Procedure for setting up a joint venture company

Setting up a joint venture company is a form that the foreign investor makes a capital contribution in Viet Nam in the form of 100 foreign capital contributions or a joint venture with Vietnamese investors to set up a company.

Forms for setting up a joint venture company in Viet Nam

Forms for setting up a joint venture company in Viet Nam as follows:

Form 1: Set up a new joint venture company

This is a plan that the foreign investor and Vietnamese investors set up a new joint venture together right from the very beginning.

Form 2: Form of contributing capital, purchasing shares, or purchasing stakes in Vietnamese companies

This is a plan that the Vietnamese investors set up a new company in Viet Nam first, then the foreign investor makes a capital contribution, purchasing shares/stakes in Vietnamese company to form a joint venture company.

Procedures for setting up a joint venture company in the form of a new joint venture company

Step 1: Issuance of investment registration certificate

Number of documents: 01 sets;

Competent authority

• The Ministry of Planning and Investment, which receives applications for approval for investment guidelines of investment projects subject to approval for their investment guidelines by the National Assembly and the Prime Minister;
• Departments of Planning Investment, which receive applications for approval for investment guidelines of investment projects subject to approval for their investment guidelines by provincial People’s Committees outside industrial parks, export-processing zones, hi-tech zones, and economic zones; investment projects executed both inside and outside industrial parks, export-processing zones, hi-tech zones, and economic zones; investment projects executed inside industrial parks, export-processing zones, hi-tech zones and economic zones where management boards of such industrial parks, export-processing zones, hi-tech zones, and economic zones have yet to be established or not under the management of the management boards of industrial parks, export-processing zones, hi-tech zones, and economic zones;
• Management boards of industrial parks, export-processing zones, hi-tech zones, and economic zones, which receive applications for approval for investment guidelines of investment projects subject to approval for their investment guidelines by provincial People’s Committees executed inside the industrial parks, export-processing zones, hi-tech zones, and economic zones.

Processing time for issuance of investment registration certificates:

The investment registration authority shall issue the investment registration certificate to the investor within:

• 05 working days from the receipt of the written approval for investment guidelines and the written approval for an investor with respect to the investment project that is subject to the issuance of an investment registration certificate;
• 15 days from the receipt of the investor’s investment registration certificate with respect to the investment project not subject to the approval of investment policy.

Procedure for issuance of the investment registration certificate

The investor submits the documents to the investment registration authority directly or online via National Foreign Investment Information System.

The investment registration authority considers the validity and issues the investment registration certificate to the investor.

Step2: Issuance of the business registration certificate

Number of documents: 01 sets;

Competent authority: Departments of Planning and Investment of the province/city

Processing time for issuance of the business registration certificate

Within 03 working days from the receipt of the document, the business registration authority shall consider the validity of the document and decide whether to issue Business Registration Certificate

Procedure for issuance of the business registration certificate

• The investor submits the document to the Departments of Planning and Investment of the province/city in person or online via the National Public Service Portal on business registration.
• The business registration authority shall consider the validity of the document and issue the Business Registration Certificate
• The company performing engraves the legal entity’s seal and the procedures after setting up a company

Procedures after setting up a new joint venture company

After setting up a new joint venture company, the company has to perform the procedures as follows:

• Issuing a qualified business license (if any) with the business line conditional
• Open a direct investment capital bank account to contribute capital;
• Tax declaration and payment;
• Register and submit the investment report

Procedure for setting up a joint venture company in the form of capital contribution, purchasing stakes in Vietnamese companies

Step 1: Set up a company with 100% Vietnamese capital

The Vietnamese investors submit 01 sets of documents at the Departments of Planning and Investment of the province/city in person or online via the National Public Service Portal on business registration.

The business registration authority shall consider the validity of the document and issue the Business Registration Certificate within 03 working days from the receipt of satisfactory documents

The company performing engraves the legal entity’s seal and the procedures after setting up a company

Step 2: Register for the foreign investor capital contribution, purchasing stakes in the company has been set up

Only applicable to cases where foreign investors buy contributed capital in Vietnamese companies conducting business in conditional lines or in case foreign investors buy more than 50% of capital in a company dealing in conditional lines

The foreign investor submit 01 sets of documents to the Departments of Planning and Investment

Within 15 days from the receipt of the valid application, the investment registration authority shall consider the satisfaction of the conditions for capital contribution or purchase of shares or stakes and notify the investors.

The investor makes a capital contribution, transfers registered capital to Vietnamese companies in accordance with regulations on foreign exchange transactions for foreign direct investment activities in Vietnam. In case foreign investors hold 51% or more of contributed capital in the company, the company opens a direct investment capital account.

Step 3: Change the business registration certificate, adding foreign investor information to the business registration documents.

The company submit 01 sets of documents to the Departments of Planning and Investment

The Departments of Planning and Investment shall issue the business registration certificate and certificate of changes to business registration information within 03 working days from the receipt of the satisfactory documents.

Some questions related to the procedure for setting up a joint venture company

Do I have to perform procedures for the issuance of an investment registration certificate when setting a joint venture company?

In case of setting up a new joint venture at the beginning that has to perform procedures for issuance of investment registration certificates. In the case of the foreign investor register to contribute capital to Vietnamese companies, they are not required to perform procedures for the issuance of investment registration certificates.

When do foreign investors need to perform the procedures for registering to purchase capital contribution or shares in a Vietnamese company?

In case a foreign investor buys capital contribution in a Vietnamese company doing business in conditional lines or In case foreign investors buy more than 50% of capital in a company conducting business lines without conditions, they must carry out procedures for registration of the purchase of contributed capital or shares.

Which account do foreign investors contribute capital to a joint venture company?

In case of the new establishment of a joint venture company, the investors contribute capital by transfer to direct investment capital account is stipulated at circular 06/2019/TT-NHNN guiding the foreign exchange management for the foreign direct investment in VietNam

In case of capital contribution, purchasing shares/stakes in a Vietnamese company to form a joint venture company, depending on the form of transfer and the ownership rate of the foreign investor that the foreign investor make contribute capital via the direct investment capital account or into the company’s checking account.

The Clients interested in the procedure of setting a joint venture company, please contact Viet An Law Firm for the fastest and most accurate support!