What types of licenses are required to establish a foreign-invested company?

Currently, with the increasing trend of global integration, foreign-invested companies in Vietnam are also developing rapidly. To legally establish a foreign-invested company, investors must understand the legal regulations to apply for the necessary licenses. This article will provide advice on how to address this issue.

1. What is a foreign-invested company?

A foreign-invested enterprise is an enterprise established in another country by an investor contributing part or all of the capital to conduct business activities for profit.

2. Types of licenses required when establishing a foreign-invested company.

a. Request for Investment Registration Certificate

When establishing a company in Vietnam with the participation of foreign investors, regardless of the capital contribution ratio, from 1% to 100%, it is mandatory to apply for an Investment Registration Certificate ( Clause 1, Article 23; Clause 1, Article 37 of the 2020 Investment Law ).

This is a crucial step in the investment and business establishment process. To complete this procedure, businesses need to prepare complete and accurate documentation in accordance with legal regulations. This documentation includes papers related to the investment project, information about the investor, capital plan, and investment objectives.

After submitting the application and having it reviewed and verified by the competent authority, the Investment Registration Certificate will be issued. This is a prerequisite before the business can proceed with the next steps.

Once the Investment Registration Certificate is obtained, the enterprise can proceed with the application for a Company Registration Certificate. This marks the official establishment of the enterprise and allows it to begin business operations in Vietnam in accordance with current legal regulations.

Are there any better options for foreign investors that don't require them to go through the procedure of applying for an Investment Registration Certificate?

For foreign investors wishing to participate in establishing a joint venture in Vietnam without going through the procedure of applying for an Investment Registration Certificate, the following optimal solution can be applied:

*Step 1 : Establish a Vietnamese Company First

Foreign investors can partner with domestic investors to establish a Vietnamese company. First, they need to complete the necessary procedures to establish the company in accordance with Vietnamese law. If the company intends to operate in regulated industries, it must apply for the corresponding operating license.

Step 2 : Transfer of Capital Contribution

After a Vietnamese company has been established and is operating in accordance with regulations, it can proceed with the transfer of capital contributions to foreign investors. This is the process by which foreign investors register to purchase capital contributions from the company's existing members.

Note :

- For the Retail Business Sector: If a company's activities involve the retail sale of goods to consumers or the establishment of retail outlets, it must obtain a business license as required by law.

- Education and Training Business Sector: For companies operating in the education and training sector, even with the above plan, foreign investors must still apply for an Investment Registration Certificate according to current regulations.

b) Requesting a business registration certificate

To apply for a Business Registration Certificate in Vietnam, businesses need to prepare a dossier including the following documents:

- Application for business registration: According to the form prescribed by the business registration authority.

- Draft company charter: The company charter clearly states the organizational structure, rights and obligations of members or shareholders, and regulations related to the company's operations.

- List of members/shareholders:

For limited liability companies with two or more members, a list of members must be provided.

For joint-stock companies, a list of founding shareholders must be provided.

-A certified copy of the identification document:

+ For individuals: A valid national identity card, passport, or citizen identification card.

+ For organizations: The organization's business registration certificate and personal identification documents of the organization's authorized representative.

- Capital contribution decision and authorization letter: For company members or shareholders who are organizations, the capital contribution decision and authorization letter must be provided.

- Other documents (if any): In special cases, additional documents may be required. HTC Vietnam Law Firm will provide specific advice to ensure the dossier is complete and accurate in accordance with the law.

Submit your application to the Business Registration Authority via the National Electronic Portal for Business Registration. Within 3-5 days, the Business Registration Authority will issue the Business Registration Certificate.

After receiving the business registration certificate, the company must publicly announce the registration on the National Business Registration Portal according to the prescribed procedures within 30 days from the date of public announcement. The company must also complete the procedures for making and publishing the company seal.

3. Cases requiring a business license

In some cases, foreign investors need to apply for a Business License to conduct trading and related activities in Vietnam.

*Case 1: Foreign investors from countries or territories that are parties to international treaties to which Vietnam is a member, with commitments to open their markets for the buying and selling of goods.

- Market access conditions must be met in accordance with international treaties to which Vietnam is a signatory.

- A financial plan is required to carry out the activities for which a business license is requested.

- No outstanding tax debts if the company has been operating in Vietnam for one year or more.

*Case 2: The foreign investor is not from a country or territory that is a party to an international treaty to which Vietnam is a member.

- The conditions for market access stipulated in international treaties to which Vietnam is a signatory must be met.

- A financial plan is required to carry out the activities for which a business license is requested.

- No outstanding tax debts if the company has been operating in Vietnam for one year or more.

- The following additional criteria must be met:

+ Complies with the regulations of the relevant specialized law.

+ In line with the level of competition among domestic businesses in the same field of operation.

+ It has the potential to create jobs for domestic workers.

+Possesses the ability and level of contribution to the state budget.

Full compliance with these requirements and regulations is crucial for foreign investors to operate legally and effectively 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 1, 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