A complete reference for foreign founders entering Vietnam in 2026, after Decree 96/2026/NĐ-CP.
On March 31, 2026, the Vietnamese government published Decree 96/2026/NĐ-CP, the implementing regulation for the new Investment Law 2025. Most foreign business guides and consultancy websites have not updated yet. Some are still describing rules from 2021. If you’re entering Vietnam, you need to know the rules from this year, not from five years ago.
This is the reference piece. I’ll explain what changed, why it changed, what’s actually useful for foreign founders, and where the new system has gaps that nobody is talking about. Bookmark it. Send it to your advisor before your next meeting.
The five things that changed
There are dozens of changes in Decree 96. Five of them matter for foreign founders.
One. The institution that issues your IRC is new. Department of Planning and Investment merged into Department of Finance at the provincial level. For projects outside special zones, your Investment Registration Certificate now comes from the Department of Finance. Inside industrial zones, export processing zones, and high-tech zones, the zone’s Management Board still handles it. File with the wrong office and your application is returned without processing.
Two. The sequence is now a choice, not a rule. Under the previous system, foreign investors had to obtain the IRC first, then incorporate the company under the ERC. Article 72 of Decree 96 introduces a new path: incorporate first, complete the IRC within 12 months. Both methods are legal. You choose. Practitioners with experience in Vietnam setup are already recommending the new path as the default for most foreign projects.
Three. Charter capital and project capital are decoupled. Before, these two figures were typically required to match. Now your registered shareholder capital can be different from the capital you actually commit to a specific project. In practice, the project capital can be lower than the charter capital. This gives you room to structure investment flow over time.
Four. One company can now run multiple projects. This is one of the most practically useful changes. Under the new framework, a single foreign-invested company can hold ten registered business lines, use five for a manufacturing project, and use the other five for a separate trading project. Two distinct IRCs, one company. This was cumbersome under the old system, which pushed each project toward its own corporate vehicle.
Five. A new fast-track procedure exists for projects in designated zones. Articles 46 to 50 introduce “special investment procedures” that bypass several of the usual permits, environmental impact assessment, fire safety, construction approval, for projects in industrial zones, export processing zones, high-tech zones, free trade zones, international financial centers, and functional zones within economic zones. These projects file a single dossier with a written commitment to meet the standards, instead of the previous multi-agency cycle.
These five changes are what actually affect your decision-making. Everything else is implementation detail.
Method 1 vs Method 2: how to choose
The most discussed change is Method 1, the ERC-first option. Most articles describe it as “more flexible” or “more modern.” Those words are accurate but useless for decision-making. Here is a more practical breakdown.
Method 2 (the traditional path). Apply for the IRC first. The issuing authority evaluates the project. If approved, incorporate the company. The company can then operate immediately. Timeline: typically 8 to 14 weeks for the IRC, then 5 to 7 days for the ERC.
Method 1 (the new path). Incorporate the company first. You then have 12 months to complete the IRC procedures. The company exists legally from day one. It has a tax code, can open bank accounts, can sign contracts, and can hire employees. It cannot formally deploy the investment project until the IRC is granted, but it can complete all the preparation work: signing leases, ordering equipment, negotiating with suppliers and customers, setting up operations.
The practitioners I trust on this question, people who have actually run hundreds of Vietnam setups , are recommending Method 1 as the default for most foreign investors in 2026. Their reasoning is worth understanding in full.
Why Method 1 is the practical default. Under the old system, a foreign investor would spend 10 to 14 weeks in limbo between the IRC approval and the ERC issuance. During that window, there was a project on paper but no legal entity. No contracts could be signed. No staff could be hired. No bank account existed. This was the real operational pain, and Method 1 eliminates it.
Why the rejection risk is less dramatic than it sounds. The concern that foreign founders encounter online is: “What if I incorporate under Method 1 and then the IRC gets rejected at month 10?” Here is the practitioner view: the evaluation of industry and location suitability happens at the ERC stage for foreign-invested companies, not just at the IRC stage. The examination of foreign capital against restricted sectors, against location conditions, and against market access requirements is applied upfront, essentially using the same criteria that the old IRC evaluation used. If your project fits the restricted industry list in a way that would reject your IRC, your ERC is likely to be flagged first.
