Restricted Sectors and the IRC vs ERC Difference Every Investor Must Know
A foreign investor can often own 100% of a company in Vietnam — but "can I own it" and "can I file for it today, in this sector, with this paperwork" are two different checkpoints. This article covers the two checkpoints most investors hit right after confirming ownership is possible: whether the sector is actually open, and how the two registration certificates fit together.
Quick answer
Some sectors are closed or conditional for foreign investors in Vietnam, and most new foreign-invested companies need an Investment Registration Certificate (IRC) before implementing their investment projects, although they may obtain an Enterprise Registration Certificate (ERC) first. The IRC documents the investment project itself; the ERC creates the legal company. Skipping the sector check, or assuming the ERC alone is enough, is one of the most common ways a registration process encounters delays.
1. Which business sectors are restricted for foreign investors in Vietnam?
Vietnam publishes a list of sectors with restricted market access for foreign investors, but this list should not be reviewed in isolation. Instead, market access for foreign investors is assessed against:
the conditional market-access list maintained under Vietnam's investment law, which sets out sectors where foreign investment is either not permitted or permitted only subject to conditions;
Vietnam's international treaty commitments (including WTO schedules and free-trade agreements such as CPTPP and EVFTA), which can be more favourable than the domestic default for investors from treaty-member countries; and
sector-specific law and licensing requirements — many "conditional" sectors are not closed outright, but require a business licence, a minimum capital level, a professional qualification, or a Vietnamese partner alongside the foreign investor.
In practice, restricted or conditional treatment tends to cluster around a recognisable set of sectors:
Sector category | Typical treatment | What this usually means in practice |
|---|---|---|
National defence, security-sensitive activities | Closed to foreign investment | Not available as a foreign-invested business line |
Press, publishing, broadcasting | Closed or heavily restricted | Foreign investors generally cannot hold direct ownership of these activities |
Education and training | Conditional | Subject to capital, facility and curriculum-approval conditions depending on level |
Logistics and certain transport services | Conditional, treaty-dependent | Foreign-ownership ceilings and licensing vary by sub-sector and by the investor's home country |
Banking, securities, insurance | Conditional, closely licensed | Requires sector-specific licensing from the relevant regulator, independent of company registration |
The categories above describe general patterns, not a complete or current list. The specific conditions attached to each sector, such as ownership ceilings, required licences and treaty carve-outs, can change with amendments to the law and can differ by the investor's country of origin. A reliable approach is to conduct a sector-specific market-access check against the investor's actual planned activity, done before the entity is structured, rather than relying on a general read of "restricted industries" articles, including this one. For guidance that reflects your specific activity and home country, consult Chilli Consulting directly.
2. What is the difference between an IRC and an ERC in Vietnam?
These are two different certificates, issued by two different processes, for two different purposes. Confusing them is one of the most common causes of a stalled registration.
IRC (Investment Registration Certificate) | ERC (Enterprise Registration Certificate) | |
|---|---|---|
What it certifies | That a specific investment project has been registered with the licensing authority | That a company has been legally established as an enterprise |
What it covers | The investment project: capital, location, scale, implementation schedule, investor identity | The company itself: legal form, charter capital, legal representative, business lines |
Issued by | The provincial or economic-zone investment licensing authority | The business registration office |
The relationship is not "either/or" — for a typical new foreign-invested company, the IRC and ERC are both part of the same registration path, not competing options. The ERC is what makes the company a legal entity that can open a bank account, hire staff and issue invoices; the IRC is what confirms the investment project behind that company has been properly registered.
3. When is an IRC not required?
Not every foreign-related transaction requires a fresh IRC. Common situations where the IRC step may be reduced or handled differently include:
A foreign investor buying shares or contributed capital in an existing Vietnamese company (rather than establishing a new one), which does not require a new IRC but may require capital-contribution/share-purchase registration, depending on the applicable conditions.
Investment projects undertaken by economic organizations that are not subject to the IRC requirement under Article 20(2) and Article 26(2) of Vietnam's Investment Law.
Expansion of an existing licensed project, which may be handled as an adjustment to the existing IRC rather than a new filing.
