Conditions for establishing a foreign-invested company

The conditions for establishing a foreign-invested company in Vietnam include legal requirements and procedures that investors must comply with to ensure a smooth investment process. Foreign investors must choose an investment form, determine the business sector, register the enterprise, and apply for an investment license. Additionally, attention must be paid to regulations on capital ownership ratios, share transfers, and compliance with business environment regulations in Vietnam.

Depending on the type of company, from a single-member limited liability company to a joint-stock company, the establishment requirements and procedures will vary to align with the investor’s goals and strategy.

Forms of establishing a foreign-invested company

Vietnamese law stipulates that investors can invest under the forms specified in article 24 of the investment law 2020, including:

• Investment to establish an economic organization.

• Investment by capital contribution, share purchase, or capital contribution acquisition.

• Execution of investment projects.

• Investment in the form of a business cooperation contract (bcc).

• Other investment forms and types of economic organizations as prescribed by the government.

Thus, to establish a foreign-invested company, investors must proceed under one of two methods: either by contributing capital, purchasing shares, or acquiring capital contributions in a Vietnamese company, or by establishing a foreign-invested economic organization.

Conditions for foreign investors to establish a business in Vietnam

Conditions for foreign investors contributing capital to establish an economic organization

According to article 22 of the investment law 2020:

• Foreign investors establishing an economic organization must meet the market access conditions for foreign investors as stipulated in article 9 of this law.

• Before establishing an economic organization, foreign investors must have an investment project and complete the procedures for granting and adjusting the investment registration certificate unless they are establishing small and medium-sized innovative start-ups or venture capital funds according to laws supporting small and medium enterprises.

Conditions for foreign investors contributing capital, purchasing shares, or capital contributions

Foreign investors contributing capital, purchasing shares, or acquiring capital contributions in an economic organization must meet the following conditions:

• Market access conditions for foreign investors as prescribed in article 9 of the investment law 2020.

• Compliance with national defense and security requirements under the investment law 2020.

• Regulations on land use rights, conditions for receiving land use rights in border communes, coastal wards, and townships under the land law.

Additionally, decree 31/2024/nd-cp outlines specific industries and market access conditions for foreign investors.

Conditions regarding the legal entity and nationality of foreign investors

Foreign investors can be individuals over 18 years old, organizations, or enterprises holding the nationality of wto members or those with bilateral investment agreements with Vietnam.

However, certain industries only allow investment from foreign legal entities. Individual investors holding passports with “nine-dash line” content cannot contribute capital or act as representatives for capital management in organizations or companies established in Vietnam.

There are no specific nationality restrictions for foreign investors; investors from any country can invest in Vietnam as long as they comply with Vietnamese laws and international agreements Vietnam has signed.

The specific provisions regarding the legal entity and nationality of foreign investors can be found in laws such as the enterprise law, investment law, and other legal documents related to foreign investment in Vietnam.

Conditions regarding the financial capacity of foreign investors

Foreign investors must have sufficient financial capacity to invest and must provide proof of their financial ability depending on the chosen business sector.

Conditions regarding the registered office and project location

Foreign investors must secure a location for the investment project in Vietnam through rental contracts or legal documents proving land use rights to set up a company office and project location.

For manufacturing projects, investors must demonstrate adequate leasing conditions for factory premises and have lease contracts for premises in industrial zones.

Conditions regarding business experience and specific requirements by investment sector

Foreign investors opening an fdi company in Vietnam must meet specific conditions for conditional business sectors.

Additionally, they must not engage in prohibited business activities as listed in article 6 of the investment law 2020, which includes:

• Trading prohibited substances such as drugs listed in annex i of this law.

• Trading chemicals restricted under annex ii of this law.

• Trading specimens of endangered wildlife and rare plants as per international conventions and Vietnamese regulations.

• Prostitution.

• Human trafficking, including organ trade.

• Cloning-related human reproductive activities.

• Trading explosive fireworks.

• Debt collection services.

Steps to establish a foreign-invested enterprise in Vietnam in 2025

Establishing a foreign-invested company by direct capital contribution

Step 1: Preparing documents for the investment registration certificate

Foreign investors must prepare documents including:

• Investment project proposal.

• Legal status verification documents.

• Financial capacity proof (financial statements, bank balance confirmations, etc.).

• Proof of legal land use rights for the project location.

• Environmental and technological usage declarations if applicable.

Step 2: Submitting the application for the investment registration certificate

Applications must be submitted online and followed up via Vietnam’s national foreign investment information system.

Step 3: Issuance of the investment registration certificate

Within 15 working days, the relevant authority will issue the certificate or provide reasons for rejection.

Step 4: Registering a business for the foreign-invested company

Foreign investors must then register their business similarly to a Vietnamese-owned company.

Step 5: Publishing business registration information

This includes public disclosure on the national business registration portal.

Step 6: Creating the company seal

The company seal must comply with electronic transaction laws or traditional stamp-making regulations.

Step 7: Applying for business licenses or sector-specific licenses

This step is necessary for specific industries such as retail, food services, education, and tourism.

Step 8: Opening a direct foreign investment capital account

This account is used to transfer registered investment capital and for financial transactions.

Establishing a foreign-invested company through share purchase or capital contribution

Step 1: Establishing a Vietnamese-owned company

A domestic company must first be established before a foreign investor can purchase shares.

Step 2: Preparing a capital contribution or share purchase application

Documents must include investor identity, investment agreement, land use declarations, and legal paperwork.

Step 3: Submitting the application for capital contribution or share purchase approval

The department of planning and investment reviews the application within 15 working days.

Step 4: Executing the capital contribution or share purchase

If the foreign investor holds more than 51% of shares, a foreign investment capital account must be used for transactions.

Step 5: Updating the business registration certificate

This involves recording foreign investor details with the business registration authority.

Step 6: Applying for business and operational licenses

Additional licenses are required for specific business sectors.

Foreign investment business support services

Bkc law provides consulting services for foreign investment procedures in Vietnam. Our experienced legal team ensures smooth and compliant business setup processes.

For legal consultation on opening a foreign-invested company in Vietnam, contact us:

Phone: 0901 3333 41
Email: info@bkclaw.vn

District 1 Office: 9th Floor, Diamond Plaza, 34 Lê Duẩn, District 1, Ho Chi Minh City
Binh Tan Office: 41 Tên Lửa, Binh Tan, Ho Chi Minh City

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