Nikita Veremeev
25.02.2026 | 6 min read
Updated: 25.02.2026
In recent years Vietnam has become one of the most pragmatic entry points for technology businesses: registering a company in Vietnam provides access to a strong talent pool, a competitive cost base and a growing ecosystem of high-tech parks. The team COREDO has implemented dozens of projects to launch development centers, structure IP, obtain financial licenses and build AML compliance. In this article I have compiled practical guidance that will save you months, and sometimes years.
Why choose Vietnam for software development outsourcing and R&D?
Vietnam has long moved beyond the bounds of a low-skilled offshore. Software development outsourcing in Vietnam combines mature engineering competencies, team discipline, and a sustainable total cost of ownership (TCO). Clients get predictable code quality, and local managers demonstrate maturity in Agile processes and engineering culture.
My experience shows: opening a company in Vietnam for software development outsourcing fits the “build-operate-scale” logic. In the early stages you can use EOR services in Vietnam (Employer of Record), PEO services and payroll in Vietnam, then move to creating a legal entity in Vietnam and your own office. This trajectory lowers the barrier to entry and allows testing the market and team metrics without excessive commitments.
Presence models: branch, representative office, subsidiary, EOR/PEO
I start with a precise definition of the model. Branch vs subsidiary in Vietnam: a choice between the foreign company’s direct presence and a standalone legal entity.
- Registering a branch in Vietnam is suitable for companies already conducting regulated activities and planning to provide services directly. A branch simplifies control but increases the risks of a permanent establishment (PE) under international tax rules.
- Registering a representative office in Vietnam provides a platform for marketing and market research without the right to conduct commercial activities. It’s a convenient preliminary step if you are just exploring the country and building a pipeline.
- Foreign company in Vietnam: registering a subsidiary is the standard practice for IT. A subsidiary protects the head office, optimizes taxation, and simplifies local operations.
- EOR/PEO: the pros and cons of using an Employer of Record are obvious at early stages. You quickly hire developers, avoid creating a legal entity, and test demand. The downsides are limited control and provider fees. COREDO’s experience shows: transitioning from an EOR to your own legal entity after 6–12 months delivers the best economics.
Legal forms and investment certificates: IRC/ERC and IC
For IT and fintech, two forms are preferred:
- Công ty TNHH (a limited liability company in Vietnam, a Vietnamese LLC). Flexible capital structure, transparent corporate hierarchy, simple corporate reporting. Công ty TNHH (Vietnamese LLC) registration: the basic scenario for development centers.
- Công ty cổ phần (a joint-stock company in Vietnam). This is an option for scalable projects with subsequent involvement of external investors and option programs.
Foreign investors go through two stages: Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC). IRC — the investment certificate (IC) in Vietnam — records the investment project and the approvals for types of activities. ERC creates the company as a legal entity and appoints the directors. The solution developed by COREDO arranges the schedule of steps so that IT company registration in Vietnam proceeds without gaps between the IRC and ERC.
Requirements for foreign investors and charter capital
Vietnam applies the principle “sufficient capital”. There is usually no formal minimum threshold for development services, but the regulator assesses the realism of the business plan. Our experience at COREDO has shown: for a development center of 10–20 people a comfortable charter capital is from 50,000 to 150,000 USD. For fintech and payment services the thresholds are higher regarding IT infrastructure and finances.
Requirements for foreign investors in Vietnam include confirmation of source of funds, experience in the relevant field and an office lease agreement for the ERC. We prepare the package in advance: bank letters, audited financial statements, a description of the employment plan with developer grades and a competency matrix.
How to open a company in Vietnam: timelines, cost, banking compliance
Step-by-step plan includes:
- Preliminary Due Diligence and assessment of risks and compliance during registration in Vietnam. We check the permissibility of business activities, the need for additional licenses and KYC/AML requirements and reporting.
- Obtaining an IRC: 15–30 working days depending on the province and industry.
- Obtaining an ERC: 3–5 working days after the IRC.
- opening a bank account for a company in Vietnam: 2–4 weeks, including banking compliance, beneficiary verification and business model review. Opening a corporate account and banking compliance will be facilitated by a detailed business plan, an office lease agreement and a draft staffing schedule.
