Conditions and procedures for establishing FDI enterprises in Vietnam according to current regulations.

In the context of international economic integration, Vietnam has become an attractive destination for foreign investors thanks to its favorable business environment, stable economy, and investment incentive policies. Establishing foreign direct investment (FDI) enterprises in Vietnam not only opens up business opportunities but also contributes to promoting economic development and technology transfer. However, to meet the requirements of Vietnamese law, investors need to understand the conditions and comply with specific procedures.

This article will provide an overview of the conditions and procedures for establishing FDI enterprises in Vietnam according to current legal regulations, aiming to help foreign investors understand and prepare well for their investment plans.

1. Conditions for establishing FDI enterprises in Vietnam according to current regulations.

Firstly , foreign investors must be established or have shares or capital contributions owned by foreign investors: According to Clause 19, Article 3 of the 2020 Investment Law, a foreign investor is an individual with foreign nationality or an organization established under foreign law that conducts investment and business activities in Vietnam. Therefore, an FDI enterprise must have at least one of the following entities: a foreign investor conducting business in Vietnam.

Secondly, regarding business sectors and professions that are not prohibited, FDI enterprises are only allowed to register and conduct business in sectors and professions permitted by Vietnamese law, and are not allowed to register and conduct business in sectors and professions prohibited according to Article 6 of the Investment Law.

Thirdly, obtaining an investment registration certificate: According to Clause 1, Article 22 of the Investment Law, before establishing an FDI enterprise, foreign investors must apply for an investment registration certificate at the Investment Registration Authority - Department of Planning and Investment of the province or centrally-governed city where the head office is located. This excludes cases of establishing innovative start-up small and medium-sized enterprises and innovative start-up investment funds as stipulated by the law on supporting small and medium-sized enterprises.

2. Procedures for establishing FDI enterprises according to current regulations

Step 1: Declare investment project information online on the National Information System on Foreign Investment.

Before proceeding with the investment registration certificate issuance procedure, investors declare information about the investment project online on the National Information System on Foreign Investment. After submitting the hard copy of the application, the enterprise will be granted an account to access the National Information System on Foreign Investment to monitor the application processing status. Simultaneously, the Investment Registration Authority also uses the National Information System on Foreign Investment to receive, process, and return results of investment registration applications, update the processing status, and assign a project code.

Step 2: Submit the application for an Investment Registration Certificate.

Within 15 working days from the date of online declaration in step 1, the investor submits a paper application (hard copy) for the issuance of an Investment Registration Certificate to the Investment Registration Authority;

Within 15 days of receiving a complete application, the investment registration authority shall issue the Investment Registration Certificate; in case of refusal, it must notify the investor in writing and state the reasons.

Documents required for applying for an Investment Registration Certificate : Application for implementing the investment project; Investment project proposal including the following contents: investor implementing the project, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, investment progress, labor requirements, proposed investment incentives, impact assessment, and socio-economic effectiveness of the project;

Step 3: Submit the application for a Business Registration Certificate and have a company seal engraved.

After receiving the Investment Registration Certificate, the enterprise submits the application to the Business Registration Department – Department of Planning and Investment to obtain the Business Registration Certificate, which also serves as the tax identification number; and proceeds with the engraving of the company seal.

Step 4: This step is only for businesses that exercise the right to retail goods. Submit an application for a Business License to the Department of Industry and Trade.

Step 5: Open a direct investment fund transfer account.

According to the Law on Enterprises, foreign investors are required to contribute capital within 90 days from the date of issuance of the Business Registration Certificate. Therefore, immediately after establishing the company, investors need to open a direct investment capital transfer account.

Step 6: Complete post-establishment procedures for the company.

After becoming an investor, you proceed with the procedures of registering an account, purchasing a digital number, paying business license tax, declaring business license tax, issuing invoices, filing tax returns, etc.

Commitment to service quality:

HTC Vietnam Law Firm operates with the motto of dedication – efficiency – credibility, and is committed to ensuring the quality of its services, specifically as follows:

- Ensure that work is completed according to the agreed schedule, in compliance with legal regulations, and in accordance with the code of ethics and conduct for Vietnamese lawyers.

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We look forward to a long-term partnership and mutual growth with our valued customers.

Best regards!

(Author: Luu Minh Thang; Date: October 29, 2024)

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