In recent years, Vietnam has become an attractive investment destination for foreign investors. The strong development of industrial zones, infrastructure, and open economic policies has led to a surge in the demand for establishing foreign-owned companies in Vietnam. However, one of the most frequently asked questions during the setup process is: “Can I use a virtual office to register the company’s head office in Vietnam?” Though it may seem like a minor detail, this issue greatly impacts the legality and operational capacity of the business post-establishment.

Legal regulations on head office addresses for foreign-invested companies

When establishing a business—whether domestic or foreign-owned—the company must register a clear and lawful head office address. According to Vietnam’s Enterprise Law and related guidelines, the head office is the main communication address between the company and state agencies and partners, and it must be where administrative work and legal records are kept.

This requires the address to be a real, physical location—not just a formal registration. That’s why licensing authorities often require a valid lease agreement with a clear term, along with documents proving the lessor’s legal rights to the property.

What is a virtual office, and can it be used for company registration?

A virtual office is a service where businesses rent an address to use for company registration without actually occupying a physical space. It’s popular in cities like Ho Chi Minh City and Hanoi due to the high cost of real office rentals. These services often include a mailing address, fixed phone line, reception services, and hourly meeting rooms.

However, for foreign-invested enterprises, using a virtual office to register an investment or establish a company in Vietnam can pose legal risks. In practice, licensing authorities frequently verify the authenticity and practicality of the provided address. If it's found to be a virtual office (no actual operations, no on-site staff, no signs of real business activity), the application may be rejected or returned for amendments.

Legal consequences of using a virtual office

Using a virtual office for investment registration or business operations in Vietnam can lead to notable risks:

First, the investment registration application may be denied. Licensing authorities may inspect the registered address, especially for conditional business sectors. If the address cannot be verified or reached, rejection is likely.

Second, the company may face administrative penalties or business license revocation. Once operational, tax, labor, or insurance agencies may conduct inspections. If the company is found not operating at the registered address, it may be fined and forced to change its address under Decree 122/2021/ND-CP.

Third, it may damage the company’s credibility and hinder future investment activities. Lack of transparency in address registration can block further administrative procedures such as changing business lines, increasing capital, obtaining work permits for foreigners, or applying for investment incentives.

DEDICA’s recommendations for foreign investors selecting a company address

As a legal advisor for many foreign investors, DEDICA understands that not all investors are ready to invest heavily in office spaces from the start. However, choosing a suitable, legal address that meets inspection requirements remains essential for swift licensing and sustainable operations.

DEDICA recommends:

Opt for shared or representative offices with actual workspaces instead of purely virtual addresses.
Ensure the registered address has a clear lease contract, with on-site staff and the ability to present documents during inspections.
For office rentals in buildings, confirm that business registration is permitted and legal property documents are available.
Consult a professional legal firm like DEDICA to select a suitable model, ensure smooth licensing, and avoid legal risks.

Virtual offices might be a short-term cost-saving solution, but they are not a safe choice for foreign-owned companies in Vietnam. With stricter laws and increasing scrutiny on the authenticity of business activities, registering a virtual address could negatively impact long-term operations and investment outcomes. Investors should carefully evaluate and prepare their head office setup to comply with Vietnamese law and maintain a professional image with authorities and partners.

DEDICA is a trusted legal advisor specializing in supporting foreign investors in company formation, investment registration, business modeling, and full legal compliance in Vietnam. Our experienced lawyers are committed to delivering comprehensive and tailored solutions for each client.

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