Key Takeaways
- Vietnam’s Law on Enterprises recognizes limited liability companies, joint-stock companies, partnerships and sole proprietorships as enterprise forms.
- Representative offices and branches are useful market-entry options, but they are not standalone Vietnam companies.
- Foreign investors must check market access conditions before choosing a structure.
- New beneficial owner information obligations apply under Vietnam’s 2025 enterprise law amendments.
Here’s good news for investors and foreign companies planning to set up a business but still unsure of what type of company in Vietnam suits them best. Premia TNC is just a tap of the finger away! With our experience in company incorporation, among other services, we can confidently assist foreign investors.
Premia TNC understands that launching a business in Vietnam involves a lot of work, like creating a marketing scheme, hiring staff, raising money, and choosing the perfect company type. So, we present the options foreign investors have to launch a company in Vietnam.
What company type in Vietnam should foreign investors choose?
Foreign investors usually compare limited liability companies, joint-stock companies, partnerships, representative offices and branches. LLCs and JSCs are the most common operating company structures, while representative offices and branches are market-entry presences of a foreign parent. The best choice depends on ownership, liability, capital raising needs, business scope and Vietnam’s market access conditions.
Indeed, investors should choose a structure that suits their business model, tax position, regulatory licensing requirements and liability risk. Under Vietnam’s Law on Investment, foreign investors must satisfy market access conditions where their intended business line is restricted, including possible conditions on foreign ownership ratio, investment method, investment scope and other treaty- or law-based requirements.
Under the Law on Enterprises, Vietnam’s enterprise forms include limited liability companies, joint-stock companies, partnerships and sole proprietorships. Representative offices and branches are not separate company types; they are dependent units or licensed presences used for specific purposes.
Limited Liability Company
I. Requirements and Capital
A Limited Liability Company (LLC) in Vietnam can be established as a single-member LLC owned by one organization or individual, or as a multi-member LLC with 2–50 members. Members’ liability is generally limited to their contributed or committed capital, subject to statutory exceptions. Members must generally contribute capital within 90 days from the issuance date of the Enterprise Registration Certificate, excluding certain time required for transport, importation or ownership transfer of contributed assets.
The registered capital requirement varies depending on the industry and the specific business activities.
II. Ownership
An LLC with partial foreign ownership may be structured as a joint venture where it includes both foreign and Vietnamese investors. A wholly foreign-owned LLC may be owned by one or more foreign investors, subject to market access rules and any sector-specific conditions. Foreign-owned LLCs can operate in many sectors, including manufacturing, trading, education, information technology and services, provided that the proposed business lines are permitted and required licenses or approvals are obtained.
III. Time Taken to Establish
The time required to establish an LLC in Vietnam can vary depending on the business sector, foreign investor structure, document legalization, lease readiness and whether an Investment Registration Certificate is required. Where an investment project of a foreign investor requires an IRC, the IRC step generally comes before enterprise registration. After the enterprise registration dossier is valid, the business registration authority issues the Enterprise Registration Certificate according to the applicable enterprise registration rules.
IV. Pros and Cons
One of the primary advantages of an LLC is limited liability, meaning the company owner or members are generally responsible only to the extent of charter capital or contributed capital, subject to statutory exceptions. The structure also allows single ownership in a single-member LLC and provides a relatively simple governance framework. However, there are disadvantages to consider. LLCs generally cannot issue shares, except for equitization cases, which may limit share-based fundraising compared with a joint-stock company. LLCs may issue bonds if legal conditions are satisfied.
Joint-Stock Company
I. Requirements and Capital
A Joint-Stock Company (JSC) in Vietnam requires at least three shareholders and has no statutory maximum number of shareholders. Its charter capital is divided into equal units called shares. The initially registered charter capital is the total face value of subscribed shares and must be recorded in the company charter.
A newly established JSC must have at least three founding shareholders, and founding shareholders must subscribe for at least 20% of the total authorized ordinary shares upon enterprise registration, unless the JSC is formed through certain conversion, division, consolidation or acquisition cases.
II. Ownership
A JSC can be wholly or partly foreign-owned by individuals or organizations, subject to market access restrictions and sector-specific conditions. Shareholders are provided with shares as evidence of ownership, and shares are generally transferable except in restricted cases under the Law on Enterprises, the company charter or securities regulations.
III. Time Taken to Establish
The process of establishing a JSC is usually more complex than establishing a simple LLC because it requires shareholder structuring, share subscription arrangements, corporate governance planning and, for foreign investors, possible IRC and market access review. The exact time frame can vary based on the business sector, investment project, licensing conditions and document readiness.
IV. Pros and Cons
One of the main advantages of a JSC is its flexibility in raising capital. The company can quickly issue shares to an unlimited number of investors, making it a preferred choice for many capital funders. Shareholders benefit from limited liability, as their financial responsibility is restricted to the amount of their investment, reducing personal financial risk. The procedure for assigning and transferring shares is relatively simple, which enhances the attractiveness of JSCs for potential investors. Additionally, JSCs can operate in a wide range of industries due to their efficient capital-raising capabilities.
