Foreign investors planning to enter the Vietnamese market often face a critical decision early on:
Should you open a Representative Office (RO) or establish a Limited Liability Company (LLC)?
While both options allow foreign presence in Vietnam, they serve very different purposes. In this guide, we’ll compare the key differences between a Representative Office and a Limited Company, helping you choose the right structure for your goals in 2025.
✅ What Is a Representative Office in Vietnam?
A Representative Office (RO) is the simplest legal form for foreign companies to establish a presence in Vietnam without generating revenue.
🎯 Purpose:
-
Market research
-
Business liaison
-
Monitoring contracts signed with local partners
🚫 Limitations:
-
Cannot generate income
-
Cannot sign contracts in its own name (except for employment or office leases)
-
Cannot issue VAT invoices
✅ Advantages:
-
Fast licensing process
-
No corporate tax
-
Low operating cost
-
Ideal for early-stage market entry
✅ What Is a Limited Liability Company (LLC)?
A Limited Liability Company (LLC) allows foreign investors to operate a fully functioning, revenue-generating business in Vietnam.
🎯 Purpose:
-
Sell products or services
-
Issue invoices and sign contracts
-
Hire full-time staff
✅ Advantages:
-
Full operational control
-
Legal ability to generate revenue
-
Eligible for tax incentives in certain zones/sectors
⚠ Requirements:
-
Investment Registration Certificate (IRC)
-
Enterprise Registration Certificate (ERC)
-
Minimum charter capital (depending on industry)
-
Monthly tax filings and annual audits
🔍 Side-by-Side Comparison
| Feature | Representative Office | Limited Liability Company |
|---|---|---|
| Legal status | Non-commercial entity | Fully registered business entity |
| Revenue generation | ❌ Not allowed | ✅ Allowed |
| Tax obligations | Minimal | Full corporate & VAT tax compliance |
| Setup time | ~10 working days | ~25–30 working days |
| Ideal for | Market research, early presence | Business operations, invoicing |
| Cost of operation | Low | Moderate to high |
| Regulatory requirements | Simple reporting | Complex compliance |
🧠 Which One Should You Choose?
| Your Goal | Best Option |
|---|---|
| Test the market or liaise with clients | Representative Office |
| Sell goods/services & scale operations | Limited Liability Company |
| Keep overhead low in early stages | Representative Office |
| Establish a long-term business | Limited Liability Company |
If you are unsure whether your activities are considered “commercial” under Vietnamese law, it’s best to consult a legal advisor to avoid compliance risks.
🤝 How We Can Help
At FDIinVietnam.com, we’ve helped 300+ clients choose and establish the right legal entity based on their goals and market readiness.
We offer:
-
Free consultation on entity selection
-
Full-service setup for both ROs and LLCs
-
Ongoing compliance support and accounting services
📞 Ready to Establish Your Presence in Vietnam?
👉 [Schedule a Free Consultation]
👉 [Download Our Comparison Guide (PDF)]
Let us help you make the right first step into Vietnam’s thriving market.