Top 10 common mistakes when establishing an FDI company in Vietnam

Date: 2025.11.04

Top 10 common mistakes when establishing a foreign-invested enterprise (FDI) in Vietnam

Vietnam remains an attractive destination for foreign businesses, especially Japanese companies. However, the process of establishing an FDI company in Vietnam involves numerous detailed legal requirements. Many investors face difficulties, with applications being rejected or delayed due to common errors.

Below are the 10 most frequent mistakes foreign investors encounter, based on real advisory cases and application processing experience in 2024–2025.

1. Not checking conditional business sectors

Many investors overlook whether their intended business sector falls under conditional industries (e.g., logistics, education, real estate, e-commerce).

Consequence: Application rejection or complex requests for additional documentation.

Solution: Review the List of Conditional Investment Sectors under the 2020 Investment Law and the latest guiding decrees.

2. Incompatible foreign ownership ratio

Some industries limit foreign ownership (commonly ≤49% or 65%). Applying for 100% ownership without verifying restrictions often leads to rejection.

Solution: Check regulations under WTO, CPTPP, or bilateral agreements with Japan regarding capital contribution ratios.

3. Invalid translated documents

Foreign documents such as business licenses, articles of incorporation, or financial reports must be translated into Vietnamese and notarized. Failure to do so results in rejection.

Solution: Use certified professional translation agencies with judicial notarization.

4. Failure to prove financial capacity

Organizations that do not submit financial statements from the past two years, or individuals without bank statements showing investment funds, will be considered financially unqualified.

Solution: Prepare complete financial documentation verified by banks or independent auditors.

5. Errors in passport or legal entity information

Typos, missing verification pages, or incorrect translations of individual/entity names lead to discrepancies across documents.

Solution: Double-check all translations and cross-verify documents before submission.

6. Incorrect IRC–ERC Procedure

Some investors attempt to register a company before obtaining the Investment Registration Certificate (IRC), which violates regulations and forces a restart of the process.

Solution: Follow the two-step process: Apply for (1) IRC → (2) ERC as stipulated under the Investment Law and Enterprise Law.

7. Invalid business address

Registering a company address in residential apartments, non-commercial housing, or without a valid lease agreement will be rejected.

Solution: Ensure the registered office is a legitimate commercial address (not public housing or purely residential zones).

8. Late capital contribution

Vietnamese law requires full capital contribution within 90 days of receiving the Enterprise Registration Certificate (ERC). Delays result in penalties and potential legal invalidation.

Solution: Secure investment funds and set up international transfer procedures before ERC issuance.

9. Missing tax and E-invoice registration

Many companies fail to register for initial tax declarations or electronic invoices within the required timeline.

Solution: Complete all tax obligations within 10 working days from receiving a tax code.

10. Lack of legal or accounting personnel

Operating without legal compliance staff or accountants exposes companies to administrative penalties.

Solution: Engage professional back-office outsourcing services to ensure full legal compliance.

Advice from Help All

Establishing an FDI companyin Vietnam becomes much smoother and more efficient with proper preparation and professional support. Help All has assisted numerous Japanese and international enterprises with services including:

– Company formation documentation
– Translation and notarization
– Business registration, bookkeeping, social insurance, HR
– Comprehensive back-office outsourcing

Conclusion

Avoiding these 10 common mistakes means you are already 70% of the way toward successfully establishing an FDI company in Vietnam. With our legal expertise and tailored support, Help All is ready to accompany your business from preparation to operation.