Setting up a foreign invested company (FDI) in Vinh Phuc

Currently, foreign investment is one of the development trends and is supported to attract foreign capital (FDI) into Vietnam. Establishing a foreign invested enterprise is one of the investment forms that many investors choose. In Vinh Phuc, the strength of being a province with many industrial zones such as Binh Xuyen Industrial Zone, Ba Thien Industrial Zone, Khai Quang Industrial Zone,… Therefore, Vinh Phuc is one of the choices for foreign investors who want to establish FDI enterprises here. In the article below, Viet An Law will present the legal contents related to setting up a foreign invested company (FDI) in Vinh Phuc.

What is the FDI company?

According to the provisions of Clause 22, Article 3 of the Law on Investment 2020, an economic organization with foreign invested capital is understood as:  “An economic organization with a foreign investor as a member or shareholder”.

Thus, a foreign invested enterprise is one of the types of economic organizations with foreign invested capital, an enterprise with direct or indirect foreign invested capital and foreign investors are members or shareholders of the enterprise.

Foreign direct invested enterprises include:

• Enterprises with 100% foreign capital
• Enterprises with foreign individuals or organizations established under the foreign investment law (contributing capital to establish, purchasing capital contributions)
• Economic organizations with foreign invested capital.

Foreign investor projects required investment policy approval

According to Article 31 of the Law on Investment, foreign investment projects that must carry out procedures to request the approval of investment policy from the Prime Minister include:

• Investment projects that require relocation of 10,000 people or more in mountainous areas or 20,000 people or more in other areas;
• New construction investment projects: airports, aerodromes; ports, wharves of special seaports;
• New investment projects on the passenger air transport business;
• Investment projects on petroleum processing;
• Investment projects that involve betting and casino services, excluding business in prize-winning electronic games for foreigners;
• Investment projects on construction and operation of infrastructure in industrial zones and export processing zones;
• Investment projects of foreign investors in the following fields: provision of telecommunications services with network infrastructure; afforestation; publication, press;

In addition, investment projects that are simultaneously under the authority to approve of investment policy of two or more provincial People’s Committees; other investment projects that are under the authority to approve of investment policy or investment decision of the Prime Minister according to the provisions of law that must also apply for the approval of investment policy.

Conditions for setting up a foreign invested company (FDI) in Vinh Phuc

Before establishing a foreign invested company (FDI) in Vinh Phuc, foreign investors must have an investment project, and carry out procedures for granting and adjusting the Investment Registration Certificate, except for the establishment of a small and medium-sized start-up enterprise and a startup investment fund following regulations of the Law on Small and Medium-sized Enterprises.

Before implementing an investment project, foreign investors establishing foreign invested enterprises must also meet the following conditions:

• Investors have full civil and legal capacity and are not currently subject to imprisonment or restrictions on citizenship rights;
• Proving the financial capacity through confirmation of personal account balance at the bank or loan confirmation from organizations/credit institutions for the project expected to be established in Vietnam;
• Meeting market access conditions for foreign investors. Specifically, it is necessary to consider the list of industrial lines that restrict foreign investors, including Industrial lines that have not yet had market access and industrial lines with conditions for access to the market according to the provisions of the Law on Investment 2020.
• Conditions on capital, project implementation location, and other conditions must be fully and properly met according to the provisions of law.

Procedures for setting up a foreign invested company (FDI) in Vinh Phuc

Step 1: Request the approval of the investment policy.

If the investment project falls under the cases requiring the approval of investment policy according to the provisions of the Law on Investment 2020, before establishing a foreign invested company (FDI) in Vinh Phuc, the investor must apply for approval of investment policy. The dossier includes the following documents:

• A document requesting to implement an investment project;
• Documents on the legal status of the investor;
• Documents proving the financial capacity of the investor;
• Proposal for the investment project. 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 the investment project proposal;
• In case the investment project does not request the State to allocate land, lease land, or allow a change of land use purpose, it must submit a copy of the land use rights or other documents determining the right to use the location to implement the investment project;
• Contents of the explanation for the technology to be used in the investment project if the project requires appraisal and collection of opinions on the technology under the Law on Technology Transfer;
• The BCC contract if the investment project is executed under a BCC contract;
• Other relevant documents (if any).
• Power of Attorney for Viet An Law.

