According to data released by the Foreign Investment Agency, Ministry of Planning and Investment, as of June 20, 2022, the total newly registered capital, adjusted and contributed capital to buy shares, buy contributed capital of foreign investors reached over 14.03 billion USD, equaling 91.1% over the same period in 2021. Although there is a decrease compared to 2021, the figure still shows that Vietnam is still an ideal investment environment. of foreign investors, FDI inflows. So about the matter “Establish a foreign-invested enterprise in Vietnam” Let’s find out with LSX in the article below.
Legal basis
- Schedule of WTO commitments;
- Law on Investment 2020, amended and supplemented in 2022 and guiding documents;
- Enterprise Law 2020, amended and supplemented in 2022 and guiding documents;
- Trade agreements with foreign investors’ nationalities.
What is the dossier of establishment of a foreign-invested enterprise?
1. Documents to be prepared for individual investors
• Passport (requires notarized copy)
• Confirm the bank account balance corresponding to the amount invested in Vietnam (Original)
• Office rental contract
• Expected capital to invest in Vietnamese company
• Expected company name
• Expected business lines of foreign companies
2. Documents to be prepared for investors who are companies/organizations
• Certified copy of business registration certificate (Consular legalization)
• Confirm the bank account balance corresponding to the amount invested in Vietnam (Original) or the corresponding profitable financial statement (Consular legalization)
• Operational charter of foreign parent company (Consular legalization)
• Office rental contract
• Expected capital to invest in Vietnamese company
• Expected company name
• Expected business lines of foreign companies
• Passport of the legal representative – Director of the company in Vietnam.
Some notes before establishing a foreign-invested enterprise
Foreign investors including foreign individuals and foreign companies can establish companies in Vietnam with capital ownership ranging from 1-100% depending on the investment field.
Conditions for establishing a foreign-invested company depend on the field the investor establishes: According to WTO commitments and Vietnamese law, a number of fields can be easily established in Vietnam such as: trade, import-export, investment consulting, management consulting, software field, real estate, construction, restaurant, tourism, manufacturing (need to have a factory in the industrial park), …
Except for industries that require legal capital, there is no minimum amount of capital contributed by investors, but it should be suitable for the operation scale of the registered company. However, the amount of contributed capital affects the application for a work permit and temporary residence card for the investor, whereby the investor, the representative managing the contributed capital is only exempted from the work permit and granted the card. If the capital contribution is 3 billion VND or more, the investor contributes a high amount of capital, the duration of the temporary residence card will be longer.
If foreign investors contribute capital right after the establishment, they need to prove their financial status through: savings book, deposit balance, etc. for individuals, deposit balances, tax reports, profitable financial statements, etc. for companies. But if foreign investors contribute capital to buy shares, it is not necessary to provide these documents.
For the procedure of establishing a foreign-invested company, it is necessary to provide additional house, office or loan contract and house and land documents of the rented house, office to submit together with the establishment dossier. Meanwhile, for Vietnamese companies or procedures for purchasing capital contributions, this condition is not required.
The director, the legal representative, the person managing the contributed capital of a foreign-invested company may be a foreigner or a Vietnamese.
Foreign-invested companies are also granted an Enterprise Registration Certificate (ERC) by the Business Registration Office – Department of Planning and Investment where the company’s head office is located like a Vietnamese capital company.
For companies with foreign investors contributing capital from the beginning from 1% and foreign capital companies operating in the field of education, it is required to carry out procedures for issuance of an Investment Registration Certificate (IRC).
The biggest difference between a foreign-invested company and a Vietnamese-owned company is that the company needs to open an investment capital account to make capital contribution and repatriate profits later.
The time limit for capital contribution of foreign-invested companies is clearly stated in the Investment Registration Certificate. Accordingly, when the investor has not contributed capital, the bank opening the investment capital account will not accept late contributed capital. In order to be able to carry out the procedures for capital contribution as committed, the company needs to amend the Investment Registration Certificate to extend the time limit for capital contribution.
Tax declaration procedures of foreign-invested companies are similar to Vietnamese-owned companies. However, foreign-invested companies must audit year-end financial statements.
In addition, foreign-invested companies that are granted an annual investment registration certificate must carry out procedures for reporting investment and project implementation status to the investment registration agency.
