How to Obtain a Business License in Vietnam (2024)

October 7, 2024

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How to Obtain a Business License in Vietnam (2024)

Key Takeaways

Understand Business Structures: Choosing the right business structure, such as an LLC or joint-stock company, is essential for a smooth licensing process in Vietnam.
Meet Legal and Regulatory Requirements: Ensure compliance with Vietnam’s updated legal standards, including sector-specific regulations and foreign ownership laws, to avoid delays.
Costs and Expert Guidance: Budget for government fees and legal services, and consider working with local consultants to navigate Vietnam’s business licensing complexities efficiently.

Vietnam has emerged as one of the fastest-growing economies in Southeast Asia, drawing significant attention from both local and international entrepreneurs.

Its strategic location, young workforce, and favorable economic policies make it a prime destination for businesses looking to expand their operations.

However, before diving into the thriving Vietnamese market, it is crucial for any business owner to understand the legal requirements involved—specifically, how to obtain a business license.

A business license in Vietnam is more than just a legal formality; it serves as the official approval from the government that allows companies to operate within the country’s legal framework.

Obtaining the right type of license not only ensures compliance with Vietnam’s business laws but also opens the door to various opportunities for growth, investment, and expansion.

Whether you are a local entrepreneur or a foreign investor, securing a business license is the foundational step toward operating successfully in this dynamic economy.

Navigating the business licensing process in Vietnam, however, can be complex due to various regulatory requirements that depend on the type of business, the business structure, and whether foreign investment is involved.

The process requires a comprehensive understanding of Vietnam’s legal system, which often undergoes changes and updates.

As we move into 2024, there are some important updates to the regulations surrounding business registration that business owners should be aware of.

For those unfamiliar with the Vietnamese market, obtaining a business license may seem daunting, particularly when dealing with bureaucratic procedures, language barriers, and unfamiliar legal requirements.

This guide will provide you with a detailed step-by-step process to successfully secure your business license in Vietnam in 2024.

It will cover everything from understanding the various business structures available to meeting the specific legal requirements, preparing the necessary documents, and addressing common challenges faced by foreign entrepreneurs.

In 2024, Vietnam continues to streamline its business registration process to attract more foreign investment while supporting local enterprises.

Recent regulatory reforms have simplified certain procedures, but they also introduced stricter compliance measures that every business owner must consider.

This comprehensive guide will walk you through these latest changes, ensuring that you are well-prepared to navigate the legal landscape with ease.

By following this guide, you will not only learn how to obtain a business license but also gain valuable insights into the Vietnamese business environment, helping you make informed decisions as you set up your business in this exciting market.

Whether you’re starting a small enterprise or expanding an international corporation, understanding the licensing process is the first step toward unlocking Vietnam’s vast economic potential.

How to Obtain a Business License in Vietnam (2024)

Understanding Business Structures in Vietnam
Key Requirements for a Business License in Vietnam
Step-by-Step Guide to Obtaining a Business License in Vietnam
Common Challenges in Obtaining a Business License
Costs Associated with Obtaining a Business License
Working with Local Consultants and Legal Services

1. Understanding Business Structures in Vietnam

Investors looking to establish a business in Vietnam can choose from six main business structures, each offering distinct advantages and legal frameworks tailored to specific business goals.

Here’s a detailed breakdown of these business structures:

Representative Office (RO)

A Representative Office (RO) is a cost-efficient option for companies looking to gain a foothold in the Vietnamese market without engaging in direct commercial activities.

It’s ideal for companies aiming to understand market dynamics before making substantial investments.

Permitted Activities:
- Conducting market research.
- Acting as a liaison between the parent company and local partners.
- Promoting the parent company’s activities through non-transactional means (e.g., meetings).
Example: A U.S.-based clothing retailer could open an RO in Ho Chi Minh City to study consumer preferences, build connections with suppliers, and gauge potential before committing to full-scale operations.
Time to Establish: Typically takes 6 to 8 weeks. Given the absence of revenue-generating activities, setting up an RO is simpler than other structures.

Limited Liability Company (LLC)

A Limited Liability Company (LLC) is the most common business structure for foreign investors in Vietnam, offering full ownership and operational control. LLCs are best suited for investors who want complete legal and financial autonomy.

Ownership: Can be 100% foreign-owned, either by individual or corporate shareholders.
Capital Requirements: While many industries have no set minimum capital requirement, the registered capital must be sufficient to cover operational costs until the business is self-sustaining. For example, a tech startup may require as little as USD 10,000, but a larger manufacturing firm would need significantly more.
Example: A European software development firm could establish a 100% foreign-owned LLC to take advantage of Vietnam’s growing tech talent pool, offering software solutions to global clients.
Time to Establish:
- Investment Registration Certificate: 15 working days.
- Enterprise Registration Certificate: 3 working days.

Joint Stock Company (JSC)

A Joint Stock Company (JSC) is the preferred option for businesses planning to issue shares or go public on the stock exchange. It’s a more complex structure, designed for companies with broader ambitions for growth and investment.

Ownership: Requires at least three shareholders, which can be individuals or companies.
Capital Requirements: Similar to LLCs, though businesses planning to go public may require a higher initial capital investment depending on their industry.
Example: A multinational pharmaceutical company might establish a JSC in Vietnam with the intent to eventually list on the local stock exchange, providing a pathway for raising public funds to support expansion.
Time to Establish: Generally follows the same timelines as LLCs but with additional regulatory compliance.

Branch Office (BO)

A Branch Office (BO) is an extension of the parent company, usually established by service-oriented businesses such as finance or consulting firms. BOs are allowed to engage in revenue-generating activities but are restricted to the services specified in their license.

Permitted Activities:
- Leasing office space and purchasing equipment.
- Recruiting both local and foreign employees.
- Engaging in commercial activities per the BO’s licensing terms.
Example: A global financial advisory firm may open a BO in Hanoi to provide consulting services directly to Vietnamese clients while maintaining full integration with its international parent company.
Time to Establish: Can be set up within 7 working days, though the approval process for certain industries may extend this timeline.

