Set Up a Company in Vietnam: Pick by Exit, Not Speed

Direct answer

To set up a company in Vietnam, choose your structure by how you plan to exit, not by how fast you can register. Most foreign investors use a limited liability company, which caps liability at contributed capital and can be sold. The household business route, cheap and quick, is not open to foreigners at all.

That single fact reshapes the decision. Vietnamese founders genuinely choose between a household business and a company. Foreign founders do not — they choose between company forms, and the only question that matters is whether the thing they are building can ever be transferred to someone else.

What business structures can you set up in Vietnam?

Four forms carry almost all small operations, and they differ far more in what happens when you leave than in what happens when you start.

A limited liability company in Vietnam is the default for foreign investment because liability stops at the capital you contributed and the ownership stake is a real asset you hold. The household business is not an asset at all — it is a permission, and it ends when you do.

Read the "can you sell it" column twice. Every other difference is administrative. That one is structural, and it is the only one you cannot fix later without starting again.

Can a foreigner register a household business?

No, and this is where a lot of money gets wasted. The household business model is registered by an individual or by household members who are Vietnamese citizens, liable with all of their assets for the business. It is administered at commune level, and reporting has historically been minimal.

That combination of cheap, fast and light made it attractive enough that foreigners kept asking for it, and a market grew to supply it — a Vietnamese name on the registration, a private agreement behind it, and a foreign owner with no enforceable rights. That is a nominee structure. It has always been fragile, and beneficial ownership disclosure has made it easier to see.

There is also a second reason the household business is no longer the bargain it was. From 1 January 2026, lump-sum tax and the business licence fee were removed for household and individual businesses under Article 10 of Resolution 198/2025/QH15. Household businesses now declare tax on actual revenue — the paperwork of a company, without any of a company's protections.

"The cheapest structure and the honest structure are usually the same one. What costs money is the version where your name is not on what you own." — LotusGuard Vietnam Advisory

What does business registration in Vietnam involve?

For a foreign investor it is two certificates, not one. Vietnam business setup runs through an Investment Registration Certificate (IRC) issued by the Department of Planning and Investment, followed by an Enterprise Registration Certificate (ERC) from the Business Registration Office. Business registration in Vietnam is therefore a sequence, not a single filing.

The IRC approves the investment project. The ERC creates the legal person. Vietnam's Enterprise Registration Certificate is the document people usually mean when they say "company licence", and it is the one your bank, your landlord and your customers will ask to see.

Documents from outside Vietnam generally need notarisation and consular legalisation, and the filing runs through the National Foreign Investment Information System before the physical dossier goes to the provincial authority. Plan for the legalisation step in your home country first — it is the part that most often slips.

How long does it take to open a company in Vietnam?

Typically 25 to 35 days end to end for a foreign-invested company. The IRC accounts for most of it, at around 15 working days from a complete dossier; the ERC then takes roughly 3 to 5 working days.

Under the Law on Investment effective March 2026, qualifying investors may obtain the ERC first in some cases, and in certain uncomplicated sectors may incorporate before completing all investment procedures. Where it applies, that removes weeks.

Note the phrase "from a complete dossier". The clock does not start when you decide to open a company in Vietnam; it starts when the file is accepted. Incomplete legalisation, a lease that does not qualify as a commercial address, or a business line that turns out to be conditional will all reset your expectations rather than the official timeline.

How much does Vietnam company registration cost?

The state fees are almost nothing. Vietnam company registration costs 50,000 VND, and that is waived entirely if you file online. Publishing the registration content costs 100,000 VND.

The real first-year money is in the tooling and the ongoing compliance:

From 2026 the business licence fee was abolished, which removes one recurring line. The cost that people consistently underestimate is not on this table at all: monthly bookkeeping. Budget for it before you register, not after your first filing deadline.

Do you need a separate business licence?

Often yes, and this catches people who assume the ERC is the finish line. The Enterprise Registration Certificate creates the company. If your registered activity falls into a conditional business line, you then need a further sub-licence before you may lawfully trade.

Whether your line is conditional depends entirely on what you registered, and the answer changes the sequence of everything else — your lease, your hiring, your first invoice. A Vietnam business license question answered late is the most common reason a company sits incorporated but unable to operate.

Check this before you commit to premises. It is a cheap question to ask early and an expensive one to discover late.

