How to Set Up a Subsidiary in Vietnam for Foreigners: Legal and Financial Insights

How do foreigners set up a subsidiary in Vietnam?

In most cases, a foreign investor first checks whether its business line is open, restricted, or subject to conditions for foreign ownership. If the project requires an IRC, that approval is obtained before applying for the ERC that creates the company. After incorporation, the business completes capital contribution, tax registration, and any sector-specific licensing.

Vietnam’s dynamic economy and strategic location make it an attractive destination for foreign investors seeking to establish a presence in Southeast Asia. Setting up a subsidiary in Vietnam offers various opportunities for expansion and market penetration.

This article breaks down the main ownership approaches foreign investors commonly use in Vietnam, including wholly foreign-owned companies and joint ventures with Vietnamese partners. In practice, these structures are usually established using Vietnamese legal forms such as a limited liability company (LLC) or joint stock company (JSC), depending on the investor’s business goals, governance preferences, and sector-specific rules.  

We also outline the legal and financial requirements for establishment, including market-access checks, licensing, capital contribution, tax registration, and ongoing compliance. By understanding these core steps, foreign investors can move through the setup process more efficiently and reduce regulatory risk while entering Vietnam’s growing market.

Core reasons to get a subsidiary up and running in Vietnam

Setting up a subsidiary in Vietnam can be attractive because the country remains an important manufacturing, sourcing, and consumer market in Southeast Asia, while also benefiting from major trade frameworks such as the CPTPP and EVFTA. At the same time, foreign investors should not rely on market size alone; they should first confirm whether their intended business lines are open to foreign investment or subject to conditions under Vietnam’s market-access rules.  

A locally incorporated subsidiary can also make it easier to contract with customers, hire employees, open local bank arrangements, invoice in Vietnam, and build a long-term operating presence. For regulated sectors, however, the ability to operate will still depend on the activity-specific approvals, ownership limits, and practical licensing requirements that apply to the chosen business model. 

The variations in subsidiaries you can expect in Vietnam

Before choosing a structure, it helps to separate ownership approach from legal form. A foreign investor may own 100% of the company or partner with a Vietnamese investor, but the operating vehicle itself is typically incorporated as an LLC or JSC under Vietnamese enterprise law.  

Ownership approach	Typical legal form in Vietnam	Main advantage	Key watchpoint
Wholly foreign-owned company	Usually LLC or JSC	Full control over strategy and operations	Must satisfy foreign market-access rules and sector conditions
Joint venture with a Vietnamese partner	Usually LLC or JSC	Local market knowledge, relationships, and regulatory familiarity	Need clear shareholder rights, governance, and profit-sharing terms

Wholly Owned Subsidiary (WOS)

A wholly owned subsidiary (WOS) is a distinct legal entity that is entirely owned by the parent company. While it may require a larger initial investment, it provides the parent business with complete control and flexibility in its operations and strategic decisions.

Joint Venture Company (JVC)

A Joint Venture Company (JVC) involves collaborating with a Vietnamese company, which can offer significant advantages in navigating local regulations and gaining access to established local networks. However, it is crucial to carefully consider aspects such as profit-sharing arrangements and decision-making processes to ensure a smooth and equitable partnership.

Legal aspects to adhere to when setting up a subsidiary in Vietnam

To establish a subsidiary in Vietnam, foreign investors should start with a market-access review. Vietnam maintains a list of sectors and sub-sectors where foreign investors face conditional market access, and some activities may require additional approvals or may not be fully open to foreign ownership. This review affects the ownership structure, licensing path, and feasibility of the project from the outset.  

Where required, the investor must obtain an Investment Registration Certificate (IRC) for the investment project from the competent investment registration authority. After that, the company is incorporated through the Enterprise Registration Certificate (ERC), which establishes the enterprise as a legal entity. The ERC is the current core company registration document; it should not be confused with sector-specific business licences or older shorthand such as “BRC.”  

Depending on the business line, the company may also need specialised post-registration approvals, such as retail, logistics, education, product, or operating permits. These extra approvals are not universal, but they are critical in regulated sectors and can materially affect the launch timeline. 

How to set up a subsidiary in Vietnam for foreigners: The process

Obtaining the mandatory IRC

Foreign investors frequently need an Investment Registration Certificate (IRC) before incorporating the local company. Under the Law on Investment, the investment registration authority generally issues the IRC within 15 days of receiving a valid dossier for projects that are not subject to investment policy approval. Where investment policy approval is required, the IRC is issued within 5 working days after the written approval is received.  