Whether a specific transaction qualifies for one of these routes depends on the investment form, the sector, and the investment law in force at the time of filing. It should be confirmed against the applicable laws and regulations for each case, not assumed from a prior deal. Chilli Consulting can assess which route applies to your transaction.
4. How do the sector check and the IRC/ERC sequence connect?
These two questions are not independent — the sector check usually determines the applicable investment and business registration requirements, regardless of whether the IRC or ERC is obtained first:
Define the activity first. What exactly will the Vietnam entity sell, provide, or manufacture? This, not the entity type, is what gets checked against market access.
Run the sector check. Confirm whether the activity is open, conditional, or restricted, and what conditions (partner requirement, licence, capital floor) apply if it is conditional.
Determine the applicable IRC requirements. Where an IRC is required, the investment project must be registered before implementation, and the IRC should reflect the applicable sector-specific conditions.
File the ERC in accordance with the applicable registration procedures. Foreign investors may establish an economic organization before obtaining an IRC, provided they satisfy the applicable market-access conditions. This step establishes the legal entity itself.
Doing this out of order — for example, drafting a company's business lines broadly before checking which of them are conditional — is a common reason licensing authorities request revisions mid-process.
5. Common mistakes
Treating "restricted sectors" as a fixed list to memorise. It is a framework to check against, not a static article to read once.
Assuming a joint-venture requirement always applies to a sensitive-sounding sector, when the actual condition may be a licence or a capital floor instead.
Confusing capital-contribution/share-purchase into an existing company with establishing a new entity, and following the wrong procedure as a result.
Not revisiting the sector check when the business plan changes — adding an activity after incorporation can trigger a condition that did not apply to the original scope.
Frequently asked questions
Is there a single official "restricted sectors" list I can check myself?
There is a conditional market-access framework under Vietnamese investment law, supplemented by treaty commitments and sector-specific licensing rules. Because conditions vary by sector, treaty status and current law, a sector-specific check against the investor's actual planned activity is more reliable than reading a general list.
Do I need an IRC even if I plan to own 100% of the company?
In most cases, yes. Where foreign investors hold more than 50% of a company's charter capital, an IRC is generally required for the investment project, even if the ERC is obtained first. Obtaining the ERC first changes the sequencing, not the IRC requirement itself. Because the requirement also depends on the project and the sector, confirm your specific case with Chilli Consulting.
Can I get the ERC first and the IRC later?
Under the current Investment Law, foreign investors may obtain an ERC before an IRC, provided they meet the applicable market-access conditions. Where an IRC is required, it must be obtained before implementing the investment project.
Does buying into an existing Vietnamese company still require an IRC?
Not always in the same form. Capital contribution or share purchase into an existing company is often handled through a separate registration route rather than a new IRC, though the specific requirements depend on the sector and the investment law in force.
What happens if I only find out a sector is conditional after incorporation?
The company may need to adjust its registered business lines, obtain an additional licence, or restructure ownership to meet the condition — all of which cost more time and money than checking before filing.
Check your sector eligibility before you file
Confirm whether your planned business activity is open, conditional, or restricted for foreign investors — and what that means for your IRC and ERC filing sequence — before committing to a structure. Every case is different, so the most accurate answer comes from a review of your own plan.
Get a sector eligibility check from Chilli Consulting for your specific planned activity.
Legal Basis
This article reflects Vietnam's legal framework as reviewed on 29 September 2026, including the Law on Investment No. 143/2025/QH15, effective from 1 March 2026, and the Law on Enterprises No. 59/2020/QH14, as amended. The conditional market-access list, sector conditions and treaty commitments referenced above may be updated by implementing regulations and can vary by the investor's home country.
This material is general information and is not legal, tax or investment advice. Sector eligibility and the IRC/ERC sequence should be assessed against the investor's actual planned activity before implementation. For advice on your specific case, contact Chilli Consulting directly.
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Disclaimer: This article is for reference purposes only and does not replace formal legal advice. Regulations may change — please confirm with a licensed lawyer before taking action.
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