Good to know
Good to Know
- A Vietnamese local partner is NOT legally required to fully own a business in Hanoi — 100% foreign ownership is available in most sectors — but a handful of 'conditional' sectors (e.g. advertising, gaming, agriculture/forestry, some logistics services) do require a joint venture with a local entity.
- Vietnam changed its investment-licensing sequencing rules effective March 1, 2026 (Law on Investment 2025): some foreign investors can now register the company entity (ERC) before completing the separate investment project approval (IRC), reversing the previous mandatory order. Because this is a very recent change, get current guidance from a licensed local lawyer rather than relying on older articles.
- Budget for real timelines of roughly 6 weeks to 4 months rather than the theoretical 15+5 working-day statutory minimum — legalizing home-country documents and address/lease requirements are the most common sources of delay.
- Residential apartments and condos are generally not accepted as a company's registered office address in Hanoi; you'll need a commercial office lease, a compliant co-working space, or an MOU-to-lease arrangement with a landlord (many landlords want to see your ERC before signing a full lease, so a short-term MOU is a common workaround).
- The government filing fee itself is tiny (about VND 100,000, under $5), but realistic total setup cost — including legal/translation/notary fees — is what actually determines your budget, commonly landing between roughly $1,000-$3,000 for a straightforward service business using a local firm.
- Foreigners cannot legally register as a sole proprietor or 'freelancer' business owner in Vietnam — the lightest legal option available to a foreign founder is a single-member LLC, which comes with real ongoing compliance (monthly/quarterly VAT, quarterly CIT payments, annual finalization) even at very low revenue.
- Standard corporate tax is a flat 20% on company profit with no tax-residency concept for the company itself — incorporation is what triggers the obligation, not physical presence.
- VAT is temporarily 8% instead of the usual 10% for most goods/services through the end of 2026 — useful to know when pricing invoices, but this is a temporary relief measure that could revert.
- Vietnam's tax rules for foreign-invested companies were rewritten quite recently (new CIT Law, Decree 320, Circular 20, and a new Investment Law all took effect between late 2025 and March 2026) — it's worth confirming current rules with a local accountant rather than relying on older guides.
- Using a Vietnamese friend or partner as a 'name-lender' to run a household business or sole proprietorship on your behalf is illegal and has real risk of losing control of the business — the safer route for a foreigner is proper LLC incorporation.
Filing Obligations
- Corporate Income Tax
- Quarterly provisional CIT payments are required based on estimated annual profit — even in a loss-making or pre-revenue quarter, a newly incorporated company must still file from its first taxable quarter. Provisional payments must reach at least 80% of the eventual annual liability or late-payment interest applies to the shortfall. The annual CIT finalization return is due within 90 days of fiscal year-end (commonly 31 March for calendar-year filers).
- VAT
- VAT is declared and paid monthly (most FDI companies) or quarterly, generally due by the 20th of the following month (monthly filers) or by the last day of the first month of the next quarter (quarterly filers).
- E Invoicing
- Newly incorporated companies must register for tax and set up Vietnam's mandatory e-invoicing system essentially immediately after incorporation, alongside their first provisional tax obligations.
- Amendment Window
- Businesses can currently submit amended declarations within 10 years of the original filing deadline (provided no audit has been announced); this window is set to shorten to 5 years from July 2026.
Penalties
- Under Declaration Penalty Percent
- 20
- Late Payment Interest
- A daily interest charge of 0.03% applies to unpaid tax on top of any administrative fine.
Late Filing Fine Range
- Amount USD Max
- 954
- Amount USD Min
- 76
- Currency Local
- VND
- Amount Local Max
- 25000000
- Amount Local Min
- 2000000
Corporate Income Tax
- Preferential Rates
- Reduced rates of 10%, 15%, and 17% exist for small Vietnamese enterprises or specific incentivized sectors/zones, but a typical foreign-owned service/consulting/trading company will not qualify — those rates are aimed at small domestic enterprises or specific investment-incentive projects, not standard FDI service companies.
- Standard Rate Percent
- 20
- Basis
- Vietnamese-incorporated entities (including 100% foreign-owned LLCs and JSCs) are taxed on worldwide income at the standard rate; there is no CIT residency concept — tax liability attaches to the entity's incorporation in Vietnam, not to where the owner lives.
- Foreign Contractor Tax
- If a foreign company does business in Vietnam without setting up a local entity (e.g. invoicing Vietnamese clients directly from abroad), it is treated as a 'foreign contractor' and the Vietnamese payer must withhold Foreign Contractor Tax, which bundles a CIT component and a VAT component on gross revenue rather than net profit.
