Establishing a foreign-invested enterprise (FIE) in Vietnam, where the company is 100% foreign-owned, generally takes around 2 to 4 months, depending on the nature of the business and company type. For those looking for a quicker setup, a Representative Office can be established in about half the time; however, the permitted business activities for Representative Offices are more limited.

 Step 1: Pre-Investment Approval

For large-scale investment projects, companies may need to obtain approval from Vietnamese authorities before proceeding with the business setup process. This step is crucial to determine if your investment project falls under the category requiring special government approval, and if so, to prepare the necessary documents in advance and accommodate potential processing delays.

Projects that often require special approval include:

• Residential housing developments;
• Airports, air transport businesses, cargo terminals, and seaports;
• Petroleum processing facilities;
• Casinos and betting businesses;
• Industrial zone and export-processing zone infrastructure;
• Nuclear power plants;
• Golf course developments;
• Special land use rights projects;
• Projects in sensitive locations, such as islands, borders, coastal areas, and other defense-sensitive zones;
• Heritage or protected area projects;
• Projects that involve relocating inhabitants; and
• Projects requiring the conversion of forests or agricultural land, such as rice fields.

For projects that fall under these categories, understanding the specific requirements and preparing for potential delays is critical.

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Step 2: Investment Registration Certificate (IRC) Application

The first official step in setting up a foreign-owned company in Vietnam is to apply for an Investment Registration Certificate (IRC). This certificate is mandatory for all foreign investment projects, granting the company the legal right to invest and operate within the country.

To apply for an IRC, investors need to prepare:

• Application for implementation of the investment project, detailing the proposed activities in Vietnam;
• Proposal of the investment project, which includes specifics such as land use requirements or lease agreements;
• Financial statements for the last two years, demonstrating the investor's financial capacity (additional documents may be requested);
• Legal documentation of the investors and their authorized representatives, particularly if the investor is an organization;
• Lease agreement or memorandum of understanding (MOU) regarding the project location; and
• Other supporting documents, depending on the nature of the project and specific legal requirements.

Timeframe: The processing of an IRC typically takes 15 working days from the date of document submission. However, if the intended business activity is outside the scope of the World Trade Organization (WTO) regulations, the process may take longer.

Step 3: Enterprise Registration Certificate (ERC) Application

The next step after obtaining the IRC is to apply for an Enterprise Registration Certificate (ERC), which is required for all entities wishing to establish a new business in Vietnam. The ERC also serves as the company’s tax registration number once issued.

The application should include:

• Application for enterprise registration;
• Company charter, outlining the company’s organizational structure and operations;
• List of board members;
• List of legal representatives; and
• Letters of appointment and authorization for legal representatives.

Note: All foreign documents must be notarized, legalized by consular officials, and translated into Vietnamese by recognized authorities.

Timeframe: The ERC application is generally processed within **three working days** from the date of submission.

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Step 4: Post-Licensing Procedures

After securing the IRC and ERC, additional steps are necessary to finalize the company’s setup and begin operations. These steps include:

• Seal carving: Creating an official company seal;
• Bank account opening: Establishing a bank account for financial transactions;
• Labor registration: Registering the company’s workforce;
• Payment of business license tax;
• Charter capital contribution: Contributing the pledged charter capital within the required timeframe;
• Public announcement of company establishment.

Minimum Capital Requirements for Business Setup

Vietnam does not have mandatory minimum capital requirements for most sectors. However, the Department of Planning and Investment evaluates the registered capital to ensure it is adequate to cover initial operating costs until the business can generate revenue. In some cases, a service-based company can be set up with less than USD 15,000, though this amount may vary depending on the business type.

Industries with Specific Capital Requirements:

• Finance, banking, insurance, and financial technology (fintech);
• Language centers and vocational schools;
• Medical clinics.

Note: The selected amount of registered capital, once approved, will be stated on the company’s Business Registration Certificate. A higher registered capital can positively influence the company's credibility. If the capital amount needs to be changed after registration, a formal application is required.

Charter Capital and Total Investment Capital

- Charter Capital: The value of capital and other assets contributed by the owners at the time of company formation.

- Total Investment Capital: Combines charter capital with loan capital, which can include shareholder loans or third-party financing. Both the charter capital and the total investment capital must be registered with Vietnam's licensing authorities.

Capital Contribution Schedules

Investors are required to contribute the pledged capital within 90 days of the company’s establishment unless otherwise approved by the local licensing authority.

Transferring Capital to the FIE

Foreign investors must establish a capital bank account with a licensed bank in Vietnam to facilitate capital transfers. This account, a **foreign currency account**, tracks the flow of capital and supports various in-country transactions.

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Registered Address and Resident Director Requirements

1. Company Registered Address: A legal address is required, with most businesses needing a physical location (e.g., office, manufacturing site). For certain service-based companies, a registered office may suffice.

2. Company Legal Representative: A company must appoint at least one legal representative with a residential address in Vietnam. While a foreign national can serve in this role, a work permit will be needed.

Lawyer: Mr. Tony

Phone: +84 919 195 939

Email: tuulawyer@nvcs.vn

Website: nvcs.vn