ESTABLISHMENT OF FOREIGN-INVESTED COMPANIES IN VIETNAM

Trade liberalization is increasingly promoting the development of cross-border business and investment processes. Foreign investors who wish to directly conduct investment and business activities in Vietnam need to understand the legal regulations on enterprises and investment laws in Vietnam, especially the difference in regulations between the laws of Vietnam and the country in which foreign investors are operating in terms of foreign-invested companies. From there, issues related to regulations, establishment order, types of activities, permitted business lines, etc. of foreign-invested companies in Vietnam are raised.

The Law on Investment 2020 allows foreign investors to establish foreign-invested companies in Vietnam, so investors must meet market access conditions for foreign investors in Vietnam. Before establishing a foreign-invested company, an investor must be granted the Investment Registration Certificate to execute its investment project in Vietnam.

Vietnamese law currently does not limit the type of business that foreign investors can choose to establish a foreign-invested company in Vietnam: limited liability companies, joint-stock companies, depending on the size of the business and the direction of development, investors can choose the appropriate model of the established company.

Normally, foreign-invested companies are allowed to operate most of the industries and trades except those banned from business investment under the Law on Investment 2020. However, for conditional business lines, investors must comply with the conditions prescribed by law.

First, the investor must carry out the procedures for applying for an Investment Registration Certificate, including the following application:

- A written request for implementation of the investment project;

- Documents on investor's legal status: Copy of identity card or passport for individual investor; a copy of the Certificate of Establishment or other equivalent document certifying the legal status of the investor being an organization;

- A copy of one of the documents proving the investor's financial capacity, including at least one of the following documents: Financial statement of the last 2 years of the investor; commitment to the 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;

- Investment project proposal including the following contents: type of investment, investment objective, investment scale, investment capital, and capital mobilization plan, location, duration, implementation progress, information on the current status of land use at the project site, and proposed land use needs (if any), labor needs, proposals for investment incentives, impacts, socio-economic efficiency of the project, preliminary assessment of environmental impacts (if any) by the law on environmental protection;

- Proposing land use demand; In case 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 that the investor has the right to use the site for implementation current investment project;

- An explanation of the use of technology for investment projects, for projects using technologies on the list of technologies restricted from transfer by the law on technology transfer, including the following contents: name of the company; technology, technology origin, technological process diagram; main technical parameters, use status of main machinery, equipment, and technological lines;

- Other documents related to the investment project, requirements on conditions, and capacity of the investor as prescribed by law (if any).

- Duration: 15 days from the date of receiving the investor's complete and valid application for an Investment Registration Certificate.

- For an investment project that is not subject to the approval of investment policies, an investor shall be granted an Investment Registration Certificate if it satisfies the following conditions without having to carry out registration procedures:

· Investment projects not in industries or trades banned from business investment;

· Having a location for the implementation of the investment project;

· Investment projects following the planning prescribed in the Law on Investment and relevant laws;

· Satisfy the conditions on investment rate per land area and number of employees (if any);

· Meeting market access conditions for foreign investors.

Agencies competent to issue, adjust, and revoke investment registration certificates for foreign-invested companies include:

- For investment projects in industrial parks, export processing zones, hi-tech zones, and economic zones: Management Board of industrial parks, export processing zones, hi-tech zones, and economic zones.

- For investment projects outside industrial parks, export processing zones, hi-tech zones, and economic zones: Department of Planning and Investment.

- For the following investment projects, the investment registration agency where the investor implements the investment project, locates or plans to locate an executive officer has the authority to issue, adjust and revoke the Certificate:

· Investment projects implemented in 02 or more provincial administrative units;

· Investment projects implemented inside and outside industrial parks, export processing zones, high-tech zones, and economic zones;

· 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 have not been established or are not within the scope of the project. management of the Management Board of industrial parks, export processing zones, high-tech zones, and economic zones.

- The agency that receives investment project dossiers is also the agency competent to issue investment registration certificates.

Next, after being granted an Investment Registration Certificate, the investor must carry out procedures for applying for an Enterprise Registration Certificate. The application shall include:

- An application for business registration;

- Company’s charter/articles of association;

- List of equity members or List of founding shareholders and shareholders being foreign investors;

- Copies of the following documents:

· Citizen's identity card, people's identity card, passport or other lawful personal identification of members being individuals;

· The establishment decision, the enterprise registration certificate or other equivalent documents of the organization and the power of attorney; Citizen's identity card, people's identity card, passport or other lawful personal identification of the authorized representative of an organization member;

· For a member being a foreign organization, a copy of the Certificate of Business Registration or an equivalent document must be consular legalized;

· Investment registration certificate for foreign investors under the Law on Investment.

- Lead-time: 03 - 05 working days from the date of receipt of complete and valid dossiers.

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