The competent authority depends on the project location and whether the investment is inside an industrial park, export processing zone, hi-tech park, or economic zone. Because that allocation is determined by law and project specifics, investors should confirm the correct filing authority before submitting the application. 

Obtaining the mandatory ERC or BRC

To register the company itself, the investor applies for the Enterprise Registration Certificate (ERC) through the business registration process. The current legal term is ERC. Under the enterprise registration framework, the business registration authority generally issues the ERC within 3 working days after receiving a valid dossier. Current registration practice should also be reviewed carefully because the amended enterprise law introduced additional disclosure requirements, including beneficial owner information where applicable. on.

Payment of taxes and registration fees for company licenses

After incorporation, the enterprise must complete tax registration and activate the relevant electronic compliance channels. In practice, Vietnam uses official e-tax systems for declarations and payments, and businesses often also need to complete e-invoice procedures before normal commercial operations begin. The enterprise registration number shown on the ERC generally functions as the company’s tax identification number.  

Instead of referring broadly to a “business licence tax,” it is more accurate to refer to Vietnam’s annual licence fee regime. As a general rule, organisations with charter or investment capital above VND 10 billion pay VND 3,000,000 per year, while those at or below VND 10 billion pay VND 2,000,000 per year; branches, representative offices, and business locations generally pay VND 1,000,000 per year. A company’s overall tax profile may also include corporate income tax, VAT, payroll withholding obligations, and other taxes depending on its activities. 

Making your capital contribution within 90 days

After receiving the ERC, the owner, members, or shareholders must generally contribute the committed charter capital within 90 days from the date of ERC issuance. For capital contributed by assets rather than cash, the statutory period excludes the time needed to transport, import, or complete ownership transfer formalities for those assets. If the capital is not fully contributed on time, the company must take corrective steps, including adjusting charter capital and member or shareholder records within the statutory deadlines. 

Get access to a sublicense or permit when necessary

Company incorporation and investment registration do not automatically authorise every business activity. Certain sectors may require additional licences, operating permits, or product-specific registrations before the company can legally trade. This is common in more heavily regulated areas such as retail distribution, logistics, education, recruitment, hospitality, manufacturing segments, and product-regulated sectors such as cosmetics. The timing impact can range from a few extra weeks to several months depending on the industry and the completeness of the application dossier. 

Key subsidiary laws to be mindful of in Vietnam

Establishing a limited liability company (LLC) in Vietnam requires careful planning around ownership, licensing, corporate governance, and compliance. Vietnam does not impose a single universal minimum charter-capital rule for all industries, but authorities may assess whether the proposed capital is sufficient for the scale and nature of the project, and some regulated sectors have their own capital or operational conditions. An LLC can be wholly foreign-owned or structured as a joint venture, subject to market-access restrictions and investment conditions.  

The governance structure depends on the type of company formed. A multiple-member LLC generally has a Members’ Council, a Chair, and a Director or General Director. A one-member LLC generally has either a Company President or a Members’ Council, together with a Director or General Director. A Board of Controllers is not required merely because an LLC has more than 11 members; that requirement in current law is tied to specific situations, particularly certain state-owned enterprise structures and subsidiaries of state-owned enterprises.  

Subsidiaries must also comply with Vietnamese accounting, tax, and reporting obligations. In practice, foreign-invested enterprises should expect annual financial statement preparation under Vietnamese rules and statutory audit requirements by an eligible independent auditor in Vietnam. Businesses should also maintain proper books, invoices, labour records, and internal approvals to support inspections, tax filings, and profit remittance planning. 

Premia TNC’s incorporation services in Vietnam

At Premia TNC, we offer top-tier incorporation services in Vietnam with a dedicated and highly skilled team of consultants who excel in a wide range of fields. Our expertise ensures you receive exceptional support, completely free of consulting fees. We pride ourselves on delivering efficient, hassle-free processes with reasonable and competitive costs, guaranteeing the highest quality service tailored to your needs.

Our role is to help investors understand the practical sequence of incorporation, investment registration, licensing, and ongoing compliance so that setup decisions are aligned with Vietnam’s current regulatory framework. This includes support on structuring, application preparation, and post-registration compliance planning. 

Choosing us means choosing a seamless incorporation experience. Whether you need comprehensive legal assistance or a straightforward setup, we’re here to make it effortless. Contact us or fill out the form below to get started and discover why Premia TNC is your best choice for incorporating in Vietnam.