Establishment of a Malaysian capital company in Vietnam

Malaysia has long been an important investment partner of Vietnam. The economic cooperation between the two countries is constantly being strengthened and expanded, clearly reflected in diverse investment projects, from the processing industry, real estate to services. The growing presence of Malaysian businesses in Vietnam has contributed significantly to the country’s socio-economic development, creating many job opportunities and transferring modern technology. Malaysia’s investment in Vietnam has left a clear mark on the country’s economic picture. Diverse investment projects, from manufacturing plants to urban areas, have contributed significantly to GDP growth, job creation and improving the competitiveness of Vietnam’s economy. In addition, cooperation between the two countries also promotes cultural exchanges, contributing to building a cohesive and developed ASEAN community. For the convenience of investors in Malaysia to establish a company in Vietnam, Viet An Law would like to guide customers through the article below.

Legal Basis

• Law on Enterprises 2020;
• Law on Investment 2020;
• Decree 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Law on Investment.

Some potential areas where Malaysian investors can set up a company to invest in Vietnam

Automotive Industry

Vietnam is becoming an attractive destination for global automakers. With support from the government and the growth of the middle class, the demand for cars in Vietnam is increasing.

• Automotive component manufacturing: Malaysia can take advantage of its strengths in the automotive auxiliary industry to produce components such as engines, gearboxes, electrical systems, furniture, etc. and supply to automobile assembly plants in Vietnam.
• Automotive assembly: Malaysian businesses can set up automobile assembly factories to produce models suitable for the Vietnamese market. This will help reduce production costs and increase competitiveness.
• Development of support services: In addition to manufacturing and assembly, Malaysia can invest in other support services such as:
  • Logistics: Build logistics centers to transport components, finished vehicles and automotive-related products.
  • Warranty and maintenance: Expand the network of car warranty and maintenance centers to serve customers.
  • Spare parts: Manufacturing and distributing spare parts for cars in circulation in Vietnam.

Food Industry

Vietnam, with its abundant and diverse sources of agricultural raw materials, along with consumers’ increasing interest in clean and safe food products, is a potential market for food processing businesses.

• Deep processing of agricultural products: Malaysia can invest in factories that deeply process agricultural products such as fruits, vegetables, and seafood to create high value-added products and meet the needs of domestic and international markets.
• Organic food production: With the increasing trend of clean food consumption, organic products will have an open consumption market.
• Processed food production: Processed food products such as canned food, frozen food, confectionery, etc. are always in great demand in Vietnam.
• Halal Food: With the growing Muslim community, Halal food products will have a potential market.

Malaysian investors apply for investment certificates in Vietnam

Dossier of application for an investment certificate

• Written request for implementation of the investment project;
• An investment project proposal includes the following contents: the investor implementing the project, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, investment schedule, labor demand, proposal for investment incentives, impact assessment, etc socio-economic efficiency of the project;
• Dossier proving the company’s head office: Lease contract, Notarized copy of real estate documents of the lessor: Land use right certificate, Construction permit; if the lessor is a company: It is necessary to provide a copy of the enterprise registration certificate with the function of real estate business;
• Confirmation of account balance corresponding to the capital intended to establish an FDI company is consular legalized and notarized

Depending on whether the investor is an individual or a legal entity, it will be necessary to provide the following additional documents:

Place of application: Department of Planning and Investment where the head office is expected to be located.

Processing order: Within 15 days from the date of receipt of a complete and valid dossier, the Department of Planning and Investment will issue an Investment Registration Certificate to the foreign investor. In case of refusal, the Department of Planning and Investment will reply in writing and clearly state the reason.

Malaysian investors apply for enterprise registration certificates in Vietnam

Application for Certificate of Registration of Japanese-Owned Enterprises

• Application for enterprise registration;
• Charter of the enterprise;
• List of members of a limited liability company with two or more members or a list of general partners;
• A notarized copy of the identity card or valid passport of the individual member; a notarized copy of the enterprise registration certificate of the member being an organization; a notarized copy of the valid identity card or passport of the legal representative of that organization;
• The investment registration certificate of the Japanese investor has been completed above.

Place of application: Department of Planning and Investment where the enterprise is headquartered.

Duration: 03 – 06 working days.

Malaysian investors carry out post-establishment procedures to conduct business activities in Vietnam

Engraving the seal of the legal entity when it has a tax identification number

After the business has a tax identification number, engraving the legal entity seal is an important step to complete the establishment procedure. The legal entity seal is an official identification sign of the business, used in transactions and legal documents. What should be included on the seal:

• Business name: Must match the name registered in the business registration certificate.
• Tax identification number: It is the unique number of the enterprise, issued by the tax authority.
• Head office address: Must match the registered address. Usually the county and city where the headquarters address is located.
• Type of enterprise: Example: Limited liability company, joint stock company,…

Opening an investment capital account and contributing capital

Procedures for opening an investment capital account

Preparation of dossiers for opening investment capital accounts includes:

• Enterprise establishment license or investment registration certificate.
• Investor’s identity document (passport, visa).
• Documents proving the legal origin of the investment capital.

Place to apply: Submit the application at the selected bank.

The bank will conduct the appraisal of the dossier and open an investment capital account for the investor.

After having an investment capital account, the company with Japanese capital contributed capital. Note that enterprises need to fully contribute the registered capital within 90 days from the date of issuance of the business registration certificate.

• Money transfer: Investors transfer money from an overseas account to an investment capital account opened in Vietnam.
• Confirmation: The bank will confirm the transfer of capital contribution.