PROCEDURES FOR ESTABLISHMENT OF FDI ENTERPRISES IN VIETNAM

FDI enterprise should be understood not as a type of enterprise but as an enterprise with foreign direct investment (Foreign Direct Investment) and in business activities always use this term. Therefore, there are no specific regulations on business establishment, but it is necessary to rely on the current provisions of the Law on Investment 2020 to determine the type of FDI enterprise and how to establish this business.

1. Forms of investment to establish FDI enterprises

According to Article 3.22 of the Law on Investment 2020, an FDI enterprise is a foreign-invested economic organization, that is, an economic organization with a foreign investor as a member or shareholder. Article 3.19 of the Law on Investment 2020, foreign investors are individuals with foreign nationality or organizations established under foreign law conducting business investment activities in Vietnam. FDI enterprises must have at least one of the above-mentioned foreign investors to set up or contribute capital.

Form of investment to become an FDI enterprise (Article 23 of the Law on Investment 2020; Article 63 of Decree 31/2021/ND-CP)

• Establishment of enterprises with 100% capital of foreign investors;

• Investment to contribute capital, buy shares, buy capital contributions of other enterprises;

2. Forms of FDI enterprises by Vietnamese laws

According to the provisions of the Law on Enterprises 2020 and the Law on Investment 2020, FDI enterprises can exist in the following forms:

• One-member limited liability company;

• Limited liability company with 02 or more members;

• Joint Stock Company;

• Partnerships.

3. Establishment of FDI enterprises

According to Article 22.1.c of the Law on Investment 2020, in case of establishing a newly FDI enterprise (foreign-invested economic organization), foreign investors must have an investment project, must carry out the procedures for applying for a license, amending the Investment Registration Certificate at the competent authority, except for the case of setting up innovative start-up small and medium enterprises and innovative start-up investment funds according to the provisions of the law on supporting small and medium enterprises.

The authority to issue an Investment Registration Certificate under Article 39 of the Law on Investment 2020, Article 34 of Decree 31/2021/ND-CP belongs to:

• Management boards of industrial parks, export processing zones, hi-tech zones, and economic zones shall grant and amend investment registration certificates for investment projects in industrial parks, export processing zones, and hi-tech parks, economic zones, except for cases under the authority of investment registration agencies.

• The Department of Planning and Investment shall grant and amend the Investment Registration Certificate for investment projects outside industrial parks, export processing zones, hi-tech parks, and economic zones, except for cases under the authority of the agency. investment registration.

• The investment registration agency where the investor implements the investment project, locates or intends to set up an executive office to implement the investment project, issues and adjusts the Investment Registration Certificate for the following investment projects:

(i) Investment projects implemented in 02 or more provincial-level administrative units;

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

(iii) Investment projects in industrial parks, export processing zones, hi-tech parks, economic zones where the management board of industrial parks, export processing zones, hi-tech zones, economic zones has not been established or is not part of the management scope of the Management Board of industrial parks, export processing zones, high-tech zones and economic zones.

• The agency receiving investment project dossiers is the agency competent to issue the Investment Registration Certificate.

After being granted the Investment Registration Certificate, the individual or organization prepares the application for registration of the establishment of an enterprise to submit to the Business Registration Office of the Department of Planning and Investment where the enterprise's head office is located.

ADK Vietnam Lawyers