1. Introduction: Beyond the Low-Cost Narrative

Vietnam has reached a critical inflection point, evolving from a regional manufacturing alternative into a global destination for sophisticated capital. In the first eight months of 2025 alone, registered Foreign Direct Investment (FDI) surged by 27% year-on-year, surpassing $26 billion. However, as a Senior Strategist, I advise you to look past the headline registration numbers. The true barometer of “skin in the game” is the $15.4 billion in disbursed capital—the highest in five years.

What is particularly telling is the shift in the investor profile. While Singapore and China remain dominant, Sweden has climbed into the top three investors, signaling a new wave of European interest focused on high-tech and sustainable industrialization. This isn’t just about cheap labor anymore; it is a race for strategic positioning in a maturing economy.

2. The “Satisfaction” Metric: Why the Real Boom is Internal

The most counter-intuitive data point in the current landscape is the divergence between new and existing players. While the number of new projects grew by over 12%, the capital registered for those new entries actually dipped by approximately 8%.

The real engine of the “Gold Rush” is coming from within the fortress: capital adjustments for existing projects skyrocketed by nearly 86%, totaling $10.65 billion. This surge in reinvestment is a powerful bullish signal. It proves that those already on the ground have moved past the “proof of concept” phase and are aggressively scaling.

“This reflects satisfaction and confidence in the actual business environment in Vietnam… moving the question from ‘Is Vietnam a good place to start?’ to ‘How to replicate the success of those who came before?'”

3. The “Negative List” Revolution: Defaulting to Open Doors

With the implementation of the 2020 Investment Law and Decree 31/2021/NĐ-CP, Vietnam has performed a “regulatory flip” to outcompete regional neighbors. By shifting from a “Positive List” (where only listed activities are allowed) to a “Negative List,” the government has established a “default to open” stance for the Digital Economy.

This shift is a game-changer for frontier sectors like AI, Fintech, and SaaS. Previously, these industries languished in “legal limbo” because they weren’t explicitly listed. Today, they are permitted by default, providing the regulatory certainty required for high-level venture capital. The restrictions are now limited to two clear categories:

• Section A: 25 prohibited sectors (e.g., debt collection, public opinion polling, specific security services).
• Section B: 59 conditional sectors (e.g., logistics, advertising), which may require joint ventures or specify foreign ownership caps.

4. The M&A Trap: Why Speed Might Cost You Your Competitive Edge

For investors seeking rapid entry, a Merger and Acquisition (M&A) path is tempting, with a timeline of 20–35 working days compared to the 1–4 months required for Greenfield (Direct) Investment. However, M&A is often a “Strategic Trap” rather than a shortcut.

In an M&A transaction, funds are paid directly to the seller for a share transfer. This means you bypass the Direct Investment Capital Account (DICA)—the mandatory “bloodline” for FDI. Without a DICA-verified injection, the entity may struggle to qualify for the lucrative government tax incentives reserved for new Greenfield projects.

Historically, M&A has been a tool for navigating ownership caps (as seen in the ThaiBev/Sabeco acquisition). But for capital-intensive manufacturing, a Greenfield setup is the only way to establish a “Strategic Platform” that allows for long-term capital injections and maximized structural incentives.

5. The $130,000 Threshold: The Practical Reality of Residency

The “no minimum capital” myth is a frequent stumbling block. While you can legally incorporate a service company with as little as $3,000 to $10,000, the “practical” minimum is dictated by your right to reside in the country.

To be eligible for a long-term Investor Visa (DT) and a Temporary Residence Card (TRC) without needing a separate work permit, an investor must contribute at least $130,000 (approx. 3 billion VND). If your capital contribution falls below this threshold, you lose the Work Permit exemption. For a founder, this means the difference between being a “legal owner” and having the “legal right to work” in your own company.

6. The “Dual-Key” Bureaucracy: IRC, ERC, and the Provincial Third Key

Market entry is a mechanism of double—and sometimes triple—control.

1. IRC (Investment Registration Certificate): The “Project Approval.” This is where the government evaluates your financial capacity and project feasibility.
2. ERC (Enterprise Registration Certificate): The “Entity Creation.” This creates the legal persona and provides your Tax ID.

The Strategic Nuance: For projects outside the primary hubs of Hanoi and HCMC, a “Third Key” is often required: Investment Policy Approval from the provincial People’s Committee. Furthermore, under current regulations, the Ministry of Defense (MoD) must now be consulted on office and project locations unless you are leasing space in an existing office building that already has foreign investment. A failure to account for these “security-cleared” locations can stall an entry strategy for months.

7. Conclusion: The 2026 Horizon

As we look toward 2026, the landscape is becoming even more streamlined. A significant victory for the “Gold Rush” is the scheduled abolition of Business License Fees (Lệ phí môn bài) starting January 1, 2026, further lowering the friction of compliance.

