For Korean startups considering Ho Chi Minh City as a development hub, it is important to design the overall structure from the outset — including business line classification, capitalization, investment structure, and Korea's overseas direct investment (ODI) reporting requirements.
Why Ho Chi Minh City?
Ho Chi Minh City is Vietnam's largest commercial center and one of the country's most active IT and startup ecosystems.
Compared with Seoul and Pangyo, the city offers lower labor and office costs as well as a large pool of young professionals with strong English-language and IT capabilities. For these reasons, Ho Chi Minh City continues to attract Korean startups looking to establish development centers in Southeast Asia.
At the same time, Vietnam's administrative systems have become increasingly digitalized, while regulations applicable to foreign-invested companies have become more sophisticated. Companies relying on outdated information may therefore encounter delays, licensing issues, or unexpected regulatory requirements.
For businesses considering a "Korean headquarters + Ho Chi Minh City development center" structure, company incorporation should not be treated as a standalone procedure. Business lines, investment structure, and intercompany arrangements should be reviewed together from the initial planning stage.
1. Choosing the Entity Type: LLCs Are Commonly Used
For IT and service businesses in Ho Chi Minh City, foreign investors commonly establish a Limited Liability Company (LLC).
An LLC can be established with a single shareholder or a small number of shareholders, and liability is generally limited to the amount of contributed capital. This makes the structure particularly suitable for startups and early-stage businesses.
For certain non-conditional business sectors, including software development and IT consulting, 100% foreign ownership may be permitted, allowing the company to be established without a Vietnamese nominee shareholder.
However, additional regulatory review may be required where the proposed business model includes any of the following:
· E-commerce functions
· Payments within a platform
· Online intermediary services
· Data or telecommunications-related services
· Direct distribution activities
These activities may trigger additional licensing requirements or foreign investment conditions. Accordingly, the business model itself should be reviewed before finalizing the registered business lines.
2. Capitalization Is More Than Just a Number
Vietnam generally does not impose a statutory minimum capital requirement on ordinary IT or service businesses.
In practice, however, the amount of registered capital may affect not only the incorporation process but also the company's ability to operate and maintain an appropriate immigration and employment structure.
The following factors should therefore be considered.
IRC Review
The proposed capital amount should be sufficient to support the company's expected initial expenses, including salaries, office rent, and equipment costs.
If the registered capital appears disproportionately low compared with the proposed business plan, the authorities may request additional explanations or supporting documents, which may delay the overall process.
Work Permit and TRC Considerations
In certain circumstances, the level of capital contribution may also affect whether a foreign owner or representative may qualify for a work permit exemption or a Temporary Residence Card (TRC).
Capitalization should therefore be treated not merely as an incorporation formality, but as a strategic element affecting the company's future operations and the immigration status of key personnel.
3. Ho Chi Minh City Company Incorporation Process in 2026
① Determine the Appropriate Business Lines
Activities such as software development, IT consulting, and platform operations must be classified under the appropriate Vietnamese business line codes.
If the company expects to expand its scope of business in the future, it may be advisable to structure the registered business lines broadly enough to accommodate reasonably foreseeable activities from the outset.
② Proceed with the IRC and ERC Process
Depending on the foreign investment structure, the company may need to obtain an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC).
For certain non-conditional sectors, structures involving ERC issuance without a conventional IRC-first process may be considered in practice. However, the applicable procedure may vary depending on the business sector, investment scale, and project location.
Advance review is therefore important.
③ Open a Bank Account and Contribute Capital
After opening the required bank account in Vietnam, the foreign investor must make the capital contribution.
Capital contributions are generally required within a specified period following issuance of the ERC. The timing should therefore be coordinated with the Korean investor's ODI reporting and remittance schedule.
④ Complete VNeID and Tax Registration
Vietnam has been rapidly transitioning toward a digital administrative system.
Businesses should prepare for procedures involving:
- · VNeID-based electronic identification
- · Electronic invoicing
- · Tax registration
- · Local mobile phone registration
- · Residential registration, where relevant
These requirements should be incorporated into the implementation timeline from the beginning.
4. Korean ODI Reporting Should Be Managed in Parallel
Where a Korean resident invests in a Vietnamese company, an Overseas Direct Investment (ODI) report may be required under Korea's foreign exchange regulations before the investment funds are remitted.
A common practical issue arises when the Vietnamese company has already obtained its ERC, but the Korean ODI filing has not yet been completed.
This can delay the capital remittance and, in turn, create issues with the Vietnamese capital contribution deadline.
Accordingly, the following processes should be managed in parallel:
Vietnam
- · IRC
- · ERC
- · Bank account opening
Korea
- · ODI reporting
- · Capital remittance
- · Post-investment reporting
Coordinating both jurisdictions from the outset can significantly reduce timing and compliance risks.
5. The Structure Should Account for Operations and Exit from the Beginning
Incorporating a company in Ho Chi Minh City is only the starting point.
Many legal and tax issues arise later, during the operational phase or when the investor seeks to exit.
The following matters should therefore be considered from the incorporation stage:
- · Development and service agreements between the Korean headquarters and the Ho Chi Minh City entity
- · Transfer pricing and related-party transaction issues
- · Intellectual property and royalty arrangements
- · Future share sales, joint venture conversions, or withdrawal and liquidation scenarios
· The way the initial structure is designed can have a substantial impact on future tax exposure, fundraising flexibility, and exit options.
DECENT Law Firm's Global Business Practice Team provides tailored cross-border legal support for Korean startups, SMEs, and venture capital firms.
Our services include:
- · Establishment of IT and service companies in Ho Chi Minh City
- · Investment structuring and contract design
- · Korean Overseas Direct Investment (ODI) reporting
- · Transfer pricing and intellectual property structure review
If your company is considering expansion into Ho Chi Minh City, we recommend reviewing not only the incorporation procedures but also the operational, tax, and foreign exchange implications of the proposed structure.