Set up a company in Vietnam exercising the right to import with foreign investment

Foreign investors have the right to import goods in Vietnam. However, foreign investors who want to set up a company to exercise the right to import in Vietnam must meet the conditions and carry out registration procedures in accordance with the law. In order for customers to better understand this issue, Viet An Law Firm would like to give preliminary advice as follows:

Legal basis

• Vietnam’s commitments in international treaties: WTO, AFAS, FTAs, VKFTA
• Law on Investment 2020;
• Law on Enterprise 2020;
• Decree No. 09/2018/ND-CP dated January 15, 2018.

Requiments to set up a company in Vietnam exercising the right to import with foreign investment

Import right means the right to import goods from a foreign country into Vietnam for sale to a trader who has the right to distribute such goods in Vietnam, including the right to be named on the declaration of imported goods to carry out and take responsibility for such goods. Responsible for import-related procedures. The right to import does not include the right to organize or participate in a goods distribution system in Vietnam, unless otherwise provided by Vietnamese law or an international treaty to which Vietnam is a contracting party.

According to the WTO Schedule to restrict market access for this sector, it is prescribed as follows: “ no restrictions, except that joint ventures must be established with Vietnamese partners and the foreign capital contribution ratio must not exceed more than 49%. From January 1, 2008, the capital contribution limit of 49% will be abolished. As of January 1, 2009, there is no restriction on ”. Thus, up to now, the restrictions on the field of exercising the right to distribute goods have exhausted foreign investors who can invest 100% of their capital in Vietnam.

How to Set up a company in Vietnam exercising the right to import with foreign investment?

• Establishing a company with foreign capital;
• Contributing capital, buying shares and capital contributions to economic organizations.

Method 1: Establishing a company with foreign capital

Step 1: The investor applies for an Investment Registration Certificate

Dossier include:

• A written request for implementation of an investment project;
• Documents on investor’s legal status: copy of identity card or identity card or passport (as an individual); a copy of the certificate of incorporation or equivalent document and the passport of the capital manager (as an organization);
• The investment project proposal includes the following contents: investor implementing the project, objectives, scale and investment capital, capital mobilization plan, location, duration, investment schedule, labor demand activities, proposals for investment incentives, assessment of the project’s socio-economic impacts and efficiency;
• Documents proving the financial capacity of the investor include at least one of the following documents: financial statements of the last 2 years of the investor; commitment to financial support of the parent company; financial institution’s commitment to financial support; guarantee on the financial capacity of the investor; other documents proving the investor’s financial capacity;
• Investment project proposal includes the following main contents: investor or investor selection form, investment objective, investment scale, investment capital and capital mobilization plan, location, duration, implementation progress, information on the current status of land use at the project site and proposed land use demand (if any), labor demand, proposal for investment incentives, impact activities, socio-economic efficiency of the project, preliminary assessment of environmental impacts (if any) in accordance with the law on environmental protection.

If the construction law provides for the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of the investment project proposal;

• In case the investment project does not request the State to allocate or lease land or permit the change of land use purpose, a copy of the paper on land use rights or other documents determining the right to use the site shall be submitted for implementation. current investment project;
• The explanation of the technology used in the investment project, for the project subject to appraisal and consultation on technology in accordance with the law on technology transfer;
• Other documents related to the investment project, requirements on conditions and capacity of the investor as prescribed by law (if any);
• Power of Attorney for Viet An Law.

Place of application:  Department of Planning and Investment where the head office is expected to be located.

Processing order:  Within 15 days from the date of receiving the complete and valid dossier, the Department of Planning and Investment will issue the Investment Registration Certificate to the foreign investor. In case of refusal, the Department of Planning and Investment will reply in writing and clearly state the reason.

Step 2: Establish a company with foreign capital in Vietnam

Apply for a Enterprise Registration Certificate:

Business establishment dossier includes:

• Application for enterprise registration;
• Company charter;
• List of founding shareholders and shareholders being foreign investors (as a joint stock company); List of members (as a multiple-member limited liability company);
• Certified copy of ID card or citizen identification card or passport (if an individual); establishment decision, enterprise registration certificate or equivalent document and citizen identification card or ID card or passport with written authorization for capital manager in Vietnam (if an organization) ;
• A certified copy of the issued Investment Registration Certificate;
• Power of attorney for Viet An Law Firm;

Place of application:  Department of Planning and Investment where the enterprise’s head office is located.

Duration:  03 – 06 working days.

