Types of Business Structures in Vietnam Explained

When expanding into Vietnam, foreign investors can choose from six primary business structures: Representative Office, Limited Liability Company (LLC), Joint-Stock Company (JSC), Branch Office, Joint Venture (JV), and Public-Private Partnership (PPP). Each structure serves different investment objectives, risk profiles, and regulatory requirements. The sections below outline the key features of each legal entity to help investors determine the most suitable option for their market entry strategy.

Representative Office (RO)

A Representative Office (RO) is a cost-effective entry option and is commonly chosen by companies entering the Vietnamese market for the first time.

An RO is suitable for businesses that want to explore the market with a limited initial investment. It allows companies to build local market knowledge and relationships before committing to a larger commercial presence in Vietnam.

Permitted Activities

A Representative Office may:

• Conduct market research

• Act as a liaison office for the parent company

• Promote the parent company’s business through meetings and non-commercial activities

ROs are not allowed to generate revenue or conduct profit-making activities in Vietnam.

Requirements and Capital

There is no minimum registered capital requirement for an RO. However, the parent company must have been operating in its home country for at least one year.

Timeframe and License Validity

• Establishment time: approximately 6–8 weeks

• RO licenses are valid for five years and may be renewed, provided the license period does not exceed the validity of the parent company’s incorporation documents

Due to its non-commercial nature, the RO setup process involves fewer regulatory procedures compared to other business structures.

Limited Liability Company (LLC) – 100% Foreign-Owned Enterprise

A Limited Liability Company (LLC) is the most common structure used by foreign investors in Vietnam. Most investors establish an LLC as a 100% Foreign-Owned Enterprise (FOE).

An LLC is a legally incorporated entity with limited liability. It is suitable for companies planning to conduct full commercial operations in Vietnam. A Joint Stock Company (JSC) is a similar structure but is typically used when public listing is intended.

Requirements and Registered Capital

Vietnam generally does not impose a minimum capital requirement for most business sectors. However, the Department of Planning and Investment will assess whether the registered capital is sufficient to support business operations until the company becomes profitable.

In practice:

• Some service companies can be established with under USD 10,000

• Capital levels depend on the nature, scale, and licensing requirements of the business

Certain industries have specific minimum capital requirements, including:

• Finance, banking, insurance, and fintech

• Language centers and vocational schools

• Real estate businesses

Ownership Structure

LLCs may be established as:

• Single-member LLCs (one owner), or

• Multi-member LLCs (two or more owners)

Owners may be individuals or corporate entities.

Time to Establish

• Typical setup time: 2–4 months, depending on the business sector and licensing requirements

• Joint Stock Companies must have at least three founding shareholders

Branch Office (BO)

A Branch Office allows a foreign company to operate in Vietnam under its parent company’s name. This structure is limited to certain service-based industries, such as finance and banking.

Branch Offices may directly conduct permitted business activities and hire staff in Vietnam.

Permitted Activities

A Branch Office may:

• Lease office space and facilities

• Purchase or lease equipment

• Recruit local and foreign employees

• Remit profits abroad

• Conduct licensed commercial activities

• Establish accounting, marketing, and HR functions on behalf of the parent company

Requirements and Capital

A Branch Office must:

• Obtain an establishment license

• Use a seal bearing the parent company’s name

A foreign company may appoint a manager from overseas; however, this individual must obtain a Vietnam work permit.

Time to Establish

• Approval authority: Department of Industry and Trade

• Processing time: approximately 20 working days after submission of complete documentation

Joint Venture (JV)

A Joint Venture (JV) is a business entity formed by two or more partners for a specific commercial purpose. A JV may include:

• Two or more foreign investors, or

• One or more foreign investors and one or more Vietnamese partners

Ownership Rules

In most sectors, foreign investors may own up to 100% of a business. However:

• Certain industries require a local partner

• Statutory rules typically require foreign investors to contribute at least 30% of the capital in a JV

• Ownership may be structured as a majority or minority stake, depending on the sector

Industries that require joint ventures include:

• Advertising services

• Agriculture, hunting, and forestry-related services

• Telecommunications

• Travel agencies and tour operators

• Entertainment and electronic gaming

• Container handling, customs clearance, and auxiliary transport services

• Inland waterway, rail, and road transport services

Investors acquiring shares in equitized state-owned enterprises must use a Joint Stock Company (JSC) structure.

Requirements and Capital

Capital requirements for Joint Ventures are generally the same as those for 100% Foreign-Owned Enterprises, depending on the industry.

Time to Establish

The legal registration process includes:

• Investment Registration Certificate: 15 days

• Enterprise Registration Certificate: 3 working days

However, identifying a suitable local partner, conducting due diligence, and negotiating JV terms may take 3–6 months.