Doing Business in Vietnam: Complete Guide for 2026

The appeal of doing business in Vietnam lies in its young workforce, strong exports, and expanding digital economy. Yet, challenges remain in regulations, costs, and cultural practices across the business of Vietnam. This MOR Software’s guide breaks down the essentials to help foreign partners move forward with confidence.

Vietnamese Business Environment Overview in 2026

Vietnam enters 2026 with strong momentum but also a more complex external environment. The country expanded by about 8% in 2025, supported by manufacturing exports, domestic demand, public investment, and continued foreign direct investment. The World Bank expects growth to moderate to 6.8% in 2026 before improving to 7.1% in 2027, which still keeps Vietnam among the more resilient economies in Southeast Asia.

This outlook matters for investors because Vietnam is deeply connected to global trade. With a trade-to-GDP ratio close to 170%, demand from major export markets can quickly affect factories, logistics providers, and suppliers. For companies doing business in Vietnam, the key question in 2026 is not only whether the market is growing, but also how exposed their sector is to tariffs, supply chain shifts, and currency movements.

Foreign investment remains a major pillar of growth. Manufacturing, real estate, energy, technology, and services continue to attract capital, while M&A activity gives some investors a faster entry route than setting up a new entity from zero. This steady inflow supports industrial zones, ports, warehouses, and supplier networks across the country.

The digital economy is also becoming a stronger part of the Vietnamese business environment. The e-Conomy SEA 2025 report estimated Vietnam’s digital economy at around USD 39 billion in gross merchandise value in 2025, while digital payments were projected to reach USD 178 billion. These figures show how quickly e-commerce, fintech, online services, and data-driven business models are shaping consumer and enterprise demand.

Overall, Vietnam in 2026 offers a balanced mix of opportunity and caution. The market is growing, the workforce remains competitive, and the government continues to support infrastructure and digital transformation. At the same time, foreign companies must prepare for changing labor costs, data protection rules, tax updates, power demand, and sector-specific licensing requirements.

This growth underscores the resilience of the Vietnam market entry strategy for both traditional industries and new digital opportunities.

Key Industries For Doing Business In Vietnam

Vietnam’s economy is powered by several core sectors that continue to attract investors worldwide. Exploring these industries reveals where the strongest opportunities for doing business in Vietnam can be found.

Manufacturing And Global Supply Chains

Manufacturing remains the backbone of doing business in Vietnam. The country has firmly established itself as a leading hub for electronics, smartphones, and related components, fueled by consistent foreign investment and ongoing supply chain shifts across Asia. 

By the close of 2024, Vietnam posted strong export numbers and secured a large trade surplus with the United States, which continues to be its biggest overseas buyer.

Government figures underline this growth path. By the end of 2024, Vietnam counted more than 42,000 active FDI projects, with registered capital exceeding 500 billion dollars. Notably, the manufacturing sector attracted more than 66 percent of new foreign commitments that year, highlighting its central role in the Vietnam business ecosystem.

Information Technology And The Digital Economy

Vietnam is emerging as a leading destination for technology and services, supported by a young pool of engineers and rapidly expanding e-commerce. 

According to the e-Conomy SEA 2024 study, the region’s digital economy reached 263 billion dollars in GMV during 2024, with Vietnam’s share climbing steadily on the back of strong online retail and the rise of short video-driven commerce.

This momentum is drawing the attention of global corporations. Reuters reported that Google is considering building a major data center near Ho Chi Minh City to meet cloud demand and strengthen the country’s digital expansion. Recent legislative changes now allow full foreign ownership of data centers, a significant step that signals new opportunities for hyperscale investors and underlines the potential of investing in Vietnam. 

The pace of innovation here reinforces why global firms see long-term opportunities in doing business in Vietnam.

Renewable Energy And Power

Vietnam is advancing toward a cleaner energy mix while maintaining system reliability. Under Power Development Plan VIII, the government has laid out its roadmap for energy transition, which in 2026 reintroduced nuclear power as part of the long-term vision. The first reactors are targeted to be operational by 2035. 

The strategy aims to diversify energy generation, cut coal dependency, and sustain the rising electricity needs of industrial growth. This balanced shift creates new opportunities for investors interested in doing business in Vietnam within the energy sector.

Agriculture And Food Exports

Agriculture continues to play a central role in the business of Vietnam. The country reached a new milestone in 2024 by exporting 9.04 million metric tons of rice, valued at 5.7 billion dollars. The Philippines remained the largest buyer, strengthening overall food trade revenues, though 2026 brings uncertainties with shifting demand and growing competition.