Joint Venture (JV)

A Joint Venture (JV) is a partnership between foreign and local companies, which is often required for sectors that restrict full foreign ownership. This structure allows foreign investors to benefit from local expertise, market insights, and existing networks.

Ownership: Foreign partners must contribute a minimum of 30% of the capital, with local partners providing the remainder. Some sectors, like telecommunications or agriculture, require JVs by law.
Example: An international telecom provider may need to form a JV with a Vietnamese company to offer mobile services in Vietnam, adhering to local regulations that limit foreign ownership in this sector.
Time to Establish:
- Investment Registration Certificate: 15 days.
- Enterprise Registration Certificate: 3 days.
- Finding a local partner and negotiating terms may take anywhere from 3 to 6 months.

Public-Private Partnership (PPP)

A Public-Private Partnership (PPP) involves collaboration between a private company and the government to complete large-scale infrastructure projects. With the Vietnamese government pushing for infrastructure modernization, PPPs offer significant opportunities in sectors like transportation, energy, and urban development.

Types of PPPs:
- Build-Operate-Transfer (BOT)
- Build-Lease-Transfer (BT)
- Build-Own-Operate (BOO)
Example: A European infrastructure development company might partner with the Vietnamese government to construct a new highway under a Build-Operate-Transfer (BOT) agreement, operating the highway for a set period before transferring ownership to the state.
Time to Establish: The timeframe for establishing a PPP varies greatly, depending on the project’s scale and government approvals.

Selecting the right business structure when entering the Vietnamese market depends on the investor’s long-term goals, the type of industry, and the desired level of ownership.

Each structure offers unique benefits, from the flexibility of Representative Offices to the robust infrastructure opportunities available through Public-Private Partnerships.

Investors are encouraged to consult with legal experts to navigate Vietnam’s complex regulatory environment and select the structure that best aligns with their business strategy.

2. Key Requirements for a Business License in Vietnam

Before embarking on the application process for obtaining a business license in Vietnam, it is critical for businesses to engage in meticulous preparation, ensuring that all required documentation is correctly assembled.

Each industry, business type, and specific license demands a unique set of documents, so identifying the precise requirements early on is essential for avoiding delays or complications later in the process.

The ability to pinpoint these crucial elements during the preparation phase significantly enhances readiness and smooths the licensing journey.

Below is a comprehensive guide to the general steps involved in obtaining the essential permits and certifications for operating a business in Vietnam:

Step 1: Identify the Required Permits and Certifications

The first and most important step is determining which permits and certifications are necessary based on your business’s type, industry, and location.

Vietnam’s regulatory environment varies across different sectors, so businesses must be aware of industry-specific licensing requirements.

For example, companies in the food and beverage industry will require health and safety permits, while pharmaceutical businesses will need licenses that govern drug production and distribution.

In addition, environmental regulations may demand certifications related to environmental impact assessments, particularly in industries like manufacturing or energy.

Example: A food processing company looking to establish a facility in Hanoi would need to obtain health permits from the local food safety authorities as well as certifications for the proper disposal of waste, in compliance with environmental regulations.

Step 2: Research Applicable Laws and Regulations

Understanding the legal framework governing the permits and certifications specific to your business is crucial for a smooth application process.

Different licenses are regulated by various governmental bodies, each with its own set of guidelines.

Comprehensive research into the relevant legal codes, industry standards, and local regulations is vital.

This includes familiarizing yourself with timelines for approvals, application requirements, and any restrictions that may apply to foreign-owned businesses or specific industries.

Example: A construction company planning to operate in Vietnam must be aware of the Construction Law of Vietnam, which outlines the procedures for obtaining building permits, fire safety certifications, and environmental impact assessments required before a project can commence.

Step 3: Gather Essential Information and Documentation

Once you have a clear understanding of the regulatory requirements, the next step is to collect all the necessary information about the business and compile the appropriate documents.

This typically includes basic business information like the company name, business location, and the nature of its operations.

More importantly, legal documents such as the company’s articles of association, certificates of incorporation, financial statements, and investment plans must be prepared.

Certain industries may also require additional documentation, such as proof of professional qualifications, technical standards, or product safety compliance.

Example: An IT consulting firm may need to submit its articles of incorporation along with detailed descriptions of the services it offers and the professional qualifications of its key personnel to obtain the necessary licenses for operating in Vietnam’s technology sector.

Step 4: Submit the Application with Required Documents

With the necessary information and documents prepared, the next step is to submit your application for the relevant permits and certifications.

Applications must be submitted to the appropriate government agency, which will depend on the type of permit being requested.

For example, health-related permits are handled by the Ministry of Health, while environmental certifications fall under the purview of the Ministry of Natural Resources and Environment.

It is important to ensure that all required documentation is complete and accurate to prevent delays or rejections during the review process.

Example: A pharmaceutical company seeking approval to distribute medicines in Vietnam must submit its application, including detailed product descriptions, testing results, and certifications, to the Drug Administration of Vietnam for review.

Step 5: Pay the Required Fees

Most permits and certifications involve a mandatory fee that must be paid before the application can be processed.

Fee structures vary depending on the type of permit, the scale of the business, and the location.

Businesses should ensure that they are fully aware of all applicable fees to avoid unnecessary delays. Some industries may also have recurring fees for maintaining licenses over time.

Example: A foreign-owned retail chain opening a new branch in Vietnam may need to pay application fees for a business license, as well as additional fees related to zoning permits and fire safety certifications.

Step 6: Await Approval and Application Review

After submitting the application and paying the required fees, businesses must await the review process by the relevant government agency.

The timeframe for approval can vary depending on the complexity of the application, the type of permit being requested, and the workload of the agency involved.

During this period, the government may request additional information or clarifications to support the application.

It’s essential to be responsive and provide any requested documentation promptly to ensure the process proceeds without unnecessary delays.

Example: A renewable energy company applying for a license to build a solar power plant in Vietnam might face an extended review process due to environmental impact assessments and government evaluations of the project’s feasibility and sustainability.

