Establish a 100% Taiwanese owned company in Vietnam

Taiwan has been one of the largest investors in Vietnam, according to statistics of foreign investors in 2023, Singapore leads with a total investment capital of more than 6.8 billion USD, accounting for 18.6% of total investment capital in Vietnam, up 5.4% over the same period in 2022; Taiwan ranked second with nearly 6.57 billion USD, accounting for more than 17.9% of total investment capital, up 37.3% over the same period. Hong Kong ranks 3rd with a total registered investment capital of more than 4.68 billion USD, accounting for nearly 12.8% of total investment capital, 2.1 times higher than the same period last year. China, South Korea and Taiwan have an investment capital of 4.57 billion USD. Taiwanese businesses have established many factories in Vietnam, focusing mainly on industries such as electronics manufacturing, textiles and footwear. The Formosa Ha Tinh project is a good example of successful cooperation between the two countries. Thanks to Taiwan’s investment, Vietnam has created many jobs, improved production and export capacity, and contributed to improving people’s lives. Due to the increasing demand for investment in Vietnam, Viet An Law would like to guide customers through the procedures for establishing a Taiwanese-invested company in Vietnam through the article below.

Taiwanese investor establishes new economic organization in Vietnam

Step 1: Apply for a Taiwan Investor Investment Certificate (IRC)

• 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

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.

Step 2: Apply for an Enterprise Registration Certificate (ERC)

• 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 investment registration certificate of the Taiwanese investor has been completed above.

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

Duration: 03 – 06 working days.

Step 3: Carry out post-establishment procedures and conduct business activities

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 Chinese capital contributes 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.

Apply for a child license (if any)

Sub-licenses are a fairly broad concept and can include many different types of licenses depending on each specific business activity of a foreign-invested enterprise (FDI) in Vietnam. Here are some types of business licenses

Environmental License

• Purpose: To ensure that the production and business activities of the enterprise do not adversely affect the environment.
• Procedure:
  • Prepare an environmental impact assessment (EIA) report.
  • Submit the application for an environmental license at the Department of Natural Resources and Environment of the locality where the project is located.

Construction Permits

• Purpose: To allow enterprises to carry out construction and construction activities.
• Procedure:
  • Preparation of construction design dossiers.
  • Apply for a construction permit at the Department of Construction where the work is located.

Business License

• Purpose: To allow businesses to exercise the right to retail distribution of goods, provide logistics services, etc.
• Procedure: Depending on the purpose of operation, the enterprise will have to submit a dossier at the Department of Industry and Trade

Taiwanese investors purchase 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.