Foreign Ownership in Vietnam: Can Outsiders Own a Business?

As per Vietnamese laws, foreigners can have up to 100% ownership of a business except for certain restricted industries. Since the laws in Vietnam regarding companies are according to the general rules of the World Trade Organization foreigners find the country attractive for setting up businesses.

In fact, foreigners don’t even need approval from the Vietnamese government to start a business in most categories. However, if there aren’t any clear laws about a certain business category related to foreign investment foreigners may be required to get approval.

With that said not all cases of foreign investment in Vietnam are going to be straightforward. That is where a professional business establishment consultancy such as Zora Consulting comes into play. Whether you want to form a 100% foreign-owned business or a partnership in Vietnam we can help you achieve your goals.

There are many things to consider when establishing a business in Vietnam as a foreign investor. We have covered the topic of foreign business ownership in Vietnam in detail through this article so keep reading.

What are the different forms of business that foreigners can establish in Vietnam?

When a foreigner wants to establish their business in Vietnam they have to choose the structure for their business.

Here are the most common types of business entities foreigners can establish in Vietnam:

Limited Liability Company (LLC): An LLC is a popular form of business around the globe and Vietnam also allows foreigners to establish LLCs.

When establishing an LLC in Vietnam foreign investors have the opportunity to establish a 100% foreign-owned business.

However, an LLC can also be formed with a joint venture between foreign investors and at least one local investor.

An LLC has the advantage of limited liability for the investors and it is usually the preferred form of business for foreigners.

Branch office: A Branch Office is another great form of business for foreign investors that already have an established enterprise in another country. Vietnamese company laws allow foreign business entities to establish branches in most sectors. However, some forms of businesses are restricted from establishing a branch in Vietnam. In addition, a foreign entity can only establish a branch in Vietnam if they have been registered and operating for more than 5 years in another country.

Joint stock company: Foreign investors can own a company in Vietnam by acquiring shares of a company. However, the ownership a foreign individual may have in a joint stock company is represented by the amount of shares they hold. 

As per law, a JSC is required to have at least 3 shareholders however there is no limit to the maximum number of shareholders.

A JSC can either be 100% foreign-owned or it can take the form of a joint venture between foreign and local shareholders.

What are business areas that are conditional for foreign investor in Vietnam?

This is one of the most common questions we get at Zora Consulting from foreign clients. As mentioned above there are some sectors that foreign investors need to meet certain conditions in order to invest in. The conditions would be in terms of sub-license requirement, or capital amount, joint venture with a local partner, or corporate investor rather than individual investor, etc.  Here is a list of some business areas that are conditional for foreign investors in Vietnam:

Education

Accounting & auditing

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Logistics

Tourism

Real estate

E-commerce

What are the requirements for establishing a company in Vietnam?

Now that you know the answer to the question can a foreigner own a business in Vietnam the next question that comes to mind is about the requirements of business establishment. Without further ado here are some important requirements that foreigners must fulfil if they want to establish a business in Vietnam:

Capital requirements: When it comes to capital requirements for setting up a business in Vietnam there is no specific capital requirement or limit. However Vietnamese law does require the foreign business to have enough capital to sustain its operations until it doesn’t rely on external funding.

So if you want to establish a business in Vietnam you should have a capital of VND 230 million or $10,000 for a regular-sized company.

Directorial requirements: Another requirement of establishing a business in Vietnam is that the company should have one director with a local address in the country.

It is important to note that the law doesn’t require the resident director to be a Vietnamese citizen. Even if a foreign director has a local address they can still fulfil the directorial requirements.

A Vietnamese business address: Along with the requirement of a resident director foreign businesses are required to have a local business address. A physical address is the best option for businesses that are looking to establish long-term goods-based business in Vietnam.

However, service-based companies can also use a virtual Vietnamese address to fulfil this requirement. Zora Consulting can help you figure out the best way to fulfil these requirements while keeping the process simple and affordable.

Conclusion

So there you have it foreign businesses have been thriving in Vietnam thanks to its strategic location and low labor costs. If you were wondering if foreigners are allowed to own a business in Vietnam this article should answer your question.

While establishing a business in Vietnam may seem complicated at first glance it can be simplified if you have the right team to support you. Zora Consulting has the expertise and the knowledge needed to ensure proper business establishment for foreign investors. Get in touch with us today to discuss how we can make the process of business establishment in Vietnam easier for you.