The Complete Guide to Establishing Your Business in Vietnam for Taiwanese Companies 2026: Understanding Investment Licenses, Environmental Impact Assessment, and Fire Safety at a Glance

From textiles, footwear, and furniture to the PCB, electronics, and server supply chains, Taiwanese businesses' presence in Vietnam has long since extended from the traditional-industry clusters of southern Vietnam all the way to the ICT hub of northern Vietnam. Driven by the U.S.-China trade war, tariff restructuring, and "China Plus One," Vietnam continues to be one of the top choices for Taiwanese businesses moving south, and Taiwan has for years ranked among Vietnam's major sources of foreign investment. And 2026 is a year of special significance for Taiwanese businesses looking to build factories in Vietnam—Vietnam's brand-new Investment Law (No. 143/2025/QH15) took effect on March 1, 2026, and the accompanying Decree No. 96/2026 came into force shortly thereafter, carrying out the most sweeping overhaul of the rules of the game for foreign investment establishment in nearly a decade.

In my practical work assisting Taiwanese businesses with investment in Vietnam, the three keywords I am most often asked about are "investment license," "environmental impact assessment," and "fire safety." These three gates have often been the biggest variables in a factory's timeline in the past, and the new 2026 system brings major relaxation at precisely these three points—yet it also shifts risk from "prior review" to "subsequent audit." Below, I place the keywords Taiwanese businesses most often Google back into the latest 2026 practical context, so that you—whether still evaluating or already advancing your factory build in Vietnam—can avoid unnecessary detours.

1. Two Core Licenses: The Investment Registration Certificate (IRC), the Enterprise Registration Certificate (ERC), and the 2026 "License-First, Permit-Later" System

For Taiwanese businesses going to Vietnam, the first step is always two certificates: the Investment Registration Certificate (IRC) and the Enterprise Registration Certificate (ERC). A simple distinction: the IRC approves the "investment project" (objectives, scale, location, term), while the ERC confers "legal-person status" on the company. In the past, foreign investors had to obtain the IRC before they could process the ERC, making Vietnam's establishment timeline longer than that of other ASEAN countries.

The biggest structural change in 2026 is the "ERC-first" mechanism introduced by the new Investment Law: foreign investors that meet the market-access conditions may first obtain the ERC to establish a legal entity, and then apply for the IRC. This means the company can be established earlier, open a bank account, sign leases, hire staff, and procure materials—decoupling the preparatory work from project approval. But there are two caveats that must be kept firmly in mind: first, the investor must commit to meeting the market-access conditions at the time of the ERC application; second, the IRC procedures for the corresponding investment project must be completed within 12 months after establishment, or the company will face uncertainty risk in terms of legal validity. In addition, "ERC-first" does not apply to all industries—the conditional-industry list is subject to the new rules from July 1, 2026, and highly regulated industries such as finance, healthcare, and education must still complete the corresponding qualification approvals before formally commencing operations.

2. Environmental Impact Assessment, Fire Safety, and the Biggest 2026 Change: The Industrial-Zone "Special Investment Procedure" Green Channel

This is the section I consider Taiwanese businesses should master most in 2026, because it rewrites all four gates of "environmental impact assessment," "fire safety," "investment policy approval," and "construction permit" at once.

First, the basics. The environmental impact assessment (EIA; ĐTM in Vietnamese), under the Law on Environmental Protection (LEP 2020) and Decree No. 08/2022, classifies projects into Categories I through IV; manufacturing factories mostly fall into Categories I and II, and must complete the EIA and obtain approval before starting construction. The competent authority is the Ministry of Natural Resources and Environment (MONRE) or the provincial Department of Natural Resources and Environment, with a review period not exceeding 45 days for Category I and not exceeding 30 days for the others—but including consultant work, in practice it often takes several months. Before operating, most factories must additionally obtain an environmental license (giấy phép môi trường). Fire safety (PCCC, fire prevention and firefighting) requires passing the fire-safety design review and completion acceptance before a factory can operate, and Vietnam already put new fire-safety-related laws into effect in 2025, with stricter standards.

The major benefit in 2026 is that Decree No. 96/2026 formally established the "special investment procedure" (commonly known as the green channel). For any project located in a specific area such as an industrial zone, export processing zone, high-tech park, or economic zone, the investor may choose the "registration plus commitment" approach to replace the separately processed investment policy approval, EIA, construction permit, and fire-safety review—needing only to submit an investment application and a written commitment to comply throughout with the various technical standards and regulations. For export-oriented Taiwanese businesses building factories, this can substantially compress the timeline before construction begins.

