Pre-Establishment Legal Advisory Services for FDI Companies in Vietnam

With a favorable geographical location and potential market, Vietnam is increasingly developing and attracting many foreign investors to establish FDI companies in Vietnam. However, establishing an FDI company is very complicated and investors need to fully comply with the procedures and regulations according to Vietnamese law. So, before establishing an FDI company, what licenses do investors need to apply for and what should they pay attention to? In the article below, Viet An Law will provide basic information on pre-establishment legal advisory services for FDI companies in Vietnam.

Forms of investment by FDI enterprises in Vietnam

Pursuant to Article 21 of the Investment Law 2020, forms of investment in Vietnam include:

• Investment in establishment of a business organization.
• Investment in the form of capital contribution or purchase of shares or stakes.
• Execution of an investment project.
• Investment in the form of a business cooperation contract.
• New forms of investment and types of business organizations prescribed by the Government’s regulations.

Pre-establishment requirements for FDI companies in Vietnam

FDI companies are established or have capital contributions owned by foreign investors.

Foreign investors are individuals with foreign nationality or organizations established under foreign laws that conduct business investment activities in Vietnam. Since FDI companies are companies with direct foreign investment capital, to be established in Vietnam, they must have capital contributed by foreign investors.

Industries, sectors and market access conditions for foreign investors

Foreign investors are subject to the same market access conditions as domestic investors, except for industries and professions that restrict market access for foreign investors, including:

• Sectors and industries not yet open to market access
• Trading in goods and services on the list of goods and services subject to state monopoly in the field of commerce.
• Journalism and news gathering activities in all forms.
• Fishing or exploitation of seafood.
• Investigation and security services.
• Judicial administrative services, including judicial appraisal services, bailiff services, property auction services, notary services, and administrator services.
• Other industries and professions that have not yet accessed the market according to Appendix I of Decree 31/2021/ND-CP
• Sectors and industries subject to market access conditions
• Production and distribution of cultural products, including video recordings.
• Production, distribution, and screening of television programs and works of music, dance, theater, and cinema.
• Provision of radio and television broadcasting services.
• Insurance; banking; securities trading and other services related to insurance, banking, and securities trading.
• Postal and telecommunications services.
• Advertising services.
• Other industries and occupations with conditional market access according to Appendix I of Decree 31/2021/ND-CP

Market access conditions for foreign investors specified in the List of industries and sectors with restricted market access for foreign investors include:

• Ratio of charter capital ownership of foreign investors in economic organizations;
• Form of investment;
• Scope of investment activities;
• Capacity of investors; partners participating in investment activities;
• Other conditions as prescribed in laws, resolutions of the National Assembly, ordinances, resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a member.

Carrying out procedures for granting the Investment Registration Certificate to foreign investors

Pursuant to Article 22 of the Investment Law 2020, before establishing an FDI company, foreign investors must carry out procedures for granting and adjusting the Investment Registration Certificate, except for establishing a small and medium-sized FDI company that is a creative startup and has an innovative startup investment fund according to the provisions of law on supporting small and medium-sized enterprises.

To carry out the procedures for granting an Investment Registration Certificate, foreign investors need to follow these steps:

Step 1: Verify if the business line is eligible for market access

Foreign investors are subject to the same market access conditions as domestic investors, except for cases in the List of industries with restricted market access for foreign investors as prescribed in Appendix I of Decree 31/2021/ND-CP. Foreign investors are not allowed to conduct business in prohibited industries in Vietnam, such as drug trading, prostitution, debt collection services, etc.

Step 2: Prepare dossier

The application dossier for approval of the investment policy of the investment project proposed by the investor includes:

• Document requesting to implement the investment project, including commitment to bear all costs and risks if the project is not approved;
• Documents on the legal status of the investor;
• Documents proving the financial capacity of the investor include at least one of the following documents: financial statements of the investor for the last 2 years; financial support commitment of the parent company; financial support commitment of a financial institution; guarantee of the financial capacity of the investor; other documents proving the financial capacity of the investor;
• The investment project proposal includes the following main contents: investor or form of investor selection, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, implementation progress, information on current land use status at the project implementation location and proposed land use demand (if any), labor demand, proposed investment incentives, impact, socio-economic efficiency of the project, preliminary assessment of environmental impact (if any) according to regulations of law on environmental protection.
• In case the law on construction stipulates the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of an investment project proposal;
• In case the investment project does not request the State to allocate land, lease land, or allow change of land use purpose, it must submit a copy of the land use rights document or other document determining the right to use the location to implement the investment project;
• Explanation of technology used in investment projects for projects subject to technology appraisal and consultation according to the regulations of law on technology transfer;
• BCC contract for investment projects in the form of BCC contracts;
• Other documents related to the investment project, requirements on conditions and capacity of investors according to the provisions of law (if any).

Note: Documents issued by foreign countries must be consular legalized, translated into Vietnamese and certified under Vietnamese law.

Step 3: Submit dossier

Before carrying out the procedures for granting or adjusting the Investment Registration Certificate, the investor shall declare information about the investment project online on the National Investment Information System. Within 15 days from the date of online declaration, the investor shall submit the application for granting or adjusting the Investment Registration Certificate to the investment registration agency. If the investment registration agency does not receive the application within 15 days from the date of online declaration, the online declaration shall no longer be valid.

Step 4: Receive the result

After receiving a complete application, the investment registration authority shall issue an Investment Registration Certificate. In case the application is incomplete and is rejected, the investment registration authority shall notify the investor in writing and state the reasons.

Note: After receiving the Investment Registration Certificate, the FDI company needs to continue with business registration procedures and apply for other necessary sub-licenses before starting to invest in Vietnam.

Why is Viet An Law the right choice for Pre-establishment legal advisory services for FDI companies in Vietnam?

• A team of experienced lawyers and experts with deep understanding in the investment field, always providing effective, reasonable and legally compliant solutions, helping customers avoid troubles when establishing FDI companies in Vietnam.
• Ensure confidentiality of all customer information in all cases;
• Reasonable cost;
• We bring professionalism in communication and work, ensuring that customers can easily exchange work with us in many different languages ​​(Vietnamese, English, Chinese);
• We are always ready to support customers to the best of our ability, always ensuring that customers feel comfortable and at ease because of our friendly communication and professionalism at work; creating peace of mind and trust.

Customers who need advice on pre-establishment legal advisory services for FDI companies in Vietnam, please contact Viet An Law for the best advice and support!