- Registration of a tax number and e-invoice system: 1–2 weeks with connection to an electronic reporting provider.
- Hiring and payroll/EOR/PEO: start in parallel with ERC.
The budget range for legal support of registration in Vietnam, translations, government fees and basic administrative setup for IT typically falls between 12 000–25 000 USD. The timeline for company registration in Vietnam under COREDO project management usually amounts to 6–10 weeks to full operational readiness, including accounts and e-invoice.
Taxes in Vietnam for IT companies and incentives
In tax planning I base my approach on three levels: general rates, sector incentives, and double taxation treaties (DTT).
- Corporate income tax (CIT) and incentives: the corporate tax in Vietnam has a default rate of 20%. For priority projects in high-tech and R&D preferential rates are available for IT and R&D, including a 10% rate for 15 years, tax holidays (often a model of 4 years exemption + 9 years at a reduced rate of 50%). The specific package depends on the location and project criteria.
- value-added tax (VAT) in Vietnam: standard 10%. Special regimes apply to software: certain types of software and export services may be taxed at 0% or exempted if the documentary and substantive export conditions are met.
- Registration in free economic zones and IT parks: registration in high-tech parks and the advantages include land on preferential terms, customs preferences, accelerated procedures and access to centralized infrastructure.
Special economic zones and customs incentives are suitable for R&D and equipment imports. A certificate of origin (C/O) for exports reduces tariffs under FTAs, including the EVFTA and CPTPP.
I am often asked about BOI investment incentives in Vietnam. The country uses a different model than the classic BOI: incentives are determined by the Ministry of Planning and Investment and provincial authorities, as well as tech park administrations. The COREDO team prepared packages in Saigon Hi-Tech Park, Hoa Lac Hi-Tech Park and Da Nang IT Park: this accelerates approvals and strengthens the tax model.
Transfer pricing, BEPS and DTT
При внутригрупповых потоках важно соблюсти трансферное ценообразование во Вьетнаме. Требуется локальная документация по TP, master file и country-by-country reporting при достижении порогов. BEPS recommendations and the impact of OECD guidance on Vietnam structures are felt through substance requirements, beneficial owner tests and controls against the risks of artificial fragmentation of functions.
Если вы структурируете холдинговые и операционные компании в ASEAN, рабочая связка: холдинг в Сингапуре и операционное юрлицо во Вьетнаме. Соглашения об избежании двойного налогообложения и международные инвестиционные договоры (BIT) Вьетнам добавляют защитный контур для дивидендов и инвестиций.
Foreign exchange control and profit repatriation
The foreign exchange control rules of the State Bank of Vietnam distinguish between settlement (current) and investment (capital) accounts. Replenishment of the charter capital is done through the capital account; operational activities: through the settlement account. Mechanisms for repatriation of dividends and currency conversion operate after the annual audit and payment of taxes, through licensed banks and at the market exchange rate. I recommend building into the project schedule in advance quarterly interim payments to management companies under a market SLA to avoid cash shortfalls.
Personnel: work permits, TRC and labor law
Work permits and residence permits in Vietnam are critical for foreign managers. The package: a visa, a work permit and a Temporary Residence Card for foreigners, which provide legal stay and multiple entries. For full-time employees social contributions, paid leave and compensation for Vietnamese employees apply under labor legislation, while for expats there are special rules on health insurance and pension programs.
For a quick launch I sometimes use company registration to hire developers in Vietnam in a lean-staff format: key roles, a director, a chief accountant (in-house or outsourced), HR and an office manager. The rest is covered by outsourced accounting, payroll and a legal retainer.
IP and contracts: code protection, NDA, SLA and escrow
intellectual property protection in Vietnam begins with trademark registration and judicial protection of IP in Vietnam. At the same time I include contracts for the transfer of software rights, assignment clauses with a clear definition of “works made for hire” and the territory of rights. Escrow agreements for source code and IP escrow add resilience in critical dependencies.
In production contracts I use SLA, KPI and penalties in IT contracts tied to quality metrics: code coverage, defect density, MTTR and release velocity. An outsourcing agreement for development in Vietnam should include an NDA, confidentiality and trade secret protection, subcontractor management and the development supply chain, as well as security testing procedures and mandatory code review.
