How to Set Up a Foreign-Owned Construction Company in Vietnam

Updated: 22 October 2026 · IVLF Advisors

Investors who set up foreign owned construction company Vietnam structures on the pre-2026 playbook can lose months, because the order of steps changed on 1 March 2026. The new Investment Law lets a foreign investor form the company first and obtain the investment registration afterwards, but it also ties the company to market-access conditions from day one. This guide sets out the sequence, the checkpoints and the open points, and shows how the answer changes for an expressway or airport package, a factory, a solar farm or a resort.

Sources: the Investment Law 143/2025/QH15 (in force from 1 March 2026) and the Construction Law 135/2025/QH15, together with Decree 212/2026/ND-CP, are read from the legal text. Details of Decree 96/2026/ND-CP, which guides the Investment Law, come from the analysis of DEDICA Law. This article does not state any foreign ownership limit for construction services, because that content is not covered here.

What changed: company first, investment certificate second

Under Article 19(2) of the Investment Law 2025, a foreign investor may establish an economic organisation to carry out an investment project before completing the procedure for the Investment Registration Certificate (IRC). The investor must meet the market-access conditions in Article 8 when it applies to establish the company. Under the previous 2020 law, the practical sequence was the reverse: an investment project and IRC first, then the enterprise registration.

Point	Investment Law 2020 practice	Investment Law 2025 (from 1 March 2026)
First step	Project approval and IRC	Establish the company, subject to market-access conditions (Article 19(2))
Market-access test	At IRC stage	When applying to establish the company (Article 19(2))
IRC	Precedes the company	Follows the company, for projects that need one (Article 26)
Practical risk	Delay before incorporation	A company exists but may not yet implement the project

Per DEDICA Law’s analysis of Decree 96/2026 Article 72(3)-(4), after the Enterprise Registration Certificate (ERC) is issued, the foreign investor has 12 months to apply for the IRC and may implement the project only after receiving it. DEDICA also reports that Article 39(3) sets a 10-working-day period for issuing the IRC. Plan timelines around those periods, but confirm them before relying on them in a funding schedule.

Step one: market-access screening before any filing

Article 8 of the Investment Law gives foreign investors the same market-access conditions as domestic investors, except for the list of restricted sectors published by the Government. That list has two categories: sectors not yet open and sectors open on conditions. Possible conditions include foreign ownership ratio, form of investment, scope of activity, capability of the investor or its partner, and other conditions in law or treaties.

According to DEDICA Law, Appendix I to Decree 96/2026 contains an entry 47 for construction and related engineering services and an entry 20 for construction activities of foreign contractors. The conditions under those entries are not set out here, so we do not state a percentage or any other limit. Before filing, check:

• the current Appendix I to the decree and the conditions it attaches to the planned construction activity;
• conditions published on the national investment portal at the filing date (DEDICA reports that Article 18 of the decree provides for publication); and
• Vietnam’s international commitments, including WTO, CPTPP and free trade agreements, which may be more favourable and, per DEDICA’s reading of Article 17 of the decree, may prevail.

Our companion article on market access for a foreign-invested construction company in Vietnam explains the screening method in more detail.

Step two: when a project needs an IRC and when it does not

Article 26 of the Investment Law requires an IRC for a project of a foreign investor and for a project of an economic organisation that is more than 50% foreign-owned (the Article 20(1) category). Projects of domestic investors, and of companies with 50% or less foreign ownership, do not have to obtain an IRC, although they may choose to.

The same 50% line decides treatment for later investments. Under Article 20, a company in the foreign-owned category must meet the same conditions and procedures as a foreign investor when it contributes capital, buys shares or carries out other projects. A company in which foreigners hold 50% or less applies the conditions for domestic investors. That threshold is a classification rule, not a cap on ownership, and it should not be read as one.

• Foreign investor alone, or with a foreign-owned vehicle above 50%: IRC required, and market-access conditions applied for later investments.
• Foreign share of 50% or less: treated as domestic for conditions and procedures. Whether sector conditions still bind the structure should be checked in the list.
• Existing foreign-invested company with a new project: may complete the project procedure without forming a new legal entity (Article 20).

How to set up foreign owned construction company Vietnam: a working sequence

Set up foreign owned construction company Vietnam: from screening to first contract

1. Screen the activities. List each planned activity (design, construction, supervision, project management, consulting) and map it to the restricted-sector list and to the registered business lines.
2. Design the ownership structure. Decide the shareholders, the capital and the vehicle, keeping the 50% classification rule and any sector condition in mind.
3. Form the company. Apply for the ERC, demonstrating that market-access conditions are met (Article 19(2)).
4. Apply for the IRC. Do so where the project requires one, within the period that DEDICA reports under Decree 96/2026.
5. Open the capital account and fund the company. DEDICA refers to Circular 06/2019/TT-NHNN (Articles 5 and 9) on foreign-currency direct investment capital accounts.
6. Put personnel and disclosure in place before bidding or signing.

