Vietnam’s fast-growing economy, young workforce, and evolving consumer market make it one of Asia’s most promising destinations for foreign investors. For entrepreneurs and companies of all sizes, forming a Limited Liability Company (LLC) is one of the most practical and profitable ways to enter the market.
This guide is designed for foreign investors, startups, and expanding businesses seeking a clear path to setting up an LLC in Vietnam. You’ll find everything you need to know, including key characteristics, legal structures, and step-by-step procedures for successful registration and operation. This guide is backed by over a decade of real-world experience helping businesses launch in Vietnam.
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Definition of Limited Liability Company (LLC)
According to the Law on Enterprises 2020, a Limited Liability Company (LLC) in Vietnam consists of two types: Single-Member LLC and Multi-Member LLC.
Multi-Member LLC
This is an enterprise with between two and fifty members, which may be either organizations or individuals. Members are liable for the company’s debts and other financial obligations only up to the value of the capital they have contributed, except in cases provided under Clause 4, Article 47 of the Law on Enterprises 2020. The transfer of a member’s capital contribution is also restricted and can only be carried out in accordance with Articles 51, 52, and 53 of the same law.
Single-Member LLC
This is an enterprise owned by a single organization or individual, referred to as the company owner. In this type of structure, the owner is responsible for the company’s debts and other financial obligations, but only within the limit of the company’s charter capital.
(Clause 7, Article 2; Clause 1, Article 46; Clause 1, Article 74 of the Law on Enterprises 2020)
Main Characteristics of Limited Liability Company (LLC)
A Limited Liability Company (LLC) offers several advantages, making it the preferred choice for most foreign investors entering Vietnam. Key benefits include:
- Members enjoy limited liability, protecting their personal assets.
- The company has the right to issue bonds.
- It features a simple and flexible structure, making it easier to manage.
Read Related: 4 Steps to Setting Up a Company in Vietnam
Structure of Limited Liability Company (LLC)
Single-Member Limited Liability Company (LLC) in Vietnam
A Single-Member LLC has only one member, who is also the company’s owner. The owner is liable for the company’s debts and obligations, but only within the scope of their contributed charter capital.
Under the Law on Enterprises 2020, the company’s owner is the President, who may also serve as the Director/General Director, or appoint another person to that position. The President has the authority to establish or dismiss a board of members and enjoys broad decision-making powers.
Rights of the Company Owner
The owner of a Single-Member LLC has the right to:
- Draft and amend the company charter.
- Decide on the company’s business plan, development strategy, and organizational structure.
- Appoint or dismiss executives and controllers.
- Approve major contracts, investment projects, borrowing, lending, or asset transactions.
- Ratify financial statements and decide on capital increases, decreases, or bond issuance.
- Establish subsidiaries or contribute capital to other companies.
- Oversee business operations and determine the use of profits.
- Decide on restructuring, dissolution, or bankruptcy.
- Recover company assets after dissolution or bankruptcy.
- Exercise other rights granted under the Law on Enterprises and the company charter.
Rights of the Director/General Director
If the Director/General Director is not the owner, they may:
- Implement resolutions and decisions of the company President or Board of Members.
- Manage daily business operations and execute business plans.
- Issue company rules and propose organizational structures.
- Enter into contracts on behalf of the company (except those reserved for the owner/President).
- Recruit employees and appoint or dismiss executives (within their authority).
- Submit annual financial statements and propose profit distribution or loss settlement plans.
- Carry out other rights and obligations as defined by the company charter or their employment contract.
Conversion from Single-Member to Multi-Member LLC
If a company wishes to convert from a Single-Member LLC to a Multi-Member LLC, it must comply with the legal procedures and timelines set by Vietnamese law. For foreign-invested enterprises, this involves:
- Step 1: Amending the Investment Registration Certificate (IRC). Processing time: 15 days from submission of a complete and valid dossier.
- Step 2: Amending the Enterprise Registration Certificate (ERC). Processing time: 3 days from submission of a complete and valid dossier.
Read More:
- Investment Registration Certificate (IRC) in Vietnam: Complete Insights for Investors
- Obtaining an Enterprise Registration Certificate (ERC) for Company Setup in Vietnam
Multi-Member Limited Liability Company (LLC) in Vietnam
A Multi-Member LLC is established by two to fifty members, who may be individuals or organizations. Each member enjoys rights such as attending meetings of the Board of Members, voting in proportion to their capital contribution, receiving profits according to their ownership percentage, and priority in contributing additional capital.
Under the Law on Enterprises 2020, members are allowed to transfer their capital contributions to other members or non-members, but transfers must comply with the law and the company’s charter. A member may also request the company to repurchase their stake if they voted against a Board of Members resolution involving:
- Amendments to the charter concerning member rights or the Board of Members,
- Reorganization of the company, or
- Other issues as specified by the charter.
Like a Single-Member LLC, the Director/General Director may be appointed from outside the company and does not need to be a member.
Rights and Duties of the Board of Members
The Board of Members is the highest decision-making body and has authority to:
- Approve the company’s annual business plan and development strategy.
- Decide on increases or decreases in charter capital, the timing and method of raising capital, and the issuance of bonds.
- Approve investments, market expansion, marketing, and technology projects.
- Ratify contracts related to borrowing, lending, and asset sales above thresholds defined in the charter.
- Elect and dismiss the President of the Board of Members, and appoint or remove key executives including the Director/General Director, chief accountant, and controllers.
- Decide remuneration, bonuses, and benefits of executives.
- Approve financial statements and profit distribution or loss settlement plans.
- Decide the organizational structure, establish subsidiaries, branches, and representative offices.