This does not mean there is zero risk. An ERC with foreign capital can still be granted even when an IRC will later be denied if, for example, the specific project configuration differs meaningfully from what was flagged at ERC. But the risk is much more manageable than the “sunk cost at month 10” narrative suggests. In practice, if you can get the ERC, you are already past the major sorting stage.
When Method 2 still makes sense. There are genuine cases where IRC-first is the right call. If your project requires investment policy approval (chấp thuận chủ trương đầu tư), typically large projects with significant land use, sensitive sectors, or national-scale implications, you go through that review anyway, and the sequence matters less. If your industry classification is genuinely ambiguous and you want the issuing authority to settle the classification before you commit setup capital, IRC-first gives you that answer first.
The one caveat everyone working on 2026 deals needs to know. As of this writing, the implementing circular (thông tư) that will govern how Method 1 is actually processed has not been issued yet. Current official correspondence on investment procedures still references the old regulations as the operational default, pending the new circular. This does not mean Method 1 cannot be used, the decree is in force, but the operational playbook is still being written. Expect timelines and form requirements to shift when the circular appears, likely in the second half of 2026.
Method 1 also opens a cleaner path for M&A
There is a second use case for Method 1 that deserves its own section, because it solves a friction that many foreign investors don’t realize is even there.
To be precise about the legal mechanics: under Article 46 of the Investment Law 2020, a foreign investor who acquires an existing project does not need to already hold an IRC of their own. The IRC belongs to the project, not to the investor. After the acquisition, the project’s existing IRC is adjusted through the standard project transfer procedure, and the acquiring investor becomes the new holder of that same IRC.
The friction was never “you need an IRC to buy an IRC.” The friction was in getting the corporate vehicle that does the acquiring.
Under the old regime, a foreign investor who wanted to acquire a project needed a Vietnamese legal entity to serve as the acquirer. That entity, being foreign-invested, could only be created through the IRC-then-ERC sequence. Which meant the investor first had to design a project of their own, obtain an IRC for that project, and then obtain the ERC, all in order to produce the corporate vehicle they actually needed for the real transaction. The placeholder project served no purpose except existing. This was particularly awkward when the investor’s real intent was acquisition all along.
Method 1 removes the placeholder project requirement. A foreign investor can now incorporate the corporate vehicle directly through the ERC, without first needing to design a project of their own. The newly formed company can then acquire an existing project’s IRC through the standard Article 46 transfer procedure. One unnecessary step eliminated.
This matters most for three scenarios:
- Strategic buyers entering Vietnam by acquisition rather than greenfield
- Foreign funds looking to consolidate multiple small projects under one vehicle
- Operators who want to structure future acquisitions through a holding company based in Vietnam
If any of these describe your situation, Method 1 is not just convenient, it is the difference between “possible” and “impractical.”
What “company exists but cannot operate” actually means
This is the part of Method 1 that generates the most confusion, and deserves a careful read.
Under Method 1, your company has an ERC. By Vietnamese corporate law, that means the company is a legal person, has signing authority, has a tax code, can open bank accounts, can hire employees, and can sign contracts. By Decree 96 Article 72, the same company cannot formally operate its investment project until the IRC is issued.
These two statements are compatible, but the distinction takes some attention.
What you can do during the 12-month window:
- Sign contracts. Employment contracts, service contracts, supply agreements, lease agreements, all valid. The company has full contracting capacity.
- Hire employees. Employment contracts signed in this period are valid. Social insurance and labor compliance apply normally.
- Rent premises. Lease contracts are valid. Registration with the landlord’s locality applies normally.
- Procure equipment. Purchase orders and import documents are valid. Customs clearance for production equipment may require coordination since some import categories reference IRC documentation.
- Open a bank account. Standard corporate account is straightforward. The specialized “foreign direct investment capital account” (vốn đầu tư trực tiếp nước ngoài) that receives the investor’s capital contribution may require additional coordination, since under the old rules it was linked to the IRC. Test this with your target bank early in the process.
