Foreign Company in Vietnam: Setup, Ownership & Key Investors

Vietnam has emerged as one of Asia’s most compelling investment destinations. With strong GDP growth, a young and skilled workforce, competitive labor costs, and increasing integration into global trade agreements, the country continues to attract multinational corporations and foreign entrepreneurs alike. As a result, establishing a foreign company in Vietnam has become a strategic move for businesses seeking long-term growth in Southeast Asia.

This guide provides a comprehensive overview of foreign investment in Vietnam, including ownership structures, legal requirements, incorporation steps, and practical insights into operating a successful foreign business in Vietnam in 2026.

Key Advantages for Foreign Companies in Vietnam

Vietnam is not only attractive because of its low costs. The government has been very proactive in implementing economic reforms and focusing on international integration; thus, the business environment is stable and gradually more transparent.

Main benefits:

• Geographical advantage, as Vietnam lies in the heart of Southeast Asia
• Engagement in several significant trade agreements (CPTPP, EVFTA, RCEP)
• An increasingly affluent population with a rising domestic consumption
• Manufacturing and operating costs at a competitive level
• Government policies that favor investment

All these factors make Vietnam an attractive destination for foreign businesses across both manufacturing and service industries.

What Does the Term "Foreign Company" in Vietnam Mean?

In legal terms, Vietnam does not formally use the term ‘foreign company’. Instead, foreign-invested enterprises are defined as economic organizations with foreign investor ownership under the Law on Investment.

In practice, a foreign company in Vietnam generally refers to an enterprise that is:

• Wholly or partially owned by foreign investors, and
• Established under Vietnamese law or operating through a licensed presence

Depending on the business goals and the regulatory environment, foreign investors may decide to establish their presence in Vietnam through various legal ‍‌entities.

Definition of a Foreign-Invested Enterprise in Vietnam

100% Foreign Owned Company in Vietnam: Is It Allowed?

One of the most common questions investors ask is whether they can establish a 100% foreign owned company in Vietnam. The answer is yes, in many industries.

Fully Foreign-Owned Enterprises (FOEs)

Vietnam allows foreign investors to own 100% of a company in many sectors, subject to market access conditions under Vietnamese law, including:

• Manufacturing
• Trading and distribution (with conditions)
• IT and software development
• Consulting and professional services
• Education and training (subject to licensing)

However, certain sectors remain restricted or conditional, such as:

• Media and broadcasting
• Telecommunications
• Real estate brokerage
• Logistics and transportation

In restricted industries, foreign ownership caps or joint venture requirements may apply.

Popular Legal Structures for Foreign Businesses in Vietnam

Foreign investors can choose from several business structures when entering Vietnam.

1. Limited Liability Company (LLC)

The most common structure for a foreign company in Vietnam, suitable for:

• SMEs
• Service providers
• Manufacturing entities

LLCs can be formed with one or multiple members and allow full foreign ownership in permitted sectors.

2. Joint Stock Company (JSC)

Often used by larger enterprises, JSCs allow:

• Multiple shareholders
• Easier capital raising
• Potential public listing in the future

3. Representative Office

A non-revenue-generating presence used for:

• Market research
• Liaison activities
• Brand promotion

Representative offices cannot conduct profit-making activities.

Common business structures for foreign investors in Vietnam

How to Set Up a Foreign Company in Vietnam: Step-by-Step Guide

Understanding the process of setting up a foreign company in Vietnam is critical to avoiding delays and compliance issues.

Step 1: Investment Policy Approval (If Required)

Some industries require prior approval from Vietnamese authorities before incorporation.

Step 2: Obtain an Investment Registration Certificate (IRC)

The IRC records:

• Investor information
• Investment capital
• Business activities
• Project duration

In most cases, foreign investors establishing a new company in Vietnam must obtain an Investment Registration Certificate (IRC). Certain investment structures may follow different procedures depending on the ownership structure and sector.

Step 3: Obtain an Enterprise Registration Certificate (ERC)

The ERC officially establishes the company as a legal entity under Vietnamese law.

