Scenario: a Singaporean company wants to set up a subsidiary in Ho Chi Minh City to distribute imported consumer goods and provide accompanying technical consultancy. The CFO is tasked with a budget “from zero to the first sales invoice.” The sample budget below shows a cost structure completely different from a manufacturer’s: asset-light, heavy on licenses and working capital.
The legal framework: distribution rights are the biggest difference
A foreign-invested trading company wanting to buy and sell goods in Vietnam needs more than an ERC — it must hold a business license for foreign-invested economic organisations. This is the most common investor mistake: assuming the ERC alone authorises selling, only to discover during an inspection that one more license is missing.
The legal framework changed just before this article was written: Decree 09/2018/ND-CP expired on 18 October 2026, replaced by Decree 342/2026/ND-CP (effective 18 October 2026, still in force at the time of writing on 19 October 2026). All business-license applications (distribution rights, import rights and related rights) from now on follow the new decree — guidance materials drafted under the old framework need re-checking.
Sample budget — nine cost groups
Mandatory note: every figure in the “Reference level” column below is a market reference compiled by the writing team, unverified against official documents; investors must obtain actual quotations from providers and check current legal documents before deciding.
| Cost item | Reference level (market, unverified) | Notes |
|---|---|---|
| State fees (IRC, ERC, publication…) | VND 1–5 million | See EXP-1047. |
| Legal consultancy (IRC + ERC + distribution business license) | VND 120–400 million | Distribution licensing under Decree 342/2026/ND-CP; see EXP-1048. |
| Translation, notarization, legalization | VND 15–60 million | See EXP-1049. |
| Office + warehouse lease, year one (deposit, prepayment, warehouse fit-out) | VND 500 million – 5 billion | Suburban warehouses cost far less than inner-city; see EXP-1052. |
| Business license (distribution rights): consultancy + appraisal costs | VND 50–200 million | Decree 342/2026/ND-CP (effective 18 October 2026); appraisal time itself is an opportunity cost. |
| Digital signature, e-invoices, accounting software, DICA account | VND 20–80 million | See EXP-1051. |
| Trademark registration and brand protection in Vietnam | VND 10–50 million per mark | Start in parallel from day one (IP Law framework as amended by Law 131/2025/QH15 per the Board watchlist). |
| Staffing and operations (work permits under Decree 219/2025/ND-CP, social insurance, outsourced 3PL logistics) | VND 400 million – 2 billion | Keep the formation budget separate from inventory working capital. |
| Contingency (10% of total) | — | — |
Three costs trading companies forget most
First, working capital for inventory: not a “formation cost,” but a matter of survival — trading companies die from running out of money for the second shipment, not from lacking license fees. Formation and operating budgets must be separated; do not merge them and assume “the money is enough.” Second, cargo insurance and outsourced logistics in the early months — many companies omit these from the year-one budget thinking they will “go into cost of goods later.” Third, post-licensing compliance costs: periodic reporting duties to regulators (e.g. the Department of Industry and Trade for distribution activities) — verify the specific reporting duties per product line in practice.
How to use this budget
This table is fundamentally different from the manufacturing version (EXP-1054): no industrial-park land, workshops, environmental permits, industrial fire-safety systems or machinery — instead distribution licensing, warehousing and trademarks. If the company both trades and does simple assembly or packing, add the technical items from EXP-1054 and check whether that activity triggers environmental or fire-safety permits — the line between “pure trading” and “manufacturing” is very thin in practice, and regulators look at the nature of the activity, not at whatever name the company gives itself.
Frequently asked questions
With the ERC in hand, can we start selling immediately?
Not yet. A foreign-invested economic organisation exercising goods distribution rights must hold a business license under Decree 342/2026/ND-CP (effective 18 October 2026). Selling without the license breaches business conditions and risks administrative penalties and suspension.
Does a pure service company (consulting, software) need a distribution license?
No. The business license under Decree 342/2026 covers trading in goods (distribution rights and related rights); a pure service company selling no goods falls outside its scope. But some service sectors are separately conditional businesses — verify against the registered business lines.
Must a leased warehouse register as a business location?
A warehouse with regular operations (receiving, storing, dispatching goods) counts as a business location — in practice it must be notified to and registered with the Business Registration Office. Even a storage-only warehouse deserves a duty check — never assume “a warehouse needs no registration.”
Can we import samples before the distribution license is granted?
Importing is tied to the import rights on the license; samples for market research have a separate mechanism but with limited quantity and purpose. Never import a commercial-size shipment without full licensing — goods may be held at the border and the entire market-launch plan collapses.
This article has been quality-reviewed by the FLAW AI Legal Council