Step 7: Receive the Permits and Certifications

Once the application has been reviewed and approved, the relevant government agency will issue the necessary permits and certifications.

This is the final step, granting the business the legal authority to commence operations in Vietnam.

Depending on the nature of the business, some permits may need to be renewed periodically, and businesses should be aware of the renewal timelines and requirements to avoid penalties or operational disruptions.

Example: A hotel chain establishing operations in Vietnam would receive its business license, along with permits related to fire safety, food safety (for its restaurant services), and environmental compliance. The business would then be fully authorized to operate in Vietnam, provided it continues to adhere to the conditions set by the respective agencies.

Through careful preparation and adherence to Vietnam’s regulatory requirements, businesses can successfully navigate the complex process of obtaining permits and certifications.

By taking the time to research, gather proper documentation, and engage with the appropriate government agencies, companies can ensure a smoother transition into the Vietnamese market while remaining fully compliant with local laws.

3. Step-by-Step Guide to Obtaining a Business License in Vietnam

Vietnam has emerged as a highly attractive destination for foreign investors, offering promising opportunities for growth and expansion.

However, the process of establishing a company in the country is complex, particularly due to its intricate legal framework.

Foreign investors looking to set up operations in Vietnam must carefully navigate these regulations to ensure a smooth and successful entry.

Below, we outline the detailed procedures for company registration and provide insights into key steps, legal requirements, and the importance of professional assistance to facilitate the process.

The process for registering a 100% Foreign-Owned Enterprise (FIE) in Vietnam typically spans 2 to 4 months, depending on the nature of the business and company type.

Establishing a Representative Office, which has limited operational scope, can be completed in half the time. The entire process can be broken down into four main stages, which we discuss in detail below.

For certain industries that fall under special regulations, businesses may need to complete an additional Pre-Investment Approval phase (Step 1).

However, most investors can proceed directly to applying for an Investment Registration Certificate (IRC) (Step 2), followed by the Enterprise Registration Certificate (ERC) (Step 3).

Once these licenses are secured, further post-licensing procedures must be completed (Step 4).

Step 1: Pre-Investment Approval

For large-scale or sensitive investment projects, foreign investors must first seek approval from Vietnamese authorities before proceeding with the company registration process.

It is essential to determine whether your project falls into this category and prepare the necessary documentation in advance, as this phase can add significant time to the overall process.

Investors should also account for the varying application processing times, which differ depending on the nature of the project.

Types of Projects Requiring Special Approvals:

Residential housing construction projects
Airports, aerodromes, air transport, cargo terminals, ports
Petroleum processing plants
Casinos and betting-related businesses
Industrial zones and export-processing zones infrastructure projects
Nuclear power plants
Golf courses
Special land-use rights projects
Projects near islands, borders, coastal or defense-sensitive areas
Heritage-sensitive locations
Projects requiring the relocation of inhabitants
Projects involving the repurposing of forests or rice crops
Example: A foreign investor planning to build a large-scale resort on an island in Vietnam would require special approval due to the project’s location in a defense-sensitive coastal area.

Step 2: Investment Registration Certificate (IRC) Application

The first formal step for any foreign-owned business in Vietnam is obtaining an Investment Registration Certificate (IRC).

This certificate is essential as it grants foreign enterprises the legal right to invest and operate within Vietnam.

The IRC application process requires careful preparation of several key documents, which must be thoroughly reviewed and submitted to the relevant authorities.

Documents Required for IRC Application:

Investment project application (includes a detailed description of the project in Vietnam)
Proposal for investment project (outlining lease agreements or land use needs)
Financial statements (covering the last two years of the company’s operations)
Legal papers (for both the investors and their authorized representatives)
Lease agreement or Memorandum of Understanding (MOU)
Other project-related documents (as required by law to demonstrate investor eligibility and capacity)

Timeframe for IRC Processing:

Typically, the IRC process takes 15 working days from the submission date. However, if the industry is not covered under WTO regulations, the approval process may extend beyond the standard timeframe.

Example: A foreign-owned manufacturing company applying to set up operations in Vietnam will need to provide its financial history, legal documents, and details of the factory location to receive the IRC.

Step 3: Enterprise Registration Certificate (ERC) Application

The Enterprise Registration Certificate (ERC) is mandatory for all businesses looking to establish a legal entity in Vietnam.

Once approved, the ERC assigns a unique identification number to the business, which also serves as the entity’s tax registration number.

This certificate officially enables the business to operate in the Vietnamese market.

Documents Required for ERC Application:

Enterprise registration application (including the proposed business structure)
Company charter (outlining the governance of the business)
List of board members and legal representatives
Letters of appointment and authorization
Foreign documents (such as legal certifications) must be notarized, legalized by consular officials, and translated into Vietnamese by approved authorities.

Timeframe for ERC Processing:

The typical processing time for an ERC application is around three working days from the date of document submission.

Example: A foreign tech startup establishing its legal entity in Ho Chi Minh City will need to submit its board members’ details, charter, and all relevant legal documentation to receive the ERC.

Step 4: Post-Licensing Procedures

Once both the IRC and ERC are secured, several additional steps must be completed before the business can fully operate in Vietnam.

These post-licensing procedures are essential for legal compliance and include practical steps such as opening a bank account, registering the company seal, and fulfilling labor and tax obligations.

Key Post-Licensing Steps:

Seal carving (the company seal is a legal requirement for signing documents)
Opening a bank account (to manage financial transactions in Vietnam)
Labor registration (to register employees and comply with labor laws)
Business license tax payment (annual tax on business operations)
Charter capital contribution (to meet financial requirements for operation)
Public announcement of company establishment (to inform the public and stakeholders of the new business entity)
Example: A newly established consulting firm in Hanoi would need to complete post-licensing steps such as opening a local bank account, registering its company seal, and paying the business license tax before beginning operations.

Conclusion

Establishing a business in Vietnam presents a lucrative opportunity for foreign investors, but the process involves navigating a complex legal landscape.

