Doing Business in Vietnam: A Guide for Foreign Companies

Doing Business in Vietnam: A Guide for Foreign Companies

Doing business in Vietnam can create valuable opportunities for foreign companies. However, entering the Vietnamese market requires careful planning. Investors need to understand market access, company structures, tax, accounting and ongoing compliance.

Moreover, Vietnam’s regulatory environment continues to change. The Investment Law 2025 took effect on March 1, 2026. Therefore, foreign investors should use current information when planning their market entry.

This guide explains the key points that foreign companies should consider before starting operations in Vietnam.

Why Are Foreign Companies Doing Business in Vietnam?

Vietnam has become an important destination for international businesses in Southeast Asia. Its manufacturing sector, growing consumer market and regional trade connections continue to attract foreign investors.

In addition, Vietnam can support companies that want to develop regional supply chains. The country also offers opportunities in manufacturing, technology, logistics, retail and professional services.

However, every industry has different requirements.

Therefore, foreign companies should evaluate their business model before investing. A clear plan can help investors identify ownership restrictions, licences, tax obligations and compliance requirements early.

1. Check Market Access Requirements

The first step in doing business in Vietnam is to check whether the proposed activity is open to foreign investors.

Some industries have specific market access conditions. These conditions can involve foreign ownership, investment structures or operating requirements.

Furthermore, Vietnam’s Investment Law 2025 changed several aspects of the investment framework from March 1, 2026. The Vietnam Investment Portal states that the revised framework reduced the number of conditional investment and business sectors.

As a result, investors should review the rules for their specific industry instead of relying on general assumptions.

Before investing, consider these questions:

• What products or services will the company provide?
• Is foreign ownership restricted?
• Does the sector require a special licence?
• Will the company import or export goods?
• Will the business hire employees?
• Will the company lease property?
• Does the activity involve a regulated industry?

By answering these questions first, investors can choose a more suitable market-entry strategy.

2. Choose the Right Business Structure

Foreign investors can enter Vietnam in several ways.

For example, an investor may:

• Establish a company in Vietnam
• Contribute capital to an existing company
• Purchase shares or capital contributions
• Implement an investment project
• Enter into a business cooperation arrangement

The best structure depends on the company’s objectives, activities and long-term plans.

For many foreign businesses, establishing a Vietnamese company provides a practical operating structure. It can allow the company to hire employees, sign contracts, issue invoices and manage local operations.

Nevertheless, incorporation is not always the best option.

For instance, an investor that wants to acquire an established Vietnamese business may prefer a share purchase. Therefore, investors should compare the available structures before committing capital.

3. Understand Vietnam’s 2026 Investment Changes

Vietnam’s Investment Law 2025 became effective on March 1, 2026.

This change matters because the new framework modifies several aspects of foreign investment.

In particular, qualifying foreign investors may establish economic organizations before completing procedures for an Investment Registration Certificate, provided that they meet the applicable market access conditions.

As a result, some investors may have greater flexibility when planning their market entry.

However, the correct procedure still depends on the investment structure and business activity. Therefore, companies should review their individual circumstances before choosing a registration route.

Investors should also avoid relying on older articles that describe the pre-2026 process.

4. Company Registration Is Only the Beginning

Company registration is an important milestone. However, it does not represent the end of the compliance process.

After establishment, a company may need to arrange:

• Bank accounts
• Investment capital accounts
• Tax registration
• Electronic invoices
• Accounting systems
• Payroll procedures
• Social insurance
• Business licences
• Tax filings
• Financial reporting

The exact requirements depend on the company’s activities.

For example, businesses in conditional sectors may need additional licences or certificates before they can operate.

Therefore, foreign investors should create a compliance plan from the beginning.

This approach can reduce administrative delays and help management understand its responsibilities.

5. Understand Vietnam Corporate Income Tax

Tax planning is another important part of doing business in Vietnam.

Vietnam’s corporate income tax framework changed under the 2025 Corporate Income Tax Law and its implementing regulations.

Generally, the corporate income tax rate is 20%. However, qualifying businesses may apply lower rates under specific conditions.

Under the current rules, a 15% rate can apply to enterprises with annual revenue of no more than VND 3 billion. Meanwhile, a 17% rate can apply to enterprises with annual revenue above VND 3 billion and no more than VND 50 billion, subject to the applicable conditions and exclusions.

Importantly, these lower rates do not automatically apply to every small or medium-sized company. Certain subsidiaries and companies with related-party relationships can fall outside the reduced-rate rules.

Therefore, foreign investors should review their ownership structure before estimating their Vietnamese corporate tax cost.

Tax incentives may also apply to qualifying projects, industries or locations. However, eligibility depends on the specific requirements.

