Starting a business in Vietnam can be a rewarding venture, thanks to the country’s growing economy and its strategic position in Southeast Asia. However, before launching your business, you must navigate the legal requirements for obtaining a business license in Vietnam. Whether you’re a local entrepreneur or a foreign investor, understanding the step-by-step process for securing a license is needed to ensure your operations run smoothly.
Vietnam’s business license process is governed by specific regulations, and requirements can vary depending on the type of business and the industry. From choosing the appropriate legal structure to submitting the necessary documents, each stage must be handled with care.
This guide provides a detailed walkthrough of how to obtain a business license in Vietnam, ensuring that your company is fully compliant with the country’s legal framework from the outset.
Legal Framework for Business Licenses in Vietnam
Vietnam’s legal framework for business establishment is primarily governed by the Law on Enterprises (Law No. 59/2020/QH14, effective from January 1, 2021). This law regulates the procedures for business registration, licensing, and the rights and obligations of businesses operating in Vietnam.
Additionally, foreign investors must also comply with the Law on Investment (Law No. 61/2020/QH14), which lays out the conditions for foreign ownership, sectors that are restricted or prohibited for foreign investment, and various incentives available to investors.
It’s important to recognize that obtaining a business license in Vietnam isn’t a single, one-size-fits-all process. The exact steps, documents, and requirements can vary depending on the type of business, the industry, and whether the applicant is a foreign or local investor.
Types of Business License in Vietnam
The term “business license” in Vietnam can refer to various permits and approvals depending on the nature of the business. Here are some of the most common types:
1. Enterprise Registration Certificate (ERC)
The ERC is the basic license required for all companies operating in Vietnam, whether foreign-invested or domestically owned. It is issued by the Department of Planning and Investment (DPI) in the province or city where the business is located. This certificate essentially registers the company as a legal entity in Vietnam and contains important information like the company’s name, address, legal representative, and business lines.
2. Investment Registration Certificate (IRC)
If the company involves foreign investment, an Investment Registration Certificate (IRC) must also be obtained. The IRC is required for businesses with foreign ownership, even if it’s only partial. The IRC outlines the investment project, including the capital structure, scope of activities, and duration of the investment. This certificate is also issued by the DPI and is a prerequisite before applying for the ERC.
3. Business License for Conditional Sectors
In Vietnam, certain sectors are considered “conditional,” meaning they require additional permits beyond the ERC and IRC. These sectors include industries like banking, insurance, telecommunications, real estate, and education, among others. Companies operating in these areas must obtain specific licenses from the relevant regulatory bodies, such as the State Bank of Vietnam for financial services or the Ministry of Information and Communications for telecommunications.
4. Sub-Licenses
Depending on the nature of your business, you may also need to obtain various sub-licenses or operational permits. For example, restaurants need food safety permits, while businesses in construction may need construction permits. These are generally issued by specialized agencies and often require the business to meet certain conditions such as having qualified personnel or appropriate facilities.
Step-by-Step Guide to Obtaining a Business License in Vietnam
Step 1: Choose the Legal Structure of the Business
The first step in obtaining a business license in Vietnam is deciding on the legal structure of the business. Vietnam recognizes several forms of business entities, each with its own legal structure and operational implications.
The most common business structures include:
- Limited Liability Company (LLC): The LLC is the most popular structure for foreign investors in Vietnam due to its straightforward setup process and limited liability protection. An LLC can be established as a single-member LLC (one owner) or a multi-member LLC (up to 50 shareholders).
- Joint-Stock Company (JSC): A JSC requires at least three shareholders and allows the issuance of shares to the public, making it an attractive option for businesses seeking to raise capital through equity investment.
- Partnership: Partnerships in Vietnam consist of at least two individuals or legal entities as partners, with partners sharing unlimited liability for the business’s obligations. Given the personal liability involved, partnerships are less common among foreign investors, who typically seek limited liability options.
- Branch or Representative Office: Foreign companies looking to establish a presence in Vietnam may opt for a branch or representative office. A branch office can conduct business on behalf of the parent company, including profit-generating activities, making it suitable for operational expansion.
- Foreign Investment Projects (FIP): For large-scale projects, foreign investors often set up an FIP, typically involving a joint venture with a local partner. This structure facilitates greater local collaboration and is ideal for industries or projects requiring significant investment, resources, and local market integration.
Each of these legal structures has different requirements in terms of minimum capital, governance, and reporting obligations, so it’s important to select the one that aligns with your business goals.
Step 2: Register the Business Name
Selecting and registering a business name is an important step that requires careful thought to ensure compliance with Vietnamese regulations and to establish a unique brand identity.
When choosing a business name, it should accurately reflect your brand’s identity and be memorable to your target audience. It’s important to select a name that aligns with your business’s mission and values while following Vietnamese naming conventions. Avoid names that might be misleading or fail to convey the nature of your business clearly.
