Vietnam has emerged as one of Southeast Asia’s most dynamic economies, making it an attractive destination for foreign entrepreneurs looking to expand their ventures.
With a rapidly growing middle class, a young and skilled workforce, and a strategic location, the country offers immense potential for those interested in setting up a business in Vietnam.
However, navigating the legal, financial, and cultural landscape can be challenging without proper guidance.
This article provides a detailed roadmap for foreign businesses aiming for setting up a business in Vietnam, including insights into the cost of starting a business in Vietnam and how partnering with a marketing agency can accelerate success.
Why Vietnam is a Prime Destination for Business Expansion
Vietnam’s economic growth has been remarkable in recent years. In 2023, the country’s GDP grew by 5.05%, despite global economic uncertainties, according to the General Statistics Office of Vietnam.
Foreign direct investment (FDI) also reached $23.18 billion in the same year, reflecting confidence in Vietnam’s market potential. With a population of over 100 million and a median age of 32.5, Vietnam boasts a youthful, energetic workforce and a burgeoning consumer base—ideal conditions for businesses aiming to establish a foothold in Asia.
The government’s proactive policies, such as the “Doi Moi” reforms initiated in 1986, have transformed Vietnam from an agrarian economy into an industrial powerhouse.
Additionally, Vietnam’s participation in 17 Free Trade Agreements (FTAs), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), enhances its appeal by reducing trade barriers and fostering international business opportunities.
For foreign entrepreneurs, setting up a business in Vietnam offers access to a low-cost labor market, competitive operational expenses, and a gateway to the broader ASEAN region.
How many Steps to Open Business in Vietnam?
For foreign investors, there are several key steps to open business in Vietnam. Understanding these processes ensures compliance with local regulations and sets the stage for a successful launch.
1. Choose the Right Business Structure
Foreigners can establish various business entities in Vietnam, with the most common being the Limited Liability Company (LLC) and Joint Stock Company (JSC). An LLC is ideal for small to medium-sized enterprises, allowing 1 to 50 shareholders and offering 100% foreign ownership in most sectors.
A JSC, requiring at least three shareholders, suits larger operations and permits public share offerings. Alternatively, a Representative Office (RO) can be set up for market research without engaging in profit-generating activities.
The choice depends on your business goals, industry, and scale. For instance, while full foreign ownership is permitted in sectors like manufacturing and IT, industries such as tourism and advertising may require a local partner.
2. Obtain an Investment Registration Certificate (IRC)
The first formal step in setting up a business in Vietnam is securing an IRC from the Department of Planning and Investment (DPI). This certificate outlines your investment project and is mandatory for foreign-owned businesses.
The process typically takes 15-20 working days, depending on the project’s complexity and location (e.g., industrial zones may have faster approvals).
3. Apply for an Enterprise Registration Certificate (ERC)
Once the IRC is approved, you’ll need an ERC, also known as a Business Registration Certificate, to legally establish your company.
This step, handled by the DPI, takes about 3-6 working days. The ERC formalizes your business entity and allows you to proceed with operational setup.
4. Complete Post-Registration Requirements
After obtaining the IRC and ERC, additional tasks include opening a corporate bank account, registering for a tax code, and securing a company seal (though seal announcement is no longer required as of the 2021 Law on Enterprises).
Depending on your industry, you may also need sub-licenses—for example, a Food and Beverage (F&B) license for a restaurant.
5. Secure a Physical or Virtual Address
A registered business address is mandatory. While manufacturing or retail businesses may require a physical location, service-based companies can opt for a virtual office, which costs around $1,200 annually and meets legal requirements at a lower expense.
Cost of Starting a Business in Vietnam
Understanding the cost of starting a business in Vietnam is critical for budgeting and financial planning.
While Vietnam offers a relatively low entry cost compared to other Asian markets, expenses vary based on business type, industry, and location.
Key Cost Components
Registration Fees: Registering an LLC with a professional service provider typically starts at $3,500, covering IRC and ERC applications, notarization, and legal fees. A JSC may cost upwards of $6,000 due to its complexity.
Capital Requirements: There’s no fixed minimum capital for most sectors, but the DPI assesses whether your declared capital (often $10,000-$15,000 for basic setups) is sufficient to sustain operations until profitability.
Conditional industries like banking or education have higher thresholds—e.g., banks require 150 billion VND ($6 million) to 3 trillion VND ($120 million).
Operational Costs: Renting office space in Ho Chi Minh City or Hanoi ranges from $15-$40 per square meter monthly, while a virtual office costs $100-$150 per month.
Labor costs are competitive, with an average monthly wage of $300-$500 for skilled workers, per Vietnam’s Ministry of Labor.
Additional Licenses: Industry-specific permits (e.g., F&B, healthcare) add $60-$500 each.
Market Research and Legal Advice: Optional but recommended, these services range from $500-$2,000, ensuring you understand market dynamics and compliance needs.
To minimize the cost of starting a business in Vietnam, consider partnering with local firms for resources and insights, leveraging government incentives like tax breaks, or outsourcing administrative tasks like accounting and HR to reduce overhead.
Once your business is registered, building brand awareness and capturing market share are critical next steps.
This is where a marketing agency in Vietnam becomes invaluable, especially for foreign businesses unfamiliar with the local landscape.
Why You Need a Marketing Agency
Vietnam’s consumer market is diverse, digitally savvy, and rapidly evolving. With over 70 million internet users (70% of the population) and a 97% smartphone penetration rate, according to DataReportal’s 2024 report, digital marketing is a powerful tool for reaching customers.
A local marketing agency can:
Navigate Cultural Nuances: Tailor campaigns to resonate with Vietnamese values and preferences.
Leverage Digital Channels: Optimize strategies for platforms like Zalo, Facebook, and TikTok, which dominate Vietnam’s social media scene.
Conduct Market Research: Provide data-driven insights into competitors and target demographics.
Finding the Right Agency
Look for agencies with experience serving foreign clients and a track record in your industry. Ho Chi Minh City and Hanoi host numerous reputable firms, offering services from SEO and content marketing to influencer partnerships. Expect costs to range from $1,000-$5,000 monthly, depending on campaign scope.
Benefits of Early Marketing Investment
Investing in marketing from the outset accelerates your market entry. A well-executed launch campaign can establish credibility, attract early customers, and position your brand ahead of competitors—crucial in a market where 62% of the population is of working age and eager for innovative products and services.
Setting up a business in Vietnam is a strategic move for foreign businesses seeking growth in Southeast Asia. With its favorable economic conditions, affordable cost of starting a business in Vietnam, and supportive government policies, the country is ripe for investment and business.
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