The Law on Investment 2025 introduces a remarkable shift for foreign investors: under certain circumstances, investors are permitted to establish a company before finalizing the procedures for the issuance of an Investment Registration Certificate (IRC). However, investors should take careful note of the following critical aspects prior to utilizing this mechanism.

I. Comprehensive Review of Sector-Specific Conditions Prior to Business Registration

1. Potential Hurdles if Market Access Conditions for the Intended Business Lines Are Not Ensured

While the Law on Investment 2025 permits investors to set up an enterprise before applying for a project-executing IRC, they must strictly satisfy the market access conditions applicable to foreign investors as stipulated in Article 8 of the Law on Investment 2025.

Furthermore, regulations require that the business registration dossier must explicitly include a commitment to satisfying the market access conditions for the intended business sectors[1]. Consequently, right from the corporate establishment phase, investors must meticulously review the market access conditions for their proposed business lines. This includes foreign ownership limits, forms of investment, scope of activities, investor capacity requirements, local partner requirements (if any), and other requirements under specialized domestic laws or international treaties to which Vietnam is a member.

Failure to conduct a thorough review of these sector-specific conditions prior to business registration may lead to significant complications when applying for the IRC at the investment registration authority, or even render it impossible to execute the project according to the initial investment objectives.

2. The Project Seeking an IRC Must Align with the Registered Business Lines

Clause 4, Article 72 of Decree No. 96/2026/ND-CP requires that the IRC application must be consistent with the registered business lines of the economic organization. The enterprise is only permitted to amend its business registration to add other business lines after the IRC has been successfully granted.

Therefore, registering business lines at the Enterprise Registration Certificate (ERC) application stage should not be treated as a mere formality or described in overly generic terms. If the registered business lines do not accurately reflect the actual objectives, scope, and activities of the prospective investment project, investors may face blockages during the IRC application process or be forced to amend their corporate business lines before the IRC procedures can proceed.

II. Strict Adherence to the Timeline for Completing IRC Procedures

Pursuant to Clause 4, Article 72 of Decree No. 96/2026/ND-CP, within 12 months from the date of ERC issuance, investors must complete all necessary procedures to be granted the IRC as prescribed. Investors are strictly permitted to execute the investment project only after completing the procedures for the issuance or amendment of the IRC.

Currently, specific guidelines have not yet been issued regarding cases where an enterprise fails to register for an IRC after the 12-month deadline. However, investors may face administrative fines ranging from VND 100,000,000 to VND 200,000,000 for executing a project prior to being granted an IRC.[2]

III. Careful Calibration of Charter Capital Prior to Applying for the ERC

Clause 5, Article 72 of Decree No. 96/2026/ND-CP allows the charter capital of an economic organization established by a foreign investor to execute an investment project to be separate from – and not necessarily equal to – the total investment capital of the project. The economic organization shall contribute its charter capital and mobilize other capital sources to execute the investment project in accordance with the schedule specified in the IRC.

However, this flexibility does not imply that investors can register charter capital at an unreasonably low level compared to the actual scale of the project.

When reviewing the IRC application, competent authorities will still evaluate the investor’s financial capacity, the capital structure for project execution, the capital contribution schedule, and the overall feasibility of the investment plan[3]. Therefore, the charter capital should be determined reasonably, based on the scale, nature, and initial operational needs of the project, backed by a clear and justifiable plan for loans or additional mobilized capital.

[1] Official Letter No. 5427/BTC-DNTN dated April 29, 2026, issued by the Ministry of Finance

[2] Clause 3, Article 19 Decree No. 122/2021/ND-CP

[3] Certain industrial parks, high-tech zones, economic zones, and export processing zones may impose minimum capital requirements as a condition for project execution approval