Funding Options for FDI Startup Company in Vietnam

The recent year marks an important turning point in attracting foreign direct investment (FDI) in Vietnam, particularly in the establishment of FDI startup companies. Data shows that the source of capital for FDI startup companies this year has shown positive signs, reflecting a strong recovery of the economy and the confidence of international investors in the investment environment in Vietnam. The open-door policy, administrative reform, and investment incentives continue to create strong momentum for the establishment of FDI enterprises, contributing to economic growth and international integration. In the following article, Viet An Law will help you better understand funding options for an FDI startup company in Vietnam.

Forms of establishing an FDI startup company

• Initial capital contribution to establish a new enterprise: In this form, foreign investors will contribute capital from the very beginning of establishing a business in Vietnam. Accordingly, the foreign investor’s contribution can range from 1% to 100% of the charter capital, depending on the industry in which the business operates.
• Purchase of shares or capital contributions in an existing business: In this form, foreign investors will contribute capital by purchasing shares or capital contributions in a Vietnamese enterprise. Depending on the industry, investors can contribute from 1% to 100% of the capital to the Vietnamese business.

Steps to establish an FDI startup company

Step 1: Apply for an Investment Registration Certificate

The investor prepares 01 dossier to apply for an investment registration certificate as prescribed in clause 1, Article 33 of the Investment Law 2020, which includes:

• A written request for the investment project by the foreign investor;
• A copy of the personal identification card/citizen’s identity card or passport for individual investors; a copy of the certificate of establishment or equivalent documents confirming the legal status for organizational investors;
• An investment project proposal;
• Document proving the investor’s financial capacity;
• A Business Cooperation Contract (BCC) for projects under the BCC form (if any)

The investor submits the above documents to the investment registration authority. In cases where the project is implemented across two or more provincial administrative units, the investor shall submit the dossier to the Department of Finance of the province/city where the project will be implemented or where the office is expected to be located.

The competent authority will receive and review the document.

• If the dossier is valid, the investment registration authority will issue the Investment Registration Certificate to the investor within 15 days from the date of receiving the valid dossier.
• If the dossier is not valid, the authority must notify the investor in writing and clarify the reasons.

Step 2: Apply for an Enterprise Registration Certificate

• After the company has been issued an Investment Registration Certificate, the next step is to apply for an Enterprise Registration Certificate. The documents required are prescribed in Chapter IV of Decree No. 01/2021/ND-CP, and include:
  • A copy of the Investment Registration Certificate;
  • An application form for business registration;
  • A draft company charter;
  • A list of members for a limited liability company with two members, or a list of founding shareholders for a joint stock company;
  • A valid copy of identification (ID card, citizen’s identity card, or passport for individuals); Enterprise Registration Certificate and Authorization Certificate from the authorized representative (for organizations); a capital contribution decision for company members or organizational shareholders; a power of attorney.

• Submit the dossier to the Business Registration Office of the Department of Finance.
• The submission can be made in one of three ways: directly, by post, or online through the Business Registration Portal.
• Within 03 working days (from the date of receiving the valid dossier), if the Enterprise Registration Certificate is denied, the applicant must be notified in writing. The notice must clearly state the reasons and any requirements for amendment and supplementation of the dossier.

Step 3: Publish Business Information

• Information about the business registration must be publicly disclosed on the National Information Portal within 30 days of the issuance of the Enterprise Registration Certificate.
• Responsible Authority: The Announcement Department of the Business Registration Office.
• Timeframe: Within 30 days.

Step 4: Complete Other Procedures

The company must complete procedures such as:

• Creating a company seal, opening a foreign direct investment capital account;
• Registering digital signatures, issuing electronic invoices, filing and paying taxes;

Funding options for FDI startup company in Vietnam

• Based on data from the General Statistics Office, the total registered foreign direct investment (FDI) into Vietnam as of December 31, 2024, includes new registered capital, adjusted registered capital, and the value of capital contributions and share purchases by foreign investors, amounting to USD 38.23 billion, a decrease of 3.0% compared to the same period last year.

