Recently in Vietnam, there are more and more foreign investors in search of business opportunities. By effective of the Law on Enterprise 2020, Vietnam has established a legal framework to regulate foreign investors’ participation in investment as well as the establishment of enterprises in Vietnam. Therefore, investments in Vietnam have been improved in a more positive direction. One of the places attracting strong investments in Vietnam is Ho Chi Minh city. This place has many high-tech areas and headquarters of foreign investors. For that reason, Viet An Law would like to provide a basic overview of the establishment of a 100% foreign capital company in Ho Chi Minh city.
Legal basis for setting up companies with 100% foreign capital in Vietnam
- WTO commitments;
- Investment Law 2020 and guiding documents;
- Enterprise Law 2020 and guiding documents;
- Specialized legal documents related to the investment sector;
- A trade agreement with foreign investor countries;
- Decree No. 09/2018/ND-CP detailing the Law on Commerce and Law on Foreign Trade Management regarding goods trading activities and activities directly related to the purchase and sale of goods by foreign investors. and foreign-invested economic organizations in Vietnam.
Parties for the establishment of companies with 100% foreign capital in Ho Chi Minh city.
Foreign investors shall carry out procedures for issuance of an investment certificate when establishing a 100% foreign capital company includes:
- Company has from 1% to 100% of the capital contributed by foreign investors when that company is established;
- Foreign capital company (the company has been granted an Investment Registration Certificate in Vietnam) continues to establish more economic organizations; capital contribution; purchase of shares or capital contributions of economic organizations; investments under a BCC contract in one of the following cases must go through the procedures for issuance of an investment certificate: New establishment of capital contribution from 1% to 100% of the company’s charter capital;
- In cases foreign investors contribute capital to buy shares in Vietnamese companies that already have an enterprise registration certificate, even when buying up to 100% of the company’s capital contribution), they are not required to carry out the procedures for issuance of the Investment Registration Certificate except for the company doing business in the field of education and training if a foreign investor buys from 1% of the capital contribution, it is also required to carry out the procedures for issuing an Investment Registration Certificate;
- For a company doing business in the field of retailing goods to consumers or setting up establishments to retail goods to consumers or setting up a retail establishment of goods, it is necessary to apply for a business license or establishment license of retailing;
- Regulations for a foreign capital company that was established before July 1, 2015: Foreign capital economic organizations that have been established in Vietnam, if there are new investment projects, are allowed to do, so the implementation of that investment project does not necessarily require the establishment of a new economic organization.
Procedures to establish a company with 100% foreign capital in Ho Chi Minh city
- Before applying for an investment registration certificate, the investors should declare information on the investment project online on the national foreign investment information system. Within 15 days from the date of online declaration, the investors shall apply for the Investment Registration Certificate to the Investment Registration Agency;
- After the application is received by the Investment Registration Agency, the investor is granted an account to access the National Foreign Investment Information System to monitor the application processing;
- The Investment Registration Agency uses the National Foreign Investment Information System to receive, process, and return the result of the investment registration dossier, update application processing, and grant investment project code.
Application for granting the Investment Registration Certificate for 100% foreign capital in Ho Chi Minh city
- A proposal for investment project implementation;
- Copy of ID card/citizenship card or passport for the individual investor; a copy of a certificate of incorporation or other documents confirming the legal status of the institutional investor;
- An investment project proposal includes the following contents: investor implementing the project, investment objectives, investment scale, investment capital, and capital raising plan, location, investment duration and proposal for investment incentives, assessment of the project’s socio-economic impact and efficiency;
- Copy of one of these following documents: financial statements of the last 2 years of the investor; commitment to the financial support of the headquarter company; commitment to the financial support of a financial institution; guarantees on investors’ financial capacity; documents explaining the financial capacity of the investor;
- Contract for the lease of company headquarters and the Red Book of the rental housing (notarized copy).
Besides, if enterprises use technology in certain business activities, or have a need to rent land from the State, it is required to submit the following additional documents:
- Proposal land use demand; in case the project does not request the State to allocate land, rent land, or permit the change of land use to propose, submit a copy of the rental agreement or other documents certifying that the investor has the right to use the area for investment project;
- Explanation on the use of technology for investment projects, for projects using technologies on the List of technologies restricted from transfer under the law on technology transfer, including the following contents: name of technology, the origin of technology, technology process diagram; main specifications, usage status of main machines, equipment, and technological lines;
- Within 15 days from the date of receiving the application will be completed.
Application for the Enterprise Registration Certificate includes:
- Copy of the Investment Registration Certificate;
- An application form for enterprise registration;
- A draft charter of the enterprise;
- List of members for two-member limited liability companies; founding shareholders for joint-stock companies;
- A valid copy of ID card, passport (for individuals); business registration certificate and certificate of authorized representative (for organizations); capital contribution decisions for company members, institutional shareholders of the company; power of attorney.
Service of establishing a company with 100% foreign capital in Ho Chi Minh city by Viet An Law:
- Counseling on the conditions for establishing foreign-invested companies for investors according to each specific business field or investor’s nationality;
- Advisory on the ratio of foreign investors’ capital contribution in Vietnam following Vietnamese laws and WTO commitments;
- Counseling on choosing the right company type for investors;
- Counseling on conditions, guiding investors to prepare necessary documents to establish foreign-invested companies;
- Consulting to draft company establishment documents for investors;
- The investor’s representative works with the Vietnamese authorities in the process of establishing the enterprise for the investor;
- Comprehensive consulting on activities arising in the process of doing business in Vietnam.