Starting a business in Vietnam can prove very lucrative and Vietnam’s booming economy in recent has seen huge numbers of foreign firms enter the market.
More often than not, they have come looking for a low-cost manufacturing base to make their goods or to make the most of a rapidly emerging consumer market in which to sell their goods, for both of which Vietnam ranks highly.
Starting a business in Vietnam, however, can be tricky. There can be a lot of red tape and requirements and working with certain authorities, to be frank, can be challenging.
That said, firms and entrepreneurs can ease the stress and tension that comes with establishing a business in Vietnam by understanding the process and its nuances ahead of time.
In this light, this article discusses the key steps and procedures that should be understood when starting a business in Vietnam.
1. Get familiar with Vietnam’s business culture
Vietnamese business culture has changed a lot in a very short amount of time.
Whereas there are distinct business customs, cultures, and traditions most Vietnamese understand that foreign business persons may not be familiar with and are unlikely to hold it against an individual that follows a more Western approach to business.
In fact, Vietnamese business persons are usually very familiar with Western business culture and tradition, particularly in the south, and therefore the following is simply advice and recommended, but not really necessary.
1.1 Introductions
Introductions are possibly the most important part of establishing a business relationship in Vietnam.
It is common for phones to go unanswered and emails ignored, even at bigger companies. Instead, Vietnamese business persons, generally, have a strong preference for personal introductions through third parties.
When meeting a Vietnamese business person for the first time, it is customary to exchange business cards.
Handing over a business card using both hands is considered a sign of respect and this is usually followed by a handshake, bit sometimes it happens in reverse order.
Vietnamese people are generally pretty loose with the rules.
1.2 Communication
Communicating with business partners and associates can often be quite informal.
Whereas initial introductions can be difficult via means other than meeting in person, it is quite common once a relationship is established to use text messaging and social media applications.
In Vietnam, the two keen means of communicating in both life and business are Facebook and a local messaging app called Zalo.
The use of emojis is also common at all levels of professional communication–replying with a love heart to good news is common though may be a little surprising to foreign business persons. This is also true of communicating with government departments.
1.3 Coffee money
The concept of coffee money is known in many other places around the world as a bribe.
This is a normalised practice in Vietnam and can be very effective at greasing the wheels.
The processes and procedures for paying coffee money often vary as does the amount to be paid but most Vietnamese workers will very quickly be able to determine exactly what needs to be paid and to whom.
Firms, however, should pay particular heed as to how this may appear to persons outside of Vietnam.
It’s worth noting that there are laws against these practices in a number of countries that apply even if they are carried out in other parts of the world, the Foreign Corrupt Practices Act in the United States for example.
See also: Corruption in Vietnam
2. Check that you are permitted to start a business in Vietnam
The process of establishing a business in Vietnam can be time-consuming.
That said, foreign individuals and firms looking to invest in Vietnam can pre-empt some of the challenges they may run into by considering regulations attached to the business they wish to operate first.
2.1 Check foreign ownership limits
At least 25 sectors prohibit foreign investment altogether and a further 59 sectors have at least some form of foreign ownership limit or restrictions.
These can take the form of a set percentage of the share of ownership a foreign entity can assume and/or additional oversight in the form of approval procedures and documentation.
Making sure that the sector a foreign entity intends to invest in is open to foreign investment is a crucial first step.
See: Vietnam’s Foreign Ownership Limits
3. Choose a good location
Choosing the right location for any business can be the difference between success and failure.
Firms and individuals looking to establish a business in Vietnam should consider the best market for their products and services.
That said, future business proprietors, wherever they choose to establish themselves, will very likely have to sign on to a commercial lease.
3.1 Conduct market research
Market research is essential when choosing a location for a new business in Vietnam.
Given the number of businesses in Vietnam’s biggest cities and the propensity for consumers to frequent establishments closest to their home or place of work, the right location depends greatly on the individual establishment and therefore offering broad advice can be difficult.
It should be noted, however, that in both Hanoi and Ho Chi Minh City there are specific enclaves in which the bulk of foreigners live.
In Hanoi that area is known as West Lake (Tay Ho) and in Ho Chi Minh City it’s Thao Dien.
Foreign businesses may find these areas easier to penetrate with Western products or services.
In other areas, businesses may need to double down on products catering more to local tastes.
E-commerce
The e-commerce market in Vietnam is among the fastest growing in the region.
Low-cost delivery apps like Grab have made it very cheap and easy to transport goods around Vietnam’s cities.