Disclosure of enterprise registration information

• After being granted an enterprise registration certificate, an enterprise must make a public announcement on the National Business Registration Portal and pay fees as prescribed by law. The content to be announced includes the contents of the Business Registration Certificate and the following information:
• Business lines;
• List of founding shareholders; list of shareholders being foreign investors in the case of a joint-stock company (if any).
• Publication fee: The request for announcement of enterprise registration contents and payment of the fee for announcement of enterprise registration contents shall be made at the time the enterprise submits the enterprise registration dossier. In case the enterprise is not granted enterprise registration, the enterprise will be refunded the fee for announcing the enterprise registration content.

The publication fee is 100,000 VND according to the provisions of Circular 47/2019/TT-BCT.

Business seal

• A seal includes a seal made at a seal engraving establishment or a seal in the form of a digital signature in accordance with the law on electronic transactions.
• The enterprise shall decide on the type, quantity, form and content of the seal of the enterprise, its branches, representative offices and other units.
• The management and keeping of the seal shall comply with the provisions of the company’s charter or regulations issued by the enterprise, branch, representative office or other unit of the enterprise with the seal. Enterprises use seals in transactions as prescribed by law.

Method 2: Contributing capital, purchasing shares, stakes to economic organizations

This method will help investors save more time and costs because they do not have to apply for an Investment Registration Certificate. However, investors must ensure the proportion of capital contribution of foreign investors in accordance with regulations. If choosing this method, investors only need to carry out the procedures for registration of capital contribution, purchase of shares and stakes at the Department of Planning and Investment. In addition, for activities that foreign investors are not allowed to carry out, it is necessary to consider and implement procedures to reduce industries.

Step 1: Foreign investors register to contribute capital, purchase shares, stakes to economic organizations

Dossier include:

• A written registration for capital contribution, share purchase, or stake purchase includes the following contents: information on enterprise registration of the economic organization to which the foreign investor intends to contribute capital, purchase shares, or purchase capital shares. contribution; business; list of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any); rate of ownership of charter capital of foreign investors before and after capital contribution, share purchase, stake purchase to economic organizations; expected transaction value of the contract of capital contribution, share purchase, stake purchase; information on investment projects of economic organizations (if any);
• Copies of legal papers of individuals and organizations contributing capital, purchasing shares, purchasing stakes and economic organizations with foreign investors contributing capital, purchasing shares, purchasing stakes: Passport (for an individual); Business license or equivalent document and Passport of the person authorized to manage the capital portion in Vietnam (for an organization);
• Written agreement in principle on capital contribution, purchasing shares, purchasing stakes between foreign investors and economic organizations in which foreign investors contribute capital, purchasing shares, purchasing stakes or between investors foreign investment with shareholders or members of that economic organization;
• A copy of the certificate of land use rights of an economic organization in which foreign investors contribute capital, purchasing shares, purchasing stakes, if such economic organization has a certificate of land use right in the island, commune, border wards and towns and coastal communes, wards and towns; Other areas affecting national defense and security, except for economic organizations implementing investment projects in industrial parks, export processing zones, hi-tech parks and economic zones established under the Government’s regulations.
• Power of Attorney for Viet An Law.

Place of application : Department of Planning and Investment where the economic organization’s head office is located.

Order and procedures:  If the foreign investor’s capital contribution, share purchase or stake meets the conditions on ownership ratio and investment form in accordance with the Schedule of Commitments and Vietnamese law, Within 15 days from the date of receipt of complete dossiers, the Department of Planning and Investment will notify in writing. In case the application does not meet the conditions, the Department of Planning and Investment will notify in writing and clearly state the reason.

Step 2: Carry out  procedures for transferring shares, stakes, changing shareholders, members, and owners.

Service to set up a company in Vietnam exercising the right to import with foreign investment of Viet An law firm

• Consulting on the conditions for establishing a foreign-invested company: capital contribution ratio of foreign investors in Vietnam; conditions for business lines; project implementation location; monitor the procedures before and after the establishment of a foreign-invested company;
• Consulting to choose the right type of company for investors: Limited Company or Joint Stock Company;
• Advice on opening a capital transfer account, capital contribution term;
• Consulting and guiding investors to prepare necessary documents to establish a foreign-invested company;
• Consulting, drafting company establishment documents for investors;
• Representing investors to work with competent Vietnamese state agencies in the process of carrying out the procedures for establishing a company for investors (Apply for Investment Registration Certificate, Enterprise Registration Certificate, Business Licenses, Licenses according to specialized requirements, making seals of legal entities, procedures after company establishment,…);
• Comprehensive, regular advice, accounting services, tax law package of activities arising in the process of doing business in Vietnam for investors.

If Client have any inquiries or demand for setting up a company in Vietnam exercising the right to import with foreign investment, don’t hestitate to contact us for the best support and advice!