Conditions for investing abroad that investors need to know

Conditions for investing abroad are specifically stipulated in the Law on Investment 2020 and its guiding documents. This article will analyze the necessary conditions for investors to carry out investment activities abroad, including investment principles, conditions for investors, conditions for investment projects, and some important notes.

The importance of investing abroad in Vietnam’s economic development

Overseas investment is one of the important driving forces promoting Vietnam’s economic growth and international integration. This activity not only brings benefits to investors but also contributes to the overall development of the country.

• Market expansion: Investing abroad helps Vietnamese businesses access new markets, expand their scale of operations and enhance their competitiveness.
• Access to advanced technology and management: Through investing abroad, Vietnamese businesses have the opportunity to access modern technology, advanced management skills and improve labor productivity.
• Enhance national status: Successful investment abroad contributes to enhancing Vietnam’s position and reputation in the international arena.
• Export promotion: Investing abroad can create effective distribution channels for Vietnamese goods and services, contributing to promoting exports.
• Job creation: Overseas investment indirectly creates jobs for domestic workers through related production and business activities.

However, investing abroad also has potential risks and challenges that investors need to be aware of and take preventive measures.

Conditions for investing abroad that investors need to know

Law on Investment 2020 and Decree 31/2021/ND-CP detailing the conditions that investors need to meet when making investments abroad.

Investment principles

According to the provisions of Article 60 and Article 51 of the Law on Investment 2020, overseas investment activities must comply with the following principles:

1. The State encourages investment abroad to exploit, develop and expand markets; increase the ability to export goods and services and earn foreign currency; Access modern technology, improve management capacity and supplement the country’s socio-economic development resources.
2. Investors carrying out investment activities abroad must comply with the provisions of the Law on Investment, other relevant laws, and the laws of the country or territory receiving investment (hereinafter referred to as investment receiving country) and relevant international treaties; Take responsibility for the effectiveness of investment activities abroad.

Conditions for investors

1. For domestic investors, the following conditions must be met:

• Is an economic organization legally established in Vietnam, with sufficient financial capacity and management experience.
• The individual is a Vietnamese citizen with full civil act capacity.

2. For foreign investors:

• Are foreign organizations and individuals investing and doing business in Vietnam according to the provisions of Vietnamese law.

In addition, investors investing abroad must have a decision to invest abroad according to the provisions of Article 59 of the Law on Investment 2020. At the same time, there must be a document from the tax authority confirming the fulfillment of the payment obligation. investor taxes. The time of confirmation by the tax authority is no more than 03 months from the date of submitting the investment project dossier.

Conditions for investment projects

Conditions for investment industries and occupations:

Outward investment industries do not belong to prohibited investment industries and occupations as prescribed in Article 53 of the Law on Investment 2020, specifically including:

1. Prohibited business investment sectors and industries are specified in Article 6 of the Law on Investment 2020 and relevant international treaties. Specifically:

• Trading in narcotics specified in Appendix I of the Law on Investment 2020;
• Trading in chemicals and minerals specified in Appendix II of the Law on Investment 2020;
• Trading in specimens of wild plants and animals originating from the wild as prescribed in Appendix I of the Convention on International Trade in Endangered Species of Wild Plants and Animals; Specimens of endangered, precious, and rare species of forest plants, animals, and aquatic animals Group I originating from natural exploitation specified in Appendix III of the Law on Investment 2020;
• Prostitution business;
• Buying and selling humans, tissues, corpses, body parts, human fetuses;
• Business activities related to human cloning;
• Trading in firecrackers;
• Debt collection service business.

2. Meet conditions on technology and export products (if any).

3. Comply with investment regulations in conditional overseas investment industries and professions as prescribed in Article 54 of the Law on Investment 2020, including: banking, insurance, securities, press, radio, television, real estate business.

Conditions for investment capital:

Investors have a commitment to arrange foreign currency themselves or have a commitment to arrange foreign currency to carry out investment activities abroad through licensed credit institutions. At the same time, meet the following conditions:

• Meet regulations on minimum capital contribution ratio (if any).
• Have legal capital sources.
• Carry out capital transfer procedures according to regulations.

In addition to the above conditions, investors must pay attention to complying with the laws of the host country. Pay attention to specific regulations on security, national defense, social order and safety.

Some important notes when investing abroad

Investing abroad is a potential business strategy, but to ensure success and compliance with legal regulations, you need to keep in mind the following important factors.

First, carefully research the market and laws of the host country: Before deciding to invest, investors need to carefully research the investment environment, incentive policies, legal risks, business culture… of the host country.

Second, choose the appropriate form of investment: Depending on the investment goals, scale and industry, investors can choose different forms of investment such as establishing a new enterprise, contributing capital, buying shares, joint ventures…

Third, carry out investment registration procedures: Investors need to fully carry out investment registration procedures according to the provisions of Vietnamese law and the law of the host country.

Fourth, pay attention to risk management: Investors need to be aware of potential risks when investing abroad, including political, legal, economic, financial, environmental and social risks. Effective risk prevention and management measures are needed.

Fifth, compliance with profit transfer regulations: Comply with regulations on profit transfer, financial reporting and tax payment in accordance with Vietnamese law.

Service for applying for a foreign investment registration certificate in Long Phan

Long Phan provides consulting services and supports procedures for applying for investment registration certificates abroad.  With a team of experienced experts and knowledgeable investment law, we are committed to providing customers with professional, effective and reliable services.

Our services include:

• Advice on conditions and procedures for investing abroad.
• Support in preparing investment registration documents.
• Drafting documents and legal documents.
• Representing customers in working with competent authorities.
• Monitor progress and complete certification procedures.

Benefits when using Long Phan’s services:

• Save time and costs.
• Ensure documents are valid and in accordance with regulations.
• Improve efficiency of licensing applications.
• Minimize risks.
• Peace of mind to invest and develop business.

Contact Long Phan today for detailed advice and service use.

Investing abroad is an important decision, requiring investors to thoroughly research the conditions, procedures and relevant regulations. Long Phan with a team of experienced experts is ready to accompany customers in the process of investing abroad, helping customers achieve their business goals and sustainable development. Contact the hotline 0906735386 for detailed advice.