Understanding the step-by-step requirements—from pre-investment approvals to post-licensing procedures—can help ensure a smoother and more efficient setup.

Partnering with professional advisors or legal experts familiar with Vietnamese regulations can further streamline the process, enabling businesses to capitalize on the vibrant opportunities within the country while maintaining full compliance with local laws.

4. Common Challenges in Obtaining a Business License

Acquiring a business license in Vietnam, while structured and relatively transparent, is not without its challenges.

Foreign and local investors alike may face various obstacles during the process, ranging from bureaucratic delays to understanding local regulations.

Addressing these challenges early on is crucial for a smooth business setup.

This section highlights some of the most common challenges that entrepreneurs encounter when applying for a business license in Vietnam.

1. Navigating Vietnam’s Bureaucratic System

Vietnam’s business registration process can involve multiple government departments and intricate procedures, which may slow down the licensing process.

Multiple Agencies Involved:
- The Department of Planning and Investment (DPI), Ministry of Industry and Trade, and local tax authorities are typically involved in the process.
- Businesses may need approvals from different ministries depending on the industry (e.g., Ministry of Health for pharmaceutical companies).
Lack of Coordination:
- In some cases, there may be a lack of communication between various governmental departments, which can lead to processing delays.
- Navigating these inter-agency communications without local legal assistance can be particularly challenging for foreign investors.
Example: A foreign company trying to set up a restaurant chain may face delays as they wait for multiple permits from both the Department of Planning and Investment and local health authorities, leading to a delay in obtaining the full business license.

2. Language Barriers and Documentation Translation

For foreign investors, the Vietnamese language can be a significant challenge, especially when it comes to understanding legal and regulatory documents.

Legal Documents in Vietnamese:
- All official business documents, such as the company charter, application forms, and contracts, must be in Vietnamese.
- Foreign investors must have these documents translated by certified translators and then notarized, which can be time-consuming and costly.
Misinterpretation of Regulations:
- Without proper legal and linguistic assistance, foreign businesses may misinterpret the requirements for a business license, leading to errors in the submission process.
Example: A foreign-invested tech company mistakenly submits incomplete translated documents, leading to rejection by the Department of Planning and Investment (DPI), forcing them to reapply and causing unnecessary delays.

3. Compliance with Investment and Capital Requirements

Vietnam has specific capital requirements that vary depending on the type of business and industry. Meeting these requirements can be complex, especially for foreign investors.

Minimum Capital Requirements:
- Certain sectors, such as finance, real estate, and education, have minimum capital requirements that must be met.
- Businesses must provide proof of the capital contribution, often by depositing the required capital in a Vietnamese bank account before the license can be issued.
Investment Registration Certificate (IRC):
- Foreign investors need to secure an Investment Registration Certificate (IRC) before applying for a business license. The IRC outlines the investment project, capital, and ownership structure.
- Failing to provide accurate capital details can delay or deny the issuance of the IRC.
Example: A foreign real estate company looking to develop a residential complex must provide proof of its minimum investment capital of $10 million. Failure to meet this requirement delays its IRC application, preventing the business from obtaining a license.

4. Industry-Specific Regulations

Certain industries in Vietnam are highly regulated, requiring additional permits, certifications, or approvals before a business can operate legally.

Highly Regulated Sectors:
- Industries such as food and beverage, tourism, education, and telecommunications require additional licenses or permits from relevant ministries.
- These industries may also have environmental, health, or safety standards that businesses must comply with.
Approval from Multiple Ministries:
- Businesses in regulated sectors often need approval from multiple government agencies, which can prolong the licensing process.
- Failure to comply with specific industry regulations can lead to legal penalties or the shutdown of operations.
Example: A pharmaceutical company requires approval from both the Ministry of Health and the Ministry of Industry and Trade, leading to delays in launching its operations due to stringent drug safety regulations and additional licensing needs.

5. Understanding Local Tax Laws and Obligations

Taxation in Vietnam is a complex area that often creates confusion for foreign and local businesses alike. Not adhering to tax obligations can result in penalties and fines, further complicating the licensing process.

Corporate Income Tax (CIT) and VAT:
- Businesses must register for Corporate Income Tax (CIT) and Value Added Tax (VAT) upon receiving their business license.
- The complexity of Vietnam’s tax system and frequent changes in tax laws can make it difficult for new business owners to fully understand their tax obligations.
Tax Compliance:
- Improper tax registration or non-compliance with tax declarations can lead to fines or delays in business operations.
Example: A newly formed LLC may fail to submit their VAT registration on time, incurring a penalty from the local tax authority and slowing down the operational launch of the business.

6. Securing a Legal Business Address

All businesses in Vietnam are required to have a registered office address, but finding a compliant location can sometimes be a challenge, especially in crowded urban areas.

Lease Agreement:
- Businesses must secure a lease agreement for their office or storefront and submit it as part of the business license application.
- In certain industries, the type of location may be subject to specific zoning laws or requirements.
Home-Based Businesses:
- Operating a business from a residential property may not be permitted in some cases, adding another layer of complexity for startups.
Example: A startup tech company looking to operate in Ho Chi Minh City struggles to find an office space that meets zoning laws and must delay their registration until a suitable space is secured.

7. Processing Delays

Vietnam’s business registration and licensing process can be delayed due to various factors, including bureaucratic backlogs, errors in application, and the need for multiple approvals.

Application Rejections:
- If any information is missing or inaccurate in the application, businesses will need to resubmit documents, adding to the delay.
- This can be especially problematic for foreign investors unfamiliar with local procedures.
Government Backlogs:
- During peak periods, such as the beginning of the fiscal year or holidays, government agencies may experience backlogs in processing business license applications.
- These delays can extend the typical processing time by several weeks.
Example: A joint venture in the tourism industry experiences a six-week delay due to a backlog at the Ministry of Culture, Sports, and Tourism, prolonging the business license issuance.

8. Changes in Regulations and Legal Framework

Vietnam’s regulatory environment is continually evolving, which can make it difficult for businesses to stay up to date with the latest requirements.

