DO ALL INVESTMENT PROJECTS NEED TO PURSUE THE PROCEDURE FOR ISSUANCE OF INVESTMENT REGISTRATION CERTIFICATE?

DO ALL INVESTMENT PROJECTS NEED TO PURSUE THE PROCEDURE FOR ISSUANCE OF INVESTMENT REGISTRATION CERTIFICATE?

The procedure for issuance of Investment Registration Certificate, is one of the pivotal processes when investors wish to embark on investment projects in Vietnam. Hence, does this imply that all investment projects are obligated to pursue the procedure for issuance of Investment Registration Certificate? In order to facilitate investors in their pursuit of investment procedures in Vietnam, HTC Vietnam Legal Company Limited will elucidate the aforementioned inquiries through the following article:

I. Legal basis

- Investment Law 2014

- Decree 118/2015/ND-CP

II. Scope of consultation

1. Cases in which the Certificate of investment registration is required

Under clause 1, Article 36 of the Law on Investment 2014 stipulates the cases in which the Certificate of investment registration is required:

- Investment projects of foreign investors;

According to clause 14, Article 3 of the Law on Investment 2014, foreign investors are defined as:

+ An individual holding a foreign nationality;

+ An organization established under foreign laws and making business investments in Vietnam.

- Investment projects of the business organizations mentioned in Clause 1 Article 23 of this Article.

Clause 1, Article 23 of the 2014 Investment Law stipulates: “When establishing business organizations, contributing capital, buying shares or capital contributions of business organizations; making investments under business cooperation contracts in one of the following cases, the foreign investor must satisfy the conditions and follow investment procedures applied to foreign investors:

a) 51% of charter capital or more is held by foreign investors, or the majority of the general partners are foreigners if the business organization is a partnership;

b) 51% of charter capital or more is held by the business organizations mentioned in Point a of this Clause;

c) 51% of charter capital or more is held foreign investors and the business organizations mentioned in Point a of this Clause.”

Thus, the cases requiring the procedure for issuance of Investment Registration Certificate include investment projects by foreign investors and investment projects by business organizations as stipulated in Clause 1, Article 23 of the Investment Law.

2. Cases in which the Certificate of investment registration is not required

Under clause 2, Article 36 of the Law on Investment 2014 stipulates the cases in which the Certificate of investment registration is not required:

- Investment projects of Vietnamese investors;

According to Clause 15, Article 3 of the 2014 Investment Law, Vietnamese investors are defined as:

+ An individual holding Vietnamese nationality;

+ A business organization whose members or shareholders are not foreign investors.

- Investment projects of the business organizations mentioned in Clause 2 Article 23 of this Article; Specifically, investment projects of business organizations that do not fall under Clause 1 of Article 23 of the Investment Law shall be subject to investment conditions and procedures as stipulated for Vietnamese investors.

- Investment is made by contributing capital, buying shares, or buying capital contributions of business organizations.

Accordingly, the investment projects exempt from the procedure for issuance of Investment Registration Certificate are the investment projects by Vietnamese investors, investment projects by business organizations under Clause 2 of Article 23, and investment projects carried out in the form of capital contribution, share purchase, or capital portion acquisition.

In summary, not all investment projects are required to pursue the procedure for issuance of Investment Registration Certificate. Investors are only required to follow the procedure of obtaining an Investment Certificate if they fall within the circumstances as analyzed above.

The foregoing represents our advice on the coordination mechanism for investors to invest in the form of capital contribution, purchase of shares/stakes To gain a comprehensive understanding of the procedures or conducting investment through capital contribution, share/stake purchase please feel free to contact us for specific consultations. HTC Vietnam Law Firm is honored to accompany clients in resolving all legal issues. Please contact us for the best consulting services.

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For more details, please contact:

HTC Vietnam Law Firm

Address: 15th Floor, Multipurpose Building, 169 Nguyen Ngoc Vu, Trung Hoa Ward, Cau Giay District, Hanoi.

Tel: 0989.386.729; Email: [email protected]

Website: https://htc-law.com; https://luatsuchoban.vn

(Writer: NMay; Date: )

Translator: Pham Nguyen Nhat Linh