IRC and ERC: Concepts and roles in business

What are IRC and ERC? These are two important concepts for business in many fields, especially international business. IRC is related to investment standards, helping to ensure smooth investment. Meanwhile, ERC refers to compliance with business registration regulations thereby avoiding legal risks. Understanding IRC and ERC helps businesses improve reputation, reduce risks and develop sustainably.

What are IRC and ERC?

IRC stands for Investment Registration Certificate or Investment Registration Certificate. According to Clause 11, Article 3 of the Law on Investment 2020, this is a paper or electronic document recording the investor’s registration information about the investment project.

ERC stands for Enterprise Registration Certificate or Enterprise Registration Certificate. According to Clause 15, Article 4 of the Law on Enterprises 2020, this is a paper or electronic document that records information about business registration that the Business Registration Authority issues to businesses.

Distinguish between IRC and ERC

Because IRC and ERC are two different types of certificates, it is not difficult to distinguish between the two.

• Firstly, in terms of regulatory law, IRC is mainly regulated by the Law on Investment 2020 and ERC is mainly regulated by the Law on Enterprise 2020.
• Second, in terms of issuing authority, IRC is issued by the Economic Department under the Department of Planning and Investment, while ERC is issued by the Business Registration Office under the Department of Planning and Investment.
• Third, regarding the order of granting, the IRC granting procedure will usually be carried out before the ERC granting procedure.
• Fourth, the content shown on IRC and ERC will be different, specifically the content of IRC is specified in Article 40 of the Law on Investment 2020 and ERC will be in Article 28 of the Law on Enterprise 2020.

The role of IRC and ERC in business operations

In business activities, IRC and ERC play a very important role, especially for businesses, investment organizations and investors in the legal and economic environment. Both types of certificates are closely linked in the process of establishing and operating business in Vietnam, specifically:

1. Role of IRC:

• Foreign investment: IRC is a certificate issued to foreign investors when they plan to invest in Vietnam. This is an important legal document confirming that the foreign investor’s investment project has been approved by a competent state agency.
• Confirming investment rights: IRC is the basis for foreign investors to start carrying out investment activities in Vietnam, including building and operating projects or establishing businesses.
• Investment Sector Regulations: IRCs often come with specific conditions on investment sectors, foreign investor ownership ratios, and requirements related to investor protection.
• Fulfilling legal obligations: After having an IRC, investors must comply with tax obligations, environmental protection and other legal obligations that Vietnamese law requires for foreign investors.

2. Role of ERC

• Legal entity: ERC is an official certificate certifying that a business has been registered and has legal status in Vietnam. Every business when established must have an ERC to be able to operate legally and have separate legal rights.
• Providing business information: ERC includes important information such as business name, head office address, business lines, charter capital, list of legal representatives, and information about shareholders (for joint stock companies). This is an important document in confirming that the business is eligible to operate.
• Operational licensing: ERC is a necessary license for businesses to be able to conduct business activities, sign contracts, open bank accounts, hire workers, and fulfill tax obligations.
• Fulfilling obligations to the state: ERC confirms that the business is registered with the state agency and will be required to fulfill obligations regarding taxes, insurance, labor regulations, and other requirements related to business operations.

What content do IRC and ERC contain?

Pursuant to Article 40 of the Law on Investment 2020, the content of the IRC includes the following information:

1. Name of investment project.
2. Investors.
3. Investment project code.
4. Location of investment project and land area used.
5. Objectives and scale of the investment project.
6. Investment capital of the project, including contributed capital of investors and mobilized capital.
7. Operational term of the investment project.
8. Progress of investment project implementation, including:

• Progress of capital contribution and mobilization of capital sources.
• Progress in implementing the project’s main operational objectives; If the project has many stages, it is necessary to specify the progress of each stage.

9. Forms of incentives and investment support and applicable bases and conditions (if any).
10. Conditions for investors when implementing investment projects (if any).

Pursuant to Article 28 of the Law on Enterprise 2020, the content of the ERC includes the following information:

1. Business name and business code.
2. Address of the enterprise’s headquarters.
3. Information about the legal representative:

• Full name, contact address, nationality, legal document number of the individual for representatives of limited liability companies and joint stock companies.
• For partners of partnerships and business owners of private enterprises, it is necessary to clearly state full name, contact address, nationality, and legal document number.
• For members that are organizations of limited liability companies, it is necessary to write the name, business code and head office address of that organization.

4. Charter capital for companies or investment capital for private enterprises.

Consulting and support services for issues related to IRC and ERC at Long Phan

After learning about IRC and ERC, you can see that possessing complete documents is an important step to ensure your business operates legally and smoothly. Long Phan provides consulting services and comprehensive support in applying for IRC and ERC, helping you quickly complete procedures and start business operations smoothly.

Long Phan’s services include:

• Instructions on conditions and procedures for applying for an investment registration certificate.
• Consulting on investment fields in accordance with regulations.
• Support in choosing the type of business and business line.
• Consulting on business establishment and ERC registration processes.
• Prepare complete application documents for IRC and ERC.
• The customer representative submits documents to the authorities.
• Support for changing information in the certificate (capital, industry, location, etc).
• Consulting and implementing license renewal as required.
• Resolve problems that arise during the process of granting or using IRC and ERC.
• Contact state agencies to ensure documents are processed on time.
• Receive certificate and hand it over to customer.
• Providing after-sales services, consulting on obligations after establishing a business and registering for investment.

With experience and a team of experts with deep understanding of administrative procedures, Long Phan is committed to providing you with quick and effective services, helping to save time and avoid errors in the process. Contact the hotline now: 0906735386 for detailed advice and timely support!