Due to the development of the economic market, the intention of foreigners to invest in Vietnam increases day by day. Accordingly, when establishing a company in Vietnam, foreigners must meet certain conditions. So what are the conditions for foreigner to set up companies in Vietnam? This article from LSX law firm will provide you with information about: “Conditions for foreigner to establish a company in Vietnam”
Legal ground
- Law on Enterprise 2020
- Law on Investment 2020
Company establishment in Vietnam
At present, foreigners can make investments and contribute capital to open a company in Vietnam according to the Law on Enterprises and the Law on Investment.
Specifically, according to Clause 1, Article 17 of the Law on Enterprise 2020, Organizations and individuals have the right to establish and manage enterprises in Vietnam in accordance with this Law, except for the cases specified in Clause 2 of this Article. Accordingly, individuals with foreign nationality and organizations established under foreign laws are fully entitled to open companies in Vietnam.
At the same time, Article 5 of this Law also regulates the investment as follows:
Article 5. Protection of enterprises and their owners by the State
1. The State recognizes the long-term existence and development of the types of enterprises prescribed in this Law; ensures equality of enterprises before the law regardless of their types of business and economic sector; recognizes lawful profitability of business operation.
2. The State recognizes and protects the rights to ownership of assets, capital, income, other lawful rights and interests of enterprises and their owners.
3. Lawful assets and capital of enterprises and their owners shall not be nationalized or administratively confiscated. Unless strictly necessary, the State may purchase or requisition assets of enterprises, in which case these enterprises shall be paid or reimbursed for in accordance with regulations of law on purchase and requisitioning of assets and in a manner that ensures the enterprises’ interests and non-discrimination among the types of business.
However, foreigners need to meet the business lines requirements as well as meet the conditions for establishing a company in Vietnam.
Conditions for foreigner to establish a company in Vietnam
Business lines
Business lines that foreigner invest to establish company in Vietnam must not include the business lines banned from business investment. Also, they have to satisfy specific conditions for conditional business lines.
Firstly
Business lines banned from business investment include:
- Trade in narcotics.
- Trading chemicals and minerals.
- Trade in plants and wild animals.
- Prostitution business.
- Buying and selling people, parts of the body.
- Businesses that lead to asexual reproduction in humans.
Secondly
Lines that foreigners are not allowed to perform in include:
- Lottery business.
- Trading firecrackers.
- Television service.
- Industrial property representation service.
- Notarization service.
- Judicial expertise services.
In addition, for conditional business lines, foreigners must carry out procedures to do business in that line.
Conditions for setting up a company in Vietnam in each field
Firstly
If foreigners operate in the manufacturing industry
- Foreign investors must ensure that the location of the project implementation is appropriate to the local development planning;
- Foreign investors must have the financial capacity to perform the project;
- Must ensure the environmental and security conditions.
Secondly
If foreigners operate in the commercial industry
- Foreign investors must ensure the location of the project;
- Foreign investors must have the financial capacity and experience to carry out projects;
- The export, import, and distribution of goods must have HS codes and do not fall into the cases of prohibition or restriction on import, export, and distribution. Also, conform to the roadmap as committed by Vietnam when joining the WTO;
- Foreign investors must satisfy the conditions for practicing certificates and the conditions for investment capital and legal capital as prescribed for each specific field;
- Foreign investors must meet the rate of foreign investment in each specific project;
Thirdly
If foreigners operate in the service industry
- Foreign investors can only register service industries for which Vietnam has committed to open the market when joining the WTO;
- Foreign investors must ensure specific conditions according to the schedule of commitments on services of Vietnam when joining the WTO;
- Must have the financial capacity and experience to carry out projects;
- Foreign investors must ensure the location of the project;
Apply for investment certificate when meeting the conditions for setting up a company in Vietnam
Foreigner who want to open a company in Vietnam will need to apply for an investment certificate. Dossier to apply for an investment certificate when meeting the conditions for setting up a company in Vietnam includes:
- Application for Investment certificate.
- Passport, identification card with documents verifying the legal status with consular receipts.
- Report on the financial capacity of foreigners who want to open a company in Vietnam. The content of the report must clearly show the source of investment capital used by the foreigner to invest and the investor has sufficient financial capacity to do so. Investors can attach the following 2 types of papers to prove their financial capacity: Financial statements (for investors who are legal entities) and Confirmation of bank account balances (for investors as individuals)
- Investment project proposal.
- Proposal on demand for land if the company uses leased land in Vietnam.
LSX legal firm’s service on company establishment
When establishing a company, people must carry out the procedure following the law at the competent business registration authority (under the Law on Enterprise 2020). The process of establishing a business includes many different steps and phases. If you are not familiar with the law, this process may take a lot of time.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself. We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application; submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
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Related questions
This step will be done after obtaining the business registration certificate as well as publishing the business establishment report. Enterprises can engrave stamps at units with seal engraving function.
Increase the owners’ contributed capital.
Also, mobilize capital from loans: organizations and individuals, bond issuance.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Conditions for foreigner to establish a company in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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