Following the trend of society, globalization process is being strongly promoted not only in developed countries but also gradually expanding in developing countries such as Vietnam, which facilitates foreign investors wishing to exploit and develop business networking around the world. Therefore, Vietnamese enterprises need to understand the available investment incentives mechanisms and policies for foreign investors and newly effective regulations. Viet An Law Firm would like to answer some questions that clients usually wonder about the essential procedures when establishing a foreign-invested company not subject to the case of applying for investment policy approval as follows:
What kind of licenses are required when establishing a foreign invested company registration?
Applying for an Investment Registration Certificate
When establishing a company in Vietnam, if there are foreign investors, whether individuals or organizations (legal entities) contributing capital to register companies in Vietnam from 1-100%, they must apply for the Investment Registration Certificate.Therefore, for each investment project, the enterprise must prepare an application dossier for an Investment Registration Certificate to submit to the competent authority. If this dossier is valid, the investment project will be approval. After being granted the investment registration certificate, you can proceed with the procedures to apply for a company registration certificate to establish a business.
Which foreign investors need to apply for an Investment Registration Certificate?
Under the available law, the following legal persons need to apply for an Investment Registration Certificate:
- The company has foreign invested capital from the beginning (even though it is only 1% of the contributed capital);
- Foreign-invested companies (companies that have been granted investment registration certificates in Vietnam) continue to establish more economic organizations; investment in capital contribution, purchase shares or contributed capital of economic organizations; Investment in a BCC contract under one of the following cases must carry out the procedures for the grant of an investment registration certificate:
New establishment or capital contribution from 1% to 100% of the company’s charter capital;
- Where a foreign investor contributes capital or purchases shares in a Vietnamese company already has an Business Registration Certificate (including the case of purchasing up to 100% of the company’s capital) in the field of education and training , even when foreign investors buy from 1% of the contributed capital, they also need to carry out the procedures for granting a Investment Registration Certificate;
- Provisions for foreign-invested companies established before July 1st, 2015: Foreign-invested economic organizations have already been established in Vietnam, if having new investment projects, they are allowed to proceed the procedures for implementing these investment projects without establishing a new company.
What documents should be prepared to apply for an Investment Registration Certificate?
You need to prepare a complete dossier as follows:
- 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).
Is the procedure for applying for an investment registration certificate complicated?
Currently, this procedure is carried out online on the National Information System on foreign investment so it is conducted very quickly and easily. First, investors declare online information about investment projects on the National Foreign Investment Information System. Within 15 days from the date of online filing, the investor submits the application file for the Investment Registration Certificate to the Investment Registration Authority. 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.
Are there any more optimal plans for foreign investors without having to conduct the procedures to apply for an Investment Registration Certificate?
In case foreign investors contribute capital with Vietnamese people to set up companies (joint-ventures between Vietnam and foreign investors), the most optimal plan can follow the sequence: first, establish a Vietnamese company and apply for an eligible license if the company conducts business in conditional business lines. After that, the company will transfer the contributed capital to foreign investors, or procedures for foreigners to register to buy the capital contribution.
- For companies doing business in the field of retailing goods to consumers or setting up goods retail establishments, clients must carry out procedures for applying for business licenses;
- For companies doing in the field of education – training, foreign investors still need to apply for an Investment Registration Certificate.
Applying for a Business Registration Certificate
The application dossier includes:
- An application form for business registration;
- The company’s charter;
- A list of members (for limited 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, Certificate of Business registration, 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 Investment.
Legal service provision contract (Authorization contract) to authorize Viet An Law Firm to perform the business establishment service.
Submiting the application dossier at the Business Registration Authority through the National Business Registration Portal within 03 – 05 days, the business registration agency will issue an business registration certificate.
Procedures after obtaining the Business Registration Certificate
After being granted a business registration certificate, you must make a public notification on the National Business Registration Portal in the order and procedures within 30 days from the date of publication then you can make seal and announcing seal sample of the company.
The cases require a business license
- A foreign investor from a country or territory which has acceded to a treaty to which Vietnam is a signatory and under which Vietnam has committed to open its market for sale of goods and other related activities shall:
- Meet market access conditions prescribed in international treaties to which Vietnam is a signatory;
- Acquire a financial plan deemed qualified to apply for a business license;
- Incur no overdue tax in a case where it has been established in Vietnam for at least 1 year.
- A foreign investor not from a country or territory which has acceded to a treaty to which Vietnam is a signatory shall:
- Meet conditions prescribed in Points b and c Clause 1 of this Article;
- Meet the criteria below:
- In accordance with special law;
- In conformity with the extent of competitiveness of domestic enterprises within the same sector;
- Employment creation for domestic workers;
- Potential and actual contribution to state budget.
Other kinds of License
Besides the main procedures that Viet An Law Firm has shared above for you, you must conduct a number of procedures to apply for other kinds of licenses when doing in conditional business sectors under specialized laws such as veterinary medicine trading, education, health care, travel, …
In order to know more detailed procedures about the industry that you want to operate, please contact the phone number or email of Viet An Law Firm to receive advice and support the most accurately from legal team with 15 years of experience. Viet An Law Firm is always ready to listen and understand all your difficulties.