Partnership Company
A partnership is a Vietnam enterprise with at least two general partners who jointly own and operate the business under one name. General partners must be individuals and have unlimited liability for the partnership’s obligations. A partnership may also have limited partners, whose liability is generally limited to their promised capital contribution. This structure can suit professional or trust-based businesses, but it is less common for foreign investors because of the unlimited liability exposure of general partners. A partnership has legal personality from the date the Enterprise Registration Certificate is issued and must not issue securities.
Representative Office
I. Requirements and Capital
Setting up a Representative Office in Vietnam does not require registered charter capital because a representative office is not a separate enterprise. For foreign traders, Decree 07/2016/ND-CP requires the foreign trader to be legally established and to have operated for at least one year from the date of establishment or registration, among other conditions. The license for establishment of a representative office or branch is generally valid for five years, but not beyond the remaining term of the foreign trader’s business registration document where that document has an expiry date.
II. Ownership
A Representative Office in Vietnam is fully owned by its parent company. This structure allows the parent company to maintain complete control over the RO’s activities, ensuring alignment with the overall business strategy.
III. Time Taken to Establish
The process to establish a Representative Office in Vietnam is relatively quick where the dossier is complete and no ministry-level consultation is required. Under Decree 07/2016/ND-CP, the licensing agency generally provides a written notification on whether the license is granted within 7 working days from receipt of a valid application, except for cases requiring additional approval or consultation.
IV. Pros and Cons
Setting up a Representative Office in Vietnam offers advantages such as a low initial investment and a relatively quick setup process. There is no registered capital requirement, reducing the financial burden for market entry. Representative Offices can conduct liaison activities, market research and promotion of the parent company’s business. However, they are restricted from conducting business activities and cannot independently generate revenue in Vietnam. ROs also rely heavily on their parent company for funding and strategic direction.
Branch Office
I. Requirements and Capital
To establish a Branch Office in Vietnam, a foreign trader must obtain an establishment license. Under Decree 07/2016/ND-CP, the foreign trader must generally have operated for at least five years from the date of establishment or registration, and the branch’s scope of operation must be consistent with Vietnam’s market access commitments and the foreign trader’s business lines.
A branch is not a separate Vietnam company. It is a licensed presence of the foreign trader, and the foreign trader is legally responsible for the entire operation of its branch in Vietnam.
II. Ownership
Foreign companies have the flexibility to appoint a head of branch, subject to Vietnam’s labor, immigration and work permit requirements where the appointee is a foreign employee. This allows for direct control and oversight from the parent company, ensuring alignment with the company’s objectives and policies.
III. Time Taken to Establish
Under Decree 07/2016/ND-CP, the licensing agency generally examines whether a branch application is complete within 3 working days and, except for cases requiring consultation with a relevant ministry, provides a written notification on whether the branch license is granted within 7 working days from receipt of a valid application. In practice, the overall timeline may be longer where documents require legalization, translation, explanation, supplementation or sector-specific approval.
IV. Pros and Cons
Branch offices can provide substantial benefits, particularly for eligible service-oriented industries. They may conduct activities within their licensed scope and can offer more operational substance than a representative office. However, branches are not separate companies, and the foreign trader remains legally responsible for their operations. Their permitted scope may be limited by Vietnam’s WTO commitments, market access rules and specialized laws. Understanding these requirements is essential before deciding whether a Branch Office is suitable for entering Vietnam.
Compliance Points Foreign Investors Should Not Miss
From 1 July 2025, Vietnam’s enterprise registration framework includes beneficial owner information requirements. Enterprises must collect, update and retain beneficial owner information and provide it to competent authorities when requested. Decree 168/2025/ND-CP also requires declaration of certain beneficial owners, such as individuals holding at least 25% of charter capital or voting shares, and notification of changes in beneficial owner information within 10 days.
How PREMIA TNC Helps in Registering Companies in Vietnam
Premia TNC understands how tough it is to decide which company type foreign investors will choose in Vietnam. Hence, even at this stage, we offer our help by providing information and all the support needed to register a business in Vietnam.
We take pride in guiding investors over the government requisites, removing clients’ confusion, and giving clarity to the entire business setup process. With our professional assistance, foreign investors can launch their companies in a relatively brief period. In this way, investors can devote their precious time to other decisions to make sure the business grows in Vietnam.
Frequently Asked Questions
What is the most common company type for foreign investors in Vietnam?
An LLC is often the most practical choice for foreign investors that want a simpler operating company with limited liability and flexible ownership. However, a JSC may be better where the investor needs multiple shareholders, easier share transfers or share-based fundraising.
Is a representative office allowed to sell goods or services in Vietnam?
No. A representative office is limited to liaison, market research and promotion of the parent company’s business. It cannot independently conduct profit-generating business activities in Vietnam.
Do foreign investors always need an Investment Registration Certificate?
No. An IRC is generally required for investment projects of foreign investors, but it is not required for certain forms such as capital contribution, purchase of shares or purchase of stakes in an existing business organization. The correct route depends on the investment structure and business sector.
