How to Set Up a Joint Stock Company in Vietnam: Full Guide for Foreign Entrepreneurs

Joint stock company registration in Vietnam enables foreign entrepreneurs to establish scalable, investment-ready businesses with full legal protection under the Enterprise Law 2020. This guide cuts through the complexity with Vietnam-specific requirements, 2024 regulatory updates, and proven strategies to secure your Investment Registration Certificate (IRC) and Business Registration Certificate (ERC) on schedule.

What is a Joint Stock Company (JSC) in Vietnam?

A joint stock company (JSC) in Vietnam is a corporate structure where ownership is divided into tradable shares held by shareholders, governed strictly by the Enterprise Law 2020. Unlike limited liability companies (LLCs), JSCs have a more complex governance structure and allow shareholders to transfer shares freely, which facilitates capital raising activities such as public offerings (IPOs).

Key features under Vietnam’s Enterprise Law 2020

• Minimum 3 shareholders (individuals or entities), with 100% foreign ownership permitted in most sectors like technology, manufacturing, and services.
• Mandatory governance bodies: A Board of Directors (min. 3 members) and a Supervisory Board (required if >10 shareholders).
• Capital flexibility: Stated capital is determined by the company’s charter and sector-specific regulations, with no general minimum of VND 100 million (~$4,000), but actual paid-in capital is verified during bank account setup.

Key features of Joint Stock Company under Vietnam’s Enterprise Law 2020

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Step-by-Step guide to registering a foreign-owned JSC in Vietnam

Establishing a foreign-owned Joint Stock Company (JSC) in Vietnam requires careful compliance with local regulations and a clear understanding of the legal process. The following step-by-step guide outlines the essential company formation procedure in Vietnam to help investors navigate registration smoothly and efficiently.

Pre-registration checklist (2025 updates)

Verify sector-specific restrictions:

• Real estate development may face ownership restrictions or licensing conditions. Specific rules depend on project type and location.
• Education and healthcare need Vietnamese partners (min. 51% ownership).
• Technology and manufacturing allow 100% foreign ownership.
  Prepare non-negotiable documents:
• Notarized passport copies of all shareholders.
• Shareholder agreement detailing capital contributions and voting rights.
• Business plan with sector classification (aligned with Vietnam’s Economic Classification System).
• Critical warning: 30% of DIY applications fail due to incomplete sector disclosures, especially in "gray zone" sectors like fintech or e-commerce logistics.

The 4-phase registration process

Phase 1: IRC Application (7-10 days)
Submit to the DPI:

1. Investment registration dossier (Form I.D1).
2. Shareholder identification documents.
3. Business plan with capital allocation breakdown.

Phase 2: ERC submission (5-7 days)
After IRC approval, file with the DPI:

1. Business registration dossier (Form II.D1).
2. Company charter (must include share structure, governance rules).
3. Board member appointments
   Key 2024 update: Electronic submissions via National Business Registration Portal now mandatory, paper filings rejected.

Phase 3: Tax/seal registration (Within 30 days of ERC)

• Register company seal at local police department.
• Submit tax registration to General Department of Vietnam Taxation (GDVT).
• Open corporate bank account (banks verify paid-in capital within 90 days).

Phase 4: Post-incorporation compliance

• Monthly VAT and corporate tax filings.
• Annual financial statements (audited if revenue >VND 50B).
• Shareholder meeting minutes (at least once per year as required by law, with additional meetings as stipulated in the company charter or upon necessity)

The 4-phase registration process of JSCs

Top mistakes foreigners make with Vietnam JSCs

While Vietnam offers significant opportunities for foreign investors, many encounter challenges when setting up and managing a Joint Stock Company (JSC). To help avoid costly setbacks, we highlight some mistakes foreigners often make with Vietnam JSCs.

Mistake 1: Underestimating Capital Requirements

"Stated capital = paid-in capital" trips up 45% of foreign founders. Banks require proof of capital contribution within 90 days of ERC issuance, failure to comply may result in frozen bank accounts and monetary penalties. Example: A U.S. e-commerce startup stated VND 500M capital but transferred only VND 100M, frozen bank account and $2,000 penalty.

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Mistake 2: Skipping Post-Incorporation Compliance

Late tax filings trigger fines up to 5% of owed tax + 0.05% daily interest. Example: A Singaporean manufacturer missed Q3 VAT filing, $8,200 penalty for $164,000 tax due.

FAQs about Vietnam Joint Stock Companies

Q: Can a foreigner be the sole shareholder of a Vietnam JSC?

A: No, min. 3 shareholders required.

Q: Can foreign shareholders hold <50% of voting rights?

A: Yes, but foreign ownership >49% requires MPI approval for "conditional" sectors like logistics.

Q: How are JSCs taxed in Vietnam?

A: Corporate tax is 20% for both JSCs and LLCs. VAT is generally 10% on goods and services, with some exceptions at 5% or 0%. Dividends are taxed at 5% for foreign shareholders.

Joint stock companies in Vietnam offer foreign entrepreneurs the optimal structure for scalable, investment-driven growth, but only with precise compliance. Avoid critical pitfalls like mismatched capital transfers or ignored residency rules that trigger fines up to 5% of owed tax. For international businesses, JSCs unlock VC funding and IPO pathways unavailable to LLCs.

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