Vietnam continues to be a top destination for international investors thanks to its strategic location, growing economy, and favorable business environment. Setting up a 100% foreign-owned company (FDI enterprise) is a popular investment model that allows foreign investors full control over operations and decision-making. However, the process requires careful legal preparation in accordance with the current Law on Investment and Law on Enterprises.
This guide outlines the legal requirements, step-by-step procedures, and how LawPlus can support foreign investors in establishing their business in Vietnam efficiently and lawfully.
Table of Contents/Mục lục
I. Legal Requirements for Establishing a Foreign-Owned Company
To set up a 100% foreign-owned company in Vietnam, investors must meet the following core legal conditions under the 2020 Law on Investment and related regulations:
1. Investment Sector Eligibility
The business activity must comply with Vietnam’s market access commitments for foreign investors:
- Restricted sectors: Prohibited from foreign investment.
- Conditional sectors: Require compliance with ownership limits, investment forms, or other conditions.
- Unconditional sectors: Open to foreign investors under the same terms as domestic investors.
2. Valid Investment Project
Investors must propose a legitimate investment project and obtain approval from the competent authority.
3. Investment Capital
While there is no fixed minimum capital requirement, the charter capital must be appropriate for the business scale and sector. Investors must demonstrate financial capacity to execute the project.
4. Project Location
The company must have legal rights to use the premises for its headquarters and project site.
II. Two-Step Process to Establish an FDI Company in Vietnam
Setting up a foreign-invested company involves two main stages:
1. Step 1- Register the Investment Project (Obtain Investment Registration Certificate – IRC)
This step is mandatory for most foreign-invested projects.
Required documents:
- Proposal for investment project
- Legal and financial documents of the investor
- Proof of project location
Authority:
- Department of Planning and Investment (DPI) of the province/city
- Management Boards of Industrial Parks, Export Processing Zones, or Economic Zones
Outcome:
- Issuance of the Investment Registration Certificate (IRC), which is required for the next step.
2. Step 2- Register the Enterprise (Obtain Enterprise Registration Certificate – ERC)
After receiving the IRC, the investor proceeds to register the company under the Law on Enterprises 2020.
Required documents:
- Enterprise registration application
- Company charter
- List of members/shareholders (if applicable)
- Copy of IRC
Authority:
- Business Registration Office under the Department of Planning and Investment
Outcome:
- Issuance of the Enterprise Registration Certificate (ERC), officially establishing the company.
LawPlus Investment Advisory Services
Establishing a foreign-invested company in Vietnam involves navigating complex legal frameworks, including WTO commitments, FTAs, and domestic regulations. LawPlus offers comprehensive legal support to foreign investors through:
- Legal feasibility assessment: Advising on business sectors and ownership structures.
- Capital planning: Assisting with appropriate capital levels and financial documentation.
- Document preparation: Drafting complete and compliant investment and enterprise registration dossiers.
- Procedure execution: Representing investors in dealings with investment and business registration authorities.
Contact LawPlus to work with experienced corporate lawyers who will ensure your company setup in Vietnam is fast, compliant, and hassle-free.