Step 4: Post-Incorporation Procedures

These include:

• Tax registration
• Corporate bank account opening
• Capital contribution
• Company seal registration

Completing these steps allows the foreign business in Vietnam to operate legally.

Capital Requirements for Foreign Companies in Vietnam

Capital requirements typically include charter capital and total investment capital. While some regulated sectors impose statutory minimums, in most cases the required capital depends on:

• Industry sector
• Business scale
• Licensing conditions

Authorities assess whether the proposed capital is sufficient to support the company’s operations.

Tax Environment for Foreign Businesses in Vietnam

Vietnam offers a competitive tax regime for foreign investors.

Corporate Income Tax (CIT)

• Standard rate: 20%
• Preferential rates available for priority sectors and locations

Value Added Tax (VAT)

• Standard rate: 10%
• Reduced rates apply to certain goods and services

Withholding Taxes

Applicable to payments such as royalties, interest, and service fees.

Tax incentives are often available for high-tech, export-oriented, and manufacturing projects.

Understanding the tax environment for foreign businesses in Vietnam

Employment and Labor Considerations

Foreign companies benefit from Vietnam’s large and skilled workforce.

Key points include:

• Compliance with Vietnam Labor Code
• Employment contracts required
• Social insurance contributions mandatory
• Work permits required for foreign employees

Understanding labor compliance is essential for long-term success.

List of Foreign Companies in Vietnam: Key Investors and Sectors

A growing list of foreign companies in Vietnam reflects the country’s diverse investment landscape.

Major Investor Countries:

• South Korea
• Japan
• Singapore
• United States

Key Sectors:

• Manufacturing and electronics
• Textiles and footwear
• Technology and software
• Retail and consumer goods
• Renewable energy

Global brands in electronics, automotive, retail, and FMCG have established major operations across Vietnam.

Challenges Foreign Companies May Face

Despite its advantages, operating a foreign company in Vietnam presents challenges:

• Regulatory complexity
• Licensing delays
• Language and cultural differences
• Changing legal interpretations
• Administrative compliance

These challenges underscore the importance of experienced local support.

Compliance and Ongoing Obligations

Foreign-invested companies must comply with:

• Annual financial reporting
• Audited financial statements
• Tax filings and declarations
• Investment reporting requirements

Failure to comply may result in penalties or restrictions on operations.

Vietnam vs Other ASEAN Investment Destinations

Compared to other ASEAN countries, Vietnam offers:

• A large and competitive workforce
• Competitive operating costs compared with many ASEAN economies
• A strong and growing manufacturing base

This balance makes Vietnam especially attractive for long-term, growth-oriented foreign investment.

Vietnam Compared with Other ASEAN Investment Destinations

How One IBC Vietnam Supports Foreign Companies in Vietnam

Navigating the regulatory landscape of setting up a foreign company in Vietnam requires expertise, local insight, and careful planning.

One IBC Vietnam supports international investors throughout the entire process of establishing and operating a foreign company in Vietnam, including:

• Market entry advisory
• Company formation and incorporation in Vietnam
• Investment and enterprise licensing (IRC & ERC)
• Corporate bank account support
• Tax, accounting, and compliance services
• Ongoing corporate advisory

With extensive experience supporting international clients, One IBC Vietnam ensures a smooth, compliant, and efficient market entry into Vietnam.

Future Outlook for Foreign Businesses in Vietnam

Vietnam’s long-term outlook remains highly positive. Continued infrastructure development, digital transformation, and trade integration will further strengthen the country’s position as a regional investment hub.

Emerging opportunities include:

• High-tech manufacturing
• Green energy
• E-commerce and digital services
• Supply chain diversification

Foreign companies that establish a presence today are well-positioned to benefit from Vietnam’s next phase of growth.

Conclusion

A‍ foreign company in Vietnam provides a great chance for growth, increased efficiency, and regional expansion. Vietnam is one of the countries that attracts global investors in 2026 as it is progressively opening up to 100% foreign-owned companies, has a competitive tax environment, and strong government support, among other reasons.

If you familiarize yourself with the law and other necessary regulations and work with good consultants, you will be able to establish and develop a foreign business in Vietnam without any difficulties.