Conditions for Establishing a Foreign-Invested Company

Conditions for Establishing a Foreign-Invested Company in Vietnam encompass the legal requirements and procedures that investors must comply with to ensure a smooth investment process. Foreign investors are required to select the form of investment, determine the business lines, register the enterprise, and obtain an Investment Registration Certificate. Additionally, attention must be given to regulations concerning capital ownership ratios, share transfers, and compliance with the business environment regulations in Vietnam. Depending on the type of company—ranging from single-member limited liability companies to joint-stock companies—the requirements and establishment procedures will vary in accordance with the investor’s objectives and strategies.

Forms of Establishing a Foreign-Invested Company
Vietnamese law provides that investors may undertake investment in the forms stipulated in Article 24 of the Investment Law 2020, including:

1. Investment in the establishment of an economic organization.
2. Investment by contributing capital, purchasing shares, or otherwise acquiring capital contributions.
3. Implementation of an investment project.
4. Investment in the form of a Business Cooperation Contract (BCC).
5. New forms of investment and types of economic organizations as prescribed by the Government.

Accordingly, to establish a foreign-invested company, investors may proceed under one of two primary forms: contributing capital, purchasing shares, or acquiring capital contributions in an existing Vietnamese company, or establishing a new economic organization with foreign investment capital.

Conditions for Foreign Investors to Establish an Enterprise in Vietnam

Conditions Applicable Where a Foreign Investor Contributes Capital from the Outset to Establish an Economic Organization

Pursuant to Article 22 of the Investment Law 2020:
A foreign investor establishing an economic organization must satisfy the market access conditions applicable to foreign investors as provided in Article 9 of this Law.
Prior to establishing an economic organization, a foreign investor must have an investment project and carry out procedures for the issuance or adjustment of an Investment Registration Certificate, except in the case of establishing innovative start-up small and medium-sized enterprises or innovative start-up investment funds in accordance with the law on support for small and medium-sized enterprises.

Conditions for Foreign Investors Contributing Capital, Purchasing Shares, or Acquiring Capital Contributions

The contribution of capital, purchase of shares, or acquisition of capital contributions by a foreign investor in an economic organization must satisfy the following conditions:

• Market access conditions applicable to foreign investors as provided in Article 9 of the Investment Law 2020;
• Safeguarding national defense and security in accordance with the Investment Law 2020;
• Provisions of the land law concerning conditions for receiving land use rights and conditions for land use in islands, border communes, wards, townships, and coastal communes, wards, and townships.

In addition, Decree No. 31/2021/ND-CP also stipulates certain business lines and market access conditions for foreign investors.

Conditions Regarding the Legal Status and Nationality of Foreign Investors

A foreign investor may be an individual over 18 years of age or an organization or enterprise holding nationality of a WTO member state or having concluded a bilateral investment treaty with Vietnam. However, certain business lines permit investment only by foreign legal entities. Individual investors holding passports containing the “nine-dash line” are prohibited from contributing capital in Vietnam or acting as representatives managing the invested capital in organizations or companies established in Vietnam in accordance with the law.
There is no specific restriction on the nationality of foreign investors. Investors from any country may invest in Vietnam provided they comply with Vietnamese law and the international agreements to which Vietnam is a party.
Detailed provisions on the legal status and nationality of foreign investors may be found in the Enterprise Law, the Investment Law, and other relevant legal instruments governing foreign investment in Vietnam.

Conditions Regarding Financial Capacity of Foreign Investors

Foreign investors must possess sufficient financial capacity for the investment and must demonstrate such capacity in Vietnam, depending on the selected business line.

Conditions Regarding the Intended Registered Head Office and Project Implementation Location

Foreign investors must secure a project implementation location in Vietnam through a lease agreement, office lease, land lease, or valid land title documents of the lessor to serve as the company’s head office and project implementation site.
For investment projects in manufacturing, investors must demonstrate eligibility for factory leasing and possess a factory lease agreement within industrial parks or clusters.

Conditions Regarding Experience and Sector-Specific Requirements

Foreign investors seeking to establish an FDI company in Vietnam must satisfy the specific conditions applicable to conditionally restricted business lines for foreign investors.
Furthermore, foreign investors must comply with restrictions on prohibited business lines. To qualify for establishing an FDI enterprise, the enterprise must not engage in the prohibited activities listed in Article 6 of the Investment Law 2020, which include:

• Trade in prohibited narcotic substances listed in Schedule I of the Law;
• Trade in chemicals listed in Schedule II of the Law;
• Trade in specimens of endangered wild flora and fauna originating from nature as listed in Appendix I of the CITES Convention; specimens of endangered, precious, and rare forest plants, animals, and aquatic species of Group I originating from nature as listed in Schedule III of the Law;
• Prostitution;
• Purchase and sale of human beings, tissues, organs, corpses, or human embryos;
• Business activities related to human asexual reproduction;
• Trade in fireworks;
• Debt collection services.

