Since the outbreak of Covid-19 until now, the situation has continued to be complicated in the world, especially in the US and Europe. However, in that situation, Vietnam is a country that is assessed to control the Covid-19 epidemic very well and become a bright spot in terms of attracting foreign investment. So about the matter “What is a foreign investor in Vietnam?” Let’s find out with LSX in the article below.
Legal ground
- Investment Law 2020
- Decree 31/2021/ND-CP guiding Investment Law
The concept of investment
Investment means the investment by an investor of capital and assets in the forms and methods prescribed by law to carry out activities for profit or other economic and social benefits.
Prohibited investment sectors: trading in narcotics, chemicals, minerals, specimens of plants and wild animals, prostitution, human trafficking, cloning activities on humans.
Current investment forms: Investment in the establishment of economic organizations, Investment in the form of capital contribution, purchase of shares, capital contribution to economic organizations, Investment in the form of PPP contract, Investment under BCC contract form.
In the trend of economic globalization, Vietnam is no exception.
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.
Foreign-invested enterprise is an enterprise established in the territory of another country by an investor of one country with all or part of its capital to conduct profit-making business activities.
“Many countries around the world do not distinguish between domestic investment capital and foreign investment capital and therefore, there is no concept of foreign-invested enterprises; they call enterprises established on the basis of capital contribution. of foreign investors according to their form of legal organization, for example: limited liability company, joint stock company…
What is a foreign investor in Vietnam?
According to Article 3 of the 2020 Investment Law on interpretation of terms, an investor is understood as an organization or individual conducting business investment activities, including domestic investors, foreign investors and organizations economy with foreign investment. At the same time, foreign investors are defined in Clause 19, Article 3 of the Law on Investment in 2020 as follows:
“Foreign investor means an individual with foreign nationality or an organization established under foreign laws that conducts investment and business activities in Vietnam.”
At the same time, the Law also defines a foreign-invested economic organization as an economic organization whose foreign investors are members or shareholders.
The concept of conditions for foreign investors
Investment conditions for foreign investors
• Rate of ownership of charter capital of foreign investors in economic organizations;
• Investment form;
• Scope of investment activities;
• Vietnamese partners participating in investment activities
• Other conditions as prescribed in international treaties and Vietnamese law.
Investment conditions for foreign investors apply in the following cases:
• Investing in the establishment of economic organizations;
• Investment in the form of capital contribution, purchase of shares or capital contribution in economic organizations;
• Investment in the form of business cooperation contract;
• Receiving transfer of investment projects or other cases of receiving investment projects;
• Amending and supplementing investment and business lines of foreign-invested economic organizations.
General conditions on industries for foreign investors
– For industries and sub-sectors to which Vietnam has committed and foreign investors satisfy the investment conditions of that industry, the Investment Registration Authority shall consider and decide to grant and adjust the Investment Registration Certificate. receive investment registration or register for capital contribution or purchase of shares or capital contributions from foreign investors in accordance with the Law on Investment;
– For service sectors and sub-sectors that have not yet committed or are not specified in Vietnam’s Schedule of Commitments in international treaties on investment, but Vietnamese law already has provisions on investment conditions for foreign investors. foreign investment shall apply according to the provisions of Vietnamese law;
General regulations on investment and establishment of economic organizations
The Investment Law 2020 has new regulations on investment and establishment of economic organizations by foreign investment as follows:
“Article 22. Investment in establishment of economic organizations
1. Investors establish economic organizations according to the following regulations:
a) Domestic investors establish economic organizations according to the provisions of the law on enterprises and the law corresponding to each type of economic organization;
b) Foreign investors establishing economic organizations must satisfy the conditions for market access for foreign investors specified in Article 9 of this Law;
c) Before establishing an economic organization, a foreign investor must have an investment project, carry out procedures for issuance and adjustment of the Investment Registration Certificate, except for the case of setting up a small and medium-sized enterprise. creative enterprises and innovative start-up investment funds in accordance with the law on supporting small and medium enterprises.
2. From the date of issuance of 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 accordance with the provisions of this Law. specified in the Investment Registration Certificate.
