Starting a Business in Vietnam: An Expat Guide

Published on May 4, 2026 and written by Cyril Jarnias

Moving to Vietnam to start a business is a promising venture, but one that requires meticulous preparation and a deep understanding of the local context.

A land of contrasts, Vietnam offers a dynamic, rapidly growing market brimming with opportunities for bold entrepreneurs. However, navigating the administrative intricacies and cultural nuances can be disorienting for expatriates.

This guide provides essential insight into the key steps to follow, from legal procedures to effective market entry strategies, and unveils the subtleties of a unique business landscape where tradition and modernity intertwine.

Choosing the Right Legal Structure in Vietnam

Choosing an appropriate legal structure is a fundamental step when setting up a business in Vietnam. This decision directly impacts owner liability, tax obligations, capital requirements, administrative procedures, and the company’s ability to grow. The Vietnamese legal framework recognizes several forms of business entities, each catering to specific needs and objectives. A thorough understanding of these structures allows entrepreneurs, especially foreigners, to minimize financial risks, optimize taxation, and comply with local regulations. This legal compliance from the outset is essential to avoid future administrative complications and secure long-term business operations.

Overview of Available Legal Structures

Sole Proprietorship

The sole proprietorship is the simplest form, owned and operated by a single individual. The owner assumes full responsibility for the company’s debts and obligations, meaning their liability is unlimited. This structure is suitable for small projects with limited financial risk and requires no minimum charter capital. However, the lack of separation between personal and business finances exposes the owner to significant personal asset risk.

Limited Liability Company (LLC)

An LLC is the most frequently chosen legal form by both Vietnamese and foreign investors. It comes in two variants: a single-member LLC (SME LLC) with one owner, and a multi-member LLC with 2 to 50 members. This structure has legal personality, allowing it to hire employees, enter into contracts, open bank accounts, and conduct business activities. Members’ liability is limited to their capital contributions, separating personal from business assets. Members cannot issue shares to the public, unlike a joint stock company. LLCs offer remarkable operational flexibility and relatively flexible capital requirements, explaining their popularity among foreign entrepreneurs.

Joint Stock Company (JSC)

A JSC is intended for larger enterprises needing to raise capital from multiple investors. It requires a minimum of three shareholders with no maximum limit. This is the only legal form that can be listed on the stock exchange in Vietnam and allows the issuance of shares to raise funds. Shareholders benefit from liability limited to the value of their shares. JSCs are particularly suitable for large companies with long-term expansion ambitions, although their governance is more complex than that of an LLC.

Partnership

A partnership is established between at least two partners who are co-owners and share responsibilities. This structure distinguishes between general partners (unlimited liability) and limited partners (limited liability). Partnerships offer an intermediate structure between sole proprietorships and more complex forms, but are less commonly used than LLCs.

Representative Office (RO)

A representative office is not an independent legal entity but an extension of a parent company, whether foreign or domestic. It cannot engage in any revenue-generating activity, issue invoices, or sign commercial contracts. This structure is suitable only for market research, business liaison, and promotional activities without generating direct income.

Branch Office

A branch office is an extension of a parent company, domestic or foreign, that conducts commercial activities on behalf of the parent. Unlike a representative office, it can generate revenue. However, it does not have independent legal personality, and liability is not separated from that of the parent company.

Business Cooperation Contract (BCC)

A BCC is a contractual relationship between a foreign enterprise and a local enterprise without forming a separate legal entity. Each party retains its own legal status. This structure is particularly useful in restricted or regulated sectors where direct foreign participation is limited.

Public-Private Partnership (PPP)

A PPP is a collaboration between the state and private enterprises to carry out infrastructure projects or provide public services, notably in transportation, energy, or water sectors. This structure involves a risk-sharing arrangement defined by contract but exposes parties to significant contractual and regulatory complexity.

Cooperative

A cooperative is established by at least seven members (individuals, households, or legal entities). Members contribute capital and/or labor, and profits are shared based on their participation. This structure is suitable for collective projects and social economy initiatives.

Household Business

A household business is a small structure typically managed by family members, with simplified tax and accounting requirements. It suits small family projects with minimal administrative complexity.