6. Consider VAT and Other Taxes

Corporate income tax is only one part of the Vietnamese tax system.

Depending on their activities, companies may also need to consider:

• Value-added tax
• Personal income tax
• Foreign contractor tax
• Special consumption tax
• Import and export duties
• Industry-specific taxes

The correct tax treatment depends on the transaction.

For example, cross-border services may require additional tax analysis. Similarly, payments for intellectual property, management services or other overseas services can create additional tax considerations.

Therefore, businesses should review the tax treatment before signing major commercial agreements.

This step is particularly important for companies that regularly transact with overseas customers, suppliers or related companies.

7. Build a Strong Accounting System

Accounting should form part of the business plan from day one.

A reliable accounting system helps companies monitor performance, prepare reports and support tax compliance.

A Vietnamese business may need to manage:

• Revenue
• Expenses
• Accounts receivable
• Accounts payable
• Fixed assets
• 工资单
• Tax records
• Foreign currency transactions
• Related-party transactions
• Financial statements

Furthermore, foreign parent companies should consider group reporting requirements.

For example, a parent company may use IFRS for group reporting while its Vietnamese subsidiary follows applicable Vietnamese accounting requirements.

Therefore, management should establish a reporting process that supports both local compliance and group consolidation.

Good accounting controls can also make audits and tax reviews easier.

8. Manage Payroll and Employment Compliance

Hiring employees creates another layer of responsibility.

Foreign-owned companies should establish clear procedures for:

• Employment contracts
• Salary payments
• Personal income tax
• Social insurance
• Health insurance
• Unemployment insurance where applicable
• Payroll records
• Employee benefits

Foreign employees may also require work permits or applicable exemptions.

Therefore, companies should review employment requirements before bringing overseas staff to Vietnam.

In addition, payroll records should remain consistent with accounting and tax records.

As a result, an integrated payroll process can reduce administrative errors.

9. Review Transfer Pricing Requirements

Transfer pricing deserves particular attention from multinational groups.

A Vietnamese subsidiary may conduct transactions with its overseas parent or other related companies.

For example, transactions can include:

• Management fees
• Service fees
• Royalties
• Intercompany loans
• Product purchases
• Product sales
• Shared operating costs

These transactions can create transfer pricing obligations.

Therefore, multinational companies should establish appropriate intercompany pricing policies and maintain supporting documentation.

Moreover, management should review related-party transactions regularly rather than only when a tax inspection begins.

Early planning can make future tax reviews more efficient.

10. Plan Foreign Investment Capital Carefully

Foreign investors should also plan how investment capital will enter Vietnam.

Capital contributions can involve specific banking and foreign exchange procedures. Therefore, investors should understand the process before transferring funds.

Before making a contribution, consider:

1. The registered investment capital
2. The contribution schedule
3. The source of funds
4. The appropriate bank account
5. Foreign exchange requirements
6. Supporting documentation

In addition, investors should keep clear records of capital transfers.

A well-designed capital plan can reduce delays and documentation problems.

11. Check Industry-Specific Licences

A common mistake is assuming that company registration automatically permits every business activity.

In reality, some industries have additional operating conditions.

Depending on the sector, a company may need:

• Operating licences
• Certificates
• Professional qualifications
• Safety approvals
• Environmental approvals
• Fire prevention requirements
• Other regulatory approvals

Therefore, companies should review their actual activities before launching operations.

For example, registering a broad business scope does not necessarily remove the need for a sector-specific licence.

As a result, investors should check operating conditions before signing major contracts or launching services.

12. Consider Acquiring an Existing Vietnamese Business

Starting a new company is not the only way to enter the Vietnamese market.

Alternatively, foreign investors can consider purchasing shares or capital contributions in an existing Vietnamese company.

This approach can provide access to:

• Existing customers
• Employees
• Supplier relationships
• Local market knowledge
• Existing operations
• Established commercial relationships

However, acquisitions require careful due diligence.

Before investing, buyers should review:

• Financial statements
• Tax records
• Corporate documents
• Commercial contracts
• Employment matters
• Licences
• Intellectual property
• Existing liabilities
• Related-party transactions
• Ownership records

Moreover, investors should assess whether the existing business has unresolved tax or compliance issues.

A detailed review can therefore help identify potential risks before the transaction closes.

13. Common Mistakes When Doing Business in Vietnam

Foreign companies can reduce risk by avoiding several common mistakes.

Relying on outdated information

Vietnam’s investment and tax rules continue to develop.

Therefore, information published several years ago may no longer reflect current requirements.

The 2026 investment changes demonstrate why businesses should check current regulations before making decisions.

Choosing a structure too quickly

The fastest structure is not necessarily the best structure.

