Overcoming Business Challenges in Vietnam

Introduction

Vietnam remains one of Southeast Asia’s most attractive destinations for manufacturing, services and foreign investment. During the first eight months of 2026, registered foreign investment reached USD40.63 billion, while disbursed foreign direct investment was estimated at USD17.25 billion. Industrial production grew by 11.9% year on year over the same period. National Statistics Office of Vietnam 

These figures demonstrate the scale of the opportunity, but they should not obscure the practical difficulties of entering and operating in the Vietnamese market. Foreign businesses must work within a regulatory environment that is developing quickly and can involve multiple licences, Vietnamese-language filings, sector-specific conditions and extensive supporting documentation. 

The most successful entrants generally treat compliance as an ongoing operational responsibility rather than a one-time incorporation exercise. 

What Are the Main Business Challenges in Vietnam? 

The main business challenges in Vietnam are navigating changing regulations, determining foreign ownership and licensing requirements, managing tax and accounting obligations, complying with foreign-exchange controls, protecting intellectual property and recruiting suitable employees. Companies may also encounter differences in administrative interpretation, document formalities, cost pressure and increasingly complex data-protection requirements. 

Vietnam Business Environment Statistics 

Recent official figures illustrate both Vietnam’s commercial momentum and the pressure faced by businesses. 

Indicator	First eight months of 2026	Business significance
Newly established and reactivated enterprises	Nearly 206,400	Demonstrates continued market activity
Enterprises temporarily suspending operations	More than 88,000	Indicates operational and cash-flow pressure
Enterprises completing dissolution	More than 40,800	Up 125.5% year on year
Average businesses entering or re-entering the market each month	25,800	Reflects strong entrepreneurial activity
Average businesses withdrawing each month	19,700	Shows the importance of financial resilience
Consumer Price Index	Up 4.45% year on year	May affect wages, rent, materials and consumer demand
Registered foreign investment	USD40.63 billion	Up 55.4% year on year
Disbursed foreign investment	USD17.25 billion	Up 12% year on year

STATISTIC-SOURCE: https://www.nso.gov.vn/en/data-and-statistics/2026/09/report-socio-economic-performance-in-august-and-8-months-of-2026/ 

The figures should be read together: Vietnam continues to attract investment and new market participants, but business withdrawals and rising prices underline the need for adequate working capital, realistic forecasts and close cost control. 

1. A Rapidly Changing Legal and Regulatory Framework

Vietnam’s regulatory system continues to evolve as the country modernises its investment environment. The challenge for foreign investors is not simply the number of rules, but the speed of legislative change and the possibility of different interpretations during implementation. 

The 2025 Law on Investment took effect on 1 March 2026. Among other reforms, it reduced the number of conditional business sectors to 198 and introduced changes intended to streamline investment procedures. Some provisions relating to business conditions took effect on 1 July 2026. investvietnam.gov.vn 

Businesses should confirm: 

• Whether their proposed activities are open to foreign investment. 

• Whether foreign ownership limits apply. 

• Whether an Investment Registration Certificate is required. 

• Whether separate operating licences or professional approvals are necessary. 

• Whether the proposed premises are legally suitable for the registered activities. 

• Regulatory approval should therefore be planned on an activity-by-activity basis. A company registration alone does not necessarily authorise the business to begin every proposed operation. 

2. Business Establishment and Licensing 

There is no single incorporation timeline that applies to all foreign-invested companies in Vietnam. The process may involve investment approval, enterprise registration, tax activation, capital-account opening, capital contribution and post-registration licences. 

Timelines depend on factors such as: 

• The investor’s nationality and legal form. 

• The proposed business activities. 

• Applicable international commitments and market-access conditions. 

• The location and scale of the project. 

• Whether land, construction, environmental or specialised approvals are required. 

• The completeness and legal status of overseas documents. 

• Foreign investors should avoid signing inflexible leases or commercial commitments before confirming that the location and business model satisfy the relevant approval requirements. 

