Economic organization is no longer a strange concept in business investment activities. Especially, for foreigners investing in Vietnam, what do they need to know? LSX Lawfirm will help you answer this question according to article: “Investment in establishment of a business organization in Vietnam”, as follows:
Law on investment 2020
Business organization means?
Accordingly, Business organizationan is organization established and operating in accordance with Vietnam’s laws. It also includes enterprises, cooperatives, cooperative unions and other organizations that carry out business investment activities.
Forms of investment
- Investment in establishment of a business organization.
- Then, investment in the form of capital contribution or purchase of shares or stakes.
- Then, execution of an investment project.
- Investment in the form of a business cooperation contract.
- Finally, new forms of investment and types of business organizations prescribed by the Government’s regulations.
Investment in establishment of a business organization in Vietnam
Every investor shall establish a business organization in accordance with the following regulations:
- Firstly, a domestic investor shall establish a business organization in accordance with regulations of law on enterprises and law corresponding to each type of business organization.
- Secondly, a foreign investor that establishes a business organization shall satisfy market access conditions applied to foreign investors specified in Article 9 of Law investment 2020, in which:
“Market access conditions applied to foreign investors specified in the Negative List for Market Access include:
a) Holding of charter capital by the foreign investor in a business organization;
b) Investment method;
c) Scope of investment;
d) Capacity of the investor; partners participating in the investment activities;
dd) Other conditions specified in the Laws and Resolutions of the National Assembly, Ordinances and Resolutions of the Standing Committee of the National Assembly, Decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a signatory”
- Thirdly, before establishing a business organization, the foreign investor must have an investment project and follow the procedures for issuance or adjustment of an investment registration certificate, except for establishment of a small and medium-sized start-up enterprise and a startup investment fund in accordance with regulations of the Law on Small and Medium-sized Enterprises.
Finally, from the date on which the enterprise registration certificate or an equivalent document is issued, the business organization established by a foreign investor shall be the investor that executes the investment project set out in the investment registration certificate.
Related article: Forms of foreign investment under Vietnamese Law
The provisions of the 2020 Enterprise Law and WTO Law allow enterprises to freely conduct business in industries, as long as the regulation does not prohibit.
Yes, they can. According to the provision of law, foreign investors can establish a company with 100% foreign investment capital in Vietnam. Still, it will vary depending on the business line.
Foreign investment means that organizations and individuals of one country bring capital in different forms into another country to conduct business activities for profit. Foreign investment is made in the form of direct investment or indirect investment.
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Hope this article: “Investment in establishment of a business organization in Vietnam” is useful for you.