Vietnamese regulations impose specific restrictions on business names to prevent confusion and protect public interest, include:
- No identical or confusingly similar name to an existing business.
- It must not violate public morals or national customs.
- Certain words are restricted or prohibited. For example, words like “Vietnam,” “national,” or “state” are typically reserved for government entities or require special permissions.
Once you have confirmed that your desired name is available, you can proceed to reserve it by submitting an application through the National Business Registration Portal. The relevant authorities will review your proposed name to ensure it complies with all regulations. If approved, your business name is officially registered, and you can include it in your business license application. It’s wise to prepare a few alternative names in case your first choice is not approved.
After registering your business name, consider applying for trademark protection to safeguard your brand from potential infringements. While this step is not mandatory for obtaining a business license, it provides additional legal protection for your business identity.
Step 3: Prepare the Application Dossier
Document requirements will vary based on whether the company is domestic or foreign-invested, and the nature of the business activities. It’s important to follow the guidelines set by the Ministry of Planning and Investment (MPI) to ensure all documents are properly included.
For the Enterprise Registration Certificate (ERC), the core documents typically include:
- An application form completed as per MPI guidelines.
- A company charter outlining governance, shareholder rights, and responsibilities.
- A list of shareholders or members includes names, nationalities, contact details, and shareholding proportions.
- Copies of passports for foreigners or ID cards for Vietnamese shareholders.
- Proof of a business address compliant with zoning regulations.
Foreign investors must also submit:
- Investment Registration Certificate (IRC).
- Financial statements to show the company’s financial stability.
- Bank statements to verify capital investment.
For businesses in regulated sectors, additional licenses or certifications may be required. It’s important to check sector-specific requirements early on.
When preparing your dossier, ensure accuracy, proper translation into Vietnamese, and notarization where necessary. It’s advisable to organize the documents in a clear, logical order, as outlined by the MPI, and include a table of contents if needed.
Proper organization facilitates the review process and avoids missing documents.
Step 4: Submit the Application and Pay the Fees
Once your application dossier is ready, the next step is to submit it and handle the associated fees. You have two main options for submission: in person or online.
Submitting in person involves visiting the local Department of Planning and Investment (DPI) office in the province or city where your business will operate. This approach allows you to interact directly with officials, which can be helpful if you have any questions or need clarifications.
Alternatively, you can submit your application online through the National Business Registration Portal. This method is often more convenient, especially for foreign investors who may not be in Vietnam. The portal guides you through each step, ensuring all required fields are completed accurately.
Upon submission, you will need to pay a processing fee depending on the type and size of your business as well as its location. Typically, fees range from approximately VND 200,000 to VND 2,000,000, which can be paid in person or by bank transfer. It’s best to confirm the exact amount with your local DPI or check the latest fee schedule on the National Business Registration Portal.
After submitting your application and paying the fees, you will receive a confirmation receipt. Keep this receipt safe as it serves as proof of your application and may be needed for tracking its status or for any follow-up inquiries.
Once submitted, the DPI will begin reviewing your application. This review process typically takes between 3 to 15 working days, depending on the complexity of your application and the specific requirements of your business sector.
For online submissions, you can track the status of your application through the National Business Registration Portal. If you submitted in person, regular follow-ups with the DPI office may be necessary to stay updated on the progress.
Step 5: Receive the Enterprise Registration Certificate (ERC)
Upon the successful review of your application, the Department of Planning and Investment (DPI) will issue the Enterprise Registration Certificate (ERC). This certificate officially recognizes your business as a legal entity in Vietnam.
The ERC contains important details about your company, including:
- Company Name: The officially registered name of your business.
- Business Address: The physical location of your operations.
- Legal Representative: The individual authorized to act on behalf of the company in legal matters.
- Business Lines: The scope of activities your business is authorized to engage in.
- Registered Capital: The total capital contributed by the shareholders or members.
- Date of Issuance: The official date when the ERC was issued.
For domestic companies, the ERC is usually issued within three to five working days after the DPI completes the review. The ERC forms the basis for all subsequent business activities and registrations. It is required for various administrative procedures, such as opening bank accounts, registering for taxes, and applying for additional permits or licenses.
Without the ERC, your business cannot legally operate in Vietnam.
Remember to keep the ERC up to date, especially if there are changes in your business’s structure, address, or other key details. Any amendments to the ERC must be officially recorded with the DPI to maintain legal compliance and avoid potential penalties.
Step 6: Register for Tax and Obtain a Company Seal
After obtaining the Enterprise Registration Certificate (ERC), the next steps involve tax registration and securing a company seal, both necessary for legal operations in Vietnam.