Comparison of Legal Structures

Aspect	LLC	JSC	Partnership	Sole Proprietorship	RO/Branch	BCC
Minimum number of owners	1 (SME LLC) or 2-50 (Multi-member LLC)	3 with no maximum	2 minimum	1	1 (parent company)	2 entities
Liability	Limited to contributed capital	Limited to share value	Unlimited (general) or limited (limited partners)	Unlimited	Not separate	Per agreement
Minimum charter capital	Required and controlled	Required and controlled	Varies per agreement	Minimal or none	Per parent company	Per agreement
Legal personality	Yes	Yes	Varies by type	No	No (RO) / Limited (Branch)	No
Ability to issue shares	No	Yes (can be listed)	No	No	No	No
Operational flexibility	Very high	Moderate	Moderate	Very high	Per parent company	Moderate
Administrative complexity	Moderate	High	Moderate	Low	Low	High
Access to restricted sectors	Conditional	Conditional	Conditional	Limited	Very limited	Relatively easier
Transfer of stakes/shares	Unanimous consent required	Free transfer	Per agreement	N/A	N/A	Per agreement

Liability and Financial Risks

The legal structure directly determines the extent of owners’ personal liability. With an LLC, liability is limited to the contributed capital, meaning creditors cannot pursue members’ personal assets in case of financial difficulties. This separation of assets is a major advantage for entrepreneurs. Conversely, with a sole proprietorship, liability is unlimited: the owner is personally responsible for all business debts. A JSC also offers limited liability, but its more complex governance and increased transparency requirements can raise the risk of disputes among shareholders. Partnerships vary by type: general partners bear unlimited liability, while limited partners enjoy limited liability.

Charter Capital and Financial Requirements

Vietnam imposes a minimum charter capital that is strictly controlled for LLCs and JSCs, unlike in France where a SCI (real estate company) can be set up without minimum capital. This capital must be paid up before or at the time of business registration. For an LLC, the minimum capital varies by sector and specific regulations. For a JSC, the minimum capital is also defined by law, and shareholders must contribute significant capital to justify the structure. Sole proprietorships are not subject to minimum capital requirements, but they cannot raise external capital in a structured manner. This minimum capital requirement in Vietnam is more restrictive than in France and necessitates financial planning prior to incorporation.

Tax Regime and Accounting Obligations

The tax regime varies by legal structure. LLCs and JSCs are subject to Corporate Income Tax (CIT), currently set at 20% in Vietnam. Sole proprietorships may be subject to Personal Income Tax (PIT) or CIT depending on their classification. Partnerships are generally subject to pass-through taxation, where income is taxed at the partner level. All structures must comply with Vietnamese accounting obligations, including maintaining books in accordance with local standards, preparing annual financial statements, and filing tax returns within prescribed deadlines. Companies must also pay Value Added Tax (VAT) if they exceed certain revenue thresholds.

Administrative Procedures and Registration Formalities

Registration procedures vary significantly by chosen structure. Setting up an LLC involves the following steps: preparing a charter declaration, registering with the Department of Planning and Investment (DPI), obtaining a business registration certificate, opening a bank account, and registering with tax authorities. Total duration ranges from 10 to 30 days depending on the complexity of the file and location. For a JSC, procedures are more complex: drafting articles of association, holding a general shareholders’ meeting, appointing a board of directors, registering with the DPI, and complying with stock exchange regulations if a listing is planned. Establishing a foreign branch also requires registration with the DPI and submission of documents from the parent company. For sole proprietorships, formalities remain simpler, primarily requiring a business registration declaration.

Considerations for Foreign Investors

Foreign investors benefit from a relatively open Vietnamese market, but certain restrictions apply depending on the sector. LLC and JSC structures are accessible to 100% foreign capital, while some sectors (telecommunications, media, air transport) require mandatory local ownership. BCCs are particularly useful for restricted sectors, allowing cooperation with a Vietnamese partner without creating a common legal entity. Representative offices offer a lightweight solution to test the market before major investment. However, the complete absence of direct foreign private ownership of land exposes investors to risks if the legal structure is inadequate. For real estate investments, structures equivalent to a French SCI are generally LLCs, but direct access to land ownership remains restricted for foreigners. Administrative procedures are longer and more complex than in France, often requiring a local partner to secure certain rights.

Recommendations for Choosing a Structure

The choice of legal structure depends on several critical factors: the nature of the business, growth objectives, funding sources, financial risks, and the sector’s regulatory requirements. For small projects or simple commercial activities, a single-member LLC (SME LLC) offers an optimal balance between administrative simplicity and personal asset protection. This structure is particularly suitable for expatriate entrepreneurs wanting to test the Vietnamese market with limited risk.

For growing companies needing external capital, a JSC is more appropriate, allowing share issuance and access to multiple investors. However, this structure involves more complex governance and increased transparency obligations.

For restricted or regulated sectors, a BCC with a trusted Vietnamese partner offers a pragmatic solution, enabling market access without creating a separate legal entity. This approach minimizes governance conflict risks while facilitating regulatory compliance.

For market research or business liaison activities prior to major investment, a representative office is a lightweight and low-cost option.

