A Comprehensive Guide for Setting Up a Company in Vietnam

A Step-by-Step Guide from Legal Registration to Tax, Banking, and Accounting Setup

Starting a business in Vietnam has become increasingly attractive thanks to the country's rapid economic growth, strategic location, expanding consumer market, and numerous free trade agreements. Whether you are a local entrepreneur, a foreign investor, or an overseas Vietnamese returning to invest, understanding the company formation process can save significant time, cost, and compliance risks.

This guide walks through every major step required to legally establish and operate a company in Vietnam—from choosing the right business structure to setting up accounting systems and issuing your first invoice.

Step 1: Decide Your Business Structure

The first decision is selecting the appropriate legal entity.

The most common business forms include:

Business Type	Suitable For	Liability
Single-member Limited Liability Company (LLC)	One owner	Limited to charter capital
Multi-member LLC	2–50 members	Limited
Joint Stock Company (JSC)	Large businesses seeking investors	Limited
Partnership	Professional services	Unlimited for partners
Private Enterprise	Small individual businesses	Unlimited

Which structure is most popular?

Most SMEs choose the Single-member LLC because:

• Easy to establish

• Limited liability

• Flexible management

• Suitable for future expansion

Foreign investors usually establish either:

• Foreign-owned LLC

• Joint venture LLC

• Representative Office (non-revenue generating)

Step 2: Determine Business Activities

Vietnam uses a standardized business classification system.

Examples include:

Industry	Example Business Code
Software Development	6201
IT Consulting	6202
Wholesale Trade	4659
Retail Trade	4741
Manufacturing	Various
Logistics	5229

Some industries require:

• Professional licenses

• Minimum legal capital

• Operating permits

• Industry-specific certificates

Examples include:

• Education

• Healthcare

• Banking

• Insurance

• Logistics

• Aviation

• Food manufacturing

Step 3: Choose Company Name

The company name must:

• Be unique

• Not duplicate existing companies

• Not violate trademarks

• Include the legal entity type

Example:

ABC Technology Company Limited

or

ABC Trading Joint Stock Company

Many businesses also register:

• English name

• Short name

• Trademark

• Website domain

Step 4: Register Company Address

The company must have a legal business address.

Acceptable locations include:

• Office buildings

• Commercial buildings

• Industrial parks

• Shared offices (depending on business activities)

Residential apartments are generally not permitted for business registration unless specifically approved.

Step 5: Decide Charter Capital

Vietnam generally does not impose a minimum capital requirement except for certain regulated industries.

Examples:

Industry	Minimum Capital
Real Estate	As regulated
Banking	Very high
Insurance	Very high
General Trading	No minimum

Practical recommendations:

Small consulting firm:100–500 million VND

Technology startup:500 million–2 billion VND

Trading company:1–5 billion VND

Manufacturing:Depends on machinery investment.

Step 6: Prepare Company Registration Documents

Typical documents include:

For Vietnamese owners:

• ID card/passport

• Company charter

• Member list

• Application forms

For foreign investors:

• Passport

• Investment Registration Certificate (IRC) if applicable

• Enterprise Registration Certificate (ERC)

• Notarized/legalized documents

• Parent company documents (if corporate shareholder)

Step 7: Obtain Enterprise Registration Certificate (ERC)

After submission, the authority reviews:

• Company name

• Business lines

• Charter

• Ownership

• Registered office

If approved, the company receives the Enterprise Registration Certificate (ERC).

This is the official birth certificate of the company.

Step 8: Company Seal

Although physical seals are no longer mandatory in many transactions, many businesses still create one.

The seal normally contains:

• Company name

• Enterprise code

Digital signatures are now more important than physical seals.

Step 9: Purchase a Digital Signature (USB Token)

A digital signature is required for:

• Tax filing

• Social insurance

• Customs declarations

• Electronic invoices

• Government portals

Without one, the company cannot complete most online compliance activities.

Step 10: Open a Corporate Bank Account

Prepare:

• ERC

• Company seal (if required)

• Legal representative ID

• Bank forms

• Resolution authorizing account opening

Many banks now support:

• Internet banking

• Mobile banking

• API connectivity

• Payroll services

Step 11: Contribute Charter Capital

Owners must contribute charter capital within the statutory deadline after company establishment (subject to current legal requirements).

Maintain:

• Bank transfer evidence

• Capital contribution records

• Ownership register

Foreign investors must transfer capital through the appropriate investment capital account where required.

Step 12: Register Tax Information

The company must register for tax administration.

Key taxes include:

Corporate Income Tax (CIT)

Standard rate:

20%

Value Added Tax (VAT)

Common rates:

• 0%

• 5%

• 10%

Depending on products and services.

Personal Income Tax (PIT)

Applicable when employees receive salaries.

Foreign Contractor Tax (if applicable)

For payments made to overseas suppliers.