When selecting a location firms should keep in mind that for many products Vietnamese will make their purchases online rather than in-store.
A strong online presence can therefore negate at least some of the need for a prime real estate location.
This will, however, require engaging with Vietnam’s logistics industry.
See also: Online Shopping in Vietnam
3.2 Get familiar with commercial leases in Vietnam
The Law on Real Estate Business 2014 regulates leases broadly and this includes commercial leases.
A typical lease agreement in Vietnam will have several key features:
- The length of the lease: In Vietnam a commercial lease typically runs for about five years;
- The payment terms: How often rent payments will be made and how. Typically, rent payments are made quarterly, however, they can also sometimes be monthly, every six months, or yearly; and
- The division of responsibilities: who is responsible for what and when between the landlord and the tenant.
These are just the broad strokes but are also the most pivotal components of the agreement.
Other aspects of the agreement can generally be negotiated between the landlord and the tenant without too much direction from the real estate law.
See also: Commercial Real Estate in Vietnam
Retail rents, Vietnam, per square meter
| Q1 2024 | Q2 2024 | Q3 2024 | ||||
| CBD | NCBD | CBD | NCBD | CBD | NCBD | |
| Hanoi | $163.20 | $30.60 | $180.80 | N/A | $172.70 | $37.00 |
| Ho Chi Minh City | $240.00 | $53.30 | $280.00 | $53.80 | $274.10 | $53.30 |
*CBD = Central Business District; NCBD = Non-Central Business District
Industrial land rents, Vietnam, per square metre
| Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | |
| South | – | US$189 | US$173 | US$174 |
| North | US$132 | US$133 | US$134 | US$137 |
Ready built factories, Vietnam, per square meter
| Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | |
| South | US$4.90 | US$4.90 | US$4.90 | US$4.90 |
| North | US$4.80 | US$4.90 | US$4.90 | US$4.87 |
Source: CBRE Market Insights
4. Check for any industry-specific regulations
In Vietnam, almost every type of business is regulated in some shape or form. How it is regulated will depend largely on what type of business it is. Here are just a few of the main ones.
Hospitality businesses
Food safety certificates
Most hospitality businesses will need, at the very least, a food safety certificate.
A food safety certificate ensures the proprietor is well aware of hygiene and food safety standards and that their premises meet these standards.
These are outlined in the Law on Food Safety.
Businesses in Vietnam that trade without a food safety certificate may be hit with a fine of up to VND 40 million (US$1,662).
See also: Food Safety Certification in Vietnam
Liquor licences
Businesses in Vietnam that wish to sell alcohol will need to apply for a liquor licence.
The sale and production of alcohol in Vietnam are generally covered by the Alcohol Law.
Specific licensing requirements for bars that wish to sell alcohol in Vietnam are outlined in Article 23 of Decree No: 105/2017/ND-CP (with some amendments in Decree 17/2020/ND-CP.
New businesses need to apply to the Economic Department or the Economic and Infrastructure Department of the district People’s Committee.
An application for a liquor licence in Vietnam attracts an appraisal fee of VND 1,200,000 (US$49).
There is also an issuing fee of VND 200,000 (US$8). This is outlined in Circular 168/2016/TT-BTC.
See also: Liquor Licences in Vietnam
Tobacco licences
If a business wishes to sell tobacco products, it will need a tobacco licence.
These are governed by Decree No: 67/2013/ND-CP with a series of amendments in subsequent decrees.
An application for a licence to sell tobacco in Vietnam attracts an appraisal fee of VND 1,200,000 (US$49).
There is also an issuing fee of VND 200,000 (US$8) per Circular 168/2016/TT-BTC.
Sports businesses
Gym equipment and facilities
Gyms in Vietnam, including their equipment, facilities, and staff are regulated by Circular 10/2018/TT-BVHTTDL and Circular 07/2021/TT-BVHTTDL.
This includes technical requirements for facilities and equipment as well as staffing requirements and training.
See also: How to Open a Gym in Vietnam
5. Form a company
Businesses in Vietnam with foreign ownership are generally established as a limited liability company either as a wholly owned foreign enterprise or a joint venture with a Vietnamese partner.
Note that this article takes a broad overview of starting a business in Vietnam. A more detailed, step-by-step guide to the legal process can be found here: How to Form a Company in Vietnam.
In general there are three main structures your business might take.
- A wholly foreign-owned business in Vietnam allows a foreign investor complete control over a company’s operations. It is, however, generally more costly and time-consuming.