Before finalizing the choice, carefully verify sectoral permits, ensure all contracts are validated in the local language and translated, scrupulously comply with all tax obligations from the outset, and anticipate any recent regulatory changes. The support of specialized local advisors is essential to secure the investment and ensure ongoing legal compliance.

Major Differences from the French Context

Compared to France, setting up a business in Vietnam has substantial differences. In France, an SCI can be easily set up between individuals with no minimum capital or prior approval. In Vietnam, any acquisition must go through a legally recognized commercial structure, the minimum charter capital is strictly controlled, the corporate purpose must precisely match the intended operations, and administrative procedures are longer and more complex. Direct foreign access to land ownership is very restricted in Vietnam, whereas it is free in France. Partnering with a local entity is often necessary to secure certain rights in Vietnam, which is not required in France. Setup times range from 10 to 30 days in Vietnam, compared to a few days in France. Finally, tax and accounting obligations are stricter and more documentation-heavy in Vietnam, with significant penalties for non-compliance.

Key Points to Watch Out For and Common Pitfalls

Several common pitfalls threaten expatriate entrepreneurs in Vietnam. Failure to verify sectoral permits in advance can lead to administrative deadlocks or business closures. Mismatch between the legal structure and actual business activity creates risks of tax and administrative non-compliance. Insufficient legal documentation in the local language exposes you to disputes or misunderstandings with authorities. Non-compliance with tax obligations from the start generates penalties and late payment interest. Lack of specialized local advice increases the risk of inadequate legal setup. Neglect of recent regulatory changes (notably post-August 2024 and January 2025) can render the structure non-compliant with new legal requirements. Choosing an unsuitable local partner in a BCC or joint venture creates risks of conflicts of interest and loss of operational control.

Practical Legal Compliance Tips

Legal compliance from the start ensures secure business operations in Vietnam. First step: Carefully verify all sectoral permits with the DPI and relevant authorities before finalizing the incorporation documents. Second step: Ensure all contracts, articles of association, and incorporation documents are validated in Vietnamese and accurately translated into French or English for reference. Third step: Strictly comply with all tax obligations from the outset, including registering with tax authorities, setting up accounting in line with local standards, and declaring first revenues. Fourth step: Anticipate any recent regulatory changes by regularly consulting official sources and specialized local advisors. Fifth step: Maintain comprehensive documentation of all incorporation acts, amendments to the charter, and decisions of the general meeting or board of directors. Sixth step: Establish clear working relationships with local partners (if applicable) and formalize all agreements in writing. Seventh step: Set up a system for regular legal and tax compliance monitoring, especially through a local accountant or legal advisor.

Special attention: The complete absence of direct foreign private ownership exposes you to significant risks if the legal structure is inadequate. It is imperative to rely on recognized specialized local advisors to secure the long-term investment.

Mastering Administrative Procedures for Expatriates

Essential Steps for Obtaining Visas and Work Permits

Work Permit

The employer must first obtain approval to recruit a foreign worker by submitting an official request at least 30 days before the contract start.

Prepare the necessary documents, including:

• Work permit application form
• Medical certificate (less than 12 months old)
• Criminal record extract (less than 6 months old)
• Degrees and proof of experience
• Copy of valid passport
• 2 photos (4×6 cm)
• Job approval letter
• Employment contract

Submit the complete dossier to the Ministry of Labor or the competent provincial department at least 15 days before the start of employment.

Permit issued within 5 working days after validation.

Work Visa (LD1/LD2)

After receiving the work permit, the employer prepares and submits documents for the visa application:

• Form NA5 (visa application)
• Company business license
• Work permit
• Valid passport
• ID photo

Submit the application to the immigration department.

Receive the invitation letter and visa at the embassy or on-site.

Documents Required for Key Procedures

Procedure	Main Documents
Work permit	Form, medical certificate, criminal record, degrees, proof of experience, passport, photos
Work visa	Form NA5, business license, work permit, passport, photo
Company registration	Passport, business plan, proof of funds, local address, charter, registration form

Procedure for Registering as a Foreign Entrepreneur

• Choose the legal form (see table below)
• Prepare a dossier including:
  • Passport
  • Business project / charter
  • Proof of address in Vietnam
  • Proof of sufficient funds
• Submit the application to the Department of Planning and Investment of the province/city
• Wait for the enterprise registration certificate (2-4 weeks generally)
• Proceed with tax registration, opening a business bank account, and obtaining the official seal

