The strong development of Vietnam’s economy in recent years, along with a stable political economy, and an abundant workforce are the important factors to attract foreign investors. A common form that foreign investors prefer to use when they want to do business in Vietnam is to open a company. In this article, Van Luat would like to send you the basic steps for foreigners to open a company in Vietnam.
1. General provisions of the investment law in Vietnam
Article 21 of the Investment Law 2020 lists investment forms in Vietnam, including:
– Investment in the establishment of economic organizations.
– Investment to contribute capital, buy shares, buy contributed capital.
– Implementation of investment projects.
– Investment in the form of BCC contract.
– New investment forms and economic organizations according to the Government’s regulations.
When foreigners want to set up a company in Vietnam, it is common to have two forms: direct investment – investment in establishing economic organizations and indirect investment – investment in capital contribution, share purchase, purchase of shares capital.
2. Some conditions for setting up a company in Vietnam:
– Foreign businessmen must be nationals belonging to WTO countries. Be a legal citizen, have full papers proving legal status, valid individual, certified by the consulate.
– Foreign investors who want to open a company must prove their financial conditions and ability to invest by providing documents verifying their financial capacity such as financial statements, bank account balances, savings book, fixed assets.
– Foreign investors are only allowed to establish companies doing business in the fields permitted by Vietnamese law.
– For occupations that require business conditions, it is necessary to fully meet the appropriate conditions. It is necessary to apply for a full license such as investment registration certificate, enterprise registration certificate, … then establish a company in Vietnam.
– Commit to doing business without harming culture, pure style customs, history… of Vietnam.
– Foreign investors must provide information on the location of the project, valid land use papers, and leased offices.
3. Procedures for opening a company for foreigners in Vietnam
3.1. Opening a company in the form of direct investment
Direct investment is a form in which investors invest capital and directly hold the right to manage, control and use their capital contribution in investment activities. business private. Foreign investors, including foreign individuals and organizations, are allowed to establish companies in Vietnam in accordance with the law. Before opening a company, foreign investors must have the investment project, carry out the procedures for granting an Investment Registration Certificate (IRC) in accordance with the law.
3.1.1. Application for issuance of an investment registration certificate
* Components of the application file:
– A written request for investment project implementation
– A copy of the certificate identity card, identity card or passport for individual investors; copy of Certificate of Establishment or other equivalent document certifying legal status for investor being an organization
– Investment project proposal
Includes the following contents: Investor implementing the project, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, investment schedule, demand on labor, proposing to enjoy investment incentives, assessing the project’s socio-economic impacts and efficiency
– A copy of one of the following documents: Financial statement of the last 2 years of the investor; commitment to financial support of the parent company; commitment to financial support of a financial institution; a guarantee of the financial capacity of the investor; documents explaining the financial capacity of the investor
Proposing land use, if the project does not request the State to allocate or lease land or permit the change of land use purpose, a copy of the location lease agreement or other document certifying the investor’s ownership of the land shall be submitted to confirm the right to use the site for the implementation of the first project private.
– Explanation of technology use for projects using technology restricted from transfer in accordance with the law on technology transfer, including the following contents: technology name, technology origin, diagram Technological process; main technical parameters, use status of main machinery, equipment and technological lines.
– BCC contract for investment projects in the form of BCC contract
* Order of implementation:
– Step 1: Submit and receive documents:
+ Individuals, organizations:
Before carrying out the procedures for issuing Certificates For investment registration, investors declare online information about investment projects at the National Foreign Investment Information System at the address: http://fdi.gov.vn or http://dautunuocngoai .gov.vn.
Submit the application file at the Department of Receiving and Returning the results of administrative procedures (Department of receiving and returning results) within 15 days from the date of online declaration, receiving the application receipt and appointment of results.
+ Department of Planning and Investment: Receive the application, return the receipt of the application and make an appointment to return the result to the individual or organization.
