Vietnam is attracting a growing number of foreign founders of startup. While foreign individuals can legally establish a company, the process involves specific investment licenses and compliance rules. This guide explains how to launch a foreign-owned startup in Vietnam successfully under the latest regulatory framework.
Can a Foreign Individual Start a Startup in Vietnam?
The short answer is: Yes. Vietnam’s Law on Investment and Law on Enterprises allow foreigners to establish companies in most sectors.
Historically, foreign founders faced a lengthy licensing hurdle (obtaining an Investment Registration Certificate first) before forming a company. Today, under the Law on Investment 2025 (No. 143/2025/QH15) and Decree 96/2026/ND-CP, foreign investors can establish a legal entity first (obtaining the ERC) and subsequently fulfill investment project requirements (IRC).
Legal Overview of Foreign Ownership
Under Law on Investment No. 61/2020/QH14, a “Foreign Investor” is defined as an individual with foreign nationality or an organisation established under foreign law.
While Vietnam has opened most of its market, your ability to own 100% of your startup in Vietnam depends on WTO Commitments and local investment laws. Tech startups, software, and e-commerce generally enjoy full foreign ownership without issue.
Key Differences: Local vs. Foreign Founders
| Aspect | Local Founder | Foreign Founder |
| Licensing Requirements | Only requires an Enterprise Registration Certificate (ERC) | Can now obtain the ERC first to form the company, but must subsequently secure an Investment Registration Certificate (IRC) within 12 months. |
| Business Sectors | Can operate freely in most sectors | Certain conditional sectors require specific preconditions, sub-licenses, or a local partner. |
| Setup Timeline | 3–5 working days. | Legal entity setup (ERC) takes ~3 days, but the full compliance process (ERC + IRC) takes 3–5 weeks. |
Common Business Structures for Foreign Startup Founders
Choosing the right legal entity is the first critical decision you will make. It impacts your liability, tax obligations, and ability to raise capital.
| Structure | Best For | Key Advantages | Key Drawbacks |
| 100% Foreign-Owned LLC | Most foreign individual founders | Full control over decision-making, clear ownership, limited liability, straightforward structure | Higher administrative and post-licensing compliance compared to local companies. |
| Joint Venture (JV) with a Vietnamese Partner | Conditional business sectors | Legal market access in restricted sectors, local expertise, and connections | Shared control, higher risk without a strong Shareholders’ Agreement (SHA). |
Many founders mistake a Representative Office (RO) for a startup vehicle. An RO is strictly for market research and promotion. It cannot conduct commercial revenue-generating activities, sign business contracts in its own name, or issue tax invoices. If you intend to operate a commercial startup, an RO is not suitable.
Step-By-Step Process to Launch a Startup in Vietnam as a Foreigner
Step 1: Define Business Activities & VSIC Codes
Before filing paperwork, you must identify your VSIC codes (Vietnam Standard Industrial Classification). Check if your chosen industry is “Unrestricted” or “Conditional” under Vietnamese law. Innovative tech startups are overwhelmingly unrestricted, allowing for 100% foreign ownership.
Step 2: Apply for the Enterprise Registration Certificate (ERC)
Under the updated “ERC-first” incorporation framework, foreign founders can establish the legal entity first.
- Process: Submitted online via the National Business Registration Portal. Authentication via a verified VNeID or electronic digital signature is required for submission.
- Timeline: ~3–5 working days.
- Result: Once issued, your company legally exists with a Tax ID. You can sign an office lease, open a corporate payment bank account, and hire employees.
- Important Restriction: Having an ERC allows you to execute preparatory steps, but you cannot commence commercial operations or generate revenue until you secure your IRC (within 12 months).
Step 3: Apply for the Investment Registration Certificate (IRC)
While you hold the ERC, you must obtain an IRC to legally validate your foreign investment project.
- Process: Submit an investment proposal, proof of financial capacity (e.g., bank balance statement), and office lease documents to the Department of Finance / DPI.
- Timeline: ~15 working days.
- Common Rejection Reasons: Insufficient proof of financial capacity, an unviable business plan, or unapproved office premises.