Prepare the file in parallel rather than in sequence. Typical items are the investor’s incorporation and good-standing documents (legalised and translated into Vietnamese where required), identification of the ultimate owners, a description of the planned construction activities, the proposed charter capital and its funding source, the registered office, and the legal representative’s details. Delays usually arise from foreign documents that are not legalised or translated, so start that process first.

Also decide early who will act as legal representative and who will hold the named construction roles. A company that is formally registered but has no qualified person for the roles it plans to perform cannot credibly bid.

Do not sign construction contracts or start site works until the legal capacity to implement the project exists, in particular the IRC where one is required.

Business lines, capital and the registered scope

The company’s registered business lines must match the activities it will actually perform. Construction, design, supervision, consultancy and project management are separate activities with different personnel requirements, so a broad registration is not a substitute for the people and records behind each line. Market-access conditions attach to the activity, not to the corporate name.

We do not assert a statutory minimum charter capital for construction companies; check the current rules for the chosen activities. In commercial terms, the capital should be sized against what clients and lenders will ask for: bank guarantee lines, working capital for retention and delayed certification, and equity for equipment. Banks usually price guarantees on the strength of the balance sheet and the sponsor’s support, which for a new company often means a parent guarantee or counter-indemnity (market practice).

A short hypothetical (illustrative only): an investor plans a design-and-build business that expects its first contract to be priced at the equivalent of 10 million dollars. If the employer asks for a 10% performance guarantee and an advance guarantee, the company needs a bank line of at least that size on day one, before it has any audited history. Planning the capital and the guarantee line together avoids a gap between incorporation and the first bid.

Capacity: disclosure for the company, certificates for the people

The Construction Law 2025 changed how capacity is shown, and capacity disclosure now serves as the public record of an organisation’s capacity. Under Article 88(6) and Article 41 of Decree 212, an organisation takes part in construction activity by disclosing its own capacity on the national construction database at csdlhdxd.gov.vn.

The legal representative is responsible for the accuracy of the information, and the content includes the enterprise code, capacity data drawn from the construction information system and, where an organisation holds one, the grade and field under a capacity certificate previously issued. Under Article 88(6), the disclosed information is a reference for investors choosing contractors.

Organisations are therefore not required to hold an organisational capacity certificate as a precondition under the 2025 law. The transitional rules in Decree 212 for certificates issued earlier have not been read for this article and should be checked.

The conditions now fall on individuals. Article 88(1) requires a practising certificate (grades I, II and III) for design leads, survey leads, design verification, construction supervision and cost roles. Article 88(2) requires qualifying capacity and experience for the site commander, the head of construction inspection and the project management director. For a new company, this means hiring or seconding qualified people before the first bid.

Per DEDICA’s reading of Decree 212 (Articles 27 and 33) and the Architecture Law 40/2019 (Articles 31 and 33), foreign professionals working in Vietnam for under six months may have foreign certificates legalised, while longer stays call for conversion of the certificate.

Foreign-owned company or foreign contractor licence?

A company incorporated in Vietnam is not a “foreign contractor” under Decree 212; per DEDICA, the definition in Article 3(8) excludes it. A foreign contractor, by contrast, works on a specific package under a construction activity licence. The routes serve different business models, and our note on a foreign-invested company versus a foreign contractor in Vietnam compares them in detail.

Question	Foreign-owned Vietnamese company	Foreign contractor with a licence
Legal form	Vietnamese legal entity (ERC, IRC where required)	Foreign entity with a project office (Decree 212 Articles 42-48)
Duration	Continuing business across projects	Tied to one contract; licence ends when the contract is completed and liquidated (Article 46)
Local partner	Not required as such; market-access conditions apply	Joint venture with, or subcontracting to, a Vietnamese contractor unless none can perform any part (Article 43)
Entry timing	Months of set-up before bidding	Licence after a winning bid; decided within six working days of a valid file (Article 46)
Best fit	Several projects or a long-term presence	One large package

Tax, transfer pricing and accounting differences between the two routes are not analysed here and should be reviewed with tax advisers.

Common mistakes when you set up foreign owned construction company Vietnam entities

• Assuming the old sequence. Advisers or banks working from 2020-era checklists may still ask for the IRC before incorporation, which is no longer the rule for a foreign investor under Article 19(2).
• Treating 50% as a cap. It is a classification threshold in Article 20. The sector list, not that article, decides whether a particular ownership level is acceptable.
• Registering too narrowly or too broadly. A scope that omits design or supervision blocks the work; a scope with no qualified staff behind it creates exposure.
• Forgetting personnel certificates. Disclosure of company capacity does not replace practising certificates for the individuals who hold named roles.
• Skipping the treaty review. Commitments under trade agreements may change the analysis for investors from particular countries.