3. Tax, Accounting and E-Invoice Compliance 

Vietnam generally applies a 20% corporate income tax rate. The current Corporate Income Tax Law also provides lower rates for certain qualifying smaller businesses: 15% for enterprises with annual revenue not exceeding VND3 billion and 17% for enterprises with revenue above VND3 billion but not exceeding VND50 billion, subject to the applicable conditions. www.mof.gov.vn 

Foreign-invested companies may also need to manage: 

• Value-added tax. 

• Foreign contractor tax. 

• Transfer-pricing documentation. 

• Personal income tax and payroll obligations. 

• Related-party transaction disclosures. 

• Electronic invoicing. 

• Tax incentives and their supporting conditions. 

• Vietnam’s new Law on Tax Administration is scheduled to take effect on 1 July 2026. Businesses should review tax processes, accounting systems and filing responsibilities whenever implementing guidance changes. vanban.chinhphu.vn 

Accounting records and supporting invoices should be complete, internally consistent and retained in accordance with Vietnamese requirements. Poor documentation can create tax exposure even where the underlying commercial transaction is legitimate. 

4. Foreign-Exchange Controls and Banking

Vietnam regulates the use of foreign currency within its territory. As a general rule, transactions, payments, price quotations, listings and advertising in Vietnam may not be conducted in foreign exchange unless an authorised exception applies. However, this does not mean that every foreign currency must automatically be converted into Vietnamese dong in every circumstance. Permitted current-account transactions may be processed through authorised credit institutions. vanban.chinhphu.vn 

Where a transaction is legally permitted in foreign currency, an electronic invoice may state the foreign-currency amount and applicable exchange rate in accordance with the invoicing rules. baochinhphu.vn 

Foreign-invested enterprises should plan for: 

• Direct investment capital accounts where required. 

• Evidence supporting incoming and outgoing transfers. 

• Proper classification of shareholder loans and capital contributions. 

• Loan registration requirements. 

• Profit-remittance documentation. 

• Bank know-your-customer and beneficial-ownership checks. 

• Capital should be contributed through the correct account and within the registered period. Incorrect payment routes can complicate future audits, loan repayments or profit remittances. 

5. Vietnamese-Language and Document Requirements 

Vietnamese is the principal language used for statutory filings and dealings with government authorities. Contracts and internal records may be bilingual, but the Vietnamese version is commonly required for regulatory, employment, accounting or tax purposes. 

Not every foreign-issued document follows one identical certification process. Requirements can depend on the document type, issuing country, applicable treaty and the receiving authority. A document may require notarisation, consular legalisation and a certified Vietnamese translation unless an exemption applies. 

Businesses should confirm document requirements before execution. Correcting a signature, legalisation or translation problem after submission can delay an application significantly. 

6. Intellectual-Property Protection 

Vietnam generally follows a first-to-file system for trademark rights. Businesses should therefore search and register important trademarks, logos and product names before launching or appointing local distributors. INTELLECTUAL PROPERTY OFFICE OF VIETNAM 

Although enforcement is strengthening, counterfeit goods and online infringement remain material concerns. During the first half of 2026, authorities removed more than 9,000 infringing products from e-commerce platforms. moit.gov.vn 

Practical precautions include: 

• Filing trademarks and industrial designs early. 

• Registering relevant domain names. 

• Including confidentiality and IP-ownership clauses in employment and supplier contracts. 

• Controlling access to proprietary information. 

• Monitoring online marketplaces and distribution channels. 

• Preserving evidence for enforcement action. 

• Relying solely on registrations obtained in another country may leave a company exposed in Vietnam. 

7. Recruitment, Employment and Foreign Workers 

Vietnam has a large workforce, but employers may face competition for experienced employees in technology, engineering, finance, compliance and senior management. Salary expectations and retention pressure can be particularly significant in major commercial and industrial centres. 

Employment contracts, payroll, compulsory insurance, working hours, leave and termination procedures must be managed under Vietnamese labour rules. Informal employment practices can create liabilities even when they are commercially common. 

