Establishing a foreign-owned company is now an attractive choice for investors when investing in Vietnam. It can be seen that this is a fairly common form and brings a lot of profit. However, many people still wonder about how much it costs to set up a foreign-invested company? Or what is the process of establishing a foreign-owned company? The following article of Van Luat will help you answer these questions in detail.
Forms of foreign investorsestablishing companies in Vietnam
Currently, according to the provisions of the Investment Law 2020, Decree No. 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Investment Law and other guiding documents, investors have two forms of establishment of foreign-invested companies in Vietnam:
Direct investment: establishing or participating in the establishment of a business.
Foreign investors will contribute capital from the beginning of the company’s establishment in Vietnam. Accordingly, the capital contribution rate of foreign investors depending on the field of operation can contribute capital from 1% to 100% of the company’s charter capital.
Order of establishment of foreign-invested enterprises in the form of direct investment:
– Firstly, when a foreign investor has an investment project, it is necessary to carry out procedures for granting investment registration certificates and receive investment registration certificates from competent agencies after 15 working days from the date of submission of valid dossiers.
– Secondly, after the investment registration certificate has been granted, the foreign investor shall apply for the certificate of enterprise registration with the business lines approved in the Investment Registration Certificate.
– Third, open an investment account at a commercial bank to carry out the transfer of capital contributions from abroad to Vietnam.
Indirect investment: Establishing a foreign-invested company in the form of capital contribution and share purchase
In this form, foreign investors will contribute capital to Vietnamese companies that already have a Certificate of Enterprise Registration. Foreign investors, depending on the field of operation, can contribute capital of 1%-100% of capital to Vietnamese companies. Foreign investors will carry out procedures to buy capital contributions and buy shares of Vietnamese companies. After that, the Vietnamese company became a foreign-invested company.
Order of establishment of foreign-invested companies in the form of indirect investment
– Firstly, establish a company with 100% Vietnamese capital
– Secondly, foreign investors submit dossiers of registration to buy capital contributions and buy shares in Vietnamese enterprises
Thirdly, foreign investors shall contribute capital, buy shares and contribute capital to Vietnamese enterprises.
– Fourth, change the business registration certificate
Expenses when establishing a company in Vietnam
The cost of establishing a foreign-invested company in the above forms is not the same. Current Vietnamese law does not have specific provisions on fees for establishing foreign-invested companies in general and 100% foreign-owned companies in particular for general application (there are new regulations on business registration fees at business registration agencies). In fact, the fee for establishing a foreign-invested company depends on many factors such as whether the investor from the country participating in the international treaty of which Vietnam is a member commits to incentives for investors, whether the business lines belong to conditional business lines in Vietnam, which service providers to use… Therefore, in order to determine the necessary fee when establishing a foreign-invested company in Vietnam, investors can contact Van Law for specific support.