Setting Up a Business in Vietnam

How can I choose the right way to enter the Vietnam?

Start With the Right Plan and Support. As with any foreign country, Vietnam’s legal entity requirements, options and processes are unique, and establishing a legal entity requires the various costs of such an investment, time, and can bear other investment risks. Once investments are made, reversing strategies can be more challenging so it is vital that a company avoid missteps from the outset.

To optimize the chances for success, a business would do well to have better

• Informed and guided business model;
• Selection of business partners or suppliers to work with;
• Options for initial service lines, products, and pricing models;
• Options to set up in the right locations and more.

Obtaining on-the-ground information and practical experience in the market, can significantly help in these areas, and help position an enterprise for successes in Vietnam. Besides researching this Doing Business in Vietnam guide thoroughly, it is advisable to leverage professional assistance for further guidance with pre-market entry, investment decisions, entity set up, and all business, operational, and financial factors that will arise along the path to achieving your investment objectives. In this respect, the contributors of this Guide are available to provide this expertise, via the Chat or Contact us link buttons.

What should I consider when choosing a location in Vietnam?

Vietnam is a diverse country, where each industry, market, and location are different and one size does not fit all. To evaluate potential locations, there are numerous factors to consider including, the availability of materials, government policy, taxation, proximity to market, labor availability, incentives, infrastructure, local laws, and political stability.

To gain certainty with location selection, business investors are advised to employ a location-by-location comparative approach is essential for identifying which locations provides the best opportunity and optimally suits their needs. In some cases, this may require that a rigorous Location Selection process be undertaken, entailing a market study, a comparison model, long listing locations and screening, due diligence, and a final site selections, and arrangement of site visits.

Available download: Finding an Ideal Location – Utilizing Vietnam’s Economic Regions.

What are the steps to open a bank account in Vietnam?

One of the first decisions that will have to be made by investors is that of banking. Upon entering the Vietnamese market, foreign investors who wish to remit profits to their home markets will be required to open a

For companies considering investment in Vietnam, it is important to note that, while the use of direct investment capital account becomes important at the latter stage of the remittance process, it is in fact important to finalize banking arrangements on the front end of the investment.

For companies that have already established operations in Vietnam, direct investment capital account will have been set up during the transfer of funds to capitalize on given projects.

Understanding which actions require the use of a direct investment capital account, where restrictions are placed upon these types of accounts, and what documents must be prepared will all ensure that operations are optimized effectively.

How well-developed is Vietnam’s IP protection environment?

As Vietnam develops as an economy and becomes more integrated globally, partly through its free trade agreements, IP rights have become a highly important factor in how organizations view the business climate in Vietnam. Vietnam is thus keenly developing its IP laws to help further support its attractiveness and, at the same time, participates in numerous international IP conventions, notably as follows:

• The Paris Convention for the Protection of Industrial Property,
• The Berne Convention for the Protection of Literary and Artistic Works,
• The Rome Convention,
• The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement,
• The Patent Cooperation Treaty,
• The Madrid Protocol and
• The Hague Agreement.
• Free Trade Agreement between Viet Nam and the European Union;
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Vietnam’s IP system is divided into three areas as shown in the below table, together with the respective administration organ.

These offices function in conjunction with international conventions in most regards, though some unique treatment distinctions and protection time limits exist, that companies should be aware of.

What are the alternatives to setting up an LLC or FIE in Vietnam?

A company can choose from several business types options when aiming to enter Vietnam: A 100% Foreign-Owned Enterprise in the form of an “LLC” (Limited Liability Company) or Joint-Stock Company; a Branch Office; a Joint Venture; or a Public Private Partnership. Each of these types may require a significant period of time and investment to set up and may bring about certain amounts of risk to the investment.

Aside from setting up a corporation, there are a few other alternatives that are available that may help a company to get started doing business in, and with Vietnam, in shorter periods of time and with less risk, as are detailed below in this section.

Representative office

One such type is a Representative Office (RO), which offers a low-cost entry option for many companies, and are among the most common for companies that are first-time entrants to the Vietnamese market. RO are often suitable for companies that may be seeking to gain a better understanding of the Vietnamese market with a smaller initial investment, and may be used to pave the way for a larger presence within the country in future years.

ROs are currently permitted to engage in the following activities:

• Conducting market research;
• Acting as a liaison office for its parent company;
• Promoting the activities of its head office through meetings and other activities that leads to business at later stages.

Employer of Record in Vietnam: Get started without an entity

An increasingly well-known alternative to establishing an entity worldwide, is that of the EOR (Employer Of Record) model often provided by a Professional Employer Organization (PEO). This model can allow a company in one country to hire employees in another country, without first establishing a company or representative office.

An increasing number of firms today are beginning their market entry in this manner, to first learn about and test a market before making a larger commitment to it. Other companies use the model to meet short-term project-based needs in a country. Whichever the case, companies enjoy a lower cost route to market, which helps to hedge against the risks more inherent to fixed investment entry.

In Vietnam, PEO services can enable foreign investors to compliantly onboard, manage and ensure the payment of people, without the costs and risks associated with setting up a legal entity – in the short-term. This enables companies to place boots on the ground, without needing to physically set up a establishment, which can save companies time and money. Your PEO provider would put your employees on their payroll, and take care of maintaining compliance with all local employment laws, and could assist you in sourcing and recruiting candidates in Vietnam as well.

Importer of Record in Vietnam: Fast-tracking your supply chain

An Importer of Record (IOR) in Vietnam is not just a middleman—it is the legally recognized individual or entity responsible for ensuring that your imported products fully comply with Vietnamese laws and regulations. This role covers a wide spectrum of activities, from preparing the right documentation and classifying goods accurately, to paying duties and taxes, and securing the necessary import permits and licenses.

In practice, the IOR can be the owner, purchaser, or a licensed customs broker empowered through a Power of Attorney (POA). They are the party that customs authorities hold accountable for the shipment, meaning they also assume financial liability for duties, tariffs, and compliance with local regulations. In Vietnam, this includes:

• Creating and maintaining a compliant list of imported products.
• Handling all duties, taxes, and other statutory fees.
• Clearing goods efficiently through customs.
• Ensuring delivery to the final destination without legal or logistical complications.

By managing these legal and administrative requirements, the IOR eliminates the need for foreign businesses to set up a local entity solely for import purposes—effectively fast-tracking market entry. This can be a critical advantage, especially since certain Vietnamese import permits, certificates, and licenses take considerable time and local knowledge to obtain. Without an IOR, businesses risk delays in production, distribution, and operations, which can directly translate into lost revenue and market opportunities.

Because the IOR is ultimately liable for the shipment and its compliance status, they play a crucial role in preventing costly mistakes such as misclassification of goods, incorrect valuation, or shipment seizures. In short, the IOR serves as your compliance guardian and logistics enabler in Vietnam, ensuring your supply chain flows smoothly from port to production line.

How difficult is it to close a business in Vietnam?

Closing a business in Vietnam requires a number of steps over an extended time process. It may take time for executives to become fully aware of the responsibilities they can face in dissolving or liquidating a company, but they are somewhat extensive. Here is a very brief summary of the procedural stages required to close a business in Vietnam:

• Issue a decision of dissolution statement.
• Numerous Steps in Debt resolution.
• Closing of the corporate tax code.
• Bank account closure and stamp destruction.
• Submission of a dossier to the provincial Department of Finance (DOF).