Instead, investors should consider ownership, tax, operations, financing and future expansion.

This broader approach can produce a more sustainable setup.

Treating accounting as an afterthought

Accounting should start when the business starts operating.

Otherwise, companies may face missing documents, inaccurate records or reporting problems later.

Therefore, management should establish accounting procedures from the beginning.

Ignoring related-party transactions

International groups often make payments between related companies.

However, these transactions can create additional tax and documentation requirements.

As a result, companies should review related-party arrangements before making significant cross-border payments.

Assuming registration equals permission to operate

Company registration does not necessarily replace sector-specific licences.

Therefore, businesses should confirm all operating conditions before launching commercial activities.

14. Doing Business in Vietnam: Practical Checklist

Before entering the Vietnamese market, foreign investors can use this checklist.

Market entry

• Define the proposed business activity.
• Check foreign ownership conditions.
• Review market access requirements.
• Identify required licences.

Company structure

• Select the appropriate investment structure.
• Determine ownership.
• Prepare corporate documents.
• Plan capital contributions.

Tax

• Review corporate income tax.
• Determine VAT treatment.
• Consider personal income tax.
• Review cross-border tax.
• Assess transfer pricing requirements.

Accounting

• Establish bookkeeping procedures.
• Maintain supporting documents.
• Prepare financial reporting processes.
• Coordinate local and group reporting.

Employment

• Prepare employment contracts.
• Establish payroll procedures.
• Review social insurance requirements.
• Check foreign employee requirements.

Ongoing compliance

• Monitor tax deadlines.
• Maintain corporate records.
• Review licences when necessary.
• Monitor related-party transactions.
• Prepare required reports.

By following this checklist, foreign investors can identify major compliance areas before starting operations.

15. How uSafe Can Support Foreign Companies

Successful doing business in Vietnam requires more than company registration.

Foreign investors may need support with accounting, tax, audit, compliance and financial reporting.

Therefore, uSafe can position its services around the complete business lifecycle.

Potential support areas include:

• Accounting services
• Tax compliance
• Financial reporting
• Audit support
• Payroll support
• Corporate compliance
• Business advisory
• Cross-border accounting coordination

Furthermore, a coordinated approach can help management connect accounting, tax and compliance decisions.

The objective is simple: help foreign companies establish a reliable financial and compliance foundation in Vietnam.

With the right systems in place, businesses can focus more on growth and less on administrative uncertainty.

Conclusion

Doing business in Vietnam can create valuable opportunities for foreign companies. However, successful market entry requires more than registering a legal entity.

First, investors should review market access requirements. Next, they should choose an appropriate structure and plan their investment capital.

At the same time, businesses should establish accounting, tax and payroll systems from the beginning. In addition, they should identify industry-specific licences and manage related-party transactions carefully.

Vietnam’s regulatory environment continues to evolve. The Investment Law 2025 took effect on March 1, 2026, bringing important changes to the investment framework.

Therefore, foreign investors should use current information when planning their Vietnam operations.

Ultimately, the key question is not simply:

“How do I register a company in Vietnam?”

A better question is:

“How can I build a compliant, efficient and scalable business in Vietnam?”

By taking this broader approach, foreign companies can make better decisions about investment, accounting, taxation and long-term growth.

Frequently Asked Questions

Can foreigners do business in Vietnam?

Yes. Foreign investors can enter Vietnam through several investment structures. However, the applicable conditions depend on the business activity, ownership structure and market access rules.

Do foreign companies need a Vietnamese company?

Not necessarily. The appropriate structure depends on the investor’s objectives and proposed activities. Therefore, companies should assess their options before choosing a structure.

What is the standard corporate income tax rate in Vietnam?

The standard corporate income tax rate is generally 20%. However, qualifying enterprises may be subject to 15% or 17% rates under specific conditions.

Is accounting required for foreign-owned companies?

Yes. Foreign-owned businesses operating in Vietnam need appropriate accounting and financial reporting processes. Therefore, accounting should be established from the beginning.

Do foreign companies need special licences?

Some businesses do. The requirements depend on the industry and actual activities. Therefore, investors should check sector-specific conditions before starting operations.

Why is transfer pricing important in Vietnam?

Transfer pricing matters because multinational companies often conduct transactions with related parties. Consequently, businesses should review their intercompany transactions and maintain appropriate supporting documentation.

References

• Vietnam Investment Portal — Investment Law and foreign investment guidance.
• Vietnam Ministry of Finance — Corporate Income Tax Law and implementing regulations.
• Vietnam Investment Portal — Foreign investment and market access information.
• Vietnam Investment Portal — Conditional business activities.
• Yoast — Transition Words and Readability Guidelines.