Limited Liability Company (LLC)
Công ty Trách nhiệm Hữu hạn (Công ty TNHH)
Company formation in Vietnam
The LLC is best suited for: Foreign companies entering Vietnam's fast-growing consumer market of 98 million people, Manufacturers implementing China+1 diversification strategies, Tech companies building Vietnamese development teams, E-commerce businesses targeting Southeast Asia's fastest-growing online market. The standard corporate income tax (CIT) rate is 20% on worldwide income for Vietnamese-resident companies. Qualifying high-tech enterprises, manufacturing companies in encouraged sectors, and companies in special economic zones may receive a preferential rate of 10% for 15 years. Tax holidays include 2–4 year CIT exemption from the first profitable year, followed by a 50% reduction for 4–9 additional years, depending on the sector and location. VAT is 10% standard (temporarily reduced to 8% on most goods and services — verify current rates). Withholding tax on dividends to foreign shareholders is 5% — significantly lower than most regional peers. Royalty payments to non-residents attract 10% withholding tax. Vietnam applies transfer pricing rules with country-by-country reporting requirements for large multinationals.
- Foreign companies entering Vietnam's fast-growing consumer market of 98 million people
- Manufacturers implementing China+1 diversification strategies
- Tech companies building Vietnamese development teams
- E-commerce businesses targeting Southeast Asia's fastest-growing online market
Key Facts
Step-by-Step Formation Process
Obtain an Investment Registration Certificate (IRC)
All foreign-invested companies must first obtain an IRC from the Department of Planning and Investment (DPI) of the province where the company will be registered. Submit the investment project proposal including business activities, charter capital, investment timeline, and environmental impact assessment (if applicable). The IRC replaces the old Investment Licence system.
Obtain an Enterprise Registration Certificate (ERC)
After receiving the IRC, apply for the ERC at the same DPI office. The ERC serves as the business registration certificate and includes the company name, address, legal representative, charter capital, and business lines (coded using CPC/VSIC classification). The company is legally established upon ERC issuance.
Carve a company seal and register it
Vietnam abolished mandatory seal registration in 2021 under the 2020 Enterprise Law, but a company seal is still practically required for most business transactions, banking, and government interactions. Commission the seal from an authorised manufacturer and notify the National Business Registration Portal of the seal sample.
Register for tax and open a corporate bank account
Register with the local tax authority for corporate income tax, VAT, and personal income tax (for employee withholding). Obtain the company's tax code. Open a direct investment capital account (DICA) at a licensed Vietnamese bank — this is a special foreign currency account required for all foreign-invested enterprises to channel investment capital. Major banks include Vietcombank, BIDV, VietinBank, HSBC, and Standard Chartered.
Contribute charter capital and obtain sub-licences
Charter capital must be contributed within 90 days of ERC issuance. If operating in conditional business sectors (education, healthcare, logistics, etc.), obtain the relevant sub-licences from sector-specific authorities before commencing operations. Register employees with the social insurance authority.
Required Documents
- Passport copies of all foreign investors (individuals) or legalised corporate documents (for corporate investors)
- Investment project proposal with financial projections
- Proof of financial capacity of the investor (bank statement or audited accounts)
- Lease agreement or proof of registered office address in Vietnam
- Draft company charter (articles of association)
- Appointment letter for legal representative
- Power of attorney (if using a representative to file)
Cost Overview
Tax Treatment
The standard corporate income tax (CIT) rate is 20% on worldwide income for Vietnamese-resident companies. Qualifying high-tech enterprises, manufacturing companies in encouraged sectors, and companies in special economic zones may receive a preferential rate of 10% for 15 years. Tax holidays include 2–4 year CIT exemption from the first profitable year, followed by a 50% reduction for 4–9 additional years, depending on the sector and location. VAT is 10% standard (temporarily reduced to 8% on most goods and services — verify current rates). Withholding tax on dividends to foreign shareholders is 5% — significantly lower than most regional peers. Royalty payments to non-residents attract 10% withholding tax. Vietnam applies transfer pricing rules with country-by-country reporting requirements for large multinationals.
Pros & Cons
- One of Asia's fastest-growing economies — GDP growth consistently above 6% pre-pandemic, with strong recovery
- 100% foreign ownership permitted in most sectors with no mandatory local partner requirement
- 20% corporate tax rate is competitive — lower than Thailand (20%), Japan (30%), and the Philippines (25%)
- Manufacturing powerhouse for China+1 strategy — Samsung, Intel, Apple suppliers, and hundreds of global manufacturers operate here
- Young, tech-savvy population of 98 million with a median age of 31 — strong consumer growth trajectory
- Member of CPTPP and RCEP — preferential trade access to major markets including Japan, Australia, Canada, and the EU (via EVFTA)
- Generous tax holidays: 2–4 year CIT exemption plus 50% reduction for 4–9 years in qualifying sectors
- All legal documents, tax filings, and government submissions must be in Vietnamese — translation and notarisation add time and cost
- Regulatory environment changes frequently — tax rules, FDI regulations, and licensing requirements are updated regularly
- Charter capital must be contributed within 90 days of ERC issuance — plan your funding timeline accordingly
- Banking for foreign-invested enterprises requires a DICA (direct investment capital account) with specific foreign exchange controls
- Conditional business sectors (over 200 sectors) require additional sub-licences beyond the IRC and ERC
- Intellectual property enforcement is improving but still weaker than in Singapore, Japan, or South Korea
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Get StartedThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.