- Amend the company charter, reorganize, or decide dissolution and bankruptcy.
- Exercise other rights granted by law and the company’s charter.
Rights and Duties of the Director/General Director
The Director/General Director is responsible for the company’s day-to-day operations, including:
- Implementing resolutions and decisions of the Board of Members.
- Managing daily business activities and executing approved business and investment plans.
- Issuing company rules and regulations unless otherwise restricted.
- Appointing or dismissing executives (within their authority).
- Entering into contracts on behalf of the company (except those reserved for the Board or President).
- Proposing organizational structures and submitting financial statements.
- Proposing profit distribution or loss settlement plans.
- Recruiting employees.
- Carrying out other rights and duties as specified in the charter, Board resolutions, or their employment contract.
Establishing a Limited Liability Company (LLC) in Vietnam
When entering Vietnam’s market, foreign investors are legally required to follow a set of incorporation and compliance procedures. Below is a step-by-step overview:
Initial Incorporation
- Legalize Foreign Documents
Prepare and legalize necessary documents from your home country (e.g., passports, bank statements).
Timeline: 7–14 business days - Lease an Office Address
Secure a business address in Vietnam. The office can be a building, house, or virtual office but not a residential apartment.
Timeline: 1–3 business days - Apply for the Investment Registration Certificate (IRC)
Submit the documents and appoint a Legal Representative (Nominee Director) who must reside in Vietnam.
Timeline: 35–40 business days - Obtain the Enterprise Registration Certificate (ERC)
Use the IRC to apply for the ERC, which officially establishes your company.
Timeline: 7 business days - Engrave and Register the Company Seal
Create the official company seal and declare it to the government.
Timeline: 7 business days
At this stage, your company is legally recognized as a business entity in Vietnam.
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Post-Incorporation Compliance
- Tax Registration
Register with the local tax authorities.
Timeline: 7 business days - Open a Corporate Bank Account
Set up a bank account and provide evidence of investment capital.
Timeline: 1–3 business days - Inject Investment Capital
Transfer the required investment capital into the account.
Timeline: within 90 days from ERC issuance - Install Company Signage
Place physical company signs at your business address (automatically provided for virtual offices).
Timeline: 2–5 business days - Obtain Sector-Specific Licenses
Apply for any additional permits required for your industry. - Register an E-Signature
Necessary for online tax filing and payments.
Timeline: 3–7 business days - Declare Business License Fee
File the required declaration with the authorities.
Timeline: 1–3 business days
Read More: Post-Incorporation Requirements in Vietnam: Licenses, Taxes and Compliance
Costs, Fees, and Taxes for Setting Up an LLC
When setting up a Limited Liability Company (LLC) in Vietnam, investors must plan for both incorporation costs and ongoing tax obligations.
Incorporation Costs and Fees
The main expenses during company formation include:
- Notary fees: Required for the preparation and notarization of incorporation documents (e.g. passports, bank statements). Costs vary depending on the region and the notary office. Many foreign investors opt for full-service incorporation packages, which can simplify the process and often reduce costs.
- Office lease: Every company must have a registered office address in Vietnam. This can be a physical office, house, or virtual office (not an apartment). Rental costs depend on the city, location, and business needs.
- Government fees: Several mandatory fees apply at the registration stage, including:
- Company name certificate
- Company seal and seal registration
- Business registration fee
- Purchase of VAT invoices
- Publication of the registration certificate on the National Business Registration Portal
- Annual business license fee
These expenses together form the initial financial commitment of starting an LLC in Vietnam.
Tax Obligations
Once established, LLCs in Vietnam are subject to taxation on their worldwide income, regardless of whether the investors are local or foreign. The key taxes include:
- Corporate Income Tax (CIT): Standard rate of 20%. In some cases, newly established companies, joint ventures, or startups may benefit from tax holidays or reductions during the early years of operation.
- Value-Added Tax (VAT): Applied at a standard rate of 10%, which is comparatively low in Southeast Asia.
- Business License Tax: Payable annually, based on the company’s registered charter capital.
- Other applicable taxes: Depending on the sector, companies may also be subject to excise tax, import/export duties, or personal income tax for employees.
Foreign-owned LLCs can take advantage of Vietnam’s double taxation agreements (DTAs), which help prevent overseas shareholders from being taxed twice on the same income.
Read Related: Real Challenges Foreign Companies When Doing Business in Vietnam in Their First Year
Conclusion
Setting up a Limited Liability Company (LLC) in Vietnam requires careful planning, not only for the initial incorporation process but also for ongoing tax compliance and financial management. From preparing and legalizing documents to handling government fees, office leasing, tax filings, and annual reporting, the requirements can feel overwhelming—especially for foreign investors new to the Vietnamese market.
This is where The Nest Asia can make the difference. With years of experience in market entry, company incorporation, and compliance services, we simplify every step for you. Our team handles documentation, government procedures, accounting, and ongoing tax obligations, so you can focus on growing your business.
New to Vietnam’s Market? Trust The Nest Asia’s Incorporation Experts!
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The Nest Asia is a one-stop resource offering comprehensive information, practical relocation advice, cultural insights, valuable connections, and trusted services to help expatriates living in Vietnam navigate the transition, overcome challenges, and build a fulfilling life abroad. Starting your journey in a new country can often feel overwhelming. The Nest Asia is your trusted partner – we’re here to simplify that process and ultimately make Vietnam feel like home for you and your loved ones.
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Disclaimer: The Nest Asia is not an authorized provider of official government or non-government services. The information provided is intended for general guidance only. While we strive to offer accurate and timely information, we make no representations or warranties regarding its completeness or accuracy.
