OPEN A COMPANY IN VIETNAM: KEY RISKS FOREIGN INVESTORS SHOULD KNOW WHEN ESTABLISHING AN FDI COMPANY

OPEN A COMPANY IN VIETNAM: KEY RISKS FOREIGN INVESTORS SHOULD KNOW WHEN ESTABLISHING AN FDI COMPANY

When foreign investors open a company in Vietnam, establishing an FDI company involves more than simply preparing an enterprise registration application. Investors must carefully consider market access conditions, investment procedures, business lines, investment capital, project location, licensing requirements, tax obligations, and compliance requirements throughout the company's operation.

In practice, overlooking these requirements may lead to delays in company establishment, additional document requests, difficulties in obtaining an Investment Registration Certificate (IRC), or unexpected legal and operational costs. Therefore, understanding the potential risks before starting the establishment process is essential for foreign investors planning to invest in Vietnam.

So, what are the key risks foreign investors should know when establishing an FDI company in Vietnam in 2026? This article highlights the most common legal and practical risks and provides important considerations to help investors choose an appropriate investment structure and prepare their company establishment plan more effectively.

Clients seeking assistance with the establishment of an FDI company in Vietnam (2026) may contact Dai Quang Minh Company via Hotline: 0932 191 299; Zalo: 0932 191 299; Email: info@quangminhlawfirm.com; Viber: (+84) 337 926 405; WhatsApp: (+84) 337 926 405; WeChat: (+84) 337 926 405 (ID: pouniverse) for complimentary consultation and comprehensive, efficient, and accurate legal services.

In addition, Dai Quang Minh Company provides a wide range of services, including sub-licenses, business registration, investment, foreign labor, and ongoing legal advisory services for both domestic and foreign enterprises.

Contact:

- Zalo: 0932.191.299

- Gmail: info@quangminhlawfirm.com

- Viber: (+84) 337926405/ (+84) 869672216

- WhatsApp: (+84) 337926405/ (+84) 869672216

- Wechat:(+84) 337926405 (ID: _pouniverse)/(+84) 869672216 (ID:DQM_Verna)

- Telegram: (+84) 337926405/ (+84)869672216

I. Open A Company In Vietnam: Failure to Check Market Access Conditions

This is one of the most serious mistakes when foreign investors establish an FDI company in Vietnam. If the proposed business line is not open to foreign investors, or is only open subject to certain conditions that the investor does not satisfy, the application may be subject to requests for clarification, have its scope of activities restricted, or be rejected.

For example, sectors such as retail, logistics, education, tourism, transportation, restaurants, food, medical devices, and e-commerce often require careful review of market access conditions, foreign ownership limits, sub-licenses, and sector-specific regulations before the application is submitted.

II. Why choose Dai Quang Minh Company

With years of practical experience in legal consulting, Dai Quang Minh Company is a pioneer in corporate support services, specializing in fast and affordable company formation. Below are the reasons to choose business registration services at Dai Quang Minh Company:

Human Resources: Gather a team of corporate legal experts and project legal experts with a long working history at domestic private economic groups; large foreign-invested enterprises operating in Vietnam.

Consulting Policy: Clients are gifted a completely free legal consulting package when using services at Dai Quang Minh Company.

Professionalism and Experience: Dai Quang Minh Company has a workforce with in-depth knowledge of business formation, ensuring a swift and accurate consulting process.

Time-Saving: Using Dai Quang Minh Company 's services helps you save precious time as we handle the entire process and related procedures.

Legal Insight: Dai Quang Minh Company ensures that all relevant legal regulations are strictly followed in accordance with the law.

Customization: Our consulting services are highly adaptable to your specific needs, allowing you to choose options suitable for your business.

Trusted Partner: Dai Quang Minh Company has built a reputation for providing affordable business setup consulting to many enterprises and individuals nationwide.

Confidentiality Assurance: Dai Quang Minh Company is committed to the absolute protection of your personal and business information.

Detailed Support: Dai Quang Minh Company provides detailed advice and support regarding the process and requirements to help you better understand business formation.

Process Optimization: Our consulting helps optimize the business setup process, minimizing potential risks and difficulties.

Excellent Customer Experience: Dai Quang Minh Company is dedicated to providing the best customer experience through professional advice and enthusiastic support.

Focus on Business Plans: By utilizing our registration services, you can focus on developing your business plans and core activities instead of worrying about legal procedures.

III. Open A Company In Vietnam: Registering Business Lines That Are Too Broad or Do Not Reflect the Actual Business Activities

Another common risk is registering business lines that are too broad, too general, or do not accurately reflect the company's actual intended activities.

For example:

- Registering “trading services” when the investor actually intends to conduct retail activities;

- Registering “logistics” without specifying transportation, warehousing, freight forwarding, or freight agency services;

- Registering “consulting services” without clearly identifying whether the activities involve management consulting, technical consulting, investment consulting, or another regulated business line;

- Registering “technology” when the actual activities involve an e-commerce platform, data processing, or regulated online services.

If the objectives of the investment project are unclear, the investment registration authority may request amendments or explanations or require inappropriate business lines to be removed.

IV. Open A Company In Vietnam: Failure to Cross-Check VSIC – CPC – WTO/FTA Commitments

For service business lines, simply identifying the business code under Vietnam's Economic Industry Classification System (VSIC) is generally not sufficient. Foreign investors should also cross-check the relevant CPC codes, WTO/FTA commitments, and sector-specific regulations to accurately determine the conditions applicable to foreign investors.

If the VSIC – CPC – WTO/FTA classification is not properly cross-checked, the application may lack a sufficient legal basis for explaining the applicable market access conditions, particularly in sectors such as logistics, distribution, education, tourism, software, consulting, e-commerce, and technical services.