Frequent Changes:
- New laws and regulations, particularly those relating to foreign ownership, tax obligations, and sector-specific rules, may affect the process of obtaining a business license.
- Staying informed about these changes can be difficult without the help of legal professionals.
Legal Updates:
- Regulations surrounding investment laws, capital contribution requirements, or labor obligations may change without much notice, causing confusion or delays.
Example: A foreign investor setting up a consultancy firm faces delays after new changes to the law require additional documentation for foreign-owned service companies.

Conclusion

While obtaining a business license in Vietnam is a clear and structured process, it comes with several challenges, especially for foreign investors unfamiliar with the country’s regulatory framework.

From navigating bureaucratic hurdles and language barriers to ensuring compliance with industry-specific regulations, these challenges can significantly delay or complicate the licensing process.

However, with proper preparation, expert guidance, and a thorough understanding of the legal landscape, businesses can successfully navigate these challenges and establish a firm foundation for their operations in Vietnam.

5. Costs Associated with Obtaining a Business License

Securing a business license in Vietnam involves several costs, which can vary based on the type of business, its scale, and the industry it operates in.

Understanding the financial requirements is crucial for both foreign and local entrepreneurs who are planning to establish their companies.

From government fees to legal services, this section will provide a comprehensive breakdown of the costs involved in obtaining a business license in Vietnam.

1. Government Fees

Government fees form a significant part of the costs associated with obtaining a business license in Vietnam.

These fees are necessary for processing and approving the business registration and related certifications.

Business Registration Fee:
- All companies are required to pay a registration fee to the Department of Planning and Investment (DPI) when applying for a business license.
- The fee typically ranges from VND 100,000 to VND 500,000 (approximately $5 to $25 USD) depending on the type of business entity.
Publication Fee:
- Upon receiving the business registration certificate, companies must also pay a publication fee to publish the business details in the National Business Registration Portal.
- This fee is generally around VND 300,000 (approximately $13 USD).
License Tax:
- After registration, companies must pay an annual business license tax based on their registered capital. This tax can range from VND 1 million to VND 3 million (approximately $40 to $130 USD) per year, depending on the company’s capital and size.

Example: A small LLC (Limited Liability Company) in the IT sector with modest capital might pay a total of VND 500,000 for registration and publication fees, and VND 1 million annually for the business license tax.

2. Legal and Consultancy Fees

For most foreign investors and even some local businesses, navigating the legal and administrative processes in Vietnam requires the assistance of legal or consultancy firms. These fees can vary greatly based on the complexity of the business and the services required.

Legal Advisory Fees:
- Foreign businesses often hire legal firms to assist with document preparation, translation, and compliance with Vietnamese regulations.
- Legal fees for registering a business can range from $1,000 to $3,000 USD, depending on the services rendered and the complexity of the business structure.
Business Consulting Fees:
- Business consultants, especially those who specialize in foreign investment, often charge for services such as market entry advice, registration assistance, and administrative processes.
- These fees can range from $500 to $2,000 USD, depending on the scope of services required.
Example: A foreign retail company setting up its first branch in Ho Chi Minh City hires a local law firm to handle the business registration, contract negotiations, and necessary permits. The legal fees amount to approximately $2,500 USD, in addition to the government fees.

3. Document Translation and Notarization Costs

For foreign companies, one of the essential steps in obtaining a business license in Vietnam is translating and notarizing business documents. All official documents must be in Vietnamese, which means translating from English or other languages can be a significant expense.

Translation Costs:
- The cost of translating business documents, such as company charters, contracts, and certificates, from English to Vietnamese ranges from VND 100,000 to VND 300,000 per page (approximately $4 to $13 USD per page).
- Larger documents, such as company formation agreements or legal contracts, may incur translation costs of several hundred dollars.
Notarization Fees:
- After translation, these documents must be notarized by a certified Vietnamese notary.
- Notarization fees typically range from VND 200,000 to VND 500,000 per document (approximately $8 to $20 USD per document).
Example: A foreign tech startup with a 20-page company charter and several additional documents may spend $500 to $1,000 USD on translation and notarization services.

4. Investment Registration Certificate (IRC) Costs

For foreign investors, the process of obtaining an Investment Registration Certificate (IRC) is an additional step that requires both time and resources.

IRC Application Fee:
- Foreign companies are required to obtain an IRC before applying for a business license. The application fee for the IRC can range from $100 to $500 USD, depending on the investment project and its scope.
Preparation Costs:
- Preparation of the IRC, including documentation, legal representation, and consultancy services, can range from $500 to $2,000 USD, depending on the complexity of the investment.
Example: A foreign-owned manufacturing company may incur a total of $2,500 USD in IRC-related fees, including legal support and government charges, before proceeding to the business license application.

5. Office Lease and Rental Costs

In Vietnam, all businesses are required to have a registered office address. Leasing office space can be a significant portion of the cost, particularly in major cities such as Hanoi or Ho Chi Minh City.

Lease Agreement Requirement:
- A registered office is mandatory, and businesses must submit a copy of the lease agreement as part of their application for a business license.
- Office rental prices in Ho Chi Minh City and Hanoi range from $15 to $50 USD per square meter per month, depending on the location and quality of the office space.
Virtual Office Costs:
- For small startups or businesses that do not require a physical office, a virtual office address is an affordable option. Virtual office services typically range from $50 to $200 USD per month.
Example: A startup looking to establish a software development firm in Ho Chi Minh City rents a small office space in District 1 for $20 USD per square meter, amounting to $2,000 USD per month for a 100-square-meter office.

6. Additional Licensing Fees

Some businesses in specific industries require additional licenses and permits, which incur additional costs.

Industry-Specific Licenses:
- Businesses in regulated industries, such as food and beverage, education, and tourism, require additional permits from relevant ministries. The fees for these licenses vary by sector.
- For instance, a food and beverage business may need to obtain a food safety certificate, which costs around VND 500,000 to VND 1 million (approximately $20 to $40 USD).
Environmental Permits:
- Manufacturing and construction companies may also need to secure environmental permits. Fees for these permits can range from $500 to $1,500 USD, depending on the size and scope of the project.
Example: A restaurant chain planning to expand across Vietnam must obtain food safety certificates for each outlet, adding an additional $1,000 USD in licensing fees for the entire chain.

