How joint venture company
- Establishing a joint venture as a joint venture established by two or more parties in Vietnam on the basis of a joint venture contract or an agreement signed between the foreign government and the Government of the Socialist Republic of Vietnam or enterprises invested by foreign-invested enterprises in cooperation with Vietnamese enterprises or joint-venture enterprises cooperating with foreign investors on the basis of joint-venture contracts;
- Joint venture enterprises are established in the form of limited liability companies. Each joint venture party is responsible for the amount of capital committed to contribute to the legal capital of the enterprise. Joint-venture enterprises have the legal person status under Vietnamese law, established and operating from the date of being granted investment licenses.
I. The legal status of joint venture companies:
- The joint venture enterprise has legal status under Vietnamese law, established and operating since the date of issuance of the investment license;
- A joint venture is established in the form of a limited liability company or a joint stock company. In particular, each joint venture party shall take legal responsibility in its capital contribution to the legal capital of the enterprise;
- Legal capital: The legal capital of a joint venture enterprise must be at least 30% of the investment capital. For projects on construction of infrastructure projects, investment projects in geographical areas where investment is encouraged, projects on afforestation and large-scale projects are likely to be lower, but not below. 20% of investment capital and must be approved by the investment licensing agency. The capital contribution ratio of the foreign joint venture party or parties shall be agreed upon by the joint venture parties, but must not be lower than 30% of the legal capital of the joint-venture enterprise. Based on the business, technology, market, business efficiency and other socio-economic benefits of the project, the Investment License Issuing Authority may consider allowing the foreign joint venture party. have lower capital contribution ratio, but not less than 20% of legal capital. The outstanding feature of a joint venture enterprise is the coordination and contribution of investment capital for production and business of foreign investors and Vietnamese investors. The capital contribution ratio of each party will determine the level of participation in the management of the enterprise, the rate of profit enjoyed as well as the risk that each party to the joint venture must bear.
II. Conditions for establishing a joint venture company
According to the regulations to establish a joint venture, investors need to meet the following conditions:
- Foreign businesses do not violate the laws of Vietnam and foreign countries, are not prohibited from establishing and undertaking enterprises regulated by Vietnamese law.
- About the subject: investors;
- Personal: Must have full capacity for civil acts, and not be in the period of serving imprisonment penalties as well as not in the cases prescribed in Article 13 of the Enterprise Law 2014;
- Legal entity: legally established, still existing at the time of investment;
- Ensuring compliance with the laws of Vietnam, international treaties Vietnam has signed or recognized;
- The financial capacity of an investment must correspond to the amount of capital committed to invest in the project;
- The bank that holds the deposit amount used for investment purposes of the investor must be a bank licensed to operate in Vietnam;
- Conditions for establishing another company in accordance with Vietnamese law;
III. Application file for establishment of a joint venture company
The investor’s profile must include other types of documents. In order to establish a joint venture company, investors need to prepare documents, the following documents:
- Written request for issuance of an investment certificate in a unified form prescribed by a competent agency;
- Document confirming the legal status of the investor;
- Investors’ financial statements in the last 2 years (If any);
- Document certifying the legal capital of a competent agency or organization with respect to companies conducting lines of business for which legal capital is required by law;
- Practicing certificates of members and other individuals for companies conducting lines of business for which a practicing certificate is required by law;
- Draft of Company’s charter;
- Economic – technical explanatory statement with contents on investment objectives, locations, land use needs, investment scale, investment capital, project implementation schedule, technological solutions and solutions about environment;
IV. Order and procedures for establishing joint venture companies
According to the regulations on the establishment of joint ventures with foreign investors, investors must fully follow the following steps:
- Prepare documents and documents;
- Apply for investment certificate of joint venture company;
- Investors submit their applications at the BPMC (one-door department) of MPI / PMU (Planning and Investment Department / Industrial Zone Management Board of provinces / cities under central authority), or submit documents at the office other letters or departments according to specific regulations of each locality if some agencies do not have BPMC;
- Department of Planning and Investment / Industrial Zone Management Boards of provinces / cities under central authority: accepting dossiers, issuing notices requesting amendments and supplements to dossiers or submitting to the City People’s Committee / Director Director of industrial zone management board approved.
- Investors receive application settlement results at the One-Stop Department. If the file is invalid, the result is a notice requesting a modification or addition to the file. After the amendment has been completed, the investor submits the application at the One-Stop-Shop Department and performs it in the same order as the first submission;
* Apply for a certificate of tax code and company seal
Businesses do not need to apply for a tax code, because the tax code will simultaneously be the business code. However, for the form of a joint venture, there will be a slight difference between investors as follows:
After obtaining the Investment Certificate (this is also a business license), the enterprise needs to carry out the seal making procedure. After having the seal of the enterprise, the investor can apply for a tax code. . The reason these organizations have to do so is due to the certificate of tax code granted later and independent of the Investment Certificate, the certificate of operation of the unit.
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