Chinese Investor Establishes 100% Foreign-Invested Company

Vietnam is becoming an attractive investment destination for Chinese investors. In the context of US-China trade tensions and rising production costs in China, many Chinese businesses have chosen Vietnam to expand their production and business activities. FDI inflows from China to Vietnam grew strongly, from 2.92 billion USD in 2021 to 4.47 billion USD in 2023. By the first half of this year, this figure has reached 1.01 billion USD, accounting for 10.6% of total FDI. Currently, Vietnam has attracted 19.4% of total FDI from China, only behind South Korea (28.8%) and Japan (23%). With a favorable geographical location, attractive investment incentives and an abundant workforce, Vietnam is increasingly asserting its position in attracting foreign investment. However, many Chinese investors do not know the procedures for investing in Vietnam, Viet An Law would like to guide customers through the article below.

Chinese investors establish 100% foreign-invested companies for investment projects under investment policies

Depending on the investment project, Chinese investors will have to apply for investment policy approval from the National Assembly, the Prime Minister, and the provincial People’s Committee or do not need to approve the investment policy.

Dossier of application for approval of investment guidelines

• A written request for the implementation of the investment project, including a commitment to bear all costs and risks if the project is not approved;
• Documents on the legal status of the investor;
• Documents proving the investor’s financial capacity include at least one of the following documents: the investor’s financial statement for the last 2 years; commitment to financial support of the parent company; financial support commitments of financial institutions; guarantee of the investor’s financial capacity; other documents proving the financial capacity of the investor;
• An investment project proposal includes the following principal contents: investor or form of investor selection, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, implementation schedule, information on the current status of land use at the project location and proposal of land use demand (if any), labor demands, proposals for investment incentives, impacts and socio-economic efficiency of the project, preliminary assessment of environmental impacts (if any) in accordance with the law on environmental protection.
• Papers proving the address of the head office where the investment project is implemented.

Order and procedures for application for approval of investment projects by competent agencies

Chinese investors establish 100% foreign-invested companies for investment projects that are not subject to investment policies

Basic steps to establish a new company with 100% Chinese capital or less

Step 1: Apply for an investment certificate;

Step 2: Register for business establishment;

Step 3: Proceed to engrave the legal entity’s seal when it has a tax identification number;

Step 4: Open an investment capital account and contribute capital;

Step 5: After completing the capital contribution procedure, business activities can be carried out. Note that it may be necessary to apply for sub-licenses for conditional business investment lines

Application for investment certificate of a Chinese company

• 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

Depending on whether the investor is an individual or a legal entity, it will be necessary to provide the following additional documents:

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.

Dossier of application for the certificate of registration of Chinese-owned enterprises

• 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 Chinese investor has been completed above.

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

Duration: 03 – 06 working days.

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.

Customers who need to support the procedures for Chinese investors to establish a company with 100% investment capital in Vietnam, please contact Viet An Law for the fastest and most detailed support!