Coffee, particularly robusta, remains another key export. Vietnam holds the position of the world’s top robusta producer, and limited global supply pushed prices to multi-decade highs through late 2024 and early 2025. 

Weather risks and ongoing tight supply conditions point to continued strength in robusta futures, further underlining agriculture’s importance to doing business in Vietnam.

Tourism And Hospitality

Tourism has staged a strong rebound. In the first half of 2025, Vietnam welcomed 10.7 million international visitors, marking a 21% year-on-year rise. Monthly arrivals even surpassed pre-pandemic figures at certain points, confirming the sector’s rapid recovery.

The government now grants 90-day e-visas to travelers from all nationalities, with both single and multiple entry options. This policy removes a key barrier for business travel and MICE activities, further strengthening Vietnam’s position as a destination that supports tourism growth and creates added value for those doing business in Vietnam. 

The expanding hospitality sector also highlights the broader vn business environment, where tourism links closely with investment opportunities in services.

Key Benefits Of Doing Business In Vietnam

Vietnam continues to stand out as one of Asia’s most promising destinations for global investors. Several structural strengths make the country highly appealing for those interested in doing business in Vietnam.

Competitive Labor Costs And A Growing Workforce

Vietnam’s labor market remains one of its strongest advantages. The workforce is large, young, and increasingly familiar with manufacturing, engineering, digital services, customer support, and business operations. For companies that need both scale and cost control, this creates a strong base for expansion.

Labor costs are rising, but they are still competitive compared with many more mature markets in Asia. From January 1, 2026, Vietnam increased regional minimum wages by about 7.2%, with monthly minimum wage levels ranging from VND 3.7 million to VND 5.31 million depending on the region. These clear wage brackets help investors estimate payroll, social insurance, and factory operating costs more accurately.

The practical benefit is not just low cost. Vietnam offers a workforce that can be trained quickly, supported by universities, vocational schools, and private training programs. This is especially useful for manufacturers, technology teams, shared service centers, and companies building long-term operations.

These regional wage brackets provide investors with a clear framework for payroll audit planning, making the labor force a strong draw for those doing business in Vietnam. This demographic advantage is often highlighted as one of the key advantages of doing business in Vietnam.

Trade Agreements And Market Access

Vietnam is part of one of Asia’s most extensive free trade agreement networks. Membership includes the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the EU-Vietnam Free Trade Agreement, the Regional Comprehensive Economic Partnership, and the UK-Vietnam FTA. 

These deals lower tariffs, harmonize standards, and open procurement opportunities across major global markets. The Ministry of Industry and Trade provides the full list of active agreements and ongoing commitments, making them central to doing business in Vietnam. 

This strong trade foundation highlights the benefits of doing business in Vietnam for global investors.

Strategic Location And Infrastructure Growth

Vietnam’s location gives it a natural edge. With a long coastline and close ties to southern China, the country serves as a prime base for suppliers seeking both China adjacency and diversification. 

Key industrial zones near Ho Chi Minh City, Hanoi, Hai Phong, Bac Ninh, and Binh Duong link seamlessly to expanding deep-sea ports and airports. Public FDI disbursement data shows steady growth in factories and infrastructure, reinforcing Vietnam’s role in regional supply chains and the strength of the Vietnam economic system.

Growing Consumer Market And Internet Adoption

Vietnam’s domestic market is becoming increasingly important each year. In 2024, e-commerce gross merchandise value and platform profitability showed clear improvements, while authorities reported strong online spending across leading platforms. 

This momentum drives growth in O2O retail, logistics, advertising, and digital payments. For foreign investors, the expanding consumer base and rising internet penetration add to the attraction of doing business in Vietnam, confirming the resilience and scalability of the local market.

The Growth Of The Manufacturing Sector

The development of Vietnam’s manufacturing sector is a major reason investors continue to choose the market. Over time, the country has built stronger supplier networks, better factory management experience, and wider industrial zone coverage. This reduces the difficulty of setting up production compared with markets where supporting industries are still thin.

Manufacturing growth also creates spillover benefits for logistics, warehousing, quality control, packaging, automation, industrial software, and maintenance services. Companies entering Vietnam can therefore build around a broader ecosystem instead of operating in isolation.

