Key Takeaways
- Indian companies may own 100% of a Vietnamese subsidiary in many sectors.
- Foreign ownership conditions must be checked for every proposed business activity.
- A new foreign-invested company normally needs an Investment Registration Certificate and an Enterprise Registration Certificate.
- There is no general minimum capital applicable to every company, but the registered amount must be commercially reasonable.
- Capital sent from India must comply with Indian overseas-investment rules and Vietnamese banking requirements.
- Trading, importing, exporting or distributing regulated products may require additional approvals.
- The subsidiary must maintain separate Vietnamese accounting, tax and corporate records.
What Is a Vietnamese Subsidiary?
A Vietnamese subsidiary is a locally incorporated legal entity controlled wholly or partly by a foreign parent company. It operates independently from its Indian parent for legal, accounting and tax purposes.
The subsidiary may sign contracts, employ workers, invoice customers, import or export goods and maintain its own bank accounts. Its activities must remain within the scope recorded in its investment documents, enterprise registration and operating licenses.
Indian investors commonly use a single-member limited liability company for a wholly owned subsidiary. A multi-member limited liability company may suit a joint venture, while a joint-stock company is more appropriate when several shareholders or future equity fundraising are anticipated.
Can an Indian Company Hold 100% Ownership?
Vietnam permits complete foreign ownership across many service, manufacturing and trading activities. However, foreign ownership is not unrestricted in every industry.
Before applying, the Indian parent should verify:
- Whether the activity is available to foreign investors;
- Whether an ownership ceiling applies;
- Whether a Vietnamese partner is compulsory;
- Whether the investor must demonstrate sector experience;
- Whether minimum capital or security deposits are required; and
- Whether a separate operational license is necessary.
Importing goods for use in manufacturing does not automatically authorize the subsidiary to distribute those goods in Vietnam. Import rights, wholesale activities, retail activities and manufacturing should therefore be assessed separately.
Which Company Structure Is Most Suitable?
Structure | Ownership requirements | Typical application |
Single-member LLC | One corporate or individual owner | Wholly owned Indian subsidiary |
Multi-member LLC | Two to fifty members | Closely held joint venture |
Joint-stock company | At least three shareholders | Multiple investors or future fundraising |
A single-member LLC is often the simplest option for an Indian parent seeking full control. Nevertheless, governance, investment plans and future share transfers should be considered before choosing the entity type.
How Much Capital Is Required?
Vietnam does not apply one statutory minimum to all foreign-invested companies. Instead, the proposed funding should be adequate for the scale and duration of the project.
Authorities may consider anticipated expenditure on:
- Premises and deposits;
- Equipment and technology;
- Employees;
- Inventory;
- Marketing;
- Professional services; and
- Working capital.
Some regulated industries impose their own capital, deposit or financial-capacity conditions.
The investment documents should distinguish between charter capital contributed by the parent and additional funding obtained through loans. A parent-company loan cannot simply be recorded as equity. Foreign borrowing may require registration or reporting to the State Bank of Vietnam.
Documents Commonly Required From India
An Indian corporate investor will generally prepare:
- Certificate of incorporation;
- Memorandum and articles of association;
- Board resolution approving the investment;
- Authorization for the application representative;
- Audited financial statements;
- Evidence of available funding;
- Passport details of relevant representatives;
- Proposed Vietnamese company charter;
- Investment-project proposal;
- Member or shareholder information; and
- Documents for the proposed Vietnamese address.
Indian documents may need to be apostilled or consularly legalized, depending on the applicable authentication procedure. They will normally require certified Vietnamese translations.
Steps for Establishing the Subsidiary
- Define the Intended Operations
The investor should identify the subsidiary’s products, services, customers and revenue model. Importers and exporters should also determine applicable customs codes, product standards, labeling rules and licensing requirements.
- Review Foreign-Investment Conditions
Each business activity must be checked against Vietnam’s market-access framework and specialized legislation. This determines whether full Indian ownership is allowed and whether additional conditions apply.
- Select a Compliant Address
The company needs a lawful registered office. A factory, warehouse or retail location may also require planning, fire-safety, environmental or construction approvals.
The investor should confirm that the premises support the proposed activities before entering a long-term lease.
- Apply for Investment Registration
A standard greenfield project normally requires an Investment Registration Certificate. The application describes the investor, objectives, capital, location, funding sources and implementation schedule.
Larger or sensitive projects may first require investment-policy approval.
- Register the Vietnamese Company
After receiving investment approval, the investor applies for an Enterprise Registration Certificate. Once issued, this certificate formally establishes the subsidiary as a Vietnamese legal entity.
- Complete Operational Registrations
Before beginning business, the subsidiary may need to:
- Open an investment-capital account;
- Open operational bank accounts;
- Receive the parent’s capital contribution;
- Arrange its company seal;
- Obtain an electronic signature;
- Activate electronic invoices;
- Establish accounting and payroll systems;
- Register for customs procedures; and
- Secure sector or product licenses.
Indian Overseas-Investment Compliance
The Indian parent’s investment will ordinarily be treated as overseas direct investment under India’s foreign-exchange framework.
Before remitting funds, the parent should:
- Approve the investment internally;
- Select a designated authorized-dealer bank;
- Complete Form FC;
- Provide the supporting corporate and financial records;
- Obtain the required Unique Identification Number; and
- Send the investment through the designated banking channel.
The Indian company may also have continuing reporting responsibilities, including filing an Annual Performance Report and reporting additional capital, loans, guarantees, ownership changes or disposal of the investment.
Vietnamese and Indian documentation should be aligned before money is transferred. Differences in the investor’s name, capital amount, payment purpose or contribution schedule can delay recognition of the investment.
Tax and Accounting Obligations
Vietnam’s standard corporate income tax rate is 20%, although qualifying projects may receive incentives or reduced rates.
VAT is generally charged at 10%. Eligible goods and services are subject to a temporary 8% rate through the end of 2026.
Payments to the Indian parent for services, interest or intellectual property may attract foreign contractor tax. Transactions between the parent and subsidiary must also follow arm’s-length principles and may require transfer-pricing documentation.
The India–Vietnam Double Taxation Avoidance Agreement may reduce double taxation when the relevant residence, documentation and treaty conditions are satisfied.
The subsidiary must maintain Vietnamese accounting records, issue compliant electronic invoices, submit tax returns and prepare annual financial statements. Foreign-invested enterprises are generally subject to statutory audit requirements.
Vietnam received USD 31.52 billion in registered foreign investment during the first ten months of 2025, representing year-on-year growth of 15.6%.
