The first legal question for a foreign-invested company in Vietnam is not “how do we incorporate?” but “what will the regulator treat this entity as?” Under the Law on Investment No. 143/2025/QH15, effective 1 March 2026, the answer turns on one number: whether foreign investors hold more than 50% of charter capital. That classification decides whether every future project needs an investment registration certificate, whether share acquisitions need prior registration, and which market access conditions bind the company for life.
The 2025 Law also reverses the sequencing rule that governed foreign entry for years: a foreign investor may now incorporate first and obtain project licensing afterwards. This guide sets out the framework, the three entry routes, the licensing authorities, the capital account rules, a risk-rated matrix and the post-licensing diary for in-house counsel.
What Is a Foreign-Invested Company in Vietnam Under the 2025 Law?
The Vietnam Law on Investment 2025 uses two related concepts that are often conflated in transaction documents. They trigger different procedural regimes.
Statutory terms in the Vietnam Law on Investment 2025
- Foreign investor (Art. 3.19): a foreign-national individual, or an organisation established under foreign law, investing in Vietnam.
- Foreign-invested economic organisation (Art. 3.22): an economic organisation with a foreign investor as member or shareholder. A single foreign shareholder holding 1% suffices.
Every foreign-invested company in Vietnam is therefore an “economic organisation with foreign investment”, but not every one is treated as a foreign investor for its own onward investments.
The 50% test for a foreign-invested company in Vietnam (Article 20)
Article 20.1 requires an organisation to follow foreign-investor conditions and procedures for new investments, capital contributions or share purchases if foreign investors hold more than 50% of charter capital, directly or through another such organisation (or, in a partnership, if most general partners are foreign). Article 20.2 treats all others as domestic. Article 20.3 confirms that an existing foreign-invested company in Vietnam with a new project need not form a new entity.
Counsel’s takeaway: a 51/49 joint venture is not merely a governance choice. Under Article 26.1(b), each new project of a majority-foreign entity needs an IRC, and onward share acquisitions may trigger Article 21.3 registration. Indirect holdings count, so run the test through the whole ownership chain.
Three Routes to Set Up Company in Vietnam
For a foreign investor Vietnam now offers three practical routes into a corporate vehicle. Branches, representative offices and business cooperation contracts are separate forms of presence.
Route 1: IRC-first greenfield
The investor files a project dossier, obtains the investment registration certificate (IRC) and then applies for the enterprise registration certificate (ERC). This was mandatory for foreign-investor-established companies under the 2020 Law. It remains available and is usually preferable for a foreign-invested company in Vietnam with a land-based or conditional-sector project, because the regulator vets market access before the entity exists.
Route 2: company-first for a foreign-invested company in Vietnam (Article 19.2)
Article 19.2 permits a foreign investor to establish an economic organisation to implement a project before carrying out IRC procedures, provided Article 8 market access conditions are met at establishment. Decree 296/2026/ND-CP (Art. 7) implements this: the dossier omits the IRC and the application includes a commitment to satisfy market access conditions. The IRC is still required before the project is implemented (Art. 29.2). Our series note on incorporating before the IRC analyses the interim-entity risks.
Route 3: capital contribution or share acquisition
Acquiring an interest in an existing Vietnamese company, rather than building a new foreign-invested company in Vietnam, needs no IRC (Art. 26.2). However, Article 21.3 requires registration before the change of members or shareholders where the deal (a) increases foreign ownership in a conditional-access sector, (b) takes foreign ownership above 50% or raises it further, or (c) involves a target holding land-use rights on islands, in border or coastal wards or other defence-sensitive areas.
| Route | Statutory basis | First authority | Market access screening | Principal legal risk |
|---|---|---|---|---|
| IRC-first greenfield | Arts. 26, 27, 29 LOI 2025; Decree 96/2026 | Department of Finance or zone board | By the IRC authority | No entity to contract in the interim |
| Company-first | Art. 19.2 LOI 2025; Art. 7 Decree 296/2026 | Business registration office | Investor’s own commitment | Entity cannot implement project until IRC |
| Capital contribution / share acquisition | Arts. 21, 26.2 LOI 2025 | Investment registration authority where Art. 21.3 applies | Where registration is triggered | Closing before registration; inherited liabilities |
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.
The Investment Registration Certificate: When Required and Who Issues It
The Law on Investment 143/2025/QH15 requires an IRC for projects of foreign investors and of Article 20.1 organisations (Art. 26.1), and exempts domestic investors, Article 20.2 organisations and capital contributions (Art. 26.2). Article 29.2 bars implementation before the IRC is obtained.