- Regulatory Note
- Vietnam's CIT/VAT/tax-administration rules were substantially rewritten in late 2025/early 2026 (new CIT Law 67/2025, Decree 320/2025, Circular 20/2026, new VAT Law effective 1 January 2026), so a company's compliance setup should be checked against current rules each year rather than assumed static.
Value Added Tax
- Temporary Rate Note
- The standard 10% VAT rate is temporarily reduced to 8% for most eligible goods and services through 31 December 2026 (some sectors like telecom, finance, banking, real estate, and IT products are excluded from the reduction).
- Standard Rate Percent
- 10
- Temporary Rate Percent
- 8
- Input VAT Documentation Threshold
- ₫20,000,000
Purchases above this amount require non-cash (bank) payment evidence to claim input VAT credit.
Structure Options For Foreigners
- Restricted Sectors Note
- Some sectors (banking, telecoms, advertising, logistics, real estate brokerage, media, parts of tourism/education/healthcare) cap or restrict foreign ownership or require a local joint-venture partner; a standard nomad-run consulting, IT, marketing, or trading business is very likely in an open sector, but this should be checked against Vietnam's official market-access list before incorporating.
Household Business
- Detail
- The individual/household business registration route (common for small local shops, street vendors, etc.) is built around Vietnamese individuals and family units; foreigners have no straightforward, direct path into this structure and would in practice need a Vietnamese partner/proxy, which carries the same legal risks as name-lending.
- Permitted For Foreigners
- effectively no — designed for Vietnamese citizens
Joint Stock Company
- Detail
- Suited to larger operations needing outside investors; requires at least 3 shareholders and can be 100% foreign-owned or a joint venture with local shareholders.
- Permitted For Foreigners
- Yes
Sole Proprietorship Freelancer
- Detail
- Under Vietnam's Law on Enterprises, a 'private enterprise' (sole proprietorship) can legally only be owned by a Vietnamese citizen with permanent residence; foreigners cannot be listed as the legal owner. 'Name-lending' arrangements where a Vietnamese citizen fronts a sole proprietorship for a foreigner are illegal and carry real legal risk for both parties (loss of asset control, no legal protection, potential penalties if discovered).
- Permitted For Foreigners
- No
Representative Office Or Branch
- Detail
- A representative office can handle market research/liaison but cannot invoice clients or generate revenue in Vietnam, so it is not a substitute for an operating company. A branch office is only available to a foreign entity that has been registered and operating for more than 5 years in its home country, and branch rights are limited by sector.
- Permitted For Foreigners
- Yes
Single Member Or Multi Member LLC
- Detail
- This is the standard vehicle for a foreign freelancer/consultant/small business wanting a proper legal footprint: a foreigner (or foreign company) can own 100% of a Vietnamese LLC in most open sectors, with liability limited to the capital contributed. A single-member LLC has the lightest governance and reporting burden and can later be converted to a multi-member LLC or Joint Stock Company if partners or investors are added.
- Capital Requirement
- There is no fixed statutory minimum charter capital for most sectors, but the company must register capital sufficient to fund operations until self-sustaining; consultants commonly cite a practical benchmark of roughly this amount for a standard small trading/services company:
- Process Requirement
- Requires both an Investment Registration Certificate and an Enterprise Registration Certificate (in addition to a company charter, appointed legal representative, and a Direct Investment Capital Account for moving capital into Vietnam), which is more paperwork than a Vietnamese-owned company but does not require a local partner in open sectors.
- Permitted For Foreigners
- Yes
- Illustrative Capital Benchmark
- ₫230,000,000
Incorporation Process And Requirements
- Overview
- Foreigners can incorporate a wholly foreign-owned company in Hanoi in most sectors without a Vietnamese partner. The standard vehicle is a Limited Liability Company (LLC), either single-member or multi-member (2-50 members), or a Joint-Stock Company for larger/multi-shareholder setups.
Typical Costs
VND
Recommended Charter Capital, Low End of Typical Benchmark for a Service Company
- Recommended Charter Capital, Low End Of Typical Benchmark For A Service Company
- ₫263,000,000
Recommended Charter Capital, High End of Typical Benchmark for a Service Company
- Recommended Charter Capital, High End Of Typical Benchmark For A Service Company
- ₫789,000,000
VND
VND
Minimum Capital
- Regulated Sectors
- Sectors such as banking, real estate, and travel/tour operations do carry statutory minimum capital requirements set by their specific governing decrees.
- Statutory Minimum
- Vietnamese law does not set a fixed statutory minimum charter capital for most standard business lines (e.g. IT, consulting, general trading); the licensing authority instead assesses whether the proposed capital is 'reasonable' and financially feasible for the stated business scope.
- Practical Benchmark
- A nominal amount like $1 USD is technically possible but essentially unapprovable in practice; a commonly cited practical benchmark for a viable service-business application is charter capital in the range of $10,000-$30,000 USD.
