trade promotion activities within the scope permitted by this Law.”

Layperson explanation: A Representative Office is like a marketing outpost; it can do research and meet clients, but it cannot sign sales contracts or collect money for services.

A Branch, while able to conduct business, is only permitted in very specific sectors committed in international treaties. For example, foreign banks often use the branch model. For most commercial enterprises, the LLC remains the more flexible vehicle.

Legal Disputes and Resolution Mechanisms

As a business grows, disputes may arise between shareholders or with third parties. Vietnam corporate law recognizes several resolution methods. Article 14 of the Law on Investment states:

“Article 14. Settlement of disputes in business investment activities. 1. Disputes related to business investment activities in Vietnam shall be settled through negotiation and conciliation. In case negotiation and conciliation cannot be reached, the dispute shall be settled at Arbitration or Court…”

Layperson explanation: If you have a business fight, try to talk it out first. If that fails, you can go to a private arbitrator or a public court.

In a notable case (Judgment 73/2025/KDTM-PT), the High People’s Court in Ho Chi Minh City dealt with a dispute involving the transfer of capital. A party who was not yet a formal member of a company but had entered into a capital transfer transaction with an existing member sued to recognize their ownership rights. This case highlights the importance of following the formal procedure for “Change of Members” under Article 26 of the Law on Investment and vietnam enterprise law, which requires registration with the DPI to be legally effective against third parties.

The court’s decision in such cases often hinges on whether the 90-day capital contribution window was met and whether the Board of Members formally approved the entry of the new member. This is why having a vietnam corporate lawyer to oversee every transaction is vital.

Why You Need a Vietnam Corporate Lawyer

Opening a business is more than just filing forms; it is about building a compliant foundation for future growth. The 2025 updates to the vietnam enterprise law and vietnam company law introduce more flexibility through digital tools but also demand higher accuracy in data reporting.

Unilaw’s legal service in vietnam provides more than just registration. We offer:

• Strategic Structuring: Ensuring your ownership and management ratios protect your control (e.g., setting a 51% majority for key decisions instead of the default 65% or 75% found in the 2005 law, as discussed in WTO working party reports).
• Feasibility Studies: Drafting the “Economic-Technical Explanations” required for conditional business lines like manufacturing or medical services.
• Ongoing Maintenance: Handling annual reporting, auditing requirements, and updates to the National Business Registration Database.

Final Thoughts for Investors

Vietnam continues to refine its investment climate, making it easier to open a business in vietnam through electronic identification and streamlined procedures. However, the conditional business lines and the strict 90-day capital contribution rule remain major pitfalls for the unwary. By leveraging professional legal service in vietnam, investors can ensure that their entry into this vibrant market is both swift and legally sound.

Whether you are setting up a software house in Ho Chi Minh City or a manufacturing plant in Hai Phong, Unilaw stands ready to be your partner in success, navigating every clause of the vietnam corporate law to secure your investment.