Vietnam Company from France: 2026 Setup and Tax Guide

France and Vietnam trade under the EVFTA, which removes almost 99% of customs duties and has been in force since 1 August 2020.

That much is well covered. Two things are not, and both matter to a French founder or group.

The first is that the investment protection agreement negotiated alongside the EVFTA is still not in force. The second is that the Vietnamese tax incentive a project might qualify for can create a French tax problem that the standard rate does not.

1 Aug 2020the EVFTA in force, removing almost 99 percent of duties

18 of 27member states that had ratified the investment protection agreement as at 2025

40%the gap that makes a foreign regime privileged under article 238 A

Two agreements, only one of them in force

• The trade agreement works today and is the reason French exporters and importers see improved terms.
• The investment protection agreement does not, and it was at 18 of 27 ratifications as at 2025 reporting.
• The practical consequence is that a French investor in Vietnam does not currently have the treaty based investor protection and dispute mechanism that EVIPA was designed to provide.
• Commentary frequently conflates the two, describing EVIPA benefits as though they were available.

If investor protection is part of your case for Vietnam, check the ratification position at the time you invest rather than relying on a description written in 2020.

What Vietnam asks of you

• Full foreign ownership is available in most sectors, subject to the negative list.
• A legal representative must reside in Vietnam.
• Online filing requires a Vietnamese electronic identity, which needs a residence card for a foreign national.
• Since 31 March 2026 you may incorporate first and obtain the investment certificate within twelve months.
• From 11 September 2026 a single apostille replaces consular legalisation for French public documents, since France has not objected to Vietnam's accession.

The process is in how to register a company in Vietnam.

The French rule that decides how the subsidiary is taxed

1. 1
   Does a French corporate taxpayer hold more than 50 percent?Directly or indirectly. Below that, article 209 B does not apply on this basis
2. 2
   Is the Vietnamese entity under a privileged tax regime?Not taxable there, or taxed at least 40 percent below what France would have charged
3. 3
   The comparison is of tax actually borneFor the same profits, for the same year, against French normal law
4. 4
   If both are met, the profits are deemed distributedAnd taxed in France in the hands of the controlling shareholder

• Article 209 B applies to a French entity holding, directly or indirectly, more than 50% of an entity established outside France.
• A privileged regime under article 238 A means the entity is not taxable there, or bears profit taxes at least 40% lower than it would have borne in France.
• The comparison is between actual burdens, computed for a given year, rather than between headline rates.
• Safe harbour provisions exist and are not covered here; they are the first thing a French adviser will examine.

Where the Vietnamese incentive becomes a French problem

This is the connection worth making, and it runs against the usual instinct.

• Vietnam's standard corporate rate is 20%. Against a French rate of 25%, a 40% reduction would put the comparison point at 15%, and 20% is comfortably above it.
• So an ordinary Vietnamese subsidiary is not normally in privileged regime territory on the headline arithmetic.
• But Vietnam's incentive rate for qualifying projects is 10%, and specially prioritised industries can now hold it for the entire operating period.
• A project that wins that incentive falls below the comparison point, and the article 209 B analysis changes accordingly.

The instinct is to chase the Vietnamese incentive. For a French controlled subsidiary, the incentive can transfer part of the benefit to the French treasury through the deemed distribution mechanism, unless a safe harbour applies.

That is not a reason to avoid the incentive. It is a reason to model the French position before the Vietnamese application is made, rather than after the certificate records it.

The Vietnamese incentives themselves are set out in corporate income tax in Vietnam.

What French businesses build in Vietnam

Business lines are recorded on the certificate and widened only with difficulty, so the model should be settled before the application.

Getting profit back to France

• Dividends to a corporate shareholder carry no Vietnamese withholding on the majority view, and 5% to an individual.
• The audited financial statements and annual tax finalisation come first, and the Vietnamese audit is compulsory whatever the company's size.
• Seven working days notice goes to the Vietnamese tax authority before any remittance.
• Funds move through the investment capital account, not the operating account.
• French taxation of the receipt depends on the participation regime and on the article 209 B position, and is a French question.

The resident representative, for a French group

• A secondment solves it cleanly and creates a Vietnamese tax residence for the person seconded, since a long lease alone can establish habitual residence.
• A local appointment is cheaper and requires careful charter drafting, because a legal representative with undefined powers holds full authority toward third parties.
• The role is not a formality. It is the person the registry, the bank and the tax authority deal with.
• It also unlocks the filing systems, since the company's electronic identity account depends on the representative holding a verified personal one.

For a French group the practical question is usually whether an existing regional manager can take the role, which is a mobility and payroll question before it is a corporate one.

Where it goes wrong

• Relying on EVIPA protections that are not in force.
• Chasing a Vietnamese incentive without modelling the French consequence of a low effective rate.
• Assuming the more than 50% test is about voting rights alone, when indirect holdings count.
• Treating the comparison as a rate comparison, when the rule compares tax actually borne, year by year.

The bottom line

The trade case for France and Vietnam is settled and works. The investment protection case is weaker than the literature suggests, because the agreement written for it has not entered into force.

The tax planning point is counterintuitive and specific: at Vietnam's ordinary rate a French group is comfortably outside the privileged regime test, and at Vietnam's incentive rate it may not be.

Model both the ordinary and the incentive positions before you apply for anything. The Vietnamese incentive is decided at the investment certificate stage, which is early, and it is not the moment to discover a French consequence.