Setting up an FDI company in Vietnam is a two-tier process: obtaining in-principle approval / the Investment Registration Certificate (IRC) for the project, then registering the enterprise to obtain the Enterprise Registration Certificate (ERC). Most mistakes are not about “not knowing the procedure” but about seemingly technical decisions with long-term consequences: choosing the wrong enterprise type, registering charter capital inconsistent with investment capital, selecting a location incompatible with planning, or contributing capital past the 90-day deadline. Below are the mistakes FLAT LAW FIRM most often encounters when reviewing FDI files for clients — and how to prevent each one.
Quick summary
| Topic | Common mistakes on enterprise type, capital, location, business lines and sequencing when setting up an FDI company in Vietnam |
|---|---|
| Who this is for | Foreign investors preparing to establish a legal entity in Vietnam; advisors supporting foreign investors |
| Key checkpoints | Enterprise type; charter capital vs investment capital; planning-compatible location; conditional business lines; 90-day capital contribution deadline; IRC-before-ERC sequencing |
| Desired outcome | A correct setup file from day one, with no costly IRC/ERC amendments after operations begin |
Core legal issue: why setup mistakes are costly later
Unlike domestic enterprises that need only a one-step enterprise registration, foreign investors must first pass through the investment project tier: proposing the project and obtaining an IRC recording its objectives, capital scale, location and schedule. Everything recorded on the IRC later becomes the binding “frame” for operations — any change requires a project amendment procedure. Setup mistakes therefore do not disappear once the company operates; they are “frozen” into the IRC/ERC and can only be fixed through amendment procedures, which cost time and may draw penalties if the company has already operated inconsistently with its license.
The second group of mistakes concerns capital: confusing investment capital (total project implementation capital, recorded on the IRC) with charter capital (recorded on the ERC, the basis for ownership ratios and limited liability). Registering charter capital lower than investment capital without a plan to raise the difference, or contributing capital more than 90 days after the ERC issuance date, are classic errors.
The third group concerns location and business lines: choosing a location incompatible with land-use or sector planning, or registering conditional business lines (logistics, education, healthcare and more) without meeting the conditions when operations begin — leading to a forced location change or suspension of the conditional lines.
Legal basis and verification sources
- Law on Investment 143/2025/QH15 (effective 01/03/2026): IRC issuance sequence and procedures; investment project amendments (Article 33)
- Decree 96/2026/ND-CP (effective 31/03/2026): guiding the implementation of the Law on Investment 143/2025/QH15
- Law on Enterprises 2020 (59/2020/QH14): enterprise types; 90-day capital contribution deadline; legal representatives
- Decree 168/2025/ND-CP: enterprise registration
- Decree 122/2021/ND-CP: administrative penalties in planning and investment
- Sector-specific legislation for conditional business lines (depending on the project’s field)
Verification sources: the National Investment Information System and the National Enterprise Registration Portal for checking file status; consolidated legal texts on vbpl.vn to confirm provisions still in force.
Common mistakes and how to prevent them
Mistake 1 — Reversing the IRC/ERC sequence. Filing for enterprise registration before obtaining the IRC (for projects subject to IRC issuance). Prevention: determine from the outset whether the project requires an IRC; for projects that do, complete the IRC first, then register the enterprise.
Mistake 2 — Charter capital inconsistent with investment capital. Registering charter capital far below the total investment capital on the IRC without a clear loan/fundraising plan, or vice versa. Prevention: design the capital structure (equity/debt) when preparing the project proposal; ensure the registered charter capital matches the investor’s capital contribution commitment.
Mistake 3 — Contributing capital past the 90-day deadline. Members/owners must fully contribute the registered charter capital within 90 days of the Enterprise Registration Certificate issuance date. Missing the deadline without reducing charter capital is a violation subject to penalties. Prevention: schedule capital transfers through the investment capital account right after receiving the ERC; if full contribution is not feasible in time, complete the charter capital reduction procedure on time.
Mistake 4 — Location incompatible with planning. Signing a factory/land lease only to discover the location is incompatible with land-use or sector planning and cannot be approved as the project site. Prevention: check planning and seek views on the location’s suitability before signing long-term leases or paying large deposits.
Mistake 5 — Conditional business lines without preparation. Registering conditional business lines (transport, education, medical examination and treatment, employment services and more) but only applying for sub-licenses when operations begin; the business line gets suspended. Prevention: list all conditions for each business line when preparing the project and build sub-license applications into the master timeline.
