5 Must-Know Things When Setting Up a Factory in Vietnam [Part 4]

Establishment of Foreign-Invested Enterprises and Licensing Procedures in Vietnam

Hello, this is RSQUARE, a company specializing in commercial real estate data.

Following our post published on July 1, 2022, “5 Things You Must Know When Establishing a Factory in Vietnam [Part 3] – How to Ship Production Equipment from Korea to Vietnam,” this section provides guidance on “Establishing a Foreign-Invested Enterprise and Licensing Procedures in Vietnam.”

To conduct business in Vietnam, foreign companies are required to establish a legal entity and operate in accordance with their registered business scope.
Foreign individuals are not permitted to operate businesses in Vietnam as sole proprietors.

Foreign companies operating in Vietnam are referred to as Foreign-Invested Enterprises (FIEs).
Establishing an FIE in Vietnam takes more time and involves a more complex process compared to business registration in Korea.

The company establishment process in Vietnam typically takes around 2 months from the point when all preparations are completed. In faster cases, it may be completed within 6 weeks.

However, for manufacturing companies, additional permits related to construction and production activities – such as fire safety and environmental approvals – are required separately. Operations can only begin after all procedures have been completed.

​

The following process is based on manufacturing companies; for non-manufacturing businesses, the procedures are simpler and require less time.

[Preliminary Preparation]

1. Opening an investment capital account: This account is used to receive the capital required for company establishment. If funds are transferred to any account other than this designated account or in cash, they will not be recognized as charter capital.
   This account must be opened in Vietnam and requires multiple documents. Therefore, it is recommended to prepare all necessary documents before visiting Vietnam.
   *Inquiry: Shinhan Bank Vietnam – Ho Chi Minh Branch: +84-28-3824-0191 (Korean-speaking support)

2. Prepare notarized documents certified by the Vietnamese Consulate, including the parent company’s business registration certificate (in English), passport, bank balance certificate, etc. (approximately 1 week; using an agency is recommended)

3. Finalize the shareholder structure and investment capital (ownership structure and capital contribution details)

4. Select a company formation service provider (some industrial parks or rental factory providers may offer this service free of charge)

5. Select a construction contractor (verification of qualifications and project experience in Vietnam is essential, even for large Korean companies)

​By completing these preparations in advance, companies can avoid time pressure and proceed smoothly after signing a lease or land purchase agreement.

[Company Establishment Process]

1. Sign a preliminary lease or land purchase agreement (for rental factories or industrial park land)
2. Transfer the deposit to the investment capital account and make the payment
3. Appoint an accounting firm and sign a service agreement
4. Apply for and obtain the Investment Registration Certificate (IRC): 2–4 weeks
5. Apply for and obtain the Enterprise Registration Certificate (ERC): 2 weeks
6. Issue the company seal (equivalent to a corporate seal in Korea)
7. Open a corporate bank account (requires the representative’s passport, ERC, and company seal)

[Post-Establishment Procedures]

1. Sign the official lease or purchase agreement under the newly established company name
2. Fully contribute the registered capital within 90 days from the ERC issuance date
3. Complete payment of deposits or purchase amounts
4. Apply for factory construction permits
5. Begin employee recruitment (some industrial parks or rental factories may support initial hiring)
6. Construct the factory
7. Transport production equipment (including existing equipment from Korea or third countries; refer to the link below)

* https://blog.naver.com/swpmc/222796332559

8. Obtain fire safety approval and construction completion certification

9. Move production equipment into the factory

10. Conduct environmental impact assessment (takes more than 6 weeks)

11. Commence operations

​The above procedures include not only company establishment but also various processes required at each stage, which may seem complex. However, by following the steps in order, companies can successfully start their business operations in Vietnam without unnecessary delays.

Rsquare provides services to support securing business premises – one of the most critical initial steps in establishing a company in Vietnam – and offers tailored real estate solutions based on business objectives and scale.

In addition, RSQUARE provides brokerage services for offices, leased factories, and industrial parks completely free of charge.

This is a unique policy of RSQUARE aimed at supporting all Korean companies entering Vietnam.

For information on offices, factories, and industrial parks in Vietnam, please visit Rsquare.

About RSQUARE VN

RSQUARE Vietnam operates a nationwide commercial real estate data platform, staffed entirely by in-house professionals. In addition to Korean companies, RSQUARE also serves local Vietnamese businesses and various global clients from Japan, China, Europe, and beyond. Its services include real estate brokerage, corporate housing leasing, visa support, and settlement services for businesses entering Vietnam.