FDI COMPLIANCE: What Foreign Investors Must Do After Obtaining IRC/ERC

Obtaining an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC) is a crucial step for foreign investors entering Vietnam. However, these licenses only confirm legal establishment and do not mean the company is ready for operation.

What are IRC and ERC?

IRC (Investment Registration Certificate): Confirms that a foreign-invested project has been approved for implementation in Vietnam.
ERC (Enterprise Registration Certificate): Confirms the legal status of the company as a duly established legal entity

The Gap Between “Being Licensed” and “Being Operational”

For foreign-invested enterprises (FDI companies), IRC/ERC is only the starting point.

Full operation requires completing post-licensing compliance obligations across tax, accounting, labor, and regulatory conditions.

Common Mistakes and Legal Risks

In practice, many FDI companies start operating immediately after obtaining the ERC. The following are the most common mistakes that lead to unnecessary penalties, tax issues, or operational disruptions:

Common Mistakes	Risks / Consequences	Penalties
Failure to fully contribute charter capital within 90 days	Required to adjust capital	Up to VND 50 million
Capital contribution not made via a Direct Investment Capital Account (DICA)	Bank may reject transactions; profit remittance abroad may not be possible
Operating without required sub-licenses (for conditional business sectors)	Not legally permitted to operate	Depends on sector
Issuing invoices without proper notification to tax authorities	Suspension of business operations up to 6 months; revocation of e-invoice usage	Up to VND 20 million
Late submission of tax returns	Classified as high tax risk	Up to VND 25 million
Failure to register internal labor regulations (from 10 employees)	Violation of labor laws	Up to VND 20 million
Failure to register social, health and unemployment insurance on time	Subject to back payments and potential criminal liability	Up to VND 150 million
Non-compliance with foreign employee requirements (e.g. no work permit, no residence card)	Foreign employees may be deported	Up to VND 75 million
Failure to submit periodic investment reports	Required to fulfill reporting obligations	Up to VND 30 million

Post-Establishment Checklist (0–90 Days)

Companies should complete the following tasks within the first 90 days after establishment.

1. Legal & Corporate

✓	Task	Timeline
☐	Install company signage at the registered office	Immediately after ERC issuance
☐	Engrave company seal (round/square)
☐	Register organizational identification via VNeID (legal representative)
☐	Open a corporate bank account
☐	Fully contribute charter capital	Within 90 days
☐	Finalize office lease agreement	Before commencing operations
☐	Obtain required sub-licenses for conditional business sectors	Before commencing operations

2. Tax & Accounting

✓	Task	Timeline
☐	Register digital signature (USB token)	Before first tax filing
☐	Register e-invoice usage	Before issuing first invoice
☐	Activate electronic tax account (eTax system)	After obtaining tax code
☐	Register accounting system/software	Before issuing first invoice
☐	Establish accounting system

3. Labor & HR

✓	Task	Timeline
☐	Prepare and sign written labor contracts (mandatory for contracts over 1 month)	Before employment starts
☐	Register social insurance (SI, HI, UI) for employees	Within 30 days from contract signing
☐	Register internal labor regulations	When having 10 or more employees
☐	Develop salary scale and payroll structure	Before employing staff
☐	Obtain work permits and residence cards for foreign employees	Before employment

TPM’s Recommendation

For foreign investors, compliance is not a one-time requirement — it is an operational foundation.

Early-stage structuring is critical to:

Ensure legal compliance
Enable profit repatriation
Maintain sustainable operations in Vietnam.

Contact TPM

If you need assistance with FDI setup and compliance in Vietnam, please contact TPM via our website or hotline: (+84) 28 3505 1800

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