Guide to Set Up a Korea Company in Vietnam 2025

Vietnam’s market has long been a hot spot for foreign investment, and 2025 promises even more opportunities, especially for businesses from South Korea. With strong historical ties, South Korea companies have played a significant role in Vietnam’s development, particularly in sectors such as electronics, manufacturing, automotive, and consumer goods. The mutual trade benefits, favorable investment climate, and rapidly growing market make Vietnam an ideal destination for South Korean businesses looking to expand their footprint in Southeast Asia.

This guide will provide you with a step-by-step overview of how to set up a South Korea company in Vietnam in 2025, highlighting the legal framework, business environment, and key factors to consider when entering the Vietnamese market.

Why South Korean Companies Should Consider Vietnam in 2025

1. Vietnam’s Growing Economy

Vietnam’s economy has been expanding rapidly, with GDP growth rates among the highest in the region. The country’s manufacturing sector, in particular, is thriving, which makes it an excellent location for South Korea companies looking to leverage low production costs while benefiting from an increasingly skilled workforce.

2. Strong Bilateral Relations

Vietnam and South Korea share strong diplomatic and economic ties. South Korea is one of Vietnam’s largest foreign investors, and the two countries benefit from various trade agreements that facilitate business operations. In addition, the presence of a significant Korea expat community in Vietnam further strengthens business connections.

3. Access to ASEAN and Global Markets

Vietnam’s position within ASEAN and its free trade agreements with multiple countries and regional blocs give businesses an advantage in accessing other markets in Southeast Asia and beyond. Korea companies that establish a presence in Vietnam can use it as a springboard for expansion into the entire ASEAN region.

4. Tax Incentives for Foreign Investors when Set Up a Korea Company in Vietnam

The Vietnamese government offers various incentives for foreign investors, including tax holidays, preferential tax rates, and exemptions on land rent for companies in high-tech, manufacturing, and green industries. These incentives significantly reduce the operational costs for South Korea companies looking to invest in the country.

Step-by-Step Guide to Setting Up a Korea Company in Vietnam

1. Choose Your Business Structure when Set Up a Korea Company in Vietnam

The first step in setting up your Korea company in Vietnam is selecting the appropriate business structure. This decision will affect everything from your level of control to tax obligations and regulatory requirements. The most common business structures for foreign investors in Vietnam include:

• Wholly Foreign-Owned Enterprise (WFOE): This structure gives full ownership and control to the South Korea parent company. WFOEs are commonly chosen by businesses that want to retain complete autonomy in their operations.

• Joint Venture (JV): A joint venture with a local Vietnamese partner is another option. It’s beneficial for businesses that want to tap into local knowledge, networks, and resources.

• Branch Office: A branch office allows the Korean company to operate in Vietnam without establishing a separate legal entity. However, branch offices cannot generate revenue or engage in commercial transactions.

• Representative Office: Ideal for market research and promoting business activities, but without the ability to generate income or enter into contracts.

2. Register the Company with the Authorities

To legally operate in Vietnam, your Korea company must be registered with the Department of Planning and Investment (DPI).

The steps involved in business registration are as follows:

• Name Approval: Ensure the company name is unique and complies with Vietnamese regulations. The name should be in Vietnamese or contain Vietnamese transliterations.

• Prepare Documents: You will need to provide the following documents: the company charter, identification of directors and investors, proof of the company’s status in Korea, and a business plan.

• Submit Registration: Once all documents are ready, submit them to the DPI for approval. The process typically takes 10–15 business days.

• Obtain a Business License: Once your application is approved, you will receive the Business Registration Certificate, officially allowing you to conduct business in Vietnam.

3. Open a Corporate Bank Account when Set Up a Korea Company in Vietnam

After registration, the next step is to open a corporate bank account. This is necessary for handling business transactions such as paying taxes, salaries, and supplier fees. Major Vietnamese banks such as Vietcombank, BIDV, and HSBC Vietnam offer corporate banking services to foreign companies.

Documents Required: You will need to provide your business registration certificate, tax code registration, and personal identification of the company’s directors.