With 82% of all disbursed capital flowing into manufacturing, Vietnam is no longer a site for opportunistic, low-value entries. It is a long-term play. The real question for your 2026 strategy is not how quickly you can enter, but whether your capital structure—specifically your DICA and residency thresholds—is robust enough to capture the structural incentives Vietnam is offering to the next generation of global leaders.

Contact us today to receive dedicated advice and the most suitable solution for your business!

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Email:

• info@iscglobal.asia
• van.pham@iscglobal.asia

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• https://iscglobal.edu.vn/

I. LEGAL BASIS

This advisory memorandum is prepared based on the following legal documents currently in force in Vietnam:

• Law on Investment No. 61/2020/QH14 dated 17 June 2020 (the “Law on Investment 2020”);
• Decree No. 31/2021/ND-CP dated 26 March 2021 of the Government detailing and guiding the implementation of certain articles of the Law on Investment;
• Decree No. 152/2020/ND-CP dated 30 December 2020 of the Government on foreign employees working in Vietnam and the recruitment and management of Vietnamese employees working for foreign organizations and individuals in Vietnam.

II. FOREIGN INVESTOR STATUS OF FOREIGN INDIVIDUALS

Pursuant to Clause 19, Article 3 of the Law on Investment 2020, a foreign investor is defined to include both individuals holding foreign nationality and organizations established under foreign laws that conduct business investment activities in Vietnam.

Conclusion: A foreign individual is fully entitled to establish a company in Vietnam in the capacity of an independent foreign investor, without being required to act through any other economic organization.

III. MARKET ACCESS CONDITIONS

Pursuant to Article 9 of the Law on Investment 2020, a foreign individual establishing an economic organization in Vietnam must cross-check the intended business lines against the List of business lines with restricted market access for foreign investors issued together with Appendix I of Decree No. 31/2021/ND-CP. Accordingly, the following three categories apply:

Market access conditions applicable to conditional business lines include:

• Ownership ratio of charter capital held by the foreign investor in the economic organization;
• Form of investment;
• Scope of investment activities;
• Capacity of the investor and partners participating in the investment activities;
• Other conditions stipulated under laws, resolutions of the National Assembly, ordinances, resolutions of the Standing Committee of the National Assembly, decrees of the Government, and international treaties to which Vietnam is a contracting party.

IV. INVESTMENT REGISTRATION CERTIFICATE REQUIREMENT

Pursuant to Clause 1, Article 22 of the Law on Investment 2020, prior to establishing an economic organization in Vietnam, a foreign investor must concurrently satisfy the following conditions:

1. Satisfy the market access conditions stipulated under Article 9 of the Law on Investment 2020;
2. Have an investment project and complete the procedures for issuance or adjustment of an Investment Registration Certificate (“IRC”).

Exception: The establishment of innovative small and medium-sized start-up enterprises and innovative start-up investment funds in accordance with the laws on support for small and medium-sized enterprises is exempted from the IRC issuance procedure.

Conclusion: Except for the above exception, a foreign individual establishing a company in Vietnam is required to obtain an IRC prior to carrying out the enterprise registration procedure.

V. FORMS OF INVESTMENT IN VIETNAM

Pursuant to the Law on Investment 2020, a foreign investor may select one of the following investment forms:

• Investment in the establishment of an economic organization;
• Investment via capital contribution, purchase of shares, or purchase of capital contribution portions;
• Implementation of an investment project;
• Investment in the form of a Business Cooperation Contract (BCC);
• Other forms of investment and new types of economic organizations as prescribed by the Government.

VI. INVESTMENT ACTIVITIES OF FOREIGN-INVESTED ECONOMIC ORGANIZATIONS

Foreign-invested economic organizations must satisfy the relevant conditions and complete the procedures stipulated by law when conducting investment activities to establish another economic organization, to contribute capital or purchase shares or capital contribution portions of another economic organization, or to invest under a Business Cooperation Contract, if they fall within one of the following cases:

• A foreign investor holds more than 50% of the charter capital, or the majority of general partners are foreign individuals in the case of a partnership;
• An economic organization falling under point (1) above holds more than 50% of the charter capital;
• A foreign investor together with an economic organization falling under point (1) above hold more than 50% of the charter capital.

Note: Economic organizations falling within any of the three cases above are governed by the legal regime applicable to foreign investors, which differs from that applicable to domestic investors.