Foreign personnel require separate attention. Decree 219/2025/ND-CP, effective from 7 August 2025, revised the framework governing foreign workers and related work-permit procedures. Employers should confirm whether a work permit or exemption is required before the employee begins work. vanban.chinhphu.vn 

8. Personal Data Protection

Vietnam’s Law on Personal Data Protection and Decree 356/2025/ND-CP took effect on 1 January 2026. The framework affects businesses that handle employee, customer, supplier or online-user information. vanban.chinhphu.vn 

Companies should map the personal data they collect, establish an appropriate legal basis for processing, review consent language, control vendor access and assess cross-border data transfers. Incident-response and deletion procedures should also be documented. These obligations should be incorporated into HR, marketing, sales, technology and procurement processes rather than assigned solely to an IT department. 

9. Trade, Supply-Chain and Cost Pressures 

Businesses importing machinery, components or finished goods may encounter product classifications, customs valuation issues, specialised inspections and origin requirements. Companies participating in preferential trade agreements must maintain sufficient evidence to support claims for reduced tariffs. 

Operational planning should also account for: 

• Changing transport and logistics costs. 

• Supplier concentration. 

• Port or customs delays. 

• Energy and utility requirements. 

• Flooding, storms and other climate-related disruption. 

• Exchange-rate and commodity-price movements. 

• Inflation is also relevant to budgeting. Vietnam’s CPI increased by 4.45% year on year during the first eight months of 2026, while core inflation increased by 4.24%. National Statistics Office of Vietnam 

10. Local Administrative Practice

A recurring challenge is the difference between national legislation and its practical application. Authorities may request clarification or supplementary documents depending on the industry, location and facts of an application. 

Businesses can reduce this risk by: 

• Preparing a clear description of each proposed activity. 

• Checking sector-specific rules before incorporation. 

• Keeping written records of regulatory submissions. 

• Allowing contingency time for supplementary requests. 

• Conducting periodic compliance reviews. 

• Seeking professional advice before restructuring activities or ownership. 

A technically correct filing can still be delayed if the proposed operations, premises or supporting documents are unclear. 

Major Challenges and Recommended Responses 

Business challenge	Potential effect	Recommended response
Regulatory changes	Delays, additional licences or non-compliance	Conduct legal reviews before launch and after major rule changes
Foreign ownership and market access	Activities may be restricted or conditional	Confirm ownership limits and approval routes before incorporating
Tax and accounting	Adjustments, interest, penalties or rejected deductions	Maintain compliant records and review related-party transactions
Foreign exchange	Delayed transfers or remittances	Use the correct bank accounts and preserve transaction documents
Document formalities	Rejected or delayed applications	Confirm legalisation and translation requirements in advance
Intellectual property	Counterfeiting, imitation or loss of brand rights	Register rights early and monitor the market
Employment and work permits	Labour disputes or immigration penalties	Use compliant contracts and verify permits before employment
Personal data	Regulatory, contractual and reputational exposure	Map data flows and implement privacy governance
Cost and supply-chain pressure	Reduced margins and interrupted production	Diversify suppliers and maintain financial contingency plans

Practical Market-Entry Checklist

Before entering Vietnam, investors should define their complete revenue model, verify market-access conditions, select an appropriate legal structure and confirm the suitability of their premises. The implementation plan should cover capital contribution, banking, licences, tax registrations, invoicing, employment and data processing—not merely incorporation. 

Contracts with landlords, distributors and employees should align with the approved business scope. Companies should also establish a compliance calendar and assign responsibility for regulatory updates. Adequate working capital is important because licensing, recruitment, fit-out and customer acquisition may take longer than forecast. 

How Premia TNC Can Help 

Premia TNC supports foreign investors throughout the business lifecycle in Vietnam, from initial market-entry planning to continuing compliance. 

Our services may include: 

• Market-entry and entity-structure assessment. 

• Company incorporation and investment registration support. 

• Accounting, tax and payroll services. 

• Corporate secretarial and statutory compliance. 

• Bank-account and capital-contribution coordination. 

• Work-permit and immigration support. 

• Licence applications and corporate changes. 

• Ongoing advisory services. 

• Professional planning can help investors identify regulatory dependencies before they become expensive delays.