Procedures for establishing a foreign invested company in Vietnam

Establishing a foreign invested company in Vietnam brings many attractive opportunities and benefits to international investors. Establishing a foreign invested company not only helps investors access the market but also takes advantage of preferential policies of foreign investors in Vietnam. Through the following article, Long Phan will provide customers with detailed information about the above procedure.

Conditions for establishing a joint stock company with foreign investment capital

Foreign investors establishing companies in Vietnam need to ensure legal conditions and industry regulations according to Vietnamese law. Specific conditions include:

• Conditions for capital contribution and new business establishment: According to Article 24 of the Law on Investment 2020, foreign investors can only participate in industries permitted by law. Investors need to prepare investment projects, and at the same time carry out procedures to apply for or adjust investment registration certificates to meet market entry conditions.
• Conditions for buying shares or contributing capital: Foreign investors must meet market access conditions specified in the Law on Investment, while ensuring national security and defense requirements and land law regulations when using or leasing land.
• Conditions on subject status and nationality: Investors can be individuals aged 18 or older or organizations from a WTO member country or a country that has signed an international treaty with Vietnam. Currently, Vietnamese law does not limit the nationality of investors, any country can invest in Vietnam if they comply with the law and are licensed.
• Financial capacity conditions: Investors must prove their financial capacity with documents such as savings books, financial reports, and financial commitments from financial institutions or parent companies.
• Conditions for location and headquarters: Investors need to have a project location in Vietnam, proven by a lease contract or documents certifying legal use rights.
• Conditions for professional capacity: Investors must comply with the requirements on conditional business lines as prescribed by law.

These conditions are intended to ensure that foreign investors have full capacity and finances to implement the project, while complying with Vietnam’s regulations on security and defense.

Prepare documents to establish a foreign invested company

To establish a company with foreign investment, investors need to prepare complete documents as prescribed in Clause 1, Article 33 of the Law on Investment 2020. Documents to be prepared include:

1. Document requesting implementation of investment project of foreign investor: The investor must submit a request to implement the investment project.
2. Documents proving the investor’s legal status:

• If an individual: Copy of identity card, citizen identification card or passport.
• If an organization: Certificate of establishment or equivalent legal document.

3. Proposed investment project: Including information about the investor, objectives, scale, investment capital, capital mobilization plan, duration, location, investment progress, assessment of the project’s socio-economic efficiency, and proposed investment incentives.
4. Prove the investor’s financial capacity:

• If an individual: Copy of savings book, documents confirming account balance.
• If an organization: Financial statements of the last 2 years, financial commitment from the financial institution or parent company, documents proving financial capacity.

5. Documents on land use rights or lease contract: For projects that do not require land allocation from the State, investors need to submit documents proving legal land use rights.
6. Technology explanation: For projects requiring technology appraisal, investors need to submit a report detailing the technology to be applied in the project.
7. BCC business cooperation contract (if any): If the investment project is in the form of a business cooperation contract, this contract must be provided.

Preparing complete documents is a very important step to facilitate the license application process and ensure investment progress.

Procedures for establishing a foreign invested company

After preparing complete documents, investors need to carry out procedures to establish a joint stock company with foreign investment, including two main stages:

Issuance of Investment Registration Certificate

Issuing an investment certificate is the first step for investors to be officially allowed to carry out projects in Vietnam, based on Article 35 of Decree 31/2021/ND-CP.

• For projects requiring investment policy approval: The investment registration agency issues a certificate within 5 working days after receiving the investment approval decision.
• If the project has been approved for investment and the investor has won the auction or bid: The investor needs to submit a written request for a certificate within 5 working days from the time the agency receives the request.
• For projects in economic zones: The economic zone management board has the right to approve and issue investment registration certificates at the same time.

Projects are not subject to investment certificates, but if needed, investors can still submit a written request for a certificate.

Issuance of Business Registration Certificate

The next step after obtaining the Investment Registration Certificate is to register the business to be granted a business code and officially operate in Vietnam. Business registration procedures are carried out according to Article 26 of the Law on Enterprise 2020, through the following forms:

• Submit registration application directly at the Business Registration Office of the Department of Planning and Investment where the enterprise is headquartered.
• Register via postal service or register your business via electronic network at the National Information Portal on business registration.

Business registration documents include data required by the Law on Enterprise. If the application is valid, the Registration Authority will issue a certificate within 3 working days. In case the dossier is not valid, the registration agency will request additional information or notify the reason for refusal.

Consulting services and guidance on establishing foreign invested companies

Establishing a foreign-invested company in Vietnam requires strict compliance with regulations and complex procedures. To ensure legality and avoid risks during the investment process, customers should consider using Long Phan’s consulting services. Our consulting services will include:

• Consulting on investment conditions suitable for specific industries and fields;
• Consulting on choosing the type of business;
• Consulting on capital contribution ratio in case of investment in the form of capital contribution;
• Consulting on procedures for approval of investment policies;
• Enterprise representatives submit documents and carry out procedures to apply for an investment registration certificate;
• Drafting registration documents to establish a foreign-invested company;
• Support and advise on post-establishment procedures such as opening a bank account, registering social insurance for employees, tax declaration,…

If you want to establish a foreign invested company in Vietnam, please contact Long Phan immediately via the hotline 0906735386 to receive in-depth advice and procedural support from experienced experts. We are committed to providing effective and appropriate solutions, helping customers ensure convenience in the investment process.