In Vietnam, along with the trend of globalization, the startup culture of Vietnamese entrepreneurs is growing, making the country an ideal opportunity for prestigious international franchises to enter this fast developing market. Franchising has become popular thanks to its advantages for young businesses such as access to new technologies, management experience and international business models. However, as an emerging market, the legal framework is not complete, and the compliance is not high from franchisees. Thus, franchising in Vietnam is still challenging for foreign franchises.

As a leading registered industrial property representative in Vietnam, and thanks to our many years of operations in the franchising field, we have developed a strong network of international and local brands. We are notably assisting foreign franchises to grant exclusive distribution rights to local franchisees in a wide range of industries such as restaurants, hotels, retail chains, fashion or education. Therefore, we understand the core interests of foreign franchisors, how to minimize potential risks and increase their chances of success in the Vietnamese market.

Registering a 100% foreign-owned company in Vietnam is possible. However, foreign investment is subject to regulatory limitations applied on each specific business sector.

In most cases, investors shall implement the following steps to establish a company:

Step 1: Obtaining an Investment Registration Certificate, abbreviated IRC (if any non-Vietnamese investors).

Step 2: Obtaining an Enterprise Registration Certificate, abbreviated ERC or BRC for Business Registration Certificate.

The company is established but the following steps are required for regulatory compliance:

Step 3: Post establishment procedures.

Step 4: Obtaining sub-licenses (if any).

IRC stands for Investment Registration Certificate which shall be obtained (in most cases) when a foreign investor wants to set up a project (such as establishing a company) in Vietnam at the beginning.

ERC stands for the Enterprise Registration Certificate which every company in Vietnam must have. In other jurisdiction it is sometimes referred to as the “Incorporation Certificate” or “Company Certificate”.

Joint Stock Company (“JSC”) and Limited Liability Company (“LLC”) are the most common types of company in Vietnam since they offer the following advantages:

  • Limitation in liabilities of their shareholders/ members/ proportionate to their capital contribution;
  • Flexible management structure;
  • Conversion from JSC to LLC and conversely is possible.

In general, there is no minimum capital required by law when registering a company in Vietnam. Only some conditional business sectors such as real estate trading, banking or education have specific capital requirements.

However, the capital shall be sufficient in light of the intended business sectors and scale of operation.

For non-conditional business sectors, we usually need from 6 to 8 weeks to setup a foreign-invested company and 1 week for a Vietnamese-invested one.

However, especially for foreign-owned companies, the time can be extended due to various reasons such as additional requirements from the licensing authorities.

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