Primary legal rational:

• Investment Law 2020;
• The Law on Enterprises 2020 (Articles 27–29 on enterprise registration dossiers and procedures), and the Law Amending and Supplementing Certain Articles of the Law on Enterprises 2025.
• Decree No. 31/2021/NĐ-CP on Investment Law guidance, Decree No. 239/2025/NĐ-CP amended Decree No. 31/2021/NĐ-CP.
• Other investment protection agreements (IPA) and bilateral investment treaties (BIT) in which Vietnam is a member party (WTO, CPTPP, EVFTA…)
• Major specific papers (education, aid, property asset, finance,…)

I. Investment business determination issue:

The most basic mistakes that investors commonly fail in is determining inappropriate business with foreign investment regulation in Viet Nam for registration. According to statutory law and regulation in Viet Nam, the business lines are categorized into three main categories: 

• Investment banning business (Ex: drugs, fireworks,…)
• Foreign investors’ market access restricted business lines, required such sub-condition as capital contribution proportion, scope of business, additional license requirements (Ex: property asset, logistics, advertisement,…)
• Investment business which foreigners can invest equivalently with the domestic investors.

Common issues including:

• Choose business activities in restricted schedule without pre-checking the conditions or principles
• Describe the business activities in broader scope, false business code pursuant to VSIC system regulated in Decision No.27/2018/QD-TTg Promulgating Vietnam Standard Industrial Classification dated July 06, 2018, which causes the consequence that competent authority request the amendments many times. 
• Lack of attention for specific restricted business, for instance: language center, school or training institution, clinic, travel service,…) 

II. Inaccurate investment capital preparation:

The investment capital is the fundamental condition in Investment Registration Certificate (IRC) granting procedures. The frequent mistakes involving:

• Registered capital is not intensively lower than the practical projects’ scale, which leads to the rejection of the competent authority as an “infeasible project” reason.
• Registered capital is not intensively high despite lack of afford to contribute; the consequence is easily penalized or capital decline force.
• Violate the capital contribution expiry date (usually around 90 days upon the company establishment date), which violate the Law on Enterprise 2020.
• Misunderstanding Charter Capital and Investment Capital (with FDI companies, these definitions are distinctive)

III. License granting procedure issues:

In terms of foreign investors, FDI company registration contains two mandatory stages:

• Requesting Investment Registration Certificate (IRC).
• Requesting Enterprise Registration Certificate (ERC).

Numerous investors are involved in misunderstanding that only submit ERC documents as the domestic corporation, which leads to the consequence of rejection. On the other hand, the mistakes are also occurred by:

• Not translating, or consular legalising foreign documents (Passport, finance report, business registration certificate,…)
• Lack of supplementary documents such as headquarter leasing agreement, planning-appropriate location proof,…
• Does not own sub-license for restricted business, for instance, the foreign language center must have educational activities license, tourism agency must have international travel service license.

IV. Mistakes in choosing location and headquarter:

According to the Law on Enterprise 2020, the headquarters of a company shall have full address, and shall not be located in apartment, collective housing (exempt those who are allowed to conduct business). In terms of FDI company, the mistakes can be extended to: 

• Hiring office in inappropriate location with business planning (Ex: conduct foreign language center in housing area which is not granted)
• Lack of documents to demonstrate the legitimate using rights (Ex: Non-notarized Leasing Agreement; the lessors do not own business licenses related to office leasing business,…).
• Choosing “virtual” (fake) address for money-saving purpose, though the competent authority will reject it while appraisal.

V. Lack of incentives research:

Various investors mainly concern the certificate granting procedure without any incentives for research in industrial zone, high-tech zone, priority business (Education, technology, renewable energy,…). The mistakes are:

• Missing Corporate Income Tax (CIT) exemption opportunity.
• Not utilizing the incentives regarding leasing land, or labor support policy.
• Locating in non-incentives areas, in case of transforming the procedures are complicated. 

VI. Lack of legal strategy after establishment

Many FDI companies are neglectful in legal obligations after establishment. The representative mistakes are:

• Not opening the regulated investment capital account in a bank for receiving international capital.
• Fail to declare, submit annual investment report fully, which lead to penalty consequences or be declared to be “fake company”
• Fail to obey labour registration regulation, foreign investors’ issuance, which violate the Labour Law and Law on Immigration

VII. In conclusion:

Establishing a company in Viet Nam can bring up various opportunities, yet also raise potential legal risk if the investors fail to prepare thoroughly. The typical mistakes such as choosing wrong business lines, inappropriate investment capital, incorrect procedure for license application, insufficient compliance with post-establishment obligations may result in significant delays, increased costs, or even prevent the company from operating.

Practical Advice:

•  Always verify the intended business lines against the list of prohibited or restricted sectors for investment.
• Prepare the appropriate investment capital and fulfill capital contribution commitments accurately.
• Comply fully with the two-step licensing process (Investment Registration Certificate – IRC and Enterprise Registration Certificate – ERC).
• Choose a legal location with all necessary supplementary documents.
• Doing research in applicable incentives to maximize benefits.
• Maintain ongoing compliance with legal obligations to mitigate future risks.

If the company lacks experience, it is necessary to consult a lawyer or a specialized foreign investment advisory firm to minimize errors, reduce processing time, and optimize business benefits in Vietnam.

VIII. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

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