Cybersecurity and personal data
Vietnam enforces a cybersecurity law and data localization requirements, as well as rules on personal data and alignment of requirements with the GDPR. For cross-border data flows, a data protection architecture and DPIA reports, encryption, and access control are important. The COREDO team develops privacy governance under Decree 13/2023, coordinates log retention and incident response plans in accordance with ISO 27001 and the NIST CSF.
Fintech and crypto: licensing and AML practice
Licensing of fintech and payment services in Vietnam is overseen by the State Bank. Payment intermediaries and e-wallet providers must demonstrate capital, IT security, risk management, and compliance with KYC/AML. Regulation of crypto assets and blockchain projects is evolving: token projects structure themselves as technology platforms, carry out legal analysis of asset functionality and accounting regimes, and particular attention is paid to the payment function of crypto assets in light of local restrictions.
anti-money laundering procedures for IT companies include a risk-based approach, transaction monitoring scenarios, a register of beneficial owners and information disclosure. Counterparty verification and corporate due diligence are important, especially in subcontracting contracts and SLAs for Vietnamese developers. Our AML solution at COREDO combines KYC questionnaires, sanctions screenings and triggers for risk review.
Financial reporting, publications and tax discipline
Requirements for financial reporting and publication of Vietnamese companies are based on VAS, and groups often convert to IFRS for managerial consolidation. E-invoice has become the standard, which simplifies expense control and VAT deductions. Tax planning and optimization in Vietnam are achieved through clean documentation, TP policy and managing PE risk in other jurisdictions.
The risk of creating a permanent establishment (PE) and tax consequences is relevant when working with clients in the EU and the UK. I recommend separating marketing, development and sales functions, and monitoring the authorities of foreign managers so that extra “signing authority” abroad does not create a PE in third countries.
Office, equipment import and customs
Opening a development office in Vietnam is best started in locations where technoparks and a pipeline of candidates already exist. Equipment import, customs duties and procedures are simplified when the project has status in a high-tech park. For incentives it is important to correctly assign HS codes and use special economic zones and customs exemptions. When exporting finished solutions or devices you can issue C/O and reduce tariffs under agreements.
Disputes, arbitration and M&A
Arbitration mechanisms: VIAC and international arbitration provide quality dispute resolution. In contracts I include arbitrability, the applicable law and the language of proceedings. Liquidation, bankruptcy and creditor protection procedures in Vietnam require calendar planning: payments to staff, settlements with the budget, closing licenses and bank accounts. The COREDO team has supported both liquidations and pre-pack asset sales.
In M&A due diligence: legal and tax risks are concentrated around IP rights, employment contracts, tax history, TP documentation and e-invoice. I always check compliance with requirements of KYC/AML, since banking risks often become a trigger for price adjustments in the deal.
Evaluation of ROI, TCO and offshoring unit economics
To evaluate ROI when outsourcing development to Vietnam, I use ROI metrics, payback period and offshoring unit economics. In the TCO of development in Vietnam I include salaries, taxes and social contributions, rent and utilities, legal & compliance, software licenses, training and certification. Assessing team performance and the TCO of development in Vietnam is linked to engineering KPIs: lead time, deployment frequency, change failure rate and defect escape rate.
Nearshore vs offshore – a comparative strategy for Europe and Asia depends on time zone, data security requirements and budget. For the EU, a hybrid is often chosen: product management in Central Europe, development outsourcing in Vietnam, QA and SecOps distributed. Such an architecture reduces risks and speeds up time-to-market.
Incubators, accelerators, grants and R&D structures
Registration in incubators, accelerators and technoparks enhances preferences and access to talent. Government grants and R&D tax credits are available for high-tech projects, and grants for high technologies and state support provide additional funding for pilots and laboratories. The R&D contractual structure and allocation of rights determine who owns the research results and how the parties use patents and know-how.
