[Q&A #1] When Doing Business in Vietnam, Is It Always Necessary to Establish a Legal Entity?

There are various ways to enter the Vietnamese market, each with its own advantages and disadvantages, and the method chosen should be tailored to the specific business and investment objectives.

For operations such as local manufacturing plants, real estate businesses, or establishing a sales base to serve the domestic market, incorporating a legal entity may be mandatory. However, incorporation brings cost burdens and ongoing management and operational burdens, and if the business does not succeed, formal liquidation procedures will also be required.

Accordingly, whether or not to incorporate should be carefully weighed based on the level of market understanding, the feasibility of the business plan, and the availability of trustworthy employees, partners, or consultants.

That said, for businesses particularly exposed to regulatory scrutiny — such as restaurants, hotels, and entertainment services — nominee investment (using a Vietnamese individual's name to hold the business) is a method that is often used in practice.