Establishing foreign-invested business organization in Vietnam
Procedure to establish new enterprise, which has from 1% to 100% foreign investment
The year of 2018, it is predicted to be a year of the foreign investment substantially conveyed into Vietnam market. With desire to assist legal issues, procedure as well as provide legal service to foreign investor so as to establish foreign-invested business entity in Vietnam, Viet an Law Firm is pleased to counsel detail procedure of establishing foreign-invested entity, as follows:
A – The regulated entities of establishing foreign-invested business organization:
Foreign investors have to manage essential procedure to apply for Certificate of Investment Registration (CIR) when establishing foreign-invested entity, includes:
Legal entity has from 1% to 100% capital contributed in the beginning of establishing
Foreign-invested business entity ( Entity which has already been issued Certificate of Investment Registration in Vietnam) continues to establish more business entity; to contribute capital; under investment of buying share capital, capital contribution of business entity; under investment of BCC
All foreign investor contributing capital, buying shares of Vietnam Business organization which has already issued Certificate of Business Register (include situation off buying 100% capital contribution of business entity) is not acquired to apply for Certificate of Investment.
Business entity exercising exportation, importation and distribution right needs apply for Business License
For foreign-invested business organizations establishing before 07/01/2015: business entities establishing in Vietnam, if having new projects, they are allowed to organize that project without establishing another new legal entities.
Notice: In 2018, when foreign investors cooperating with Vietnamese investors together establish business organization ( so-called joint-ventured company between Vietnam and foreign investors), the priority solution to reduce procedure should be:
Step 1: Establishing Vietnamese business organization
Step 2: Applying for Business License in case of exercising conditional business lines
Step 3: Transferring capital contribution to foreign investor
Step 4: Applying for Business License with lines which exercise right of import and export
With this consultative solution, although foreign-invested companies have members which are foreign investors, it is not mandatory for them to apply for Certificate of Investment. Without Certificate of Investment, foreign-invested companies will diminish rough procedure with state-agencies when making changes in the content’s Certificate of Business Register. These are some plus points:
Simple procedure of change: When companies have Certificate of Business Register only, they just make changes exactly like Vietnam Business Entity.
No duty on reporting the progress on organizing projects, reporting on supervising investment,…
Free from updating investment information on Investment administration system.
B – The procedure of issuing Certificate of Investment
As for Investment project classified in project acquiring investment policies, Investment licensing agencies issue Certificate of Investment for 05 working days, from the day receiving document of investment policy.
As for Investment project exempt for acquiring investment policies, investor have to apply for Certificate of Investment, following below procedure:
Before applying for Certificate of Investment, investors enumerate information about project online on National Foreign Investment Information Portal. Within 15 days from day enumerating dossier online, investors handle issuing Certificate of Investment profile to investment licensing agency.
After investment licensing agency receives the profile, investors are issued an account in National Foreign Investment Information Portal to supervise the progress of processing the profile.
Investment licensing agency use National Foreign Investment Information Portal to receive, process, respond the investment registration profile, update the progress of processing the profile and issue investment project’s code.
The dossier which investors submit to investment licensing agency consists of:
A written request for permission for project adjustments;
Copies of the ID card or passport (if the investor is an individual) or Certificate of Enterprise Registration or another document with equivalent legal value (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;
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 that use technologies on the List of technologies restricted from transfer prescribed by regulations of law on technology transfers., 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 processing deadline:
Within 15 days, from full project dossier submitted, the registry office issues Certificate of Investment; if declining, the agency have to notify investors in writing with detail explanation.
The content of Certificate of Investment:
Code of the project.
Name and address of the investor.
Name of the project.
Location and area of the project.
Objectives and scale of the project.
Capital investment in the project (including the investor’s capital and raised capital), capital contribution and capital raising schedule.
Duration of the project.
Project execution schedule: schedule of infrastructural development and inauguration (if any); schedule of achievements of primary targets and items; targets, duration, and operations of each stage (if the project is divided into multiple stages);
Investment incentives, support, and conditions (if any).
Conditions applied to the investor (if any).
The competent Registry Office:
The Department of Planning and Investment of each province shall receive applications, issue, adjust, and revoke Investment Registration Certificates of:
a) Investment projects outside industrial parks, export-processing zones, hi-tech zones, and economic zones;
b) Projects of investment in development of infrastructure of industrial parks, export-processing zones, hi-tech zones, and investment projects in industrial parks, export-processing zones, and hi-tech zones in areas without management boards of industrial parks, export-processing zones, and hi-tech zones.
Management boards of industrial parks, export-processing zones, hi-tech zones, and economic zones shall receive applications, issue, adjust, revoke Investment Registration Certificates of investment projects therein, including:
Projects of investment in development of infrastructure of industrial parks, export-processing zones, and hi-tech zones;
Investment projects executed within industrial parks, export-processing zones, hi-tech zones, and economic zones.
The Department of Planning and Investment of the province in which the investor’s premises or offices are located or intended to be located shall receive applications, issue, adjust, revoke Investment Registration Certificates of:
Any investment project that is executed in more than one province;
Any investment project executed both inside and outside an industrial park, export-processing zone, hi-tech zone, or economic zone.
C – Procedure to establish business organization after having Certificate of Investment
Step 1: Investors exercise necessary procedure to apply for Certificate of Business Registration
Step 2: Creating business organization s’ seal
Step 3: Notifying the usage of Company s’ seal.
The due period to fulfill 3 above steps is from 05 to 07 days.
D – Procedure of Business License (Only applied to Business entities have business lines which exercise importation , exportation and distribution right).
An application form for Business License
A representation that have qualified all related conditions;
Presentation of financial capacity, confirm bank
Copy of Certificate of Investment; Certificate of Business Registration
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