Personnel model: staff vs freelancers, nominees and insurance
Staff hiring vs freelancers: legal risks often lie in reclassifying freelancers as de facto employees, which affects taxes and social contributions. I prefer a hybrid: core: staff, periphery: trusted contractors with a clear IP chain. Nominee directors and the risks of nominee arrangements undermine control and compliance, and at COREDO I always insist on real management and a transparent structure.
Professional liability insurance and cyber risks cover potential incidents, including data leaks and business interruptions. Development quality certification and ISO standards (ISO 9001, ISO 27001) serve not just as a “checkbox”, but as an operational basis for mature processes.
FinOps and banking requirements
Opening a bank account is accompanied by KYC, verification of the source of funds, and analysis of the business model. Banks assess the due diligence of the provider of development services in Vietnam, check key contracts and the existence of internal policies on AML and sanctions. For foreign currency payments, it is useful to agree with the bank in advance on invoice formats and confirmation of service export in order to apply VAT and DTT benefits.
COREDO Case Studies: How We Launch and Scale
- Registration of an IT company in Vietnam for a European SaaS. The COREDO team registered IRC/ERC, chose Công ty TNHH, connected e-invoice, and built payroll. We structured transfer pricing, formalized DTT agreements and set up dividend repatriation mechanisms. Result: office payback in 14 months and a 28% reduction in TCO.
- Opening a development office using an EOR transition. We started with an EOR service in Vietnam for a pilot team of 12 engineers, then carried out company formation in Vietnam, migrated employees and integrated PEO services and payroll in Vietnam. SLA, KPI and penalty clauses in IT contracts, NDA and escrow for source code provided manageable delivery quality.
- Fintech and payment services. The solution developed at COREDO combined a licensing track with KYC/AML, monitoring and cybersecurity models, and aligned personal data handling with GDPR and local regulations. We built a cross-border data flow architecture, arranged a VIAC arbitration clause and ensured resilience to PE risks outside Vietnam.
Practical answers to frequently asked questions
- Cost of opening a company in Vietnam: legal and administrative setup: 12 000–25 000 USD depending on complexity and industry. Set aside 2–3 months’ salaries of key positions for initial liquidity.
- Timeline for company registration in Vietnam: 6–10 weeks to operational start, including accounts, e-invoice and office.
- Transfer pricing and documentation: prepare a local file and justify at the level of functions, assets and risks, synchronizing with the master file.
- BEPS and PE: differentiate product/engineering roles, take into account agency powers and physical presence abroad.
- Trademark and IP: register the brand and key IP assets, use escrow and assignment clauses.
- Process of liquidating a company in Vietnam: plan for audit, tax closure, settlements with employees, license revocation, then account closure. This takes 2–4 months in standard scenarios.
- Subcontracting contracts and SLAs: define metrics, penalties, rights to source code, non-solicitation clauses and the chain of IP transfer.
How COREDO reduces project risk
The benefit of my approach is its comprehensiveness. I combine legal engineering with operational practice, including:
- Assessment of TCO, LTV and project financial metrics so that unit economics work on a quarterly horizon.
- Due diligence of the development services provider in Vietnam and vetting of subcontractors, including sanctions risks and cyber profile.
- Data architecture for cybersecurity law compliance, localization, and GDPR mapping.
- bank onboarding with a KYC/AML package, UBO disclosure and profit repatriation models.
- Structuring holding and operating companies in ASEAN, optimizing for DTT and BIT.
- Setting up Agile and managing distributed development teams with mandatory code review and security testing so that code quality remains predictable.
Conclusion: How to move forward
Vietnam offers the technology business a rare combination: a mature talent market, reasonable taxes, flexible scaling mechanisms and proven investment protection institutions. When I build projects here, I rely on strict compliance, transparent processes and discipline in the numbers. This is how entrepreneurs get reliable and comprehensive solutions, save time and control risks.
COREDO’s practice confirms: success in Vietnam comes to those who think systemically. Define a presence model, choose a form (Công ty TNHH or Công ty cổ phần), secure IRC/ERC, set up taxes and TP, address AML and KYC, put in place IP and SLA, and build an HR framework with EOR/PEO where appropriate. At every stage there are nuances, and my team is used to bringing such projects to completion: with clear timelines, transparent economics and a sustainable growth architecture.