How to Start a Business in Vietnam as a Foreigner: A Complete Legal Guide

How to Start a Business in Vietnam as a Foreigner

Vietnam has become an increasingly important destination for international investors and entrepreneurs looking to establish a business presence in Southeast Asia. However, starting a business in Vietnam as a foreigner is different from establishing a company as a Vietnamese national.

Foreign investors need to consider not only company registration, but also market access conditions, investment regulations, corporate structure, capital, licensing requirements and post-registration compliance.

The right approach therefore starts before submitting any registration documents.

This guide explains the main legal and practical considerations for foreigners who want to start a business in Vietnam and shows how the company formation process fits together.

Planning to establish a company in Vietnam?
Before choosing a company structure or preparing documents, it is important to determine whether your intended business activity is open to foreign investment and whether additional licensing conditions apply.

For a step-by-step overview of the entire process, see our main guide: Set Up Company in Vietnam: Complete Guide for Foreign Investors.

1. Can a Foreigner Start a Business in Vietnam?

Yes. Foreign investors can establish a business presence in Vietnam, subject to the applicable investment and market access regulations.

The important issue is not simply whether foreigners are permitted to establish a company. The more important question is:

Can a foreign investor establish the particular type of business they intend to operate, and under what conditions?

Depending on the business sector, the investor may need to consider:

• Whether foreign investment is permitted;
• Whether foreign ownership is restricted;
• Whether a Vietnamese partner is required;
• Whether specific market access conditions apply;
• Whether additional business licenses are required;
• Whether the proposed location and business model satisfy applicable regulations;
• Whether investment registration procedures are required.

This is why foreign investors should conduct a market access and legal feasibility assessment before incorporating the company.

2. What Are the Main Ways for a Foreigner to Establish a Business in Vietnam?

Foreign investors may consider several forms of commercial presence depending on their objectives.

The most common options include:

2.1 Foreign-invested company

A foreign investor can establish a company in Vietnam to directly conduct business activities.

Depending on the investment structure and number of investors, the company may take the form of a:

• Single-member limited liability company;
• Multi-member limited liability company;
• Joint stock company.

The appropriate structure depends on factors such as ownership, number of investors, governance requirements, capital structure and future financing plans.

2.2 Joint venture

A foreign investor may establish a company together with Vietnamese investors where the applicable business sector permits or requires such an arrangement.

A joint venture can be useful where:

• Local market knowledge is important;
• The business sector has foreign ownership restrictions;
• A Vietnamese partner provides operational capabilities;
• The parties have complementary resources.

However, a joint venture should not be used merely because a foreign investor assumes that every foreign-owned company requires a Vietnamese shareholder.

The actual ownership requirements must be assessed based on the proposed business activities and applicable regulations.

2.3 Representative office

A representative office can provide a foreign company with a presence in Vietnam for permitted representative activities.

However, a representative office is fundamentally different from a company established to conduct ordinary commercial operations.

A foreign investor should therefore distinguish between:

establishing a Vietnamese operating company and establishing a representative presence for an overseas company.

The appropriate option depends on the investor's commercial objectives.

3. What Should You Check Before Starting a Company?

The biggest mistake foreign investors can make is starting with the company registration form before determining whether the proposed business model is legally feasible.

A better approach is to conduct a pre-investment assessment.

Step 1: Define the proposed business activities

Start by clearly identifying what the company will actually do.

For example, an investor may intend to operate in:

• Trading;
• Manufacturing;
• Consulting;
• Technology;
• Software;
• Education;
• E-commerce;
• Logistics;
• Real estate;
• Professional services;
• Other specialized sectors.

The description of the business matters because different sectors can be subject to different legal conditions.

Step 2: Determine the relevant business activities

The proposed business model should then be translated into the appropriate Vietnamese business activities and registration classifications.

This is more important than simply selecting a broad business name.

A company may have a commercially attractive business model but still need to determine precisely which activities it will register and whether any of those activities are conditional.

Step 3: Assess foreign market access

Foreign investors should determine whether the proposed activities are:

• Open to foreign investment;
• Subject to foreign ownership limitations;
• Subject to specific conditions;
• Subject to additional licensing;
• Restricted or prohibited.

This assessment should be completed before finalizing the investment structure.

Step 4: Determine the appropriate corporate structure

Once the business activity and market access position are understood, the investor can select the appropriate company structure.

This avoids choosing a company form first and discovering later that the intended business model requires a different structure or additional conditions.

4. Choosing Between an LLC and a JSC

One of the most important decisions when starting a business in Vietnam as a foreigner is choosing the appropriate legal entity.

Limited Liability Company

An LLC may be appropriate where the investor wants a relatively straightforward ownership and management structure.

Depending on the ownership arrangement, the investor may establish a single-member or multi-member LLC.