- Register for tax. Immediate registration is required upon ERC issuance. Standard tax compliance applies.
- Negotiate and plan. Talk to customers, suppliers, partners, investors. Build your pipeline. Do everything a pre-launch company does except ship the project.
What you cannot do during the 12-month window:
- Formally operate the investment project. The IRC defines the project’s scope of activities. Until that scope is approved, you cannot formally begin the activities it will define. Revenue-generating activity specifically tied to the project scope falls into this category.
- Add new business lines to the ERC in ways that would expand the project before the IRC is issued.
In practice, this matters less than it sounds for most projects, because the 12-month window is spent on preparation anyway. Equipment, space, team, systems, and pipelines all take time. A competent founder fills those 12 months with the preparation work that would have to happen regardless of which method they chose.
The exception is businesses that are essentially ready to generate revenue the day the company exists, some SaaS products, some trading operations, some consulting practices. For these, the gap between incorporation and operation matters. In those cases, Method 2 may still be the cleaner path, because the IRC-first sequence means the company operates from the moment it exists.
The Department of Finance transition: a 6 to 12 month warning
Before March 31, 2026, the Department of Planning and Investment handled foreign investment registration in every province. They had decades of institutional knowledge. After the merger into the Department of Finance, that knowledge is being transferred to a different institution with a different historical mission.
This matters for one practical reason: the people evaluating your application in 2026 are largely new to this work.
In the first 6 to 12 months after the transition, expect three patterns:
Longer timelines. Even applications that would have been straightforward under the old DPI may take an extra 4 to 8 weeks while the new staff calibrate.
More requests for supplementation. New evaluators tend to request more information than experienced ones, because they have less mental model of which details actually matter for the decision.
Wider provincial variance. Each provincial Department of Finance is staffing this function differently. A clean application in Hanoi may be evaluated differently in Ho Chi Minh City, or vice versa, for reasons that have nothing to do with the project itself.
Add to this the point from the Method 1 section: the circular that will formalize how the new procedures actually run has not been issued yet. Until it does, you’re working with the decree plus the old operational rules, stitched together by official correspondence. This is manageable, but it’s not settled.
The strategic implication: if your project allows flexibility in choice of province, late 2026 and early 2027 are not the year to test edge cases. File where you have the strongest local relationships and the cleanest application. Build buffer into your timeline.
By mid 2027, the new system should reach a stable equilibrium. Decisions made now are made under transition conditions.
The “special investment procedure” that changes the calculation for tech and manufacturing
If your project goes into an industrial zone, an export processing zone, a high-tech zone, a concentrated digital zone, a free trade zone, an international financial center, or a functional zone within an economic zone, Articles 46 to 50 of Decree 96 give you access to a fundamentally different procedure.
Under the special procedure, the project bypasses several normally required cross-agency permits:
- Environmental impact assessment (EIA)
- Fire prevention and safety approval
- Construction permit
Instead of obtaining each of these before starting, you submit a written commitment to meet the relevant standards. The zone’s Management Board grants the IRC within 15 working days. Compliance is verified after, not before.
This is a meaningful change. Under the old system, obtaining a fire safety approval alone could take 6 to 10 weeks for a manufacturing facility. Building a complete project package with all required permits routinely took 4 to 6 months before any IRC application could be filed. Under the special procedure, that same project can have an IRC in 15 working days and proceed to construction with the commitments instead of the approvals.
Two cautions before you assume this solves your problem.
One, the special procedure is available only for projects that don’t require investment policy approval (chấp thuận chủ trương đầu tư). Most large projects with significant land use, energy use, or sensitive sectors still require that approval, which is a separate and slower process.
Two, “compliance verified after” means inspections will happen later. The commitment is legally binding. If your facility doesn’t actually meet fire safety or environmental standards when inspected, the consequences include suspension of operations and significant penalties. The procedure is faster; the standards are unchanged.
