Set up a 100% foreign owned company

A registered company is a key for your startup to enter into contracts, employ staff and collect revenues in Vietnam. Therefore, one of the most effective ways for a foreigner who wants to invest and do business in Vietnam is set up a 100% foreign owned company. To meet client’s requirements, Vietan law gratefully answers some popular questions which Vietan law frequently receives from foreign investors.

How many procedures shall a foreign investor conduct when setting up a 100% foreign owned company in Vietnam?

• Apply for the Approval of Vietnamese competent authority such as Prime Minister, the National Assembly and Chairman of the People’s Provincial Committee (for special investment projects);
• Apply for the Investment Registration Certificate;
• Apply for the Business Registration Certificate;
• Apply for other licenses such as Business License for the companies which retails directly to customers or specialized licenses to meet the requirements of some conditional business lines such as Training, Travel, Legal, Healthcare,…. These licenses are prescribed under equivalent specialized law.

What business lines are the foreign investors not allowed or restricted to invest in Vietnam?

The investments projects are banned:

• Trade in the narcotic substances specified in Appendix I of Law on Investment 2014;
• Trade in the chemicals and minerals specified in Appendix I of Law on Investment 2014;
• Trade in specimens of wild flora and fauna specified in Appendix 1 of Convention on International Trade in Endangered Species of Wild Fauna and Flora; specimens of rare and/or endangered species of wild fauna and flora in Group I of Appendix 3 of Law on Investment 2014;
• Prostitution;
• Human trafficking; trade in human tissues and body parts;
• Business pertaining to human cloning.

Conditional business investment sectors include:

• Conditions under Vietnamese law, namely Investment law and specialized laws;

• Conditions under international treaties to which Vietnam is a signatory such as GATS commitments under the framework of WTO, AFTA, AFAS, .. and a number of BITs between Vietnam and other countries;

Tips for you: Information about conditional business lines are posted on the National Business Registration Portal, so you can look up the conditions for the business lines that you would like to invest on this website.

What are investment projects subject to issuance of decisions on investment policies by the National Assembly?

• Projects that have significant effects on the environment or potentially have effect on the environment, including:
• Nuclear power plants;
• Projects that change purposes of land in national parks, wildlife sanctuaries, landscape sanctuaries, experimental forests of 50 hectares or larger; headwaters protective forests of 50 hectares or larger; protection forests meant for protection against wind, sand, waves, land reclamation, environmental protection of 500 hectares or larger, production forests of 1,000 hectares or above;
• Projects that change purposes of land meant for rice cultivation with two or more crops of 500 hectares or larger;
• Projects that require relocation of 20,000 people or more in highlands; 50,000 people or more in other areas;
• Projects that require special policies decided by the National Assembly.

What are the investment projects subject to issuance of decisions on investment policies by the Prime Minister?

• The following projects regardless of capital sources:
• Projects that require relocation of at least 10,000 people in highlands; at least 20,000 people in other areas;
• Construction and operation of airports; air transports;
• Construction and operation of national seaports;
• Petroleum exploration, extraction, and refinery;
• Betting and casino services;
• Cigarette production;
• Development of infrastructure of industrial parks, export-processing zones, and specialized sectors in economic zone;
• Construction and operation of golf courses;
• Investment projects not mentioned in the above regulations have the capital sources from 5,000 billion VND;
• Projects of investment of foreign investors in sea transport, providing telecommunications services with network infrastructure; afforestation, publishing, journalism, establishment of wholly foreign-invested science and technology organizations or science and technology companies;
• Other projects subject to issuance of decisions on investment policies by the Prime Minister as prescribed under law.

What are the investment projects subject to issuance of decisions on investment policies by the People’s Provincial Committees?

• Projects that use land allocated or leased out by the State without auction or bidding or transfer; projects that require changes of land purposes. However, if these investment projects are executed at industrial parks, export-processing zones, hi-tech zones, and economic zones in conformity with planning approved by competent authorities, they are not subject to issuance of decisions by the People’s Committees of provinces;
• Projects that use technologies on the List of technologies restricted from transfer prescribed by regulations of law on technology transfers.