An LLC can be suitable for:

• Foreign entrepreneurs establishing a wholly owned business;
• Small and medium-sized investment projects;
• Businesses with a limited number of investors;
• Investors who do not immediately need a share-based fundraising structure.

Joint Stock Company

A JSC may be more appropriate where the business requires a share-based ownership structure and potentially more complex capital arrangements.

A JSC can be considered where the investors anticipate:

• Multiple shareholders;
• Future capital raising;
• Share transfers;
• A more sophisticated corporate structure;
• Potential long-term expansion involving additional investors.

The choice should be based on the company's expected development rather than simply choosing the structure that appears easiest to register.

For a detailed comparison, this article will later link to:

LLC vs JSC in Vietnam: Which Company Structure Is Right for Foreign Investors?

5. Do Foreign Investors Need an Investment Registration Certificate?

For foreign investment projects, investment registration requirements are an important part of the legal analysis.

LHD Law Firm's current company setup guide identifies the Investment Registration Certificate (IRC) as one of the core documents involved in the foreign-invested company establishment process.

However, the precise procedure depends on the investor, project and applicable legal framework.

Therefore, foreign investors should not assume that every project follows exactly the same registration route.

The first question should be:

What investment procedure applies to this particular project?

That assessment should take place before preparing the application dossier.

6. What Is the Enterprise Registration Certificate?

The Enterprise Registration Certificate, commonly referred to as the ERC, establishes the Vietnamese enterprise as a registered company.

It is different from the investment registration process.

In simplified terms:

• The investment framework concerns the foreign investor and investment project;
• The enterprise registration framework concerns the Vietnamese legal entity.

LHD Law Firm's existing ERC guide explains that company formation involves pre-registration structuring, preparation of the registration dossier and subsequent post-registration compliance.

The relationship between the investment and enterprise registration procedures should therefore be assessed as part of the overall setup strategy rather than treated as isolated administrative applications.

7. What Documents Does a Foreign Investor Need?

The required documents depend on the investor's circumstances and the proposed investment structure.

Documents may include information and supporting evidence relating to:

• The foreign investor;
• Passport or corporate identification documents;
• Corporate ownership;
• Financial capacity;
• Investment project;
• Proposed business activities;
• Company headquarters;
• Legal representative;
• Members or shareholders;
• Company charter;
• Other documents required for the relevant application.

Foreign-issued documents may also require appropriate authentication, legalization, translation or certification depending on the document and applicable procedure.

Because document requirements can differ according to whether the investor is an individual or an organization, investors should obtain a customized checklist rather than relying on a generic list found online.

8. How Much Capital Does a Foreign Investor Need?

There is no single universal capital figure that can be presented as the required amount for every foreign-owned company in Vietnam.

The appropriate capital structure depends on factors including:

• The proposed business;
• Investment scale;
• Operating expenses;
• Business location;
• Infrastructure requirements;
• Sector-specific requirements;
• Financial capacity;
• The investment project's commercial plan.

Some business sectors may have specific capital or financial requirements.

For this reason, investors should avoid choosing an arbitrary capital amount simply because it appears in another company's registration documents.

The capital should be commercially reasonable, legally compliant and consistent with the investment project.

9. Does a Foreigner Need a Vietnamese Business Partner?

Not necessarily.

The requirement for a Vietnamese partner depends on the proposed business activities and the market access conditions applicable to foreign investors.

For some sectors, foreign investors may establish a wholly foreign-owned company.

For other sectors, specific ownership or market access restrictions may apply.

Therefore, the correct question is not:

"Do all foreigners need a Vietnamese partner?"

It is:

"Does my proposed business activity require a Vietnamese partner or impose a foreign ownership restriction?"

This distinction is critical when planning an investment.

LHD Law Firm's existing materials also explain that foreign ownership can depend on the particular business sector and applicable market access rules.

10. Can a Foreigner Set Up a Company Remotely?

In many situations, foreign investors can complete substantial parts of the company formation process without being physically present in Vietnam.

However, whether the entire process can be handled remotely depends on:

• The investor's identity;
• The corporate structure;
• Document requirements;
• Authentication and legalization;
• Signing requirements;
• Banking procedures;
• The nature of the investment;
• Any additional licensing requirements.

Accordingly, "remote company formation" should not be treated as a universal procedure.

A professional legal representative can help coordinate document preparation, filings and communication with the relevant authorities where legally permitted.

11. What Happens After the Company Is Registered?

Company registration is not the end of the process.

A newly established company may need to address various post-registration matters, depending on its circumstances.

These can include:

Corporate seal

The company may need to arrange its corporate seal and establish appropriate internal procedures for its use.

Digital signature

Electronic transactions with government systems may require appropriate digital authentication arrangements.

Corporate bank account

The company should establish the appropriate banking arrangements for its operations and, where applicable, foreign investment capital.

