Compliance, operations, and navigating business setup in Vietnam for foreign entrepreneurs
Doing Business in Vietnam: A Comprehensive Guide
Introduction
Vietnam remains one of Southeast Asia’s fastest-growing economies. GDP grew an estimated 8.02% in 2025, the second-highest rate of the 2011-2025 period (according to the National Statistics Office), and foreign direct investment reached USD 27.6 billion that year. The country is a favored destination for China plus one manufacturing, backed by competitive costs, a young workforce and open investment policies. Whether you are in manufacturing or IT services, Vietnam offers a large export base, a deep network of free trade agreements and government incentives worth understanding before you commit.
Key Business Metrics and Advantages
Economic Growth and Business Environment:
Vietnam has spent the past few years simplifying business registration and cutting administrative procedures, including the two-tier local government model that took effect in July 2025. Setting up a Limited Liability Company (LLC) typically takes 4-8 weeks, depending on the industry and how accurate your documents are. Working with local experts who know the registration process is still the reliable way to avoid delays.
Tax Regime:
- Corporate Income Tax (CIT): The standard rate is 20%. Under the new Corporate Income Tax Law No. 67/2025/QH15, which applies from the 2025 tax period, micro-enterprises (annual revenue up to VND 3 billion) pay 15% and small enterprises (revenue of VND 3-50 billion) pay 17%. Preferential rates also apply to encouraged sectors such as high technology and infrastructure. On top of that, Resolution No. 43/2026/QH16 cuts CIT payable by 30% for the 2026 and 2027 tax periods for enterprises with annual revenue up to VND 10 billion.
- Value-Added Tax (VAT): The standard rate is 10%, temporarily reduced to 8% for most goods and services through December 31, 2026. Unless the National Assembly extends the reduction, the standard 10% rate applies again from January 1, 2027. Reduced rates of 5% and 0% apply to essential goods and qualifying exports.
- Personal Income Tax (PIT): Resident individuals are taxed on a progressive schedule of 5% to 35% (five brackets under the new Personal Income Tax Law No. 109/2025/QH15, effective July 1, 2026); non-residents pay a flat 20%. The family circumstance deduction is now VND 15.5 million per month for the taxpayer and VND 6.2 million per dependant.
Foreign Ownership and Restrictions:
Vietnam permits 100% foreign ownership in most sectors. Industries such as telecommunications and broadcasting remain conditional, so market access commitments and the investment negative list should be checked before you finalize the structure. Opening a corporate bank account requires your Enterprise Registration Certificate and, for foreign-invested projects, the Investment Registration Certificate, plus identification for the legal representative – who must also complete biometric verification with the bank, a requirement enforced since July 2025. Knowing these steps early makes planning far easier, particularly in regulated sectors.
Types of Business Structures in Vietnam
- Limited Liability Company (LLC): The default choice for SMEs. Flexible management, limited liability, and full foreign ownership. Suitable for trading, services and light manufacturing.
- Joint-Stock Company (JSC): Built for equity financing and future listing. A JSC can issue shares to raise capital from multiple shareholders.
- Representative Office: Market research and non-commercial activity only. A low-commitment way to test the market before incorporating.
- Branch Office: Can trade in approved sectors, typically used by established international businesses extending existing operations into Vietnam.
We discuss this in more detail in our post about optimal company structures.
Whichever structure you choose, it will be governed by the Enterprise Law (Law No. 59/2020/QH14, as amended, most recently by Law No. 76/2025/QH15) and, for foreign-invested projects, the Law on Investment No. 143/2025/QH15 and its guiding decrees.
Setting Up an LLC in Vietnam
- Business Structure Decision: Match the entity type to your operational goals, capital plans and licensing needs.
- Document Preparation: File the business registration application, company charter and member or shareholder list, confirm capital, provide identification documents, and secure a lease for office space.
- Beneficial Ownership Information: Since July 1, 2025, newly established enterprises must collect and keep beneficial ownership information and provide it to state agencies on request; existing companies file it whenever they change their enterprise registration details.
- Obtaining Necessary Licenses: Apply for sector-specific licenses through the provincial registration authority or the relevant line ministry, depending on your industry.
- Company Seal and Bank Account: Adopt a legally compliant company seal and open a corporate bank account for day-to-day transactions.
- Tax and Social Insurance Registration: Register for a Tax Identification Number (TIN) and register employees for social, health and unemployment insurance as required.
Corporate Banking in Vietnam
Opening a corporate account takes roughly 2-3 weeks. Banks require incorporation documents, identification for the legal representative and information on expected transaction activity, and they verify the account before activation. Most banks offer multi-currency accounts, which keeps international transfers straightforward. Note that since mid-2025 banks can suspend electronic transactions on corporate accounts whose legal representative has not completed biometric verification, so treat this as an opening-day task, not an afterthought.
Compliance and Licensing
Businesses in finance, healthcare and manufacturing may need special licenses, some with annual renewals. Non-compliance can mean penalties or suspension. Routine compliance work includes monthly or quarterly payroll filings, PIT withholding, social insurance contributions and periodic investment reporting, which runs on its own calendar (see our annual compliance checklist for foreign-owned companies). Staying current with labor law keeps operations smooth and reduces the risk of disputes.
Depending on your company type and industry, you may also be required to appoint a Chief Accountant.
Visas, TRCs, and Work Permits in Vietnam
- Investor Visa: Available to shareholders and key stakeholders, with validity of roughly 1-5 years depending on the investment category.
- Work Permits: Required for foreign employees working in Vietnam for more than three months. The application needs proof of professional qualifications and a sponsoring employer.
- Application Process: Passport, health certificate and criminal background check, with processing typically taking 1-3 months. Temporary Residence Cards often follow the work permit.
Closing a Business in Vietnam
- Formal Dissolution: Pass a shareholder or member resolution, complete final tax returns, and de-register with the provincial business registration authority.
- Financial Obligations: Settle outstanding debts, pay all due taxes, and complete employee terminations under Vietnamese labor law.
- Alternative: Temporary suspension lets you pause operations without closing the company, preserving the registration and licenses for later use.
We discuss this in more detail on our post about Company Dissolution in Vietnam.
Conclusion
Vietnam rewards well-prepared entrants. Registration is only the start: tax obligations, employment rules and periodic reporting will shape your week-to-week operations, and the rules have moved substantially since 2025. Build your 2027 plan around the current tax rates and filing calendar, not last year’s.
United Consulting handles business setup, licensing and ongoing compliance for foreign investors in Vietnam. Whether you are a startup establishing your first entity or an established company expanding, we make the process smooth and keep you on the right side of the rules.
Contact us to discuss your business goals in Vietnam.