For global firms, this advantage is especially valuable in China plus one strategies. Vietnam allows companies to diversify production while staying close to Asian supply chains, regional shipping routes, and major consumer markets.

Company Formation Requirements For Doing Business In Vietnam

Before setting up a company, investors need to understand the basic legal conditions that shape company formation in Vietnam. This section explains the main requirements in a clearer order, including ownership rules, charter capital, registered address, legal representatives, visas, and conditional business lines.

These requirements are different from setup costs. Capital refers to the amount owners commit to the company, while costs refer to fees and expenses paid to register, license, and operate the business. Keeping these two ideas separate helps avoid confusion during planning.

Foreign Ownership Regulations In Vietnam

Foreign investors are permitted to own up to 100 percent of a company in most industries. Certain sectors, including advertising, logistics, and tourism, apply restrictions where a local joint venture partner may be required. 

International companies must also comply with World Trade Organization (WTO) agreements, which regulate ownership rights in many sectors. Where industries fall outside WTO or local regulations, approval from the relevant ministry is necessary. 

These ownership rules remain a key factor when american companies doing business in Vietnam seek entry.

Minimum Capital Requirement For Doing Business In Vietnam

For most ordinary business lines, Vietnam does not apply one universal minimum charter capital requirement under the Enterprise Law 2020. Instead, investors declare charter capital based on the business plan, operating needs, licensing expectations, and financial capacity of the project.

This is why fixed figures such as VND 10 million or VND 30 million should not be treated as a general rule for all foreign-invested companies. In practice, licensing authorities may still assess whether the proposed capital is realistic for the registered activities, office plan, hiring plan, and investment timeline.

Some conditional sectors do have legal capital requirements or higher financial capacity expectations. These can apply to areas such as real estate, banking, insurance, securities, education, labor outsourcing, aviation, and other regulated fields. Investors should check the exact requirement for their sector before filing.

After the Enterprise Registration Certificate is issued, members or shareholders generally need to contribute the registered capital within 90 days, unless a shorter period applies under the company charter or share subscription documents. This makes capital planning a compliance issue, not just a budgeting exercise.

Registered Address And Headquarters

Every company must have an official business address in Vietnam. This may be a leased office, a serviced office, or a registered virtual office. The location must be recognized by local authorities and listed in incorporation documents. 

During registration, the Department of Planning and Investment may request proof of occupancy, which confirms the premises will be used for company operations.

Legal Representative And Local Management

A Vietnamese company must have at least one legal representative. The legal representative is responsible for signing company documents, representing the company in legal matters, and ensuring that business operations follow Vietnamese law.

The legal representative does not always have to be a Vietnamese national, but at least one legal representative should reside in Vietnam. If the only legal representative leaves Vietnam for an extended period, a written authorization arrangement is usually needed so the company can continue operating and receiving official notices.

Visa, Work Permit, And Temporary Residence Card

Foreign founders, managers, and specialists need the right immigration and labor documents. Depending on their role and capital contribution, they may need an investor visa, business visa, work permit, work permit exemption, and temporary residence card.

Immigration planning should be prepared early because the company setup process, hiring plan, and management structure may depend on who can legally sign, work, and stay in Vietnam.

Conditional Business Lines

Some business activities require additional approvals before operations can begin. Retail, education, tourism, logistics, food services, healthcare, fintech, cybersecurity, telecoms, and data-related services may involve extra licenses, sub-licenses, or operating permits.

This is one of the most important checks when doing business in Vietnam. A company can be legally incorporated but still unable to operate a specific business activity until the required sector license is approved.

Cost Of Setting Up And Operating A Company In Vietnam

How much does it cost to begin doing business in Vietnam? The answer depends on the business entity you choose. Among all options, the limited liability company (LLC) remains the most common. 

The average cost of forming an LLC is around 2,700 USD. This figure covers legal and accounting services, government filing fees with the national business registry portal, and the issuance of a Vietnam business registration certificate. These initial costs provide the foundation for legal operations within the vn business environment.

Company Formation And Licensing Costs

Initial setup costs may include legal consultation, company name search, document preparation, translation, notarization, consular legalization, government filing, investment registration, enterprise registration, company seal, and tax registration support.

For foreign-invested companies, the Investment Registration Certificate and Enterprise Registration Certificate can increase both timeline and service costs. Conditional sectors may add more licensing fees and preparation costs because authorities often request extra evidence of capital, facilities, professional staff, or sector-specific qualifications.

