Hello Lawyer, Can you tell me about the 3 regulations when foreigners invest in business in Vietnam? I would like to sincerely thank the lawyer who answered for me.
Thank you for sending us your question. Nowadays, there are many foreigners flocking to Vietnam to invest. However, due to the conflict of legal regulations; making it difficult for foreigners to invest in Vietnam. So what are the notes when foreigners do business in Vietnam?
To answer the question about 3 notes when foreigners do business in Vietnam? LuatsuX invites you to refer to our article below.
Legal grounds
- Enterprise Law 2020
- Investment Law 2020
- Decree 31/2021/ND-CP
What is the process of foreigners setting up a company in Vietnam?
Step 1: Carry out administrative procedures to be granted an investment registration certificate in Vietnam.
Before carrying out the procedures for granting an Investment Registration Certificate, the investor shall declare online information about the investment project on the National Foreign Investment Information System.
The investor’s dossier submitted to the investment registration agency includes:
A written request for implementation of an investment project;
Copy of passport of foreign investor
Investment project proposal;
A copy of the bank confirmation with the balance corresponding to the investment amount;
If the investment project does not request the State to allocate or lease land or permit the change of land use purpose, a copy of the paper on land use rights shall be submitted: Real estate lease contract, red book; construction decision or other documents proving the location of the project;
The explanation of the technology used in the investment project, for the project subject to appraisal and consultation on technology in accordance with the law on technology transfer;
Other documents related to the investment project, requirements on conditions and capacity of the investor as prescribed by law (if any).
Time limit for processing applications:
Within 15 days after receiving a complete dossier, the investment registration agency shall issue an investment registration certificate; In case of refusal, the investor must be notified in writing and clearly state the reasons therefor.
Authority to issue Investment Certificate:
Management Boards of industrial parks, export processing zones, hi-tech parks and economic zones shall grant, adjust and revoke investment registration certificates for investment projects in industrial parks, export processing zones and industrial parks. hi-tech, economic zones.
The Department of Planning and Investment shall issue, adjust and revoke the Investment Registration Certificate for investment projects outside industrial parks, export processing zones, hi-tech zones, economic zones and the following projects:
Investment projects implemented in 02 or more provincial-level administrative units;
Investment projects implemented inside and outside industrial parks, export processing zones, high-tech zones and economic zones;
Investment projects in industrial parks, export processing zones, hi-tech zones, economic zones where the management board of industrial parks, export processing zones, hi-tech zones, economic zones has not been established or is not under the management Management board of industrial parks, export processing zones, high-tech zones and economic zones.
Step 2: Issue business registration certificates to foreigners to establish companies in Vietnam.
Procedures for granting a business registration certificate:
Investors submit dossiers at the Department of Planning and Investment directly or online through the National Enterprise Registration Portal;
The Department of Planning and Investment considers the validity and issues the Certificate of Business Registration;
The company carries out the engraving of the legal entity’s seal and the procedures after the establishment of the business.
Application for establishment of an enterprise and issuance of an enterprise registration certificate
After obtaining the investment registration certificate, investors need to prepare documents to set up a business. Depending on the type of company that the investor wants to establish, the investor prepares the corresponding documents. However, basically the following basic documents are required:
Application for business registration;
Company rules;
List of founding shareholders and shareholders being foreign investors (if it is a joint stock company); List of members (if it is a two-member limited liability company);
Certified copy of identity card or citizen identification card or passport (if an individual); establishment decision, business registration certificate or equivalent document and citizen identification card or identity card or passport with written authorization for capital manager in Vietnam (if an organization) ;
Certified copy of the identity card or citizen identification card or passport of the legal representative of the joint venture company;
A certified copy of the issued Investment Registration Certificate;
Power of attorney for Viet An Law Firm;
Receiving agency: Department of Planning and Investment of province/city.
Processing time for issuance of business registration certificate: 03 working days from the date the investor submits a complete and valid dossier as prescribed.
Note when foreigners invest and do business in Vietnam?
Here are 3 notes when foreigners do business in Vietnam:
Note 1: Investment incentives that foreigners who invest and do business in Vietnam need to know.
According to the provisions of Article 15 of the Investment Law 2020, the form and subjects of application of investment incentives are as follows:
Investment incentives include:
Corporate income tax incentives, including the application of a lower corporate income tax rate than the normal tax rate for a definite term or for the entire duration of the investment project; tax exemption, tax reduction and other incentives in accordance with the law on corporate income tax;
Exemption from import tax on goods imported to create fixed assets; raw materials, supplies and components imported for production in accordance with the law on import and export tax;
Exemption or reduction of land use levy, land rent and land use tax;
Depreciation is fast, increasing the amount of expenses deductible when calculating taxable income.