Types of Companies Accessible to Expatriates

Company Type	Key Features	Advantages	Disadvantages
100% Foreign-owned Enterprise (LLC)	Wholly foreign-owned, limited liability	Management freedom, no local partner requirement	Longer procedure, sector restrictions sometimes apply
Joint Venture	Partnership with a Vietnamese entity	Access to certain regulated sectors	Sharing of control
Representative Office	No direct commercial activity, for market research or liaison	Simple procedure, little capital required	Limited activity, no invoicing possible

Opening a Bank Account as a Foreigner

• Provide:
  • Passport
  • Valid visa or residence card
  • Enterprise registration certificate (for business account)
  • Proof of local address
• Physical presence required at the time of opening
• Choose an international or Vietnamese bank with services suited to foreigners
• Recommendation: Favor large banks (Vietcombank, BIDV, Techcombank, HSBC)

Practical Tips and Local Resources

Turn to specialized expatriation service agencies, law firms, or local consultants for:

• Dossier preparation
• Certified document translation
• Support during administrative appointments

Consult foreign chambers of commerce (French, European, American) for recommendations on reliable service providers.

Refer to official ministry websites for the latest regulatory updates.

Recent Legislative Changes to Consider (2024-2025)

• Enhanced enforcement of Decree 152/2020/ND-CP on foreign worker management
• Work permit renewal limited to once (maximum total duration of 4 years)
• Increased scrutiny of experience and degree documentation
• Employer must prove unavailability of qualified local labor before recruiting a foreigner

Reliable Sources for Further Information

Official website of the Ministry of Labor, Invalids and Social Affairs (MOLISA)

National immigration portal: DVC Vietnam Immigration

Foreign chambers of commerce in Vietnam

Specialized agencies like Expat Assurance, Vietnam-visa.com, or international law firms based in Hanoi or Ho Chi Minh City

Understanding International Tax Considerations

Vietnam has signed numerous international tax agreements, primarily Double Taxation Agreements (DTAs), to avoid double taxation and prevent tax evasion on income and wealth. These agreements directly impact the taxation of foreign companies and expatriate entrepreneurs based in Vietnam.

Vietnam’s Main International Tax Agreements

Partner Country	Type of Agreement	Main Scope
France	Double Taxation Agreement	Income tax, corporate tax, wealth tax
Canada	Double Taxation Agreement	Income tax, profit tax, profit transfers
Indonesia, Japan, Germany, Switzerland, UK, etc.	Similar agreements	Income tax, corporate tax, other direct taxes

Vietnam has signed DTAs with over 80 countries, including most major trading partners.

Influence on Taxation of Foreign Companies

• Reduction of double taxation: DTAs help avoid the profits of a foreign company being taxed both in Vietnam and in the home country. Typically, tax paid in Vietnam can be credited in the company’s country of residence.
• Reduced withholding tax rates: Agreements often set ceilings for withholding tax on dividends, interest, and royalties. For example, if the standard withholding tax rate in Vietnam is 10%, the DTA may reduce it to 5% or less depending on the case.

Income Type	Standard Withholding Tax Rate	Reduced Rate via DTA*
Dividends	10%	5-10%
Interest	10%	5-10%
Royalties	10%	5-10%

*Exact rates vary by the relevant bilateral agreement.

Determination of tax residence: The agreements define criteria to determine tax residence and avoid dual residence.

Tax Obligations for Expatriate Entrepreneurs

• Worldwide income of an expatriate who is a tax resident of Vietnam is taxable.
• DTAs may allow a tax credit to avoid double taxation on foreign income.
• Expatriates are generally subject to Personal Income Tax (PIT) under a progressive rate scale from 5% to 35%.
• For non-resident foreign entrepreneurs, tax is generally withheld at source on Vietnamese-source income.

Administrative Steps for Tax Compliance

• Tax registration: Every foreign company must obtain a tax identification number from Vietnamese authorities.
• Tax declaration and payment: Submit monthly, quarterly, and annual tax returns depending on the nature of the business.
• Supporting documents: It is imperative to provide tax residence certificates to benefit from DTA advantages.
• Retention of records: Companies must keep documents related to international transactions, transfer pricing, and withholding tax.

Impact of Recent Changes in Vietnamese Tax Legislation

• Vietnam has recently strengthened transfer pricing controls and increased documentation requirements for international intra-group transactions.
• Corporate income tax rates remain around 20%, but certain sectoral and regional tax incentives have been revised.
• The entry into force of free trade agreements (e.g., EU-Vietnam) comes with a gradual reduction of customs duties, enhancing attractiveness for foreign investors.
• New regulations aim to better align Vietnamese taxation with international standards (OECD, BEPS), implying greater transparency and closer cooperation between tax authorities.