7. Administrative and Miscellaneous Expenses

Beyond the core fees and costs associated with obtaining a business license, there are various other administrative expenses that businesses should account for.

Bank Account Setup:
- Businesses must open a local bank account to deposit their initial capital. While opening a bank account itself may not incur a fee, minimum balance requirements can range from $1,000 to $5,000 USD, depending on the bank.
Stamp Making Fee:
- After receiving the business license, companies are required to create a corporate stamp for official transactions. The cost of making a company stamp typically ranges from VND 200,000 to VND 500,000 (approximately $8 to $20 USD).
Example: A newly registered LLC may spend $500 USD in miscellaneous fees, including bank setup costs, stamp creation, and administrative services.

Conclusion

The costs associated with obtaining a business license in Vietnam encompass a variety of fees, ranging from government charges and legal fees to office rental and industry-specific permits.

While the initial government fees may seem modest, additional costs like legal assistance, document translation, and office setup can add up, especially for foreign businesses.

By carefully budgeting and understanding these costs, entrepreneurs can better plan their financial commitments and ensure a smooth business setup process in Vietnam.

6. Working with Local Consultants and Legal Services

Navigating the process of obtaining a business license in Vietnam can be complex, especially for foreign investors unfamiliar with local regulations and administrative procedures.

Engaging local consultants and legal services is a critical step to ensure compliance, minimize delays, and streamline the setup process.

Local experts bring in-depth knowledge of Vietnamese laws and government requirements, making them valuable partners in securing your business license efficiently.

In this section, we will explore why partnering with local consultants and legal firms is essential, the key services they offer, and how businesses can benefit from their expertise.

1. Importance of Local Consultants and Legal Services

Local consultants and legal firms are indispensable when it comes to registering a business in Vietnam.

They provide professional guidance and ensure all legal requirements are met, reducing the risk of delays or costly mistakes.

Understanding Local Laws and Regulations:
- Vietnamese laws, especially in areas such as foreign investment, labor, and taxes, can be intricate and subject to frequent changes. Local consultants stay updated on the latest legal amendments and ensure businesses remain compliant.
- Legal consultants are familiar with industry-specific regulations, such as those affecting manufacturing, retail, and hospitality. Their expertise helps foreign investors meet all sector-specific requirements and avoid non-compliance issues.
Efficient Navigation of Bureaucratic Processes:
- Government processes in Vietnam can involve multiple agencies, such as the Department of Planning and Investment (DPI), Ministry of Industry and Trade (MOIT), and Ministry of Finance (MOF). Local consultants and legal firms have established connections and can efficiently liaise with these authorities.
- With knowledge of which documents and permits are required, consultants help businesses avoid common delays caused by incorrect filings or missing paperwork.
Example: A foreign investor looking to establish a manufacturing plant in Hanoi might encounter delays due to environmental impact assessments. A local consultant can facilitate communication between the investor and relevant authorities, ensuring timely approval and submission of necessary documents.

2. Key Services Offered by Local Consultants and Legal Firms

Local consultants and legal firms offer a wide range of services tailored to meet the unique needs of each business. Their expertise spans across various aspects of business registration and operational compliance.

2.1. Business Registration Support

Company Incorporation:
- Consultants assist with selecting the appropriate business structure, preparing the necessary documents, and completing the registration with the DPI.
- They handle administrative tasks, such as filing applications, coordinating translations, and ensuring the business complies with both national and local regulations.
Investment Registration Certificate (IRC) Application:
- For foreign-owned businesses, securing an Investment Registration Certificate (IRC) is the first step before applying for a business license. Local consultants ensure that the application is submitted with accurate and comprehensive details.
- They help prepare financial projections, investment plans, and other required documentation, ensuring a smooth and timely approval process.
Example: A Singaporean entrepreneur establishing a tech startup in Ho Chi Minh City hires a local consulting firm to handle business registration. The consultants prepare the IRC, register the company, and secure the business license, allowing the entrepreneur to focus on operational planning.

2.2. Legal and Regulatory Compliance

Contract Drafting and Review:
- Local legal firms assist in drafting business contracts that comply with Vietnamese law, including leases, employment agreements, and supplier contracts.
- They review contracts to ensure that terms are favorable and legally binding, minimizing the risk of disputes or legal issues down the line.
Labor Law Compliance:
- Legal services help businesses comply with labor laws, including proper employment contracts, insurance obligations, and workplace safety regulations.
- They guide businesses in preparing documents related to employee hiring, termination, and dispute resolution.
Tax Registration and Compliance:
- Consultants assist businesses in registering for tax codes and staying compliant with Vietnam’s complex tax laws. This includes corporate income tax, value-added tax (VAT), and personal income tax (PIT) for employees.
- They also help in preparing and filing annual tax returns, avoiding penalties or delays in payments.
Example: A foreign-owned restaurant chain expanding in Vietnam worked with a legal firm to review all employee contracts and lease agreements to ensure compliance with local employment laws and real estate regulations, protecting the business from potential legal conflicts.

2.3. Intellectual Property Protection

Trademark and Patent Registration:
- Legal services assist businesses in protecting their intellectual property (IP) rights by registering trademarks, patents, and copyrights with the relevant Vietnamese authorities.
- They offer strategic advice on how to protect IP assets and represent businesses in any disputes or infringement cases.
Example: A foreign-owned fashion brand entering the Vietnamese market works with a local legal firm to register its trademark, ensuring protection against copycats and unauthorized use of its brand name and designs.

3. Benefits of Engaging Local Consultants and Legal Services

Working with local consultants and legal services offers several key benefits, particularly for foreign investors who may be unfamiliar with the Vietnamese business landscape.

