This entry covers only local business tax implications and the freelancer/sole-proprietor vs. company distinction for foreigners in Hoi An/Vietnam.
Good to know
Good to Know
- There is no dedicated Hoi An business registration office — filings go through the Quang Nam provincial licensing authority, so budget extra time if you're not physically based near the provincial capital.
- The official government fees to incorporate are genuinely tiny (often just a few dollars online); almost all of your real budget goes to document legalization/translation and professional help navigating the dossier, not government charges.
- You must have a compliant commercial-use registered office address before applying — a residential apartment without commercial zoning generally cannot be used as your registered address.
- The 90-day charter capital contribution deadline after incorporation is strictly enforced and missing it can trigger fines, so don't set up the company before your funds are ready to move.
- As of a March 2026 law change, it's now technically possible to get your Enterprise Registration Certificate before finishing Investment Registration Certificate paperwork — but this is very new, so confirm current provincial practice with a local advisor rather than assuming it's smooth everywhere yet.
- There is no 'freelancer visa' or sole-trader registration route for foreigners in Vietnam — if you want a fully compliant local business presence, an LLC is generally the realistic option, not a simple sole-proprietorship filing.
- The 8% reduced VAT rate (down from the 10% standard) is currently extended through end of 2026, so budget for a possible increase back to 10% on new contracts drafted after that date.
- Standard corporate income tax is 20% of profit for a Vietnamese-registered company regardless of foreign ownership — there's no special 'small business' discount most foreign-owned service companies will actually qualify for.
- Company incorporation timelines (often a few months in practice) mean this is not a same-week solution — many nomads test their business idea informally before committing to the registration process.
Core Steps
1. (If applicable) Investment Policy Approval
- Detail
- Only required for a narrow set of special/sensitive sectors or large-scale projects; most small foreign-owned service or F&B/tourism businesses skip this step entirely.
2. Investment Registration Certificate (IRC)
- Detail
- Filed with the provincial licensing authority (historically DPI). This certificate is required of all foreign-owned investment projects and establishes the right of the foreign enterprise to invest within Vietnam. Statutory processing time is generally 15 working days from a valid dossier, though in practice complex cases stretch to 20–30 working days.
3. Enterprise Registration Certificate (ERC)
- Detail
- Filed after the IRC is issued (this is the long-standing default order). The ERC functions as the business license and establishes the company's legal presence, including company name, charter capital, registered address, legal representative, and entity type. Statutory processing time is 3 working days from a complete dossier, in practice often 3–7 working days.
- Regulatory Change 2026
- Under the Law on Investment 2025 (effective 1 March 2026), foreign investors are now explicitly permitted to establish the project company (obtain the ERC) first and then complete IRC procedures afterward, provided market-access conditions are met at the time of establishment — a reversal of the previous mandatory IRC-then-ERC sequencing. This is a legally enabled option, not a mandatory new order, and practical implementation is still being clarified by local authorities.
4. Post-licensing steps
- Detail
- Company seal engraving, public disclosure of registration on the National Business Registration Portal, initial tax registration and digital signature/e-invoice setup, and opening a Direct Investment Capital Account (DICA) plus a VND current account at a licensed Vietnamese bank.
5. Charter capital contribution
- Detail
- Investors must contribute capital within 90 days from the date of establishment of the foreign-invested enterprise, transferred via the DICA. Missing this deadline can trigger an administrative fine (cited in the range of roughly VND 30–50 million, about USD 1,200–2,000) and a forced capital-reduction filing.
6. Sector-specific sub-licenses (if applicable)
- Detail
- Enterprises operating in certain sectors, such as banking, insurance, telecommunications, real estate, and education, are required to gain additional permits from relevant regulatory bodies after obtaining ERC and IRC. Restaurants/F&B need food safety permits.
7. Legal representative & digital identity
- Detail
- The company must have a lawful head office address and at least one legally qualified legal representative, who can be Vietnamese or a foreigner holding a valid work permit. A quirk noted by several legal-service providers: corporate e-ID registration (needed for digital tax filing/e-invoicing) currently requires the legal representative to authenticate with a personal government e-ID, which in practice only Vietnamese citizens or foreigners already holding a Temporary Residence Card can obtain smoothly — many foreign founders temporarily appoint a local legal representative for this step before transferring the role once their own TRC/work permit is issued.
Typical Costs
Official Government Fees (ERC Filing, Public Announcement, Seal Registration)
Nominee/resident Legal Representative Service (Recurring, Monthly)
Business Tax And Structure Options
VAT
- Standard Rate Pct
- 10
- Reduced Rate Valid Until
- 2026-12-31
- Temporary Reduced Rate Pct
- 8
- Notes
- The reduced 8% rate applies to most goods/services but excludes certain sectors (e.g. banking, real estate, some luxury/regulated goods); after expiry the rate reverts to the standard 10%.
Corporate Income Tax
- Standard Rate Pct
- 20
- Citations Basis
- PwC Worldwide Tax Summaries and Vietnam Briefing / Acclime doing-business guides, cross-checked against 2025-2026 CIT Law updates.
- Notes
- Vietnam-wide rate; applies uniformly, there is no separate Hoi An/Da Nang provincial CIT rate.
