What are economic organizations with foreign investment capital?

Economic organizations with foreign investment capital is an important form of investment in Vietnam. This is a type of enterprise with capital contribution from foreign investors, with its own characteristics and regulations on establishment and operation. This article will analyze in detail the concepts, characteristics, classification and some issues related to economic organizations with foreign investment capital in Vietnam.

What are economic organizations with foreign investment capital?

Economic organizations with foreign investment capital are economic organizations that have foreign investors as members or shareholders. This is the definition specified in Clause 22, Article 3 of the Law on Investment 2020.

According to this regulation, an economic organization is considered to have foreign investment capital when at least one foreign investor contributes capital or buys shares. Foreign investors can be individuals with foreign nationality or organizations established under foreign law.

Economic organizations with foreign investment capital can be established in forms such as limited liability companies, joint stock companies, and partnerships. Depending on the capital contribution ratio of foreign investors, this economic organization will have to comply with different regulations on investment conditions, establishment and operation procedures.

Determining whether an economic organization has foreign investment capital or not is important in applying legal regulations on investment and enterprises as well as preferential and investment support policies of the State.

Classification of economic organizations with foreign investment capital

Economic organizations with foreign investment capital can be classified based on the following criteria:

Based on the capital contribution ratio of foreign investors:

• Economic organizations with foreign investors holding 51% or more of charter capital.
• Economic organizations with foreign investors holding from over 50% to less than 51% of charter capital.
• Economic organizations with foreign investors holding 50% or less of charter capital.

Based on legal form:

• One-member limited liability company with 100% charter capital owned by foreign investors.
• LLC with two or more members.
• Joint stock company.
• Partnership company.

Based on the nationality of the foreign investor:

• Economic organizations with investment capital from investors from one country.
• Economic organizations with investment capital from investors from many different countries.

This classification has important implications in applying legal regulations on investment and businesses as well as investment incentives and support policies.

Some notes on establishing economic organizations with foreign investment capital

When establishing economic organizations with foreign investment capital, the following issues should be kept in mind:

Firstly, regarding investment conditions: Foreign investors need to meet market access conditions as prescribed in Article 9 of the Law on Investment 2020. Some industries and fields have regulations limiting ownership rates. capital of foreign investors.

Second, regarding investment procedures: Before establishing an economic organization, foreign investors must carry out procedures to apply for an Investment Registration Certificate, except in the case of establishing small and medium-sized start-up enterprises. creative.

Third, regarding investment form: Foreign investors can choose to invest in the form of establishing a new economic organization or contributing capital, buying shares, or purchasing capital contributions to established economic organizations. Legal basis: Clause 2, Article 24 of the Law on Investment 2020.

Fourth, regarding investment capital: The charter capital of an economic organization established by a foreign investor is not necessarily equal to the investment capital of the project. Economic organizations can mobilize other sources of capital to implement investment projects.

Fifth, regarding business lines: It is necessary to pay attention to regulations on prohibited business investment lines and conditional business investment lines for foreign investors.

Consulting services on establishing economic organizations with foreign investment capital

Establishing economic organizations with foreign investment capital is a complex process, requiring a deep understanding of Vietnamese investment and businesses. Therefore, using professional consulting services will help investors save time, costs and ensure compliance with legal regulations. Long Phan provides consulting services including:

• Consulting on investment conditions, choosing appropriate investment forms;
• Support in developing investment project documents;
• Carry out procedures to apply for an Investment Registration Certificate;
• Carry out business establishment registration procedures;
• Consulting on tax, accounting and related issues.

Economic organizations with foreign investment capital play an important role in attracting capital and technology from abroad into Vietnam. To establish and effectively operate this type of enterprise, investors need to master the relevant legal regulations. Customers who need detailed advice on establishing economic organizations with foreign investment capital, please contact via Hotline: 0906735386 for the best support.