Office, Address, And Bank Account Costs

Companies need a lawful registered address, and the cost depends on the location and office type. Options may include a serviced office, co-working space, private office, warehouse, factory site, or retail location. Investors should confirm whether the address is accepted for company registration and tax purposes.

A corporate bank account is also required for business operations. Foreign-invested companies may need direct investment capital accounts or other banking arrangements depending on the investment structure and capital contribution method.

Accounting, Tax, Audit, And Compliance Costs

Vietnamese companies must maintain accounting records, submit tax filings, issue invoices correctly, and meet reporting obligations. Many small and foreign-invested companies outsource accounting at the beginning, then build an internal finance team as transaction volume grows.

Costs may include monthly bookkeeping, quarterly tax filing, annual financial statements, invoice management, payroll calculation, social insurance reporting, and statutory audit if required. These ongoing expenses are essential for staying compliant after incorporation.

Labor And Social Insurance Costs

Payroll planning should include salaries, bonuses, overtime, social insurance, health insurance, unemployment insurance, trade union-related contributions where applicable, and personal income tax administration. The regional minimum wage increase in 2026 should also be reflected in salary bands and insurance calculations.

Foreign employees may add extra costs for work permits, residence cards, legalization of documents, translation, relocation support, and dependent visas. These costs should be included in the market entry budget, especially for companies sending managers or technical experts to Vietnam.

Sector-Specific License And Renewal Costs

Some industries involve higher compliance and licensing costs. For example, retail stores may require retail outlet approvals, education providers may need facility and teacher documentation, tourism companies may need travel service licenses, and food businesses may need food safety certificates.

These costs are not always paid once. Some licenses need renewal, inspection, reporting, or updates when the company changes location, business scope, shareholders, or key personnel.

Ongoing Operating Costs

After setup, investors should budget for rent, utilities, internet, payroll, accounting, tax advice, HR services, insurance, IT systems, cybersecurity, local marketing, logistics, translation, legal support, and management travel. These ongoing costs often matter more than registration fees when assessing long-term profitability.

A realistic cost plan helps investors avoid undercapitalization and supports smoother licensing. It also allows companies to compare Vietnam against other markets based on total operating cost, not just headline wages or incorporation fees.

A Step-By-Step Guide On Doing Business In Vietnam

Setting up operations in Vietnam requires following a clear process that aligns with local laws and regulations. Below is a structured roadmap that helps investors understand each stage of doing business in Vietnam.

Step 1: Register The Investment Registration Certificate

For foreign investors who want to officially begin doing business in Vietnam, the first legal requirement is obtaining an Investment Registration Certificate (IRC) from the Department of Planning and Investment. This certificate grants the permissions necessary for operations and validates the investment under Vietnamese law.

The application process usually takes about 30 days. In sectors not regulated under WTO agreements or local laws, the process can take longer, since approvals from one or more government ministries may be required. This is one of the early disadvantages of doing business in Vietnam, as additional steps and waiting periods may slow down market entry for certain industries.

Business Registration Certificate

After receiving the IRC, investors must also apply for a Business Registration Certificate (BRC). This confirms the legal standing of the company and is essential for beginning formal operations.

Documents Of The Investor Needed For Setting Up A Company In Vietnam

When applying for the IRC, investors must prepare and submit the following:

Authority To Issue The Investment Registration Certificate

• For projects inside industrial parks, export-processing zones, hi-tech zones, or economic zones, the respective management boards are responsible for issuing, adjusting, and revoking the IRC.
• For projects outside these zones, the provincial Department of Planning and Investment is the issuing authority.
• If a project spans multiple provinces, the Planning and Investment Service where the investor plans to locate its headquarters must handle the application.

The Dossier For The Investment Registration Certificate

Investors must prepare a dossier that includes:

• A formal request to conduct the investment project.
• Proof of identity: ID card or passport for individuals, or certificate of establishment for organizations.
• An investment proposal detailing project objectives, capital, location, duration, labor demand, incentives requested, and expected socio-economic outcomes.
• Evidence of financial capacity, such as recent financial statements, bank guarantees, or parent company support letters.
• An office lease contract, with the landlord’s right to lease verified by relevant certificates.
• Land use approval from the government if state-owned land is leased or repurposed.
• For technology-related projects, documents showing the technology’s origin, process, and conditions of use if it falls under restricted lists.
• A business cooperation contract if the project is structured as a partnership.

