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Establish 100% FDI enterprise in Vietnam

In this article, we explore the legal intricacies of establishing a 100% Foreign Direct Investment (FDI) enterprise in Vietnam. By examining the legal framework, procedures, compliance obligations, and regulatory safeguards, we aim to equip potential investors with the knowledge needed to navigate the establishment process and ensure adherence to Vietnamese law. Our goal is to provide valuable insights that foster sustainable economic growth and prosperity in Vietnam.

Establish 100% FDI enterprise in Vietnam

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    Apply to the establishment of foreign-invested enterprises subject to the case of applying for investment policy approval

    Since July 1st, 2015, the Law on Investment 2014 has taken effect, based on the provisions of the Law on Investment 2014, the process of establishing a foreign-invested company belongs to the cases of applying for the investment policy approval is as follows:

    Step 01: Registration of investment policy

    Foreign investors entering Vietnam to implement a project must follow the procedures to apply for an Investment Registration Certificate. However, before carrying out the application for an Investment Registration Certificate, in some cases, the investor must register an investment policy under the jurisdiction of the Prime Minister or the provincial People’s Committee.

    Cases of investment policy decision belong to the competence of Provincial People’s Committees.

    Provincial People’s Committees shall decide on investment policy for the following projects:

    • Projects that are allocated or leased land by the Government through auction, bidding or transfer; projects that require change of land use purpose;
    • Projects using technologies on the List of technologies restricted from transfer under the technology transfer law.

    Dossier include:

    • The proposal to implement the investment project;
    • For individual investors: Copy of identity card, citizen identity card or passport
    • For institutional investors: copy of Enterprise Registration Certificate or other equivalent documents certifying legal status;
    • The proposal of investment project including the following contents: investor implementing the project, investment objectives, investment scale, investment capital and capital raising plan, location, duration, schedule of investment, demand for labor, proposal of investment incentives, impact assessment, socio-economic efficiency of the project;
    • A copy of one of the following documents: financial statements of the last o2 years of the investor; financial commitment of the parent company; financial institutions’ commitment to financial support; guarantee of financial capacity of the investor; documents explaining the financial capacity of the investor;
    • Proposal of land use demand; if the project does not request the Government to allocate, lease land or permit the change of land use purpose, a copy of the location-leasing agreement or other documents certifying that the investor has the right to use that location for carrying out investment projects shall be submitted;
    • An explanation of the use of technology including the following contents: technology name, technology origin, technology process diagram; main specifications, using status of main machines, equipment and technological lines for projects using technologies on the list of technologies restricted from transferring
    • BCC contracts for investment projects in the form of BCC contracts.

    Cases of investment policy decision belong to the competence of the Prime Minister:

    • In the case of foreign investors’ projects in the fields of shipping business, telecommunications with network infrastructure, afforestation, publishing, journalism, establishment of science and technology organizations, 100% foreign-invested science and technology enterprises. Relocation and resettlement of 10,000 people or more in mountainous areas, 20,000 people or more in other areas; Construction and commercial operation of airports; Air transport; Construction and trading of national seaport; Exploration, exploitation and processing of petroleum; Activities of betting business, betting, casino; Producing cigarettes; Development of infrastructure of industrial parks, export processing zones and functional areas in economic zones; Construction and business of golf courses;
    • Projects not falling into the cases prescribed above with an investment capital of VND 5,000 billion or more;
    • Accordingly, in case of setting up a company with 100% foreign capital related to the above issues, the investment policy must be registered with the Prime Minister in accordance with the Law on Investment 2014.

    Dossier include:

    • Documents similar to the investment policy registration belonging to competence of the Provincial People’s Committee
    • Plan of site clearance, emigration, resettlement (if any);
    • Preliminary assessment of environmental impacts, environmental protection solutions;
    • Assessing socio-economic impacts and efficiency of investment projects.

    Cases of investment policy decision belong to the competence of the National Assembly

    Projects must apply for the National Assembly’s investment policy decision:

    Projects that greatly affect the environment or have the potential to seriously affect the environment, including: Nuclear power plants; Changing the land use purpose of national parks, nature conservation zones, landscape protection areas, scientific research or experimental forests from 50 hectares; headwater protection forests from 50 hectares; protective forests against wind, sand, wave break, sea encroachment, environmental protection from 500 hectares; production forests from 1,000 hectares.

