Legal Handbook for Seed-Stage Startups in Vietnam

At the seed stage, founders pour their energy into product and customers and leave legal matters "for later". Yet most of the legal problems that surface in later funding rounds — unclear equity splits, products that do not belong to the company, foreign investors coming in through the wrong procedure — trace back to decisions made at this stage. This handbook walks through what to get right from the start in Vietnam.

The legal framework

• The Law on Enterprises 2020 (Law No. 59/2020/QH14), amended by Law No. 76/2025/QH15 (effective 1 July 2025), which added the obligation to collect, keep and declare beneficial owner information in the enterprise registration dossier;
• The Law on Investment No. 143/2025/QH15 (effective 1 March 2026, replacing the 2020 Law on Investment) — relevant whenever a founder or investor is foreign;
• The Law on Support for Small and Medium-sized Enterprises 2017 and Resolution 198/2025/QH15 on special mechanisms for private sector development;
• The Law on Intellectual Property, the Labour Code 2019 and tax legislation.

Choosing the vehicle: LLC or joint stock company

A single-member or multi-member limited liability company (LLC) is simple and cheap to run, but awkward for investors: members of a multi-member LLC have pre-emption rights over transferred capital, the number of members is capped at 50, and an LLC cannot issue shares. If you plan to raise from funds or grant equity to staff, a joint stock company (JSC) is usually the better fit: new shares are easier to issue and preference shares can be created under the charter. You can start as an LLC and convert, but conversion is an extra procedure that tends to land right in the middle of a funding negotiation.

Watch the capital contribution deadline: members and shareholders must fully contribute the committed capital within 90 days of the enterprise registration certificate (Articles 47, 75 and 113 of the Law on Enterprises). Registering a "nice-looking" charter capital that is never paid in leads to corrective filings and possible penalties. In a JSC, founding shareholders' shares are restricted from transfer to outsiders for the first three years unless the general meeting of shareholders approves (Article 120).

The founders' agreement

The Law on Enterprises does not require one, but it is the most important document at the seed stage. Agree in writing on:

• Equity split and its basis (cash, effort, technology contributed);
• Vesting and buy-back of a departing founder's stake — Vietnamese law has no specific vesting regime, so it must be built through buy-back agreements, conditional transfers and the company charter;
• Roles, decision-making powers and deadlock resolution;
• Non-compete, confidentiality and assignment of intellectual property to the company.

Whatever can go into the company charter should go there, because the charter binds the company and every future member or shareholder; a side agreement among founders binds only those who signed it.

Intellectual property must belong to the company

Source code, designs and the brand are often created before the company exists, by founders or freelancers. Without a written assignment, those rights stay with the individuals — and investors will find out during due diligence. You need:

• A written assignment of copyright, software rights and domain names from the founders to the company;
• IP clauses in employment contracts and freelancer service contracts;
• Early trademark filing with the Intellectual Property Office — Vietnam applies a first-to-file system; copyright arises automatically, but registration makes it easier to prove in a dispute.

Raising the seed round: instruments and pitfalls

The clearest route is to issue new shares (a private placement by a non-public JSC under Article 125 of the Law on Enterprises) or to accept a capital contribution into an LLC. Instruments familiar abroad, such as SAFEs or convertible notes, have no dedicated legal framework for non-public companies in Vietnam; in practice they are restructured as loans with conversion conditions or commitments to issue shares, and need a lawyer to design them so they work under Vietnamese law while meeting investors' expectations. Investor protections (liquidation preference, veto rights on certain matters) can be implemented through charter-based preference shares and a shareholders' agreement.

Foreign founders or investors: under the Law on Investment 2025, a foreign investor may establish an enterprise before having an investment project if it meets the market access conditions. When a foreign investor subscribes for or buys shares in an existing startup, it must register the capital contribution before the transaction in the cases prescribed by law — for example, where the business lines are subject to conditional market access, or where the transaction takes foreign ownership above 50% of charter capital. Funds must flow through a direct investment capital account under the foreign exchange rules. Getting this sequence wrong is a defect that is routinely discovered at the next round.

Tax and incentives for new companies

Resolution 198/2025/QH15 (effective 17 May 2025) provides a three-year corporate income tax exemption from the date of the first enterprise registration certificate for newly established small and medium-sized enterprises, subject to the conditions in the Resolution and its guidance; the Resolution also abolished the business licence fee from 1 January 2026. An exemption is not an exemption from filing: the startup must still keep accounting books, use e-invoices, and file declarations and finalisations on time.

Early hires

A person who works for pay under the company's management is in an employment relationship even if called a "collaborator" or "freelancer" (Article 13 of the Labour Code 2019), which brings compulsory social insurance and personal income tax obligations. An employee share option plan (ESOP) should be approved by the competent body and set out in written rules covering conditions, timing, price and treatment on departure.

Common legal risks

• Charter capital not fully contributed on time; changes not registered;
• Beneficial owner information not declared under the 2025 amendments to the Law on Enterprises;
• IP held in individuals' names; the trademark filed first by someone else;
• Money taken from foreign investors without the capital contribution registration or outside the capital account;
• Verbal deals among founders that turn into disputes when someone leaves.

Practical advice

Keep a "legal file" from day one: enterprise registration certificate, charter, register of members or shareholders, minutes and resolutions, proof of capital contribution, IP assignments and employment contracts. When investors run due diligence, a complete file shortens the time to close considerably. For rounds involving foreign investors or complex preference terms, have a lawyer review before signing the term sheet.

Quick Q&A

Should a startup choose an LLC or a joint stock company?

If you plan to raise from funds or grant equity to staff, a joint stock company is usually more suitable because new shares and preference shares are easier to issue. An LLC is simpler but cannot issue shares and its members have pre-emption rights.

How long do we have to pay in the charter capital?

Within 90 days of the issuance of the enterprise registration certificate, under the Law on Enterprises 2020.

Are newly established startups exempt from corporate income tax?

Resolution 198/2025/QH15 exempts newly established small and medium-sized enterprises from corporate income tax for three years from their first enterprise registration certificate, subject to its conditions and guidance. Filing obligations still apply.

What does a foreign investor need to do to invest in a startup?

In the cases prescribed by law (conditional market access sectors, or a transaction taking foreign ownership above 50% of charter capital), it must register the capital contribution or share purchase under the Law on Investment 2025 before completing it, and the funds must pass through a direct investment capital account.