Living in a developing country like Vietnam, especially an economy that has a tendency to grow step by step, it is inevitable that there are many newly established businesses. In addition to the established domestic enterprises, there are many foreign investors who want to participate in Vietnam market. This is a good sign for the economy as well as creating many job opportunities for Vietnam’s workers. So what are the conditions and procedures for establishing a foreign-invested enterprise? HNLaw & Partners Law Firm would like to give you some necessary information on this issue.
- What is a foreign-invested enterprise?
enterprises are a type of enterprise that has started to develop in our country
since Doi Moi( “Reform”) policy has taken up. ( Foreign-invested enterprises
are enterprises established by foreign companies to invest in business
development in the Vietnamese market or are domestic enterprises acquiring and
merging into foreign companies.
- What is a foreign invested enterprise?
+ Foreign enterprises holding 51% or more of the charter capital value of an enterprise or an economic organization shall be considered a foreign-invested enterprise.
+ A foreign organization holds 51% of the charter capital of the enterprise.
+ An organization and foreign investor hold 51% of the charter capital of the enterprise.
- Conditions for establishing a foreign invested enterprise
+ Must be organizations, companies (operating from 1 year or more).
+ Foreign individuals wishing to invest in the form of joint-stock companies, joint-venture companies, limited liability companies with one member or more members in Vietnam.
+ There must be an investment project and procedures for registration or investment verification at state agencies.
+ Need to ensure the location of project implementation in accordance with the development plan in the locality.
+ Guarantee of financial capacity to implement investment projects.
+ Guarantee of environmental, security and social order conditions.
+ Having registered services that Vietnam has committed to open the market when it joins WTO 2016.
Procedures for issuance of Investment Registration Certificate
For investment projects subject to investment policy decisions, investment registration agencies shall grant investment registration certificates to investors within 5 working days after receiving written decisions on undertakings of invest.
For investment projects not subject to investment policy decisions, investors shall carry out procedures for granting investment registration certificates according to the following regulations:
1. Implementation process
- Before carrying out procedures for issuance of Investment Registration Certificates, investors declare online information on investment projects on the National Information System on Foreign Investment. Within 15 days from the date of online filing, the investor submits the application file for the Investment Registration Certificate to the Investment Registration Authority.
- After the Investment Registration Agency receives the application file, the investor is granted an account to access the National Information System on foreign investment to monitor the application processing.
- The investment registration agency uses the national information system on foreign investment to receive, process and receive the results of investment registration documents, update the situation of processing dossiers and issue business codes to investment projects.
2. The investor’s file submitted to the investment registration agency includes:
- Written request for investment project implementation;
- Copy of identity card / ID card or passport for individual investors; a copy of the Certificate of Establishment or another equivalent document certifying the legal status of the investor being an organization;
- Proposing investment projects including the following contents: investors implementing projects, investment objectives, investment scale, investment capital and plans on capital mobilization, locations, early dates and schedule. investment, demand for labor, proposals for investment incentives, assess the impact and socio-economic efficiency of the project;
- A copy of one of the following documents: financial statements for the last 2 years of investors; commitment to financial support of the parent company; commitment to financial support of financial institutions; guarantee of financial capacity of investors; Notes on financial capacity of investors;
- Proposing demand for land use; In case the project does not ask the State to allocate land, lease land, or permit the change of land use purpose, then submit a copy of the agreement on renting the place or other documents certifying that the investor has the right to use the location for real existing investment projects;
- Explanation on the use of technology for investment projects for projects using technologies on the list of technologies subject to transfer restriction under the provisions of the technology transfer law, including the following contents: technology, technology origin, technological process diagram; Main specifications, usage status of machinery, equipment and main technology lines;
- BCC contract for investment projects in the form of BCC contract.
3. Time limit for processing dossiers:
- Within 15 days after receiving a complete dossier, the investment registration agency grants an investment registration certificate; In case of refusal, the investor must notify in writing to the investor and state the reason.
4. Contents of Investment Registration Certificate:
- Investment project code.
- Name and address of the investor.
- Name of the investment project.
- Location of investment project implementation; land area used.
- Objectives and scale of investment projects.
- Investment capital of the project (including investors’ capital and mobilized capital), capital contribution schedule and mobilization of capital sources.
- Term of operation of the project.
- Progress of investment project implementation: construction progress and putting the project into operation (if any); the progress of implementing the project’s main objectives and items, in case the project is implemented in each period, it must stipulate the objectives, duration and operation contents of each stage.
- Investment incentives, support and bases and conditions for application (if any).
- Conditions for investors implementing the project (if any).
5. Competence to issue investment certificates
- Department of Planning and Investment receives, grants, adjusts and withdraws Investment Registration Certificates for the following investment projects:
+ Investment projects outside industrial parks, export processing zones, hi-tech parks and economic zones;
+ Project to invest in developing infrastructure of industrial parks, export processing zones, high-tech zones and investment projects in industrial parks, export processing zones and hi-tech parks in localities where Management Boards have not yet been established. management of industrial parks, export processing zones and high-tech zones.
- Management Boards of industrial parks, export processing zones, high-tech zones and economic zones receive, issue, adjust and withdraw investment registration certificates for investment projects in industrial parks. export processing zones, high-tech zones, economic zones, including:
+ Project on investment in developing infrastructure of industrial parks, export processing zones and hi-tech parks;
+ Investment projects implemented in industrial parks, export processing zones, high-tech zones and economic zones.
- Department of Planning and Investment where the investor places or plans to set up its head office or executive office to implement the investment project to receive, issue, adjust and revoke the Investment Registration Certificate for The following investment projects:
+ Investment projects implemented in many provinces and cities directly under the Central Government;
+ Investment projects implemented simultaneously in and outside industrial parks, export processing zones, high-tech zones and economic zones.
Procedures for establishing a company after issuing an investment registration certificate
Step 1: Investors implement procedures for granting business registration certificates,
Step 2: Fix the legal seal,
Step 3: Notice of using the company’s sample
The time limit for completing the above 3 steps is from 05 to 07 days.
Procedures for granting business licenses (Only applicable to companies operating in the field of implementing import and export rights and distributing goods).
- Application for business license;
- Good explanation of the conditions; Confirm the experience
- Notes on financial capacity, bank confirmation
- Copy of Investment Certificate; Business registration certificate
- Certificates of land use rights
- Authorize the Hnlaw & Partners Law Firm to apply.
Completion time: 25 – 30 working days.
The above is information provided by HNLaw & Partners to customers on the establishment of a foreign-invested enterprise, if you have any questions or needs, please contact:
Room 405, DBS Building, P405, 4th floor, DBS building, number N028, lot of 31 commercial service areas and houses in Ha Tri, Ha Tri, Ha Dong, Hanoi
Hotline: (+84) 912918296