- A joint venture with a local partner foreign business persons do not need to file for an Investment Registration Certificate, but rather the Vietnamese partner establishes the company and the foreign investor buys a share. Joint ventures, however, can be risky. A mismatch in work ethics and management styles can cause conflict in the workplace, particularly in cross-cultural settings.
- A franchise. There are a number of franchises spread out around the country–KFC and McDonald’s for example. Buying into a franchise is an option for foreign investors but foreigners should be mindful that establishing a business via a franchise has its own governing regulations specific to them.
6. Organise your visa
Foreign business persons who start a business in Vietnam will likely qualify for an investor visa.
The length and cost of an investor visa will depend on the value of the investment.
Vietnam investor visas
Investor visas in Vietnam are known as DT visas. There are four types of investor visas which vary in length depending on the value of the investment.
Investor visas in Vietnam
| Code | Description | Length |
| DT1 | Investments over VND 100 billion (US$4.15 million), or for investment into ‘prioritised’ sectors, professions, or areas of Vietnam. | 5 years |
| DT2 | Investments between VND 50 billion (US$2.07 million) and VND 100 billion (US$4.15 million), or for investment into ‘prioritized’ sectors, professions, or areas of Vietnam. | 5 years |
| DT3 | Investor visa: issued for investors with total investment capital between VND 3 billion (US$125,000) and VND 59 billion (US$2.07 million). | 3 years |
| DT4 | Investor visa: issued for investors with total investment capital less than VND 3 billion (US$125,000). | 12 months |
Source: Vietnam Visas for Doing Business in Vietnam
7. Calculate your staffing costs
Entry-level staff in Vietnam who do not have university degrees or some form of higher education are generally paid around minimum wage.
Minimum wages in Vietnam are different for each of one of four key regions.
These are outlined in Conclusion 83-KL/TW which came into effect on July 1 2024.
Vietnam’s minimum wage
| Monthly | Hourly* | |||
| Region | VND | US$ | VND | US$ |
| 1 | 4,960,000 | $195 | 25,306 | $0.99 |
| 2 | 4,410,000 | $173 | 22,500 | $0.88 |
| 3 | 3,860,000 | $152 | 19,694 | $0.77 |
| 4 | 3,450,000 | $136 | 17,602 | $0.69 |
*Hourly rate calculated on 196 hours per month
See also: Minimum Wage in Vietnam
Average wages by sector
Wages vary across sectors in Vietnam.
That said, the General Statistics Office of Vietnam publishes quarterly labor market updates that average wages in several sectors.
In the first quarter of 2025, the GSO found that:
- Service sector workers received an average monthly income of VND 9.9 million or roughly US$383.65;
- Processing and manufacturing workers received an average monthly wage of VND 9.1 million or US$352.64; and
- Agriculture, forestry and fisheries workers receive VND 4.9 million or US$189.89 per month on average.
See also: Average Salary in Vietnam
Employee entitlements and benefits in Vietnam
A standard work week in Vietnam is 48 hours. An employee can work up to 40 hours of overtime in a month not exceeding 200 hours of overtime in a year.
There is, however, an exception for some workers in fields like manufacturing whereby they can work up to 300 hours of overtime in one year.
Workers in Vietnam are entitled to 12 days of annual leave a year.
There are also six public holidays in Vietnam that vary in length but all-up give workers an additional 11 days off.
Employees in Vietnam are also entitled to social and unemployment insurance.
Employers generally need to contribute the equivalent of 21.5 percent of a local employee’s wage to these two social safety nets whereas employees contribute 10.5 percent .
For foreign employees it is only 20.5 percent and 9.5 percent.
See also: Vietnam’s Labour Law
8. Protect your intellectual property
Protecting intellectual property in Vietnam can be challenging. It is common for local businesses to use brand names and logos of other more well-established businesses.
On the Office of the US Trade Representative’s Special 301 Report Vietnam’s lax IP enforcement has been labelled ‘a serious challenge’ for the burgeoning nation.
That said, it is a signatory to most international intellectual property treaties and it has made a number of key reforms in recent years to strengthen IP protections.
Trademarking a business’s intellectual property in Vietnam
With respect to establishing a business, there are a number of items of intellectual property that business owners may want to consider trademarking.
A unique product name, a brand name, or a company logo could all be the subject of a trademark application.
Note that Vietnam is a signatory to the Madrid Agreement and therefore, firms with trademarks approved in other countries that are also party to the agreement will automatically have their trademarks recognised in Vietnam.
Likewise, businesses that register a trademark in Vietnam will automatically have protection in the other countries party to the agreement.
