For foreign investors in Vietnam, having appropriate immigration status for legal compliance also means having the right status to build a stable operational business foundation. While company registrations are a focal point, the ability to live, travel, and conduct business efficiently in Vietnam plays a significant role in the success and sustainability of the business.
Two main immigration tools that cater to this need are the Investor Visa (DT Visa) and the Temporary Residence Card (TRC). This guide describes how these two tools operate, who the main constituents are, and what investors need to understand about the both the Investor Visa and the Temporary Residence Card in order to establish a more permanent foothold for their investment in Vietnam.
The Investor Visa (DT Visa): Four Categories, One System
For foreign nationals who wish to invest in or establish a business in Vietnam, the DT (Investor) Visa is the first immigration option many of them consider. Unlike business or tourist visas, the DT Visa is designed for persons who invest in a Vietnamese company or who invest in projects that are sanctioned by the Vietnamese legal system.
Vietnam currently has four classes of Investor Visas, the DT1, DT2, DT3, and DT4. While all four classes are part of the same Investor Visa system, the class granted is dependent on the level of investment and the scope of the investment.
| Visa Category | Investment Threshold | Maximum Validity | TRC Eligibility |
| DT1 | Capital contribution of VND 100 billion or investment in encouraged sectors | Up to 10 years | Eligible |
| DT2 | Capital contribution from VND 50 billion to under VND 100 billion | Up to 5 years | Eligible |
| DT3 | Capital contribution from VND 3 billion to under VND 50 billion | Up to 3 years | Eligible |
| DT4 | Capital contribution below VND 3 billion | Up to 12 months | Not eligible |
Investor Visa and Business Visa: The Distinction
Among the many misconceptions of foreign entrepreneurs, especially those from the Western hemisphere, is that business activities related immigration visas are more or less equivalent and therefore provide the same residency and business rights. The fact is, there is a substantive distinction between Investor Visas and Business Visas.
The DN visa is a type of business visa that applies generally to foreign individuals coming to Vietnam for business purposes such as attending meetings, negotiating partnerships, conducting market surveys, or overseeing work projects. It does not require the holder to make any contribution of capital to any Vietnamese entity.
In contrast, the DT visa prescribes investment activities. The applicant must be regarded as an investor in a Vietnamese entity or investment project. This distinction becomes imperative especially in providing access to longer visa validity periods and, in most cases, the eligibility for a Temporary Residence Card (TRC).
For individuals planning to have a long-term presence in Vietnam, the investor visa is frequently the more viable option compared to the repeat short-term business visa.
Rights to Work and Reside
Acquisition of a DT visa does not provide the investor unrestricted rights to work in every case. The main reason of the visa is to acknowledge the holder’s status as an investor and not as an employee.
However, in reality, a considerable number of foreign investors assume management or executive role in the affairs of their company. Depending on the form of the business and the role of the individual, further compliance may be required. Therefore, investors should balance both the immigration and the corporate aspects of their long-term foreign presence in Vietnam.
DT1, DT2, and DT3 visas have the added benefit of applying for a temporary residence card (TRC). A TRC allows foreign investors to live in Vietnam for a longer period without the need to apply for a visa and also helps with many administrative tasks, such as banking, housing, and daily business activities.
For foreign investors who are looking for a more permanent solution while building or expanding their business in Vietnam, a combination of the investor visa and the temporary residence card is the most practical solution for long-term business activities.
Why a Temporary Residence Card (TRC) Matters for Investors
How Does a Temporary Residence Card (TRC) Benefit the Investor Compared to a DT Visa alone?
For many foreign investors, the DT visa is the first step in the process towards establishing a permanent business in Vietnam. While a DT visa has residency for a specified period, a Temporary Residence Card (TRC) offers flexibility and helps with the daily business activities.
Having long-term residency is a significant benefit. Depending on the DT visa category, investors are eligible to apply for a TRC that can be valid for up to 10 years, allowing them to stay in Vietnam without renewing their visa. The card serves as a visa that can be used to enter and exit Vietnam multiple times.
A TRC streamlines actual business operations in Vietnam. For instance, foreign investors can face fewer hurdles to open a bank account, acquire housing, sign a service contract, and carry out administrative tasks once they obtain a residence card. Though this is subject to change on a case-by-case basis, many organizations see a TRC as more compelling proof of long-term residency compared to a visa.
There are additional benefits for investors who relocate family members. Eligible family members can lodge related applications for residence. Thus, during the investment period, families can establish their residence in Vietnam.
Who Gets It and One Notable Exception
The TRC is typically available based on the investor’s classification in the DT visa scheme. Typically, the issuance of a TRC is available to DT1, DT2, and DT3 visa holders provided that the immigration and investment provisions are satisfied.
One notable exception involves holders of DT4 visas. Since the capital contribution within DT4 is comparatively small, this category is generally ineligible for a temporary residence card. Therefore, investors who intend to make low-value investments should be well-informed that the immigration provisions available to them will not be as comprehensive as those provided in DT1, DT2, and DT3.
Investors should also be very mindful of losing TRC eligibility. If an investor reduces their capital contribution to the level corresponding with their visa category, immigration control will likely reassess their status during the visa or TRC renewal. Therefore, it is recommended that investment and immigration concerns be viewed as a single issue.
