A 100% foreign-owned company Vietnam structure is lawful in most sectors, but three points decide whether the file clears the first time: the market access test, the vehicle, and the evidence that the parent can fund what it promises. Counsel who treat these as formalities usually meet them again as requests for supplements, delayed capital inflows or an unplanned conversion of the entity.
This guide is written for in-house counsel and general counsel who must sign off a wholly foreign-owned enterprise under the Law on Investment No. 143/2025/QH15 and its implementing instruments. It follows the order in which a file actually fails: market access, status under Article 20, vehicle, funding evidence, capital account and sequencing, and it ends with a risk matrix that a 100% foreign-owned company Vietnam project team can adopt as a sign-off checklist.
Market Access Screening for a 100% Foreign-Owned Company Vietnam Filing
Screening comes first because it fixes the ownership ceiling. If the ceiling is below 100%, every later decision on vehicle and funding changes.
Article 8 and the Decree 96/2026 Negative List
Article 8 of the Law on Investment 2025 grants foreign investors the same market access as domestic investors, except for the sectors in Article 8.2 (not yet open, or conditionally open). Article 8.3 describes conditions as ownership caps, investment form, scope of activities, investor capacity or partner requirements, and other conditions under law or treaties. Article 10.1 bars performance requirements such as local content or export ratios.
Decree 96/2026/NĐ-CP, Articles 16–18 and Appendix I, lists Part A (sectors not open) and Part B (conditional sectors), with conditions published on the National Investment Portal. Under Article 17.5, existing foreign investors may continue under prior rules; new companies, projects and scope changes must meet the new conditions.
The practical output is a one-page sector memo stating the applicable condition, its source and the date checked. Since Decree 296/2026, Article 7, requires a commitment to satisfy market access conditions when the company is registered before the IRC, that memo is also the basis on which the legal representative signs the commitment.
Conditional Lines Affecting a 100% Foreign-Owned Company Vietnam Plan
Law No. 24/2026/QH16 replaces Appendix IV with a list of 137 conditional business lines from 01/03/2027. Pending applications for lines that are repealed are halted or returned, while existing licences remain valid until expiry. A project scheduled to be filed late in 2026 should therefore be tested against both lists. Treaty commitments (WTO, CPTPP, EVFTA, RCEP) may be more favourable in a given sector [State Authority Practice / Verification Required].
What a 100% Foreign-Owned Company Vietnam Structure Triggers Under Article 20
Full foreign ownership is not a separate legal form. A 100% foreign-owned company Vietnam entity is an LLC or JSC that places the company in the foreign-investor “lane” of the Law on Investment.
Wholly Foreign-Owned Enterprise: Treatment as a Foreign Investor
Under Article 20.1, an entity in which foreign investors hold more than 50% of charter capital is treated as a foreign investor for new projects and capital contributions. Consequences:
- New projects need an IRC (Article 26.1(a)–(b)); capital contribution and share purchase do not (Article 26.2).
- Any later step taking foreign ownership of a target above 50% requires prior registration (Article 21.3(b)).
- An existing entity with a new project need not form another entity (Article 20.3).
Downstream Investments by a Foreign Subsidiary Vietnam Vehicle
Because a foreign subsidiary Vietnam vehicle above 50% is treated as foreign, its acquisitions of Vietnamese companies follow the foreign-investor rules, including market access checks on the target. Build this into the holding design now rather than at the first acquisition.
Two traps deserve a line in the memo. First, Article 21.3(c) requires prior registration where the target holds land-use rights in islands, border or coastal wards or other defence-security-sensitive areas. Second, a 100% foreign-owned company Vietnam entity that later brings in a Vietnamese shareholder does not leave the foreign-investor lane unless foreign ownership falls to 50% or below (Article 20.2).