Filing a trademark application in Vietnam
In order to apply for a trademark a firm must first complete an application that includes:
- A trademark registration declaration,
- An image of the trademark between 3cm x 3cm and 8cm x 8cm,
- A list of products and services that are to be registered;
- A power of attorney, if necessary, and
- Proof of payment of all necessary fees and charges.
Trademarks in Vietnam are then filed with the Intellectual Property Office of Vietnam (IPVN).
It can take 12 to 18 months for a trademark application in Vietnam to be approved.
9. Pay any fees and organise your taxes
New businesses will need to register with the General Department of Taxation in order to pay their taxes and ensure they are tax-compliant.
There are also a number of recurring fees and taxes in Vietnam that new business owners should be aware of.
Business licence fees
Limited liability companies in Vietnam are required to pay a business licence fee annually. This must be paid by January 30. These fees depend on the registered capital of the firm.
Business licence fees, 2023
| Registered Capital | Fee (VND) |
| Less than 10 billion VND (US$415,671) | 2,000,000 (US$83) |
| Greater than 10 billion VND (US$415,671) | 3,000,000 (US$124) |
Source: Decree No. 20/VBHN-BTC
Value-Added tax (VAT)
The Value Added Tax in Vietnam is a consumption-based tax on goods and services in Vietnam. It is generally charged at the point of sale for retail businesses.
There are some exceptional circumstances in which VAT declarations and payments can be made quarterly, however, payments are usually made to the General Department of Taxation each month. VAT is generally charged at 10 percent of the sale price, though for select specialty items, it is only 5 percent, and some items are also exempt.
Personal Income Tax (PIT)
Vietnam’s Personal Income Tax is levied on a worker’s wages in Vietnam.
The amount to be collected is on a sliding scale, the more a worker earns the more PIT they pay. Employers are required to collect PIT on an employee’s wages and pay said tax to the General Department of Taxation each month.
If approved by the authorities an enterprise may be able to make tax payments quarterly instead.
Corporate Income Tax (CIT)
Corporate Income Tax in Vietnam is the tax a company pays.
The standard CIT payment is 20 percent of assessable income, however, on large investments foreign firms have been known to receive tax breaks.
This tax is paid yearly though firms can make payments quarterly.
Special Consumption Tax (SCT)
Vietnam’s Special Consumption Tax is levied on luxury goods and services typically with the potential to have a negative impact.
Gambling, cigarettes, and alcohol for example. Restaurant owners in Vietnam should be mindful that this tax is 65 percent for alcoholic beverages.
They should also note that there are currently regulatory changes tabled that could see the SCT on beer increased to 100 percent.
10. Start trading
Put out your sandwich board and open the doors. You’re in business!
11. Expanding into Southeast Asia
As an after thought, if all goes well (and why wouldn’t it), expanding into Southeast Asia is always an option.
Indonesia
Indonesia is one of the fastest-growing economies in Southeast Asia and offers numerous opportunities for foreign firms looking to expand their operations.
With a population of over 270 million, a booming digital economy, and increasing foreign direct investment (FDI) incentives, Indonesia is a strategic destination for global businesses.
However, foreign firms must navigate investment regulations, industry restrictions, and legal compliance to successfully establish their operations.
See: How to Start a Business in Indonesia
The Philippines
The Philippines is a rapidly growing economy in Southeast Asia, offering opportunities for foreign investors across various industries.
With a large consumer base, a skilled workforce, and increasing government support for businesses, the country presents an attractive destination for investment.
However, businesses must navigate regulatory requirements, foreign ownership limitations, and infrastructure challenges to succeed.
See: How to Start a Business in the Philippines
FAQ
What business structure do foreigners normally use in Vietnam?
Foreign investors typically establish limited liability companies, either wholly foreign-owned or joint ventures with a local partner. Franchises are also a common model for market entry, especially in food and retail sectors.
Is it difficult for foreigners to start a business in Vietnam?
While Vietnam offers significant opportunities, starting a business can be complex due to regulatory requirements, foreign ownership limits, and administrative procedures. However, with proper research and local legal support, these challenges can be managed effectively.
Do I need a local partner to start a business in Vietnam?
Not always. Wholly foreign-owned businesses are allowed in many sectors, but some industries require a joint venture or impose ownership limits. It’s important to check foreign investment conditions before applying.
How much does it cost to start a business in Vietnam?
There are a lot of factors that go into how much it will cost to start a business in Vietnam. That said, its not unheard of for a small business can get up and running for as little as US$10,000.
What’s next?
Last reviewed January 2, 2025.