Rising Importance of VNeID Registration
Vietnam’s Foreign Digital System Initiative started its first phase in the Q3 of 2022 and is expected to be completed within 2025. The purpose of the program is to digitize administrative systems from the government. Once the system is operational, foreign investors who hold valid residence permits will begin to encounter administrative processes that integrate with the VNeID electronic identification.
Based on the specific administrative process, requirements may differ. However, investors who intend to stay long, should begin to view the registration of their digital identity as an aspect of administrative compliance in Vietnam. Completing the work in a timely manner may minimize the opportunity costs of waiting on government administrative processes, including the updating of immigration records.
For investors with an intention to remain in Vietnam for several years, the process of obtaining a TRC continues to be one of the most rational steps to take in order to create a secure and reliable legal and administrative framework.
The Application Process: IRC to TRC Steps
Step 1: Establish the Legal Framework (IRC & ERC First)
Foreign investors cannot apply for a DT Visa or a temporary residence card without the corresponding business structure being set up first. For the majority of foreign-owned businesses, this process starts with obtaining the relevant business licenses and registering with the relevant authorities within the framework of Vietnam’s investment procedures.
In many instances, foreign investors are required to obtain an Investment Registration Certificate (IRC) followed by an Enterprise Registration Certificate (ERC). These certificates provide the legal basis for the investment and the registration of the company in Vietnam.
Capital contribution must be made post incorporation, and must be made in accordance with the approved investment plan. Evidence of the capital contribution is required during the immigration procedures, as it confirms that the investor is eligible for the relevant DT Visa.
Step 2: Apply for a DT Visa
Other than the requirements of the investment being structured and the supporting documents being prepared, there are no substantial barriers to the application of the DT Visa.
The supporting documents include a passport, registration of the company, proof of investment, completed immigration forms, and other supporting documents. Depending on the location of the investor, the application may be made to the Vietnamese immigration authorities or the Vietnamese diplomatic missions abroad.
The time taken for assessment may vary depending on the method of application and the complexity of the issues. It is advisable that all corporate records and immigration documents are consistent, as any inconsistency may result in unnecessary delays.
Step 3: Apply for the TRC
After receiving the DT visa and entering Vietnam, investors can apply for a Temporary Residence Card. Immigration procedures are usually conducted within Vietnam. Applications are submitted to the Immigration Department, and the necessary documents include the investor’s passport and DT visa, company documents, evidence of investment, and an application for temporary residence.
Usually, the duration of the procedures is shorter than that of the procedures for the establishment of a company. However, the duration of immigration procedures is dependent on the place of application and the workload of the immigration office. Investors should ensure that their passport is valid. In practice, the validity of a TRC will not exceed the validity of the investor’s passport. Thus, the planning of passport renewal should be included in the long-term immigration planning.
If foreign investors follow the correct order in the establishment of a company, the procurement of an investor’s visa, and the application for a TRC, foreign investors can avoid most of the usual delays when entering the Vietnamese market.
Practical Implications for Investors Operating in Vietnam
Tax Residency and the TRC
The Temporary Residence Card may facilitate long-term operations in Vietnam, and considering the implications on tax residency, this is an important factor for investors to consider.
According to the tax laws of Vietnam, an individual may be categorized as a tax resident if he/she resides in Vietnam for 183 days or more in a calendar year, or meets certain residency criteria as defined by the tax authorities of Vietnam. The status of tax residency will affect the manner in which an individual’s personal income is taxed and the obligations regarding the reporting of income.
For investors actively managing operations in Vietnam, it is helpful to know the difference between immigration status and tax status. For example, holding a DT visa or TRC does not equate to having tax residency, though the latter may be the case given the presence of the investor in Vietnam for an extended period. For this reason, investors should reassess their tax status with the likelihood of relocation to Vietnam for a considerable amount of time.
It is common for investors, who divide their time between several countries and/or have business operations in several jurisdictions, to seek professional tax advice.
Investors who are not Vietnamese citizens may hold the belief that possession of a Temporary Resident Card will ultimately result in their Permanent Residency in Vietnam. This is not true. Permanent Resident Card (PRC) status in Vietnam is Immigration and has a more demanding criterion than Temporary Resident Card (TRC) status.
PRC status is generally only available to a confined number of persons (i.e. persons who have made outstanding contributions to the Socialist Republic of Vietnam, immediate family members of persons who are Vietnamese citizens and other special cases as may be decided on by the Vietnamese authorities). For the majority of foreign investors, the more realistic and practical long-term solution will be the renewal of the DT Visa and the TRC, rather than the attainment of Permanent Residency in Vietnam.
The framework of the DT Visa and TRC provides the majority of investors with the flexibility and means to conduct business, and expand their operations in Vietnam, without the need for Permanent Resident status.
Continued understanding of the immigration and business operational aspects of Vietnam is essential for foreign investors as Vietnam seeks to attract and increase Foreign Direct Investments and International businesses. This understanding is critical for foreign investors to be able to develop and maintain business operations in Vietnam.
The DT Visa and Temporary Resident Card are business facilitation tools for potential investors rather than standard immigration documents. The incorporation of a thoughtful immigration framework allows potential investors to decrease the administrative burden and increase routine efficiency and long-term flexibility.
Conclusion
The DT Visa and Temporary Resident Card may be used by potential investors for either the establishment of a new business entity or the expansion of an existing business operation.
The immigration framework may lack the excitement of other aspects of market establishment. However, it facilitates the business entity’s operational capabilities and provides the legal framework to support business activities.