Starting March 1, 2026, Vietnam now allows foreign investors to register a company (ERC) before obtaining an Investment Registration Certificate (IRC). This reverses the previous sequence. However, market access conditions and project registration requirements still apply. The change simplifies the process but does not eliminate investment compliance obligations.
The Old Playbook No Longer Works
Imagine you’ve found the perfect opportunity in Vietnam. You want to set up a wholly foreign owned company, hire local talent, and start operations. But under the old rules, you couldn’t even create your legal entity until the government approved your investment project first.
That often meant months of waiting with no company name, no bank account, and no ability to sign a lease.
As of March 1, 2026, Vietnam flipped the script.
Under the 2025 Investment Law, foreign investors can now establish their company before completing the Investment Registration Certificate (IRC) procedure. The legal shorthand for this shift? ERC first.
This is the most significant procedural change to Vietnam company formation in years. But it’s also one of the most misunderstood.
What Actually Changed on March 1, 2026?
Before this reform, Vietnam required a rigid sequence for foreign investors: define the investment project, obtain the IRC, and only then register the enterprise.
The new framework reverses that order. A foreign investor may now set up the economic organization, meaning the actual company, and handle investment registration afterward.
Think of it this way:
• Old model: Investment project → IRC → Company registration
• New model: Company registration (ERC) → IRC procedure (where required)
This is a structural shift in legal sequencing, not the removal of investment licensing. Foreign invested projects still require IRC procedures. The government simply moved the company formation step earlier in the timeline.
Why Vietnam Made This Change
The previous system created friction that didn’t match how businesses actually operate.
In practice, investors need a legal entity to negotiate leases, appoint directors, open bank accounts, and structure governance. Forcing them to finalize an investment project before the company even existed was backward.
The 2025 Investment Law aligns the process with commercial reality. It reduces bottlenecks at the front end while preserving Vietnam’s screening tools, including market access restrictions, sector specific conditions, and project level registration.
This reform is best understood as resequencing, not deregulation.
What ERC First Means in Practice
Establishing the company earlier in the process opens up several practical advantages.
Investors can now choose the corporate form, lock in the ownership structure, appoint the legal representative, and prepare governance documents, all before entering the investment registration stage.
This is especially useful for complex entries involving joint ventures, multilayered holding structures, or deals where commercial negotiations require a registered entity to move forward.
However, having an ERC does not automatically mean the company can begin full operations. Depending on the sector and business activities, the entity may still need the IRC, sectoral permits, or other regulatory approvals before launching.
ERC first is more flexible. It is not a shortcut.
A Ten Step Roadmap for Foreign Investors
Step 1: Define the Business Model First
Clarify what the company will do, how it generates revenue, whether it holds assets, and whether you need a wholly foreign owned entity or a joint venture. Every subsequent filing depends on this.
Step 2: Verify Market Access Conditions
Even under ERC first, foreign investors must satisfy market access conditions when forming the company. Check whether your target sector is fully open, conditionally accessible, or restricted for foreign ownership.
Step 3: Choose the Right Legal Vehicle
Most foreign investors choose between a limited liability company (LLC) and a joint stock company (JSC). The right choice depends on ownership plans, governance preferences, and capital raising strategy.
Step 4: Prepare the ERC Application
Draft the company name, registered address, charter, ownership details, legal representative information, and business lines. Weak preparation here creates costly amendment issues later.
Step 5: Obtain the ERC
Once issued, the legal entity officially exists. This is the formal establishment point, but not necessarily the green light to operate.
Step 6: Complete IRC Procedures
The 2025 Investment Law still requires IRC procedures for foreign invested projects. After the ERC stage, file for investment registration based on your sector, location, and project scope.
Step 7: Check for Investment Policy Approval
Certain project categories still require separate government policy approval. ERC first does not override these requirements.
Step 8: Handle Post Licensing Setup
After establishment, attend to tax registration, banking arrangements, accounting systems, labor registration, capital contributions, and contract readiness.
Step 9: Obtain Sector Specific Permits
Industries like e commerce, education, logistics, fintech, and food services often require additional licenses beyond the ERC and IRC.
Step 10: Launch Only When Everything Is Aligned
The safest approach is to begin substantive operations only after the company structure, project registration, capital plan, and all sector specific requirements are fully in place.
Three Mistakes That Trip Up Foreign Investors
Mistake 1: Assuming IRC no longer matters.
The ERC first model changed the order, not the requirement. Foreign invested projects still need IRC procedures.
Mistake 2: Registering overly broad or narrow business lines.
Mismatched business lines create amendment headaches and can delay operations.
Mistake 3: Treating company formation as a standalone task.
Vietnam company formation is a combined exercise in corporate law, investment regulation, tax planning, licensing, and operational structuring. Filing the ERC is just the first layer.
Frequently Asked Questions
What is the ERC first model for Vietnam company formation?
It means foreign investors can now register the company (obtain an Enterprise Registration Certificate) before completing the Investment Registration Certificate procedure. This reversal took effect on March 1, 2026, under the 2025 Investment Law.
How does Vietnam’s ERC first process differ from the old IRC first system?
Previously, investors had to define the investment project and obtain the IRC before the company could legally exist. Now, the company can be formed first, with IRC procedures following afterward where required.
Can a foreign investor start operations immediately after getting an ERC?
Not necessarily. Depending on the business sector and project type, the company may still need to complete IRC procedures, obtain sectoral permits, or satisfy other regulatory conditions before lawfully operating.
Why did Vietnam switch to ERC first for foreign investors?
The reform aligns the licensing process with how businesses actually operate. Investors typically need a legal entity to negotiate contracts, appoint management, and arrange governance before finalizing full project registration.
Do market access restrictions still apply under ERC first?
Yes. The 2025 Investment Law explicitly requires foreign investors to meet applicable market access conditions at the time of forming the economic organization. Restricted and conditional sectors remain regulated.
The Bottom Line
The ERC first era makes Vietnam company formation more logical, but not simpler by default. The old model forced the project to come first and the company second. The new model reverses that, while keeping investment controls intact.
The real question is no longer whether a foreign investor can set up a company in Vietnam. It’s how to structure the formation so the ERC, IRC, business lines, and operating plan fit together without costly corrections later.
Get the sequencing right from day one, and you avoid the most expensive mistake in market entry: having to restructure what you just built.
For foreign investors navigating this new landscape, working with experienced legal counsel such as ANT Lawyers can help ensure the ERC, IRC, and operational setup are properly aligned from the start.
Read the full guide here: Vietnam Company Formation in the ERC 1st Era
Have you navigated the new ERC first process as a foreign investor in Vietnam? What challenges did you face? Share your experience in the comments. Your insights could help others entering the market.
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