License Fee

Annual fee depending on charter capital and applicable regulations.

Step 13: Register Electronic Invoice System

Vietnam now requires electronic invoices.

Typical process:

Choose an invoice software provider

↓

Register invoice issuance

↓

Connect to tax authority

↓

Issue invoices electronically

The accounting software is often integrated directly with the e-invoice platform.

Step 14: Purchase Accounting Software

A good accounting system should include:

• General Ledger

• Accounts Payable

• Accounts Receivable

• Fixed Assets

• Inventory

• Cash Management

• Financial Statements

• VAT reporting

• Bank reconciliation

Popular solutions include local accounting software and international cloud ERP systems, depending on company size and complexity.

Step 15: Set Up the Chart of Accounts

A proper Chart of Accounts (COA) forms the backbone of financial reporting.

Typical accounts include:

Assets

• Cash

• Bank

• Receivables

• Inventory

• Fixed Assets

Liabilities

• Payables

• Taxes

• Loans

Equity

• Charter Capital

• Retained Earnings

Revenue

• Sales

• Service Income

Expenses

• Salary

• Rent

• Utilities

• Marketing

• Depreciation

Step 16: Establish Accounting Policies

Document internal policies covering:

Revenue recognition

Expense approval

Procurement

Asset capitalization

Depreciation

Inventory valuation

Expense reimbursement

Travel claims

Cash handling

These policies ensure consistency and support internal controls.

Step 17: Set Up Payroll

Payroll setup includes:

Employee contracts

Salary structure

Allowances

Overtime

Insurance

Personal income tax

Monthly payroll process:

Attendance

↓

Payroll calculation

↓

PIT calculation

↓

Insurance calculation

↓

Salary payment

↓

Accounting entries

Step 18: Register Social Insurance

Employers must register eligible employees for:

• Social Insurance

• Health Insurance

• Unemployment Insurance

Monthly contributions must be declared and paid in accordance with current regulations.

Step 19: Build Internal Control Procedures

Even small businesses benefit from basic internal controls.

Examples include:

Approval matrix

Purchase approval

Payment approval

Inventory counting

Bank reconciliation

Asset management

Expense reimbursement

Segregation of duties

These controls help reduce fraud and operational risk.

Step 20: Prepare Financial Reporting

Typical reporting includes:

Monthly:

• Profit & Loss

• Balance Sheet

• Cash Flow

• VAT reports

Quarterly:

• Tax declarations

• Management reports

Annually:

• Financial Statements

• Corporate Income Tax Finalization

• Personal Income Tax Finalization

• Independent audit (where required)

Recommended Timeline

Week	Activities
Week 1	Prepare company documents
Week 2	Receive ERC
Week 2	Create seal and digital signature
Week 3	Open bank account
Week 3	Register tax information
Week 4	Register electronic invoices
Week 4	Purchase accounting software
Week 5	Set up payroll and accounting
Week 5	Begin operations

Estimated Initial Setup Costs

Item	Typical Cost
Company registration	Government and service fees vary
Company seal	Low cost
Digital signature	Annual subscription
Bank account	Usually low or no opening fee
Electronic invoice software	Annual subscription
Accounting software	Subscription or perpetual license
Accounting service (if outsourced)	Monthly fee depending on transaction volume

Costs vary based on company size, location, and service provider.

Common Mistakes New Businesses Make

• Choosing incorrect business codes

• Registering insufficient charter capital for business needs

• Missing tax filing deadlines

• Not implementing accounting procedures early

• Delaying payroll and social insurance registration

• Mixing personal and business bank accounts

• Failing to maintain supporting documentation

• Using manual spreadsheets for growing businesses

• Ignoring internal controls

• Waiting until year-end to organize accounting records

Best Practices for a Smooth Business Launch

• Engage experienced legal and tax advisors during incorporation.

• Open and use a dedicated corporate bank account for all business transactions.

• Adopt cloud-based accounting software from the outset to improve efficiency and scalability.

• Document accounting policies and internal approval workflows early.

• Maintain complete supporting documentation for every transaction.

• Reconcile bank accounts monthly and review financial performance regularly.

• Stay informed about changes in tax, labor, and business regulations.

• Consider integrating accounting, invoicing, payroll, and inventory systems to reduce manual work and errors.

Final Thoughts

Establishing a company in Vietnam involves much more than obtaining a business registration certificate. Long-term success depends on building a compliant operational foundation that includes proper tax registration, banking arrangements, accounting systems, payroll administration, internal controls, and financial reporting processes.

By following a structured, step-by-step approach, entrepreneurs can minimize compliance risks, streamline operations, and focus on growing their business. Investing time in setting up the right legal, financial, and administrative framework from the beginning will pay dividends as the company expands, attracts investors, and navigates Vietnam's dynamic business environment.