Note: For investment projects subject to issuance of decisions which Viet An Law has shared above, after receiving investment decisions from competent agencies, the investment registry will grant an investment registration certificate to an investor within 5 working days after receiving a decision on investment policy without having to carry out the procedures for obtaining an investment registration certificate as other investors.

How to apply for the Investment Registration Certificate?

A dossier needed to apply for the Investment Registration Certificate includes:

• A written request for permission for execution of the investment project;
• A copy of the ID card or passport (if the investor is an individual); a copy of the Certificate of establishment or an equivalent paper that certifies the legal status of the investor (if the investor is an organization);
• An investment proposal that specifies: investor(s) in the project, investment objectives, investment scale, investment capital, method of capital rising, location and duration of investment, labor demand, requests for investment incentives, assessment of socio-economic effects of the project;
• Copies of any of the following documents: financial statements of the last two years of the investor; commitment of the parent company to provide financial support; commitment of a financial institutions to provide financial support; guarantee for investor’s financial capacity; description of investor’s financial capacity;
• Office lease agreement, documents proof of the lessor’s right (Certificate of land use right, construction permit, certificate of business registration with the function of real estate business of the lessor or equivalent documents);
• Demand for land use; if the project does not use land allocated, leased out by the State, or is not permitted by the State to change land purposes, then a copy of the lease agreement or other documents certifying that the investor has the right to use the premises to execute the project shall be submitted;
• Explanation for application of technologies to the project mentioned in the List of technologies restricted from transfer under the law on technology transfer, which specifies: names of technologies, origins, technology process diagram, primary specifications, conditions of machinery, equipment and primary technological line;
• The business cooperation contract (if the project is executed under a business cooperation contract).

The procedure for applying for an Investment Registration Certificate

Step 1: Declare online information about investment projects on the National Foreign Investment Information System.

Step 2: Submit the application file for the Investment Registration Certificate to the Investment Registration Authority.

Step 3: After the application is received, the investor is provided with an online account to access the National Foreign Investment Information System to track the processing and results of the application. In case of obtaining a successful investment registration certificate, the investment registration agency will issue a code through this account to the investment project. In case the application is rejected, this agency must notify the investor in writing and explain the reason.

Duration of application: within 15 working days.

How to apply for the Business Registration Certificate?

After being granted the Investment Registration Certificate, you can start carrying out some procedures to set up the company.

A dossier needed to apply for the Business Registration Certificate includes:

• An application form for business registration;
• The company’s charter;
• A list of members (for limited liability company) or stakeholders (for joint-stock company);
• Certified copies of:
• Copies of the ID card or other ID papers of members being individuals;
• Decision on Establishment, Business Registration Certificate, or an equivalent document of the organization and the letter of authorization; the ID card or other ID papers of the authorized representatives of members being organizations. If a member is a foreign organization, the copy of the Certificate of Business registration or an equivalent document must be consularly legalized;
• The Investment registration certificate of the foreign investors as prescribed by the Law on Investmen

Legal service provision contract (Authorization contract) to authorize Viet An Law Firm to perform the business establishment service.

The procedure for applying for a Business Registration Certificate

Step 1: Submit a dossier online through the National Business Registration Portal

Step 2: Submit the application dossier at the Business Registration Authority (Department of Planning and Investment)

Step 3: The business registration agency will issue a Business Registration Certificate if an application dossier is valid.

Duration of application: 03 – 05 working days.

Note: After being granted a Business Registration Certificate, you must make a public announcement on the National Business Registration Portal following the procedures prescribed in law within 30 days from the date of publication.

Are there any procedures to notice after conducting to apply for all kinds of certificate and license?

To complete setting up a 100% foreign owned company, you need to make seal and announce seal sample of the company, hang the name board at the headquarters, open a bank account for the new company,…

Vietanlaw has just answered some basic questions that foreign investors always wonder when prepare to set up company in Vietnam. If there are any issues or procedures that you do not understand clearly, please contact to us via phone number or website to get information for more details. Vietan law is willing to help you solve all legal difficulties that you have faced up with!