In a major step toward reducing the cost of doing business, Vietnam’s National Assembly passed Resolution 198/2025/QH15 on May 17, 2025, officially ending the collection of the annual business license fee starting January 1, 2026. This reform is expected to simplify tax compliance and cut administrative expenses for all business entities, including foreign-invested enterprises and representative offices operating in Vietnam.
In this article, we unpack what the business license fee is, who will benefit from the exemption, and how this change will affect foreign investors managing operations in Vietnam.
Elimination of Business License Fee
The removal of the business license tax, effective January 1, 2026, is a welcome reform that eases both the administrative and financial burden on businesses in Vietnam. The business license fee is an annual fixed tax, and eliminating it will help companies, including Foreign-owned companies and representative offices, save on costs and simplify tax compliance.
The business license fee is a fixed annual tax paid by businesses in Vietnam based on charter capital or revenue. The current fee schedule is:
- Companies with charter capital over VND 10 billion: VND 3,000,000 per year
- Companies with charter capital of VND 10 billion or less: VND 2,000,000 per year
- Branches, representative offices, and business locations: VND 1,000,000 per year
- Individual business households: VND 300,000 – 1,000,000 per year, depending on revenue
This tax is not based on company profits and must be paid annually before January 30.
What Business Types Are Going to Be Beneficial from This Regulation?
Resolution 198/2025/QH15 clearly states that the collection of the business license fee will cease as of January 1, 2026. This applies to all entities previously subject to the fee, including domestic and foreign-invested companies, branches, representative offices, business locations, and individual business households.
This means that foreign representative offices in Vietnam, which currently pay VND 1,000,000 per year, will also benefit from the policy. The removal of the fee applies equally across all business types, ensuring no differentiation in treatment.
Impact on Foreign-owned Companies and Representative Offices
Vietnam’s decision to eliminate the annual business license fee demonstrates the government’s commitment to reducing regulatory burdens and supporting a thriving, investor-friendly environment. While the fee itself is relatively modest, removing it eliminates recurring paperwork and costs for both companies and representative offices.
This change makes Vietnam an even more attractive destination for global entrepreneurs looking to set up a low-cost presence before scaling operations. And with company registration now faster and easier than ever, foreign investors have a timely opportunity to enter the Vietnamese market under more favorable conditions.
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