For tech projects, R&D centers, and light manufacturing in eligible zones, the special procedure is a major opportunity. For projects with environmental complexity or unusual safety profiles, the speed gain may not be worth the deferred compliance risk.
What this decree does not solve
Decree 96 closes some doors and opens others. It also leaves three significant gaps that foreign founders will encounter in 2026 and 2027.
Gap one: exit procedures. The decree focuses heavily on entry, formation, IRC, capital structure. It says little about how foreign-invested companies should be wound down, sold to domestic parties, or restructured to remove foreign ownership. The procedures for exit are scattered across multiple regulations and remain administratively heavy. If you’re entering Vietnam, plan for the possibility that you’ll want to exit in 5 to 10 years, and budget accordingly.
Gap two: cross-border enforcement. The decree’s investment guarantee provisions are domestic. They don’t address what happens when a foreign investor needs to enforce a Vietnamese court judgment in another jurisdiction, or when a foreign judgment needs to be enforced in Vietnam. These remain governed by separate bilateral agreements and the New York Convention, with significant practical limitations.
Gap three: interaction with Personal Data Protection Law 2025. Foreign tech and SaaS companies need to comply with both Decree 96 (investment) and the Personal Data Protection Law (data handling). The IRC does not cover PDPL compliance. Cross-border data transfers require a separate Transfer Impact Assessment. Many founders entering Vietnam in 2026 are unaware that obtaining the IRC does not give them permission to operate their data layer.
These gaps are not flaws in Decree 96. They are simply outside its scope. But they are the issues that will produce the most expensive surprises for foreign founders who plan only against the regulation in front of them.
How to use this for your own decision
If you’re reading this because you’re planning to enter Vietnam in 2026 or 2027, here’s the practical sequence:
First, identify which side of the restriction list your industry is on. The restricted industries face additional conditions. Everything else has equal-treatment access in principle.
Second, determine whether your project location qualifies for a special zone. If yes, the special investment procedure changes your timeline calculation significantly.
Third, default to Method 1 unless you have a specific reason to use Method 2. The practitioner view in 2026 is that Method 1 is the better path for most projects: faster start on preparation work, ability to sign contracts and hire early, cleaner path for acquisitions, and the sorting of ineligible projects mostly happens at the ERC stage anyway.
Fourth, confirm with your target bank that they will open the specific accounts you need (both the standard corporate account and the foreign direct investment capital account) under Method 1 conditions. This single conversation can surface issues early.
Fifth, check whether the implementing circular for Decree 96 has been issued. If it has, your advisor should be using it. If it has not, your advisor should tell you how they are handling the transition period, what official correspondence they are relying on, what risks they are managing.
Sixth, plan for the Department of Finance transition period. Build buffer into your timeline. File where you have strong local relationships.
Seventh, treat the IRC as one piece of compliance, not the complete picture. Personal data, intellectual property, taxation of related-party transactions, and labor law all have their own regimes that the investment regulation does not cover.
If you’re working with an advisor on Vietnam entry in 2026, the conversation you owe yourself is not “tell me which method is faster.” The conversation is “tell me what my specific project looks like under each method, and what your recommendation is based on the practitioner experience, not the law firm marketing.”
If your advisor cannot separate the two, you don’t have an advisor. You have a service provider who hasn’t done the homework you need them to do.
A note on what comes next
Decree 96 is the implementing regulation for the new Investment Law 2025. The circular that operationalizes it has not been issued yet. Other regulations will follow over the next 12 to 24 months: detailed guidance on the special investment procedure for specific zones, transitional rules for the Department of Finance restructuring, and likely several circulars from the Ministry of Finance refining how IRC evaluation is done in practice.
I’ll cover those as they’re issued. If you want updates, this newsletter is where they’ll appear first.
Rita Ngo writes weekly about Vietnam’s legal and regulatory environment for foreign business decision-makers. If you found this useful, the easiest way to support the work is to share it with one foreign founder who’s planning their Vietnam entry in 2026.
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I advise foreigners living and working in Vietnam on legal matters. Most of my clients come to me after something has already gone wrong, so I focus on helping them understand the rules early, before problems start.