Details
- Enterprises established under Vietnamese law — including 100%-foreign-owned LLCs — are taxed on worldwide income at the standard rate.
- Preferential 10%/15%/17% CIT rates exist for qualifying small-revenue Vietnamese enterprises or specific incentivized sectors (e.g. high-tech, R&D, certain difficult-area investments), but most typical foreign-owned SMEs in a city like Hoi An (tourism, hospitality, F&B, services) do not qualify and pay the standard rate.
- If a foreigner operates without setting up a Vietnamese legal entity and simply invoices Vietnamese clients from abroad or through informal arrangements, the paying Vietnamese party is generally required to withhold Foreign Contractor Tax (a combined VAT + CIT withholding) rather than the foreigner filing a normal CIT return.
Filing Obligations For A Registered Company
- Quarterly provisional CIT payments plus an annual CIT finalization return after year-end.
- Regular VAT declarations (monthly or quarterly depending on revenue size), using either the credit/deduction method or a simplified direct method for smaller businesses.
- An annual business license fee (a fixed yearly levy tied to registered/charter capital, distinct from CIT/VAT), payable early in the calendar year.
- Statutory annual financial statements, and for many foreign-invested enterprises, an independent audit of those financial statements.
- Ongoing bookkeeping and invoicing must follow Vietnamese accounting standards and use the government's e-invoice system.
Minimum Capital
No general statutory minimum charter capital for most unrestricted sectors, but the amount must be realistic for the proposed business — in practice, roughly USD 10,000–15,000 is treated by licensing officers as a workable minimum for a small service business.
Jurisdiction Note
Company formation is governed entirely by national Vietnamese law (Law on Investment 2020, amended by Law on Investment 2025 effective 1 March 2026, and the Law on Enterprises 2020). There is no Hoi An-specific incorporation regime — applications for a business based in Hoi An are filed with the Quang Nam provincial licensing authority (historically the Department of Planning and Investment, DPI) rather than a city-level office.
Common Entity Type
Limited Liability Company (LLC) — single-member or multi-member (up to 50 members) — is the most common vehicle for foreign individual investors; a Joint Stock Company (JSC, minimum 3 shareholders) is used for larger or fundraising-oriented ventures.
Realistic Timeline
- Erc
- About 3–7 working days once the IRC is in hand
- Irc
- About 15–20 working days statutory, sometimes 20–30 working days for more complex projects
- Overall Estimate
- Most sources converge on roughly 6–10 weeks (1.5–2.5 months) end-to-end for a straightforward single-member LLC with clean documentation; more cautious estimates for a full foreign-invested enterprise across all sectors put the range at 2–4 months, especially where document legalization from the investor's home country or conditional-sector approvals add delay.
- Post Licensing Setup
- Roughly 10–15 additional days for seal, tax registration, and bank account setup
Official Registry Link
Local Partner Sponsor Requirement
- General Rule
- Vietnam allows 100% foreign ownership for a wide range of business lines under the Investment Law 2020's 'negative list' system.
- Sector Exceptions
- Certain conditional sectors still require a Vietnamese joint-venture partner, a foreign-ownership cap, or additional approvals — commonly cited examples include advertising, logistics, education, real estate, and road freight transport.
- Citation Note
- For example, in the field of advertising, foreign investors must enter into a joint venture with a Vietnamese enterprise or through a business cooperation contract to be able to provide services in Vietnam.
Freelancer Or Sole Proprietor Vs Company
- Key Distinction
- Vietnam's 'sole proprietorship' (doanh nghiệp tư nhân) and 'business household' (hộ kinh doanh) structures — the closest local equivalents to a freelancer/sole-trader setup — are legally restricted to Vietnamese citizens as the registered owner.
LLC Setup Basics
- Most sectors have no minimum charter capital requirement, though the registered capital amount is self-declared and should realistically reflect the business's needs.
- Setting up a 100%-foreign-owned LLC typically involves obtaining an Investment Registration Certificate (around 15 working days for most WTO-committed sectors) followed by an Enterprise Registration Certificate, with the whole process commonly taking a few months in practice.
- A registered legal address in Vietnam and a Legal Representative are required; foreign investors must also open a Direct Investment Capital Account at a licensed bank to bring capital into the country.
Foreigner Implications
- A foreign individual cannot be the legal owner of a Vietnamese sole proprietorship or business household; only a Vietnamese citizen with full civil capacity can hold that registration.
- Foreigners can be hired as a manager, director, or advisor inside a Vietnamese-owned sole proprietorship, but cannot hold ownership or bear the associated tax/legal liability themselves.
- The realistic formal path for a foreigner who wants to legally run a business in Vietnam is to incorporate a company — most commonly a single-member or multi-member Limited Liability Company (LLC), which permits up to 100% foreign ownership in most sectors, or a Joint-Stock Company for larger-scale operations.
- Alternatives besides a full LLC include a representative office (cannot generate direct revenue, used mainly for market research/liaison), a branch, or a Business Cooperation Contract with a Vietnamese partner — none of these substitute for a genuine freelance/sole-trader registration.
- In practice, many foreign remote workers in Hoi An operate informally — invoicing overseas clients directly without any Vietnamese business registration — which sits in a legal gray area and is not the same as a compliant local company structure.
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.