Company Formation & Tax in Vietnam
The manufacturing relocation story of the decade — 20% corporate tax, VAT temporarily cut to 8% through end-2026, and 100% foreign ownership across most sectors.
Vietnam has become the default "China plus one" destination for export manufacturing, and its tax settings reinforce the pull: a 20% standard corporate tax with newly introduced 15% and 17% rates for smaller enterprises, deep incentives for high-tech and priority projects, and a standard 10% VAT temporarily reduced to 8% for most goods and services until the end of 2026. Foreign investors can own 100% of companies in the great majority of sectors.
The headline numbers
| Tax | Rate |
|---|---|
| Corporate income tax (standard) | 20% |
| CIT — revenue up to VND 3 billion | 15% |
| CIT — revenue VND 3–50 billion | 17% |
| VAT (standard) | 10% |
| VAT — reduced rate to 31 Dec 2026 | 8% |
The reduced small-enterprise rates were introduced by the new Law on Corporate Income Tax with effect from the 2025 fiscal year, subject to conditions — related-party structures generally cannot fragment to qualify. Exports are zero-rated for VAT, and there is no separate capital gains tax; gains are taxed within CIT.
The 8% VAT window
Vietnam's 2% VAT reduction — cutting the 10% rate to 8% — has been extended through 31 December 2026, and now covers a wider scope including transport, logistics and IT goods and services. Telecoms, finance, banking, insurance, real estate and goods subject to special consumption tax remain excluded. Invoicing at the correct rate matters: mixed-rate suppliers must state each rate line by line.
Incentives worth knowing
- Preferential CIT rates — 10% for 15 years (with four years' exemption and nine years at half rate) for high-tech, large manufacturing and priority-sector projects.
- Location-based incentives — reduced rates and holidays in economic zones, high-tech parks and difficult socio-economic areas.
- Trade access — CPTPP, EVFTA, RCEP and a dense FTA network give Vietnamese-origin exports preferential tariffs into the EU, Japan and across Asia-Pacific.
Forming the company
The standard vehicle is the single- or multi-member LLC (a joint-stock company suits larger or pre-IPO structures). The sequence: IRC from the provincial investment authority (roughly 15 working days for unconditional sectors), then ERC (about a week), followed by tax registration, the company seal and a capital account through which charter capital must be injected — generally within 90 days. There is no statutory minimum capital for most sectors, but the registered amount must be credible for the project, and a resident legal representative is required.
Frequently asked questions
What is Vietnam's corporate tax rate in 2026?
20% standard, with reduced rates of 15% (revenue up to VND 3 billion) and 17% (VND 3–50 billion) for qualifying smaller enterprises, and deep preferential rates for incentivised projects.
What is the VAT rate in Vietnam?
The standard rate is 10%, temporarily reduced to 8% for most goods and services until 31 December 2026. Exports are zero-rated; finance, telecoms, real estate and special-consumption goods are excluded from the reduction.
Can a foreigner own a Vietnamese company fully?
Yes — 100% foreign ownership is permitted in most sectors under WTO and FTA commitments; a defined list of conditional sectors carries caps or joint-venture requirements.
How long does setup take?
Typically four to eight weeks end to end: IRC, then ERC, then tax, seal and bank account, with charter capital contributed within 90 days of the ERC.
Official sources
- General Department of Taxation — CIT and VAT
- National Business Registration Portal — enterprise registration
- Ministry of Planning and Investment
This guide is general information prepared by ARM Management and is current as at July 2026. It is not legal or tax advice; reduced-rate eligibility, VAT scope and sector conditions change. Confirm against the General Department of Taxation, or with an advisor, before acting.
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