3.1. Time and Cost Efficiency

Avoiding Delays and Mistakes:
- Without local expertise, businesses can face significant delays in the registration process due to incomplete applications, missed deadlines, or misunderstanding of regulations. Consultants and legal firms mitigate these risks by handling the process with precision and efficiency.
Streamlining Document Preparation:
- From translation services to notarization and filing, consultants manage all administrative tasks, ensuring that the necessary documents are prepared accurately and in a timely manner.
Example: A U.S. pharmaceutical company expanding into Vietnam reduced the registration time from several months to a few weeks by working with a local consultant who handled all documentation and coordinated with the Ministry of Health for product approvals.

3.2. Expertise in Navigating Industry-Specific Regulations

Understanding Sector-Specific Requirements:
- Different industries in Vietnam, such as education, healthcare, and manufacturing, have specific regulatory requirements. Consultants with industry experience can provide tailored advice and handle the submission of additional permits and licenses.
Example: An Australian university setting up a branch in Vietnam worked with a local consulting firm to meet the Ministry of Education’s strict licensing requirements, including curriculum approvals and local accreditation.

3.3. Local Market Insights

Cultural and Market Adaptation:
- Local consultants provide valuable insights into Vietnam’s business culture, helping foreign investors adapt their operations to the local market. They offer advice on local consumer preferences, business etiquette, and potential challenges.
Business Networking:
- Local firms can connect foreign investors with local suppliers, partners, or government officials, facilitating smoother entry into the market.
Example: A French wine company entering the Vietnamese market benefited from the local consultant’s network by gaining access to trusted distributors and local suppliers, ensuring a successful market entry.

4. Choosing the Right Consultant or Legal Firm

Selecting the right local consultant or legal firm is essential for a smooth and successful business registration process. Here are the key factors to consider:

Experience with Foreign Investors:
- Choose consultants or legal firms with a proven track record of working with foreign investors in your industry. Their familiarity with foreign investment laws and business registration processes will ensure a smoother experience.
Reputation and Credentials:
- Look for firms that are well-established and have a solid reputation for successfully helping businesses obtain licenses. Check client testimonials and industry affiliations to gauge their reliability.
Comprehensive Service Offering:
- Opt for consultants who offer a wide range of services, from legal compliance to tax advisory and business registration. Having a one-stop service provider can simplify your setup process.
Example: A Japanese manufacturing firm chose a local legal firm with extensive experience working with Japanese investors and navigating Vietnam’s manufacturing regulations, ensuring smooth entry into the market and operational compliance.

Conclusion

Working with local consultants and legal services is a strategic move for any business looking to establish a presence in Vietnam.

Their expertise in navigating the legal landscape, preparing necessary documents, and ensuring regulatory compliance can significantly streamline the process of obtaining a business license.

For foreign investors, especially, having a local partner who understands the complexities of the Vietnamese business environment is critical to achieving long-term success.

By choosing the right consultant or legal firm, businesses can save time, reduce costs, and avoid common challenges in the business registration process.

Conclusion

Obtaining a business license in Vietnam in 2024 is an essential step for both local and foreign entrepreneurs looking to tap into one of Southeast Asia’s most dynamic and rapidly growing economies.

The process, while detailed, reflects Vietnam’s ongoing efforts to streamline business regulations, attract foreign investment, and foster economic growth.

Whether you are establishing a small business, setting up a manufacturing plant, or launching a tech startup, understanding the current legal framework, requirements, and the associated costs is crucial to ensuring your business’s smooth entry into the Vietnamese market.

Vietnam’s government has made significant strides in simplifying the business registration process, particularly through digitalization and the introduction of e-governance platforms, which have sped up procedures and minimized paperwork.

However, while steps have been taken to facilitate smoother business license applications, understanding the complexity of Vietnam’s business environment is still necessary.

Factors such as choosing the right business structure, complying with industry-specific regulations, and navigating foreign ownership laws require careful planning and adherence to legal requirements.

Key Takeaways:

Business Structures in Vietnam: Selecting the correct business structure, whether it’s a sole proprietorship, limited liability company, or joint stock company, plays a pivotal role in the licensing process. Each structure has its own advantages and regulatory requirements, which will directly impact your business operations and legal obligations.
Legal Requirements: The licensing process is contingent upon fulfilling Vietnam’s strict legal requirements. These include capital contributions, sector-specific compliance, foreign investment laws, and tax registration. Understanding the necessary permits and fulfilling these requirements is vital to avoid potential delays or complications.
Step-by-Step Guidance: Following a structured, step-by-step process for obtaining a business license is key to ensuring your business gets off to a smooth start. This includes registering with the Department of Planning and Investment, submitting all necessary documentation, and acquiring sector-specific permits as required.
Common Challenges: Despite the streamlined processes, businesses often face challenges such as language barriers, delays in documentation approval, and navigating local compliance standards. Foreign businesses, in particular, may encounter hurdles when understanding local laws regarding ownership, taxation, and specific industry regulations.
Costs and Fees: The cost of obtaining a business license in Vietnam varies depending on the type of business, industry, and specific region. Businesses must account for government fees, legal service costs, and any additional expenses tied to sector-specific licensing.
Working with Consultants and Legal Services: One of the most effective ways to avoid these challenges is by partnering with local consultants or legal experts. These professionals have in-depth knowledge of Vietnam’s legal landscape and can help businesses navigate complex regulatory requirements efficiently, ensuring a smooth and successful licensing process.
2024 Legal Updates: Staying updated on legal changes is critical for businesses. In 2024, Vietnam introduced several important updates, including streamlined procedures, changes in foreign ownership rules, sector-specific licensing requirements, and stricter compliance measures. Understanding these updates and adhering to them is essential for long-term success.

Why Vietnam Is an Attractive Destination for Businesses

Vietnam continues to attract foreign investors and local entrepreneurs due to its stable political environment, growing middle class, and competitive labor market.

In recent years, the country has emerged as a regional hub for manufacturing, technology, and services.

Vietnam’s strategic location within Southeast Asia, along with various free trade agreements and incentives for foreign investors, makes it a prime destination for business expansion.

