7 Essential Insights About Business Incorporation in Vietnam: A Hopeful Guide for Foreign Investors

In a world increasingly defined by instability, geopolitical tensions, tax wars, protectionist policies, and shifting global supply chains, business still has to go as usual, money flows where opportunities exists, and foreign investors are looking for places that offer stability, opportunity, and legal clarity.

Vietnam, with its sustained economic growth, favorable location in Southeast Asia, and ongoing regulatory reforms, has emerged as one of the region’s most promising business destinations. While its appeal has been steadily rising, the country’s role as a dependable investment hub has never been more relevant than it is now.

This article is a brief guide for foreign individuals and companies considering business incorporation in Vietnam. It is designed to demystify the legal and practical framework for setting up a company, opening a bank account, and staying compliant with the country’s legal and financial rules.

With particular focus on limited liability companies and non-conditional investment sectors, this guide outlines the steps, timelines, and requirements involved. Whether you’re looking to establish a consulting firm, expand your tech business, or start something new from the ground up, this is the roadmap you’ll need to move forward with clarity and confidence.

Why Vietnam Stands Out

Vietnam’s success as an investment destination is rooted in its balance of modern development and political steadiness. While many countries face internal unrest or unpredictable regulatory environments, Vietnam remains focused on attracting high-quality foreign investment through long-term planning, investor protection, and trade liberalization.

It maintains membership in numerous bilateral and multilateral free trade agreements—such as the CPTPP, EVFTA, and RCEP—that ensure preferential market access, and more importantly, reinforce its commitment to international norms and investment transparency.

The government’s steady efforts to digitize administrative procedures, simplify licensing, and reform corporate laws have made Vietnam increasingly accessible to foreign entrepreneurs. With a young, dynamic labor force and growing middle class, the domestic market itself is becoming more attractive, while the country’s central position within Asia makes it ideal for companies seeking to access regional supply chains. Business incorporation in Vietnam, while still demanding a degree of legal and procedural precision, is easier today than ever before for investors who take the time to prepare properly.

Choosing the Right Structure: The Case for Limited Liability Companies

Among the different forms of business entities that foreign investors can establish in Vietnam, the limited liability company, or LLC, is the most practical and commonly adopted.

An LLC in Vietnam can be formed with just one member or multiple members, who may be either individuals or organizations. It allows full foreign ownership in many non-conditional sectors and shields the investors from personal liability beyond the capital they contribute.

This model is also simpler to manage than a joint-stock company, which requires a more complex governance structure and is typically reserved for large-scale or public investment. The LLC’s streamlined compliance requirements, straightforward management structure, and adaptability to both small and medium enterprises make it the go-to format for most cases of business incorporation in Vietnam.

Understanding Vietnam’s Investment Classification

Vietnam classifies investment activities into two broad categories: conditional and non-conditional. Conditional investment areas are those that, due to national security, social welfare, or market regulation considerations, require specific government approvals, licenses, or compliance with additional legal conditions.

This guide focuses exclusively on non-conditional investment areas. These are sectors that are open to foreign investment without requiring additional licenses beyond standard incorporation documents. Most common business activities such as IT, consulting, and most services fall under this category and are therefore not subject to the same level of regulatory scrutiny. Nonetheless, it’s important to confirm your intended business scope with legal experts before beginning the process of business incorporation in Vietnam, as the categorization may change depending on the exact nature of your operations and evolving local regulations.

The Incorporation Process in Vietnam: A Step-by-Step Journey

Starting a business in Vietnam requires planning and procedural diligence. The process generally includes five key phases: preparing your documents, applying for the Investment Registration Certificate (IRC), applying for the Enterprise Registration Certificate (ERC), fulfilling post-licensing compliance obligations, and opening a corporate bank account. While none of these stages are prohibitively difficult, missteps can lead to costly delays or rejections.

The first stage involves preparation. Investors must choose a business activity that complies with Vietnamese law and secure an office lease for the company’s registered address. For foreign companies investing in Vietnam, a key requirement is submitting audited financial statements from the most recent fiscal year. These documents must demonstrate the parent company’s financial capacity to support operations in Vietnam. All foreign documents must be notarized, legalized, and consularized before they are accepted by Vietnamese authorities.

Once all documents are properly translated and authenticated, the investor proceeds to apply for the Investment Registration Certificate (IRC). This certificate is required for all foreign-invested companies and must be approved by the competent licensing authority, which used to be the Department of Planning and Investment (DPI), but may vary due to Vietnam’s ongoing administrative restructuring. The processing time for the IRC has expanded in practice, depending on the jurisdiction and the complexity of the investment.

Following the IRC, the investor applies for the Enterprise Registration Certificate (ERC), which serves as the business’s official license under Vietnamese law. The ERC includes key corporate details such as company name, registered address, charter capital, legal representative, and business scope.

Post-incorporation compliance includes registering the business’s tax code, announcing the company formation on the national enterprise registration portal, engraving the company seal, and fulfilling any other administrative steps required by law. Depending on the nature of the business, registration for VAT and other taxes may also be necessary.

Finally, a corporate bank account must be opened. This step is crucial, as capital contributions must be made via bank transfer to the company’s Vietnamese bank account. Depending on the bank, whether local or foreign, account opening may taking more or less time. Banks will require the submission of incorporation documents, information on the company’s ownership and beneficiaries, and compliance with Know Your Customer (KYC) requirements. Planning for potential delays at this stage is advisable when pursuing business incorporation in Vietnam.

What You’ll Need: Documentation and Compliance

Incorporating in Vietnam involves assembling a package of documents that varies slightly depending on whether the investor is an individual or a company. Individual investors must present a valid passport and legal address, while corporate investors must submit a legalized and consularized certificate of incorporation, audited financial statements, and a resolution from the board of directors or parent company authorizing the Vietnam investment.

