Establish a company in Vietnam for paper manufacturing

The paper industry in Vietnam is growing strongly through enterprises applying advanced technologies, comply with requirements for environmentally friendly products. In addition, Vietnam is an exporting country, high growth in export activities has also led to a sharp increase in the demand for packaging paper. Accordingly, investment needs to establish paper production companies with both Vietnamese and foreign capital accordingly. At this article, Viet An Law synthesizes regulations related to the procedures for establishing a foreign-invested paper manufacturing company in Vietnam.

Legal basis

• ACIA, EVFTA, CPTPP;
• Law on Investment 2020 and implementation guidelines.
• Decree 08/2022/ND-CP dated January 10, 2022 of the Government detailing and guiding the implementation of a number of articles of the Law on Environmental Protection;

Conditions for establishing a company in Vietnam for paper manufacturing with foreign capital

Conditions of market access to establish a company for paper manufacturing

Regulations in ACIA:

• Paper production (with development of domestic raw materials) (ISIC 2101)
• Production projects/investments in these industries must comply with specific requirements for domestic raw materials, technical, and/or environmental and/or qualitative that may be inconsistent with the national treatment provision in the ACIA.

Regulations in CPTPP:

• Appendix NCM II-VN-28: Paper production
• Vietnam reserves the right to adopt and maintain measures inconsistent with Article II.9.1.(h) against foreign-invested enterprises in this industry.

Regulations in EVFTA:

Appendix 8-B : Manufacture of paper and paper products: non restricted.

Conditions on the percentage of capital contributed by foreign investors when establish a company for paper manufacturing

According to the provisions of the international agreements Vietnam is a member, foreign investors establishing paper manufacturing companies are not limited in the capital contribution ratio Accordingly, foreign investors can contribute capital from 1 -100% of the company’s charter capital.

Procedures for foreign investor to establish a company in Vietnam for paper manufacturing

Step 01: Apply for an Investment Registration Certificate for a foreign-invested company

Foreign-invested companies carrying out production activities are required to have factories leased or leased land from the State in industrial parks and clusters to ensure production conditions as well as related environmental conditions. If renting land from the state, investors needs to carry out additional procedures for approving investment policies.

If the projects do not use land (without direct land lease from the state and do not use technologies on the list of restricted transfers, the procedures for approval of investment policies are not required. Foreign investors carry out directly the procedures for applying for an Investment Registration Certificate.

Dossier for issuance of Investment Registration Certificate of a foreign-invested company:

• An application form for execution of the investment project, including a commitment to incur all costs and risks if the project is not approved;
• Documents on investor’s legal status:
  • For individual investors: Copy of identity card, identity card or passport
  • For institutional investors: copy of Certificate of Establishment or other equivalent document certifying legal status;
• Document(s) proving the financial capacity of the investor;
• Proposal for the investment project. If the law on construction requires formulation of a pre-feasibility study report, the investor is entitled to submit the pre-feasibility study report instead of a proposal for the investment project
• A copy of the document regarding the land use rights or other document identifying the right to use the location for execution of 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 in accordance with the Law on Technology Transfer;
• The business cooperation contract if the investment project is executed under a business cooperation contract;
• Other documents relating to the investment project, and requirements on the eligibility and capacity of the investor in accordance with regulations of law (if any).

The agency that submits the application for the Investment Registration Certificate to the company with 100% foreign capital at the investment registration agency

• If the company is located in an industrial park, it is the Management Board of industrial zones.
• If the company is located outside the industrial park, it is the Department of External Economic Relations – Provincial Department of Planning and Investment.

Step 02: Establish a business and issue an enterprise registration certificate

After obtaining the investment registration certificate, investors need to prepare documents to set up a business.

Dossier of establishment of a foreign-invested company

• Enterprise registration application form;
• Company charter;
• List of members/shareholders;
• Copies of the following papers: Citizen identification cards, People’s identity cards, Passports or other lawful personal identification of members being individuals;
• The establishment decision, the enterprise registration certificate or other equivalent documents of the organization and the power of attorney; Citizen’s identity card, people’s identity card, passport or other lawful personal identification of the authorized representative of the member being an organization;
• For a member being a foreign organization, a copy of the Enterprise Registration Certificate or an equivalent document must be consularly legalized;
• Investment registration certificate for foreign investors in accordance with the Law on Investment.

The agency that submits the application for an enterprise registration certificate to a company with 100% foreign capital

Business registration agency – Provincial Department of Planning and Investment.

Time to issue business registration certificates for companies with 100% foreign capital: 05 working days from the date of receipt of complete and valid documents

Step 03: Posting the statement of establishment of a foreign-invested company

After an enterprise is granted an enterprise registration certificate, it must make a public announcement on the national business registration portal according to the order and procedures and pay fees as prescribed.

The content to be announced includes the contents of the Business Registration Certificate and the following information:

• Business lines;
• List of founding shareholders and shareholders being foreign investors for joint-stock companies.

Executing agency: Reporting division of the Business Registration Authority – Provincial Department of Planning and Investment.

Step 04: Engrave the seal of the foreign-invested company

After obtaining the Enterprise Registration Certificate and having posted the enterprise establishment statement. The enterprise conducts seal engraving at one of the licensed seal engraving units. Enterprises decide by themselves the number and form of seals within the scope permitted by law.

Step 05: Carry out the procedures for the company to operate officially

Clients wishing to establish a foreign-invested company, provide legal advice during the implementation of an investment project in Vietnam, please contact Viet An Law for the best support!