Mistake 6 — Legal representative not meeting residence requirements. Appointing a foreigner as legal representative who does not reside in Vietnam as required by the Law on Enterprises 2020. Prevention: arrange at least one legal representative residing in Vietnam, or a valid authorization when travelling abroad.
Mistake 7 — Missing post-licensing obligations. Assuming the IRC/ERC is the end of the story, without initial tax registration, e-invoice registration or periodic investment reporting. Prevention: prepare a post-licensing compliance checklist from the day the certificates are received.
Common risks
Risk 1 — Having to amend the IRC/ERC right after setup. Capital, location or business-line mistakes discovered after licensing can only be fixed through amendment procedures — time-consuming and possibly requiring explanations to the authorities.
Risk 2 — Penalties for late capital contribution. Failing to contribute full capital within 90 days without adjusting charter capital: administrative penalties and a compelled adjustment.
Risk 3 — Lease contract frustrated as to purpose. Deposits paid or long-term leases signed for a location not approved for the project: costs lost, a new location needed and the IRC amended.
Risk 4 — Sub-license refused, business line halted. Operating a conditional business line without meeting the conditions: suspension, penalties and disruption to the entire business plan.
Risk 5 — Documents signed by an unauthorized person. A legal representative appointed in breach of the requirements: the validity of contracts and documents they sign may be disputed.
Competent authorities and filing bodies
IRC issuance and amendment files are submitted to the investment registration authority: the Industrial Park/Economic Zone Management Authority (projects inside zones) or the Department of Finance (projects outside zones), depending on location. Enterprise registration (ERC) files are submitted to the provincial business registration authority via the National Enterprise Registration Portal. Sub-licenses for conditional business lines are issued by the sector-managing authority.
Investors should engage the investment registration authority from the project proposal stage for guidance on location and business-line suitability, rather than filing “blind” and being asked to revise repeatedly.
When to contact a lawyer
Engage a lawyer before filing when: (1) the project involves large capital, multiple investors or a complex ownership structure — the enterprise type and capital structure need designing from the start; (2) the location or business lines show signs of being conditional or restricted for foreign investors; (3) the company is already established but mistakes are found in the IRC/ERC and the lowest-cost amendment plan is needed.
How FLAT LAW FIRM helps
FLAT LAW FIRM advises on full-package FDI company setup: project feasibility assessment (location, business lines, market access conditions), capital structure and enterprise-type design, IRC/ERC file preparation and filing, sub-license applications, and post-licensing compliance checklists. We work in Vietnamese, English and Chinese, and have supported many Chinese and other foreign investors in establishing legal entities in Vietnam.
See also: FDI company setup roadmap in Vietnam | Setting up accounting for newly established FDI companies | Appointing foreign managers in FDI companies
Talk to FLAT LAW FIRM
If you are preparing to set up an FDI company in Vietnam, or need a review of an already completed setup file, FLAT LAW FIRM can assist with assessment and a suitable plan. Please contact us for advice.
FAQ
Is an IRC mandatory when setting up an FDI company?
It depends on the project. Foreign investors establishing a business organization to implement an investment project must apply for an Investment Registration Certificate in cases prescribed by the Law on Investment 143/2025/QH15; some cases require only enterprise registration. Determine the project category from the outset to follow the correct sequence.
What is the difference between investment capital and charter capital?
Investment capital is the total project implementation capital (recorded on the IRC, comprising equity and mobilized capital); charter capital is the capital committed by owners/members (recorded on the ERC). The two figures must be consistent with each other and with the project’s financing plan.
What is the deadline for full charter capital contribution?
90 days from the Enterprise Registration Certificate issuance date, under the Law on Enterprises 2020. Failure to contribute in full without reducing charter capital will be penalized.
Can the project location be changed after the IRC is issued?
Yes, but the investment project/IRC amendment procedure must be completed before operating at the new location, and the new location’s planning compatibility must be checked.
What should be noted for conditional business lines at setup?
All conditions (statutory capital, practicing certificates, sub-licenses and more) must be met before operating the business line. Sub-license applications should be built into the master timeline from the project preparation stage to avoid suspension after investment.
What conditions apply to a foreign legal representative?
Beyond a valid work permit/visa, the legal representative must reside in Vietnam as required by the Law on Enterprises 2020; when travelling abroad, they must authorize another person in writing to exercise their rights and obligations.