VII. WORK PERMIT MATTERS

Pursuant to Decree No. 152/2020/ND-CP, foreign employees working in Vietnam are required to obtain a work permit, except for certain exemption cases. With respect to foreign individuals establishing a company in Vietnam, the notable work permit exemptions include:

• Being the owner or a capital-contributing member of a limited liability company with a capital contribution value of VND 3 billion or more;
• Being the Chairman or a member of the Board of Directors of a joint-stock company with a capital contribution value of VND 3 billion or more;
• Being the person in charge of establishing a commercial presence;
• Intra-corporate transfer within the scope of 11 service sectors specified in Vietnam’s schedule of specific commitments in services under the World Trade Organization (WTO), namely: business, communication, construction, distribution, education, environment, finance, health, tourism, recreation and culture, and transport;
• Entering Vietnam to work as a manager, executive director, expert, or technical worker for a period of less than 30 days and no more than 03 times per year;
• Other exemption cases under Article 154 of the Labor Code and Decree No. 152/2020/ND-CP (teachers and researchers certified by the Ministry of Education and Training; volunteers; personnel implementing ODA programs and projects; etc.).

Recommendation: A foreign individual establishing a company in Vietnam with a capital contribution of VND 3 billion or more will generally fall within the work permit exemption when serving as owner, capital-contributing member, or Board of Directors member. However, the procedure for confirming work permit exemption status with the competent authority must still be completed.

VIII. DOSSIER FOR APPLICATION OF INVESTMENT REGISTRATION CERTIFICATE

The dossier for applying for an IRC by a foreign individual comprises the following documents:

1. Written request for implementation of the investment project;
2. Legal documents of the individual: Valid copies of passport, citizen identification card, or equivalent documents; documents verifying legal status must be authenticated through consular legalization;
3. Documents evidencing financial capacity: For individuals, a bank account balance confirmation corresponding to the proposed investment capital; for legal entities, audited financial statements. The documents must clearly demonstrate the source of investment capital and financial capability to implement the project;
4. Investment project proposal: Describing the objectives, scale, location, implementation schedule, investment capital, technology, labor utilization, impact assessment, and socio-economic efficiency of the project;
5. Proposal on land use needs: Applicable in cases where the company will use leased land in Vietnam.

Receiving authority and processing time: The dossier is submitted to the Department of Planning and Investment (or the Management Board of industrial zones, export processing zones, or economic zones for projects located within such zones). The IRC issuance timeline is 15 working days from the date of receipt of a complete and valid dossier.

IX. ENTERPRISE REGISTRATION DOSSIER

Following the issuance of the IRC, the foreign individual shall proceed with the enterprise registration procedure. The dossier comprises:

1. Application form for the Enterprise Registration Certificate;
2. List of members (for multi-member limited liability companies) or list of founding shareholders (for joint-stock companies);
3. Draft Company Charter: Corresponding to the intended type of enterprise, duly signed by the legal representative, the owner, members, founding shareholders, or their duly authorized representatives;
4. Documents verifying the legal status of the investor:
   1. For individuals: Valid copies of passport, citizen identification card, or other valid personal identification documents;
   1. For organizations (in case of authorization): Power of attorney accompanied by valid copies of personal identification documents of the authorized representative;
5. Written approval for the use of State capital from the competent authority (if State capital is used);
6. Joint venture contract (for the form of joint venture between a foreign investor and a domestic investor);
7. Documents evidencing the capacity and experience of the foreign investor;
8. Documents evidencing the lawful right to use the registered head office (valid office or premises lease agreement).

Receiving authority and processing time: The dossier is submitted to the Business Registration Office under the Department of Planning and Investment. The Enterprise Registration Certificate is issued within 03 to 06 working days from the date of receipt of a complete and valid dossier.

X. PROCEDURE SUMMARY

XI. KEY RECOMMENDATIONS

• Review of business lines: Prior to initiating the procedure, the foreign individual should carefully cross-check the intended business lines against Appendix I of Decree No. 31/2021/ND-CP and Vietnam’s international commitments (in particular, Vietnam’s WTO Schedule of Specific Commitments in Services) to determine market access feasibility and applicable conditions.
• Preparation of comprehensive financial capacity documents: The bank account balance confirmation should match the registered capital contribution and, where issued abroad, be notarized, translated, and consularly legalized.
• Consider a minimum capital contribution of VND 3 billion: To qualify for work permit exemption when serving in a managerial or executive role, the recommended minimum capital contribution is VND 3 billion.
• Note on registered office location: The head office must have a clearly identified address with a valid lease agreement; residential apartment units in apartment buildings designated solely for residential purposes shall not be used as the registered office of an enterprise.
• Engagement of professional legal advisors: Given the complexity of foreign investment procedures (involving consular legalization, notarized translation, and cross-referencing with WTO commitments), investors are advised to engage professional legal counsel to ensure efficiency and timely implementation.

Disclaimer: This advisory memorandum is prepared based on the provisions of Vietnamese laws in force at the time of drafting and is intended for reference purposes only. When applying this content to a specific case, the investor should take into consideration all relevant factual circumstances and consult a qualified lawyer or legal advisor.

Contact us today to receive dedicated advice and the most suitable solution for your business!

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