Establishment of a Taiwanese-invested company in Vietnam

The economic cooperation between Vietnam and Taiwan has made significant strides in recent years, with direct investment inflows from Taiwan growing strongly. Up to now, Taiwan has become one of the major foreign investors in Vietnam. With a young, abundant workforce and competitive costs, along with a large and rapidly growing domestic market, Vietnam has become an attractive destination for Taiwanese investors. In addition, Vietnam’s favorable geographical location and investment incentives are also factors that attract Taiwanese businesses. This partnership brings many benefits to both parties. For Vietnam, Taiwan’s investment has contributed to creating millions of jobs, transferring modern technology and promoting socio-economic development. For Taiwanese businesses, Vietnam provides a stable business environment, a skilled workforce and the opportunity to access the Southeast Asian market. Viet An Law would like to guide you through the procedures for establishing a Taiwanese-invested company in Vietnam through the article below.

Taiwanese investor establishes new economic organization in Vietnam

Step 1: Apply for a Taiwan Investor Investment Certificate (IRC)

• 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.

Step 2: Apply for an Enterprise Registration Certificate (ERC)

• 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 Taiwanese investor has been completed above.

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

Duration: 03 – 06 working days.

Taiwanese investors buy contributed capital and shares of Vietnamese companies

Dossier of registration for purchase of contributed capital and shares of a Vietnamese company

• Written registration of capital contribution, purchase of shares, purchase of contributed capital (according to Form A.I.7 issued together with Circular 25/2023/TT-BKHDT).
• Written agreement in principle on capital contribution, share purchase or purchase of contributed capital between foreign investors and economic organizations with foreign investors contributing capital, purchasing shares or purchasing contributed capital.
• Copies of legal papers of individuals and organizations contributing capital, purchasing shares, purchasing contributed capital; and of economic organizations with foreign investors contributing capital, buying shares, buying contributed capital.
• In case of necessity, the External Economic Relations Division may request the supply of a copy of the land use right certificate of the economic organization to which foreign investors contribute capital, purchase shares or purchase contributed capital.

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 a written confirmation of the purchase of contributed capital to the foreign investor. In case of refusal, the Department of Planning and Investment will reply in writing and clearly state the reason.

Some related questions when establishing a Taiwanese-invested company in Vietnam

What form should be prioritized for establishing a Taiwanese-invested company?

– When deciding to invest, investors need to carefully consider between establishing a new economic organization and contributing capital to buy shares of an existing enterprise. If the goal is to have complete control of the business, build its own brand, and create a unique business model, then establishing a new economic organization is the right choice. However, if you prioritize quickly entering the market, taking advantage of available resources and sharing risks, then contributing capital to buy shares will be an optimal solution. The choice of investment form also depends on many other factors such as financial resources, business experience and long-term investment goals of each investor.

What is the minimum investment capital?

The Law on Enterprises 2020 and the Law on Investment in Vietnam do not specify the minimum charter capital. This is to create more favorable conditions for start-ups, small and medium-sized enterprises, and encourage entrepreneurship.

However, this does not mean that you can register the charter capital at too low a level.

So how to decide the level of investment capital?

Deciding on the appropriate level of capital will depend on many factors, including:

• Scale and type of business: Large-scale companies operating in the field of real estate production and trading often have a higher charter capital than small companies, operating in the service sector.
• Business lines: Some specific industries may require legal capital
• Business plan: The charter capital needs to be sufficient to meet the initial financial needs of the business, including the cost of renting an office, purchasing equipment, paying employees, and other expenses.
• Business objectives: Charter capital also affects the reputation of the enterprise in the market. A high charter capital will help businesses create trust with customers, partners and investors.