Vietnam continues to draw interest from foreign fund managers and corporates for good reason. A young workforce, growing consumer base, and stable economic fundamentals have made the country a serious option for long-term investment. But turning interest into real results depends on clear, early decisions - many of which are made well before operations begin.
Here are five planning steps to help investors enter Vietnam on a solid footing.
Define the purpose and structure from the outset
Vietnam offers multiple legal structures, each with its own obligations, restrictions, and governance rules. For most foreign investors, the choice will be between a Limited Liability Company “(LLC”) and a Joint Stock Company (“JSC”).
An LLC is widely used for its simplicity, particularly when 100% foreign ownership is permitted in the relevant sector. A JSC, with its ability to issue shares and raise capital from multiple shareholders, may suit more complex or expansion-focused models. Deciding which to use isn’t just a legal formality, it shapes how the business operates, raises funds, and adapts in the future.
2. Plan licensing and compliance timelines carefully
Initial licensing begins with the Investment Registration Certificate, followed by the Enterprise Registration Certificate. These are standard steps, but they are only the beginning.
In certain industries, such as retail, food, tourism, and education, further approvals are needed before business activity can begin. These sub-licences vary by sector and location. Overlooking them can delay market entry or expose a business to penalties.
3. Capital injection and banking requirements
After the ERC is issued, the company must open a Direct Investment Capital Account in Vietnam and inject the full charter capital within 90 days. Missing this deadline can result in fines and affect future licensing.
This banking requirement is often underestimated. Opening accounts in Vietnam may require documentation from the investor’s home jurisdiction, particularly where a holding company is involved. Gathering and legalising the correct documents in advance can save significant time.
4. Understand reporting, tax, and accounting obligations
Vietnam operates a well-defined but strict tax regime. Corporate income tax is generally 20%, and VAT, foreign contractor tax, and personal income tax may also apply depending on activities. Reporting must be completed monthly, quarterly, or annually, with full supporting documentation in Vietnamese.
Accounting must follow Vietnamese Accounting Standards, and many businesses will be required to appoint a local chief accountant. Larger firms may also need to prepare for International Financial Reporting Standards, which Vietnam is introducing in stages.
5. Prepare for employment and HR compliance
Vietnam’s labour regulations require written contracts, social insurance contributions, and formal processes for hiring foreign staff. For foreign employees, a labour demand report, work permit, and appropriate visa must all be in place.
Hiring locally can offer both cost and cultural advantages but doing so requires full compliance with registration and reporting obligations from the very first employee. Companies with ten or more local staff are encouraged to support union formation, which adds a further layer of compliance.
Download the Vietnam market entry handbook
Planning ahead is the single most effective way to avoid delays and reduce cost. Decisions about structure, licensing, governance, and finance all carry long-term implications for how a business grows - and how it exits.
To support this, we’ve developed the Vietnam market entry handbook, offering detailed, practical guidance across all these areas. Whether you’re entering Vietnam for the first time or reviewing an existing presence, the handbook outlines what to expect and how to approach each step clearly and confidently.
Complete the form below to download the full handbook for practical support at every stage.