But I must caution: the green channel moves the gate from "before" to "after." The competent authority retains the power of subsequent audit, and once construction, environmental, or fire-safety non-compliance is found, it may impose penalties, or even order a shutdown or terminate the project. In other words, not a single one of the substantive technical standards for the EIA and fire safety has been relaxed—only the timing of the review has changed. Taiwanese businesses must not misinterpret "exemption from prior review" as "exemption from compliance"; internal environmental and fire-safety compliance systems must be solidly built from day one.

3. Choosing the Right Entity and Registered Capital: LLC, Joint-Stock Company, and Export Processing Enterprise (EPE)

For the entity to establish in Vietnam, most Taiwanese businesses choose a limited liability company (LLC), which is simple to control and carries a lighter compliance burden; only if there are future listing plans would one consider a joint-stock company (JSC), but the governance and disclosure requirements are far more cumbersome. Foreign enterprises may also set up a branch, though its legal liability is borne by the parent company.

Regarding registered capital, Vietnam has no statutory minimum capital for most industries, but the amount must "reasonably match" the project scale—if you declare a factory but put in only extremely low capital, the competent authority will reject it on the grounds that it is not feasible. After obtaining the ERC, the registered capital must generally be fully remitted through a dedicated Direct Investment Capital Account (DICA) within 90 days.

Export-oriented Taiwanese businesses should especially get to know the Export Processing Enterprise (EPE) status: an EPE's imports of raw materials, equipment, and goods can be exempt from import duties and import-stage value-added tax, and its exported goods are also tax-exempt—highly favorable to cash flow. However, an EPE is under bonded supervision, its customs procedures are strict, and its annual bonded reconciliation, inventory in-and-out, and customs declaration data must balance, so it must not be taken lightly.

4. Land: In Vietnam It Is "Leasing Land," Not "Buying Land"

This is where the most Taiwanese businesses misjudge based on their China experience. Vietnam, like China, has a system of public ownership of land, and foreign-invested enterprises cannot obtain land ownership; they can only obtain land-use rights for a fixed term, and in practice this mostly means leasing factory land from the industrial-zone developer, rather than leasing land directly from the government.

Under Vietnamese regulations, the land-lease term for an investment project generally does not exceed 50 years; for large-capital, slow-recovery projects or those located in socio-economically difficult areas, it can be extended to 70 years. Special attention must be paid to one "invisible shrinkage": the term of use for industrial-zone land is mostly counted from the time the developer obtained the development rights to that parcel from the government, and by the time the developer completes land leveling and infrastructure such as water, electricity, and roads and then markets it to tenants, several years have often already been consumed. By the time a Taiwanese business formally leases it, the usable term is often only around forty-five to forty-seven years. Before signing, be sure to ask clearly about the "commencement date of the term" and the "actual remaining number of years." The one-time payment of long-term rent can usually serve as collateral for financing from a bank.

5. The People Issue: Work Permits and the New 2026 Labor Rules

With the factory built, the next issue is "people." Foreign executives working in Vietnam must obtain a work permit. There are several new 2026 rules worth noting: the foreign-employee quota no longer applies a nationally uniform ratio cap, but instead adopts a position-by-position review: the employer must, for each position for which it intends to hire a foreigner, submit a statement of the need to use foreign labor, and the competent authority individually approves whether that position may bring in foreign personnel. The work permit is now applied for online through the provincial labor authority, with the approved electronic file bound to the passport; after obtaining the work permit, a labor contract must be signed and filed with the competent authority before the foreign employee starts work. In addition, Vietnam's social insurance has been fully digitized, and late or evaded payments will incur a daily penalty; the minimum wage was raised effective January 1, 2026, based on the wage region of the actual place of work, so personnel costs must be recalculated. There is also one point often overlooked: Vietnamese law requires a company to have at least one legal representative residing in Vietnam; should a company appoint only one legal representative and that person needs to leave the country, before departure they should delegate their authority and responsibilities in writing to another person residing in Vietnam to exercise on their behalf, otherwise the company's external actions during that period may be subject to validity disputes.

