Can foreigners set up private enterprise?

by BichNgoc

With the policy of opening the market for foreign investors to access investment in Vietnam with many types of enterprises in accordance with current regulations. Therefore, there is no question that foreign investors can invest by opening a private enterprise. Regarding this issue, LSX Lawfirm would like to share with you the article: “Can foreigners set up private enterprise?” as follows:

Law on Enterprises 2020

Law on Investment 2020

What is private enterprise?

According to the provisions of Clause 1 of Article 188 of the Enterprise Law 2020 stipulates that an individual now own private enterprise. They shall be responsible with their entire assets for all operations of the business.

Thus, the enterprise law does not specifically stipulate that individuals who are owners of private enterprises have Vietnamese or foreign nationality. Therefore, that the Law on Enterprises does not prohibit or restrict foreigners from setting up private enterprises in Vietnam.

However, the current law does not have any documents specifically guiding the procedures for setting up private enterprises by foreigners. In addition; there are no regulations guiding measures to ensure the liability with the entire property of foreigners when their assets are abroad.

Legal regulations on investment in Vietnam related to private enterprise

According to the Law on Investment, there are four basic forms of investment in Vietnam:

– Firstly; invest in the establishment of economic organizations.

– Secondly; investment to contribute capital, buy shares, buy capital contribution.

– Thirdly; implementation of investment projects.

– Finally; investment in the form of BCC contract.

In addition, Vietnamese law establish and operate Economic organization ; including enterprises, cooperatives, unions of cooperatives and other organizations conducting investment activities business”. Therefore, private enterprises belong to the type of investment in the form of investment in establishing economic organizations.

Related article: What type of company can a foreigner set up in Vietnam

Can foreigners set up private enterprise?

According to the Law on Investment of Vietnam, “Foreign-invested economic organization is an economic organization with a foreign investor as a member or shareholder”. According to the provisions of the Enterprise Law; an individual own private enterprise. Therefore, if only one individual own a private enterprise , it is impossible for a foreigner establish private enterprise. They to be a member or shareholder of that enterprise.

Thus, there cannot a foreigner own a private enterprise . In addition, before establishing an economic organization in accordance with the law on enterprises; foreign investors must have an investment project and carry out procedures for applying for an Investment Registration Certificate in accordance with the provisions of Investment Law.

However, as mentioned above, the investment law has not yet recognized the legal status of private enterprises.

Therefore, foreigners cannot carry out the procedures for applying for an investment registration certificate to establish a private enterprise.

Thus, the current law does not prohibit but also has no specific guidance on the establishment of private enterprises by foreigners in Vietnam.

Related questions

Types of businesses in Vietnam?

According to the provisions of the Enterprise Law 2020, Vietnam includes 5 main types of enterprises as follows:
– Private enterprise
– Joint Stock Company
– One member limited liability company
– Company Limited
– Partnership Company
 

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