– Step 2: Handling dossiers:
The specialized department accepts and considers the validity of the dossiers and the conditions for granting the Investment Registration Certificate, submits to the Department’s Leaders for approval of the results of the application (IRC/Notice of the addition of the dossier/Notice about the non-conditional settlement of the dossier).
– Step 3: Return results:
Individuals and organizations receive the results of application processing at the Receiving and Returning Department.
3.1.2. Applying for a business registration certificate
After obtaining an investment registration certificate, a foreigner submits an application for registration of establishment of an enterprise to the competent authority to apply for a business registration certificate, start conducting production and business activities.
The application file for an Enterprise Registration Certificate will depend on the type of business that the foreigner wants to establish. Normally, foreign individuals will open a limited company to make management and operation easier.
* Documents to be provided to open a limited company include:
– Business registration application form
– A draft of the company’s charter.
– List of members (if there are two or more members).
– Certified copy of passport or equivalent document.
– A certified copy of the issued investment registration certificate.
In some cases, when there are three or more foreigners setting up a company in Vietnam and contributing capital, the joint stock company will be prioritized by investors to establish.
* Documents to open a joint-stock company include:
– Application for registration of enterprise establishment
– Draft charter of joint-stock company
– List of founding shareholders and shareholders being foreign investors (applicable sample)
– Authenticated copy of passport or equivalent document;
– A certified copy of the granted investment registration certificate
– The investor submits 01 application to the business registration agency in person or online via the Public Service Portal country on business registration.
– The business registration authority shall receive and issue the enterprise registration certificate within 03 days from the date of receipt of a valid application.
*Processing times: 25 – 45 working days
* Handling agency: Department of Planning and Investment
3.2. Establishing a company in the form of indirect investment
Indirect investment is a form in which investors invest capital but do not hold the right to manage, control and use their contributed capital, but through a third party to help control and implement investment projects. The forms of indirect investment under the Investment Law 2020 include the following forms: capital contribution, share purchase, capital contribution (excluding the case of purchase of shares or contributed capital in which investors rights in business investment activities).
With this form, the advantage is that the implementation will take place quickly and conveniently. Besides, investors can conduct business activities quickly.
* Dossier for registration of purchase of contributed capital:
– A written registration of capital contribution or capital contribution, including the following contents: Information about the economic organization to which the foreign investor intends to contribute capital and capital contribution; rate of ownership of charter capital of foreign investors after capital contribution or capital contribution to economic organizations;
– A copy of the identity card, identity card or passport for the investor being an individual; copy of Certificate of Incorporation or other equivalent document certifying legal status for investor being an organization.
However, according to the provisions of Clause 2, Article 26 of the Law on Investment 2020, the case of investment in capital contribution, purchase of shares or capital contribution of more than 50%:
“2. Foreign investors shall carry out procedures for registration of capital contribution, purchase of shares or purchase of contributed capital of an economic organization before changing members or shareholders if they fall into one of the following cases:
- a) The contribution of capital, purchase of shares, purchase of contributed capital increases the foreign investors’ ownership ratio in economic organizations engaged in conditional market access for foreign investors. outside;
- b) The contribution of capital, purchase of shares, purchase of contributed capital results in foreign investors and economic organizations specified at Points a, b and c, Clause 1, Article 23 of this Law holding more than 50% of the capital. the charter of the economic organization in the following cases: increasing the rate of ownership of charter capital of foreign investors from less than or equal to 50% to over 50%; increase the rate of ownership of charter capital of foreign investors when foreign investors already own more than 50% of charter capital in economic organizations;
- c) Foreign investors contribute capital, purchase shares, purchase capital contributions from economic organizations with land use right certificates in islands and border communes, wards and townships; coastal communes, wards and towns; other areas that affect national defense and security…”
Therefore, if foreigners contribute capital, buy shares, or have contributed capital of more than 50%, they will have to carry out procedures for registration of capital contribution, then proceed with the procedure. procedures related to change of business registration.
* Processing time: 25 – 45 working days
* Handling agency: Department of Planning and Investment