Set up a company in Vietnam in vegetable oil processing

Vietnam has been the world leader in exporting many agricultural and aquatic products, which has a lot of potential to develop the food processing industry thanks to its rich source of raw materials and many unique specialties including the vegetable oil processing industry. Therefore, foreign investors establish a business company in the field with many advantages for development.

Legal basis

• WTO, FTAs, BIT Vietnam – Japan;
• Law on Investment 2020;
• Law on Enterprise 2020;
• Law on Food Safety 2010;
• Decree 17/2020/ND-CP amending the Decree related to business investment conditions in the field of state management of the Ministry of Industry and Trade;
• Decree 15/2018/ND-CP, amended and supplemented by Decree 155/2018/ND-CP and Decree 85/2019/ND-CP;
• Circular 43/2018/TT-BCT Regulations on food safety management under the responsibility of the Ministry of Industry and Trade, amended and supplemented by Circular 13/2020/TT-BCT.

Investment conditions of vegetable oil processing

According to WTO, FTAs

Not specified in the commitment schedule.

According to BIT Vietnam – Japan

• Investment projects in this field require the development of domestic raw materials. This restriction shall be removed for Japanese investors and investors no later than the date on which investors and investors of any third country are removed from this restriction, or the date on which the of Vietnam against any third country in this regard shall enter into force, whichever occurs first.

According to Vietnamese law:

• Having sufficient conditions to ensure food safety suitable to each type of food production and trading: Using food and food ingredients must have clear origins and ensure safety, and save food samples. must be processed to ensure safety and hygiene.
• Having registered the food business lines in the Business Registration Certificate.

To set up a company in Vietnam in vegetable oil processing, foreign investors have two options:

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

Method 1: Set up a company in Vietnam with foreign capital

Step 1: The investor applies for an Investment Registration Certificate

Dossiers include:

• A written request for implementation of an investment project;
• Documents on investor’s legal status: copy of citizen identification card or ID card or passport (if individual); a copy of the certificate of incorporation or equivalent document and the passport of the capital manager (if 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, time deadline, 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:

Enterprise establishment dossier includes:

• Application for business registration;
• Company rules;
• 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 identity card or citizen identification card or passport (if an individual); establishment decision, business registration certificate or equivalent document and citizen identification card or identity 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;

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

Duration: 03 – 06 working days.

Disclosure of business 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 business registration, the enterprise will be refunded the fee for announcing the business registration content.

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

Corporate 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 contributed capital 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

Dossiers include:

• A written registration for capital contribution, purchasing shares, stakes includes the following contents: information on business registration of the economic organization to which the foreign investor intends to contribute capital, purchase shares, stakes; 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, purchase of capital contribution to economic organizations; expected transaction value of the contract of capital contribution, purchasing shares, stakes; information on investment projects of economic organizations (if any);
• Copies of legal papers of individuals and organizations contributing capital, purchasing shares, stakes and economic organizations with foreign investors contributing capital, purchasing shares, stakes: Passport (if applicable) is an individual); Business license or equivalent document and Passport of the person authorized to manage the capital portion in Vietnam (if an organization);
• Written agreement in principle on capital contribution, purchasing shares, stakes between foreign investors and economic organizations in which foreign investors contribute capital, purchasing shares, 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, purchase shares, 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 capital contribution 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 and changing shareholders, members, and owners.

Apply for a Certificate of Food Safety

After being granted an Investment Registration Certificate, an Enterprise Registration Certificate to put into operation, investors need to apply for an additional Certificate of Food Safety Eligibility.

File:

• Application form (form 01a Appendix to Decree 17/2020/ND-CP)
• Certificate of business registration or Certificate of enterprise registration or Certificate of investment as prescribed by law (copy)
• An explanation of the facilities, equipment and tools to ensure food hygiene and safety conditions , made according to Form No. 02a (for production establishments), Form No. 02b (for business establishments) or both Form No. 02a and Form No. 02b (for both production and business establishments) in the Appendix issued together with Decree 17/2020/ND-CP;
• A list of general health, certified by the establishment’s owner, or a health certificate of the establishment’s owner and the person directly producing and trading food, issued by a district-level or higher-level health facility;
• Certificate of having been trained in food safety knowledge of the person directly producing and trading food, certified by the owner of the establishment.

Number of dossiers: 01 set.

Competent authority to issue:

• The Ministry of Industry and Trade shall grant certificates to vegetable oil processing establishments: From 50,000 tons of products/year or more;
• Provincial Department of Industry and Trade issues a Certificate for vegetable oil processing establishments: Under 50,000 tons of products/year.

Service to set up a company in Vietnam in vegetable oil processing of Viet An law firm

• Advising on the conditions for establishing a foreign-invested company: capital contribution ratio of foreign investors in Vietnam; conditions for business lines; project implementation location; pay attention to 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.