Legal requirements for foreign investors setting up a company in Vietnam

Foreign investment requirements in Vietnam answer one question before any paperwork starts: may you invest in this business, and on what terms? For most sectors the answer is yes, with full ownership. For a defined list, the answer is "yes, but" or simply "not yet".

This page deals only with those conditions. It does not walk through the filing steps, which are covered in the guide to set up company in Vietnam. Each rule below cites the provision it comes from, so you or your advisers can check the source directly.

The legal framework changed in 2026. The Law on Investment 2025 (Law No. 143/2025/QH15) took effect on 1 March 2026, and its guiding Decree 96/2026/ND-CP took effect on 31 March 2026. Older guides written under the 2020 law may no longer be accurate.

Can foreign investors establish a company in Vietnam?

Yes. Foreign individuals and foreign organizations can establish companies in Vietnam, own them outright in most sectors, and act as their legal representatives.

The starting point is the principle of equal treatment. Under Article 8 of the Law on Investment 2025, foreign investors apply the same market access conditions as domestic investors, except for sectors on the restricted list. In other words, the default is "open", and restrictions must be found in a specific list rather than assumed.

Among the foreign investment requirements in Vietnam, one structural rule is worth knowing early. The Law on Enterprises 2020 (Article 12.3) requires every company to have at least 1 legal representative residing in Vietnam. A foreign owner who lives abroad can still own the company, but someone must be on the ground.

Foreign ownership rules and market access conditions

Vietnam market access conditions start with the sector. Decree 96/2026/ND-CP sorts restricted sectors into 2 lists:

• 23 sectors not yet open to foreign investors at all.
• 62 sectors open with conditions.

Everything outside these 2 lists is open on the same terms as domestic investment.

Sectors open to foreign investment

Most of what foreign investors actually do falls here: manufacturing, software and IT services, management consulting, wholesale, import-export, construction, engineering consulting, and many other services. In these sectors, Vietnam foreign ownership restrictions do not apply, and 100% foreign ownership is the norm.

"Open" does not mean "unregulated", though. A sector can be fully open to foreign capital and still require a sector license that any company, foreign or domestic, must obtain. That point is covered further below.

Sectors subject to foreign ownership limits

This is where Vietnam foreign ownership restrictions actually bite. For the 62 conditional sectors, Article 8.3 of the Law on Investment 2025 allows conditions of 5 kinds:

1. A cap on the foreign ownership ratio.
2. A required form of investment.
3. Limits on the scope of activities.
4. Requirements on the capacity of the investor or its Vietnamese partner.
5. Other conditions under laws and international treaties.

Ownership caps come mainly from Vietnam's WTO commitments and sector laws. Some familiar examples:

Two rules are frequently missed. First, a company registering several business lines is bound by the strictest condition among them. Second, a public company in a conditional sector with no specific cap is limited to 50% foreign ownership by default, under Article 139 of Decree 155/2020/ND-CP.

Treaties can improve these terms. An investor from a country with a free trade agreement with Vietnam may qualify for better access than the WTO baseline. Article 8 lets investors apply the more favorable treaty terms, but the same set of commitments must be applied consistently.

Sectors requiring a Vietnamese joint venture partner

Some conditional sectors do not cap a percentage so much as require a structure. Under Vietnam's WTO commitments, advertising services and travel agency services for foreign investors are delivered through a joint venture or cooperation with a Vietnamese partner, and travel services are limited to inbound tourism.

A Japanese advertising agency, for example, cannot simply incorporate a 100% subsidiary in Ho Chi Minh City and start selling campaigns. It needs a Vietnamese partner licensed for advertising.

If the question you are asking is specifically about full ownership, the dedicated page on whether foreigners can own 100% of a company in Vietnam goes deeper into that decision.

Choosing the right legal entity for foreign investment

Entity choice is not one of the foreign investment requirements in Vietnam in the strict sense. It does not change whether you may invest. It changes how flexibly you can run, fund and exit the business.

