FDI Procedures into Vietnam: 5 Essential Legal Steps Not to Be Missed

16 March, 2026 47 Views

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FDI procedures into Vietnam are always a top priority for investors, as Foreign Direct Investment (FDI) inflows play a pivotal role in driving stable and sustainable economic growth in Vietnam throughout 2024 and 2025. Through numerous studies and actual data from the first 10 months of 2025, Vietnam has affirmed its position as a destination with great potential for attracting FDI. However, many investors have failed not because of the market, but due to a lack of thorough preparation regarding FDI procedures in Vietnam; behind every opportunity lie hidden challenges and potential legal risks. The following article will clarify the five core legal procedures that investors who have invested or intend to invest in Vietnam cannot ignore

Overview of FDI

Concept of FDI Enterprises

- 100% foreign-owned enterprises: Where the foreign investor holds the entire charter capital.
- Enterprises with foreign investor capital contribution: Economic organizations in which individuals of foreign nationality or organizations established under foreign laws participate in the investment (through capital contribution for establishment or the purchase of shares/capital contributions).
  
  FDI stands for Foreign Direct Investment. According to the current Investment Law 2020, Vietnamese law does not use the concept of “foreign-invested enterprise (FDI)” independently, but replaces it with the broader concept of Foreign-Invested Economic Organization.
  
  Specifically, Article 3 of the Investment Law 2020 stipulates: “A foreign-invested economic organization is an economic organization that has a foreign investor as a member or shareholder.”
  
  Thus, a foreign-invested enterprise is considered one type of foreign-invested economic organization, regardless of the foreign party’s capital contribution ratio.
  
  The scope of foreign-invested economic organizations includes:

Popular Forms of FDI Investment in Vietnam:
- Establishment of a new economic organization: Under Vietnamese law, foreign investors (FIs) have the right to establish an economic organization with 100% ownership, which is a direct investment form providing high strategic advantages. To implement this, FIs must meet market access conditions as prescribed in Article 9 of the Investment Law 2020 and are mandatory required to perform the procedure for granting an Investment Registration Certificate (IRC) before establishing the legal entity, except for certain exempt cases. The greatest advantage of the 100% capital investment form is that it allows FIs to be fully proactive in deciding the structure, operating activities, and business strategies, and they are not dominated by any partners.
- Implementation of investment projects: Implementing an investment project is the “priority” and most popular form of FDI, allowing foreign investors (FIs) to establish a new economic organization in Vietnam to directly deploy production and business activities. This form provides comprehensive initiative for FIs in management, personnel, and finance, but simultaneously requires long-term commitment and strict compliance with regulations on licensing, investment management, environment, and financial obligations. This is a suitable choice for sectors requiring large capital and long payback periods (such as industry, infrastructure, energy) and often brings sustainable value by utilizing local resources and labor.
- M&A: M&A stands for Mergers and Acquisitions, considered a method for investors to gain control of an economic organization. According to the Law on Enterprises 2020, a Merger is a process where one or several companies transfer all assets, rights, and obligations to another company and terminate their existence; while Acquisition, according to the Law on Competition 2018, is the act of a company purchasing part or all of the shares, capital contributions, or assets of another company for the purpose of controlling or dominating that company. Thus, M&A is a form that allows investors to change ownership structures to establish control in the Vietnamese market. Businesses use M&A to achieve more benefits such as: expanding market share, reducing unnecessary personnel to achieve higher business efficiency, reducing incurred costs, leveraging transferred technologies, etc.
- Investment in the form of a BCC (Business Cooperation Contract): This is an investment form regulated by Vietnamese law, whereby parties link up to perform one or several specific business activities without establishing a new legal entity. Legally, the parties participating in the BCC still maintain independent legal status and act in their own names to perform the contract; profits will be divided as agreed. This characteristic brings high flexibility and independence to the investor, helping to avoid organizational constraints and management conflicts often found in joint venture models. Furthermore, BCC is an optimal choice to help investors significantly save time and costs for establishing, governing, and operating a new legal entity, while limiting legal risks as they do not directly own an economic organization in Vietnam.