Procedures for Establishing a Foreign-Invested Enterprise in 2025

Establishing a Foreign-Invested Company by Contributing Capital from the Outset

Step 1: Prepare the Application for the Investment Registration Certificate
To obtain an Investment Registration Certificate, a foreign investor must prepare the following documents:

• Written request to implement the investment project;
• Documents evidencing legal status:

Depending on the type of investor, the specific documents are as follows:

• For institutional investors: a copy of the Certificate of Establishment or equivalent legal document verifying legal status.
• For individual investors: a copy of the ID card/Citizen Identity Card or passport.

• Investment project proposal containing: investor implementing the project, investment objectives, scale, capital and capital mobilization plan, location, duration, implementation schedule, labor requirements, proposed investment incentives, and assessment of socio-economic impact and efficiency.
• Documents evidencing the investor’s financial capacity:

• For institutional investors: audited financial statements for the last two years, or financial support commitment from the parent company or financial institution, or guarantee of financial capacity.
• For individual investors: bank balance confirmation, savings book, etc.

• Documents related to lawful use of the project location, such as lease agreement, Land Use Rights Certificate, construction permit, approved construction planning decision, land allocation/lease decision, etc.
• Proposal for land use needs for the project.
• Explanation of technology use for the project, including details of technology name, origin, process diagram, main technical parameters, and status of machinery, equipment, and technological lines.

Step 2: Submit the Application for the Investment Registration Certificate
For projects not requiring an investment policy decision, the Investment Registration Certificate is applied for as follows: Declare project information on the National Foreign Investment Information System:

• The investor declares project information online on the National Foreign Investment Information System prior to submitting the application. The application must then be submitted to the investment registration authority within 15 working days from the date of online declaration.
• Upon receipt, the investor is granted an account to monitor the processing status. The investment registration authority uses the system to receive, process, and assign project codes.

Step 3: Issuance of the Investment Registration Certificate
Within 15 working days from receipt of a complete dossier, the investment registration authority shall issue the Investment Registration Certificate. If refused, written notification with clear reasons will be provided.

Step 4: Prepare and Submit the Application for the Enterprise Registration Certificate to Establish a Foreign-Invested Company in Vietnam
After receiving the Investment Registration Certificate, the investor must follow the same procedures as for establishing a domestic-capital company to obtain the Enterprise Registration Certificate.
The application dossier includes:

• Application for enterprise registration;
• Company charter;
• List of members or shareholders;
• Copies of ID card/Citizen Identity Card/passport or other lawful personal identification documents (for individuals);
• Establishment decision, Enterprise Registration Certificate or equivalent document of the organization and authorization letter; copy of lawful personal identification document of the authorized representative (for organizations);
• For foreign institutional members, a copy of the Enterprise Registration Certificate or equivalent document must be consular legalized;
• Investment Registration Certificate issued to the foreign investor.

Step 5: Publish the Enterprise Registration Information
After receiving the Enterprise Registration Certificate, the company must publish the information on the National Business Registration Portal and pay the prescribed publication fee.
The published content includes business lines, list of founding shareholders, and list of foreign shareholders (for joint-stock companies, if any).
Publication request and fee payment are submitted together with the enterprise registration dossier. Additionally, Decree No. 122/2021/ND-CP provides sanctions for failure to disclose or inaccurate disclosure on the National Business Registration Portal.

Step 6: Engrave the Company Seal
The seal may be produced by a seal engraving facility or in the form of a digital signature in accordance with the law on electronic transactions.
The enterprise decides on the type, quantity, form, and content of the seal for the enterprise, branches, representative offices, and other units.
Management and retention of the seal shall comply with the company charter or regulations issued by the enterprise. The enterprise uses the seal in transactions as required by law.

Step 7: Obtain a Business License or Conditional Business License
A Business License is required for enterprises engaged in retail distribution to consumers or establishing retail outlets. For certain conditional business lines, after completing company establishment procedures, foreign investors must obtain additional licenses such as food safety, environmental, training, or travel services licenses.
To qualify for a Business License in retail distribution, foreign investors must satisfy the following requirements:

• For investors from countries/territories party to international treaties to which Vietnam is a member, commitment to market opening for goods trading and directly related activities.
• Compliance with market access requirements under international treaties to which Vietnam is a party.
• Financial plan to implement the business activities;
• No overdue tax debts if the enterprise has operated in Vietnam for at least one year.