6. Taxation: Corporate Income Tax, VAT, and the Taiwanese Businesses' Favorite "2 Exempt, 4 Half"

Before going to Vietnam, three sets of tax figures must be calculated clearly. The corporate income tax (CIT) standard rate is 20%; the value-added tax (VAT) is 0%, 5%, or 10% depending on the category of goods/services, and the 2% reduction benefit for certain goods has been extended to December 31, 2026. The incentive most commonly applicable to Taiwanese businesses is that a Vietnamese enterprise established in an industrial zone or export processing zone can enjoy the "2 exempt, 4 half"—2 years of income tax exemption, followed by 4 years of tax at half rate; for priority fields such as semiconductors and high-tech R&D, the new 2026 system also offers more targeted incentives. There is also an administrative relief: Vietnam has abolished the business license fee effective January 1, 2026. On the cross-border side, there is a double taxation avoidance agreement between Taiwan and Vietnam, which can reduce withholding on dividends, interest, and royalties and avoid double taxation in the two jurisdictions—this should be factored in when planning dividend repatriation routes.

7. Practical Recommendations for Taiwanese Businesses

First, "license-first, permit-later" is fast, but don't forget the 12-month deadline. Establishing the ERC early is very convenient, but be sure to complete the IRC within 12 months, and add suspensive conditions and termination protections to any contracts signed between the ERC's establishment and the IRC's issuance, to reduce the risk of approval not being granted.

Second, the green channel is "exemption from prior review," not "exemption from compliance." The technical standards for the EIA and fire safety have not been relaxed, and once a subsequent audit finds non-compliance, operations can be ordered to stop. Before taking the green channel, first have professionals thoroughly inventory the technical standards and the content of the commitments.

Third, for the land-lease term, look at the "remaining" years, not the "nominal" ones. Fifty years is nominal; what you actually get in hand is often only 45 to 47 years, and it is a lease, not a purchase, so both financing and exit planning should be premised on this.

Fourth, incorporate the Taiwanese parent company into the planning as well. The DICA capital-injection deadline, transfer pricing, dividend repatriation, the Taiwan-Vietnam tax treaty, and filings in both jurisdictions should all be designed in tandem at the very moment of "establishing," rather than being patched up only at the time of exit.

Frequently Asked Questions (FAQ)

Can Taiwanese businesses be 100% wholly foreign-owned in Vietnam?

Most manufacturing, trade, and technology industries permit 100% wholly foreign-owned investment; but some industries (such as telecommunications, education, healthcare, and real estate) have foreign-ownership caps or require special permits, so you must first check against the "conditional investment list" to confirm.

What is the difference between the Investment Registration Certificate (IRC) and the Enterprise Registration Certificate (ERC)?

The IRC approves the "investment project," while the ERC confers "legal-person status" on the company. Under the new 2026 system, those meeting the conditions can go "license-first (ERC), permit-later (IRC)," but must complete the IRC within 12 months.

When building a factory in an industrial zone, can the EIA and fire safety be simplified?

Yes. Projects located in an industrial zone, export processing zone, high-tech zone, or economic zone can take the 2026 "special investment procedure (green channel)," using registration plus commitment to replace the separate EIA, fire safety, construction permit, and investment policy approval—but this shifts to subsequent audit, and violations can result in a shutdown.

Is there a minimum registered capital for building a factory in Vietnam?

Most industries have no statutory minimum capital, but the amount must reasonably match the project scale; after obtaining the ERC, the capital must generally be fully injected within 90 days through the dedicated capital account (DICA).

Can Taiwanese businesses buy land in Vietnam?

No, land cannot be bought—only land-use rights for a fixed term can be obtained, and this is mostly by leasing from the industrial-zone developer, generally for 50 years (up to 70 years in economic zones), with the actual remaining term often only 45 to 47 years.

The opportunity in Vietnam is real, but it rewards those who are prepared. Louis Group (萬國萬佳) maintains offices in both Hanoi and Ho Chi Minh City in Vietnam, connected with our Taiwan headquarters, and has long assisted Taiwanese businesses with the full end-to-end process of building factories on their southbound move—investment licenses and enterprise licenses, environmental and fire-safety compliance, the industrial-zone green channel, land leasing, work permits, and cross-border taxation. If you are evaluating this step, we welcome you to contact our Vietnam team and let our professionals accompany you in making every decision right.

This article is a sharing of general legal information and does not constitute legal advice on any specific case. For actual planning, please consult a professional attorney and rely on the latest announcements from the competent Vietnamese authorities.