Vietnam Company Registration — 100% Foreign-Owned Enterprise

Company registration in Vietnam is a two-step process, and the order is fixed.

The Investment Registration Certificate (IRC) governs the foreign investment itself — the project, the sectors, the location, the registered capital. It is issued by the provincial investment authority and it is the document that makes foreign ownership lawful.

The Enterprise Registration Certificate (ERC) creates the company as a legal entity and is issued by the business registration office. It carries the enterprise code, which also serves as the tax code.

Both are required. Neither substitutes for the other. A foreign investor cannot skip to the ERC, and an IRC alone does not give you a company.

Limited Liability Company (LLC) — the standard vehicle for foreign investment. Single-member or multi-member. Simpler governance, no share issuance, and the most common choice for trading, services, consulting and manufacturing operations.

Joint Stock Company (JSC) — minimum three shareholders. Can issue shares and is the only form that can list. Appropriate where you intend to raise equity, admit investors in rounds, or eventually go public.

Representative Office — not a company. It may conduct market research and liaison activity but cannot trade, invoice, or generate revenue in Vietnam. Useful as a first step; useless as an operating structure.

Branch — permitted in a narrow set of sectors only. Rarely the right answer for a new entrant.

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There is no statutory minimum charter capital for most business activities in Vietnam. There are minimums for specific conditional sectors, and the licensing authority will assess whether your declared capital is adequate for the business plan you have submitted — but for a straightforward trading or services company, the law sets no floor.

The floor comes from immigration, not company law.

The DT investor visa tiers:

DT1 and DT2 can also be reached by investing in government-encouraged sectors or areas rather than on capital alone.

Read the DT4 row carefully. Below VND 3 billion there is no residence card at all — you stay on a twelve-month visa and renew it every year, and you cannot bring your spouse or children on a dependent visa. This is why most investors who intend to be resident register at least VND 3 billion. It is not a legal requirement. It is the difference between annual renewals and a residence card.

One thing in your favour: an investor on a DT visa is exempt from the work permit that ordinary foreign employees must hold.

Vietnam replaced its corporate income tax law in 2025. Law No. 67/2025/QH15 took effect on 1 October 2025 and applies from the 2025 tax year. It ended the flat 20% rate that had applied to nearly all companies since 2016.

Eligibility is assessed on the immediately preceding year's revenue.

Three qualifications that matter:

1. Anti-fragmentation rules apply. The 15% and 17% rates are not available to subsidiaries or related companies where a related party fails the revenue threshold. Splitting a business across entities to reach a lower band does not work.
2. They do not apply to all income. Income from capital transfers, transfer of capital contribution rights, real estate, transfer of investment projects or participation rights, and offshore business activities is excluded from the reduced rates.
3. Preferential rates are separate. Qualifying investment projects in encouraged sectors or locations may access preferential rates of 10%, 15% or 17%, alongside tax holidays and reduction periods. Priority sectors were expanded to include information security, semiconductors, artificial intelligence, defence manufacturing and digital technology production. At the same time, projects with capital of VND 6 trillion or more and projects located in industrial zones lost eligibility for certain incentives they previously held.

Also under the new law:

• Foreign enterprises engaged in e-commerce and digital platform business are now treated as having a taxable presence and must declare and pay tax on Vietnam-sourced income, whether or not they have a permanent establishment.
• The non-cash payment threshold for expense deductibility fell from VND 20 million to VND 5 million. Any business expense of VND 5 million or more must be settled by bank transfer to be deductible. Companies operating on older guidance will lose deductions.
• Tax losses carry forward for five years. No carry-back, no group relief, no consolidated filing.

Vietnam's VAT law was also replaced. Law No. 48/2024/QH15 took effect on 1 July 2025, with certain provisions for small taxpayers applying from 1 January 2026. It retains three rates — 0%, 5% and 10% — but reorganises which goods and services fall into each.

The reduction does not apply to everything. Excluded sectors remain at 10%: telecommunications, financial services, banking, securities, insurance, real estate, metals and prefabricated metal products, and special consumption goods and services. Transport, logistics and information technology goods and services were added to the eligible list in the current extension.

Other VAT points for a foreign-invested company:

• Exported goods and services consumed outside Vietnam or in non-tariff areas are zero-rated, but the documentation burden is real — for services, you must evidence that the foreign recipient consumed them outside Vietnam.
• The non-cash payment threshold for input VAT deduction also fell to VND 5 million. A cash payment above that amount disqualifies the input VAT regardless of correct invoicing.
• VAT refunds for investment projects require accumulated input VAT of at least VND 300 million.
• Foreign suppliers without a permanent establishment providing e-commerce or digital services into Vietnam moved from 5% to 10% VAT.
• From 1 July 2026, domestic online marketplaces operate as deemed suppliers, collecting and remitting VAT on third-party seller transactions.
• E-invoicing is mandatory nationwide.