Step 4: Capital Contribution & Bank Account Setup
Open a Direct Investment Capital Account (DICA / FDIA) at a licensed bank in Vietnam. This is the mandatory legal channel through which you must inject charter capital and remit future profits home. You must contribute 100% of the registered charter capital within 90 days from the issuance date of your ERC.
Step 5: Post-Setup Compliance
After receiving your certificates, complete the following mandatory post-licensing steps:
- Make a public announcement of the company’s registration on the national portal.
- Register the digital corporate stamp/seal.
- Register for an electronic tax signature (Token) and e-invoicing system.
- Business License Tax (Lệ phí môn bài): Newly established companies are exempt from Business License Tax for their first calendar year of operation. Declarations must still be filed.
Minimum Capital Requirements for Foreign-Owned Startup
For most service and tech industries, Vietnamese law does not specify an explicit minimum capital amount. You declare what you intend to contribute. However, authorities will verify if your declared Charter Capital is feasible for your business plan during the IRC evaluation.
Note: Declaring an unrealistically low capital amount may lead to IRC application rejection on the grounds of commercial unfeasibility.
For a service-based software/tech startup, US$10,000–$20,000 is typically recognized as a practical baseline.
For capital-intensive industries (manufacturing, logistics, education), requirements are significantly higher.
Read Related: Open a Business Bank Account in Vietnam: Account Types, Benefits & Required Documentation
The Best Business To Start In Vietnam For Foreigners
Vietnam offers an active market for innovative foreign entrepreneurs. Prime sectors include:
Agritech & Green Tech: Benefiting from government incentives focused on sustainability and digital transformation.
FinTech, EdTech, SaaS, and E-commerce: Driven by high smartphone penetration, a young tech-savvy demographic, and strong digital adoption.
IT Development & Outsourcing: Leveraging Vietnam’s large, cost-effective tech talent pool.
Read More: Top Business Opportunities in Vietnam: Best Options for Foreign Investors
Visas & Work Permits for Foreign Startup Founders
Investor Visa (DT Visa)
Founders can qualify for an Investor Visa/Residency based on their capital contribution:
- DT4 Visa: Capital investment under 3 billion VND (~US$120,000) — valid for up to 12 months.
- DT1 / DT2 / DT3 Visa: Larger investments offer longer temporary residency cards (TRC) ranging from 3 to 10 years.
Work Permit Requirements & Exemptions
Capital ≥ 3 Billion VND: Owners/founders contributing 3 billion VND or more are exempt from needing a standard Work Permit (though a Work Permit Exemption Certificate must still be processed).
Capital < 3 Billion VND: If your capital contribution is below 3 billion VND, you do not qualify for investment-based work permit exemption. If you intend to actively serve as the Managing Director/CEO, you must secure a standard Work Permit as an foreign employee.
Common Mistakes Foreign Founders Make
- Failing to Secure the IRC: Having an ERC forms the legal shell, but failing to meet IRC requirements will prevent you from legally operating.
- Using Nominee Shareholders: Registering a company under a local friend’s name to bypass foreign setup procedures carries high legal risk and can result in total loss of business ownership.
- Missing the 90-Day Capital Deadline: Capital must be transferred from the founder’s overseas account into the company’s DICA/FDIA within 90 days of ERC issuance. Missing this deadline results in administrative fines and banking compliance issues.
Read More: Top 10 Mistakes Investors Make When Setting Up a Business in Vietnam
Costs & Timeline to Start a Foreign-Owned Startup
Timeline: Legal entity creation (ERC) takes ~1 week; full regulatory setup (ERC + IRC + DICA setup) takes 3 to 5 weeks.
Budget: Government registration fees are minimal, but professional legal/consulting fees for a complete foreign-owned setup typically range between US$2,000 and $5,000, depending on industry complexity.
Building a startup in Vietnam is a marathon, not a sprint. By ensuring your legal structure is sound and your compliance is airtight, you can focus on what really matters. This allows you to scale your business in one of the world’s fastest-growing economies.
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