Establishing a Foreign-Owned Company in Vietnam in 2026
Vietnam Continues one of Southeast Asia’s most compelling investment destinations in 2026, supported by continued economic growth, a young workforce and deep integration into global supply chains. However, while market opportunities are significant, foreign investors must navigate a structured regulatory framework that requires careful planning and sequencing. Company incorporation alone does not determine successful market entry in Vietnam, as it depends on understanding market access rules, licensing requirements and post-establishment obligations from the outset.
The Law on Investment (“LOI”) was recently revised and took effect on 1 March 2026. Its implementing Decree No. 96/2026/ND-CP was subsequently issued on 31 March 2026 and became effective on the same date. Together, these instruments form the core regulatory framework for foreign investment in Vietnam and introduce several notable updates
New Incorporation Process for Foreign-Invested Enterprises
Under the new regulations, foreign investors may now choose to apply for the ERC first and the IRC afterwards. Under this mechanism, the newly established legal entity may, from a legal perspective, carry out necessary transactions to support business operation (recruiting personnel, entering into factory lease agreements, or undertaking other preparatory investment activities). Selecting the correct business lines, investment capital structure and legal representative at this stage is essential, as these details form the foundation for all future operations.
Special Investment Procedure
Inherited from LOI 2020 and its relevant updated regulations, the special investment procedure is not an entirely new mechanism under the new LOI. However, it has been updated with several notable changes to better align with current practical needs, including the expansion of its applicability to international financial centres (IFC) and clearer provisions on sanctions for breaches of commitments relating to construction, environmental protection, and fire prevention and fighting.
While this mechanism offers significant advantages in terms of processing speed and procedural efficiency, it also imposes greater expectations on investors in relation to legal self-compliance, risk management, and internal legal control from the early stages of project preparation.
Special Investment Incentives and Support
Under the LOI, the sectors newly eligible for special investment incentives and support include strategic technology, semiconductors, and key digital technologies. These sectors have been introduced based on the new legal framework under the Law on Digital Technology Industry, marking a shift from the previous regime, under which such activities were regulated solely under the legal framework for high-tech industries, toward a more specialized regulatory framework.
Removal and Reform of Conditional Business Lines
A cornerstone of the new LOI is the reduction of conditional business activities, with 38 conditional business lines removed and 20 further activities amended. These changes significantly reduce pre-operation licensing requirements across a wide range of sectors, including finance, construction, transportation, agriculture, technology, and services. Importantly, technical regulations and product or service standards issued by competent authorities are no longer treated as investment or business conditions under the Law on Investment. This distinction removes ambiguity that has historically created compliance risk for foreign investors.
For tailored advice on market entry, structuring, compliance or expansion strategy, please contact our Vietnam team at vietnam@alitium.com
This guide is intended as a general overview only and does not constitute legal or tax advice. Outcomes, procedures and requirements vary depending on specific circumstances, contractual structures, and regulatory interpretation. Investors should seek professional advice before relying on this information.