LLC vs JSC Vietnam: Choosing the Vehicle
The choice between a limited liability company and a joint stock company affects governance, transferability and later conversion. The comparison below reflects general rules of the Law on Enterprises [verify pinpoint].
| LLC vs JSC Vietnam | Single-member LLC | Joint stock company |
|---|---|---|
| Owners | One organisation or individual | At least three shareholders |
| Equity issuance | No shares; capital contribution only | Shares, including preferred classes |
| Governance | Owner decides; light organs | General meeting and board |
| Fit for a 100% foreign-owned company Vietnam plan | Operating subsidiary of one parent | Equity incentives or staged investor entry |
Single-Member LLC Vietnam as the Default
A single-member LLC Vietnam fits one corporate owner: decisions sit with the owner, governance is light, and the owner’s liability is limited to charter capital. Its limit is that it cannot issue shares, so an employee share scheme or a minority investor requires conversion under the Law on Enterprises [verify pinpoint].
When a JSC Is the Better Answer
A joint stock company requires at least three shareholders, which usually means an additional group entity. It suits a plan for equity incentives, a pre-agreed investor entry or a listing path, at the price of a heavier board structure.
Planning Your Market Entry into Vietnam?
Foreign ownership restrictions and capital account regulations vary significantly by industry sector. Send your proposed business scope and target timeline to our Corporate Practice Team via WhatsApp or Email for a complimentary 24-hour Feasibility & Regulatory Check.
Ownership Chain and the Parent Company Support Letter
The registry and the bank both read the chain from the company up to the individual at the top. For a 100% foreign-owned company Vietnam file, the chain is the evidence of who funds, who controls and who must be declared.
What the Parent Company Support Letter Must Achieve
Decree 96/2026, Article 6.7, does not require audited financial statements for the last two years and sets no validity period for a parent company support letter. For a 100% foreign-owned company Vietnam entity funded by the parent, the letter should still: name the company and project; state the amount and currency; commit the parent to fund it; and be signed by an authorised officer with evidence of authority. Documents are filed in Vietnamese (Article 5); under Decree 296/2026, Article 19, a translator’s signature certification replaces notarised translation. Whether consular legalisation or apostille applies depends on the issuing country [Verification Required].
Beneficial Ownership Disclosure
Decree 168/2025/NĐ-CP, Article 17.1, defines a beneficial owner as a natural person holding directly or indirectly 25% or more of charter capital or voting shares, or exercising control; Article 17.2 addresses indirect holdings, Article 18 the declaration duty and Article 19 record-keeping. Prepare a chart that reaches the individuals before filing. The underlying duty comes from Law 76/2025/QH15 [verify pinpoint].
Capital Flows into a 100% Foreign-Owned Company Vietnam Entity under Circular 38/2026
Circular 38/2026/TT-NHNN, issued 31/07/2026 and effective 18/08/2026, governs the account known in practice as the DICA, now termed the “foreign investment capital account” (Article 18.5). It does not use the abbreviation. Circular 06/2019/TT-NHNN lapsed on the effective date (Article 18.2).
- Who must open: foreign-invested economic organisations, including companies above 50% foreign-owned charter capital (Article 6).
- Contributions: within the amounts in the IRC and related documents; monetary contributions by bank transfer into the account (Article 4.4); transfers may precede registration of a capital change (Article 4.5).
- Accounts: one foreign-currency and/or one VND account per entity at the same authorised bank; one account per currency (Article 7.1–7.4).
- Before the IRC: an already-established company may receive charter capital, pay lawful pre-investment costs and refund capital if no IRC issues (Articles 5.1, 7.3). The circular does not expressly cover opening an account before the company exists [Verification Required].
- Remittance: profits and capital abroad must pass through the account (Articles 11–12). The text sets no deadline or tax precondition; tax obligations still apply [verify bank practice].
Existing companies holding charter capital in payment accounts may move it into the new account (Article 19.1).
Two further points matter for treasury. Banks record the amount and purpose of each transfer (Article 14.2) and investors must state the purpose truthfully (Article 15.2); the circular does not address third-party payments, so a payer other than the shareholder should be cleared with the bank first [Verification Required]. If a company’s shares later list or become registered for trading, the account must be closed under Article 7.5.b.
Sequencing: Company First or IRC First
Article 19.2 allows the investor in a 100% foreign-owned company Vietnam project to establish the company before IRC procedures, provided Article 8 conditions are met at establishment.