Reasons Why Foreign Investors Need to Note FDI Procedures in Vietnam

Market access conditions: Foreign investors (FIs) need to conduct a legal review of the “List of sectors and trades with restricted market access” under the Investment Law 2020 before proceeding with any project. First, it is necessary to accurately determine the maximum permitted ownership ratio, especially for sectors in the general restricted list or sectors with specialized regulations. Failure to comply with this rule will lead to the rejection of the IRC application. Additionally, projects must meet special conditions regarding national defense, security, and land management.
Financial issues and FDI capital: When investing in Vietnam, FIs must strictly comply with regulations on foreign exchange and capital management, including: mandatory opening and use of a Direct Investment Capital Account (DICA) in foreign currency at a Vietnamese commercial bank. Simultaneously, FIs need to pay attention to contributing sufficient charter capital within the prescribed time limit (usually within 90 days from the date of issuance of the Enterprise Registration Certificate (ERC)). Finally, FIs need to fully perform tax obligations.
Risks regarding sub-licenses and capital structure: After obtaining the ERC and IRC, FIs must proactively apply for additional mandatory specialized licenses as required by specialized laws, as the lack of these licenses will lead to the suspension of business operations; strictly manage changes in capital structure to ensure the foreign ownership ratio does not exceed the prescribed limit; and continuously update changes in Vietnamese laws and policies.

5 FDI Procedures into Vietnam You Cannot Miss

Online Declaration of Investment Project Information on the National Foreign Investment Information System:

Before performing the procedure for granting an Investment Registration Certificate (IRC), foreign investors are mandatory required to declare online information related to the project on the National Foreign Investment Information System. This system plays a central role in the FDI procedure process in Vietnam, serving not only as the place where the Investment Registration Authority receives, processes, returns results, and issues codes for investment projects, but also as a tool to help transparency the process. After submitting the hard copy dossier, the investor is granted an account to proactively track the dossier processing status and project progress online, thereby creating favorable conditions and improving the efficiency of state management over foreign investment activities.

Note: For projects requiring Approval of Investment Policies (Articles 30, 31, 32 of Investment Law 2020), a dossier must be submitted to the competent authority. According to Clauses 1 and 2, Article 33 of the Investment Law 2020, the dossier for approval of investment policies includes:

- A written request for implementation of the investment project, including a commitment to bear all costs and risks if the project is not approved;
- Documents regarding the legal status of the investor;
- Documents proving the financial capacity of the investor, including at least one of the following: the investor’s financial statements for the last 02 years; commitment of financial support from the parent company; commitment of financial support from a financial institution; guarantee of the investor’s financial capacity; other documents proving the financial capacity of the investor;
- Investment project proposal including main contents: investor or form of investor selection, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, implementation schedule, information on the current status of land use at the project location and proposal for land use needs (if any), labor needs, proposal for investment incentives, socio-economic impact and efficiency of the project, preliminary environmental impact assessment (if any) in accordance with the law on environmental protection.

Procedure for Granting the Investment Registration Certificate (IRC):
After completing the online declaration, the investor needs to promptly prepare and submit a full hard copy dossier to officially perform the application for an IRC at the competent Investment Registration Authority. Based on Clause 1, Article 33 of the Investment Law 2020, the IRC application dossier includes:
- Written request for implementation of the investment project.
- Investment project proposal.
- Documents proving the project location in Vietnam:
  - Office lease contract.
  - Documents proving the lessor’s land use rights such as: Land Use Right Certificate, Construction Permit, Business License, or other documents of equivalent value.
- BCC contract (for investment projects in the form of a BCC contract).
- Explanatory document on the technology used in the investment (for projects subject to appraisal or comments on technology as prescribed).
- Copy of passport/ID card of the Vietnamese person (in case the foreign investor performs the investment project jointly with a Vietnamese person).
Depending on whether the foreign investor is an individual or an organization, the dossier must be supplemented with:
- If the foreign investor is an individual:
  - Notarized copy of the investor’s passport.
  - Document proving the investor’s bank account balance equal to or more than the investment amount or other documents of value proving the investor’s financial capacity.
- If the foreign investor is an organization:
  - Copy of the establishment decision or Certificate of Enterprise Registration.
  - Copy of passport/ID card of the representative of the foreign organization’s capital contribution in Vietnam.
  - Audited financial statements for the last 2 years of the organization (consularly legalized and valid within 90 days) or commitment of financial support from the parent company or other documents of equivalent value.
Note: Documents in the dossier must be presented in Vietnamese; in the case of foreign documents, they must be consularly legalized at the Vietnamese Embassy abroad, then translated and notarized, accompanied by the original foreign language document.

