How to start a business in Vietnam? [FAQ]

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Do you have a business project that you would like to develop elsewhere, and why not in Vietnam?

With one of the strongest growth in the world, a stable political environment, an internal market of more than 90,000,000 inhabitants, an emerging middle class and a central position in Asia, there is no doubt that this coastal country has many appeals!

As everywhere, however, these conditions are not sufficient to open a business. First of all, it is necessary to learn more about the legal framework and the possibilities that are offered to foreigners in terms of opening a business in Vietnam.

Administration, finance, taxation, human resources: we will cover the basics with useful information, advice and steps necessary to open a business in Vietnam.

Business Administration in Vietnam


Is it possible to start a business in Vietnam as a foreigner?

Yes, it is quite possible to start a company in Vietnam as a non-Vietnamese.

However, due to the nature of the Vietnamese political regime, certain sectors of activity are not eligible for companies made up mainly of foreign capital and require special licenses. This is the case, for example, in the health sector.

In this kind of case, in fact, two solutions are practiced in Vietnam:

  • The association with a Vietnamese national who will be the majority shareholder (51% minimum).
  • The association with a nominee, who will be a shareholder up to 100% of the company. Of course, this practice is illegal, but decidedly common, a fortiori in the case of international couples.

Conversely, as a foreigner, you can be the sole owner of your business in Vietnam in a sector such as consulting. The latter, relatively broad in its definitions, can thus accommodate many companies specializing in the sale of services. When it comes to goods, however, things are more complicated.

Consult an attorney specializing in Vietnamese corporate law to learn more about opportunities and open sectors.

What are the different business status in Vietnam?

To be able to have a commercial activity on Vietnamese soil, several options are possible.

1. Limited Liability Company (LLC)

This is the form most often used by foreigners to set up their company in Vietnam. The country allows 100% foreign ownership in most sectors, including commerce, manufacturing, information technology and education.

Number of partners and associates: 1 shareholder and 1 manager minimum. This form of company does not require the presence of a partner of Vietnamese nationality.
Minimum and / or maximum capital: 10,000 VND.
Liability of partners: Liability limited to contributions.

2. Joint Stock Company (JSC)

The main difference with the LLC is that a joint-stock company can publicly issue shares and securities. If this is the wish of your company (to be listed on the stock exchange), it must have a share capital greater than 475,000 USD (if it was profitable the previous year).

Number of partners and associates: 3 people minimum
Minimum and / or maximum capital: No minimum.
Liability of partners: Liability limited to contributions.

3. Limited liability partnership

This form of business involves a Vietnamese shareholder, a prerequisite for the following sectors: Advertising, agriculture and forestry, video game companies, storage services, tourism, transport services. The Vietnamese shareholder is not necessarily the majority. The foreign shareholder can own 49 to 99% of the company, depending on the rules in force for a particular sector.

Number of partners and associates: At least 2 shareholders, including one with Vietnamese nationality.
Minimum and / or maximum capital: No minimum.
Liability of partners: Liability limited to contributions.

Finally, it is also possible to open a branch or a representative office in Vietnam. In these cases, there is no legal personality in Vietnam, and their scope is more limited. Naturally, a branch or a representative office requires the prior existence of an entity registered in another country (for at least 5 years).

Which sectors are open or closed to foreign companies?

Most industries and services as well as construction are open to foreign investors (100% or 49%):

  • Electrical and electronic products
  • Construction materials
  • Textile
    Information technology
  • Real estate (construction of offices, apartments, industrial zones)
  • Tourism (hotels, catering)
  • Transport and postal services
  • Advertising services

The sectors subject to conditions (or being totally closed to foreigners) are as follows:

  • Oil and mineral industries (exploration, production, processing)
  • Forest and timber exploitation, forestry
  • Games (Lottery) and Casinos
  • Tobacco and cigarette production
  • Maritime and air transport
  • Telecommunications
  • Journalism, broadcasting and television
  • Science and technology
  • University training

import export vietnam

What are the steps to start a business in Vietnam?

Three steps are necessary to start a business in Vietnam.

  1. Applying for an investment in Vietnam and obtaining an Investment Registration Certificate (“IRC”) (approximately 3 weeks).
  2. The company registration application. (“ERC”, Enterprise Registration Certificate) (approximately 1 week). For this registration, a company domiciliation will be requested. It is possible to opt for a virtual office if you do not have physical premises.
  3. After registration, you will need to complete the final administrative formalities such as registering your company seal, opening a bank account, publishing in official journals, settling business tax, etc. (About 2 weeks).

How long does it take to start a business in Vietnam?

According to the Doing Business website, there are 8 procedures that must be followed for setting up a business in Vietnam. The time required for this training would theoretically be 17 days according to this same organization. But as seen above, more reasonably, it takes a minimum of one to two months to complete all the steps.

What are the accounting rules for companies in Vietnam?

In Vietnam, the fiscal year runs from January 1 to December 31.

Accounting standards are local (VAS system). The accounting structure includes the balance sheet, cash flow, general balance and profit and loss.

