Vietnam offers a growing economy, regional trade access, and investor-friendly reforms but achieving full compliance from the outset remains one of the key challenges for fund managers.
From the type of business entity selected to tax filings and labour laws, each stage of market entry carries distinct legal responsibilities. A structured approach is essential.
Step one: Pick the right legal vehicle
Vietnam offers several company structures. For most fund managers, the Limited Liability Company (“LLC”) strikes the right balance between regulatory compliance and operational control. An LLC can be set up as a single- or multi-member entity. While it offers protection for investors and simpler administration, it is subject to strict capital contribution rules and local governance requirements.
For more complex or public-facing operations, a Joint Stock Company (“JSC”) may be appropriate. With its ability to issue shares and raise capital, it suits managers with larger funds or long-term capital plans. However, it requires more comprehensive governance and reporting.
Step two: Secure the correct licences
Before operating, foreign investors must obtain both an Investment Registration Certificate and an Enterprise Registration Certificate. After these, post-licensing steps include tax registration, opening a Direct Investment Capital Account, and injecting registered capital within 90 days.
In regulated sectors, such as retail, food, and tourism, additional sub-licences are necessary. These include trading licences, retail outlet approvals, and health or education-related permits. Each of these involves its own timeline and authority.
Step three: Set up strong governance
Each legal form requires a specific governance structure. LLCs require a Members’ Council and a General Director, while JSCs must have a General Meeting of Shareholders, a Board of Directors, and possibly a supervisory board.
Vietnamese law also mandates that each company appoints at least one legal representative who resides in the country. This person carries legal accountability and must be selected with care.
Step four: Understand tax and reporting obligations
Foreign-invested enterprises are subject to a full range of taxes: Corporate Income Tax, VAT, and Foreign Contractor Tax among them. All filings must be submitted electronically, with supporting documentation, and in accordance with Vietnamese Accounting Standards.
While tax rates are broadly predictable, the administrative burden is considerable. Mistakes can result in penalties or affect licensing renewals. It’s advisable to establish strong processes from the beginning.
Step five: Comply with employment law
Foreign and local staff must be employed under formal contracts, with social insurance contributions paid monthly. Hiring foreign employees involves obtaining work permits, with exemptions available in specific cases.
Local law also encourages the formation of trade unions for companies with ten or more Vietnamese staff, adding another layer of compliance for foreign firms.
Download our comprehensive market entry handbook
Vietnam remains an attractive destination for foreign capital, but the path to compliance is detailed and highly procedural.
Inside the handbook
- Legal structures: LLCs, JSCs, branch offices, BCCs
- Set-up process: licensing and post-licensing steps
- Sector approvals: trading, retail, education, and more
- Compliance: tax, accounting, and governance rules
- Operations: structuring strategies and employment laws
Complete the form below to download our Vietnam market entry handbook.