Tax residency. An individual is a Vietnamese tax resident if they reside in Vietnam for 183 days or more within twelve consecutive months from first arrival or in a calendar year, hold a temporary or permanent residence card, or lease property in Vietnam for a term of 183 days or more in the assessment period. Residents are taxed on worldwide income; non-residents on Vietnam-sourced income at a flat 20% on employment income.

Compulsory insurance contributions:

• Vietnamese employees — employer 23.5% including the 2% trade union fee; employee 10.5%.
• Foreign employees holding a valid work permit — participate in social insurance and health insurance but are exempt from unemployment insurance. Employer 22.5%; employee 9.5%.
• Contributions are capped, with the ceiling at VND 46.8 million per month. Senior hires therefore cost proportionally less to employ than the headline percentages suggest.
• A work permit is a precondition for a foreign employee, not a formality. Investors on a DT visa are exempt; employees are not.

Regional minimum wages rose 7.2% on 1 January 2026. Because the 2025 provincial mergers changed regional boundaries, re-check which wage region each worksite now falls into rather than carrying forward a prior classification.

Non-taxable benefits worth structuring for: one annual round-trip airfare home for expatriate employees, school fees below tertiary level for their children, one-off relocation costs, mid-shift meals within cap, and uniforms within cap.

This is where structures fail quietly, and it is worth understanding before you incorporate rather than at the first dividend.

Profit remittance. Foreign investors may remit profits abroad annually, after completing the annual tax finalisation. All accumulated losses must be fully recouped before any dividend can be declared. The tax authorities must be notified at least seven working days before any decision to remit profits abroad.

Dividend withholding. No withholding tax on dividends paid to corporate shareholders. 5% on dividends to individual shareholders.

Foreign Contractor Withholding Tax (FCWT). Payments to foreign entities for services delivered to Vietnamese parties attract combined CIT and VAT withholding, whether or not the recipient has a permanent establishment. Under the Direct Method — the most common — the deemed rates include 5% CIT and 5% VAT on services, 10% CIT on royalties, 5% CIT on loan interest, and 1% CIT on the supply of goods.

The practical point: if your Vietnamese subsidiary pays a management fee, licence fee or interest to the parent, FCWT applies. Contracts should state explicitly which party bears it. Where this is left ambiguous, the dispute surfaces when the first payment is withheld — and inadequate documentation is a routine ground for the bank refusing to process the outbound payment at all.

Capital Assignment Profits Tax. A 20% tax applies to gains on the sale of interests in non-public Vietnamese companies, calculated as proceeds less original cost and transfer expenses. Non-resident transferors of securities are instead subject to a deemed 0.1% of total sales proceeds.

Treaty relief is not automatic. Vietnam has comprehensive double tax agreements with more than 70 countries. To claim relief, a foreign taxpayer must submit a notification application to the Vietnamese tax authorities 15 days before the tax payment deadline. The authorities apply a substance-over-form analysis and will refuse relief where the main purpose of an arrangement is to obtain treaty benefits or where the recipient is not the beneficial owner.

Transfer pricing. Related-party status arises at 25% common ownership. Documentation follows the three-tier OECD approach — master file, local file, country-by-country report — prepared before the annual CIT finalisation and maintained in Vietnamese. Deductible interest for companies with related-party transactions is capped at 30% of EBITDA.

Vietnam is an operating jurisdiction, not a holding one. It suits businesses that will genuinely manufacture, trade, employ, or deliver services in the country. It is a poor choice for a passive holding vehicle: the substance expectations are real, the compliance calendar is dense, the audit is mandatory, and treaty relief is discretionary and evidence-based.

It works well for: manufacturing and assembly serving regional supply chains · software development and IT services · trading and distribution into the domestic market · professional and consulting services · businesses in the expanded priority sectors, where preferential rates and holidays are meaningful.

Look elsewhere if: you need a passive holding company with treaty access — a jurisdiction with a mature holding regime is a better fit · your model cannot support genuine local substance · you need an entity operational in weeks rather than months · you are considering a representative office as a way to trade without a company, which it cannot do.

Compare with Singapore for a regional holding structure, and Labuan for a lower-substance Southeast Asian vehicle.