Article 23. Investment activities of foreign-invested economic organizations
1. Economic organizations must satisfy the conditions and carry out investment procedures as prescribed for foreign investors when investing in establishing other economic organizations; make capital contribution, purchase shares, purchase capital contribution portion of other economic organizations; investment in the form of BCC contract if such economic organization falls into one of the following cases:
a) There is a foreign investor holding more than 50% of the charter capital or the majority of general partners are foreign individuals, for economic organizations being a partnership;
b) Having economic organizations specified at Point a of this Clause holding more than 50% of charter capital;
c) Foreign investors and economic organizations specified at Point a of this Clause hold more than 50% of the charter capital.
2. Economic organizations other than those specified at Points a, b and c, Clause 1 of this Article shall comply with investment conditions and procedures as prescribed for domestic investors when investing to establish an organization. other economic; investment in the form of capital contribution, share purchase, purchase of capital contributions of other economic organizations; investment in the form of BCC contract.
3. If a foreign-invested economic organization already established in Vietnam has a new investment project, it shall carry out procedures for implementation of that investment project without having to establish a new economic organization.
4. The Government shall detail the order and procedures for investment in the establishment of economic organizations and the implementation of investment activities by foreign investors and foreign-invested economic organizations.”
– Investors may establish economic organizations in accordance with law.
Before establishing an economic organization (also known as an enterprise), a foreign investor must have an investment project and carry out procedures for issuance of an Investment Registration Certificate as prescribed in Article 38 of the Law on Investment. April 2020:
+ For an investment project subject to an investment policy decision as prescribed in Articles 30, 31 and 32 of the Investment Law 2014, the investment registration agency shall issue an investment registration certificate to the investor within 05 working days from the date of receiving the decision on investment policy.
+ For an investment project that is not subject to an investment policy decision as prescribed in Articles 30, 31 and 32 of the 2014 Investment Law, the investor shall carry out the procedures for issuance of an Investment Registration Certificate in accordance with regulations.
The investor submits the application as prescribed in Clause 1, Article 34 of the Law on Investment to the investment registration agency;
Within 15 days from the day on which the complete application is received, the investment registration authority shall issue the Investment Registration Certificate; In case of refusal, the investor must be notified in writing and clearly state the reasons therefor.
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Frequently asked questions
According to the current law, there are 8 sectors and industries that are prohibited from doing business in Vietnam according to the provisions of Article 6 of the Law on Investment in 2020, namely the following industries:
Trading in narcotic substances according to regulations;
Trading in chemicals and minerals according to regulations;
Trading in specimens of wild plants and animals as prescribed in Appendix 1 of the Convention on International Trade in Endangered Species of Wild Fauna and Flora; specimens of endangered rare and precious wild animals and plants of Group I originating from nature as prescribed;
– Prostitution business;
…
Pursuant to Clause 3, Article 9 of the Investment Law stipulates:
Market access conditions for foreign investors specified in the List of industries and trades restricted from market access for foreign investors include:
a) Rate of ownership of charter capital of foreign investors in economic organizations;
b) Form of investment;
c) Scope of investment activities;
d) Investor’s capacity; partners participating in investment activities;
dd) Other conditions as prescribed in laws and resolutions of the National Assembly, ordinances and resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties to which the Socialist Republic of Vietnam is governed.
According to the Law on Investment, an application for an investment registration certificate includes:
A written request for implementation of the investment project;
– A copy of the identity card, identity card or passport for the investor being an individual; a copy of the Certificate of Establishment or other equivalent document certifying the legal status of the investor being an organization;
Investment project proposal, including the following contents: investor implementing the project, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, and investment schedule investment, labor demand, proposal for investment incentives, assessment of the project’s socio-economic impact and efficiency;
– A copy of one of the following documents: financial statements of the last 2 years of the investor; commitment to financial support of the parent company; financial institution’s commitment to financial support; guarantee on the financial capacity of the investor; documents explaining the financial capacity of the investor;
Conclusion: So the above is What is a foreign investor in Vietnam?. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
