Conditions for foreigners to establish a company in Vietnam

Article overview

Foreigners who establish a company in Vietnam can take advantage of the dynamic business environment and strong development potential of the market. This not only helps expand investment opportunities but also increases profits thanks to Vietnam’s strategic location in the region. However, to establish a company, investors need to meet the conditions and procedures prescribed by law. Next, let’s learn about this topic with Long Phan through the following article.

What conditions do foreigners need to establish a company in Vietnam?
What conditions do foreigners need to establish a company in Vietnam?

Types of businesses that foreign investors can establish in Vietnam

Pursuant to the Law on Enterprise 2020 and Law on Investment 2020, it can be seen that when foreign investors want to establish an economic organization in Vietnam, they must carry out procedures for granting or adjusting the Investment Registration Certificate, except for some special cases such as establishing innovative start-up small and medium enterprises, and innovative start-up investment funds.

Foreign investors can choose to establish a partnership, limited liability company or joint stock company in Vietnam depending on their needs and business objectives, provided that they comply with investment procedures and relevant regulations of Vietnamese law.

Conditions for foreigners to establish a company in Vietnam

Conditions for investors

Foreign investors establishing a company in Vietnam must meet the following conditions:

  • Be of age of majority and have full capacity for civil acts according to the provisions of the Civil Code 2015;
  • Not subject to criminal prosecution;
  • Not subject to a ban on investment in Vietnam and meeting the market access conditions in Article 9 of the Law on Investment 2020;
  • Have the nationality of a WTO member.

Conditions for investment capital

According to the provisions of Clause 23, Article 3, Article 23 of the Law on Investment 2020, investment capital of foreign investors must meet the following conditions:

  • If investment capital is money, according to the provisions of Clause 1, Article 3 of Decree 222/2013/ND-CP, it must be Vietnamese currency issued by the State Bank of Vietnam.
  • If the investment capital is another asset, you must pay attention to the regulations on environmental conditions, health,… that Vietnam stipulates.
  • Pay attention to the regulations on investment capital and legal capital prescribed by Vietnam’s specialized laws and international treaties to which the Socialist Republic of Vietnam is a member.
Conditions for investment capital
Conditions for investment capital

Conditions of business location

According to the provisions of Clause 3, Article 44 and Article 45 of the Law on Enterprises 2020, foreigners establishing companies in Vietnam when choosing a business location need to pay attention to the following conditions:

  • Enterprises can only establish business locations in the province or centrally run city where their head office or branch is located;
  • Must carry out procedures to notify the establishment of a business location to the Business Registration Office where the business location is established;
  • Must be the place where the enterprise’s business activities take place;
  • Must not be the same headquarters as the enterprise.

Conditions for business lines

Conditions when doing business in conditional industries and occupations include:

  1. Business registration certificate:
  • According to Article 27 of the Law on Enterprises 2020, businesses must have a Certificate of Business Registration when registering for industries and professions that are not prohibited from investment and business, a valid business name, valid registration documents, and full payment of registration fees.
  1. Business investment conditions:
  • Clause 9, Article 2 of the Law on Investment 2020 stipulates that business investment conditions are requirements that individuals and organizations must meet when carrying out business investment activities in conditional industries and occupations. These conditions may include licenses, certificates, or written confirmations from competent state agencies.
  • Business investment conditions must ensure openness, transparency, objectivity, and save time and costs for investors.
  1. The list of conditional business investment industries and occupations is specified in Appendix IV of the Law on Investment 2020.

Thus, when businesses want to invest in conditional industries and occupations, they must comply with the requirements for licenses, certificates and administrative procedures according to the provisions of law. Conditional businesses must be posted on the National Business Registration Portal.

Procedures for establishing a company in Vietnam for foreigners

Forms of capital contribution, share purchase, capital contribution

Pursuant to Article 65 and Article 66 of Decree 31/2021/ND-CP, foreigners establishing companies in Vietnam in the form of capital contribution, share purchase, or capital contribution will follow the following procedures:

Step 1: Register with the Department of Planning and Investment:

Prepare a set of registration documents to submit to the Department of Planning and Investment where the economic organization is headquartered. Records will include:

The Department of Planning and Investment will consider meeting investment conditions for foreign investors and notify investors. In case the conditions are not met, the Department of Planning and Investment shall notify the investor in writing and clearly state the reason.

Step 2: Carry out procedures for changing members and shareholders at the business registration agency according to the provisions of law on enterprises (for enterprises) and other laws (for economic organizations other than enterprises).

Note: Economic organizations are not required to carry out procedures for granting or adjusting Investment Registration Certificates or Investment Policy Decisions for investment projects implemented before the time foreign investors contributed capital, purchased shares or contributed capital.

How to establish a company in Vietnam for foreigners
How to establish a company in Vietnam for foreigners

Form for registration of new business establishment

In case a foreigner registers to establish a new business, he will go through the following steps:

Step 1: Prepare documents to apply for an Investment Certificate according to Clause 1, Article 33 of the Law on Investment 2020.

Documents include investment project proposals, documents on legal status, project proposals, proof of financial capacity, and documents related to land use rights, technology, and BCC contracts (if any).

Step 2: Submit application for Investment Certificate

Documents are submitted to the investment registration agency. If the project is implemented in multiple provinces, documents are submitted to the Department of Planning and Investment where the headquarters is located or where the project is implemented (Clause 1, Article 36 of Decree 31/2021/ND-CP).

Step 3: Issuance of Investment Registration Certificate

The investment registration agency reviews and issues the Investment Certificate within 15 days of receiving a valid application (Clause 3, Article 36, Decree 31/2021/ND-CP).

Step 4: Apply for a Business Registration Certificate

After obtaining the Investment Certificate, the investor continues to carry out procedures for issuance of the Business Registration Certificate, submitting documents according to Chapter IV of Decree 01/2021/ND-CP, including the application, company charter, list of members, and personal and organizational documents.

Step 5: Disclosure of business information.

Step 6: Enterprises publish information after being granted a Business Registration Certificate and engrave their seal immediately afterward.

Step 7: Open a direct investment capital account from abroad.

Enterprises open direct investment capital accounts at banks with legal foreign currency transaction functions.

Step 8: Complete post-establishment procedures.

Subsequent procedures include capital contribution, digital signature registration, electronic invoice issuance and tax declaration.

Some procedures to note after foreigners establish a company

After foreigners establish a company in Vietnam, some of the following procedures should be noted:

  • Capital contribution: Ensure investors comply with investment capital commitments.
  • Register digital signature: To perform electronic transactions, tax reporting and other obligations.
  • Issue electronic invoices: Register and use electronic invoices according to regulations.
  • Tax declaration and payment: Ensure timely fulfillment of tax obligations.
  • Open a bank account: Open a company account to trade and manage capital.

Consulting on conditions and procedures for foreigners to establish a company in Vietnam

Conditions for foreigners to establish a company in Vietnam not only open up vast business opportunities but also require you to comply with strict regulations to ensure smooth investment activities.

With Long Phan’s consulting services, you will receive comprehensive support from A-Z, including:

  • Consulting on conditions and procedures for establishing a company for foreign investors.
  • Support in preparing investment registration documents and business licenses.
  • Register and carry out procedures at the Department of Planning and Investment.
  • Consulting on preferential investment policies and choosing appropriate business lines.
  • Support tax, accounting and social insurance procedures after establishment.

Long Phan is committed to providing professional consulting services, helping you quickly establish and operate a company in Vietnam. For detailed advice, please contact the hotline 0906735386.