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23.03.23

How to start a business in Vietnam as a foreigner

Son Nguyen Minh
Vietnam has become an attractive destination for foreign investors due to its dynamic economy, low labor costs, and favorable business environment. However, navigating the legal and cultural landscape of starting a business in Vietnam can be daunting, especially for those who are not familiar with the country's laws and customs. In this blog post, Tubudd will provide a guide on how to start a business in Vietnam as a foreigner

1. Can foreigners start a business in Vietnam?

Yes, foreigners can start a business in Vietnam. In fact, the Vietnamese government has been actively promoting foreign investment and entrepreneurship in the country in recent years. However, there are certain requirements and regulations that foreign investors must follow when setting up a business in Vietnam.

Foreign businessman and businesswoman

2. Vietnam's restrictions and limitations on foreign business establishment

Restricted industries

There are certain industries in Vietnam that are restricted or prohibited to foreign investors. These include industries related to national defense and security, media, and certain agricultural products.

Foreign ownership restrictions

In some industries, foreign investors are subject to restrictions on the percentage of ownership they can hold in a Vietnamese company. For example, foreign investors are limited to a maximum ownership of 49% in a Vietnamese bank.

Investment capital requirements

There are minimum capital requirements for foreign investors in some industries. For example, foreign investors looking to set up a foreign-owned advertising company in Vietnam must have a minimum capital of VND 10 billion (approximately USD 430,000).

Local content requirements

Some industries require a certain percentage of local content in the products or services offered. This can pose challenges for foreign investors who may need to establish local partnerships or acquire local suppliers to meet these requirements.

Busy foreign professional

Visa and work permit requirements

Foreign investors must obtain the appropriate visas and work permits to work and live in Vietnam. These requirements can be complex and time-consuming to navigate. For your information, Tubudd also provides Vietnam visa and work permit services for foreigners.

3. Suitable business structure for foreign business in Vietnam

Before starting a business in Vietnam, it is important to understand the different types of business structures available. The most common forms of business structures in Vietnam are limited liability companies (LLCs), joint-stock companies, partnerships, and sole proprietorships. An LLC is the most popular option for foreign investors, as it offers limited liability protection and allows for a simple and flexible management structure. Specifically, in Vietnam, an LLC can be a 100% foreign-owned enterprise or a joint-venture enterprise (have at least one Vietnamese investor).

Happy businessman and businesswoman

4. Requirements for setting up a business

Business license

Foreign investors must obtain a business license from the local Department of Planning and Investment (DPI) in the province where the business will be registered.

Businessman doing his job

Investment registration certificate

Foreign investors must obtain an investment registration certificate from the DPI, which outlines the scope of their business activities and the amount of capital they plan to invest.

Foreign investors must have a local legal representative who can act on their behalf in Vietnam. This representative must be a Vietnamese citizen or a foreigner with a valid work permit.

Local business representative

Local address

Foreign investors must have a local address in Vietnam where their business will be registered.

Capital requirements

The minimum capital requirements vary depending on the type of business and the industry in which it operates. In general, the minimum capital requirement for a limited liability company (LLC) is VND 1 billion (approximately USD 43,000).

Industry-specific requirements

Depending on the industry in which the business operates, there may be additional requirements or restrictions on foreign ownership.

5. Tips for starting a successful business in Vietnam

To start a successful business in Vietnam, it is important to do your research and seek advice from experts who are familiar with the local market. It is also important to build relationships with local partners and customers, and to invest in learning the local language and culture.

Foreign businessman discuss with his Business Assistant

6. Tubudd has a solution for all of your concerns

You don't need to worry too much because Tubudd can connect you with a local Business Assistant. With the help of Tubudd's Business Assistant, all your administrative tasks will be handled, freeing you up to focus on your business's goals. Also, we facilitate communication with professionals and company owners who share your interests, making it simpler for you to approach and resolve your commercial strategies in the Vietnam market. Whether you need advice on a specific business challenge or are looking to expand your network, we can refer you to relevant people in the field to help you achieve your business goals.

Foreign businessman with Tubudd's Business Assistant

Ideally, you should learn more about do and don't in Vietnam business beforehand. What traditions must you abide by, and how should you treat your Vietnamese partners with respect? What manners should you express?

Starting a business in Vietnam can be a rewarding experience for foreign entrepreneurs who are willing to invest the time and effort to navigate the local landscape. By understanding the different business structures available, meeting the requirements for setting up a business, and following the steps for registering a company in Vietnam, foreign investors can establish a successful business in this dynamic and growing economy. With the right resources and support, foreign entrepreneurs can overcome the challenges of starting a business in Vietnam and achieve their goals.

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