Fee for set up a foreign company in Vietnam

The integrated economy is increasingly developing, leading to many foreign companies establishing companies in Vietnam. However, establishing a company profile is very complicated and costly. To answer questions from clients, Viet An Law provides an article about the fee for set up a foreign company in Vietnam below.

Legal basis

• Law on Investment 2020.
• Law on Enterprise 2020.
• Decree 31/2021/ND-CP on guidelines for the Investment Law.
• Circular 47/2019/TT-BTC regulates the rates, collection, payment, management, and use of fees for providing business information and business registration fees.

What is a foreign invested company in Vietnam?

Pursuant to the Investment Law, a company with foreign investment capital is a company established by a foreign investor to carry out investment activities in Vietnam or a Vietnamese company whose shares are purchased by a foreign investor.

Current law stipulates that economic organizations with 100% capital of foreign investors or joint venture economic organizations between domestic investors and foreign investors establish foreign invested companies under types of limited liability companies, joint stock companies, and partnerships according to the provisions of the Enterprise Law.

In addition to the provisions of law that apply generally, in accordance with international commitments to which Vietnam is a member and to facilitate investment management, laws on enterprises and investment apply specifically. For foreign investment in conditional investment fields, regulations in establishing joint stock companies and private enterprises, investment procedures, investment project dossiers and locations of registration procedure.

Forms of establishing foreign invested companies

• Establish a foreign invested company in the form of investors contributing capital from the beginning of establishing a company in Vietnam. Accordingly, foreign investors’ capital contribution, depending on the field of activity, can range from 1% to 100% of the company’s charter capital.
• Establishing a company with foreign investment capital in the form of capital contribution and share purchase. With this form, foreign investors will contribute capital to a Vietnamese company that already has an Enterprise Registration Certificate. Foreign investors, depending on the field of activity, can contribute capital from 1% to 100% of capital to Vietnamese companies. Foreign investors will conduct procedures for purchasing capital contributions and shares of Vietnamese companies. After that, the Vietnamese company became a foreign invested company.

Types of companies with foreign capital that can be established

• Establish a partnership company (in fact, this type is rarely chosen by investors).
• Established a single-member limited liability company
• Establishing a multiple-member limited liability company;
• Establishment of a joint stock company.

The fee for set up a foreign company in Vietnam

Pursuant to Article 32 of Decree 01/2021/ND-CP, companies must pay registration fees at the time of submitting company establishment documents. According to Circular 47/2019/TT-BTC, the fees and charges companies must pay include:

• The business establishment registration fee is 50,000 VND, equivalent to about 05 USD.
• The fee for publishing business registration content is 100,000 VND, equivalent to about 4.09 USD.

This is the initial fee that must be paid at the time of submitting the company registration application and is paid directly to the Business Registration Office (where the business registration application is submitted).

Note: In case of registering to establish a business online, client will not need to pay the business establishment registration fee, but only need to pay the fee for publishing the business registration content.

In addition, the company will have to pay license fees every year after its establishment. License fees are based on the company’s charter capital and are divided into the following two levels:

• Charter capital is over 10 billion, and the license fee is 3,000,000 VND/year equivalent to 122.77 USD/year.
• Charter capital from less than 10%, the license fee is 2,000,000 VND/year equivalent to 81.85 USD/year.

The process of establishing a foreign direct invested company

Procedures for establishing a company with foreign investment from 1% to 100% of capital contributed by foreign investors immediately upon establishment are carried out according to the following steps:

Step 1: Prepare documents for the Investment Registration Certificate

Step 2: Submit an application for the Investment Registration Certificate

Step 3: Issue Investment Registration Certificate

Within 15 days from the date of receiving complete documents, the investment registration agency shall issue an Investment Registration Certificate. In case of refusal, the investor must be notified in writing and clearly state the reason.

Step 4: Prepare documents and submit an application for Business Registration Certificate

Step 5: Publish the content of the business registration information

Step 6: Engrave the company seal

Step 7: Issue a business license or operating license

Step 8: Open a foreign direct investment capital account

Step 9: The foreign invested company carries out the following procedures for establishing the company.

The process of establishing a company with foreign indirect investment capital

Step 1: Establish a company with Vietnamese capital

Foreign investors can only contribute capital to buy shares when there is a Vietnamese company. In case the company establishment procedures have not yet been completed, the Vietnamese partner must proceed with establishing a company with 100% Vietnamese capital.

Step 2: Prepare documents to register to purchase capital contributions and shares from foreign investors.

Step 3: Submit an application to register to purchase capital contributions and shares from foreign investors.

Step 4: Foreign investors contribute capital, buy shares, capital contributions, and Vietnamese enterprises.

Step 5: Change the Enterprise Registration Certificate.

Step 6: Issue the Business License as required.

Documents for establishing a foreign company in Vietnam

Dossier for individual foreign investors

Foreigners directly investing in establishing foreign invested companies in Vietnam need to prepare:

• Certified copy of the foreign individual’s passport.
• Lease contract for company headquarters/location for investment project implementation.
• Legal statement of bank account balance at least equal to the amount of capital invested in the company.

Dossier for organizations’ foreign investors

• Certified copy of enterprise registration certification and consular legalization.
• Audited financial statements or certification by tax authorities in the most recent year, consular legalization.
• Certified copy of the representative’s ID card or passport.
• Charter of the managing company.
• Authorization document of the organization for the representative of the capital contribution in the company planned to be established in Vietnam.
• Documents proving the experience and financial capacity of the foreign investor.

Advantages of procedures for foreign investors to contribute capital and purchase shares in Vietnamese companies

The advantages of procedures for foreign investors to contribute capital and purchase shares in Vietnamese companies compared to establishing a foreign invested company where foreign investors contribute capital from the beginning are as follows:

• Even if a foreign invested company has members who are foreign investors, it is not required to carry out procedures for the issuance of an Investment Certificate. When an enterprise does not have an Investment Certificate, procedures will be minimized when there is a change in the contents of business registration with state agencies.
• Simple change procedures: When a business only has an Enterprise Registration Certificate, it only has to be done when there is a change in company name, company address, and owner information, follow the same procedures as Vietnamese company;
• You do not have to carry out procedures to update investment information on the investment management system.
• Procedures for proving financial capacity are also simpler and easier.
• In cases where foreign investors contribute capital or buy shares in a Vietnamese company that already has an Enterprise Registration Certificate (including cases of purchasing up to 100% of the company’s capital contribution), they do not have to carry out procedures. issuance of an Investment Registration Certificate, except in the case of a company doing business in the field of education and training, if a foreign investor purchases from 1% of the capital contribution, it is also necessary to carry out procedures for issuance of an Investment Registration Certificate.

Clients who need advice on the fee for set up a foreign company in Vietnam, please contact Viet An Company for the best support.