- Subjects eligible for investment incentives include: (detailed instructions are provided in Article 19 of Decree 31/2021/ND-CP)
Investment projects in sectors or trades eligible for investment incentives specified in Clause 1, Article 16 of the Law on Investment 2020;
Investment projects in investment incentive areas specified in Clause 2, Article 16 of the Law on Investment 2020;
Investment projects with a capital scale of VND 6,000 billion or more, disbursed at least VND 6,000 billion within 03 years from the date of issuance of the Investment Registration Certificate or approval of investment policies, VND having one of the following criteria: having a total turnover of at least VND 10,000 billion per year within 03 years at the latest from the year of revenue or employing more than 3,000 employees;
Investment projects on construction of social housing; investment projects in rural areas employing 500 or more employees; investment projects using employees with disabilities in accordance with the law on people with disabilities;
High-tech enterprises, science and technology enterprises, science and technology organizations; projects involving technology transfer on the list of technologies encouraged for transfer in accordance with the law on technology transfer; technology incubators, science and technology business incubators according to the provisions of the law on high technology and the law on science and technology; enterprises producing and providing technology, equipment, products and services to meet the requirements of environmental protection in accordance with the provisions of the law on environmental protection;
Innovative start-up investment projects, innovation centers, research and development centers;
Investing in the business of product distribution chains of small and medium-sized enterprises; business investment in technical facilities to support small and medium-sized enterprises, small and medium-sized business incubators; invest in business in the co-working space to support small and medium-sized enterprises and start-ups in accordance with the law on supporting small and medium-sized enterprises.
Investment incentives are applied to new investment projects and expansion investment projects.
– Specific incentives for each type of investment incentive shall be applied in accordance with the provisions of law on tax, accounting and land.
– Investment incentives specified at Points b, c and d, Clause 2, Article 15 of the Law on Investment 2020 do not apply to the following investment projects:
Mineral mining investment projects;
Investment projects on production and trading of goods and services subject to excise tax under the provisions of the Law on Special Consumption Tax, except for projects on production of cars, aircraft and yachts;
Investment projects to build commercial houses in accordance with the law on housing.
Investment incentives are applied for a limited time and based on the investor’s project performance. Investors must meet the conditions for enjoying incentives as prescribed by law during the time of enjoying investment incentives.
- Investment projects that satisfy the conditions for enjoying different levels of investment incentives, including investment incentives as prescribed in Article 20 of the Law on Investment 2020, are eligible for the highest investment incentives.
Second note: Regulations on approval of foreign investment policies to do business in Vietnam.
According to the provisions of Clause 1, Article 3 of the Investment Law 2020, the investment policy approval is as follows: Approval of the investment policy is the approval of the target, location and scale by a competent state agency. , progress and time limit for project implementation; investor or investor selection form and special mechanisms and policies (if any) to implement investment projects.
Authority to approve investment policies of the National Assembly: The National Assembly approves investment policies for the following investment projects:
– Investment projects that have a great impact on the environment or have the potential to seriously affect the environment, including:
Nuclear power plants;
Investment projects requiring conversion of land use purposes of special-use forests, watershed protection forests or border protection forests of 50 hectares or more; protection forest against wind, flying sand and protection forest against waves and sea encroachment of 500 ha or more; production forests of 1,000 ha or more;
- Investment projects that require change of land use purpose for wet rice cultivation from 02 crops or more with a scale of 500 ha or more;
- Investment projects that require migration and resettlement of 20,000 people or more in mountainous areas, and 50,000 or more people in other areas;
Investment projects requiring the application of special mechanisms and policies need to be decided by the National Assembly.
Authority to approve investment policies of the Prime Minister: Except for investment projects specified in Article 30 of the Investment Law, the Prime Minister shall approve investment policies for the following investment projects:
An investment project, regardless of capital source, falls into one of the following cases:
Investment projects requiring resettlement of 10,000 people or more in mountainous areas, 20,000 people or more in other areas;
New construction investment projects: airports, airfields; runways of airports and airfields; passenger terminals of international airports; cargo terminals of airports or airfields with a capacity of 01 million tons/year or more;
New investment project for passenger transport business by air;
New construction investment projects: wharves, port areas belonging to special seaports; wharves and port areas with an investment capital of VND 2,300 billion or more, belonging to class I seaports;
Oil and gas processing investment projects;
Investment projects involving betting and casino business, except for the business of prize-winning electronic games for foreigners;
Investment projects on construction of houses (for sale, lease, lease-purchase), urban areas with a land use scale of 300 hectares or more or a population of 50,000 people or more;
The investment project is in accordance with the provisions of the law on cultural heritage, regardless of the size of the land area and population within the protection zone I of the relic recognized as a national relic by the competent authority. national, special national monuments; within the protection zone II of the relic recognized by the competent authority as a special national relic on the list of world heritage sites;
Investment projects on construction and business of infrastructure of industrial parks and export processing zones;
- Investment projects of foreign investors in the field of telecommunications service business with network infrastructure, afforestation, publishing and press;
- Investment projects concurrently under the authority to approve investment policies of 02 or more provincial-level People’s Committees;
- Other investment projects falling under the Prime Minister’s authority to approve investment policies or investment decisions in accordance with law.
