Register a foreign-owned construction design companies in Vietnam

Currently, the real estate market in Vietnam is growing rapidly leading to the development of relating services, one of which is construction design service. The laws of Vietnam do not contain any limitations on foreign investors to establish foreign-owned construction design companies in Vietnam. Hence, foreign investors can own up to 100% of the charter capital of the company. However, this is also a conditional business sector that during operation, both local and foreign investors shall comply with those conditions. To help our Clients during preparation for investing in Vietnam, Viet An Law Firm collects and provides some basic information as follows:

Legal documents:

• The Law on Investment 2014;
• The Law on Enterprises 2014;
• The Law on Construction 2014;
• Decree No.59/2015/NĐ-CP on construction project management;
• Decree No. 42/2017/NĐ-CP on supplementation, amendment of some articles of Decree No.59/2015/NĐ-CP.

By clause 24 Article 3 of the Law on Construction 2014, construction design, construction design assessment are listed as construction investment consultancy activities. This law also specifies that:

Construction design includes:

As there is no limitation on foreign investment in this field, foreign investors can invest in two ways:

• Establish a foreign-owned construction design, construction design assessment company in Vietnam;
• Contribute capital, purchase shares, purchase capital contributions to Vietnamese construction design, construction design assessment companies.

Option 1: Establish a foreign-owned construction design, construction design assessment company in Vietnam

Foreign capital in the company: no limitation, foreign investors can own up to 100% of the charter capital of the company.

Step 1: Apply for the Investment Registration Certificate

• A written request for permission for project execution;
• Individual investors: copies of ID or passport of each individual;
• Organization investors: copies of Establishment Certificate or equivalent paper confirming the legal status;
• Project proposal specifying: the investors, project’s objectives and scale; capital and capital rising method; location, duration, and schedule of the project; labor demand;
• Copies of financial statements in the current 02 years or financial support commitment of the parent company or financial institutions; guarantee for investors’ financial capacity, description of investors’ financial capacity; request for investment incentives; assessment of socio-economic effects of the project;
• Land use demand. If the project does not use land allocated or leased by the State or does not require the State to change land use purpose, the copies of the lease agreement or equivalent papers proving that investors have rights to use the location shall be submitted;
• If the project uses any technology in the List of technologies restricted from the transfer, investors have to submit an explanation on technology transfer.

Apply to The Department of Planning and Investment.

The process: Within 15 days from the receipt date of the valid application, the Department of Planning and Investment will grant the Investment Registration Certificate to foreign investors. If the Department of Planning and Investment refuses to grant, they will respond in notices and explain the reasons.

Step 2: Establish a foreign-owned construction company in Vietnam

Apply for the Business Registration Certificate:

An application includes:

• A written request for business registration;
• The Articles of Associates;
• The list of members of the multi-member limited liability company or the list of partners of partnership;
• Notarized copies of ID or valid passport of each member; notarized copies of the Business Registration Certificate/Establishment Certificate of each organization member; notarized copies of ID or valid passport of each legal representative of each organization;
• Power of attorney (Clients grant to Viet An);
• Certificate of Investment Registration of foreign investors.

Submission place: The Department of Planning and Investment.

Duration: 03 – 06 working days.

Announce the business registration contents:

• Business registration information must be announced publicly on the National Portal of Business Registration within 30 days from the date of issuance of the Business Registration Certificate. The contents of the announcement are all the information stated in the Business Registration Certificate.
• Notice: By Clause 1 Article 26 of the Decree 50/2016/NĐ-CP, if the company does not announce or lately announce the business registration information on the National Portal of Business Registration, they are fined an amount of money from 1.000.000 VND to 2.000.000 VND.

Engrave the seal and publish the seal sample:

• The company can authorize Viet An Law Firm or can engrave the seal by itself then announce the seal sample to the Department of Planning and Investment. The company is allowed to decide about the appearance, quantity, and the contents of the deal but it must contain the name and the code of the company;
• After receiving the announcement on the seal sample, the Business Registry Office shall grant the receipt to the company, post the announcement on the National Portal of Business Registration and issue the Announcement on the Publication of the seal sample to the company.

Step 3: Apply for the Certificate of eligibility construction design and construction design assessment

An application for the Certificate of eligibility construction design and construction design assessment includes:

• A written request for Certificate of eligibility to execute construction: using the form in Annex 3 – Circular No.17/2016/TT-BXD;
• Copy of the Business Registration Certificate or establishment decision;
• The list providing working experiences, construction practices, labor contracts of key individuals working in the company;
• A declaration on company’s professional experiences mentioning at least 03 typical latest tasks for each registered field;
• A declaration on financial capacity; machines, devices, computer software for each registered field;
• A task management process; a quality management system for each registered field.

Submission place:

• The Ministry of Construction: for Class I certificate;
• The Department of Construction: for Class II certificate.

The process: Within 10 days from the date of receipt, the Ministry of Construction/the Department of Construction shall examine the validity and completion of the application. In case the application is missed or invalid, the Ministry or the Department of Construction will grant a written response to the company to supplement the application or conduct an assessment on the application (if necessary). After that, within 15 days with Class I certificate, 10 days with Class II and III certificate, the Testing Council will assess and submit it to the Ministry or Department of Construction to decide to grant the Certificate of eligibility to execute construction or not.

Option 2: Contribute capital, purchase shares, purchase capital contributions to a Vietnamese construction design, construction design assessment company.

Instead of establishing a foreign-owned company, foreign investors can invest by contributing capital, purchasing shares, purchasing capital contributions to a Vietnamese construction design, construction design assessment company. If foreign investors choose this option, they do not need to apply for the Investment Registration Certificate but register for capital contribution, shares purchase, capital contributions purchase at the Department of Planning and Investment. The company just needs to hold the Certificate for eligibility suitable to execute projects. If needed, the company shall apply for a suitable certificate.

Step 1: Foreign investors register to contribute capital, purchase shares/capital contributions to the company

Application includes:

• Application for capital contribution, shares/capital contributions purchase indicating: the information of the target company, the foreign capital contribution after completing the procedures;
• Copies of the ID or passport of each investor; copies of Establishment Certificate or equivalent papers confirming the legal status of each investor who is an organization.

Submission place: The Department of Planning and Investment.

The process: If the capital contribution, shares purchase, capital contribution purchase of foreign investors comply with the regulations on investment firms and foreign capital contribution, within 15 days from the date of receipt of the valid application, the Department of Planning and Investment will grant a written announcement. If the application does not satisfy conditions, the Department of Planning and Investment will grant a written announcement providing reasons and explanations.

Step 2: Transfer the shares, capital contributions and change the shareholders or members of the company

Foreign investment services in Viet An Law Firm:

• Consult about conditions for each business sector for foreign investors in Vietnam;
• Consult about foreign investment procedures, processes in Vietnam;
• Draft, prepare and submit the application at the state-authorized agencies;
• Consult about after-establishing issues: contracts, labor, tax, social insurance…

If you need legal advice about regulations and procedures to establish foreign-owned construction design companies in Vietnam as well as other legal issues relating to foreign investment and enterprises in Vietnam, please feel free to contact Viet An Law Firm for detailed information!