    Land use with a requirement to change the purpose of use of wet rice cultivation land from two crops or more with a scale of 500 hectares or more;

    Relocation and resettlement of 20,000 or more people in mountainous areas or 50,000 or more people in other regions;

    Projects requiring the application of special mechanisms and policies should be decided by the National Assembly

    The same dossier as the investment policy registration of the provincial People’s Committee Agency is required, including:

    • Plan of ground clearance, emigration, resettlement (if any);
    • Preliminary assessment of environmental impacts and environmental protection solutions;
    • Assessing the socio-economic impacts and effectiveness of the project;
    • Proposing specific mechanisms and policies (if any).

    Step 02: Apply for an Investment Registration Certificate

    In the following cases, investors must carry out the procedures to apply for an investment registration certificate:

    • Investment projects of foreign investors;
    • Investment projects of the following economic organizations:
    • Having foreign investors holding 51% or more of the charter capital or having a majority of general partners being foreign individuals for economic organizations being partnership companies;
    • Having the above mentioned economic organization holding 51% or more of charter capital;
    • Having foreign investors and economic organizations mentioned above holding 51% or more of charter capital.

    Processing time:

    For investment projects subject to investment policy decision: 05 working days from the date of receiving the investment policy decision

    Step 03: Establish the enterprise and have the Enterprise Registration Certificate issued

    After obtaining the Investment Registration Certificate, investors need to prepare documents to set up the enterprise.

    Order and procedure, refer to the article: https://luatvietan.vn/tu-van-thanh-lap-doanh-nghiep

    Dossier include:

    * For limited liability company

    • Application for business registration.
    • Company charter.
    • List of Members.
    • Copy of the following documents: Citizen identity cards, identity cards, passports or other lawful personal identification of members as individuals; Establishment decision, Enterprise Registration Certificate or other equivalent document of the organization and the authorization document; Citenzen identity card, identity card, passport or other lawful personal identification of the authorized representative of a member being an organization
    • For members being foreign organizations, the copy of the enterprise registration certificate or equivalent document must be consular legalized;
    • Investment Registration Certificate for foreign investors in accordance with the Law on Investment.

    * For joint stock companies

    Dossier include:

    • Application for business registration.
    • Company charter.
    • List of founding shareholders and shareholders being foreign investors (list of authorized representatives if any)
    • Copy of the following documents: Citenzen identity cards, identity cards, passports or other lawful personal identification of members as individuals; Establishment decision, Enterprise Registration Certificate or other equivalent document of the organization and the authorization document; Citenzen identity card, identity card, passport or other lawful personal identification of the authorized representative of a member being an organization;
    • For members being foreign organizations, the copy of the enterprise registration certificate or equivalent document must be consular legalized;
    • Investment Registration Certificate for foreign investors in accordance with the Law on Investment.

    Implementing agency: Business registration authority agency

    Processing ime: 05 working days from the date of receiving a complete and valid dossier.

    Step 04: Publish the announcement of business establishment

    Enterprises, after being granted enterprise registration certificates, must publicly announce on the National Business Registration Portal according to the order and procedures and pay fees according to regulations.

    The content to be published includes the contents of the Enterprise Registration Certificate and the following information:

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

    Implementing agency: Announcement publishing unit of The department of business registration.

    Step 05: Engrave the company’s seal

    After obtaining the Enterprise Registration Certificate and having published the enterprise establishment announcement. The enterprise must carry out the seal engraving at one of the licensed seal engraving units. Enterprises may decide by themselves on the number and form of seals within the permitted scope of law.

    Step 06: Publish the company’s seal sample on the National Portal for Enterprise Registration

    After having the seal, the enterprise will upload the seal sample on the National Portal for Enterprise Registration and be issued a certificate of seal sample successfully posted by the Department of Planning and Investment.

    Implementing agency: Announcement publishing unit of The department of business registration.

    Processing time: 03 working days from the date of receipt of complete and valid dossier.

    Viet An Law Firm provides services of setting up foreign-invested companies. For further information, please contact Viet An Law Firm for detailed advice.

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