Typical Timeline
- Driver Of Delay
- The biggest real-world time drains are notarizing and consular-legalizing foreign corporate/personal documents before filing, and back-and-forth clarification requests from the licensing authority on business scope or capital adequacy.
- Realistic Total Timeline
- In practice, most sources describing real-world foreign incorporation in Vietnam quote a considerably longer total — estimates across different advisory firms range from roughly 4-6 weeks in the most optimistic case up to 3-4 months once document legalization/apostille, translation, clarification requests from authorities, and post-ERC banking setup are included.
- Statutory Processing Time
- The IRC is targeted for issuance around 15 working days after a complete, valid application, and the ERC around 3-5 working days after that.
Core Process Steps
- 1. Pre-screening: classify the intended business activity against Vietnam's standard industry codes and the 'negative list' (Decree 31/2021/ND-CP) to confirm the sector is open, conditional, or prohibited to foreign investors.
- 2. Secure a compliant business address in Hanoi: a commercial office lease, co-working space with exclusive-use confirmation, or industrial land lease. Residential apartments/condos are not accepted as a registered office address by business registration authorities.
- 3. Investment Registration Certificate (IRC): filed with the provincial licensing authority (in Hanoi, historically the Department of Planning and Investment; under 2025-2026 restructuring this function is being folded into the provincial Department of Finance). This approves the investment project's scope, location, capital, and duration.
- 4. Enterprise Registration Certificate (ERC): the certificate that actually creates the legal entity (Vietnam's equivalent of a Certificate of Incorporation), filed with the Business Registration Office, listing company name, address, charter capital, ownership, and legal representative.
- 5. Sequencing note (major 2025-2026 change): under the Law on Investment 2025, which took effect March 1, 2026, investors in projects that require an IRC may now choose an 'ERC-first' route (establish the legal entity, then apply for the IRC) instead of the older mandatory IRC-then-ERC order. Projects not requiring an IRC just apply for the ERC directly.
- 6. Open a Direct Investment Capital Account (DICA) — a special foreign-currency bank account used to bring investment capital into Vietnam and to track capital flows in and out of the country.
- 7. Contribute charter capital into the DICA within the statutory deadline (commonly cited as within 90 days of ERC issuance); missing this deadline can trigger an administrative fine and a forced reduction of registered capital to the amount actually paid in.
- 8. Post-licensing steps: company seal registration, tax registration/tax code activation, public announcement of the new enterprise on the National Enterprise Registration Portal, e-invoicing setup, and (from mid-2025) use of a personal VNeID Level-2 e-ID by the legal representative for digital company filings.
- 9. If hiring: register with labor authorities, arrange social insurance, and secure work permits for any foreign staff (including the legal representative, if foreign).
Official Government Links
- https://dangkykinhdoanh.gov.vn/ (Vietnam National Business Registration Portal, used for e-filing of Enterprise Registration Certificate applications)
Local Partner Or Sponsor Requirements
- General Rule
- No local partner or sponsor is legally required to set up a 100% Foreign-Owned Enterprise (FOE/WFOE) in most business lines.
- Conditional Sectors
- A small number of 'conditional' sectors cap foreign ownership or require a joint venture with a Vietnamese entity/person, commonly cited examples being advertising, gaming, agriculture/forestry, and some logistics sub-services under Vietnam's WTO commitments.
- Nominee Arrangement Warning
- Some intermediaries offer a 'nominee local company' structure (a local person holds nominal ownership on the investor's behalf) as a faster route, but this arrangement is explicitly flagged as not legally protected and carries significant risk to the foreign investor because it relies entirely on trust with the nominee.
- Legal Representative Residency
- Every Vietnamese company must have at least one Legal Representative, and this individual must reside in Vietnam. The Legal Representative can be a foreigner or a Vietnamese national; if a foreign national fills the role, they will eventually need a work permit or an exemption certificate.
Practical Takeaway For A Solo Foreign Nomad
There is no lightweight 'freelancer registration' or sole-proprietorship option open to foreigners in Hanoi — a foreigner who wants any formal local business presence must incorporate a company (almost always a single-member LLC in practice), which then owes standard 20% CIT on profits, VAT filings, and continuous quarterly/monthly compliance from day one, regardless of how small the revenue is. Many solo foreign consultants instead invoice Vietnamese or international clients from a home-country or offshore entity and treat Vietnam purely as a place of personal residence, avoiding local corporate registration altogether — but that choice is a business-structure decision to make with a local accountant, not a shortcut around personal tax residency rules covered elsewhere.
AI-generated estimateData refreshed July 2026
Sources cited for this category
These are the sources cited in this business permits & incorporation for foreigners research for this city. Individual figures may not each trace to one of them.
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Data last updated July 2026 · Verify anything important.