Whether a foreign-invested company in Vietnam needs an IRC, and from whom, is therefore a function of its classification and the route chosen.
- Authority (Art. 27): zone management boards for projects inside industrial, export processing, hi-tech and economic zones; the provincial Department of Finance (Sở Tài chính, which absorbed the Department of Planning and Investment from 1 July 2025) for projects outside zones.
- Timing: for projects without investment policy approval, Decree 96/2026, Art. 39.3, requires the IRC within 10 working days of a valid dossier if the sector, site, planning, local threshold, market access and technology conditions are met. The 15 May 2026 application date is reported [State Authority Practice / Verification Required].
- Procedure (Art. 6): supplementation may be requested once, in writing; cure time is excluded from the clock; refusals must be reasoned.
- Special procedure (Art. 28): optional registration-based route for zone projects, dispensing with policy approval, technology appraisal, EIA and construction permits against written undertakings.
- Change coming on 1 March 2027: Law 24/2026/QH16 replaces Appendix IV with a new list of 137 conditional business lines. Pending applications for repealed lines are halted or returned; existing licences remain valid until expiry. Sub-licence plans should be mapped against the new list now.
Vietnam Company Formation and the Foreign Investor Vietnam Checklist
Vietnam company formation for a foreign-invested company in Vietnam follows the Law on Enterprises as amended by Law 76/2025/QH15, Decree 168/2025/ND-CP and Decree 296/2026/ND-CP. The business registration office sits in the provincial Department of Finance (Decree 168/2025, Art. 20).
- Identity: corporate certificate or passport copy (Decree 168/2025, Art. 11.3); electronic authentication is an alternative (Decree 296/2026, Art. 12).
- Translation: Vietnamese translation required; certification of the translator’s signature replaces notarisation (Decree 296/2026, Art. 19). Consular legalisation under Decree 111/2011/ND-CP unless exempted [Verification Required].
- Databases: the office should not request copies of IRCs already held in national databases (Decree 296/2026, Art. 1). ERC timing is about 2–3 working days [State Authority Practice / Verification Required].
- Beneficial owners: natural persons holding 25% or more, directly or indirectly, or exercising control (Decree 168/2025, Arts. 17–19).
- Financial capacity: Decree 96/2026, Art. 6.7, dispenses with two years’ audited statements and any validity period for parent support letters; credible evidence such as bank confirmations is still advisable. Forms follow Circular 55/2026/TT-BTC (for example I.1.5, I.1.13), codes to be checked against the annex [Verification Required].
Capital Flows of a Foreign-Invested Company in Vietnam: DICA Under Circular 38/2026
Charter capital of a foreign-invested company in Vietnam must be contributed within 90 days of the ERC date, excluding transport and import time for contributed assets (Law on Enterprises, Arts. 47, 75, 113). Foreign exchange on that capital is governed by Circular 38/2026/TT-NHNN, issued 31 July 2026 and effective 18 August 2026; Circular 06/2019/TT-NHNN lapsed from that date (Art. 18). The market still says DICA, but the circular speaks of the “foreign investment capital account”.
- Who must open (Art. 6): foreign-invested economic organisations, including companies more than 50% foreign-owned, BCC parties and PPP project companies.
- Accounts (Art. 7): one foreign-currency and/or one VND account per entity at the same bank; one account per currency; a separate set per BCC, PPP project or petroleum contract.
- Before the IRC (Arts. 5.1, 7.3): available to an entity already established but not yet licensed, and limited to receiving charter capital and interest, paying lawful pre-investment costs and refunding capital if no IRC issues. The text does not expressly address opening an account before the company exists [Verification Required].
- Contributions (Art. 4): monetary contributions must be bank transfers into the account (Art. 4.4); transfers may precede registration of a capital change (Art. 4.5).
- Remittance (Arts. 11–12): profits and capital must leave through the account; the circular sets no deadline and no tax or audit precondition, though tax law and Art. 11 LOI 2025 still apply [verify bank practice].
Counsel’s takeaway: for a foreign-invested company in Vietnam on the company-first route, the 90-day clock starts at the ERC, while the account is usable before the IRC only for the limited purposes above. Pre-clear the account bank before filing. Existing companies holding capital in payment accounts may migrate it under the transitional rule (Art. 19.1). See our series note on the direct investment capital account Vietnam.
