With the available market access policies, Vietnam is increasingly attracting foreign investors to promote investment projects in all areas. However, Vietnamese law still stipulates a number of cases that investment projects must be issued decisions on inestment policies by the National Assembly, the Prime Minister and provincial People’s Committees. With a team of lawyers with 15 years of experience, Viet An Law would like to share for you the basic legal information when establishing a foreign-invested company as follows:
Investment projects must be issued a decision on investment policies
Projects that require State’s decision are often significant projects which affect national defense, security, politics, economy, culture and society. Therefore, for these projects, investors must proceed to apply for decisions on investment policies before carrying out the procedures for obtaining Investment Registration Certificates as other projects. Except for projects under the law of public investment law, Viet An Law will provide you with projects that need to be decided by the National Assembly, the Prime Minister and the People’s Committee of provinces as follows:
The 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.
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 transport;
- 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 by law.
The investment projects subject to issuance of decisions on investment policies by the People ‘s Committees of provinces
- 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.
Investment projects must not be issued a decision on investment policies
For projects that do not need decisions investment policies, you can proceed immediately with the procedure for obtaining an Investment Registration Certificate.
Conditions when applying for an Investment Registration Certificate
The investments in the activities below 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;
- 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;
Information about conditional business lines are posted on the National Business Registration Portal, so you can look up the conditions for the bussiness lines that you would like to invest on this website.
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.
The dossier you need to prepare 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
Firstly, investors must 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.
Note: 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: firstly, establish a Vietnamese company and apply for an eligible license if the company proceeds 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 the Bussiness Registration Certificate
After being granted the investment registration certificate, you can start carrying out some procedures to set up the company.
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, 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.
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 announcement on the National Business Registration Portal in the order and procedures within 30 days from the date of publication.
- Conduct procedures to make seal, announce seal sample of the company;
- Hang the name board at the headquarters;
- Open a bank account for the new company;
- Beside the main procedures that Viet An Law Firm has shared above for you, you must perform a number of procedures to apply for other types of licenses when operating in conditional business lines. It is regulated by specialized laws such as applying for business license, industry certificate when trading veterinary medicine, education, healthcare, travel, etc.
To understand the procedures for applying for other types of licenses in more detail about the business lines that you want to operate, please please contact the phone number or email of Viet An Law Firm to Receive the most accurate legal advice and support from a team of lawyers with 15 years of experience. Viet An Law Firm is always ready to listen and understand all your difficulties!