Limited liability company (LLC)

An LLC can have 1 owner (single-member) or 2 to 50 members (multi-member, Article 46 of the Law on Enterprises 2020). It cannot issue shares. Liability is limited to contributed capital.

Most foreign-invested companies in Vietnam are single-member LLCs owned by a parent company. Governance is simple and decisions stay with the owner.

Joint stock company (JSC)

A JSC needs at least 3 founding shareholders (Article 111) and has no maximum. It can issue shares, which makes it the vehicle of choice for projects planning several funding rounds or an eventual listing.

The trade-off is heavier governance. For a small project with 1 investor, a JSC is usually more structure than needed.

Representative office and branch: when are they appropriate?

These are not companies. They are extensions of a foreign parent, governed by Decree 07/2016/ND-CP.

A representative office is for market research, liaison and promotion. It cannot carry out profit-generating activities. The foreign trader must have operated for at least 1 year.

A branch can conduct business, but only in sectors where Vietnam's commitments allow foreign branches, and the foreign trader must have operated for at least 5 years.

A practical rule: if you intend to sign contracts, issue invoices and earn revenue in Vietnam, a company is almost always the right vehicle.

Capital requirements for foreign-invested companies

Capital is the area where foreign investment requirements in Vietnam are most often misunderstood. There is no general minimum capital for a foreign-invested company. Two rules shape the amount in practice.

First, sectors with legal capital requirements, such as banking, insurance and certain real estate activities, must meet those thresholds.

Second, the capital must be credible for the project you propose. The investment registration authority compares capital against rent, staffing and equipment in your investment proposal. A plan with USD 10,000 of capital and 50 employees will be questioned.

Once the company is registered, the capital clock starts. Members of an LLC must contribute in full within 90 days of the enterprise registration certificate (Article 47.2 for multi-member, Article 75.2 for single-member LLCs). JSC shareholders face the same 90-day period under Article 113.1. Foreign capital must move through a direct investment capital account opened at a licensed bank in Vietnam.

Budgeting is a separate question from legal capital. For fees, legalization and first-year running costs, see the breakdown of the cost of company registration in Vietnam for foreigners.

Requirements for individual and corporate investors

The conditions for foreign investors in Vietnam differ depending on who invests.

Individual investors need to:

• Be at least 18 with full civil capacity.
• Not fall within the categories barred from establishing or managing enterprises (Article 17 of the Law on Enterprises 2020).
• Hold a valid passport.
• Show financial capacity matching the proposed capital, usually through a bank balance confirmation.

The conditions for foreign investors in Vietnam are heavier for companies than for individuals. Corporate investors need to:

• Prove legal existence through a certificate of incorporation or equivalent.
• Show financial capacity, typically through financial statements or a funding commitment from a parent company or financial institution.
• Appoint an authorized representative to manage the capital in Vietnam.
• Identify their beneficial owners down to the individual level.

The last point tightened in 2026. Decree 296/2026/ND-CP, effective 23 July 2026, amended the beneficial ownership rules in Decree 168/2025/ND-CP. The 25% threshold now aggregates holdings within a family group, and the beneficial owner field can no longer be left blank. A Singapore holding company owned through 3 layers of funds must trace its chain to the individuals at the top before filing.

Decree 296/2026/ND-CP also states expressly that owners must not hold capital on behalf of someone else. Using a Vietnamese nominee to get around an ownership cap is not a compliance strategy.

Registered office and business line requirements

Every company needs a lawful head office address in Vietnam (Article 42 of the Law on Enterprises 2020). Three requirements trip foreign investors up:

• The address must follow the new administrative map. Since 1 July 2025, Vietnam has operated a 2-tier local government system without districts, and addresses must use the current ward or commune names.
• Residential apartments cannot serve as a head office.
• The landlord must be able to prove the right to lease, and a sublease needs the owner's consent.

Business lines are registered using Vietnam's 4-digit industry codes. Register what you will actually do in the next 1 to 2 years. Every extra line is another item the authority reviews, and a single restricted line can affect the entire company.

