Establishing an FDI company in Vietnam: Legal requirements and investment capital

Vietnam has become one of the most attractive destinations in Asia for foreign investors, thanks to its increasingly favorable business environment, reasonable operating costs, and strategic location within the ASEAN region. However, establishing a foreign-invested enterprise (FDI company) in Vietnam requires a clear understanding of the legal framework and investment capital requirements. This article outlines the essential elements investors should know before getting started.

1. Who can establish an FDI company in Vietnam?

Any foreign individual or organization can establish an FDI company in Vietnam, provided they meet the conditions stipulated by the Law on Investment and the Law on Enterprises. An FDI company may take one of the following forms:

• A 100% foreign-owned company
• A joint venture between a foreign investor and a Vietnamese partner

Depending on the business sector, investors may own all or part of the company’s charter capital.

2. Basic legal requirements

a. Investment registration certificate (IRC)

This is the first and mandatory step for foreign investors. The IRC application dossier includes:

• Investment project proposal
• Financial capacity report
• Explanation of business sector, location, and investment capital
• Passport (for individuals) or business registration certificate (for foreign organizations)

Processing time: Around 15 working days from the date of full submission.

b. Enterprise registration certificate (ERC)

After obtaining the IRC, the investor must apply for the ERC to formally establish the company. The application includes:

• Company charter
• List of members/shareholders
• Power of attorney (if applicable)
• A legal business address in Vietnam

Processing time: Around 3–5 working days.

3. What Is the Minimum Investment Capital?

Vietnamese law does not set a universal minimum capital requirement for all FDI companies. However, in practice, investment capital must:

• Match the scale and nature of the project
• Be sufficient to cover initial operational costs
• Be legally sourced (transferred via an investment capital account in Vietnam)

Some business sectors have specific minimum capital requirements, for example:

• Foreign language training centers: From VND 1–3 billion
• Logistics and transportation services: From VND 10 billion
• Finance companies: As per regulations by the State Bank of Vietnam

4. Conditions based on business sector

Vietnam classifies business sectors into three groups:

• Unconditional sectors: Open to foreign investment without additional licenses (e.g., IT, manufacturing, trading)
• Conditional sectors: Require additional licenses or permits (e.g., education, logistics, real estate)
• Prohibited sectors: Include weapons, explosives, narcotics, and other dangerous activities

Foreign investors should carefully review the list of conditional sectors (Appendix IV – Law on Investment 2020) before proceeding.

See also: Conditional business sectors for foreign-invested companies

5. Additional considerations

• Office and registered address: Must be clear, legal, and not located in a residential apartment if such use is not permitted.
• Capital transfer: Capital contributions must be made via a dedicated foreign investment bank account, in foreign currency or VND.
• Periodic reporting: FDI enterprises must submit quarterly and annual investment activity reports.
• Tax procedures: Must register a tax code, open a corporate bank account, and fulfill all tax obligations (VAT, CIT, PIT, etc.).

Establishing an FDI company in Vietnam is entirely feasible and full of potential, but it requires thorough legal and financial preparation. Understanding the IRC, ERC, capital requirements, and applicable business sectors can help investors save time, minimize risks, and build a strong foundation for long-term success.
If you need in-depth consulting support in the process of establishing an FDI enterprise in Vietnam, please contact Zora Consulting - an investment and legal consulting unit with practical experience, a professional team and a good understanding of the Vietnamese market.