Appendices
Reference materials, definitions, and comprehensive comparison tables.
Appendix A: Glossary of Terms
Công ty TNHH (Limited Liability Company / LLC)
A corporate structure where owners' liability is limited to their capital contribution. Most popular structure for SMEs in Vietnam.
Công ty Cổ phần (Joint Stock Company / JSC)
A corporate structure with share-based ownership, designed for companies planning to raise significant capital or go public.
Doanh nghiệp tư nhân (Sole Proprietorship)
Simplest enterprise form with single owner who has unlimited personal liability.
Hộ kinh doanh (Household Business)
NOT an enterprise. Individual Vietnamese citizens operating small-scale businesses. Capped at 10 employees and single location.
IRC (Investment Registration Certificate)
Required certificate for foreign-invested enterprises in Vietnam. First step in company formation for foreign investors.
ERC (Enterprise Registration Certificate)
Business license that confirms legal establishment of an enterprise. Required for all formal business entities.
VAS (Vietnamese Accounting Standards)
Accounting standards that all enterprises must follow for financial reporting and tax purposes.
CIT (Corporate Income Tax)
Tax on business profits. New 2026 tiered rates: 15%/17%/20% based on revenue. New SMEs get 3-year exemption.
VAT (Value Added Tax)
Tax on sale of goods and services. Standard rate is 10% for most goods including fashion.
PIT (Personal Income Tax)
Tax on personal income including salaries (progressive 5-35%), dividends (5%), and business profits.
ENT (Economic Needs Test)
Assessment required for opening second and subsequent retail locations. Evaluates impact on local economy.
CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership)
Trade agreement including Vietnam. Provides benefits like ENT exemption for qualifying investors.
EVFTA (EU-Vietnam Free Trade Agreement)
Trade agreement between EU and Vietnam. Provides tariff reductions and market access benefits.
Charter Capital
Minimum capital contribution required to establish company. $10,000 minimum for foreign-owned LLCs in Vietnam.
Beneficial Ownership
Individuals who ultimately control 10%+ of voting rights or capital. Must be disclosed under Law 76/2025.
Appendix B: Comprehensive Comparison Tables
All Structures Compared Across Key Dimensions
| Dimension | Household Business | Sole Proprietorship | LLC | JSC |
|---|---|---|---|---|
| Governed by | Separate regulations (NOT Enterprise Law) | Enterprise Law 2020 | ||
| Foreign ownership | ❌ Prohibited | ❌ Vietnamese only | ✅ 100% allowed | ✅ Yes |
| Liability | Unlimited | Unlimited | Limited to capital | Limited to capital |
| Minimum capital | None | None | $10k (foreign) | Varies |
| Employee limit | 10 maximum | Unlimited | Unlimited | Unlimited |
| Locations | Single only | Unlimited | Unlimited | Unlimited |
| Setup cost | ~$50 | ~$20-520 | $5k-8k (foreign) | $5k-30k |
| Setup time | 3 days | 3-5 days | 1-2 months | 2-3 months |
| Monthly compliance cost | $0-100 (pre-2026) $200-400 (post-2026) |
$200-400 | $500-800 | $800-1,500 |
| 3-year CIT exemption | ❌ No | ✅ Yes | ✅ Yes | ✅ Yes |
| Can raise investment | ❌ No equity | ❌ No equity | ✅ Up to 50 members | ✅ Unlimited |
| Annual audit required | No | Optional | Yes (foreign-owned) | Yes |
| Best for | Losing advantages 2026 | Solo freelancers | SMEs, fashion startups | Companies planning IPO |
Appendix C: Legal Reference Documents
Enterprise Law 2020 (Law No. 59/2020/QH14)
Effective: January 1, 2021
Scope: Foundational law governing all enterprise types including sole proprietorships, partnerships, LLCs, and JSCs
Key Provisions:
- Defines structure and governance requirements for each enterprise type
- Registration processes and capital requirements
- Rights and obligations of owners, shareholders, and management
Law 76/2025/QH15: Amended Law on Enterprises
Effective: July 1, 2025
Key Changes:
- Beneficial ownership disclosure requirements (10%+ control must be declared)
- Enhanced corporate governance and transparency standards
- Digital integration with mandatory electronic filing
- JSC-specific provisions: debt-to-equity caps, stricter related-party transaction rules
Corporate Income Tax Law 67/2025/QH15
Effective: January 1, 2026
Tiered Tax Rates:
- 15% for annual revenue under VND 50 billion (~$2 million)
- 17% for revenue VND 50-100 billion ($2-4 million)
- 20% for revenue above VND 100 billion ($4 million+)
Critical Incentive: New SME enterprises established in 2025-2026 receive 3-year complete CIT exemption plus registration fee waivers
Value Added Tax Law 48/2024/QH15
Effective: January 1, 2026
Key Provisions:
- Mandatory non-cash payments for VAT-deductible transactions above VND 20 million ($800)
- Enhanced e-invoicing requirements
- Stricter record-keeping for VAT claims
Decree 117/2025: E-Commerce Platform Regulations
Effective: October 1, 2025
Impact on Sellers:
- 1.5% automatic withholding from unregistered sellers
- Platforms jointly liable for seller tax compliance
- Enhanced seller verification requirements
- Consumer protection enforcement strengthened
Decree 43/2017/ND-CP: Product Labeling Requirements
Scope: Labeling requirements for goods sold in Vietnam
Fashion Products Must Display:
- Product name in Vietnamese
- Origin/manufacturer information
- Material composition
- Care instructions
- Size information
- Must be in Vietnamese language
QCVN 01:2017/BCT: Formaldehyde Safety Standards
Scope: Chemical safety standards for textiles and clothing
Limits:
- Products for children under 3: Maximum 20 mg/kg
- Products in direct skin contact: Maximum 75 mg/kg
- Other products: Maximum 300 mg/kg
Decree 13/2023: Personal Data Protection
Effective: July 1, 2023
Key Requirements:
- Explicit consent required for customer data collection
- Purpose limitation: Data used only for stated purposes
- Security measures for data storage and processing
- Customer rights to access, correct, and delete data
Important Note
This guide provides educational information based on regulations current as of October 2025. Laws and regulations are subject to change. Always consult with qualified legal and tax professionals before making business structure decisions or relying on this information for compliance purposes.