Register For Your Investment Registration Certificate

Investors must first declare their project online through the National Foreign Investment Information System.

Within 15 days of the online submission, a physical file must be presented to the Investment Registration Authority. Once received, the investor is granted an online account to track progress and outcomes.

If approved, the system issues an official code confirming registration. If rejected, the authority provides written notice with clear explanations. This transparency helps investors better understand how the economic system Vietnam governs foreign entry and approvals.

Step 2: Register The Business Registration Certificate

After obtaining the Investment Registration Certificate, the next step in doing business in Vietnam is to officially register the enterprise. Investors can choose from several business structures, including:

• Limited Liability Company (LLC)
• Joint Stock Company (JSC)
• Partnership
• Sole Proprietorship

For an LLC, registration begins through the National Business Registration Portal, where investors must upload the required documents. This includes a copy of the Investment Registration Certificate and other legal papers relevant to the chosen entity.

Each company must have at least two founding members, who may be Vietnamese citizens or foreign investors with valid identification. Although in theory each founder can own up to 50%, foreign investors are typically limited to 49% ownership depending on sector rules and investment size.

The company’s name must also be submitted through the portal and approved by the Department of Planning and Investment. Once approved, the enterprise receives a Business Registration Certificate (BRC). 

This certificate details the company’s name, registered address, and business code, confirming its legal standing in the business of Vietnam.

The registration process is generally straightforward if the dossier is complete, but processing may take from 7 to 30 days based on the complexity of the project. Costs also vary depending on the entity type and scale of the venture, adding to the calculation of the pros and cons of doing business in Vietnam.

Required Dossier For Business Registration

To register, investors must prepare and submit the following documents:

• Completed business registration application form.
• The company charter.
• List of members (for LLCs) or shareholders (for JSCs).
• Certified copies of:
  • Identity documents of individual members.
  • Establishment decision, business registration certificate, or equivalent document of organizational members, plus authorization letters and ID cards of representatives.
  • For foreign organizations, a legalized copy of the business registration certificate or equivalent document.
• The Investment Registration Certificate of foreign investors in line with the Law on Investment.

The dossier must be submitted to the National Business Registration Portal within three to five days. Once approved, the company is issued a BRC. Within 30 days of receiving this certificate, the enterprise is required to publish an official announcement on the same portal in compliance with regulations.

Step 3: Register The Business License For Conditional Business Lines

In certain cases, registering a company alone is not enough to begin doing business in Vietnam. Enterprises that engage in retail, education, or tourism must obtain additional licenses before starting operations.

Under Decree 09/2018/NĐ-CP, regulations govern trading activities for foreign investors and businesses with foreign capital. Retail is defined as selling goods directly to individuals, households, or companies for consumption. 

While no license is required for export, import, or wholesale of items outside restricted categories such as petroleum, lubricants, rice, sugar, videos, books, newspapers, and magazines, a business license becomes mandatory when retailing through physical stores or commercial outlets.

For investors wishing to operate inbound international travel services, their activities must focus exclusively on bringing foreign visitors into Vietnam. Only then will they be eligible for licensing.

Likewise, enterprises offering foreign language training must secure authorization from the Department of Education and Training during the Investment Registration Certificate process. Before starting operations, they must also apply for a license to run a foreign language training center through the same authority.

These additional steps illustrate how certain industries in the Vietnam economic system are more tightly controlled, requiring careful planning to avoid delays. 

At the same time, they highlight the unique advantages of doing business in Vietnam, where regulatory clarity in sectors like retail, travel, and education provides structure for foreign enterprises entering the market.

Important Notes Before Doing Business In Vietnam

When preparing to launch a company, investors need to be mindful of several legal requirements. Following these rules ensures that the enterprise remains compliant, reputable, and sustainable over time. Understanding the following notes helps create a stronger foundation for long-term success when doing business in Vietnam.

Those interested in doing business in Vietnam should keep a close eye on the Vietnam economic growth trends. From the logistical steps to set up a company in Vietnam to securing a Vietnam work visa, the nation's goal to become a digital country by 2030 makes it a prime destination.

Note About The Company’s Headquarters

According to Article 42 of the Enterprise Law 2020, a company’s headquarters must be located in a stand-alone property and not in an apartment or multi-unit building. Investors who lease or borrow a property must sign a formal contract and request two certified copies of the landlord’s land use rights certificate. 