Every year, companies must submit their financial and accounting report to their city’s tax department. It is therefore advisable to call on a local accountant (firm or in-house). For a small business, you can pay an accountant from 3,000,000 to 5,000,000 VND per month (100 to 180 EUR).

Finally, if your company is owned by foreign capital, you will have to submit to a financial audit each year by a company established in Vietnam (international or not).

Business finance in Vietnam


What social capital to choose for your business in Vietnam?

As we have seen previously, in its basic principle, there is not really a minimum of social capital for your business in Vietnam.

However, this amount may change depending on the industry of your business. If for services, a low share capital may be accepted, certain sectors such as import / export will require further investments, up to a minimum of 50,000 USD.

In addition, this social capital remains a very important data for your company and can be scrutinized, in particular by the migratory authorities.

Indeed, insofar as the establishment of a company in Vietnam opens up specific rights in terms of Visa or even Temporary Resident Card at rates which may be interesting, and in order to avoid the creation of “empty shells”, there is in fact a minimum recommended amount for your company’s share capital in Vietnam.

How much does it cost to start a business in Vietnam?

Support from a lawyer or an accountant to start your business in Vietnam ranges from € 1,800 to € 4,000. We invite you to contact several entities as prices can vary widely.

These fees may or may not include various official fees (eg licenses, work permits or work permit exemptions, investor visa).

Again, this will depend on the chosen industry. Some will require larger sums (especially in industry, sectors deemed “strategic” by the Vietnamese State, import / export, etc.).

Status of entrepreneurs in Vietnam


What are the visas for business creators or investors in Vietnam?

Legally, the country distinguishes between 4 types of investor visas which can subsequently give entitlement to a Vietnamese resident card:

Visa DT1 : 

  • Minimum Capital : 100.000.000.000 VND – 3.545.000 EUR
  • Length : 5 years

Visa DT2 :

  • Minimum Capital : 50.000.000.000 VND – 1.772.000 EUR
  • Length : 5 years

Visa DT3 : 

  • Minimum Capital : 3.000.000.000 VND – 106.000 EUR
  • Length : 3 years

Visa DT4 : 

  • Minimum Capital : None
  • Length : 1 year

However, to obtain a DT4 Visa, if in theory no minimum is necessary, in practice, Visa agents advise having at least the equivalent of 5000 USD of share capital for a simple and fast obtaining of your investor Visa.

In order to qualify for these visas, you will need your company’s registration license and official stamp.

Corporate taxation in Vietnam


What are the corporate taxes in Vietnam?

Vietnam’s standard corporate profit tax rate is 20%, and 17% if income is less than VND 20 billion. This rate may be lower in the case of projects in strategic sectors.

Finally, this rate is valid for both earned income and capital gains.

Are there tax exemptions for businesses in Vietnam?

Unlike countries like France, donations to associations are in principle not tax deductible in Vietnam. However, donations intended for education, health care, natural disasters, building charitable homes for the poor or scientific research can sometimes be deducted.

The depreciation of real estate, machinery and tangible and intangible assets, as well as business start-up costs (subject to justification) are mainly exempt from tax within a period of 3 years.

What are the other taxes for companies established in Vietnam?

  • Property tax: between 0.03% and 0.15% of the land price per square meter depending on the locality.
  • Stamp duties: between 0.5% and 15%, levied on certain assets, including real estate.
  • Inheritances and gifts over 10 million VND: taxed just like income tax at 10%.

Finally, a natural resource tax of 1-40% can be levied in the case of industries exploiting Vietnam’s natural resources.

What are the VAT regimes in Vietnam?

By default, Vietnam’s Value Added Tax rate is 10%. However, there are several special cases where this rate varies.

  • Rate at 15%: Luxury goods.
  • Rate at 5%: Food and water, transport, medical equipment and drugs, agricultural production and services, education, cultural activities (cinema, exhibitions, etc.), games and toys for children, books.
  • Rate at 0% or not subject to VAT: Export of services, animal feed, agricultural equipment, certain insurance or financial and banking services, health care, technology transfers.

Human resources of companies in Vietnam


What are the employment contracts in Vietnam?

As in France, there are two types of employment contracts in Vietnam:

– indefinite: the two parties do not determine either term or duration for the validity of the contract;

– fixed term: the two parties determine a term and the duration of the validity of the contract per period of 12 to 36 months: or an employment contract for a specific seasonal job with a duration of less than 12 months.

What is the minimum wage in Vietnam?

According to data from Vietnam’s Ministry of Labor, the minimum wage was 3,980,000 VND per month in 2018, or around 140 EUR at the current rate (January 2021).

What is the legal duration of working time in Vietnam?

In Vietnam, the weeks are in principle 48 hours of work, and 40 hours for employees in the administrative sector.

ressources humaines vietnam

What are the social contributions in Vietnam?

Employer’s share (22% of salaries):

  • 18% for social insurance
  • 3% for health insurance
  • 1% for unemployment insurance

Employee share (10.5% of gross salary):

  • 8% for social insurance
  • 1.5% for health insurance
  • 1% for unemployment insurance

Go Further

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