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ERC Before IRC? Choosing the Sequence under Vietnam's Investment Law 2025

ERC, IRC and Vietnam’s Investment Law 2025 — one of the most practical changes for foreign investors: for the first time, the law allows a company to be formed (granted an Enterprise Registration Certificate — ERC) before applying for an Investment Registration Certificate (IRC), instead of requiring the IRC first as before. But “more flexible” does not mean “less regulated”: the ERC-first sequence comes with a 12-month deadline, a market-access commitment, and a strict prohibition on implementing the project without an IRC. This article examines this right to choose — its conditions, limits, comparison with the old law, and the transitional points that remain unclear.

For a refresher on the concepts, see IRC and ERC: differences when forming an FDI company.

Contents

1. What’s new: a choice, not a mandate

Article 19(2) of Investment Law 143/2025/QH15 (effective 01/03/2026) provides that a foreign investor may establish an economic organisation to implement an investment project before carrying out procedures for issuance or amendment of the Investment Registration Certificate, provided it satisfies market-access conditions for foreign investors (Article 8).

Decree 96/2026/ND-CP (effective 31/03/2026, replacing Decree 31/2021/ND-CP) implements this in Article 72: foreign investors may now choose one of two sequences:

  • Option 1: Establish the economic organisation (obtain the ERC) first → then carry out IRC issuance procedures.
  • Option 2: Carry out IRC issuance procedures first → then establish the economic organisation (the traditional sequence).

FDI companies are therefore no longer locked into a single sequence. Allowing incorporation first does not mean dispensing with investment procedures — it only changes the order. If the project requires an IRC, the investor must still complete that procedure before implementing the project.

2. The two sequences in detail

Option 1: ERC first → IRC after

  1. Enterprise registration under enterprise law (no IRC required). Key point: under Decree 96/2026/ND-CP, Article 72(3), the enterprise registration application must contain a commitment to satisfy market-access conditions for foreign investors — this is the “entry ticket” for this sequence.
  2. Complete IRC issuance procedures within 12 months of the establishment date (Article 72(4)).
  3. While awaiting the IRC, the company already has legal personality to sign contracts, recruit, and prepare assets — but may not implement the investment project.

Option 2: IRC first → ERC after (traditional sequence)

  1. Obtain the IRC for the investment project first.
  2. Use the IRC to establish the economic organisation (enterprise registration).
  3. Implement the project once both certificates are in hand.

Which option to choose? Option 1 suits investors who want a legal person early for preparatory work (leasing offices, hiring, negotiating contracts) while pursuing the IRC in parallel. Option 2 suits projects that need certainty on investment standing from the outset (e.g., projects requiring land allocation or land lease — since in practice the IRC is normally one of the bases for the State to consider allocating or leasing land; check the land regulations applicable to each project).

3. Three limits of the ERC-first sequence

Limit 1 — The 12-month deadline. A pre-established economic organisation must complete procedures to be issued the IRC within 12 months of its establishment date (Decree 96/2026/ND-CP, Article 72(4)). This is an obligation, not an automatically extendable right.

Note: The 12-month clock runs from the date the company is established — not from the first IRC filing; no extension mechanism has been published to date. For projects subject to investment policy approval, the ERC-first route does not waive the approval and IRC requirements before project implementation.

Limit 2 — No project implementation without an IRC. Article 72(4) is explicit: the economic organisation may implement the investment project only after completing IRC issuance/amendment procedures. The same principle appears in Investment Law 143/2025, Article 29(2): for projects subject to IRC issuance, the investor must complete IRC issuance procedures before implementing the investment project. In short: an ERC lets the company “exist”, but only an IRC lets it “do the project”.

Limit 3 — No unilateral addition of business lines. Before the IRC is issued, the economic organisation may amend its enterprise registration to add other business lines only after the IRC has been issued (Article 72(4)). Registering business lines beyond the scope of the initial market-access commitment without an IRC is a legal risk.

Additionally, in practice the charter capital stated on the ERC and the project investment capital stated on the IRC may differ — they should be calculated appropriately from the outset to avoid repeated amendments. This is a practical filing note, not a verbatim rule of Decree 96/2026.

4. Comparison with the old law

ItemInvestment Law 61/2020 (expired 01/03/2026)Investment Law 143/2025 (effective 01/03/2026)
SequenceAs a rule, the IRC had to be obtained before establishing the economic organisation (Art. 22(1)(c)), except in specific casesA choice: ERC first or IRC first (Art. 19(2); Decree 96/2026, Art. 72)
Market-access commitmentNo equivalent requirement in the enterprise registration dossierThe registration application must contain the commitment (Decree 96/2026, Art. 72(3))
Deadline for IRC completionNot set (the IRC came first)12 months from establishment (Decree 96/2026, Art. 72(4))
Implementing the project without an IRCDid not arise (IRC came first)Prohibited — only after completing IRC issuance/amendment procedures

This change is expected to shorten foreign investors’ market-entry time. But as analysed in section 3, flexibility comes with tight obligations and limits — it is not a shortcut around investment procedures.

5. Transition: what about projects already underway?

Three dates to remember:

  1. 01/03/2026 — Investment Law 143/2025/QH15 takes effect; Investment Law 61/2020/QH14 expires.
  2. 31/03/2026 — Decree 96/2026/ND-CP takes effect, replacing Decree 31/2021/ND-CP.
  3. 01/07/2026 — Article 7 and Appendix IV of Law 143/2025 (conditional business lines) take effect.