Establish a foreign-invested enterprise in Vietnam
Step 1: Apply for an Investment Registration Certificate associated with the establishment of a foreign-invested economic organization
The investment registration authority shall grant the Investment Registration Certificate to the investor within 15 days from the date of receipt of a valid dossier when the project meets the following conditions:
• Do not belong to a business or industry that is prohibited from doing business as prescribed in Article 6 of the Law on Investment and international treaties on investment;
• Having an investment project location determined on the basis of a valid copy of a land use right document or a valid copy of the location lease agreement or another document or document defining the land use right. points for implementing investment projects;
• Investment projects in accordance with the plannings prescribed in Clause 7 Article 31 of this Decree;
• Satisfy the conditions for investment rate on a land area prescribed by the Provincial People’s Committee based on the actual conditions of the locality and approved by the Standing Committee of the Provincial People’s Council (if any). quantity of labor used (if any);
• Meeting market access conditions for foreign investors.
Step 2: Apply for a Business Registration Certificate
Dossier of establishment of a foreign company applying for an enterprise registration certificate:
• Business registration application form
• Company rules
• List of founding members/shareholders of the company
• Authorization letter
• Notarized copy of investment registration certificate
• Notarized copy of legal representative’s personal papers
Agency receiving business registration dossiers: Business registration office of province/city.
Time to issue business registration certificate: 5-8 working days
Step 3: Apply for a business license for some conditional lines of business
According to the provisions of Decree 09/2018/ND-CP on goods trading activities and activities directly related to the purchase and sale of goods of foreign investors, economic organizations with investment capital Foreigners in Vietnam:
• Retail is the activity of selling goods to individuals, households and other organizations for consumption purposes.
• Investors are not required to issue business licenses for the export and import of goods and wholesale of goods (not in the categories of: Oil, lubricating grease; rice; sugar; video products; books, newspapers and magazines).
• Investors shall issue business licenses when performing goods retailing activities, setting up goods retailing establishments.
Services of LSX
Prestigious professional services: Firstly, the team of consultants and consultants for many years in the field of civil status, and customer support.
On-time: Certainly, with the motto “Get your lawyer right at your fingertips”, we ensure the service always performs on time. The rights and interests of customers always come first.
Cost: Besides, LSX’s service costs are highly competitive; depending on the nature of the particular case. So, we want our guests to have the best possible service experience. Therefore, costs which guaranteed to be the most suitable and economical for customers.
Confidentiality of client information: Finally, all brand information of client LSX will be 100% confidential.
Please contact us immediately if you have any questions about “Establish a foreign-invested enterprise in Vietnam”
Contact LSX
The above article has provided detailed information related to the issue “Establish a foreign-invested enterprise in Vietnam”. At the same time, LSX Law firm always has leading lawyers and legal consultants who will help you in legal matters of life. If you have any need, please get in touch with us via hotline: +84846175333 or Email: [email protected]
Please see more
- Dissolution of foreign-invested enterprises in Vietnam
- Looking up foreign-invested enterprises in Vietnam
- Proving separate property before marriage under Vietnam law
Frequently asked questions
There are two ways to establish a foreign-owned company, the registration procedure for foreign investors to contribute capital, receive the transfer of capital and shares in a Vietnamese company to convert into a foreign-owned company is the method of development, the fastest and easy way. The procedure should be done in the following order:
• Step 1: Establishing a Vietnamese company;
• Step 2: Transfer of contributed capital and shares to foreign investors;
• Step 3: Apply for a retail business license and other conditional business licenses if the business lines are conditional
This method is just an objective assessment for the general foreign company establishment procedure, because many foreign companies deploy production, processing or plan to borrow foreign capital in the course of their business, so they need a Certificate of investment registration to operate. At that time, the option to establish a new foreign company in connection with the application for an investment registration certificate will be mandatory. We base on the actual needs of customers to give the fastest and best implementation direction.
Establishment of a foreign-invested company in the form of investors contributing capital from the beginning
Accordingly, foreign investors will contribute capital right from the start of establishing a company in Vietnam. Accordingly, the capital contribution rate of foreign investors, depending on the field of operation, can contribute capital from 1% to 100% of the company’s charter capital.
Establishment of a foreign-invested company in the form of capital contribution or share purchase
With this form, foreign investors will contribute capital to a Vietnamese company that already has an enterprise registration certificate. Foreign investors, depending on the field of operation, can contribute 1%-100% of capital to a Vietnamese company. Foreign investors will carry out procedures to purchase contributed capital and shares of Vietnamese companies. After that, the Vietnamese company became a foreign invested company.
• Areas where investors establish a company: according to the WTO Schedule of commitments, Vietnam commits to the ratio of foreign investment capital when establishing businesses by field. Accordingly, there are many industries in Vietnam that do not limit the capital contribution rate of foreign investors such as commerce, construction, manufacturing, healthcare, education, etc., but many fields have the most limited capital contribution ratio. with investors such as advertising, tourism, transportation, logistics, …
• Investor’s nationality will also affect the rate of capital contribution when establishing the company.
Conclusion: So the above is Establish a foreign-invested enterprise in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
