Are you looking for a solution for setting up a company in Vietnam and explore opportunities in one of Asia’s fastest-growing economies? Vietnam, with its strategic geographic location along the South China Sea and borders with China, Laos, and Cambodia, has become a top destination for foreign investors in the trading sector. However, full legal compliance is essential for sustainable success, governed by the Law on Investment 2020 (amended in 2025) and the Law on Enterprises 2020. This comprehensive guide details the essential steps to set up a trading company in Vietnam, from basic concepts to full operations, catering to both informational and transactional search intent.
- Key Benefits: Access to FTAs for tariff reductions, excellent logistics positioning, and policies allowing up to 100% foreign ownership in most trading activities.
- Challenges to Consider: Administrative procedures can take 1–6 months, and it’s crucial to stay updated on recent changes, such as the 2025 Investment Law amendments permitting company establishment before obtaining the Investment Registration Certificate (IRC).
By following these steps carefully, you can successfully start a business in Vietnam as a foreigner.
1/ What is a Trading Company in Vietnam?
A trading company in Vietnam specializes in buying and selling goods, including import, export, wholesale/retail distribution, and related services, regulated by Decree 09/2018/ND-CP (with a replacement draft under discussion in 2025). Unlike manufacturing companies, which focused on production or service providers offering labor or consulting, trading companies serve as intermediaries in the supply chain, connecting producers with consumers. With Vietnam’s exports surging by 28% in 2025, this sector is booming—especially in electronics, textiles, and agricultural products. According to the Ministry of Industry and Trade, trading contributes 15–20% to GDP, with an average annual growth rate of 9–10% over the past decade, fueled by international integration.
Key Activities:
- Importing goods from abroad for domestic distribution.
- Exporting Vietnamese products to global markets.
- Wholesale and retail distribution through traditional or online channels.
- Logistics, warehousing, and product promotion services.
Comparison table with other business types:
| Type | Key Characteristics | Example |
| Trading | Focuses on buying/selling, no production | Mobile phone importer, apparel distributor |
| Manufacturing | Produces goods from raw materials | Textile factory, electronics component maker |
| Services | Provides labor or advisory services | Software consulting, management consulting |
2/ Benefits and Challenges of Setting Up Company in Vietnam
Setting up a trading company in Vietnam offers substantial advantages but also involves challenges. Here is a clear comparison:
| Benefits | Challenges | Illustrative Example |
| Young market with 100 million consumers and high demand | Complex and potentially lengthy administrative procedures | Textile exports grew by 20% due to young population |
| Strategic location near China and major sea routes | A local partner is required hoặc Local partners are required | Logistics advantages reduce transport costs by 15% |
| FTAs reduce tariffs and open access to EU and US markets | Currency fluctuations and legal risks | EVFTA boosts agricultural exports by 25% |
The benefits clearly outweigh the challenges with proper planning. For example, foreign investors can leverage FTAs to expand markets but must comply with regulatory requirements such as the Economic Needs Test (ENT) for multiple retail outlets.
3/ Legal Requirements and Foreign Ownership Rules
Under the Law on Investment 2020 (amended 2025) and the Law on Enterprises 2020, Vietnam permits up to 100% foreign ownership in most trading sectors, except for restricted industries such as pharmaceuticals, oil and gas, and printing. The 2025 amendments (effective from 2026) simplify procedures by allowing company registration before IRC issuance and reducing conditional business lines from 243 to approximately 200. These changes have driven record FDI inflows in 2025. Compliance with Decree 09/2018/ND-CP (a replacement draft pending) remains required for foreign-invested trading operations.
Key Requirements:
- Investment registration with the Department of Finance (DOF)
- Compliance with WTO market access commitments.
- ENT evaluation for retail operations involving multiple stores.
Restricted Product Categories and Conditional Business Lines
Certain products are restricted or required special conditions under the Investment Law and Decree 09/2018/ND-CP, such as explosives, printing materials, and pharmaceuticals.
Summary table:
| Product Category | VSIC Code | Restrictions |
| Explosives | 2029 | Import prohibited except for national defense purpose |
| Printing Materials | 1811 | Requires approval from Ministry of Information |
| Pharmaceuticals | 2100 | Foreign ownership limited to 49% |
Verification checklist:
- Check the national portal for conditional business lines.
- Assess legal risks with a local lawyer.
- Monitor the draft replacement of Decree 09 for 2026 updates.
4/ Choosing the Right Business Structure
Selecting the right business structure for your trading company depends on its scale and ownership. Under the Law on Enterprises 2020, the two most common forms are the Limited Liability Company (LLC) and the Joint Stock Company (JSC), with the LLC being ideal for smaller businesses due to its simpler procedures.
- LLC Pros & Cons: Flexible, liability limited to contributed capital; drawback: harder to raise large capital.
