Singapore and Vietnam have officially established bilateral relationship for nearly 45 years and have become strategic partners in many fields, especially in commerce. In the trend of foreign investment flows in Vietnam, Singaporean investors should not miss their opportunities as Vietnam’s economy is growing rapidly and the law system also opens and encourages foreign investment. Singaporean investors pay much attention to growing business sectors in Vietnam such as infrastructure, construction, food and beverage, manufacturing… Two countries also sign an agreement on double taxation avoidance which makes Vietnam become a favorable place of Singaporean investors.
In order to own a company in Vietnam, Singaporean investors may choose one of the two methods:
- Establish Singaporean-owned company in Vietnam;
- Contribute capital, purchase shares, purchase capital contributions in Vietnamese companies (often called as M&A).
Option 1: Establish Singaporean company in Vietnam
Step 1: Apply for the Investment Registration Certificate
An application for the Investment Registration Certificate includes:
- A written request for permission for project execution;
- Individual investors: copies of ID or passport of each individual;
- Organization investors: copies of Establishment Certificate or equivalent paper confirming the legal status;
- Project proposal specifying: the investors, project’s objectives and scale; capital and capital rising method; location, duration and schedule of the project; labor demand;
- Copies of financial statements in the current 02 years or financial support commitment of the parent company or financial institutions; guarantee for investors’ financial capacity, description of investors’ financial capacity; request for investment incentives; assessment of socio-economic effects of the project;
- Land use demand. If the project does not use land allocated or leased by the State or does not require the State to change land use purpose, the copies of the lease agreement or equivalent papers proving that investors have rights to use the location shall be submitted;
- If the project use any technology in the List of technologies restricted from transfer, investors have to submit the explanation on technology transfer.
Submit the application at: The Department of Planning and Investment.
The process: Within 15 days from the receipt date of the valid application, the Department of Planning and Investment will grant the Investment Registration Certificate to foreign investors. If the Department of Planning and Investment refuse to grant, they will respond in notices and explain the reasons.
Step 2: Apply for the Business Registration Certificate
An application for the Business Registration Certificate includes:
- A written request for business registration;
- The Articles of Associates;
- The list of members of the multi-member limited liability company or the list of partners of partnership;
- Notarized copies of ID or valid passport of each individual member; notarized copies of the Business Registration Certificate/Establishment Certificate of each organization member; notarized copies of ID or valid passport of each legal representative of each organization;
- Power of attorney (Clients grant to Viet An);
- Certificate of Investment Registration of foreign investors.
Submission place: The Department of Planning and Investment.
Duration: 03 – 06 working days.
Announce the business registration contents:
- Business registration information must be announced publicly on the National Portal of Business Registration within 30 days from the date of issuance of the Business Registration Certificate. The contents of the announcement are all the information stated in the Business Registration Certificate.
- Notice: In accordance with Clause 1 Article 26 of the Decree 50/2016/NĐ-CP, if the company does not announce or lately announce the business registration information on National Portal of Business Registration, they are fined an amount of money from 1.000.000 VND to 2.000.000 VND.
Engrave the seal and publish the seal sample:
- The company can authorized Viet An Law Firm or can engrave the seal by itself then announce the seal sample to the Department of Planning and Investment. The company is allowed to decide about the appearance, quantity and the contents of the deal but it must contain the name and the code of the company;
- After receiving the announcement on the seal sample, the Business Registry Office shall grant the receipt to the company, post the announcement on the National Portal of Business Registration and issue the Announcement on Publication of the seal sample to the company.
Option 2: Contribute capital, purchase shares, purchase capital contributions in Vietnamese companies (often called as M&A)
In accordance with current regulations, this option does not require foreign investors to apply for Investment Registration Certificate except for register to contribute capital, purchase shares, purchase capital contributions at the Department of Planning and Investment. After receiving the approval, the company shall adjust business registration information complying with the laws on enterprises. This option shall help investors save time and money.
Step 1: Foreign investors register to contribute capital, purchase shares/capital contributions to the company
- Application for capital contribution, shares/capital contributions purchase indicating: the information of the target company, the foreign capital contribution after completing the procedures;
- Copies of the ID or passport of each individual investor; copies of Establishment Certificate or equivalent papers confirming the legal status of each investor who is an organization.
Submission place: The Department of Planning and Investment.
The process: If the capital contribution, shares purchase, capital contribution purchase of foreign investors comply with the regulations on investment forms and foreign capital contribution, within 15 days from the date of receipt of the valid application, the Department of Planning and Investment will grant a written announcement. If the application does not satisfies conditions, the Department of Planning and Investment will grant a written announcement providing reasons and explanation.
Step 2: Transfer the shares, capital contributions and change the shareholders or members of the company
Legal consulting services on enterprises and investment at Viet An Law Firm:
- Consult about regulations on enterprises and investment in Vietnam;
- Consult about process, procedures for Investment Registration Certificate, Business Registration Certificate, sublicense…;
- Consult about tax, foreign investment incentives in Vietnam;
- Consult about conditional business sectors and detailed conditions apply to foreign investors in Vietnam;
- Draft, submit the application and work with state-authorized agencies when Clients authorize;
- Consult about after-establishing issues such as: contracts, tax, Vietnamese labor, foreign labor working in Vietnam, intellectual property, commercial franchise…
If you are looking for legal advice about enterprises, commerce and investment in Vietnam, please feel free to contact Viet An Law Firm for more information!