Business License for 100% Foreign-Owned FDI Enterprises

One of the most important procedures in this process is obtaining a Business License for goods trading activities. This article provides a comprehensive analysis of licensing conditions, procedures, and key legal considerations to help 100% foreign-owned FDI enterprises lawfully and sustainably access the Vietnamese market.

​What Is an FDI Enterprise?

Pursuant to Clauses 19 and 22, Article 3 of the Law on Investment 2020:

“19. A foreign investor is an individual holding foreign nationality or an organization established under foreign law conducting investment and business activities in Vietnam.”

“22. A foreign-invested economic organization is an economic organization having a foreign investor as a member or shareholder.”

FDI is an abbreviation of Foreign Direct Investment, which in Vietnamese refers to an economic organization with foreign investment capital.

FDI enterprises include:

• Enterprises with 100% foreign-owned capital; and

• Joint venture enterprises between foreign investors and Vietnamese organizations.

Conditions for FDI Enterprises to Obtain a Business License

To be granted a business license for goods trading activities in Vietnam, an FDI enterprise must satisfy the following conditions:

1. Establishment or Capital Contribution by a Foreign Investor

Pursuant to Clause 19, Article 3 of the Law on Investment 2020, a foreign investor must lawfully carry out investment and business activities in Vietnam.

2. Not Engaging in Prohibited Business Sectors

FDI enterprises are prohibited from engaging in business sectors banned under Clause 1, Article 6 of the Law on Investment 2020. This condition applies to all forms of investment in Vietnam.

Prohibited business sectors include:

• Prostitution-related businesses;

• Fireworks trading;

• Debt collection services;

• Drug-related businesses;

• Export of relics and antiques;

• Trading in national treasures;

• Trading in certain minerals and chemicals;

• Human trafficking, trade in embryos, corpses, tissues, or human body parts;

• Human cloning-related activities;

• Trading in specimens of endangered, precious, and rare wildlife sourced from nature.

3. Having an Investment Project and an Investment Registration Certificate (IRC)

Pursuant to Point c, Clause 1, Article 22 of the Law on Investment 2020:

“Before establishing an economic organization, a foreign investor must have an investment project and carry out procedures for the issuance or adjustment of an Investment Registration Certificate, except for certain cases prescribed by law.”

Accordingly, to establish an FDI enterprise in Vietnam, foreign investors must first have an investment project and obtain a valid Investment Registration Certificate (IRC).

Dossier for Issuance of an Investment Registration Certificate

(For 100% Foreign-Owned Enterprises Not Subject to Investment Policy Approval)**

Pursuant to Clause 1, Article 36 of Decree No. 31/2021/NĐ-CP, the dossier includes documents prescribed in Clause 1, Article 33 of the Law on Investment 2020, such as:

Key Documents Include:

• Written request for implementation of the investment project, including a commitment to bear all costs and risks if the project is not approved;

• Legal documents of the investor:

  • Individual investor: Passport/ID (certified copy);

  • Organizational investor: Certificate of incorporation, charter, legal representative’s ID, etc.;

• Documents proving financial capacity:

  • Individual: Bank balance confirmation, savings book, asset ownership documents, proof of income;

  • Organization: Audited financial statements for the last two years, financial guarantees, parent company support letters;

• Investment project proposal detailing objectives, scale, capital, location, duration, implementation schedule, labor demand, incentives, and socio-economic impact;

• Land use proposal or lease agreement (if applicable);

• Technology explanation (if required);

• BCC contract (if investing under a BCC model).

Proper preparation of a complete dossier significantly accelerates the licensing process.

Enterprises need to prepare a complete set of documents to expedite the process of applying for the Enterprise Registration Certificate

Procedure for Establishing a 100% Foreign-Owned FDI Enterprise

The process consists of two main stages:

Stage 1: Issuance of the Investment Registration Certificate (IRC)

1. The investor submits one dossier to the investment registration authority.

2. If the dossier is incomplete, the authority issues a notice requesting amendments.

3. If valid, the IRC is issued within 15 days from receipt of a complete dossier.

Stage 2: Issuance of the Enterprise Registration Certificate (ERC)

After obtaining the IRC, the investor applies for the ERC pursuant to Decree No. 01/2021/NĐ-CP.

Depending on the enterprise type (private enterprise, partnership, LLC, or joint-stock company), required documents include:

• Application for enterprise registration;

• Company charter;

• List of members/shareholders;

• Legal documents of investors and legal representatives;

• Consularly legalized documents for foreign organizations;

• Investment Registration Certificate.

If the dossier is valid, the ERC will be issued within 07 working days.

If the dossier is complete, the competent authority will issue the Business Registration Certificate to the investor

LHLegal’s Legal Support Services for FDI Enterprises

Comprehensive Legal Consultation

LHLegal provides in-depth advice on conditions, permitted business sectors, and legal requirements for establishing FDI enterprises in Vietnam.

Dossier Preparation and Representation

We draft investment and enterprise registration dossiers and represent clients before competent authorities such as the Department of Planning and Investment, Department of Industry and Trade, and tax authorities.

Support for Changes in Business Lines

LHLegal assists with adding or adjusting business lines, investment capital, and registration contents in a lawful and efficient manner.

Post-Licensing Compliance Guidance

We support FDI enterprises in complying with ongoing obligations such as investment reporting, tax filings, foreign labor registration, and compliance with conditional business regulations.

If you have any questions or need legal advice, please contact us via the following forms:

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