- JSC Pros & Cons: Easier to list on stock exchanges; drawback: more complex structure, requires at least 3 shareholders.
Comparison table:
| Structure | Number of Members | Legal Liability |
| LLC | 1–50 | Limited to contributed capital |
| JSC | Minimum 3 | Limited to share capital |
For foreign investors with limited capital, an LLC is the best choice for a fast start.
LLC vs. JSC: Which is Best for Trading?
Detailed comparison:
| LLC | JSC | Best for Trading |
| Simple procedures, flexible capital | More complex, easier expansion | High for small businesses, local distribution |
| No board of directors required | Requires diverse shareholders | Lower if needing large capital for exports |
LLC is generally more suitable for trading due to its flexibility. For example, a foreign agricultural trading company often opts for an LLC to quickly begin import operations.
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5/ Capital Requirements and Financial Planning
Vietnam imposes no fixed minimum capital for trading companies, but charter capital must be “reasonable” to demonstrate operational capability. A typical recommendation is USD 10,000–50,000, depending on the business plan. Total investment capital includes charter capital and other expenses, with full contribution required within 90 days of registration.
Financial preparation checklist:
- Estimated setup costs: USD 3,000–10,000 for procedures and office.
- Reserve for VND/USD exchange rate risks.
- Budget for taxes and employee salaries.
Estimated capital table:
| Recommended Capital | Purpose |
| USD 10,000 | Basic operations, small-scale distribution |
| USD 50,000 | Expansion of import/export activities |
6/ Essential Steps to Setting Up a Company in Vietnam as a Foreign Investor
Setting up a foreign-invested company in Vietnam requires following a clear, structured process to ensure full legal compliance and smooth operations. This step-by-step guide is tailored for foreign-owned trading or commercial entities.
Step 1: Prepare Your Investment Documentation
Gather all necessary paperwork for your investment project. This includes defining your business model (e.g., Limited Liability Company – LLC, joint venture, or representative office), choosing the right structure, and outlining main activities. Verify that your industry allows foreign ownership under Vietnamese law.
Step 2: Submit Application for the Investment Registration Certificate (IRC)
The IRC is the foundational approval for foreign-invested enterprises. It authorizes your project and details the charter capital, scale, location, and business scope. Without an IRC, you cannot proceed to company registration.
Required documents:
- Application form and a detailed project proposal (objectives, scale, capital, location, and timeline).
- Proof of financial capability (bank statements, audited financials, or credit agreements).
- Legal documents: notarized passport (individuals) or business registration certificate (organizations), both legalized.
- Proof of location (lease agreement or land use rights).
- Power of attorney (if using a third-party service).
Foreign documents require consular legalization and official Vietnamese translation. Partnering with a professional company setup service such as Vina TPT is recommended to avoid delays.
Step 3: Obtain the Enterprise Registration Certificate (ERC)
After the IRC issuance, register the company to receive the ERC, which establishes its legal identity in Vietnam.
Step 4: Open a Corporate Bank Account and Inject Charter Capital
Open a dedicated capital account at a licensed Vietnamese bank. Contribute the full charter capital within 90 days of ERC issuance to avoid penalties and ensure the credibility for future permits.
Step 5: Complete Tax Registration and Post-Licensing Formalities
Register for a tax ID, VAT, and fulfill obligations such as social insurance and labor compliance if hiring staff.
Step 6: Secure Industry-Specific Licenses (If Applicable)
Sectors like trading, retail, F&B, education, or e-commerce may require additional permits.
By following these steps and staying updated on regulations, foreign investors can successfully set up company in Vietnam.
7/ Taxation, Compliance, and Ongoing Operations
Foreign-invested trading enterprises (FDIs) in Vietnam must strictly comply with tax, labor, and periodic reporting obligations to avoid penalties and maintain legal standing.
A – Taxes:
- Corporate Income Tax (CIT): 20% (15–17% incentives for SMEs from late 2025 if revenue < VND 50 billion); quarterly provisional payments (at least 80% of annual obligation); due by the 30th of the first month of the following quarter; annual declaration within 90 days after the fiscal year-end.
- Value Added Tax (VAT): 8–10% (reduced to 8% until 2026); monthly declaration (revenue > VND 50 billion/year) or quarterly declaration; due by the 20th of the following month or the end of the first month of the next quarter; retain invoices for deductions.
- Personal Income Tax (PIT): 5–35% (residents) or 20% (non-residents); withholding and declaration monthly/quarterly, aligned with VAT; annual employee declaration.
- Foreign Contractor Withholding Tax (FCT): Applies to payments to foreign contractors; monthly or per-payment declaration within 10 days.
- Other fees (environmental protection, resource tax, land use): Usually annually or on an event basis, with changes required to be reported within 30 days.