For many businesses, Vietnam offers the opportunity for growth and scalability, especially within industries such as technology, manufacturing, retail, and renewable energy.

However, to take full advantage of these opportunities, businesses must remain agile and adaptable to Vietnam’s evolving regulatory landscape.

Final Thoughts

Successfully obtaining a business license in Vietnam requires a combination of preparation, thorough research, and the ability to navigate a regulatory framework that is continuously evolving.

While Vietnam has made significant efforts to improve its business environment, challenges still exist, particularly for foreign investors unfamiliar with the local laws and procedures.

By following a clear and structured process, ensuring compliance with all legal requirements, and working closely with local legal experts, businesses can achieve a smooth entry into the market.

In 2024, Vietnam continues to present itself as an attractive destination for both local and foreign businesses.

Its expanding economy, favorable investment policies, and strategic importance in the global supply chain make it a prime choice for new ventures.

By understanding the nuances of the business licensing process and staying informed about the latest legal updates, businesses can successfully establish a strong presence in this thriving market.

Embarking on the journey to obtaining a business license in Vietnam may seem challenging, but with the right knowledge, resources, and strategic partnerships, businesses can unlock the vast potential that this fast-growing economy offers.

For more information on investing in Vietnam, do follow our blog here.

People Also Ask

What is the first step to obtaining a business license in Vietnam?

The first step is selecting the appropriate business structure (LLC, JSC, etc.) and registering your company with the Department of Planning and Investment.

Do foreign investors need a business license in Vietnam?

Yes, foreign investors must obtain a business license to operate legally in Vietnam, along with adhering to specific foreign ownership regulations.

How long does it take to get a business license in Vietnam?

It typically takes between 15 to 30 business days, depending on the type of business and complexity of the application.

What documents are required to apply for a business license in Vietnam?

Common documents include the company charter, application form, investor’s passport, proof of legal capital, and lease agreements for the business location.

Can I apply for a business license online in Vietnam?

Yes, you can submit the necessary documents via Vietnam’s online business registration portal or work through a local legal service.

How much does it cost to obtain a business license in Vietnam?

The cost can vary depending on the business type and region, but generally includes government fees ranging from $50 to $500, excluding legal or consulting fees.

Do I need a local partner to open a business in Vietnam?

It depends on the industry. Some sectors require foreign investors to partner with a local entity, while others allow 100% foreign ownership.

What types of businesses require special licenses in Vietnam?

Sectors such as healthcare, education, and finance may require additional permits and approvals beyond a general business license.

Can foreign companies own 100% of a business in Vietnam?

Yes, certain industries allow 100% foreign ownership, while others may require a local partnership, depending on government regulations.

What is the most common business structure for foreign investors in Vietnam?

A Limited Liability Company (LLC) is the most popular business structure for foreign investors due to its flexibility and limited liability protection.

Are there annual renewal fees for a business license in Vietnam?

No, business licenses do not typically require annual renewal. However, companies must comply with yearly tax filings and other regulatory obligations.

Can I change my business license type after registration?

Yes, businesses can apply for a change in business license type, but this requires submitting an amendment application and meeting additional requirements.

What are the capital requirements for obtaining a business license in Vietnam?

There is no minimum capital requirement for most businesses, but certain sectors, such as banking or insurance, may have industry-specific capital thresholds.

What language should the application documents be in?

All documents submitted for business registration must be in Vietnamese. If your documents are in another language, certified translations are required.

Do I need a physical office to register my business in Vietnam?

Yes, having a physical office with a legitimate lease agreement is a key requirement for obtaining a business license.

Is it necessary to hire a local legal consultant for the business licensing process?

While not mandatory, hiring a local legal consultant is highly recommended to navigate Vietnam’s complex regulatory environment effectively.

What are common mistakes made during the business license application process?

Common mistakes include incomplete documentation, choosing the wrong business structure, and misunderstanding sector-specific regulations.

Do I need a tax registration certificate along with my business license?

Yes, once your business is licensed, you must also register for tax at the local tax authority to legally operate in Vietnam.

Are there any incentives for foreign businesses in Vietnam?

Vietnam offers tax incentives, land-use privileges, and favorable regulations for foreign businesses, particularly in manufacturing, technology, and renewable energy.

Can I operate my business while the license is being processed?

No, you must wait until the business license is approved and issued before legally operating in Vietnam.

How does Vietnam’s e-Government portal help in obtaining a business license?

Vietnam’s e-Government portal allows for online submission of required documents, tracking application progress, and digital communications with authorities.

Do I need to register my business with the Ministry of Industry and Trade?

Some industries, especially those involving import-export or e-commerce, require additional registration with the Ministry of Industry and Trade.

What happens if my business license application is rejected?

If rejected, you can reapply after addressing the reasons for rejection, which are usually outlined by the authorities, such as missing or incorrect documents.

Is a business license sufficient to start operations in Vietnam?

While the business license is key, additional permits may be required depending on your industry, such as health permits or environmental approvals.

Can a business license in Vietnam be revoked?

Yes, a business license can be revoked for non-compliance with legal regulations, failure to pay taxes, or engaging in prohibited business activities.

How does Vietnam’s 2024 legal update affect the licensing process?

In 2024, Vietnam introduced digital processing for faster approvals and updated foreign ownership rules in key sectors like technology and services.

What taxes are associated with obtaining a business license in Vietnam?

Businesses must register for value-added tax (VAT), corporate income tax, and other applicable taxes depending on the type and scale of operations.

Can I expand my business into new sectors after obtaining a license?

Yes, businesses can expand into new sectors, but this requires modifying the business license and ensuring compliance with regulations in the new sector.

Is there a specific authority for handling business licenses in Vietnam?

The Department of Planning and Investment is the main authority for handling business license applications in Vietnam.

How do free trade agreements benefit foreign investors in Vietnam?

Vietnam’s free trade agreements provide foreign businesses with easier access to markets, reduced tariffs, and favorable business conditions.