Why Vietnam Should be Part of Your Global Expansion Strategy

We are seeing growing interest from international businesses looking to incorporate a company and do business in Vietnam. Based on my recent experiences helping businesses with set up in Vietnam, I look at the benefits of incorporating in Vietnam.

As Director at MSA Asia, I support international businesses to set up and manage the financial and regulatory side of their Asia operations. Historically, global businesses have often chosen China as a base for manufacturing or export, and Hong Kong or Singapore for financial and investment vehicles. But this is starting to change, with higher costs in those jurisdictions driving businesses to seek out other regional hubs.

Multiple locations also hedge against the risk of changing trade rules and economic difficulties in any one location (the oft-cited ‘China+’ strategy). Vietnam has emerged as one of Asia’s most attractive destinations for entrepreneurs and foreign investors looking for that ‘2nd home’ in Asia.

I was recently approached by a US-based consulting firm seeking to establish a Vietnam subsidiary for offshore delivery, but was confused about how to manage the set-up and compliance. In supporting them through the incorporation of a 100% foreign-owned Vietnam subsidiary, alongside a compliant invoicing system, I thought it might be helpful to other businesses if I set out the key steps for Vietnam market entry.

Why incorporate in Vietnam?

Vietnam has a lot of appeal to growing businesses: It has a population of over 100 million, a young and skilled workforce and strong GDP growth driven by exports, technology and services. Key business hubs such as Ho Chi Minh City and Hanoi offer access to talent, infrastructure and international connectivity.

Specific economic benefits of expanding into Vietnam in 2026 include:

1. Strong economic growth and foreign investment. Vietnam has been one of the fastest-growing economies in Asia with GDP expanding ~7.85% in the first nine months of 2025. This is almost-record growth for the last decade.

Vietnam is also attracting record levels of investment from global companies seeking production bases and market access with FDI stock exceeding ~$322 billion by the end of 2024 — roughly two-thirds of the country’s GDP.

2. Relatively low labor and manufacturing costs. Skilled labor costs are much lower in Vietnam than in China or other manufacturing hubs, where there has been an astronomical cost hike over the last 20 years. A recent McKinsey Report stated labor costs in Vietnam are, on average, half what they are in China.

3. Lack of trade barriers. Vietnam also benefits from extensive free trade agreements, including the CPTPP and the EU–Vietnam Free Trade Agreement, making it an attractive base for companies serving regional or global markets.

4. Flexible and permissive company incorporation. Vietnam has one of the most permissive company incorporation regimes in Asia. The incorporation framework is enabling of foreign enterprises, through ease of full foreign ownership (no negative list, as in China, requiring a joint venture), no requirement for a local director (as in Singapore), and no requirement for a company secretary (as in Hong Kong). Note also the lack of statutory minimum share capital (more on this below).

Most businesses expanding into Vietnam will set up a Limited Liability Company (LLC), though joint ventures with local Vietnam partners are also relatively straightforward.

There is also the option of a Vietnam Joint Stock Company, with more extensive compliance requirements, but this is only relevant when seeking to list the company on the stock exchange, so it will not be relevant to many businesses.

The small bureaucratic hurdles of Vietnam expansion

Incorporating in Vietnam does come with some challenges. For one, most documentation must be completed in Vietnamese, so local support is usually necessary — something that isn’t typically required in Hong Kong or Singapore. Additionally, setting up a company in Vietnam requires both an investment license and enterprise registration, a bureaucratic step that differs from many Western countries.

Foreign-owned companies typically require an Investment Registration Certificate (IRC) approving the investment project and an Enterprise Registration Certificate (ERC) establishing the legal entity.

Step-by-step: How to incorporate a company in Vietnam

Note also that certain sectors, such as education, logistics, fintech or media, can be subject to additional licensing. It is important to confirm whether your proposed business activity is fully open to foreign investment or classified as a conditional sector.

Finally, there is also often a requirement that directors are physically present to open bank accounts.

Starting a company in Vietnam involves a few key steps, but with careful planning, it’s manageable. The first step is defining your business scope and structure. You’ll need to clearly outline your business activities using Vietnam’s official classification system, since the approved scope determines licensing requirements and ongoing compliance obligations.

For foreign investors, the next step is securing an Investment Registration Certificate (IRC). This formal approval details the investor, capital contribution, business activities and project duration. Processing usually takes 15 to 30 working days, depending on the sector and location. Once the IRC is issued, you can obtain the Enterprise Registration Certificate (ERC), which legally establishes the company and lists essential information such as the company name, registered address, legal representative and charter capital.

After incorporation, foreign investors must open a dedicated capital bank account in Vietnam to deposit investment funds. Contributions generally need to be made within the timeframe specified in the company charter, often within 90 days. Following this, several post-incorporation registrations are required to operate legally. These include registering the company seal, setting up tax and VAT accounts, enrolling for e-invoicing and completing labor and social insurance registration if you plan to hire staff.

Overall, incorporating in Vietnam can be a smart move for entrepreneurs looking to access one of Southeast Asia’s fastest-growing markets or establish an additional regional entity. While the process is relatively straightforward, some bureaucratic steps can be tricky, so working with a local or regional partner can make the process smoother and help ensure full compliance.