PROCESS OF ESTABLISHING FOREIGN INVESTED ENTERPRISE IN VIETNAM

FDI enterprises continue to play an key role in contributing to the state budget revenue. With the advantage of a developing economy and various incentives on taxation and investment procedures, Vietnam has become an attractive destination for foreign investors. In reality, the number of FDI enterprises entering the domestic market has continuously increased, leading to a strong rise in the demand for establishing foreign-invested companies. However, unlike domestic enterprises, FDI enterprises must comply with more complicated legal procedures. Therefore, many investors often seek professional consulting firms for support with the process of establishing a foreign invested enterprise in Vietnam in order to ensure legal compliance, optimize costs, and shorten the implementation timeline. The article below analyzes in detail the 05 steps for establishing an FDI enterprise in Vietnam.

Determining Licensing Conditions and Scope of Operation

The consulting firm needs to collect and assess information from the client in order to determine the licensing conditions and operational scope for the investors. Determining licensing conditions is often associated with the business sectors in which the investor intends to operate in Vietnam. Investors need to review market access conditions applicable to each proposed business sector, including:

• • • • Business sectors not subject to market access restrictions;
      • Business sectors not yet open to foreign investors;
      • Business sectors market access conditions.

Each business group will be subject to different legal requirements relating to foreign ownership ratios, investment forms, operational scope, or specialized licensing conditions. For example, Article 38 of the Law on Tourism 2017, travel service business activities in Vietnam are classified as a conditional market access sector and do not allow foreign investors to own 100% of the capital.

Based on the investment condition assessment and business sectors analysis, the consulting firm will propose an suitable structure regarding the enterprise model, capital structure, and investor ownership ratio. Establishing a suitable investment structure from the outset not only helps the enterprise comply with legal regulations but also optimizes costs, minimizes legal risks, and ensures the licensing process is carried out on schedule.

Preparing Investment Dossiers and Legal Structure

After determining the appropriate plan, the enterprise will proceed with preparing the investment dossiers and legal structure. This is a highly technical stage, requiring consistency and accuracy among the documents. During this stage, the enterprise needs to prepare the complete application dossiers for procedure to apply the Investment Registration Certificate (IRC) and the Enterprise Registration Certificate (ERC). Specifically:

The application dossier for the IRC under of the Law on Invesment 2025 includes:

• • • • A written request for implement the investment project;
      • Investment project proposal;
      • Documents on the legal status of the investor;
      • Documents proving financial capacity;
      • Other documents.

The application dossier for the ERC depends on the business type under Chapter III of Decree No. 168/2025/ND-CP and generally includes:

• • • • Application for enterprise registration;
      • Company charter;
      • List of members for Limited Liability Companies with two or more members or list of shareholders for Joint Stock Companies;
      • Personal legal documents of members/shareholders and authorized representatives that have been consular legalized for foreign investors;
      • Investment Registration Certificate (IRC);
      • Other documents.

During the drafting process, standardizing documents in accordance with the requirements of the licensing authority is particularly important. Specifically, documents must be prepared in compliance with the prescribed legal forms issued by law in order to minimize requests for amendment or supplementation, thereby shortening the processing time.

Representing Investors in Submitting Applications and Working with State Authorities

At the stage of submitting applications and working with state authorities, after completing the full set of application dossiers, the consulting firm will usually represent the investor in carrying out the entire procedure for obtaining the IRC and ERC. This process includes directly working with competent authorities and monitoring the application processing progress. In addition, where the licensing authority requests explanations or additional documents, the consulting firm will directly assist in revising and completing the dossiers when necessary to ensure that the approval process proceeds smoothly, efficiently, and according to the expected timeline.

Completing Legal Procedures and Activating Business Operations

After obtaining the IRC and ERC, the enterprise must continue completing post-licensing procedures and activating business operations in order to officially put the company into operation. Necessary procedures include publishing enterprise information on the National Business Registration Portal; making the company seal and notifying the seal specimen to the Department of Planning and Investment; conducting initial tax registration; and opening a bank account.

For foreign invested enterprises, opening a Direct Investment Capital Account (DICA) is a mandatory requirement for making capital contributions in compliance with foreign exchange regulations. For example, many enterprises, despite having obtained licenses, are still unable to receive capital contributions or sign contracts due to delays in opening bank accounts or errors in tax registration procedures. Therefore, enterprises need to fully complete post-licensing legal procedures in order to operate stably. This also helps minimize legal risks and avoid affecting the actual business schedule.

Specialized Licenses and Post-Establishment Compliance

Some sectors require specialized licenses to operate effectively. Therefore, enterprises will need to apply for specialized licenses and comply with post-establishment. Consulting firms will assist enterprises in obtaining specialized licenses for conditional business sectors such as retail, distribution, and e-commerce. For example, operating in the e-commerce sector requires an E-commerce Trading Platform Registration License issued by the Ministry of Industry and Trade after the foreign invested enterprise has satisfied all business conditions in Vietnam.

In addition, if necessary, enterprises will be advised on and assisted in establishing a legal compliance framework relating to taxation, labor, accounting, and periodic reporting obligations. This is intended to ensure lawful, stable, and sustainable long-term operations in the long term, while minimizing legal risks and facilitating future business expansion.

In summary, in order to establish a foreign-invested enterprise in Vietnam, foreign investors need to thoroughly understand market access conditions, enterprise establishment procedures, and related legal matters in order to ensure that the investment project is implemented in compliance with regulations, minimize legal risks, and quickly commence actual business operations.

For legal consultation regarding the establishment of a foreign-invested enterprise in Vietnam, you may contact BKCLAW through the following information:

Phone: 0909 073 692

Email: info@bkclaw.vn

District 1 Office: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, Sai Gon Ward, Ho Chi Minh City

Binh Tan Office: 41 Ten Lua Street, An Lac Ward, Ho Chi Minh City