Company-First Route for a 100% Foreign-Owned Company Vietnam Entity
Decree 296/2026, Article 7, removes the IRC copy from the registration dossier and substitutes a commitment to satisfy market access conditions; the dossier goes to the registration office under the Department of Finance (Decree 168/2025, Articles 20, 24.5). Decree 296/2026, Article 1, also tells the registry to use national databases rather than ask for documents already held there, and several three-working-day deadlines are cut to two. Treat the overall timeline as about two to three working days [verify].
A project that needs an IRC still cannot be implemented before it is issued (Article 29.2), and the company-first route moves the market access risk to the commitment signed at registration.
When IRC-First Remains Preferable
For a 100% foreign-owned company Vietnam project, use IRC-first where it needs land, investment policy approval (Articles 24–25) or sectors where the condition is uncertain. The IRC is issued by the zone management board or the Department of Finance (Article 27); for projects not requiring policy approval, Decree 96/2026, Article 39.3, sets 10 working days from a valid dossier if the listed conditions are met (from 15/05/2026 [verify]).
Risk Matrix for a 100% Foreign-Owned Company Vietnam Set-Up
| Risk | Trigger | Rating | Mitigation |
|---|---|---|---|
| Ownership ceiling below 100% | Part B or conditional line (Article 8.3) | High | Written sector analysis before any filing |
| Inaccurate market access commitment | Company-first filing (Decree 296/2026, Article 7) | High | Counsel sign-off on commitment wording |
| Weak support letter | No amount, currency or authority (Article 6.7) | Medium | Use the drafting points above |
| Capital stranded outside the account | Transfers bypass the account (Circular 38/2026, Article 4.4) | Medium | Instruct the parent to wire only to the account |
| Project started before IRC | Lease or hiring before the IRC (Article 29.2) | High | Limit pre-IRC activity to costs permitted by Circular 38/2026, Articles 5.1, 7.3 |
| Beneficial owner gaps | Multi-tier chain (Decree 168/2025, Article 17) | Medium | Ownership chart to individuals |
For every 100% foreign-owned company Vietnam file, record the market access basis, the funding evidence and the account route in one memo before the first filing. IVLF prepares this through company incorporation support and reviews structure with tax advisory.
Planning Your Market Entry into Vietnam?
Foreign ownership restrictions and capital account regulations vary significantly by industry sector. Send your proposed business scope and target timeline to our Corporate Practice Team via WhatsApp or Email for a complimentary 24-hour Feasibility & Regulatory Check.
Frequently Asked Questions
Can a foreign investor own 100% of a Vietnamese company?
Yes, in sectors without an ownership cap or investor-form condition. Sectors in Part A of Appendix I to Decree 96/2026 are closed, and Part B sectors may cap ownership. Check the conditions on the National Investment Portal at filing, because they can change.
Is an IRC still required for a wholly foreign-owned enterprise?
For a new project, yes (Article 26.1). The company itself may be registered first under Article 19.2, but the project cannot be implemented before the IRC is issued. Capital contribution and share purchase need no IRC (Article 26.2).
Which is better for a foreign subsidiary: LLC or JSC?
For a 100% foreign-owned company Vietnam subsidiary with one parent, a single-member LLC suits light governance. A JSC suits planned share issuance, additional investors or listing, but needs three shareholders.
Do we need audited accounts from the parent company?
For a 100% foreign-owned company Vietnam filing, audited statements are not mandatory for the last two years under Decree 96/2026, Article 6.7, and a parent support letter needs no validity period. Evidence of funding capacity is still expected.
Must a 100% foreign-owned company Vietnam entity open a capital account?
Yes. Circular 38/2026/TT-NHNN, Article 6, covers companies above 50% foreign-owned charter capital, and monetary contributions must be wired into the account (Article 4.4).
Conclusion
Before instructing the parent, obtain a written market access opinion and a funding-evidence checklist for the 100% foreign-owned company Vietnam project. Those two documents decide whether the vehicle can be registered first and funded cleanly, and they are the first thing a bank or registry officer will ask to see.
This article provides general legal information as of 10 October 2026 and is not advice on a specific matter. Seek counsel before making an investment decision.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
