Estimated Year-One Costs for Foreign SMEs Opening an Office in Vietnam

1.LEGAL & COMPANY FORMATION

Can a foreign company own 100% of its business in Vietnam?
Yes. In most industries, Vietnam allows 100% foreign ownership. However, some sectors may require joint ventures or have foreign ownership limits.

What types of legal entities can foreign investors set up in Vietnam?
Common options include:

• Limited Liability Company (LLC)
• Joint-Stock Company (JSC)
• Representative Office (RO)
• Branch Office (for specific industries)

What is the process and timeline to establish a company in Vietnam?
The process typically takes 30–45 working days and includes investment registration, business registration, and post-licensing procedures.

Is there a minimum capital requirement for foreign-owned companies?
There is no universal minimum capital, but the required amount depends on your business sector and operational scale. Some conditional sectors may require higher capital.

Does my business require a specific license to operate in Vietnam?
Yes. Conditional industries such as logistics, education, and fintech require additional sub-licenses or permits.

Are there restrictions for foreign investors in certain sectors?
Yes. Some industries such as publishing, telecommunications, and security services may have limitations for foreign ownership or require special approvals.

2. TAXATION & FINANCIAL COMPLIANCE

What is the corporate income tax rate in Vietnam?
The standard corporate income tax (CIT) rate is 20%. Preferential rates may apply for specific sectors or locations.

Are tax incentives available for foreign investors in Vietnam?
Yes. Tax holidays and reduced CIT rates are offered for high-tech, export-oriented, or investment-incentive zones.

Is there a Double Taxation Agreement (DTA) between Vietnam and my country?
Vietnam has signed DTAs with over 80 countries, helping foreign investors avoid being taxed twice on the same income.

Can I transfer profits from Vietnam to my home country?
Yes, profit remittance is allowed after fulfilling tax and financial obligations. A remittance report must be submitted to tax authorities.

Do companies need to follow the Vietnamese accounting system?
Yes. Foreign-invested companies must comply with Vietnamese Accounting Standards (VAS), but international systems can be used for internal management.

3. OFFICE LOCATION & OPERATING COSTS

How much does it cost to rent an office in Vietnam?
Rental costs vary by city and location. In major cities like Ho Chi Minh City or Hanoi, prices can range from $15 to $50 per square meter per month.

Are flexible office or co-working spaces available?
Yes. Many serviced offices and co-working spaces are available, ideal for new or small foreign companies entering Vietnam.

What are the average monthly operating costs?
Operating costs may include:

• Office rental
• Staff salaries
• Accounting services
• Internet & utilities
• Legal & compliance services

Total monthly costs vary based on company size and industry.

Where should I set up my office in Vietnam?
Popular business hubs:

• Ho Chi Minh City – Southern economic center

• Hanoi – Capital and political center
• Da Nang – Emerging tech and services hub

4. HIRING & HUMAN RESOURCES

Is there a strong local talent pool in Vietnam?
Yes. Vietnam has a young, tech-savvy, and highly trainable workforce, especially in IT, finance, marketing, and engineering.

What are average salaries for local employees?
Salary levels vary by city and position.

For example: 5 Key Staff to Hire for Your Vietnam Office (with Estimated Salary)

1.Office Manager / Admin Lead

• Handles day-to-day operations, HR admin, vendor management
• Salary: $1000 – $2000/month

2. Accountant / Finance Executive

• Manages bookkeeping, tax filing, financial reporting
• Salary: $600 – $900/month

3. Sales Executive / Business Development

• Finds clients, builds local partnerships, drives sales
• Salary: $700 – $1,200/month (plus commission)

4. Marketing Executive / Digital Marketer

• Runs social media, digital ads, branding & content
• Salary: $600 – $1,000/month

5. Executive Assistant / Admin Support

• Supports expat managers, handles translation & coordination
• Salary: $500 – $800/month

Are companies required to provide insurance or benefits?
Yes. Social insurance, health insurance, and unemployment insurance are mandatory and must be paid by both employer and employee, Around + 31% month salary

Can I outsource staffing or HR functions?
Yes. Many companies use third-party HR or staffing services to reduce cost and ensure compliance.

How long does it take to hire key personnel?
Typically 2–6 weeks, depending on the role and industry. Executive or bilingual positions may take longer.

5. MARKET ENTRY & LOCAL STRATEGY

What is the business culture like in Vietnam?
Vietnamese business culture values relationship-building, face-to-face meetings, and trust. Local connections are important for long-term success.

What sales channels work best in Vietnam?
Effective channels include:

• B2B partnerships
• E-commerce platforms
• Local distributors or agents
• Physical retail stores (for consumer goods)

Should I conduct market research before entering?
Yes. Market research helps identify customer behavior, competitive landscape, and demand for your product or service.

Can I partner with a local company?
Yes. Many foreign investors choose to enter through joint ventures or commercial partnerships for faster market access.

Are there government or private agencies that can help me find partners or distributors?
Yes. Business matching services, trade promotion agencies, and consulting firms can assist with partner search and due diligence.

6. GOVERNMENT SUPPORT & INCENTIVES

Does Vietnam offer government support for foreign investment?
Yes. Support includes tax incentives, streamlined licensing for certain zones, and infrastructure support in industrial parks and high-tech zones.

Are there special economic or industrial zones for foreign investors?
Yes. Vietnam has many industrial parks and export processing zones (EPZs) with ready-built factories, tax breaks, and simplified procedures.

Can I apply for investment incentives?
Yes. Incentives apply based on:

• Industry sector (high-tech, renewable energy, etc.)
• Investment location (remote or priority provinces)
• Business scale or social impact

7. COMPLIANCE, RISK & ONGOING SUPPORT

Are there mandatory compliance requirements for foreign businesses?
Yes. This includes:

• Annual audit
• Tax reporting
• Labor contracts and social insurance
• Foreign investment reporting

What legal or political risks should I consider?
Vietnam has been politically stable for decades. Key risks include regulatory changes, licensing delays, and sector-specific restrictions.

Should I use a one-stop consulting service for setup and operations?
Yes. One-stop services save time, reduce risk, and ensure full compliance with Vietnamese laws.

ESTIMATED TOTAL YEAR 1 COST FOR SETTING UP AN SME OFFICE IN VIETNAM

Currency: USD | Scale: Small Office (3–10 employees) | Location: Hanoi or Ho Chi Minh City

Total Estimated First-Year Cost:

• Low Range: $65,000 USD

• High Range: $155,000 USD

Cost Optimization Tips:

• Use shared office space or adopt a remote team model to reduce rental expenses.

• Opt for outsourced accounting and HR services - RPO instead of hiring full-time internal staff.

• Start with a lean team of 3–5 key employees, and scale as the business grows.

• Begin with basic branding and digital marketing for the first 6 months to test the market response.

Need help setting up your business in Vietnam?
Our expert consulting team provides end-to-end services for foreign companies looking to enter Vietnam – from entity setup, licensing, office search, recruitment to accounting & HR outsourcing.

Contact us now for a free consultation at [email protected] or +84 866 047 046