Foreign Direct Investment licensing in Vietnam

Disclaimer: This page is general information only and is not legal or tax advice. Rules change frequently and individual circumstances vary. Verify everything with a licensed Vietnamese lawyer or corporate services firm before acting.

FDI in Vietnam in one paragraph

Vietnam permits foreign-owned businesses to operate through a two-document system introduced under the Law on Investment 2020 and the Law on Enterprises 2020. Any foreign individual or entity putting capital into a new Vietnamese company must first obtain an Investment Registration Certificate (IRC) from the relevant licensing authority, then register the legal entity with the business registry to receive an Enterprise Registration Certificate (ERC). Only after both documents are in hand can the company open a bank account, hire staff, apply for sector-specific sub-licences, or begin trading. The entire framework is administered primarily by the Department of Planning and Investment (DPI) at provincial level, or by the Economic Zone Management Board for projects inside industrial parks or special economic zones.

The IRC — Investment Registration Certificate

The IRC records the investor's identity, the investment project, the total registered capital, the intended business lines (coded by Vietnam Standard Industrial Classification), and the project term, which is typically up to 50 years and extendable. The document is the legal proof that the foreign investment has been approved and is the basis for all subsequent steps.

Applications go to the provincial DPI for projects outside industrial parks, or to the relevant Management Board for projects inside one. Most cases require a written investment proposal, a copy of the investor's constitutional documents (company charter or passport for individuals), financial evidence, a draft lease agreement for the registered office address, and payment of the registration fee — estimated at around VND 3–5 million as of 2026, though fees are set by provincial regulation and can vary.

Projects above certain capital thresholds, or in sectors flagged for appraisal, require a separate investment policy decision from the Provincial People's Committee or, for very large projects, from the National Assembly or Prime Minister. This adds significant time and documentation to the process, so confirm the threshold with your adviser early.

The ERC — Enterprise Registration Certificate

Once the IRC is issued, the investor registers the legal entity at the Business Registration Office under the DPI. The ERC records the company name, registered address, legal representative, charter capital, and the business lines listed in the IRC. It is functionally the company's birth certificate and tax code in one document.

The choice of entity type — single-member LLC, multi-member LLC, joint-stock company, or joint venture — affects governance, share transfer rules, and foreign-ownership caps in certain sectors. For a detailed comparison, see company registration LLC vs JV.

The registered charter capital must reflect the amount stated in the IRC. Investors are required to contribute that capital within a defined period — 90 days from ERC issuance for most entity types. Under-contribution relative to the charter capital triggers penalties and can affect the company's ability to remit profits.

Sector conditions

Vietnam classifies business activities into three broad groups for foreign investors:

• Open sectors — no special restrictions on foreign ownership or entry; the investor follows the standard IRC/ERC process.
• Conditional sectors — foreign participation is permitted but subject to specific conditions such as ownership caps, market-access requirements, partner requirements, or additional sub-licences.
• Negative-list sectors — foreign investment is prohibited outright.

The full lists are set out in the Appendices to the Law on Investment 2020 and are periodically updated. Always check the current Appendices, not summaries, because the detail matters.

Conditional sectors

Common conditional sectors include financial services, telecommunications, aviation, media and publishing, real estate, education, and healthcare. Conditions vary widely: some impose a foreign-ownership cap (often 49% or 51%), others require a local partner, and others demand a sub-licence from a sector regulator before trading can start.

For example, a foreign-invested company in retail distribution may need an Economic Needs Test before opening a second retail outlet. A company in education needs approval from the Ministry of Education and Training in addition to the standard IRC/ERC. These sector-specific requirements sit on top of the investment registration process and add time and cost that should be budgeted at the outset.

Some conditional-sector investors find that structuring through an industrial park simplifies licensing. Investors targeting incentive regimes should also review government FDI incentives to understand how location and sector interact with corporate income tax preferences.

Negative-list sectors

Sectors fully closed to foreign investment include narcotics production, certain chemicals, wildlife trading, prostitution, and specific national-security activities. A short list of additional restricted areas covers things like fireworks manufacture and debt-collection services. The negative list is narrow but should be confirmed for any project in a sensitive sector.

Process flow

A simplified process for a standard project outside an industrial park looks like this:

1. Prepare the investment proposal, financial evidence, and office lease.
2. Submit IRC application to provincial DPI.
3. Receive IRC (standard track, see timelines below).
4. Prepare ERC application: company charter, list of members or shareholders, legal representative details.
5. Submit ERC application to the Business Registration Office.
6. Receive ERC and company tax code.
7. Open a Direct Investment Capital account at a licensed bank to receive capital contributions.
8. Contribute charter capital within 90 days.
9. Apply for any required sector sub-licences, work permits, or trading licences.

Foreign employees working at the company will need work permits, and senior management may want to look at whether the investor visa route is worth researching — see investor visa for an overview, though eligibility depends on individual circumstances and should be verified with an immigration lawyer.

Indicative timelines

These are estimates based on typical cases reported by practitioners in 2025–2026. Actual times vary by province, project complexity, and workload at the licensing authority.

Budget conservatively. Provincial DPIs differ in processing speed, and requests for additional documents restart the clock.

Common pitfalls

Mismatched business lines. The VSIC codes on the IRC must match those on the ERC exactly. Errors require amendment applications that add weeks. Have a lawyer check the codes before submission.

Under-capitalised charter capital. Setting charter capital too low to reduce fees then failing to contribute the full amount within 90 days creates compliance risk. Set capital at a realistic level for the business.

Office address validity. The registered office must be a genuine commercial address where the company can receive official correspondence. Residential addresses are generally not accepted for company registration.

Missing sector sub-licences. Some investors begin operations before sector-specific approvals are in place. This creates retroactive compliance exposure. Map all required approvals before the launch date.

Annual reporting. After incorporation, companies must file regular reports with the DPI and maintain statutory records. Failure to report can result in fines or revocation of the ERC.

This page reflects general understanding of Vietnam's investment registration framework as of May 2026. Regulations are amended regularly. Always verify current requirements with a qualified Vietnamese legal adviser before making investment decisions.

Related

• Company registration LLC vs JV
• Government FDI incentives
• Investor visa