Learning Outcomes
By the end of this section, you'll understand:
- The scale and growth rate of Vietnam's fashion e-commerce market
- Key 2025 regulatory reforms that impact business structure decisions
- Why choosing the right structure is more consequential than ever
- Real examples of successful Vietnamese fashion brands
Understanding Vietnam's Business Landscape in 2025
Vietnam's business environment is experiencing rapid transformation, making 2025 a pivotal year for entrepreneurs. Understanding this landscape is essential before choosing your business structure.
Why This Matters
The business structure you choose today will determine your ability to access this growing market, comply with new regulations, and scale your fashion business. What worked in 2020 may not work in 2025.
Market Size and Growth
The Fashion E-Commerce Opportunity
Vietnam's fashion e-commerce market has reached $32 billion in 2025, growing at an impressive 27% year-over-year. This explosive growth is driven by:
- Demographic advantages: Young, tech-savvy population with rising disposable incomes
- Platform proliferation: TikTok Shop, Shopee, Lazada making online shopping mainstream
- Social commerce boom: Direct-to-consumer brands leveraging social media for discovery and sales
- Improving logistics: Same-day delivery now available in major cities
Vietnam Fashion E-Commerce Growth Trajectory
Recent Regulatory Changes: The 2025 Legal Reforms
2025 marks a watershed year for business regulation in Vietnam. Three major legal reforms fundamentally change the compliance landscape:
Law 76/2025: Amended Law on Enterprises
Key Changes:
- Beneficial ownership disclosure: All companies must declare individuals who ultimately control 10%+ of voting rights or capital
- Enhanced transparency: Stricter requirements for corporate governance and reporting
- Digital integration: Mandatory electronic filing systems
Corporate Income Tax Law 67/2025/QH15
New Tiered Tax System:
- 15% CIT for annual revenue under VND 50 billion (~$2 million)
- 17% CIT for revenue VND 50-100 billion ($2-4 million)
- 20% CIT for revenue above VND 100 billion ($4 million+)
- Critical for startups: New SMEs get 3-year CIT exemption (formal enterprises only)
Value Added Tax Law 48/2024/QH15
Payment Requirements:
- 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
Platform Accountability:
- 1.5% automatic withholding from unregistered sellers on platforms
- Platforms jointly liable for seller tax compliance
- Enhanced seller verification requirements
- Stricter consumer protection enforcement
Critical Insight: The Household Business Tax Advantage Disappears
Prior to 2026, household businesses enjoyed simplified tax treatment with presumptive taxation rates. This advantage is being eliminated. Starting January 1, 2026, household businesses must maintain full accounting records and file tax returns just like formal enterprises—without the benefits of corporate structure.
Success Stories: Vietnamese Fashion Brands That Got Structure Right
YODY: From Single Store to National Champion
Structure: Established as formal limited liability company from inception
Key Success Factors:
- Corporate structure enabled multi-location licensing from the start
- Attracted institutional investors with clean governance
- Scaled manufacturing partnerships through corporate credibility
- Built professional accounting and compliance systems early
Takeaway: YODY's founders chose formal corporate structure despite higher initial costs. This decision enabled the rapid expansion that would have been impossible as a household business.
Blue Exchange: Affordable Fashion at Scale
Structure: Joint Stock Company (JSC) enabling investor participation
Key Success Factors:
- JSC structure facilitated multiple investment rounds for aggressive expansion
- Share structure allowed strategic investor participation
- Professional governance attracted retail property owners
- Scale enabled negotiation power with suppliers and landlords
Takeaway: Blue Exchange's choice of JSC structure (more complex than LLC) was strategic for capital-raising ambitions. The company successfully raised funds to open 300+ locations across Vietnam.
Common Success Pattern
Notice what both YODY and Blue Exchange have in common:
- ✅ Started with formal corporate structures (LLC or JSC)
- ✅ Prioritized scalability from day one
- ✅ Built professional systems early (accounting, compliance, governance)
- ✅ Attracted institutional capital through clean structure
- ❌ Neither started as household businesses despite lower initial costs
Why Structure Matters More in 2025 Than Ever Before
The combination of market opportunity and regulatory tightening creates a unique moment where business structure choice has outsized consequences:
Pre-2025 Environment
- Household businesses enjoyed simplified taxation
- Platform enforcement was lax
- Compliance requirements were lighter
- Converting structures was straightforward
Starting informally made economic sense for many entrepreneurs
2025+ Environment
- Household business tax advantage eliminated (2026)
- Platforms enforcing seller verification (Decree 117/2025)
- Enhanced transparency and reporting required
- 3-year CIT exemption only for new SME enterprises
Starting with proper structure increasingly advantageous
The Credibility Factor
Beyond regulatory compliance, formal corporate structure provides credibility that opens doors:
Supplier Relationships
Manufacturers prefer working with registered companies for:
- Payment reliability
- Contract enforceability
- Credit terms eligibility
- Long-term partnership potential
Investor Confidence
Venture capital and angel investors require:
- Clean corporate governance
- Audited financial statements
- Equity issuance capability
- Limited liability protection
Retail Property Access
Premium mall and retail locations require:
- Business license documentation
- Financial stability proof
- Insurance capability
- Corporate leasing capacity
Talent Acquisition
Skilled employees seek:
- Formal employment contracts
- Social insurance contributions
- Career growth in established company
- Equity participation options
Key Takeaway
Vietnam's business landscape in 2025 is characterized by tremendous opportunity ($32B fashion e-commerce market growing at 27% annually) combined with increasing regulatory sophistication (2025-2026 legal reforms). Success stories like YODY and Blue Exchange demonstrate that formal corporate structure from inception—despite higher upfront costs—enables the scalability, credibility, and capital access needed to capture market opportunity.
Your choice of business structure isn't just a legal formality—it's a strategic decision that determines your ceiling for growth.