Tax and accounting

The company must establish appropriate accounting and tax compliance procedures from the beginning of its operations.

Electronic invoices

Businesses conducting activities that require invoicing need to establish the appropriate electronic invoicing arrangements.

Business-specific licenses

Some activities require additional licenses or approvals beyond company registration.

LHD Law Firm's ERC guide identifies several of these post-registration matters, including the corporate seal, digital signature, corporate bank account, tax procedures and electronic invoices.

12. Common Mistakes Foreign Investors Should Avoid

Mistake 1: Choosing the company structure too early

Investors sometimes choose an LLC or JSC before determining the legal requirements for their actual business.

Better approach: assess the business model and market access first.

Mistake 2: Assuming 100% foreign ownership is always available

Foreign ownership rules can depend on the specific business activity.

Better approach: conduct a market access assessment before committing capital.

Mistake 3: Using an arbitrary capital amount

Capital should reflect the actual investment project rather than being selected solely because another company used the same figure.

Mistake 4: Treating company registration as the entire process

Obtaining the registration documents does not automatically mean that every business-specific compliance requirement has been completed.

Mistake 5: Ignoring post-registration compliance

Tax, accounting, banking, invoicing, labor and licensing matters can become important immediately after establishment.

Mistake 6: Using outdated information

Vietnam's investment and corporate regulatory environment changes over time.

Foreign investors should therefore verify the applicable rules at the time they begin their investment rather than relying on an old company formation checklist.

13. A Practical Roadmap for Starting a Business in Vietnam

A foreign investor can approach the process through the following strategic roadmap:

1. Define the business model

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2. Identify the proposed business activities

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3. Assess foreign investor market access

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4. Determine whether additional licenses or conditions apply

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5. Select the appropriate corporate structure

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6. Determine the investment and capital structure

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7. Prepare the investment and corporate documents

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8. Complete the applicable investment and enterprise registration procedures

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9. Complete post-registration requirements

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10. Begin operations and maintain ongoing legal, tax and accounting compliance

This approach is more reliable than treating company formation as a single registration form.

14. When Should You Consult a Vietnam Law Firm?

Legal advice is particularly valuable before incorporation when:

• The investor is unfamiliar with Vietnamese regulations;
• The business operates in a regulated sector;
• Foreign ownership restrictions may apply;
• The investor is considering a joint venture;
• The investment involves a foreign corporate shareholder;
• The business requires additional licenses;
• The investor needs assistance with legalized foreign documents;
• The company will employ foreign workers;
• The investor wants to establish the company remotely.

Early legal review can help identify structural problems before documents are submitted.

15. How LHD Law Firm Can Help Foreign Investors

LHD Law Firm provides legal support for foreign investors establishing and operating businesses in Vietnam.

Depending on the investment project, legal support may include:

• Investment structure assessment;
• Foreign market access analysis;
• Company structure selection;
• Preparation of company establishment documents;
• Investment registration support;
• Enterprise registration support;
• Legal review of company documents;
• Corporate bank account support;
• Tax and accounting coordination;
• Business license assessment;
• Post-establishment legal compliance;
• Legal support for foreign investors and companies operating in Vietnam.

The appropriate scope of work depends on the nature of the investor and the proposed business.

16. Frequently Asked Questions

Can a foreigner own a company in Vietnam?

Yes, subject to the market access rules and conditions applicable to the proposed business activity.

Does every foreign investor need a Vietnamese partner?

No. Whether a Vietnamese partner is required depends on the proposed business activity and applicable foreign investment restrictions.

What type of company is best for a foreign investor?

There is no universal answer. An LLC or JSC may be appropriate depending on the number of investors, ownership structure, governance requirements and future financing plans.

Does a foreigner need to live in Vietnam to establish a company?

Not necessarily. The practical requirements depend on the investment structure, documentation, signing and banking procedures.

Is company registration enough to start operating?

Not always. Depending on the business, additional post-registration procedures, licenses and compliance requirements may apply.

How should a foreign investor determine the required capital?

The capital should be assessed based on the proposed investment project, business model, operating requirements and applicable legal requirements rather than using an arbitrary figure.

Conclusion

Starting a business in Vietnam as a foreigner involves considerably more than registering a company name and obtaining corporate documents.

The most important work happens before incorporation: understanding the business model, assessing foreign market access, selecting the appropriate corporate structure, determining the investment structure and identifying any additional licensing requirements.

Once the legal structure is clear, the registration process becomes much easier to manage.

For investors who want a structured approach to establishing a company in Vietnam, LHD Law Firm's main guide provides a broader overview of the company setup process:

Set Up Company in Vietnam: Complete Guide for Foreign Investors

For professional assistance with your specific investment project, contact LHD Law Firm for an assessment of your proposed business structure and registration requirements.