Contract and financing readiness

Once the company exists, its commercial standing depends on documents rather than certificates. Employers and lenders look for track record, personnel, and the ability to provide security. On public-investment and PPP projects only, Decree 210 sets numbers for security: performance security of 2% to 10% of contract value (Article 13), and an advance payment guarantee for advances above VND 1 billion (Article 12(3)). Private projects follow the parties’ agreement.

A new company with limited balance sheet capacity may need parent guarantees or bank facilities to meet those expectations. The relevant public-procurement and PPP statutes, including the Procurement Law 2023 and the PPP Law, are named here only and should be reviewed for eligibility rules affecting a newly formed entity.

A further amendment to the Investment Law is reported to apply from 1 March 2027. If your timetable straddles that date, review the transitional rules before filing.

Set Up Foreign Owned Construction Company Vietnam: Applying It Across Infrastructure, Industry, Energy and Real Estate

The corporate steps are the same whatever you build, but the market you can credibly serve depends on the sector. Plan the entity around the project types you intend to bid for, not around a generic construction licence.

Infrastructure and transport: expressways, ports, metro, rail and airport terminals

These projects are often public investment or PPP and owned by the State or a State-owned enterprise, although the classification depends on the funding source and must be checked project by project. The North–South high-speed railway (about 1,541 km from Hanoi to Ho Chi Minh City through 15 provinces and cities, design speed 350 km/h, per press reports of 9 October 2026) and Long Thành International Airport, whose phase 1 passenger terminal works began on 31 August 2023 and whose phase 1 commercial operation is expected from 24 December 2026 per press reports, show the scale of work in this category.

A newly formed company with no audited history will rarely win a prime package of that size. A realistic first role is subcontractor, specialist trade or joint-venture partner to an experienced Vietnamese contractor. Eligibility and security rules sit in the procurement and PPP statutes, which we name but have not read.

Heavy industry and FDI factories: steel, petrochemical, cement and industrial parks

Private industrial owners, many of them foreign-invested, usually follow the parties’ agreement and often invite contractors they already know from other countries. A foreign-owned Vietnamese company is well placed here if it can show design-and-build or EPC experience, safety systems and enough balance sheet for performance and advance guarantees. Match the registered business lines to heavy civil, structural, mechanical and installation scope, and confirm that each activity passes the sector list.

Renewable energy and power: solar, onshore and offshore wind, grid and LNG-to-power

Whether a solar farm, grid line or gas-fired plant is a private or public project depends on its ownership and power-purchase structure, so it is fact-specific and governed by the electricity regime. Offshore wind and offshore energy work adds marine installation and specialist vessels, which may be better served through a project licence or a partnership than through a new local company. Check which activities the entity would actually perform on site.

Real estate: resorts, hotels, urban areas, mixed-use complexes and housing

Developers of resorts, hotels, urban areas and mixed-use schemes (retail, hospitality and residential in one complex) are private clients, so contract terms follow the parties’ agreement under the Construction Law. The land and real-estate regime governs the developer’s rights and sales, and its effect on the contractor’s payment security should be reviewed. A new company can compete credibly for fit-out and mid-size building packages before it has the record for a large complex.

Sector	Typical contract or risk feature	What to check for company set-up
Infrastructure and transport	Often public or PPP; large packages; strict experience rules	Track record and guarantee line; likely subcontract or JV role first
Heavy industry and factories	Private EPC or design-and-build; guarantees and delay damages	Registered business lines; safety record; balance sheet
Energy and power	Depends on ownership and power-purchase structure	Which activities fall on the sector list; offshore marine capability
Real estate	Private; payment and retention terms by agreement	Fit-out versus main-contract scope; developer credit

Conclusion

The 2026 reform shifts the first decision to market-access screening, then company formation, then the IRC where required. The risk lies in assuming a foreign ownership limit, or its absence, without reading the current list. Your next step: prepare an activity-by-activity matrix of planned construction services against the Government’s restricted-sector list and your treaty position, and use it to fix the structure before filing.

Frequently Asked Questions

Can a foreign investor form a construction company before getting an IRC?

Yes. Article 19(2) of the Investment Law 2025 allows a foreign investor to establish the company first, provided market-access conditions are met. The IRC follows for projects that need one.

Is there a foreign ownership cap for construction services?

We do not state one. The conditions for construction entries sit in the Government’s restricted-sector list and in treaty commitments, which must be checked at the date of filing.

Does the company need an organisational capacity certificate?

The 2025 Construction Law relies on self-disclosure of capacity on the national database, with conditions placed on named individuals. Check transitional rules for existing certificates.

When is an IRC required?

For projects of foreign investors and of companies more than 50% foreign-owned. Others may apply voluntarily.

Is a foreign-owned Vietnamese company a foreign contractor?

Per DEDICA’s analysis, no. A foreign contractor works under a licence on a specific package; the company is a Vietnamese entity.

Disclaimer: this article is general information, not legal advice for a specific matter. It reflects the law as of 22 October 2026. Please obtain advice on your own facts before acting.