4. Tax and Accounting Compliance

Vietnam has a relatively complex tax system, and it is essential to comply with local tax laws to avoid penalties. Key taxes that foreign companies need to pay attention to include:

• Corporate Income Tax (CIT): The standard CIT rate is 20%, although tax incentives may be available for companies in certain sectors such as manufacturing or technology.

• Value-Added Tax (VAT): The VAT rate in Vietnam is typically 10%, but certain goods and services may qualify for a reduced rate.

• Personal Income Tax (PIT): Foreign employees must comply with Vietnam’s personal income tax laws.

• Other Taxes: You may also need to pay import-export duties, environmental taxes, or taxes on property or land use, depending on your business activities.

Vietnam also has a well-defined accounting framework, and all companies must maintain accurate financial records and submit annual tax returns.

5. Labor Laws and Hiring Employees

Vietnam’s labor market offers a skilled and cost-effective workforce, making it an attractive location for companies to set up manufacturing operations or expand sales teams. However, it’s essential to comply with Vietnamese labor laws, which include:

• Employment Contracts: All employees must have a written labor contract outlining terms and conditions of employment.

• Social Insurance Contributions: Employers must contribute to social insurance for employees, which includes health insurance, pension contributions, and unemployment insurance.

• Work Permits for Foreign Employees: Foreign nationals working in Vietnam must obtain work permits from the Ministry of Labor, Invalids, and Social Affairs (MOLISA).

6. Industry-Specific Licensing and Approvals

Depending on the nature of your business, you may need to obtain additional licenses or permits. For example:

• Manufacturing and Export: Companies in the manufacturing or export sectors may need environmental licenses, health and safety approvals, or product-specific certifications.

• Technology and Telecommunications: The government regulates the tech industry heavily. If you plan to operate in sectors like e-commerce, telecommunications, or software development, you may need special permits.

7. Marketing, Expansion, and Scaling

Once your company is established, you can start operations and look for growth opportunities in the Vietnamese market. To scale effectively, it’s essential to focus on:

• Market Research: Understand Vietnamese consumer behavior, preferences, and demand trends. This will help you tailor your products and marketing strategies to local tastes.

• Networking and Partnerships: Building strong local partnerships can give your business an edge. Participate in local trade fairs, conferences, and business forums to connect with key stakeholders.

• Digital Marketing: Given Vietnam’s growing internet penetration, digital marketing is an essential tool for reaching consumers.

Key Considerations When Setting Up a Korea Company in Vietnam

• Understanding Local Culture: Vietnamese business culture can differ significantly from South Korea’s. Respecting local traditions and understanding cultural nuances are key to successful business relationships.

• Legal Compliance: Vietnam’s legal system can be complex and evolving. It is crucial to stay updated on any regulatory changes that may affect your operations.

• Cost of Doing Business: While Vietnam is known for its relatively low operating costs, businesses should be prepared for initial investment in infrastructure, human resources, and legal compliance.

Why Choose La Défense Law Firm for Your Investment in Vietnam?

Navigating the legal and regulatory landscape of Vietnam can be challenging, especially for foreign businesses. La Défense Law Firm is a trusted legal advisor with in-depth knowledge of Vietnam’s investment laws and practices. They provide expert support to South Korean companies entering the Vietnamese market.

Key Benefits of Choosing La Défense Law Firm:

• Specialized Expertise: With a focus on foreign investments, La Défense offers expert advice on business registration, tax compliance, labor law, and dispute resolution.

• End-to-End Services: La Défense supports South Korea companies throughout the entire process, from company registration to post-establishment legal matters.

• Local Insight: La Défense’s deep understanding of Vietnamese market dynamics and regulations ensures that your business is set up for success and stays compliant.

• Transparent and Reliable: Clients trust La Défense for its integrity, professionalism, and commitment to providing effective legal solutions for international businesses.

If you’re a South Korea company looking to expand into Vietnam in 2025, La Défense Law Firm is the ideal partner to guide you through every stage of the process, ensuring that your investment is both compliant and profitable.

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