Vietnam Company from India: 2026 Setup and ODI Guide

India and Vietnam traded USD 16.46 billion in 2025, a record, and the first quarter of 2026 ran 28% ahead of the same period the year before.

That is a genuine corridor rather than a diplomatic aspiration. It is also lopsided: Vietnam sold India USD 10.3 billion and bought USD 6.1 billion.

For an Indian founder, the Vietnamese side of the entry is the straightforward half. The Indian side is where the planning belongs.

USD 16.46bntwo way trade in 2025, a record, growing 10.5 percent

USD 250,000a resident individual's annual remittance limit under the LRS

20%tax collected at source above ten lakh rupees of remittance in a year

The corridor, honestly described

• The trade flow runs toward India, so Vietnam is more often the supplier than the customer.
• That is an argument for an Indian buyer to be closer to the source, which is a sourcing case rather than a market entry case.
• Growth is accelerating, which is unusual for a corridor of this size.
• Targets are political statements. The 2025 number is the fact; the 2030 number is an intention.

What Vietnam asks of you

The requirements are the same for an Indian founder as for anyone else, and the mechanics are set out in the guides.

• Most sectors allow full foreign ownership, with a short list of closed and conditional activities.
• The company needs a legal representative residing in Vietnam, which is the first real constraint.
• Filing online needs a Vietnamese electronic identity, which for a foreign national needs a residence card.
• Since 31 March 2026 you may incorporate first and obtain the investment certificate within twelve months.

The detail is in setting up in Vietnam as a non-resident.

The Indian side: two different doors

1. 1
   Is the investor an individual or a company?The two use different frameworks with different limits and reporting
2. 2
   Individual: the Liberalised Remittance SchemeUp to USD 250,000 per financial year, April to March, across all permitted purposes combined
3. 3
   Company: overseas direct investmentLimits tied to the company's financial strength, with fuller reporting to the Reserve Bank
4. 4
   Either way, the remittance is reportedThe bank is the reporting channel and will ask what the money is for before it moves

• The LRS limit is per individual per financial year, not per transaction and not per bank.
• It covers all permitted purposes combined, including education and travel, so a founder funding a company abroad shares the limit with everything else.
• Corporate overseas direct investment has its own framework, with limits linked to the investing company's financials.
• A family can fund more than an individual, since the limit attaches to each resident individual separately, which is planning rather than avoidance.

The tax that is collected before the money leaves

This is the part that surprises founders, because it is not a tax on the investment at all.

• The threshold is aggregated across all non tour package remittances in the year, not applied per transfer.
• It is collected by the bank at the point of remittance, before the money reaches Vietnam.
• It is creditable against your Indian tax liability, so it is a cash flow cost rather than a permanent one for a taxpayer with sufficient liability.
• The doubled rate for non-filers under sections 206CC and 206AB is a compliance trap, not a policy about foreign investment.

Plan the remittance schedule around the threshold and the financial year boundary. A capital contribution split across two Indian financial years behaves very differently from the same amount sent at once.

What this changes about the Vietnamese structure

• The ninety day charter capital deadline runs on Vietnamese time, not on the pace of Indian approvals, so the two calendars have to be reconciled before incorporation.
• A modest charter capital is easier to fund within the LRS limit and below the tax collected at source threshold.
• But a charter capital below VND 3 billion does not reach the investor visa tier that carries a residence card, which matters if you intend to be the resident legal representative yourself.
• Those two pressures point in opposite directions, and resolving them is the actual planning question on this route.

The capital and visa interaction is set out in setting up in Vietnam as a non-resident.

Sourcing, selling, or making

The business lines on the certificate are fixed early and widened only with difficulty, so it is worth being precise about which of three things you are doing.

• Sourcing is the model the trade data supports, given that Vietnam sells India more than it buys.
• Distribution and retail are conditional activities in ways that manufacturing usually is not.
• Manufacturers should re run their numbers, because locating in an industrial park no longer produces a tax outcome by itself.

Taking profit back to India

• Dividends to a corporate shareholder carry no Vietnamese withholding on the majority view, and 5% where the shareholder is an individual.
• The audit comes first. Profit cannot be remitted until the audited financial statements and the annual tax finalisation are filed.
• Notice of at least seven working days goes to the Vietnamese tax authority before the transfer.
• Money leaves through the investment capital account, not the operating account.
• Indian taxation of the receipt is a separate question and depends on your own position rather than on Vietnamese law.

Where it goes wrong

• Funding the company before the capital account exists, so the contribution is not recognised.
• Underestimating the Indian reporting, particularly on the corporate route where the Reserve Bank expects continuing filings.
• Assuming tax collected at source is lost, and over engineering the structure to avoid a credit that would have been recovered anyway.
• Registering a charter capital that the LRS limit cannot fund inside the ninety day window.
• Treating a sourcing operation as a market entry, which leads to the wrong business lines on the certificate.

The bottom line

The India to Vietnam route is one of the better supported corridors on this list, with real trade volume behind it and growth that is still accelerating.

The Vietnamese requirements are ordinary. The Indian ones are where the timetable is decided, because the remittance limits, the reporting and the tax collected at source all sit upstream of a Vietnamese deadline that does not pause for them.

Sequence the Indian approvals first, then incorporate, and set the charter capital at a figure you can actually fund inside ninety days.