A foreign investor seeking a legal entity in Vietnam must complete two separate layers of procedure: first obtaining the Investment Registration Certificate (IRC), then the Enterprise Registration Certificate (ERC). Omitting a single document from the IRC dossier, or choosing the wrong investment form, causes the file to be returned and delays the project by anywhere from several weeks to a few months. This article sets out the process under the 2020 Law on Investment, the 2020 Law on Enterprises and Decree 96/2026/ND-CP (replacing Decree 31/2021/ND-CP as of 2026), together with the issues TLA most often encounters when supporting FDI clients.
Investment forms available to a foreign investor
The 2020 Law on Investment allows a foreign investor to choose one of the following forms, each with its own procedure and implementation timeline:
- Establishing a new economic organisation — contributing 100% of the capital or forming a joint venture with a Vietnamese partner. The most common route for medium and large manufacturing or services projects; an IRC is mandatory before enterprise registration.
- Contributing capital to, or purchasing shares or contributed capital in, an economic organisation already established in Vietnam. If the business line is not on the list of conditional market-access sectors and the ownership ratio does not exceed the threshold requiring registration, the capital-contribution registration procedure may not be required — it should still be reviewed in advance to avoid non-compliance.
- Business Co-operation Contract (BCC) — no new legal entity is formed; the parties co-operate on a contractual basis, but an IRC must still be issued if a foreign investor is party to the contract.
- Other investment forms and new types of economic organisation as prescribed by the Government.
For most of TLA's FDI clients, the most common choice remains establishing a new, wholly foreign-owned economic organisation, since it gives full operational control.
The process from IRC to ERC
The sequence for an FDI project that establishes a new legal entity comprises the following main steps:
- Preparing the investment project dossier — the project proposal, evidence of financial capacity (financial statements, a parent-company financial-support commitment, or a bank guarantee), a legalised copy of the passport/certificate of incorporation, and documents on the project location.
- Filing the IRC application with the Department of Finance (which absorbed the Department of Planning and Investment from early 2025) in the locality where the head office will be based, or with the industrial park/economic zone management board if the project is located within an industrial park.
- Receiving the IRC — the mandatory basis for applying for enterprise registration.
- Filing the ERC application with the Business Registration Office (now part of the Department of Finance following its merger with the Department of Planning and Investment), attaching the IRC as supporting documentation.
- Completing post-registration formalities — making the company seal, initial tax registration, opening the direct investment capital account (DICA) at a licensed bank, notifying invoice issuance, and registering for labour and social insurance.
The IRC and ERC steps cannot be combined into one: the licensing authorities differ, the dossiers differ, and the ERC always relies on an IRC that has already been issued. Investors should build contingency time for both steps into their implementation planning.
Conditional business lines
Before filing, an investor must determine whether the target business line falls under the list of conditional business lines (Appendix IV of the 2020 Law on Investment) or the list of conditional market-access sectors for foreign investors (set out in detail in Decree 96/2026/ND-CP — which replaced Decree 31/2021/ND-CP, Decree 19/2025/ND-CP and Decree 239/2025/ND-CP, and references Vietnam's WTO schedule of commitments). The two lists are distinct:
- Conditional business lines apply equally to all investors, domestic and foreign alike (for example legal services, accounting and auditing, education, healthcare, real estate).
- Conditional market-access sectors apply only to foreign investors — they may restrict the ownership ratio, investment form, or scope of activity, or require partner capacity conditions.
The specific number of business lines and the detailed conditions for each may change as the governing instruments are amended or supplemented; investors should check the version in force at the time of filing.
Investment capital and implementation timeline
The project's investment capital is self-declared by the investor, supported by corresponding evidence of financial capacity; the 2020 Law on Investment does not set a minimum legal capital that applies uniformly across all business lines. Certain specific sectors (real estate business, financial services — banking, securities, insurance, and others) carry their own legal-capital requirements under sector-specific law.
As to processing time, the investment registration authority has a set period, running from the date of receipt of a complete and valid dossier, in which to process an IRC application for a project that is not subject to investment policy approval; the ERC dossier is processed within a shorter period once the IRC has been issued. A project subject to investment policy approval (granted by the National Assembly, the Prime Minister, or the provincial People's Committee) requires an additional appraisal step before the IRC is issued, and typically takes considerably longer than an ordinary project.
Common issues and how to address them
From its practical experience supporting FDI clients, TLA has identified the issues that recur most often:
- Evidence of financial capacity that is not sufficiently persuasive — the parent company's financial statements have not been consularly legalised, or the financial-support commitment lacks an authorised signature. Fix: prepare the full set of original documents, consularly legalise and have them notarially translated before filing.
- The target business line is not clearly covered in the WTO schedule of commitments — the investment registration authority must seek the opinion of the relevant specialised ministry, extending the processing time beyond the expected schedule. Fix: carry out a legal review of the business line before filing, and engage with the specialised regulator in advance if needed.
- Capital contributions that fall behind the schedule committed in the IRC — creating a risk of an administrative penalty or complications when amending the licence later. Fix: draw up a realistic capital-contribution schedule, and do not commit to a timeline that exceeds the investor's actual capacity to remit funds.
- A change of shareholders/members after licensing without a corresponding IRC amendment — leaving the legal file out of sync and creating difficulties for later tax, banking, or M&A procedures. Fix: amend the IRC and ERC in parallel as soon as a change occurs, rather than letting it accumulate.
- Choosing the wrong project location (inside or outside an industrial park) — directly affecting the licensing authority, the processing time, and the level of investment incentives available. Fix: survey the location and the related incentive policy before finalising the dossier.
Frequently asked questions
Must a foreign investor obtain an IRC before establishing a company in Vietnam? Yes, if the chosen form is establishing a new economic organisation. The IRC is a prerequisite for applying for the ERC. Where the investor instead contributes capital to, or purchases shares in, an existing Vietnamese enterprise, the procedure may be simpler depending on the business line and the ownership ratio.
Can an FDI project have several foreign investors named jointly on the IRC? Yes. An IRC can record several investors (organisations or individuals) participating jointly in a project, together with each party's corresponding capital contribution ratio.
If a project fails to proceed on the schedule committed in the IRC, can the licence be revoked? Yes, this is a real risk. Investment law sets out the circumstances in which a project's operations are terminated, including a project that fails to proceed on its registered schedule where the investor has not completed the amendment procedure. Investors should proactively apply for an extension or a schedule adjustment before a breach occurs.
Does an FDI enterprise need additional sub-licences after obtaining the ERC? It depends on the business line. Many conditional business lines (education, healthcare, logistics, retail distribution, and others) require a sub-licence or a certificate of eligibility to operate after the ERC has been issued, before the enterprise can commence operations officially.
Book a consultation with TLA Consulting to have your IRC-ERC dossier reviewed and to plan an on-schedule roadmap for establishing your FDI enterprise.
