Establishing a foreign-invested enterprise in Vietnam in 2024

As of January 20, 2024, the total registered capital of newly registered, adjusted, and contributed foreign investors in Vietnam reached over US$2.36 billion, a 40.2% increase compared to the same period in 2023. The disbursed capital is estimated at approximately US$1.48 billion, a 9.6% increase year-on-year. The cumulative registered capital of 39,377 active projects is nearly US$471.9 billion, with disbursed capital reaching nearly US$298.66 billion, equivalent to 63.3% of the total registered capital. These figures highlight Vietnam's attractive investment destination for foreign investors.

I. Legal Basis

- WTO Commitment Schedule;

- Multilateral trade agreements include commitments on investment;

- The Investment Law of 2020, amended and supplemented in 2022, and its implementing guidelines;

- The Enterprise Law of 2020, amended and supplemented in 2022, and its implementing guidelines;

- Trade agreements with countries whose citizens are foreign investors.

II. Content of the consultation

1. Essential information for establishing a foreign-invested enterprise in Vietnam

To complete the procedure for establishing a foreign-invested company in Vietnam, clients need to provide the following information:

(1) Investor's Nationality Information: Provide information on the nationality of the investor, especially countries that are members of the WTO and trade agreements that Vietnam participates in. This affects the conditions related to company establishment and international cooperation commitments.

(2) Investment Sector: Determining the investment sector is very important as it affects the requirements for statutory capital, the percentage of foreign investor ownership, the necessary professional certificates, and other conditions for company establishment.

(3) Information on Registered Capital and Investment Capital: Provides details on registered capital, projected investment capital, and capital structure. This relates to statutory capital requirements, deposits, and procedures related to registering foreign loans, as well as granting temporary residence permits to investors and managing representatives.

(4) Project Location and Company Headquarters: Identify the project location and the company's head office. Providing this information helps prepare the necessary legal documents and apply for licenses and certificates of eligibility to operate.

(5) Type of Business: Determine the type of business to be established, as some industries have specific requirements for the type of business.

2. Procedures for establishing a company with foreign investment capital

To establish a foreign-invested company where the investor contributes capital from the outset, you need to follow the steps stipulated by Vietnamese law.

Step 1: Prepare the Application for Investment Registration Certificate

The file includes the following documents:

- The proposal for the implementation of an investment project: According to Article 33 of the 2020 Investment Law, it includes information on the objectives, scale, investment capital, and other relevant contents.

- Documents proving legal status:

+ For institutional investors: A copy of the Certificate of Incorporation or other equivalent document proving legal status in accordance with Article 31 of the 2020 Investment Law.

+ For individual investors: A copy of your identity card, citizen identification card, or passport.

- Investment project proposal: Provides information on the investor, objectives, scale, investment capital, capital mobilization plan, location, duration, investment progress, labor needs, investment incentives, and impact assessment of the project. Based on Article 31 of the 2020 Investment Law.

- Demonstrate the investor's financial capacity:

+ For institutional investors: Financial statements for the two most recent years, commitment to financial support, financial guarantee, or documents proving financial capacity. Based on Article 31 of the 2020 Investment Law.

+ For individual investors: Provide confirmation of account or savings account balance.

- Lease agreement for the office premises and documents proving the right to lease: According to Article 5 of Decree 31/2021/ND-CP, proof of the right to lease the premises for the project must be provided.

- Proposed land use requirements: For projects that do not request land allocation from the State, a copy of the site lease agreement or documents proving the right to use the site must be submitted. This is in accordance with Article 33 of the 2020 Investment Law.

- Explanation of technology (if any): If the project uses technology on the List of Restricted Transfer Technologies, the name of the technology, origin, technological process, and main technical specifications must be clearly stated. This is in accordance with Article 20 of Decree 31/2021/ND-CP.

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

Declare information on the National Information System on Foreign Investment as prescribed in Article 33 of the 2020 Investment Law and Decree 31/2021/ND-CP.

Submit applications directly to the competent investment registration authority: the Provincial Department of Planning and Investment for projects outside industrial parks, export processing zones, high-tech zones, or investment projects spanning multiple provinces and cities; and the Management Board of industrial parks and export processing zones for projects within industrial parks, export processing zones, high-tech zones, and economic zones.

Step 3: Issuance of Investment Registration Certificate

The investment registration authority shall issue the Investment Registration Certificate within 15 days from the date of receiving a complete application. If the application is rejected, the authority must notify the applicant in writing and state the reasons as prescribed in Article 34 of the 2020 Investment Law.

Step 4: Documents and procedures for issuing the Business Registration Certificate

The required documents include: Application for business registration, company charter, list of members/shareholders, copies of personal documents, and Investment registration certificate. Based on Article 21 of the 2020 Enterprise Law, these documents must be submitted to the Department of Planning and Investment of the province where the company's head office is located.

Step 5: Publish business registration information

According to Article 62 of the 2020 Enterprise Law, information must be published on the National Portal for Enterprise Registration, including business lines and shareholder list. The publication fee is paid at the same time as the enterprise registration application.

Step 6: Engrave the company seal.

Businesses decide on the type, quantity, form, and content of the seals, and manage them in accordance with the regulations in Article 43 of Decree 01/2021/ND-CP.

Step 7: Obtain a business license (if applicable)

The conditions and required documents for obtaining a business license are stipulated in Decree 09/2018/ND-CP and depend on the specific field of activity of the enterprise.

The authority to issue licenses rests with the Department of Industry and Trade in the locality where the enterprise's head office is located.

Step 8: Open a foreign direct investment account.

Open a bank account in accordance with Article 7 of Decree 31/2021/ND-CP and transfer capital into this account according to the capital contribution deadline recorded in the Investment Certificate.

This process helps ensure compliance with legal regulations and facilitates the operations of foreign-invested companies in Vietnam.

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.

- We prioritize customer interests and strive to provide our customers with the best possible service quality.

- Protect the information provided by customers and information related to customers.

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

Best regards!

(Author: Tien Manh; Translator: Nguyen Phuong Anh; Date: August 2, 2024)

For detailed advice, please contact:

HTC Vietnam Law Firm

Address: 15th Floor, Multi-purpose Building, 169 Nguyen Ngoc Vu Street, Yen Hoa Ward, Hanoi City.

Phone: 0989.386.729

Email: hotmail@htcvn.vn

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