Tax Registration
After receiving the ERC, the next step is to register for taxes with the local Tax Department. All companies in Vietnam are required to have a tax code, which is used for all tax filings and payments.
Depending on your business activities and revenue projections, you may need to register for Value-Added Tax (VAT). VAT registration allows your business to charge VAT on goods and services and reclaim VAT paid on business-related purchases. Corporate Income Tax (CIT) registration is also mandatory, as all companies in Vietnam are subject to CIT based on their taxable income.
Additional tax registrations may be required based on your business activities. For instance, businesses involved in international trade might need to register for import-export taxes, while those in the financial sector may have specific tax obligations.
The process of tax registration includes:
- Submission of documents for for tax registration:
- Enterprise Registration Certificate (ERC)
- Company Charter
- Other relevant documents
- The Tax Department reviews your application for accuracy and completeness, which may include inspecting your business premises or interviewing the legal representative.
- Upon approval, the Tax Department issues a tax code, which must be displayed prominently at your business location as per regulations.
Company Seal
In addition, Vietnamese companies are required to have an official company seal. The company seal is used to sign official documents and contracts, and its design must be registered with the Public Security Department.
To obtain the seal, it must be designed in compliance with Vietnamese regulations, including your company’s name and registration number. Submit your seal design for approval to the Public Security Department. Once approved, the seal will be registered, and you can begin using it in your official business operations.
Step 7: Open a Bank Account and Contribute Capital
After completing tax registration and securing your company seal, the next steps are opening a corporate bank account and contributing the registered capital.
When choosing a bank, consider its reputation, services, fees, online banking capabilities, and whether it supports foreign businesses. Most banks in Vietnam, both local and international, offer a range of business banking solutions. The following documents are typically required to open a corporate account:
- Enterprise Registration Certificate (ERC)
- Investment Registration Certificate (IRC) (for foreign-invested companies)
- Company charter
- Tax code certificate
- Identification documents (passports for foreign investors, ID cards for Vietnamese directors)
You may also need to attend an in-person meeting to finalize the account setup. Banks can offer different account types, such as current accounts for daily transactions or foreign currency accounts for international operations.
Once your account is set up, the next step is contributing the registered capital. Foreign-invested companies must typically transfer the capital within 90 days of receiving the ERC. Contributions can be made in cash or non-cash assets, and all transactions should be well-documented. The Department of Planning and Investment (DPI) may require proof of contribution through bank statements or receipts.
If your capital needs increase over time, you may need to amend the ERC and notify authorities. It’s important to have robust accounting systems in place to manage finances and ensure compliance with tax and reporting obligations. Proper capital management will support the business’s financial stability and build trust with stakeholders.
Step 8: Apply for Any Additional Permits or Sub-Licenses
Depending on your business activities, additional permits or sub-licenses may be required beyond the standard Enterprise Registration Certificate (ERC) and Investment Registration Certificate (IRC). These are typically necessary for businesses in regulated sectors, ensuring they meet specific industry standards.
Certain industries in Vietnam are considered conditional and require special permits. Examples include banking and financial services, which require licensing from the State Bank of Vietnam, insurance (governed by the Ministry of Finance), telecommunications (regulated by the Ministry of Information and Communications), real estate (under the Ministry of Construction), and education (requiring approval from the Ministry of Education and Training).
Other examples of required permits include:
- Food Safety Permit
- Fire Safety Certificate
- Liquor License
- Environmental Permits
- Import-Export Licenses
To apply for these additional permits, first identify the specific requirements for your business by consulting the relevant regulatory bodies. You will then need to prepare necessary documentation such as:
- Business plans
- Technical specifications
- Safety protocols
- Compliance proof
Ensure all documents are in Vietnamese and notarized if needed. Submit applications to the appropriate authorities, either online or in person. Inspections may be required to confirm compliance, and approval times can vary.
Once the permits are granted, regular audits and renewals may be needed to maintain compliance.
Finding a Legal Representative in Vietnam
When navigating Vietnam’s regulatory landscape, having a reliable legal representative is vital to ensuring smooth business operations.
Russin & Vecchi, with decades of experience in Vietnam, is a trusted name for both local and foreign businesses. Our expertise spans various industries, from banking and telecommunications to real estate and education. We understand the complexities of Vietnamese law and work closely with businesses to handle everything from securing licenses to ongoing compliance.
As your legal representative, we provide:
- Comprehensive legal advice tailored to your industry
- Assistance with obtaining business licenses and permits
- Representation in legal proceedings and negotiations
- Support with contract drafting, review, and dispute resolution
- Regular updates on regulatory changes affecting your business
Our deep understanding of Vietnamese law, combined with our international expertise, ensures that your business is not only compliant but positioned for long-term success.
Choose us as your partner, and we will handle the legal intricacies while you focus on growing your business.