Risk Matrix for a Foreign-Invested Company in Vietnam
The matrix ranks the issues we see most often when structuring a foreign-invested company in Vietnam. Ratings reflect legal consequence if unmanaged, not likelihood.
| Issue | Legal position | Commercial impact | Risk | Mitigation |
|---|---|---|---|---|
| Sector in Appendix I, Part A, Decree 96/2026 | Not open to foreign investors (Art. 8.2 LOI 2025) | Project cannot proceed as proposed | Fatal | Sector mapping before any spend |
| Conditional sector (Part B) misdescribed | Art. 8.3 conditions; commitment under Decree 296/2026, Art. 7 | Refusal or post-registration exposure | High | Use IRC-first; seek written guidance |
| Implementing before IRC | Prohibited (Art. 29.2) | Sanctions; contracts at risk | High | Conditional contracts; file IRC at once |
| Capital not contributed in 90 days; account not ready | Law on Enterprises; Circular 38/2026, Arts. 4, 5, 7 | Charter capital adjustment, penalties | Medium | Pre-clear bank; align remittance with ERC date |
| Indirect foreign ownership overlooked | Art. 20.1 counts indirect holdings | Wrong procedure for onward investments | Medium | Ownership-chain analysis |
| Land-based project deposit | 3% / 2% / 1% tiers (Decree 96/2026, Arts. 26–27) | Cash tied up; termination if unpaid (Art. 36.2(e)) | Medium | Bank guarantee; 25% / 50% reductions |
Hypothetical scenario: A Singapore holding company, 60% owned by a US parent, plans a 45% stake in a Vietnamese logistics company alongside a Vietnamese majority partner. The target remains domestic for Article 20 purposes. If the partner later sells 10% to a foreign fund, foreign ownership exceeds 50%, triggering Article 21.3(b) prior registration and changing the procedure for every later project. The shareholders’ agreement should say who bears that cost.
Post-licensing diary for a foreign-invested company in Vietnam
Diarise the 90-day capital deadline, quarterly and annual project implementation reports (Circular 55/2026, Forms I.3.1 and I.3.2), changes to the beneficial owner list, and the performance deposit for land-based projects (Decree 96/2026, Art. 27, payable after the IRC and before the land decision). The standard CIT rate is 20% under CIT Law 67/2025/QH15 [Verification Required]; groups with revenue of EUR 750 million or more should model the global minimum tax under Resolution 107/2023/QH15.
The right structure depends on facts no checklist captures: sector codes, ownership chains, site, capital-flow arrangements and the timing of first contracts. IVLF prepares a Market Access & Structuring Memo and a pre-filing red-flag review of the IRC, ERC and DICA steps for a foreign-invested company in Vietnam, followed by sub-licences, work permits, temporary residence cards and a monthly compliance retainer. See our company incorporation practice or use the contact page; telephone (+84) 936 726 065.
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
When is a company treated as a foreign investor in Vietnam?
When foreign investors hold more than 50% of its charter capital, directly or through another majority-foreign entity, or a partnership has mostly foreign general partners (Art. 20.1 LOI 2025). A foreign-invested company in Vietnam below that line is treated as domestic for onward investments.
Does a foreign-invested company in Vietnam always need an IRC?
No. An IRC is required for projects of foreign investors and majority-foreign entities (Art. 26.1). Capital contributions and share purchases are exempt (Art. 26.2), though Article 21.3 prior registration may apply.
How long does it take to set up company in Vietnam?
For projects not requiring policy approval, the IRC should issue within 10 working days of a valid dossier (Decree 96/2026, Art. 39.3); the ERC follows in about 2–3 working days, subject to verification.
Which circular now governs the DICA of a foreign-invested company in Vietnam?
Circular 38/2026/TT-NHNN, effective 18 August 2026, replaced Circular 06/2019/TT-NHNN. It calls the DICA the foreign investment capital account.
Can a foreign-invested company in Vietnam incorporate before the investment registration certificate?
Yes. Article 19.2 allows incorporation first if market access conditions are met, with a commitment in the ERC application (Decree 296/2026, Art. 7). The project cannot be implemented until the IRC issues.
Conclusion: Classify a Foreign-Invested Company in Vietnam First, Then Sequence
Before drafting any dossier for a foreign-invested company in Vietnam, run three tests: Appendix I sector mapping, the Article 20 ownership-chain calculation, and the choice between IRC-first and company-first sequencing against your contracting and funding timetable. Record the analysis in a board paper that will later justify the route to regulators, banks and auditors.
This article provides general information as of 10 October 2026 and does not constitute legal advice on any specific matter. Obtain advice on your particular facts before acting.
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.