Additional licenses for conditional business sectors

Market access is one test. Sector licensing is another, and unlike most conditions for foreign investors in Vietnam, it applies to domestic companies too.

The Law on Investment 2025 lists conditional business sectors in its Appendix IV, which reduced the list from 227 to 198 sectors. Companies in these sectors must hold the relevant license before trading. Common examples for foreign investors:

• Retail: a business license under Decree 09/2018/ND-CP, with an economic needs test for additional outlets in many cases.
• Education and training: an operating license and minimum facility requirements.
• Food and beverage: a food safety certificate.
• Travel: an international travel business license.

A Korean cosmetics company can own 100% of its Vietnam subsidiary. It still cannot open stores until the retail license is in place.

Legal and regulatory updates foreign investors should check

Several 2025 and 2026 changes affect foreign investment requirements in Vietnam, and Vietnam market access conditions in particular. Each was checked against the legal text or official summaries before publication.

A note of caution on the enterprise-first route. The registration authority does not review your market access commitment when it issues the enterprise registration certificate. You are responsible for it. If the IRC is later refused, you hold a company that cannot carry out the project it was formed for. For conditional sectors, obtaining the IRC first remains the safer path.

Common compliance risks before investing in Vietnam

Most problems with foreign investment requirements in Vietnam are visible before the first filing, if someone looks.

Assuming an "open" sector needs no license. Ownership and licensing are separate tests.

Adding business lines "just in case". One restricted line can lower the ownership cap for the whole company.

Using nominee shareholders. Now expressly prohibited, and the investor's claim to the assets becomes weak in any dispute.

Underestimating beneficial ownership. Fund structures and family holdings need tracing before filing, not after a request for clarification.

Choosing premises before checking zoning. A valid lease on a building not approved for office use will not support registration.

Taking the enterprise-first route in a conditional sector. Speed is not worth a stranded company.

Frequently asked questions about foreign investment conditions

Do Vietnam foreign ownership restrictions mean I need a Vietnamese partner?

Not in most sectors. A partner is required only where the sector's market access conditions call for a joint venture or cooperation.

Can a foreigner be the legal representative?

Yes. The company must, however, always have at least 1 legal representative residing in Vietnam.

Is there a minimum investment for foreigners?

There is no general minimum. Capital must suit the project, and sectors with legal capital must meet their thresholds.

Do treaty commitments differ by nationality?

Yes. Investors from countries with trade agreements may have better access in some sectors than the WTO baseline.

Does the 2026 law let me skip the IRC?

No. It changes the order, not the obligation. Projects that require an IRC must still obtain one, within 12 months if the enterprise is established first.

Check your sector before you commit

Before signing a lease or transferring capital, map your project against the foreign investment requirements in Vietnam by writing down 3 things: the exact business activities, the investor's nationality, and the ownership chain up to the individuals at the top. With those, it is usually possible to confirm in a single review whether the project is open, conditional or closed, and what it needs.

LHD Law Firm carries out this pre-investment review for foreign investors across Vietnam. Foreign investment setup in Ho Chi Minh City is led by lawyer Thanh Thuy.

• Ho Chi Minh City: HP Tower, Floor 7, 60 Nguyen Van Thu Street, Tan Dinh Ward. Tel: +84 28 2244 6739. Email: all@lhdfirm.com
• Ha Noi: Anh Minh Tower, Floor 4, 36 Hoang Cau Street, O Cho Dua Ward. Tel: +84 24 6260 4011. Email: hanoi@lhdfirm.com
• Da Nang: 71 Ly Tu Trong Street, Thach Thang Ward. Tel: +84 905 987 929. Email: danang@lhdfirm.com

Legal sources referenced: Law on Investment 2025 (Law No. 143/2025/QH15), Decree 96/2026/ND-CP, Law on Enterprises 2020, Decree 168/2025/ND-CP as amended by Decree 296/2026/ND-CP, Decree 155/2020/ND-CP, Decree 07/2016/ND-CP, Decree 09/2018/ND-CP, Resolution 198/2025/QH15.