Authority to approve investment policies of provincial-level People’s Committees:
– Except for investment projects specified in Article 30 and Article 31 of the Law on Investment, the People’s Committee of the province shall approve investment policies for the following investment projects:
An investment project that requires the State to allocate or lease land without auction, bidding or transfer, or an investment project with a request for permission to change the land use purpose, except for the case of land allocation. lease land, permit the change of land use purpose of households and individuals who are not subject to written approval of the provincial People’s Committee according to the provisions of the law on land;
Investment projects on construction of houses (for sale, lease, lease-purchase), urban areas with a land use scale of less than 300 hectares and a population size of less than 50,000 people;
The investment project is in accordance with the provisions of the law on cultural heritage, regardless of the size of the land area, the population within the protected area II of the relic recognized as a national relic by the competent authority. national monuments, special national monuments, except for special national relics on the list of world heritages; investment projects regardless of the size of land area, population in restricted development areas or historic inner cities (defined in urban planning projects) of special urban areas;”.
Investment projects on construction and business of golf courses (golf);
Investment projects of foreign investors and foreign-invested economic organizations implemented in islands and border communes, wards and townships; coastal communes, wards and towns; other areas affecting national defense and security.
- For investment projects specified at Points a, b and d, Clause 1, Article 32, implemented in industrial parks, export processing zones, hi-tech parks, and economic zones in accordance with planning approved by competent authorities approval authority, the Management Board of industrial parks, export processing zones, high-tech zones and economic zones shall approve the investment policy.
Third note: Investor selection
According to the provisions of Article 29 of the Investment Law 2020, the selection of investors to implement investment projects is as follows:
Investor selection is conducted through one of the following methods:
Auction of land use rights in accordance with the law on land;
Bidding to select investors in accordance with the law on bidding;
Approve investors as prescribed in Clauses 3 and 4, Article 29.
– The selection of investors to implement investment projects as prescribed at Points a and b, Clause 1 of this Article is done after approving the investment policy, unless the investment project is not subject to approval. investment policy.
- In case the auction of land use rights is held but only one person registers to participate or the auction fails according to the provisions of the law on land or the bidding organization selects an investor but only one person has registered to participate. If an investor registers in accordance with the law on bidding, the competent authority shall carry out procedures for investor approval when the investor meets the conditions prescribed by relevant laws.
- For investment projects subject to approval of investment policies, the competent authority shall approve the investment policies and at the same time approve the investor not through the auction of land use rights, bidding for investor selection. in the following cases:
Investors have the right to use land, unless the State recovers land for national defense and security purposes or recovers land for socio-economic development for national and public interests as prescribed by law. law and land;
Investors receive transfer, capital contribution, or lease of agricultural land use rights to implement non-agricultural production and business investment projects that are not subject to land recovery by the State in accordance with the land law. band;
Investors implementing investment projects in industrial parks and high-tech zones;
Other cases not subject to auction or bidding as prescribed by law.
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Frequently asked questions
The types of enterprises that foreigners are allowed to establish in Vietnam are prescribed as follows:
– One-member limited liability company;
– Limited liability company with two or more members;
– Joint stock company;
Partnerships
According to the provisions of Clause 1, Article 80 of Decree 01/2021/ND-CP, the right to establish business households is as follows:
Individuals and household members who are Vietnamese citizens with full civil act capacity as prescribed by the Civil Code have the right to establish business households as prescribed in this Chapter, except for the following cases: this:
Minors, persons with restricted civil act capacity; persons who have lost their civil act capacity; people with difficulties in cognition and behavior control;
Persons who are being examined for penal liability, held in custody, are serving prison sentences, are serving administrative handling measures at compulsory detoxification establishments, compulsory education establishments or are being prosecuted by courts. prohibited from holding certain posts, practicing certain professions or doing certain jobs;
Other cases as prescribed by relevant laws.”
According to the above regulations, the mandatory condition to establish a business household is that an individual, the member of that household must be a Vietnamese citizen.
According to Clause 1, Article 5 of the Law on Nationality 2008, a person with Vietnamese nationality is a Vietnamese citizen. Thus, foreigners without Vietnamese nationality do not have the right to establish business households.
Conclusion: So the above is Notes when foreigners invest in business in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
