Establishment of joint ventures for domestic and foreign investors

Article overview

Organizing joint ventures for domestic and foreign investors is a popular form of business organization in Vietnam today. Before starting to cooperate to establish a joint venture organization, what issues and procedures should foreign investors and domestic investors pay attention to ensure the cooperation process goes smoothly and according to regulations? The article below by Long Phan will help customers answer the above questions. We welcome customers to follow us.

Regulations on establishing joint ventures for domestic and foreign investors
Regulations on establishing joint ventures for domestic and foreign investors

Conditions for foreign investors to establish joint ventures with domestic investors

To establish a joint venture with a domestic investor, a foreign investor must meet the following conditions:

  • Meet the business investment conditions specified in Clause 1, Article 5, Clause 5, Article 7 of the Law on Investment 2020;
  • Meet the market access conditions specified in Clauses 2 and 3, Article 9 of the Law on Investment 2020;
  • In addition, foreign investors and domestic investors must also meet conditions on investment entities; investment form; Financial capacity when establishing a joint venture company in Vietnam.

Competent authority for the establishment of joint ventures for domestic and foreign investors

Pursuant to Clause 15, Article 4, Clause 1, Article 26 of the Law on Enterprises 2020 (amended and supplemented in 2022) stipulates that the competent authority for the establishment of joint ventures for domestic and foreign investors is Business Registration Office under the Department of Planning and Investment (hereinafter referred to as Business Registration Office).

Procedures for establishing joint ventures for domestic and foreign investors

Prepared documents

There are two ways to establish a joint venture company, each with a different set of documents:

Method 1: Establishing a joint venture company directly from foreign investors’ capital:

Pursuant to Clause 1, Article 33 of the Law on Investment  2020 (amended and supplemented in 2022), Point b, Clause 2, Article 12 of Decree 31/2021/ND-CP; At the same time, depending on the type of joint venture company, investors need to prepare some additional basic documents as prescribed in Article 20, Article 21, Article 22 of the Law on Enterprises 2020 (amended and supplemented in 2022) as follows :

  • Written request for investment project implementation (with full signatures of investors);
  • Proposing investment projects;
  • Copy of house/office rental contract for company headquarters. If subleasing from an enterprise, you need to provide an additional business registration certificate of the leasing enterprise with a registered real estate business code;
  • Valid copies of legal documents of Vietnamese investors and foreign investors;
  • Documents proving the investor’s financial capacity.
  • Application for registration of joint venture company;
  • Charter of joint venture company;
  • List of members of the joint venture company (for LLCs with two or more members) or list of founding shareholders of the joint venture company (for joint stock companies);
  • Copy of ID card/ID card/Passport of the legal representative of the joint venture company;
  • Copy of ID card/ID card/Passport of individual investors;
  • Copy of business registration license/establishment decision of the institutional investor;
  • Document appointing an authorized representative to manage the organization’s capital contribution, accompanied by a copy of the representative’s ID card/CCCD/Passport;
  • Power of attorney for the person submitting the application and receiving the results, accompanied by a copy of the ID card/CCCD/Passport of the person authorized to submit the application (if any).

Method 2: Established in the form of capital contribution, acquisition of shares, capital contributions in Vietnamese enterprises

With this method, foreign investors only need to prepare documents to be granted a business registration certificate. Document components are mainly listed in the Law on Enterprises2020 (amended and supplemented 2022), including:

  • Application for business registration (signed by legal representative);
  • Company charter;
  • List of members (for limited liability companies with 2 or more members) or list of founding shareholders (for joint stock companies);
  • Copy of business registration certificate of member/shareholder who is an organization;
  • Document appointing a representative for the capital contribution of the Vietnamese organization, accompanied by a copy of the ID card/CCCD/Passport of the representative of the organization’s capital contribution;
  • Copy of ID card/CCCD/Passport of the legal representative;
  • Power of attorney for the person submitting the application and receiving the results, accompanied by a copy of the ID card/CCCD/Passport of the person authorized to submit the application (if any).
Prepared documents will depend on how the joint venture organization is established
Prepared documents will depend on how the joint venture organization is established

Execution order

For the first method, investors need to apply for an investment certificate:

Step 1: Apply for an investment certificate for the joint venture company

  • Investors submit applications directly to the Investment Department – Department of Planning and Investment of the province/city where the joint venture company’s headquarters is expected to be located.
  • Within 15 working days from the date of receipt of complete and valid documents, the Investment Department will issue an investment certificate to the joint venture company.

Step 2: Procedures for establishing a joint venture company:

  • Submit the application for business establishment registration directly at the Business Registration Office – Department of Planning and Investment of the province/city where the joint venture company’s headquarters is expected to be located or submit via the website: https://dangkykinhdoanh.gov.vn/vn
  • Within 03 – 05 working days from the date of receiving complete documents,

For the second method, investors do not have to apply for an investment certificate, so the procedure is as follows:

Step 1: Vietnamese investors establish businesses from 100% of their capital contribution;

(The steps to establish a business are relatively similar step 2 of the first method)

Step 2: Apply for documents to qualify for capital contribution/repurchase of shares for foreign investors:

  • Enterprises need to submit registration documents to contribute capital and repurchase shares for foreign investors, including:
    1. Document to register capital contribution, share purchase, capital contribution of foreign investors;
    2. Copy of business registration certificate of Vietnamese company;
    3. Notarized copy of ID card/ID card/passport of the foreign investor being an individual;
    4. Notarized copy of the business registration license of the foreign investor who is an organization (consular legalized copy and translated into Vietnamese);
    5. Document of capital contribution/share purchase agreement between Vietnamese company and foreign investor;
    6. Authorization letter for the business representative to submit the application and receive the results, accompanied by a copy of the ID card/ID card/passport of the person authorized to submit the application (if any).
  • Submit your application directly to the one-stop department of the Investment Department – Department of Planning and Investment of the province/city where the company’s headquarters is located. The deadline for processing documents is 10 working days from the date of receipt of valid documents

Step 3: Change business license (update capital contributing member information)

Enterprises carry out procedures to change business licenses at the Department of Planning and Investment to receive a new business registration certificate.

In case of capital transfer to a foreign organization that leads to a change in the type of business, it is necessary to supplement the dossier to change the license similar to the original establishment.

Steps to establish a joint ventures for domestic and foreign investors
Steps to establish a joint ventures for domestic and foreign investors

Consulting services and support for establishing joint ventures for domestic and foreign investors

During the process of establishing a joint ventures for domestic and foreign investors, if customers need a professional consulting unit to assist in solving difficulties in the stage of preparing documents and carrying out procedures., you can consider using Long Phan’s services. With his professional experience, Long Phan will support you:

  • Consulting on the steps to establish joint venture organizations with domestic and foreign investors;
  • Consulting and supporting the full preparation of conditions that foreign investors need to meet before investing in Vietnam in the form of joint ventures;
  • Support in preparing dossiers and documents to establish joint venture organizations for domestic and foreign investors;
  • Monitor the process of appraising documents to establish joint venture organizations with domestic and foreign investors, support in resolving arising problems;
  • On behalf of clients, work with State agencies throughout the process of establishing joint venture organizations with domestic and foreign investors;
  • Hand over work results to customers, support handling problems that arise after registering to establish joint venture organizations with domestic and foreign investors.

With a team of experts with many years of experience in consulting and resolving investment and business procedures, Long Phan will support customers in the most effective way regarding the problems they are facing. If you need any more information about the process of establishing a joint ventures for domestic and foreign investors, please contact Long Phan via hotline. 0906.735.386 for quick advice and support.