Summary of Implications for Foreign Investment

• Advantages: Reduced risk of double taxation, reduced tax rates on certain financial flows, greater legal certainty.
• Constraints: Increased administrative complexity, need for regulatory monitoring, strict documentation and compliance requirements.

To secure their tax position, foreign companies in Vietnam must rely on tax treaties, anticipate regulatory changes, and maintain rigorous compliance.

Leveraging Resources and Funding for Entrepreneurs in Vietnam

Main Sources of Funding Available for Entrepreneurs in Vietnam

• Local banks: Vietnamese banks (e.g., BIDV, VietinBank) offer credit to SMEs but often require collateral (real estate or land). Annual interest rates generally range from 7% to 10%. Provincial credit guarantee funds exist to facilitate access to bank credit, but requirements remain high for young companies without assets.
• Venture Capital (VC) Funds: Foreign funds dominate the market, representing nearly 90% of venture capital investments, with a growing presence of local funds and corporate venture capital. Major players include: 500 Startups Vietnam, Ascend Vietnam Ventures, Jungle Ventures, AVV, Seedcom, ThinkZone, and Vietnam Silicon Valley.
• Angel Investors: Present mainly in early stages of development, often investing alongside family and friends, with particular attention to reputation, sector expertise, and the investor’s network.
• Other channels: Microcredit, crowdfunding (still emerging), remittances from the Vietnamese diaspora, programs of international agencies (USAID, UNDP, World Bank).

Funding Source	Advantages	Main Limitations
Local banks	Large amounts, moderate rates	Collateral required, difficult access
Venture capital funds	Significant investments, expertise	Preference for tech sectors, high competition
Angel investors	Fast access, potential mentorship	Limited amounts, high selectivity
Microfinance, crowdfunding	Accessibility, speed	Small amounts, unclear regulations

Government Initiatives and Tax Incentives

• Subsidies and grants: The government offers subsidies, startup contests, innovation tax credits, and seed support funds.
• Decree 38/2018/ND-CP: Legal framework for establishing local venture capital funds and regulatory support for startup investment.
• Support programs: Incubation programs, public incubators, temporary tax exemptions for young innovative companies, tax relief on reinvested profits, administrative facilitation for startup registration.

Importance of Incubators and Accelerators in Vietnam

• Incubators: Offer workspace, mentorship, access to investor networks, training workshops, and personalized support for early-stage projects.
• Accelerators: Provide structured programs (often 3 to 6 months) to accelerate growth, with pre-seed investments, privileged access to funds, and industry partners.

How to Apply

1. Identify programs suited to your sector (e.g., Vietnam Silicon Valley, Zone Startups Vietnam, Founder Institute Vietnam).
2. Prepare a dossier (pitch deck, business plan, MVP).
3. Apply via online platforms or participate in selection events.
4. Take part in local hackathons or innovation contests to increase your chances of selection.

Non-Governmental Organizations and Professional Associations Supporting Foreign Entrepreneurs

• International networks: European Chamber of Commerce (EuroCham), American Chamber of Commerce (AmCham), Canadian Chamber of Commerce (CanCham).
• NGOs and agencies: USAID (funding and support programs), UNDP (social enterprise support), ADB, World Bank (entrepreneurial development projects).
• Local associations: Vietnam Business Angel Network (VBAN), Vietnam Association of Small and Medium Enterprises (VINASME), sectoral associations (FinTech, EdTech…).

Practical Tips for Building Professional Relationships in Vietnam

• Prioritize in-person meetings (events, fairs, meetups).
• Use professional social networks (LinkedIn, specialized Facebook groups).
• Seek introductions through local partners or mentors.
• Show respect for hierarchy and politeness during exchanges.
• Attend events organized by chambers of commerce and incubators.
• Value long-term collaborations over immediate gains.

Cultural and Regulatory Differences Impacting Access to Funding and Strategies to Overcome Them

• Network culture: Social capital (personal and professional relationships) often outweighs the financial file. Investing time in building trust is essential.
• Hierarchy and negotiation: Investment decisions often involve multiple levels of approval; adopt a patient and respectful approach.
• Language and documentation: Legal documentation is in Vietnamese; working with local lawyers and specialized translators is crucial.
• Fluctuating regulations: The legal framework evolves rapidly; stay informed through local partners and consider using legal structures in Singapore for international fundraising to facilitate transactions.

Overcoming Obstacles

• Surround yourself with reliable local partners.
• Participate in public or international programs to benefit from regulatory support.
• Prioritize transparency and compliance from the start.

Leveraging resources and funding in Vietnam involves articulating a solid project, integrating into the local ecosystem (incubators, professional networks), anticipating cultural specificities, and optimizing available public and private mechanisms.