In recent years, Vietnam has continued to be an attractive destination for foreign investors. However, a foreign investor’s entry into the Vietnamese market through the establishment of an economic organization does not depend solely on business opportunities, but is subject to strict regulation under Vietnam’s investment legal framework. Under current laws, in order to establish a legal entity in Vietnam, one of the first key steps that foreign investors must undertake is to obtain an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC).
The issuance of Decree No. 96/2026/ND-CP has introduced several notable changes to the procedures and sequencing by which foreign investors carry out the above two licensing processes, particularly allowing, in certain cases, foreign investors to apply for and obtain the ERC prior to the issuance of the IRC. This new regulation offers clear benefits to investors by enabling them to proceed with the ERC procedure instead of waiting for the completion of the IRC, which often requires a considerable amount of time due to complex appraisal processes. As a result, investors may establish their enterprises more quickly, proactively commence initial operations, and significantly reduce waiting time, thereby enhancing flexibility and efficiency in the investment process.
However, in order to follow this new procedural sequence, investors must clearly understand the relevant conditions to ensure compliance with applicable laws. This article by PLF aims to provide foreign investors with an overview of the new investment procedure in the form of enterprise establishment, enabling them to consider and evaluate its application.
1. Investors’ right to choose the order for carrying out investment procedures
As mentioned above, Investment Law 2025 has introduced a significant advancement in the implementation of investment procedures for foreign investors. Specifically, investors are granted the discretion to choose the order for applying for the ERC and the IRC, depending on the actual needs of the project, its characteristics, and the investor’s business strategy. On this basis, the implementation may follow two approaches:
(i) First, applying for the ERC and followed by the IRC.
This option is suitable where the proposed investment activities of the foreign investor in Vietnam are relatively straightforward and where the applicable market access conditions under Vietnamese law and relevant international treaties can be readily satisfied.
By adopting this approach, the investor may promptly establish a legal presence in Vietnam and proceed with activities such as entering into office lease agreements, recruiting personnel, opening bank accounts, or preparing infrastructure, thereby facilitating resource readiness for the subsequent application for the IRC and project implementation.
(ii) Second, following the traditional order, i.e., obtaining the IRC first, followed by the ERC.
This option is appropriate for projects that are complex or sensitive in nature, or where the investor wishes to ensure that all investment conditions are fully reviewed and approved by the competent authorities prior to the establishment of a legal entity in Vietnam.
2. Conditions for implementing the new order in investment procedure – Obtaining the ERC prior to the IRC
The introduction of a new procedural order in the implementation of investment projects does not imply a complete relaxation of applicable conditions; rather, it remains subject to certain legal requirements. Accordingly, where an investor elects to establish an economic organization prior to obtaining the IRC, a prerequisite is that the foreign investor must satisfy the applicable market access conditions as prescribed under Vietnamese law and relevant international treaties. In addition, the investor is obligated to complete the procedures for obtaining the IRC within 12 months from the date of establishment of the enterprise. During this period, any amendment to the ERC for the purpose of supplementing business lines associated with the investment project may only be carried out after the IRC has been granted.
It should be noted that, although the enterprise has been legally established, a foreign-invested enterprise is only permitted to implement its investment project after completing the procedures for issuance or amendment of the IRC. This requirement is intended to ensure that investment activities remain subject to State control in terms of scope, conditions, and content in accordance with the applicable regulatory framework.
3. Key Considerations for foreign investors
The establishment of an economic organization prior to obtaining the IRC does not require that the charter capital of the company (as stated in the ERC) be identical to the total contributed capital of the project (as stated in the IRC). This approach provides flexibility for investors in structuring their capital sources, allowing them to allocate and mobilize capital in line with the actual implementation schedule of the project.
However, it is important to note that this new procedural order has not yet been comprehensively guided nor widely applied in practice. Therefore, foreign investors are advised to exercise caution and closely monitor forthcoming implementing regulations in addition to Decree No. 96/2026/ND-CP to ensure a sound basis for implementation.
From a legal perspective, the new regulation on the order for implementing investment procedures in the form of establishing an economic organization (i.e., obtaining the ERC prior to the IRC) reflects a clear shift from a pre-approval mechanism to a post-approval approach in the management of investment activities. This implies that the focus of legal responsibility is shifted to the post-establishment phase, particularly in relation to ensuring compliance with market access conditions and the statutory timeline for completion of investment procedures. In this context, conducting thorough legal due diligence at the preparatory stage, together with establishing a practical and feasible implementation roadmap, plays a crucial role in mitigating risks and ensuring legal compliance throughout the lifecycle of the investment project.