This protects both the business and the owner, ensuring the location is legally valid.

To avoid complications, the company should always have someone available to receive notices from the tax office or business registry. If no contact is available, the authorities may classify the headquarters as inactive, which could lead to suspension of the business or tax codes. 

Relocating to another district also requires closing all obligations with the former tax office before updating the registration.

The Type Of Business

The Enterprise Law 2020 provides different options for establishing a company. These include single-member limited liability companies, multi-member LLCs, joint-stock companies, sole proprietorships, and partnerships. 

In practice, most foreign and local investors choose LLCs or JSCs, as they cover common needs while providing secure ownership structures.

The main distinction lies in capital and flexibility. A joint-stock company can raise funds from three or more shareholders and can trade shares on the market, which makes it attractive for businesses seeking growth. In contrast, LLCs offer tighter control with one to fifty members, where ownership changes are more restricted. 

Although JSCs offer broader funding opportunities, their complexity requires stricter compliance, and mistakes in management may have serious legal consequences.

The Name Of The Company

Articles 37 to 41 of the Enterprise Law 2020 require that company names be unique. With thousands of new enterprises registered each year, finding a distinct name can be challenging. Adding specific prefixes or suffixes often helps.

Names cannot duplicate or include registered trademarks like Samsung, Honda, or Nokia, as this may result in forced name changes later. Investors should also ensure the chosen name is eligible for trademark protection and has an available domain, which strengthens brand recognition and digital presence.

The Charter Capital

Clause 34, Article 4, and Clause 2(c), Article 24 of the Enterprise Law 2020 state that companies are liable for their declared charter capital but are not required to prove its source at registration. 

Owners should carefully decide the amount, taking into account project commitments, contract values, industry requirements, and related tax obligations.

Individuals must contribute capital within 90 days of receiving the Enterprise Registration Certificate. Contributions can be made by depositing funds directly into the company’s account. For organizations, contributions must be transferred through the business’s registered bank account, following Decree 222/2013/ND-CP and Circular 09/2015/BTC.

Increasing capital is relatively simple, while reducing it is more complicated and often requires meeting stricter conditions. To maintain fairness, all shareholders must contribute within the set period, and companies should carefully assess their funding needs before declaring the amount in registration documents.

The Business Lines

Decree 01/2021 states that companies may engage in any sector not explicitly prohibited by law. However, businesses must only operate within the fields they declare during registration. To maximize future flexibility, investors often select multiple relevant business lines from the beginning.

A key benefit under the current Enterprise Law is that companies do not need to provide practice certificates when registering certain business lines. This allows operations to expand more freely later. 

Decision 27/2018/QD-TTg also requires enterprises to register industry codes up to Level 4 in the Vietnam System of Economic Sectors, ensuring proper classification of activities.

These notes highlight both the opportunities and the challenges of doing business in Vietnam. By preparing carefully, foreign partners can minimize risks and set their companies on a strong path to growth in the local market.

Working Culture And Business Etiquette For Doing Business In Vietnam

Understanding Vietnam’s professional culture is just as important as handling legal or financial procedures. Respect for hierarchy, relationship-building, and clear communication all shape how business is done, making cultural awareness a key success factor when doing business in Vietnam.

Relationships First

In Vietnam, successful business deals often begin with strong relationships. Meetings usually open with personal introductions and light conversation, allowing trust to build gradually. 

Foreign investors are advised to be patient during the early stages of negotiation, as establishing credibility takes time. Spending effort on in-person engagement is highly valued in the Vietnam business environment.

Respect For Hierarchy

Seniority carries significant weight in professional interactions. Decision-makers should attend key meetings, and presentations are often expected in bilingual form to accommodate local partners. 

Public disagreement with senior counterparts is considered disrespectful, so it is best to acknowledge hierarchy and show deference to official titles during discussions.

Punctual, Prepared, And Polite

Timeliness is crucial. Arrive on schedule, exchange business cards with both hands, and keep a courteous tone. Hardline negotiation tactics are generally frowned upon, as direct confrontation may harm long-term cooperation. 

Instead, framing objections with constructive alternatives is more effective. Maintaining a respectful approach in meetings ensures smoother collaboration when doing business in Vietnam.

Communication Style

Clear communication helps bridge cultural and linguistic differences. Written follow-ups, bilingual meeting notes, and milestone trackers are often expected to keep projects on track. 

Humor is acceptable but should remain professional. When offered tea or coffee during a meeting, it is polite to accept, as these gestures are part of building a positive working relationship.

