How is investment in establishing economic organizations regulated?

Investing in establishing economic organizations is an important activity for both domestic and foreign investors who wanting to carry out investment projects in Vietnam. According to the provisions of the Law on Investment 2020, the establishment of economic organizations will have to comply with specific regulations, including different conditions, procedures and forms of investment. This article will analyze the legal regulations on investing in establishing economic organizations in Vietnam, helping investors better understand the steps that need to be taken.

Regulations on economic organizations

Economic organization is an organization established and operating in accordance with Vietnamese law. According to Clause 21, Article 3 of the Law on Investment 2020, economic organizations include types such as enterprises, cooperatives, cooperative unions and other organizations carrying out business investment activities. These organizations must comply with the provisions of Vietnamese law on establishment, operation, management and protection of the legal rights of investors and related parties.

In addition, according to the provisions of Clause 22, Article 3 of the Law on Investment 2020, an economic organization with foreign investment capital is an economic organization with foreign investors as members or shareholders.

Subjects are allowed to invest in establishing economic organizations

The main subjects with the right to invest in establishing economic organizations include:

• Domestic investors: Domestic individuals and organizations have the right to establish economic organizations in Vietnam according to the provisions of law on enterprises, cooperatives, or other types of economic organizations.
• Foreign investors: Foreign investors are only allowed to invest in establishing economic organizations in Vietnam if they meet the market access conditions as prescribed in Article 9 of the Law on Investment 2020. Foreign investors must comply with procedures for granting an Investment Registration Certificate before establishing an economic organization in Vietnam.

Conditions for investors to establish economic organizations

To establish an economic organization, investors must meet a number of basic conditions as prescribed in Article 2 of the Law on Investment 2020. Specifically:

• For domestic investors: Establish economic organizations in accordance with the law on enterprises and legal regulations corresponding to each type of economic organization.
• For foreign investors: Meet market access conditions for foreign investors according to Article 9 of the Law on Investment 2020.
• Investment project and registration procedures: Foreign investors must have an investment project and carry out procedures for granting and adjusting Investment Registration Certificates (except for small and medium-sized innovative startups and innovative startup investment funds).

Regulations on establishment of economic organizations by foreign investors

For foreign investors who want to establish economic organizations, it will be regulated in Article 63 of Decree 31/2021/ND-CP as follows:

In case of implementing a new investment project:

• Foreign investors need to carry out investment policy approval procedures.
• Issuance of Investment Registration Certificate for new investment projects.
• After being granted an Investment Registration Certificate, investors carry out procedures for establishing economic organizations according to current legal regulations, applicable to each type of economic organization.

In case of transfer of investment project:

• If the project does not have an Investment Registration Certificate, foreign investors need to carry out procedures for issuance of an Investment Registration Certificate.
• If the project already has an Investment Registration Certificate, the investor will carry out procedures to adjust the Investment Registration Certificate.
• Finally, the investor carries out procedures to establish an economic organization according to the provisions of law for each type of economic organization.

>>> See more: Forms of foreign indirect investment in Vietnam.

Investment consulting on establishing economic organizations

Establishing an economic organization requires a clear understanding of processes, administrative procedures, and investment conditions. Investors can seek professional investment consulting services for support in implementing investment procedures, including:

• Consulting on choosing the appropriate investment form.
• Consulting on procedures for applying for an Investment Registration Certificate.
• Guidance on regulations related to market access for foreign investors.
• Consulting on preferential policies and support for small and medium-sized enterprises.
• Consulting on implementing procedures to adjust the Investment Certificate if there are changes in the investment project.
• Consulting on internal management regulations, organizational structure, rights and obligations of members of economic organizations.
• Support in resolving issues that arise during the operation of economic organizations.

Investing in establishing an economic organization in Vietnam is a process that requires investors to clearly understand the regulations and fully meet the conditions prescribed by law. Customers who want to learn details about investment procedures and investment consulting services can contact us immediately. Please call the hotline 0906735386 to receive advice and support from Long Phan’s team of experts.