Currently, the Vietnamese Government has many preferential policies for foreign investors when doing business in Vietnam to attract investment from abroad. Therefore, more and more foreign-invested companies are established in Vietnam. However, when carrying out the establishment of a foreign-invested company in Vietnam, investors need to learn the provisions of current laws to ensure the most optimal conditions when investing and doing business. In this article, LSX legal provides information about our service of setting up a company with foreign investment in Vietnam.
Legal grounds
- Law on Investment 2020
- Law on Enterprise 2020
Companies with foreign investment
According to Clause 22, Article 3 of the Law on Investment 2020: “Foreign-invested economic organization means an economic organization whose foreign investors are members or shareholders”.
Foreign-invested directly companies include:
- Companies with 100% foreign capital.
- Companies with foreign nationals, organizations established under foreign Law on Investment (contributing capital for the establishment, purchasing contributed capital).
Conditions for setting up a foreign-invested company
Foreign organizations and individuals who intend to invest in the form of company establishment in Vietnam must satisfy the following conditions in order to establish a foreign-invested company:
Investor nationality
Vietnam only allows organizations and foreign companies to invest in the form of company establishment in Vietnam if a foreign investor has a nationality as a member of the WTO.
Forms of foreign-invested company establishment in Vietnam include:
- Establishing a company with 100% foreign capital in Vietnam.
- Establishing a joint venture company in Vietnam.
Project implementation location and the location of the head office
Foreign investors need to choose a project implementation location suitable to the target of the business plan. This is an important point that makes the difference between setting up a Vietnamese company and a foreign capital company.
Foreign-owned companies will not be able to register for Outsourcing production if there is a project implementation site in a small residential area or office building. Additionally, for each case, the condition of the location varies.
Investor’s experience
Investors need to explain their experience with the intended investment objectives. Conditions the project needs to meet when implementing the project objectives in the line of conditional investment.
financial capacity of investors
Foreign investors need to declare information about the investment capital of an investment project, the company’s charter capital and foreign capital need to correspond to their financial capacity. Also, they must present papers proving the financial capacity with the amount of capital expected to contribute to the project.
In particular, such papers can be a confirmation of account balance, foreign bank’s guarantee, or some other papers.
Procedures for setting up a foreign-invested company
Step 1: Apply for an Investment Registration Certificate
To establish a company with foreign investment capital, First of all, investors need an investment certificate.
Step 2: Apply for a Certificate of Business Registration, engrave a seal for the company, and title seal for the legal representative.
After obtaining the Investment Registration Certificate, investors need to prepare dossiers to carry out the procedures for applying for a Business Registration Certificate.
Step 3: Publish the business establishment
Companies after receiving a business registration certificate need to make a public announcement on the national portal on business registration. Also, they must pay the prescribed fee.
Things to do after setting up a foreign-invested company
- Firstly, register to apply the deducted value-added tax calculation method; Enterprises submit form 06/GTGT requesting the application of the deducted value-added tax calculation method to the tax authority to issue a red invoice.
- Secondly, declare and pay the license tax.
- Hanging signs at the company headquarters: the company sign must show information about the company name, address, and company phone number. Avoid the case that when the tax authority comes down to inspect the headquarters, notify the business that they did not operate at the head office and will not allow the enterprise to register for the use of invoices.
- Open a business bank account; notify the bank account to the business registration office and pay taxes electronically.
- Registration of electronic signatures for electronic tax payment: Companies purchase digital signatures and register for use with a digital signature authenticate service provider. A digital signature has the same value as an enterprise’s seal when paying taxes electronically.
- Lastly, print and order invoice printing.
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
a) Firstly, Decide the company’s annual business plan and development strategy;
b) Secondly, Decide increase or decrease in charter capital, time and method for raising more capital; issuance of bonds;
c) Thirdly, Decide investments in the company’s development projects; solutions for market development, marketing and technology transfer;
d) Fourthly, Approve contracts for borrowing, lending, sale of assets and other contracts prescribed by the company’s charter whose value are at least 50% of the total assets written in the latest financial statement (or a smaller ratio or value specified in the company’s charter);
dd) Fifthly, Elect, dismiss the President of the Board of Members; designate, dismiss, sign and terminate contracts with the Director/General Director, chief accountant, controllers and other executives specified in the company’s charter;
e) Equally important, Decide the salaries, remunerations, bonuses and other benefits of the President of the Board of Members, Director/General Director, chief accountant, controllers and other executives specified in the company’s charter;
g) Next, Ratify annual financial statements, plans for use and distribution of profits or settlement of losses;
h) Decide the company’s organizational structure;
i) Decide establishment of subsidiary companies, branches and representative offices;
k) Revise the company’s charter;
l) Decide reorganization of the company;
m) Decide dissolution or file bankruptcy of the company;
n) Lastly, Other rights and obligations prescribed by Law and the company’s charter.
The company does not generate revenue from the business, but it still has to pay CIT if the company generates other legal revenue belonging to the income subject to corporate income tax (CIT).
Contact LSX
Finally, hope this article is useful for you to answer the question about “Service of setting up a company with foreign investment in Vietnam”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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