By respecting these cultural practices, foreign investors not only avoid misunderstandings but also gain one of the key benefits of doing business in Vietnam: strong and lasting partnerships built on trust and respect.

Risks And Challenges To Watch When Doing Business In Vietnam

Even with its strong growth and investment appeal, Vietnam presents certain risks that investors need to plan for. Trade policies, infrastructure limits, and regulatory changes can all influence outcomes, so preparing ahead is essential for smooth operations when doing business in Vietnam.

Trade Policy Shifts

Vietnam’s economy remains highly dependent on exports to the United States, with shipments in 2024 accounting for nearly 30% of GDP according to Reuters. This reliance exposes businesses to tariff risks. 

By mid-2025, both governments were negotiating tariff caps of 20% for most goods and up to 40% for confirmed transshipment cases. Foreign companies, especially those in electronics, textiles, furniture, and agriculture, should prepare contingency plans to manage such exposure when doing business in Vietnam.

Power Supply And Grid Constraints

Energy reliability is another concern. Industrial parks in northern Vietnam faced power shortages and transmission bottlenecks in 2023, creating disruptions for manufacturers. 

While the government’s Power Development Plan VIII and renewed nuclear power planning offer long-term solutions, factories must still plan for backup generation and adopt demand-response strategies in the short run.

Regulatory Updates

Vietnam continues to refine its legal and tax systems. The Corporate Income Tax law taking effect October 1, 2025 introduces new rates for SMEs and updates on offshore profit taxation. VAT relief has been extended through December 2026, but not all sectors qualify. 

Additionally, the Personal Data Protection Law, effective January 1, 2026, will require businesses to update compliance procedures. Maintaining a clear compliance calendar is essential for foreign investors navigating the business of Vietnam.

Commodity Price Volatility

Key exports such as rice and coffee have faced significant price swings due to weather conditions and global supply issues, pushing values to multi-decade highs in late 2024 and early 2025. These shifts can compress profit margins for processors and exporters. Hedging strategies and diversified sourcing are advisable to limit risk.

Compliance And Localization Barriers

Certain sectors remain “conditional” for foreign participation, meaning investors face ownership limits or need additional licenses. Approval timelines for Investment Registration Certificates (IRC) and Enterprise Registration Certificates (ERC) may vary by province. 

Engaging experienced local counsel can help navigate these challenges of doing business in Vietnam and ensure smoother market entry.

Action Checklist For Market Entry Into Vietnam

Setting up operations in Vietnam requires more than just legal paperwork. Investors should prepare a clear roadmap that covers structure, compliance, and relationship building to succeed.

• Select the appropriate entry mode. Companies exploring the market without generating revenue can begin with a representative office, ideal for research and partner engagement. For full-scale operations, setting up a Limited Liability Company (LLC) or a Joint Stock Company (JSC) is the preferred option.
• Clarify licensing requirements early. Identify whether your intended business activities are unrestricted, conditional, or subject to foreign ownership limits. From there, schedule the timelines for obtaining the Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC), or consider a share acquisition if you need a faster route into the Vietnam market.
• Understand the total tax structure. Corporate Income Tax (CIT) remains at 20 percent in 2025. Businesses should also assess eligibility for the extended 8 percent VAT scheme valid through 2026, and anticipate new SME tax brackets effective from October 2025. Additionally, factor in social insurance obligations and foreign contractor tax when calculating operational costs.
• Prepare for mobility and staffing. The 90-day multiple-entry e-visa is useful during the initial ramp-up. Once the business expands and staff numbers increase, ensure compliance with work permit requirements and HR procedures.
• Strengthen local execution and cultural fit. Appoint a bilingual project manager to coordinate weekly progress reviews and manage local approvals alongside infrastructure development. Focusing on relationship-building and cultural understanding will accelerate project timelines and reduce friction when doing business in Vietnam.

Conclusion

Doing business in Vietnam presents exciting opportunities for foreign partners, from its fast-growing economy to its dynamic consumer base. The advantages of doing business in Vietnam outweigh the risks when investors plan carefully and understand the legal framework. Still, the challenges of doing business in Vietnam such as compliance and cultural adaptation require reliable guidance. With the right strategies, foreign companies can maximize the benefits of doing business in Vietnam and achieve long-term growth. 

Contact MOR Software today to get expert support for every stage of your Vietnam business journey.