• Newly registered capital: There were 3,375 projects approved with a registered capital of USD 19.73 billion, increasing by 1.8% in terms of the number of projects but decreasing by 7.6% in terms of registered capital compared to the same period last year. Specifically:
  • The manufacturing and processing industry attracted the largest share of new foreign direct investment, with registered capital of USD 13.44 billion, accounting for 68.1% of total newly registered capital;
  • The real estate business sector reached USD 3.72 billion, accounting for 18.8%;
  • Other industries reached USD 2.57 billion, accounting for 13.1%.
• Among the 80 countries and territories with newly approved investment projects in Vietnam in 2024, Singapore was the largest investor with USD 6.26 billion, accounting for 31.7% of the total newly registered capital; followed by South Korea with USD 2.89 billion, accounting for 14.6%; China with USD 2.84 billion, accounting for 14.4%; and the Hong Kong Special Administrative Region (China) with USD 2.17 billion, accounting for 11.0%.

Some forecasts for the source of capital for newly established FDI enterprises in Vietnam in 2025

• In 2025, ministries, sectors, and localities need to accelerate the implementation and disbursement of public investment capital, swiftly and effectively execute large-scale investment projects, and enhance the attraction of high-quality foreign investment capital.
• Strongly implementing provincial, regional, and sectoral planning will create new momentum and capabilities for economic development in 2025. The focus will be on speeding up the construction progress of key national projects, major infrastructure works, and important transportation infrastructure. It will also emphasize leveraging the investment resources of state-owned corporations and efficiently utilizing the resources of the private sector and foreign sectors.
• There will be preferential, competitive policies and conditions that support business operations to attract large, key national projects, high-tech projects, and encourage strategic investors and multinational corporations to invest, set up headquarters, and establish R&D centers in Vietnam.
• Upcoming year, Vietnam will continue to be a bright spot, attracting foreign capital, and will remain among the top 15 developing countries attracting the largest FDI in the world. This will be driven by the achievements of attracting FDI capital in 2024, when, within 11 months, FDI reached USD 31 billion, and FDI disbursement reached USD 20.4 billion, an increase of 7.1%, the highest in many years.
• Provinces such as Bac Ninh, Quang Ninh, Ho Chi Minh City, Hai Phong, and Binh Duong will continue to be the leading provinces in attracting new FDI enterprise establishment capital.

Some reasons for the increasing funding options for FDI startup company in Vietnam

The figures for 2024 demonstrate that Vietnam has become an increasingly attractive destination for foreign investors. There are many reasons behind this success.

First, Vietnam has an attractive investment environment.

Vietnam has always been a country with strong political and social stability. It is one of the most dynamic and growing economies. The average economic growth rate of Vietnam in recent years has been very promising. Many international organizations predict that Vietnam’s GDP will continue to grow positively in the coming years.

Second, Vietnam has an abundant labor force.

• Vietnam is in a “golden” demographic period, with a favorable geographical location in the heart of East Asia, a region that houses many large and dynamic economies.
• Vietnam is a market economy and a member of the World Trade Organization (WTO), participating in many international economic cooperation frameworks, including Free Trade Agreements (FTAs) with partners inside and outside the region. Notably, Vietnam is actively involved in negotiating the Trans-Pacific Partnership (TPP). These are fundamental advantages that continue to attract investors.

Third, the government always supports foreign investors in Vietnam.

• The Vietnamese Government is consistently committed to creating an open, convenient, and equal investment environment for foreign investors. It continuously works on improving the legal framework and institutional structures to support business and investment activities.
• In addition, the Vietnamese Government has made efforts to implement the roadmap for restructuring the economy, transitioning growth models, including the focus on improving the investment environment and the enhancement of national competitiveness.

The above is legal advice from Viet An Law regarding the funding options for FDI startup company in Vietnam. If you have any questions or need legal advice on investment matters, please contact Viet An Law for the best support.