Additionally, the following factors are considered for granting a retail Business License:

• Compliance with specialized legal regulations.
• Compatibility with the level of competition of domestic enterprises in the same sector.
• Ability to create jobs for domestic labor.
• Contribution to the state budget.

Specifically, the application for a retail Business License for an FDI enterprise includes:

• Application for Business License;
• Detailed explanation of licensing conditions under Article 9 of Decree No. 09/2018/ND-CP;
• Detailed business plan describing the content and method of implementation, and assessment of socio-economic impact and efficiency;
• Detailed financial plan, including audited business results and current financial status;
• Documents evidencing no overdue tax debts from the tax authority;
• Copies of the Enterprise Registration Certificate and Investment Registration Certificate for goods trading projects and directly related activities (if any).

The Department of Industry and Trade where the enterprise is headquartered processes the retail Business License for foreign-invested enterprises, with an expected processing time of approximately 30–45 working days.

Step 8: Open a Direct Foreign Investment Capital Account
This account is used to transfer capital in accordance with the contribution schedule recorded in the Investment Registration Certificate.
Additionally, the FDI company must open a transaction account to receive funds from the capital account for domestic revenue and expenditure transactions.

Procedure for Establishing a Foreign-Invested Company in Vietnam by Contributing Capital or Purchasing Shares

Step 1: Establish a Domestic-Capital Company
A foreign investor may only purchase shares or contribute capital when a Vietnamese enterprise already exists. If establishment procedures are not yet complete, the Vietnamese partner must first establish a company with 100% domestic capital.

Step 2: Prepare the Application for Registration of Capital Contribution or Share Purchase by the Foreign Investor
The dossier includes:

1. Application for registration of capital contribution, share purchase, or capital contribution acquisition, detailing the target economic organization and the post-transaction foreign ownership ratio in the charter capital.
2. Copy of personal legal documents (for individual investors) or Certificate of Establishment or equivalent (for institutional investors).
3. Written agreement on capital contribution or share purchase between the foreign investor and the target economic organization.</>
4. Declaration (with copy) of the Land Use Rights Certificate of the economic organization receiving capital from the foreign investor.

Step 3: Submit the Application for Registration of Capital Contribution or Share Purchase
The complete dossier is submitted to the Investment Registration Division of the provincial Department of Planning and Investment where the enterprise is headquartered.
Within 15 working days from receipt of a complete and valid dossier, the Department of Planning and Investment shall issue a notification confirming satisfaction of the conditions for capital contribution, share purchase, or capital contribution acquisition.

Step 4: The Foreign Investor Contributes Capital or Purchases Shares to Establish an FDI Company in Vietnam
If the foreign investor contributes more than 51% of capital, the Vietnamese company must open a direct investment capital account. Capital transfers are made through this account in accordance with regulations. Transferring members/shareholders must declare and pay personal income tax and corporate income tax (if applicable) as required by law.

Step 5: Amend the Enterprise Registration Certificate
After completing the capital contribution or share purchase, the company shall carry out procedures to amend the enterprise registration, updating the foreign investor’s contribution information. Required documents include:

• Notification of amendment of enterprise registration content.
• Company decision on the amendment (if any).
• Minutes of the General Meeting of Shareholders/Limited Liability Company meeting regarding the amendment (if any).
• Transfer contract and related documents.
• List of foreign members or shareholders contributing capital.
• Notarized copy of passport or business registration certificate of the investor.

The amendment is carried out at the Department of Planning and Investment where the company is headquartered.

Step 6: Obtain a Business License and Conditional Business License
Similar to the initial contribution method, enterprises engaged in retail distribution or establishing retail outlets must apply for a Business License. For conditional business lines, additional relevant licenses are required to commence operations.

Services for Establishing a Foreign-Invested Company at BKC Law

BKC Law provides consulting and procedural services related to investment activities in Vietnam. With an experienced and professional team of lawyers, we are confident in being one of the best legal partners in the market, assisting clients in completing the procedures for establishing a foreign-invested company quickly and efficiently.
For legal advice on services for establishing a foreign-invested company in Vietnam, please contact our lawyers using the following information:
Phone: 0901 333 341
Email: info@bkclaw.vn
District 1 Office: 9th Floor, Diamond Plaza Building, 34 Le Duan, District 1, Ho Chi Minh City
Binh Tan Office: 41 Ten Lua, Binh Tan District, Ho Chi Minh City
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