Set up a Turkish invested company in Vietnam

Although not a major investor compared to other countries, Turkey is increasingly increasing its presence in Vietnam. With its favorable geographical location, abundant human resources, and open-door policy, Vietnam is an attractive destination for Turkish businesses, especially in areas such as infrastructure, manufacturing, and technology. In contrast, Turkey, with its dynamic economy and rich experience, can bring advanced technologies and large investment capital to Vietnam. Cooperation between the two countries is being strengthened in many fields, especially economy, trade and investment. In the first 6 months of 2024, Turkey has invested a total of 730.1 million USD in Vietnam. To guide Turkish investors, Viet An Law would like to guide the procedures for establishing a Turkish investment company in Vietnam through the following article.

Business lines in which Turkish investors should set up a company in Vietnam

The textile and garment industry is one of the most promising sectors in the economic cooperation between Vietnam and Turkey. With a long history and rich experience in the industry, Turkish textile and garment enterprises possess advanced production technologies, unique designs and strong global supply chains, including brands such as Mavi Jeans, Koton, LC Waikiki, Sarar… The transfer of technology from Turkish enterprises will help significantly improve the competitiveness of Vietnam’s textile and garment industry, from design, production to product completion. At the same time, Vietnam, with its abundant and flexible labor force, competitive production costs and attractive investment incentives, will be an ideal location for Turkish businesses to expand their production scale, reduce costs and access the vast Southeast Asian market.

Both countries have mutual advantages. Turkey is famous for its high-end textile and garment products, while Vietnam has the strength of producing garments in large quantities. By combining these strengths, the two countries can create diverse textile products, meeting the increasing demand of the world market, especially fastidious markets such as Europe and the US. In addition, cooperation in the textile and garment sector also contributes to promoting the development of supporting industries such as chemicals, and garment equipment, creating more jobs and increasing income for people.

Set up a Turkish-owned company in Vietnam

Basic steps to establish a Turkish company in Vietnam

Step 1: Apply for an investment certificate;

Step 2: Register for business establishment;

Step 3: Proceed to engrave the legal entity’s seal when it has a tax identification number;

Step 4: Open an investment capital account and contribute capital;

Step 5: After completing the capital contribution procedure, business activities can be carried out. Note that it may be necessary to apply for sub-licenses for conditional business investment lines

Application for an investment certificate of a Turkish company

• Written request for implementation of the investment project;
• An investment project proposal includes the following contents: the investor implementing the project, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, investment schedule, labor demand, proposal for investment incentives, impact assessment, etc socio-economic efficiency of the project;
• Dossier proving the company’s head office: Lease contract, Notarized copy of real estate documents of the lessor: Land use right certificate, Construction permit; if the lessor is a company: It is necessary to provide a copy of the enterprise registration certificate with the function of real estate business;
• Confirmation of account balance corresponding to the capital intended to establish an FDI company is consular legalized and notarized

Depending on whether the investor is an individual or a legal entity, it will be necessary to provide the following additional documents:

Place of application: Department of Planning and Investment where the head office is expected to be located.

Processing order: Within 15 days from the date of receipt of a complete and valid dossier, the Department of Planning and Investment will issue an Investment Registration Certificate to the foreign investor. In case of refusal, the Department of Planning and Investment will reply in writing and clearly state the reason.

Dossier of application for a Turkish enterprise registration certificate

• Application for enterprise registration;
• Charter of the enterprise;
• List of members of a limited liability company with two or more members or a list of general partners;
• A notarized copy of the identity card or valid passport of the individual member; a notarized copy of the enterprise registration certificate of the member being an organization; a notarized copy of the valid identity card or passport of the legal representative of that organization;
• The Turkish investor’s investment registration certificate has been completed above.

Place of application: Department of Planning and Investment where the enterprise is headquartered.

Duration: 03 – 06 working days.

Engraving the seal of the legal entity when it has a tax identification number

After the business has a tax identification number, engraving the legal entity seal is an important step to complete the establishment procedure. The legal entity seal is an official identification sign of the business, used in transactions and legal documents. What should be included on the seal:

• Business name: Must match the name registered in the business registration certificate.
• Tax identification number: It is the unique number of the enterprise, issued by the tax authority.
• Head office address: Must match the registered address. Usually the county and city where the headquarters address is located.
• Type of enterprise: Example: Limited liability company, joint stock company,…

Opening an investment capital account and contributing capital

Procedures for opening an investment capital account

Preparation of dossiers for opening investment capital accounts includes:

• Enterprise establishment license or investment registration certificate.
• Investor’s identity document (passport, visa).
• Documents proving the legal origin of the investment capital.

Place to apply: Submit the application at the selected bank.

The bank will conduct the appraisal of the dossier and open an investment capital account for the investor.

After having an investment capital account, the company with Turkish capital proceeds to contribute capital. Note that enterprises need to fully contribute the registered capital within 90 days from the date of issuance of the business registration certificate.

• Money transfer: Investors transfer money from an overseas account to an investment capital account opened in Vietnam.
• Confirmation: The bank will confirm the transfer of capital contribution.

Turkish investors buy contributed capital and shares of Vietnamese companies

Dossier of registration for purchase of contributed capital and shares of a Vietnamese company

• Written registration of capital contribution, purchase of shares, purchase of contributed capital (according to Form A.I.7 issued together with Circular 25/2023/TT-BKHDT).
• Written agreement in principle on capital contribution, share purchase or purchase of contributed capital between foreign investors and economic organizations with foreign investors contributing capital, purchasing shares or purchasing contributed capital.
• Copies of legal papers of individuals and organizations contributing capital, purchasing shares, purchasing contributed capital; and of economic organizations with foreign investors contributing capital, buying shares, buying contributed capital.
• In case of necessity, the External Economic Relations Division may request the supply of a copy of the land use right certificate of the economic organization to which foreign investors contribute capital, purchase shares or purchase contributed capital.

Place of application: Department of Planning and Investment where the head office is expected to be located.

Processing order: Within 15 days from the date of receipt of a complete and valid dossier, the Department of Planning and Investment will issue a written confirmation of the purchase of contributed capital to the foreign investor. In case of refusal, the Department of Planning and Investment will reply in writing and clearly state the reason.

Changes to the Certificate of Business Registration with Additional Information of Foreign Investors

• After obtaining the approval of the Investment Department – Department of Planning and Investment on the approval for foreign investors to contribute capital, purchase shares or contributed capital, the investor shall carry out the following procedures:

Carry out procedures for changing shareholders and members on the Business Registration Certificate (Enterprise Registration Certificate) in accordance with the law at the Business Registration Office – Department of Planning and Investment.