Introduction: The World Is Changing Fast, So Should Your Strategy
When the world becomes unpredictable, the winners are those who adapt first. For foreign businesses facing mounting U.S. tariffs, geopolitical tensions, and inflationary pressures, the question is urgent: Where do we go next? Still, one of the option is to set up a subsidiary in Vietnam.
Vietnam is no longer just “emerging.” It’s surging, with a government committed to economic transformation, a favorable geographic position, and a legal environment evolving rapidly to support foreign investment.
In here, amid new US tariffs annoucement that shock the world, we look into compelling reasons foreign investors still consider to set up a subsidiary in Vietnam now and how to do it right.
Vietnam Offers a Safe Harbor Amid Global Trade Storms
The global trading environment is increasingly volatile. U.S. tariffs on Vietnamese exports and many of US long term trading partners are sending shockwaves through established supply chains. But companies need to adapt quicly.
Vietnam, with its network of free trade agreements (EVFTA, RCEP, CPTPP), allows companies to hedge against protectionist pressures. When you set up a subsidiary in Vietnam, you gain preferential access to many markets while anchoring your operations in a stable, low-cost, business-friendly country.
Regulatory Reforms Are Opening Doors Faster Than Ever
Vietnam’s government has made it a national priority to streamline investment procedures. Laws have been updated, digital systems are expanding, and provinces are competing to attract foreign capital.
If you plan to set up a subsidiary in Vietnam, here’s what’s new and improved:
- Faster licensing with clearer guidance on Investment Registration Certificates (IRC) and Enterprise Registration Certificates (ERC)
- Simplified digital submissions and fewer paper-based approvals in major cities
- Clearer definitions of conditional business lines and legal rights of foreign-invested enterprises
- Enhanced dispute resolution channels, including more support for arbitration and mediation
Legal Structure Gives You Full Ownership and Control
Unlike many jurisdictions, Vietnam allows 100% foreign ownership in most sectors. Your company does not need to hire local director or local corporate secreterials. When you set up a subsidiary in Vietnam, you retain control while operating under local law with the full rights of a domestic enterprise.
The preferred vehicle is a Limited Liability Company (LLC), which gives you:
- A separate legal identity from your parent company
- Limited liability protection
- The right to lease property, hire staff, import/export, and sign contracts
- Repatriation of profits under clearly defined regulations
This legal clarity is a big reason why major global players have chosen to set up subsidiaries in Vietnam instead of relying on third-party distributors or setting up representative offices in Vietnam.
The Compliance Landscape Is Tough, but Manageable with the Right Support
Vietnam’s legal system is evolving quickly. That’s good for investors, but also means companies must stay sharp.
After you set up a subsidiary in Vietnam, ongoing compliance will require attention to:
- Corporate income tax (CIT) at 20%
- Value-added tax (VAT), typically 10%, with industry-specific exemptions
- Transfer pricing rules aligned with OECD standards
- Labor laws that favor employees and require labour contracts, insurance, and work permits for expats in Vietnam
- Customs and import/export documentation that must be precise and timely
Good news is, if you use your consulting partner then your company can not only stay compliant, but leverage incentives you might otherwise miss.
Political Will Is Driving Pro-Business Reforms
Vietnam is one of the few emerging economies where economic growth is a political mandate.
Over the last five years, Vietnam’s leadership has made foreign direct investment (FDI) a strategic pillar. It’s not just policy, it’s priority.
If you follow the polical news in Vietnam, there has been quicker changes in positive direcions more than ever.
When foreign companies set up a subsidiary in Vietnam, they benefit from:
- Central-local coordination to facilitate big projects
- Industrial parks with tailored incentives
- Infrastructure investment backed by government bonds and public-private partnerships
- Trade promotion efforts that connect investors with local partners
The system isn’t perfect, but it’s functional, improving, and committed to growth. That’s more than can be said for many investment destinations in today’s fractured world.
Vietnam Offers Strategic Legal Flexibility in Structuring Operations
One of Vietnam’s quiet strengths is the flexibility it gives foreign companies to shape their operations, within the legal framework.
When you set up a subsidiary in Vietnam, you can:
- Choose between 100% foreign-owned, joint venture, or multi-tiered holdings
- Structure investment capital and charter capital in a phased or conditional approach, aligned with your expansion plans
Few countries in the region allow this level of tailored legal structuring. Vietnam does, especially for companies that know how to negotiate their setup terms early.
The Timing Has Never Been Better
Every investor knows timing is everything. Now, the window is wide open to set up a subsidiary in Vietnam. But:
- Tariff rules may change, and early movers will adapt faster
- Industrial zone availability is shrinking as more investors pour in
- Incentives are tightening as Vietnam matures and no longer needs to offer steep discounts
- Legal complexity increases over time, especially with new sector-specific rules
Make Vietnam Part of Your Global Risk Strategy
To set up a subsidiary in Vietnam today is to do more than enter a new market. It’s a powerful, timely, and emotionally intelligent move toward resilience, control, and long-term opportunity.
Vietnam isn’t perfect, but it’s open, it’s moving, and it’s making room for global business.
The companies that thrive in the next decade will be the ones that recognized the shift and took bold steps early.
Vietnam is shifting from “interesting” to “essential.” Make your move while the momentum is still on your side.