In recent years, Vietnam is one of the potential destinations to attract investment from many countries around the world in many fields. With a favorable geographical position, Vietnam has many types of terrain from plains, coastal areas to hills, easily developing many different industries. Vietnam has a large population (in 2020, ranked 13th in the world) which is both a potential consumption market and an abundant labor market. In addition, the stability of socio-political and macroeconomic conditions is also one of the factors attracting foreign investment in Vietnam. Under the impact of the Covid pandemic, although Vietnam’s economy was affected, it was still assessed by experts to have a quick recovery compared to other countries in the region.
To set up a business in Vietnam, investors will need to carry out several procedures at the competent authority including two main steps:
– Step 1: Apply for an Investment Registration Certificate (IRC)
– Step 2: Apply for an Enterprise Registration Certificate (ERC)
The following article of Van Luat will provide an overview of the procedures, competent authorities, and documents that customers need to prepare to set up a business in Vietnam as follows:
Application for Investment Registration Certificate (IRC)
Foreign investors who want to establish an economic organization in Vietnam in the direct form need to carry out the procedures for applying for an Investment Registration Certificate.
What is an IRC?
An Investment Registration Certificate (IRC) is a paper or electronic document recording the investor’s registration information about an investment project, including the following basic details:
– Name of the investment project.
– Code of the investment project.
– Location of the investment project, land use area.
– Objectives and scale of investment projects.
– Investment capital of the investment project (including contributed capital of the investor and mobilized capital).
– Operational duration of the investment project.
– Investment project implementation progress
– Forms of incentives, investment support, and application grounds and conditions (if any).
– Conditions for investors implementing investment projects (if any).
Authorities competent to issue IRC
According to the current law, there are two agencies competent to issue Investment Registration Certificates:
– The Department of Planning and Investment where the investor implements the investment project, locates or plans to set up an executive office to implement the investment project, shall issue the Investment Registration Certificate for the following investment projects:
- a) Investment projects implemented in 02 or more provincial-level administrative units;
- b) Investment projects implemented inside and outside industrial parks, export processing zones, high-tech zones, and economic zones;
- c) 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 are not within the scope of management. under the management of the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones.
– Management boards of industrial parks, export processing zones, hi-tech zones, and economic zones shall grant investment registration certificates for the following investment projects:
- a) Investment projects on construction and business of infrastructure of industrial parks, export processing zones, high-tech zones, and functional zones in economic zones;
- b) Investment projects implemented in industrial parks, export processing zones, high-tech zones, economic zones.
- IRC issuing procedures
For projects that do not require approval of investment policies, the investment registration authority shall issue an investment registration certificate to the investor within 15 days from the date of receipt of a valid application.
- Dossier to prepare
- a) A written request for the implementation of the investment project
- b) Documents on the investor’s legal status;
- c) Documents proving financial capacity
- d) Proposal of the investment project
- dd) If the investment project does not request the State to allocate, lease or permit the change of land use purpose, a copy of the paper on land use rights or another document determining the right to use the site shall be submitted. to carry out investment projects;
- e) The explanation of the technology used in the investment project, for the project subject to appraisal and consultation on technology according to the provisions of the law on technology transfer;
- h) other documents related to the investment project, requirements on conditions, and capacity of the investor as prescribed by law (if any).
- Apply for an Enterprise Registration Certificate (ERC)
- What is an ERC
An enterprise registration certificate is a paper or electronic document that records information on business registration that the business registration authority grants to an enterprise, including the following:
– Company’s name;
– Address of the head office of the enterprise, phone number; fax number, email (if any);
– Authorized capital; investment capital of private business owners;
– Types of shares, par value of each type of share, and the total number of shares authorized to be offered for sale of each type of share, for a joint-stock company;
– Tax registration information;
– Expected number of employees;
– Full name, signature, contact address, nationality, legal document information of the individual for the owner of a private enterprise and a general partner of a partnership;
– Full name, signature, contact address, nationality, legal information of the individual, for the legal representative of the limited liability company or joint-stock company.
- Authority competent to issue Certificate of Registration: Department of Planning and Investment where the company’s head office is located
- Procedures for issuance of ERC
Within 07-10 working days from the date of receipt of the application, the business registration agency shall consider the validity of the enterprise registration dossier and grant the enterprise registration; In case the application is not valid, the business registration agency must notify in writing the contents that need to be amended and supplemented to the enterprise founder. In case of refusal to register an enterprise, it must notify in writing the enterprise founder and clearly state the reasons therefore.
Dossier to prepare
Investors can establish one of the following types of companies in Vietnam: Joint Stock Company; One-member limited liability company; Limited liability companies with two or more members; Partnerships.
Depending on the type of business, the required documents will be different. The basic profile will include the following documents:
– Application form
– Company rules
– Contributing members list
– Investment registration certificate (granted in step 1)
– Legal papers of capital contributors and legal representatives of the company.
Other procedures that need to be carried out after the business establishment
After being granted a business registration certificate, depending on different industries, before conducting business activities, the company needs to carry out procedures for applying for a certificate of business eligibility for the following industries. conditional business.
For example: If a company trades in cosmetics, it is necessary to carry out the cosmetic declaration procedure. If the company intends to carry out retail activities, it is necessary to carry out the procedures for applying for a retail license, etc.
In addition, in the process of operation, the company needs to have supported tools such as:
– Bank account: After being granted the Investment Registration Certificate, foreign investors need to open a capital account. This account will record the flow of capital and profits between Vietnam and foreign countries
– Company seal: used to record the legality of documents certified by the company
– Digital signature: used to declare all kinds of quarterly and annual tax reports
– Electronic invoices: record transactions between the company and its partners.
Currently, to attract foreign investment capital, Vietnamese law has issued many policies to support administrative procedures and tax incentives for investors. Van Luat provides a full package of consulting services for setting up a foreign-invested company in Vietnam, assisting in preparing documents, representing for working with state agencies, and providing other operational support services. For more specific advice on the industry and business orientation in Vietnam, do not hesitate to contact Van Luat immediately. Our experts are always ready to advise and support you wherever you are in the world.
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