Currently, Japan is one of the most important investment partners of Vietnam. By the Vietnam-Japan Economic Partnership Agreement (VJEPA), international commitments (WTO commitments of which Vietnam and Japan are members) and other legal documents, Japanese investors are encouraged to invest in some special fields such as: electronic, equipment and components of automobile, shipbuilding…According to the Vietnam’s Law on Investment 2014, Japanese investors are allowed to set up companies with 100% foreign investment or establishing a joint venture with Vietnam’s partner depends on the demand of Japanese investor as well as specific regulations. This following article provides some details of conditions and procedures for Japanese investors to establish a company in Vietnam.
Conditions that Japanese investors must fulfill, pursuant to the Law on Investment 2014:
Form of investment, scope of investment, Vietnam partners and other conditions under international treaties to which the Vietnam is a signatory;
Foreign investor’s charter capital: Based on the regulations in Vietnam-Japan Economic Partnership Agreement (VJEPA), the ownership ratio of Japanese investors depends on the commitment of the two parties, regarding the business lines registered by the Japanese investor.
The following is procedure for Japanese investors to establish a 100% foreign owned company in Vietnam:
Step 1: Registration for decisions on investment policies or application for Certificate of investment registration.
A project dossie registration for decision on investment policies from the People’s Committees of provinces consists of:
A written request for permission for execution of the investment project;
A copy of the ID card or passport (if the investor is an individual); a copy of the Certificate of establishment or an equivalent paper that certifies the legal status of the investor (if the investor is an organization).
An investment proposal;
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 (required in some type of company regulated by Law on Investment 2014);
The business cooperation contract (if the project is executed under a business cooperation contract).
If the project is subject to issuance of a decision on investment policies from the Prime Minister or the National Assembly, there will be more documents required, depending on the features of the project.
If the project is subject to issuance of a decision on investment policies, the registry office shall issue the Certificate of investment registration to the investor within 05 working days from the receipt of the decision on investment policies.
If the project it not subject to issuance of a decision on investment policies, the Japanese investor shall follow the procedures below:
The investor shall submit the documents mentioned above to the Department of Planning and Investment where company’s headquarter is located;
Within 15 days from the receipt of sufficient documents, the the Department of Planning and Investment shall issue the Certificate of investment registration. In case of rejection, the investor must be notified in writing and provided with explanation.
Step 2: Establishing an enterprise
Application for establishing an enterprise includes:
An application form for business registration;
The company’s charter;
A list of founding shareholders/members (not for single-member liability company);
Copies of the ID card or other ID papers of founding shareholders and foreign investors being individuals;
Decision on Establishment, Certificate of Business registration, or an equivalent document of the organization and the letter of authorization; the ID card or other ID papers of the authorized representatives of founding shareholders and foreign investors being organizations.
If shareholders are foreign organizations, the copy of the Certificate of Business registration or an equivalent document must be consularly legalized.
The Certificate of Investment registration of the foreign investors.
Japanese investors prepare the application file and submit it to the business registration office of the province / city where the company is located. After 3 to 5 working days, the Business Registration Office will issue the Certificate of business registration to the investor.
For more information on the conditions and procedures for Japanese investor to establish a company in Vietnam, please contact Viet An Law Firm.
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