For projects in progress at the transition point (e.g., an IRC application filed under the old law but not yet issued, or an IRC already issued under the old law with the project underway), the applicable law (Articles 50 and 51 of Law 143/2025) must be assessed dossier by dossier. Some details for the transition period still await implementing guidance, so investors should not guess — each dossier should be reviewed with counsel to determine: which rules govern the pending procedure, whether acquired rights (investment incentives, project timelines) are preserved, and whether any supplementary filings are needed under the new rules.

6. Practical recommendations

  1. Choose the sequence based on real needs, not habit: need a legal person early → ERC first; need certainty on investment standing/land → IRC first.
  2. Review market-access conditions (Article 8) before making the commitment in the enterprise registration application — a wrong commitment seeds trouble at the IRC stage. See conditional business lines for foreign investors.
  3. Build the 12-month timeline from the ERC date, targeting IRC completion at least 2–3 months before the deadline as a buffer.
  4. Draw a clear internal line between “preparatory activities” and “project implementation” — inadvertently implementing the project without an IRC is the easiest violation to commit.
  5. Transitional projects: review each dossier; do not apply one formula mechanically.
  6. See the full FDI company setup roadmap in Vietnam and the guide to applying for an Investment Registration Certificate.

7. Quick Q&A

Does Investment Law 2025 require an IRC before incorporating a company?

**Short answer:** No. Article 19(2) of Investment Law 143/2025/QH15 (effective 01/03/2026) allows foreign investors to establish an economic organisation before carrying out IRC issuance/amendment procedures, provided market-access conditions are met. Article 72 of Decree 96/2026/ND-CP (effective 31/03/2026) offers a choice of two sequences: ERC first then IRC, or IRC first then ERC.

**Why it matters:** This is a major change from the old law (which as a rule required the IRC first). But “a choice” is not “an exemption”: the ERC-first sequence carries a 12-month deadline and tight limits.

**Legal basis:** Investment Law 143/2025, Art. 19(2) (effective 01/03/2026); Decree 96/2026/ND-CP, Art. 72 (effective 31/03/2026).

**Next step:** decide based on needs (early legal person vs. investment certainty); call our hotline 0988424851 for advice.

How long is the deadline if the company is formed before the IRC is obtained?

**Short answer:** 12 months from the date of establishment. Article 72(4) of Decree 96/2026/ND-CP requires the pre-established economic organisation to complete IRC issuance procedures within 12 months, and it may only implement the investment project after completing IRC issuance/amendment procedures. Specific sanctions for missing the 12-month deadline have not been clearly published — companies should complete the procedures early and consult the local investment registration authority.

**Why it matters:** The 12 months is a legal obligation, not an automatically extendable period. Since sanctions are unclear, the safest course is to finish well before the deadline.

**Legal basis:** Decree 96/2026/ND-CP, Art. 72(4) (effective 31/03/2026).

**Next step:** build the 12-month timeline from the ERC date.

What may the company (with ERC) do before obtaining the IRC?

**Short answer:** It may carry out certain necessary preparatory work as a legal person (e.g., signing contracts, recruiting personnel, preparing assets and facilities — to the extent not constituting ‘project implementation’), while pursuing IRC issuance in parallel. It may not implement the investment project (Decree 96/2026/ND-CP, Art. 72(4); Investment Law 143/2025, Art. 29(2)), and may only amend its enterprise registration to add other business lines after the IRC has been issued. The line between ‘preparation’ and ‘project implementation’ should be assessed case by case with counsel.

**Why it matters:** The boundary between “preparation” and “project implementation” must be drawn carefully for each project — this grey zone is where violations most easily arise.

**Legal basis:** Decree 96/2026/ND-CP, Art. 72(4); Investment Law 143/2025, Art. 29(2).

**Next step:** establish internal procedures distinguishing preparatory activities from project implementation.

What should be noted in the enterprise registration dossier when forming the company first?

**Short answer:** Under Article 72(3) of Decree 96/2026/ND-CP, the enterprise registration application must contain a commitment to satisfy market-access conditions for foreign investors. This is the “entry ticket” for the ERC-first sequence — a commitment inconsistent with the actual business lines may cause difficulties when applying for the IRC later.

**Why it matters:** This commitment partly replaces the screening role that IRC procedures previously performed. Registered business lines must match market-access conditions (Law 143/2025, Art. 8) from the start.

**Legal basis:** Decree 96/2026/ND-CP, Art. 72(3) (effective 31/03/2026); Investment Law 143/2025, Art. 8.

**Next step:** review market-access conditions before filing the enterprise registration dossier.

When do the new rules apply? What about ongoing projects?

**Short answer:** Investment Law 143/2025/QH15 takes effect 01/03/2026; Decree 96/2026/ND-CP takes effect 31/03/2026 and replaces Decree 31/2021/ND-CP; Article 7 (conditions for conditional business lines) and the list of conditional business lines in Appendix IV of Law 143/2025 take effect 01/07/2026 (Article 51(2)). Projects in progress at the transition point are governed by the effectiveness and applicable-law rules in Articles 50 and 51 — investors should review each dossier specifically with counsel.

**Why it matters:** Transition periods carry the highest risk because enforcement authorities’ interpretations may not yet be uniform. Do not guess at applicability.

**Legal basis:** Investment Law 143/2025/QH15; Decree 96/2026/ND-CP; Law 143/2025, Art. 7 and Appendix IV.

**Next step:** review each transitional dossier with counsel; call our hotline 0988424851.

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References

  • Investment Law No. 143/2025/QH15 (effective 01/03/2026; Article 7 and Appendix IV effective 01/07/2026)
  • Decree No. 96/2026/ND-CP (effective 31/03/2026; replacing Decree 31/2021/ND-CP)
  • Investment Law No. 61/2020/QH14 (expired 01/03/2026)