The process includes:
- Step 1: Prepare the Dossier.
- Step 2: Submit the dossier at the competent authority:
  - Management Board of Industrial Parks, Export Processing Zones, High-Tech Zones, Economic Zones: For projects inside these zones.
  - Department of Planning and Investment (DPI): For other cases, including projects in two or more provinces, or projects both inside and outside industrial parks.
- Step 3: The Investment Registration Authority reviews the dossier within 15 working days:
  - Valid Dossier: Issue the IRC.
  - Invalid Dossier: Written notice with detailed instructions for modification/supplementation.
1. Step 1: Prepare the dossier.
2. Step 2: Submit the dossier at the Business Registration Office – Department of Finance (Planning and Investment) to be granted the ERC and tax code. Within 3 days from receiving a valid dossier, the business registration authority will issue the ERC.

Procedure for Granting the Enterprise Registration Certificate (ERC):

The ERC is the next document the investor needs. After obtaining the IRC, the investor will proceed to establish the enterprise in Vietnam. The ERC certifies that the enterprise is legally registered and has the right to conduct business operations in Vietnam.

ERC application dossier includes:

Information about the enterprise: Application form for enterprise registration; Company Charter; List of members.
Documents related to the investor: Documents proving the identity or legal status of the investor.
IRC: The granted Investment Registration Certificate.

The process includes:Opening an Investment Capital Account:

- Must open a DICA in foreign currency at a permitted bank to perform legal foreign currency transactions related to direct investment activities;
- Only 1 DICA can be opened for each corresponding foreign currency at 1 permitted bank;
- 1 DICA in Vietnamese Dong (VND) can be opened at the same bank where the foreign currency DICA was opened;
- In case of changing banks, the FDI enterprise or investor must:
  - Step 1: Open a new DICA at another permitted bank;
  - Step 2: Transfer the entire balance from the old account to the new one, then close the old account.
    
    According to the Law on Enterprises, foreign investors need to contribute capital within 90 days from the date of ERC issuance. Therefore, immediately after establishment, the investor needs to open a Direct Investment Capital Account (DICA).
Completing Post-Establishment Procedures:

After completing the opening of the DICA and payment accounts, the most important next step is to fully contribute charter capital as committed by transferring money from the foreign investor into the DICA within 90 days from the ERC issuance date. Simultaneously, the enterprise must:

Perform initial tax registration with the direct managing tax authority.
Pay the Business License Fee for the first year of operation.
Register for the use of electronic invoices.
Comply with labor and social insurance regulations (declaration of labor use and registration for mandatory insurance).
Apply for sub-licenses: If the business lines are conditional, the enterprise must complete the application for sub-licenses before officially commencing operations and performing periodic tax declaration/payment obligations.

Contact Us

Our support service for consulting on Vietnam company establishment procedures provides a comprehensive solution for entrepreneurs and investors. We help clients understand the legal process, from choosing the appropriate business type and registering the company name to applying for licenses and taxes. Our team of experts will accompany you, ensuring all procedures are performed quickly, accurately, and in compliance with the law.

With a team of senior lawyers with many years of experience, solid legal knowledge, and excellent bilingual consulting capabilities, BKC LAW is confident in being one of the best legal partners in the market to support clients in performing enterprise registration activities.

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