In this article
“How much capital should we register?” is the first question most investors ask when preparing an Investment Registration Certificate (IRC – Giấy chứng nhận đăng ký đầu tư) application. There is no single right figure for every case: the charter capital of a foreign-owned company should be worked out from the actual spending plan, the requirements of the business line and the ability to contribute on time. This article explains how to build the budget step by step, with a sample table, prepared by the FDI accounting team at ACCA Consulting Vietnam.
1. Why there is no single capital figure for every FDI company
Charter capital is the amount the members commit to contribute, as stated in the company charter. For foreign investors, this figure is also linked to the registered investment capital on the IRC. Licensing authorities, banks and partners all look at it to assess the project's financial capacity.
A two-person consulting firm and a manufacturing workshop have completely different capital needs. Some business lines have capital conditions under sector-specific regulations, which need to be checked separately. The right approach is therefore to work up from costs to the figure, not down from a number you have “heard about”.
2. How to budget the charter capital of a foreign-owned company
- 1List set-up costs
Office rent, deposits, furniture, equipment, incorporation and licensing costs.
- 2Budget operating costs for 12–24 months
Salaries, insurance, premises, accounting, audit, marketing, travel.
- 3Estimate cash inflows
When the first revenue arrives and how quickly cash is actually collected.
- 4Calculate the funding gap and buffer
Spending not yet covered by income, plus a buffer for the risk of delayed revenue.
- 5Check the ability to contribute on time
Capital must be transferred through the DICA and fully contributed within 90 days of the issue date of the Enterprise Registration Certificate (ERC – Giấy chứng nhận đăng ký doanh nghiệp).
3. Sample budget for a small service company
The table below is an illustrative example for a 100% foreign-owned consulting company with 3 Vietnamese employees, renting a small office in Ho Chi Minh City and expecting first revenue from month 7. The figures are assumptions to illustrate the method, not market prices.
| Item | Calculation (assumed) | Amount (VND) |
|---|---|---|
| Salaries for 3 employees | 3 × 15,000,000 × 12 months | 540,000,000 |
| Employer insurance at 21.5% | 540,000,000 × 21.5% | 116,100,000 |
| Office rent | 20,000,000 × 12 months + 2 months' deposit | 280,000,000 |
| Equipment and furniture | Assumed | 150,000,000 |
| FDI accounting service (ACCA, 1–15 documents) | 1,280,000 × 12 months | 15,360,000 |
| Annual financial statement audit and other costs | Assumed | 120,000,000 |
| 20% contingency | 20% of the lines above | 244,292,000 |
| Total first-year capital requirement | 1,465,752,000 |
Illustrative example using the assumptions in the table; cash inflows from month 7 not yet deducted.
View as table
| Salaries | 540,000,000 VND |
| Employer insurance | 116,100,000 VND |
| Office | 280,000,000 VND |
| Equipment | 150,000,000 VND |
| Accounting | 15,360,000 VND |
| Audit and other | 120,000,000 VND |
| Contingency | 244,292,000 VND |
Based on the example, the investor could choose charter capital of about VND 1.5 billion (≈ USD 59,000, approximate, at a reference rate of VND 25,500/USD) to fund the whole first year, or less if revenue comes early and there is a plan to borrow from the parent company. If planning for 24 months, add the second year's costs less expected cash inflows.
Extending the budget to months 13–24
Continuing the illustrative example: if from month 7 the company collects an average of VND 120 million/month and second-year costs are similar to the first (without equipment and deposits), the funding gap will narrow gradually. Plot cumulative monthly cash flow: the lowest point of the cumulative curve is the minimum capital you need, while the contingency covers a scenario where revenue arrives a few months later than planned. This presentation also helps the licensing authority and the bank quickly understand why you chose that capital figure.
4. Risks of capital that is too low or too high
| Capital too low | Capital too high |
|---|---|
| The IRC application may be asked to justify financial capacity | Pressure to transfer the full amount within 90 days of the ERC issue date |
| Running out of cash early, requiring a capital increase and IRC/ERC amendments | If not fully contributed, capital must be reduced, adding procedures |
| Heavy borrowing from the parent company, triggering foreign loan procedures | Cash sitting idle in the account, reducing the efficiency of group capital |
| Harder to demonstrate capacity when applying for work permits for expatriates | More procedures when dissolving or withdrawing capital |
For late or incomplete contributions, see capital contribution deadlines for foreign investors.
5. Practical tips when settling the capital figure
- Budget by month, not by year, to see clearly which month cash flow is most negative.
- Separate charter capital from borrowings: fund long-term costs with equity and consider loans only for short-term needs.
- Include compliance costs in the budget from the start: accounting, audit, insurance and personal income tax (PIT/TNCN).
- Keep the budget as supporting evidence for the IRC application and when the bank asks about the purpose of the capital transfer.
FAQ
Is there a general minimum charter capital for FDI companies?
There is no single minimum for all sectors; some business lines have specific capital conditions under sector regulations. The licensing authority will consider whether the capital is appropriate to the scale of the project.
How long do we have to contribute charter capital?
For an FDI company, capital must be transferred through the direct investment capital account (DICA) and fully contributed within 90 days of the ERC issue date.
Can we register low capital and increase it later?
Yes, but each increase usually requires amending the IRC and ERC and updating the bank. Budget for at least 12 months to keep procedures to a minimum.
Budget realistic capital before filing for the IRC
ACCA Consulting Vietnam is an accounting firm in Ho Chi Minh City supporting foreign investors from capital budgeting to monthly bookkeeping and tax. Call or Zalo +84 938 847 699.
Free consultationZaloWhatsApp