Other required documents include the company charter, a lease agreement for the company’s office, and a list of founding members. If the investor is using a third-party service provider or representative, a power of attorney will also be necessary.

Once the company is formed, opening a corporate bank account will require submission of the Investment Registration Certificate, Enterprise Registration Certificate, company seal sample, tax code, and signed KYC forms. Proof of identity and residential address of the ultimate beneficial owner (UBO) must also be disclosed, in compliance with Vietnam’s anti-money laundering regulations. Proper documentation is key to a smooth and successful business incorporation in Vietnam.

Citizenship: What Foreign Investors Should Know

Vietnam is generally welcoming to foreign investors, particularly those from countries that are members of the World Trade Organization (WTO). Thanks to Vietnam’s WTO commitments, investors from member countries benefit from greater transparency and access under the most-favored-nation principle.

However, investors from jurisdictions not party to WTO agreements may face additional barriers or review procedures. In some cases, such as when an investor is from a country subject to international sanctions or on an internal watchlist, the licensing authorities may require additional due diligence or deny incorporation outright. Additionally, dual citizens or individuals residing in high-risk financial jurisdictions should anticipate extended review periods and provide comprehensive disclosure of their identity and source of funds.

Corporate investors, especially those with multi-layered ownership structures or ties to offshore jurisdictions, should also be prepared to demonstrate not only legality but transparency. Financial documentation will need to be clear, recent, and auditable, and compliance with international reporting standards may be requested during business incorporation in Vietnam.

AML and KYC: Banking and Compliance Expectations

Vietnam’s financial regulatory system has strengthened significantly over the past decade, particularly in the realm of anti-money laundering (AML) and financial transparency. All companies and financial institutions operating in Vietnam are bound by the country’s Anti-Money Laundering Law and related implementing guidelines.

When opening a corporate bank account, investors must comply with Know Your Customer (KYC) rules, which require banks to verify the company’s ownership, source of investment capital, intended business activities, and identify all parties with control or influence over the business.

Foreign banks in Vietnam tend to apply more stringent KYC protocols in line with global standards. This often results in longer processing times and additional paperwork, particularly for corporate investors.

In contrast, local Vietnamese banks may apply more flexible risk-based assessments. While they still comply with national regulations, their internal procedures tend to focus more on local context and documentation rather than rigid global compliance checklists. As a result, opening accounts at local banks may be faster and more straightforward, especially for investors engaged in business incorporation in Vietnam in low-risk, non-conditional sectors.

Common Mistakes and How to Avoid Them

A common cause of frustration among foreign investors is the assumption that Vietnam’s incorporation process is identical to that of Western countries. In reality, it is unique and requires a clear understanding of procedural nuances. One major mistake is failing to have corporate documents properly legalized and notarized, this is not optional and must be done in accordance with Vietnam’s consular requirements.

Another misstep is choosing a business activity without checking whether it is conditional or restricted. This can result in a rejected license application or the need to restart the entire process under new terms. Investors also frequently underestimate the timeline for bank account opening or expect to contribute capital in cash, which is not permitted. All capital contributions must be made via bank transfer from the investor’s account abroad to the company’s capital account in Vietnam.

Additionally, some investors neglect post-licensing compliance tasks, such as announcing the company formation or registering for tax codes. These are not formalities; failure to complete them may incur penalties or invalidate your registration. Avoiding these mistakes will ensure a smoother experience in business incorporation in Vietnam.

Final Thoughts: Vietnam is Open If You’re Ready

Business incorporation in Vietnam is increasingly accessible for foreign investors.  But, understanding the regulatory framework, preparing compliant documentation, and allowing realistic timeframes for licensing and banking are all critical to success.

Vietnam rewards those who prepare. It offers a stable business environment, a welcoming attitude toward foreign capital, and strong economic fundamentals. Investors who work with experienced professionals, follow the law, and stay up to date on policy changes can expect not only a smooth entry into the market but a strong foundation for growth.

As global uncertainty continues to shape investment decisions, Vietnam offers something rare: predictability, growth, and opportunity wrapped into one jurisdiction. For those willing to engage thoughtfully, it may very well be the most rewarding move you’ll make in the decade ahead.

Frequently Asked Questions (FAQs)

How long does it take to complete business incorporation in Vietnam?

The process of business incorporation in Vietnam typically takes around 4 to 6 weeks for most non-conditional investment sectors. This includes document preparation, licensing, and bank account setup.

What is the timeline for obtaining the Investment Registration Certificate (IRC)?

It usually takes up to 20 working days to obtain the IRC. This timeline may vary slightly depending on the province, the business sector, and the quality of submitted documents.

How long does it take to receive the Enterprise Registration Certificate (ERC)?

After receiving the IRC, the ERC is typically issued within 5 to 7 working days, provided that all required documents are accurate and complete.

What is the expected duration for opening a corporate bank account in Vietnam?

The timeline to open a corporate bank account ranges from 1 to 4 weeks, depending on the bank’s internal compliance process and whether you choose a local or foreign bank. Foreign banks may take longer due to stricter KYC and AML procedures.

Can I speed up the process of business incorporation in Vietnam?

While certain administrative steps are fixed by law, having all documents correctly prepared, properly legalized, and using a knowledgeable local service provider can significantly reduce delays during business incorporation in Vietnam.

Is it possible to begin operations before completing bank account setup?

Yes. After your companies complete all steps of business incorporation in Vietnam, including obtaining the IRC, ERC, your company can operate.  But, opening the corporate bank account would allow your company receiving any revenue from business activity or capital contribution.

Are the timelines the same in every city or province in Vietnam?

Not exactly. Although business incorporation in Vietnam follows a national framework, processing speed may vary between cities due to local administrative differences and staffing.

ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.