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Foreign investors establish economic organizations in Vietnam

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Law on enterprises 2020

Law on investment 2020

Decree No. 31/2021/ND-CP

Circular 03/2021/TT-BKHDT

What is a foreign invested enterprise?

Foreign-invested enterprises are legal entities invest in part or in whole by investors of another country and established and operating in the territory of another country to conduct business activities commercial activities and bring profits to investors. In Vietnam, the concept of foreign-invested enterprises, also known as FDI enterprises.

Related article: Entry, exit, and residence of foreigners in border economic zones

What are the pros and cons of IPO in Vietnam?

Foreign investors establish economic organizations in Vietnam

  • In case of establishment of an economic organization:
  • Foreign investors establishing economic organizations must satisfy the market access conditions for foreign investors specified in Article 9 of the Investment Law.
  • Before establishing an economic organization, a foreign investor must have an investment project and carry out procedures for granting and adjusting the Investment Registration Certificate; except for the case of setting up a small and medium-sized enterprise that is just starting out.
  • Creation and innovative start-up investment funds in accordance with the law on supporting small and medium enterprises. From the date granted the Certificate of Business Registration or another document of equivalent legal validity; the economic organization established by the foreign investor is the investor implementing the investment project.

In addition

Regarding the implementation of investment activities of foreign-invested economic organizations; economic organizations must satisfy the conditions and carry out investment procedures as prescribed for foreign investors when investing in the establishment other economic organizations; make an investment to contribute capital; purchase shares or purchase capital contributions from other economic organizations if it falls into one of the following cases:

  • There is a foreign investor holding more than 50% of the charter capital or a majority of contract members; name as a foreign individual, for economic organizations being a partnership; There are economic organizations holding more than 50% of charter capital.
  • There are foreign investors and economic organizations mentioned above holding more than 50% of charter capital. Economic organizations that do not fall into this category shall comply with the investment conditions and procedures prescribed for domestic investors; when investing in establishing other economic organizations; investment in the form of capital contribution, share purchase, purchase of capital contributions from other economic organizations.
  • Finally, Foreign-invested economic organizations established in Vietnam; if they have new investment projects; shall do the procedure continue to implement that investment project without necessarily establishing a new economic organization.

Related questions

Features of economic organization?

Enterprises and cooperatives are legally established under the provisions of law.
Licensed to operate and do business to serve economic development.
An economic organization must have a clear operating charter and organizational structure.
Businesses have full information about their names, addresses, property numbers, clear and transparent operational purposes.
The enterprise has a legal personality.
Economic organizations are enterprises or cooperatives without foreign investment capital.

Operational forms of economic organizations?

The state-owned economy is consolidated and developed, especially in the field that plays a key role in the national economy.
Collective economy contributed by citizens to cooperate in production and business is organized in various forms on the principle of voluntary, democratic and mutual benefit.
Individual economy, private capital can choose the form of organization of production and business, and can establish an enterprise without any restriction on the scale of activities and industries that bring benefits to the national economy.
Economic families are encouraged to grow.

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