B – Laws and Other Compliance:
- Labor Law 2019 (amended): Work permits for foreigners; quarterly labor reports; standard contracts; monthly social insurance contributions (pension, health, unemployment insurance).
- Intellectual Property: Registration and monitoring (annual review recommended).
- Financial Reporting: Annual audited financial statements for FDI, submitted with final CIT.
- Transfer Pricing: Local/master file prepared annually, submitted within 90 days after the fiscal year-end if thresholds are met.
Compliance Checklist:
| Requirement | Details | Frequency | Deadline | Penalties if Violated |
| VAT Declaration & Payment | Input/output, deductions (Form 01/GTGT or 04/GTGT) | Monthly (>50B VND) or quarterly | 20th of next month or end of first month of next quarter | 0.03%/day interest, disallowed deductions, audits |
| PIT Withholding & Declaration | Employee withholding (Form 05/KK-TNCN) | Monthly/quarterly | 20th or end of the first month of next quarter; annual within 90 days | Daily fines, criminal liability |
| Provisional CIT Payment | Estimated profit-based | Quarterly | 30th of the first month of next quarter | Interest if below 80% the annual obligation |
| Social Insurance | Contributions and reporting | Monthly | Aligned with PIT monthly/quarterly | Late fees, hiring restrictions |
| Labor Usage Report | Employee numbers and changes | Quarterly | End of the quarter | Administrative fines, suspension |
| FCT Declaration | Payments to foreign contractors | Monthly or per payment | 20th of the next month or 10 days after payment | Employer liability, heavy fines |
| Transfer Pricing | Local/master file | Annually | 90 days the after fiscal year-end | Audits, tax adjustments |
| Audited Financial Statements | VAS-compliant with independent audit | Annually | With final CIT (90 days) | Mandatory audits, penalties for errors |
FDI companies should engage professional accounting services and monitor updates such as Decree 132/2025/ND-CP on CIT, ensuring electronic filing with digital signatures.
8/ Frequently Asked Questions (FAQs)
- Can foreigners own 100% of a trading company in Vietnam?
Yes, foreign investors can own up to 100% in most sectors, including import-export and distribution. Exceptions apply to restricted sectors such as pharmaceuticals, oil and gas, or printing, where ownership may be limited or may require a local partner.
- What is the minimum capital required?
No fixed minimum capital exists for most trading companies. Charter capital must be reasonable to support operations. Authorities often recommend at least USD 10,000 to show financial capability and avoid delays. The exact amount depends on your business plan and scale.
- How long does it take to set up?
Setting up a business in Vietnam as a foreigner typically takes 1–2 months, depending on the complexity and the province. The IRC usually takes 30–45 working days, the ERC follows in 7–14 days. Additional licenses and post-registration steps may extend the timeline.
- Do I need a local partner?
For general trading (import, export, wholesale, and distribution), no local partner is needed—100% foreign ownership is allowed. In restricted or conditional sectors (e.g., multi-outlet retail, pharmaceuticals, and media), a local partner or joint venture may be required.
- How to start a business in Vietnam as a foreigner?
Follow these key steps: obtain the Investment Registration Certificate (IRC), then the Enterprise Registration Certificate (ERC), secure trading or sector-specific licenses, open a corporate bank account, contribute charter capital, and complete tax registration. Using professional services like Vina TPT’s company setup service ensures accuracy and efficiency.
Vina TPT – Your Trusted Partner for Foreign Businesses in Vietnam
Vina TPT is one of Vietnam’s leading company formation consultancies, specializing in helping foreign investors to set up companies in Vietnam for trading, manufacturing, and services. With over 20 years of experience, Vina TPT has assisted hundreds of FDI companies from Europe, the US, Japan, Korea, and Singapore in successfully obtaining IRCs, ERC, and required licenses in minimal time.
- Multilingual Expert Team: Lawyers, accountants, and registration specialists fluent in English, Japanese, and more for seamless communication.
- Fast and Transparent Process: Commitment to completing the IRC in 30–45 working days and the ERC in 7–14 days, with a near-100% success rate.
- Full-Service Package: From company registration to capital advisory, bank account opening, tax filing, work permits, social insurance, and transfer pricing support.
- Competitive and Transparent Pricing: Clear quotes with no hidden fees, ideal for SMEs.
- Long-Term Post-Setup Support: Daily operational guidance and updates on the latest laws (including the 2025 Investment Law changes) to minimize risks and support sustainable growth.
We go beyond simply setting up a company in Vietnam – we help you build a strong foundation for success. With our commitment to “Fast – Accurate – Cost-Effective” service, Vina TPT saves time, reduces legal risks, and lets you focus on business growth. Hundreds of satisfied clients trust Vina TPT – contact us today for a free consultation and a personalized quote tailored to your needs.