Common risks include:

- Incorrect CPC code mapping;

- Incorrect citation of international commitments;

- Failure to determine the applicable foreign ownership ratio;

- Failure to determine whether the business requires a joint venture structure or permits 100% foreign ownership;

- Failure to anticipate sub-licenses required after obtaining the ERC.

V. Open A Company In Vietnam: Financial Documents Fail to Demonstrate Investment Capacity

Insufficient financial documentation is a common reason why the establishment of an FDI company may take longer than expected. Depending on whether the investor is an individual or an organization, financial capacity may be demonstrated through a bank balance confirmation, bank statements, audited financial statements, financial support commitments, or equivalent documents.

Common mistakes include:

- The account balance is lower than the proposed investment capital;

- The financial statements do not demonstrate sufficient investment capacity;

- The financial documents are not in the investor's name;

- Foreign-issued documents have not been consularly legalized as required;

The investor cannot adequately explain the source of funds or its capacity to implement the project.

If the investor's financial capacity is considered insufficient or inconsistent with the proposed project, the competent authority may request additional documents or require the investor to adjust the investment capital or project scale.

VI. Open A Company In Vietnam: An Investment Project Location That Is Not Suitable

Not every address can be used as the location of an FDI investment project. The project location must be appropriate for the proposed business activities and comply with applicable requirements relating to planning, land use functions, fire prevention and fighting, environmental protection, and relevant sub-licenses, if any.

For example:

- A manufacturing project requires a suitable factory and should not generally be registered at an ordinary office address;

- A restaurant should review food safety, fire prevention and fighting, and environmental requirements;

- An educational center should review requirements concerning floor area, facilities, and the permitted use of the premises;

- Warehousing and logistics projects should review the permitted use of the premises, transportation access, fire prevention and fighting, and environmental requirements;

- An apartment intended solely for residential use should not be used as the location of a business project.

If the location is unsuitable, the investor may have to amend the lease agreement, revise the IRC/ERC application, or may be unable to obtain the required sub-licenses after the company is established.

VII. Open A Company In Vietnam: Failure to Open a DICA or Contributing Capital Through the Wrong Account

This issue often arises after the company has been licensed but can significantly affect the legality and traceability of foreign investment capital flows.

For an FDI enterprise, the foreign investor generally needs to open a Direct Investment Capital Account (DICA) and contribute capital through the appropriate account, by the correct investor, with accurate transfer details, within the prescribed timeframe, while retaining complete banking records and supporting documents.

Common mistakes include:

- Transferring capital into an ordinary payment account;

- Transferring capital into an individual's personal account;

- Asking another person or entity to transfer the capital on the investor's behalf;

- Contributing capital in cash;

- Stating the transfer purpose as “loan,” “payment,” or “service fee” when the actual purpose is capital contribution;

- Failing to retain SWIFT messages, credit advice, or bank statements;

- Failing to contribute capital within the prescribed deadline.

Incorrect capital contribution procedures may make it difficult for the company to prove its capital contribution, remit profits overseas, increase or decrease capital, transfer contributed capital, or provide explanations to banks and regulatory authorities.

VIII. Open A Company In Vietnam: Starting Business Activities After Obtaining the ERC but Before Obtaining Required Sub-Licenses

Many investors mistakenly believe that an FDI company can immediately commence operations after obtaining an Enterprise Registration Certificate (ERC). In practice, if the company's business activities are subject to specific conditions, the company must obtain the relevant sub-licenses or satisfy applicable sector-specific requirements before commencing operations.

For example:

If the company has not satisfied the applicable conditions but has already sold goods, issued invoices, or provided services, it may face administrative penalties, be required to suspend its activities, or have to obtain the necessary licenses before continuing its business operations.

IX. Open A Company In Vietnam: Inconsistencies Between the IRC and ERC

The information stated on the IRC and ERC should be consistent, particularly with respect to the investor, company name, address, capital, business lines, legal representative, ownership ratio, and capital contribution schedule.

If the information is inconsistent, the company may encounter difficulties when:

- Opening a DICA;

- Contributing investment capital;

- Completing tax and e-invoice registration procedures;

- Applying for sub-licenses;

- Amending its capital, location, or business lines;

- Transferring contributed capital;

- Remitting profits overseas;

- Working with banks, auditors, or regulatory authorities.

This is why the IRC and ERC should not be prepared separately without cross-checking. The entire investment dossier, enterprise registration documents, charter, banking documents, and sub-license applications should be reviewed consistently from the outset.

Prospective clients seeking assistance with procedures for establishing a foreign-invested company in Vietnam (2026) are kindly invited to contact Dai Quang Minh Company via Hotline: 0932 191 299; Zalo: 0932 191 299; Email: info@quangminhlawfirm.com; Viber: (+84) 337 926 405; WhatsApp: (+84) 337 926 405; WeChat: (+84) 337 926 405 (ID: pouniverse) for complimentary consultation and comprehensive, efficient, and accurate legal services.

In addition, Dai Quang Minh Company provides a wide range of services, including sub-licenses, business registration, investment, foreign labor, and ongoing legal advisory services for both domestic and foreign enterprises.

Contact:

- Zalo: 0932.191.299

- Gmail: info@quangminhlawfirm.com

- Viber: (+84) 337926405/ (+84) 869672216

- WhatsApp: (+84) 337926405/ (+84) 869672216

- Wechat: (+84) 337926405 (ID: _pouniverse)/ (+84) 869672216 (ID: DQM_Verna)

- Telegram: (+84) 337926405/ (+84) 869672216

During the course of operations, should you have any questions or require any assistance, please contact Dai Quang Minh Company. We are always ready to provide support and accompany you throughout the process of construction, operation, and development.

We wish you sustainable development and breakthrough success.

Sincerely thank you./.