The receiving agency: Ministry of Planning and Investment.

Agencies competent to approve investment policy include:

• National Assembly;
• Prime Minister;
• Provincial People’s Committee.

Step 2: Submit the dossier for granting an IRC

Receiving agency:

• Department of Planning and Investment for investment projects outside industrial zones, export processing zones, high-tech zones, economic zones;
• Management Board of industrial zones, export processing zones, high-tech zones, economic zones for investment projects in industrial zones, export processing zones, high-tech zones, economic zones

Note: Submit the dossier to the investment registration agency where the investor implements the investment project, locates or plans to locate the management office to implement the investment project for the investment project:

• Investment projects implemented in 02 or more provincial administrative units;
• Investment projects implemented inside and outside industrial zones;
• Investment projects in industrial zones, export processing zones, high-tech zones, economic zones where the Zone Management Board has not been established or is not under the management scope of the Zone Management Board.

Step 3: Processing dossier

The investment registration agency shall grant an Investment Registration Certificate to the investor within 15 days from the date of receipt of a valid dossier.

Step 4: Apply for Enterprise Registration Certificate

Submit the enterprise registration dossier as prescribed in Decree 01/2021/ND-CP to the Department of Planning and Investment of Vinh Phuc province (Business Registration Office). The dossier includes:

• A copy of an Investment Registration Certificate
• Enterprise Registration Certificate Application Form
• Company charter
• List of members
• A certified copy of a valid passport
• A written appointing an individual as authorized representative (if any)
• Power of Attorney

Step 5: Publish enterprise registration information

Step 6: Engrave the company’s seal

Step 7: Open a foreign direct invested capital account

Step 8: Carry out post-establishment process

Information on foreign invested industrial zones in Vinh Phuc province

According to the Management Board of Vinh Phuc Industrial Zones, as of December 2023, industrial zones in the area have attracted 473 valid domestic and foreign investment projects. Of these, there are 111 domestic direct investment projects (DDI) with a total investment capital of 32.973,14 billion VND and 362 foreign direct investment projects (FDI) with a total investment capital of 6.372,13 million USD. Currently, 18 countries and territories have invested in Vinh Phuc’s industrial zones, with South Korea leading with 181 projects; Taiwan (China) ranked second and Japan ranked third.

With 16 established industrial zones, in which 9 industrial zones have come into operation, including: Khai Quang Industrial Zone (221,46 ha); Binh Xuyen Industrial Zone (286,98 ha); Kim Hoa Industrial Zone (50 ha); Ba Thien Industrial Zone (325,75 ha); Binh Xuyen II Industrial Zone – stage 1 (42,21 ha); Ba Thien II Industrial Zone (308,83 ha); Tam Duong II Industrial Zone – area A (135,17 ha); Son Loi Industrial Zone (257,35 ha); Thang Long Vinh Phuc Industrial Zone (213 ha).

FDI projects are mainly invested in the industrial sector, with 49,7% of projects investing in manufacturing components and electronics; 7,8% in textiles and garments; 7,2% in manufacturing automobiles and automobile components; 6,1% in manufacturing motorbikes and motorbike components and 28,6% in other sectors.

Services for setting up a foreign invested company (FDI) of Viet An Law

• Consulting and guiding procedures for establishing foreign invested companies in Vinh Phuc
• Consulting the investment law, approval for investment policy, investment certificates, registration for the establishment of foreign invested company;
• Preparing dossiers for the company establishment
• Legal support for issues related to the company registration

If you have any questions or legal needs related to setting up a foreign invested company (FDI) in Vinh Phuc, please contact Viet An Law Firm for the best consultation!