What corporate tax will you pay?

Vietnam corporate tax sits at 20% on taxable income, meaning revenue less deductible expenses. That deductibility is the practical difference from the old household-business regime, where most costs simply did not count.

Newly established small and medium enterprises may qualify for a corporate income tax exemption in their first years under Article 10 of Resolution 198/2025/QH15. Sources we checked disagree on whether that exemption runs for two years or three, so treat the length as unconfirmed and verify it against the current text before you build a plan around it. We have flagged this for legal review rather than pick a number.

Separately, the revenue threshold below which a household or individual business owes no VAT or personal income tax rose to 200 million VND per year from 1 January 2026. A further increase to 500 million VND has been proposed by the Ministry of Finance but, at the time of writing, remains a proposal rather than law.

What happens after registration?

The obligations start immediately, and they are unforgiving of neglect rather than difficult. Vietnam company formation is the short part; running the company is the long one.

You will need a digital signature, e-invoicing, a corporate bank account, a tax code, and either an in-house or outsourced accountant. E-invoice in Vietnam is not optional tooling — it is how your revenue becomes documentable, and therefore how your costs become deductible.

Then come the recurring duties: monthly or quarterly tax declarations, annual financial statements, social insurance for employees, and a personal income tax file for the legal representative. Businesses that struggle after incorporating are rarely the ones who found the rules complex. They are the ones who assumed a company could be run the way an informal operation was run.

The exit test: four questions

Before you start a business in Vietnam, answer these. A yes to any one of them means you want a company, not an informal arrangement — and it means the structure matters more than the setup speed.

1. Do you intend to sell this, or hand it to someone, one day? An informal arrangement cannot be transferred as a going concern.
2. Might you want a partner or an investor? There must be a stake for them to receive.
3. Could one bad year produce a debt larger than the business holds? If yes, limited liability is a live risk control, not a theoretical one.
4. Do your customers or suppliers require contracts with a legal entity? Many corporate buyers cannot contract with anything else.

If all four answers are no and you are a Vietnamese citizen, the household business remains proportionate and you should keep your costs down. If you are a foreign investor, the question was never open — and anyone offering you a household business route is offering you a nominee structure without saying the word.

Before you pay any adviser for doing business in Vietnam, ask two things: which provision of which law your file rests on, and whether they are paid by anyone other than you. LotusGuard takes no third-party commission and does not hold client passports, which is why we can tell you the cheap route is closed instead of selling it to you.

Frequently asked questions

What is the fastest way to set up a company in Vietnam? For a foreign investor, the two-step Investment Registration Certificate then Enterprise Registration Certificate route typically runs 25 to 35 days. Under the Law on Investment effective March 2026, qualifying investors in uncomplicated sectors may obtain the ERC first, which removes weeks from the timeline.

Can a foreigner register a household business in Vietnam? No. The household business model is for Vietnamese citizens, so a foreign investor choosing how to set up a company in Vietnam is deciding between company forms, not between a household business and a company. Any arrangement putting a Vietnamese name on your business is a nominee structure.

How much does business registration in Vietnam cost? State fees are small: 50,000 VND for enterprise registration, waived if you file online, plus 100,000 VND to publish the registration content. Real first-year cost sits in the digital signature at 1 to 3 million VND and e-invoicing from roughly 935,000 to 2 million VND.

What corporate tax does a Vietnamese company pay? The standard corporate income tax rate is 20% on taxable income, meaning revenue less deductible expenses. Newly established small and medium enterprises may qualify for a corporate income tax exemption in their first years under Resolution 198/2025/QH15, though sources differ on whether that period is two or three years.

Do I need a business licence as well as a company registration? Often yes. The Enterprise Registration Certificate creates the company; conditional business lines then require a separate sub-licence before you may trade. Which lines are conditional depends on your registered activity, so confirm this before you sign a lease or hire anyone.

Conclusion

Three things to take away. The household business route is closed to foreigners, so if someone offers it to you they are offering a nominee structure. Registration itself is cheap and quick — the cost and the risk both sit after incorporation, in compliance and in the structure you chose. And the question that should decide your structure is whether what you are building can ever be handed to someone else.

If you want your own situation mapped against the structures actually available to you, talk to LotusGuard — including when the answer is that you should wait.