Some keynotes when setting up a company in Hanoi and Ho Chi Minh

Since joining the WTO in 2007, Vietnam has increasingly become a potential and vibrant market. Strong competition between domestic and foreign investors has created momentum for the economy to develop. In that context, establishing a suitable business model is an urgent need for both domestic and foreign investors. In this article, Viet An Law will provide preliminary information about some keynotes when setting up a company in Hanoi and Ho Chi Minh, especially for foreign investors.

Legal basis

• Law on Enterprise 2020;
• Law on Investment 2020;
• Decree 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Investment Law;
• Decree No. 01/2021/ND-CP on business registration;
• Circular 47/2019/TT-BTC regulates the rates, collection, payment, management and use of fees for providing business information and business registration fees;
• Decree 39/2018/ND-CP on guiding the Law on Support for Small and Medium Enterprises;
• Vietnam’s schedule of commitments on trade and services in the WTO.

Procedures for establishing a new company in Vietnam with 100% Vietnamese capital

Basically, for Vietnamese investors, when establishing a new enterprise with 100% Vietnamese capital, they will have to go through 5 main steps including:

• Step 1: Prepare information and documents to carry out company establishment procedures;
• Step 2: Prepare business establishment documents and submit application for Enterprise Registration Certificate;
• Step 3: Engraving the company seal;
• Step 4: Publication of the company’s seal;
• Step 5: Publish business registration information (formerly, posting a business establishment announcement).

However, you must take one more step to apply for a business license to be able to conduct business. Specifically, you Products can be looked up at Viet An’s website

In addition, after establishing a company, investors are also required to carry out a number of other procedures before starting business such as:

• Open a business bank account, notify the bank account to the Department of Planning and Investment;
• Submit license tax declaration and pay license tax;
• Making company signs:
• Buy electronic digital signatures to make electronic tax payments;
• Order printed invoices and print paper invoices or register to issue electronic invoices;
• And some other procedures according to the provisions of law.

Procedures for establishing a new foreign-invested enterprise in Vietnam

An enterprise will be considered foreign invested if it has capital contribution from 1% to 100% from foreign investors. A foreign investor is an individual with foreign nationality or an organization established under foreign law. If the investor has Vietnamese nationality and a nationality other than Vietnamese nationality, he or she can choose to apply the regulations to domestic or foreign investors. In other words, investors can choose to be treated as domestic investors or foreign investors.

For foreign investors, the procedure will basically include 6 steps as follows:

• Step 1: Prepare information and documents to carry out company establishment procedures;
• Step 2: Consider conditions for foreign investors;
• Step 3: Prepare investment registration documents and submit application for Investment Certificate;
• Step 4: Prepare business establishment documents and submit application for Business Registration Certificate;
• Step 5: Carve the company seal;
• Step 6: Announce the seal sample;
• Step 7: Announce business registration information (formerly, publish a business establishment announcement)

Thus, procedures for foreign investors will have steps: Consider conditions for investors in Vietnam’s commitments within the WTO and ASEAN frameworks as well as in multilateral and bilateral agreements. other (Step 2); and Register for investment registration certificate (Step 3). For the remaining steps, the procedure is basically the same as for opening a company with 100% Vietnamese capital as described above. Therefore, the following section will only delve deeper into the issue of considering conditions for foreign investors and applying for an investment registration certificate.

Consider conditions for foreign investors

In principle, foreign investors carrying out investment activities in Vietnam must not only comply with the provisions of Vietnamese law but also comply with international treaties to which Vietnam is a member. outside the subject of adjustment such as Vietnam’s commitments within the WTO framework, ASEAN Comprehensive Investment Agreement – ACIA (2009), ASEAN Framework Agreement on Services – AFAS. Accordingly, investment conditions for foreign investors are often regulated based on the following content: charter capital ownership ratio of foreign investors in economic organizations; investment form; scope of investment activities; Vietnamese partners participate in investment activities and a number of other conditions.

When applying investment conditions to foreign investors, attention should be paid to complying with the principles specified in Clause 2, Article 10 of Decree 31/2021/ND-CP guidance on implementing a number of articles of the Investment Law, specifically as follows:

• Foreign investors carrying out investment activities in different industries and occupations must meet all investment conditions for those industries and occupations;
• Foreign investors subject to international investment treaties with different provisions on investment conditions may choose to apply the investment conditions specified in one of those treaties. In case an international treaty has been chosen, the foreign investor shall exercise its rights and obligations according to the provisions of that international treaty;
• For service sectors and sub-sectors that have not yet committed or are not specified in Vietnam’s Schedule of Commitments in the WTO and other international investment treaties for which Vietnamese law has regulations on investment conditions for foreign investors, the provisions of Vietnamese law apply;
• Foreign investors in territories that are not WTO members conducting investment activities in Vietnam are subject to the same investment conditions as prescribed for investors in countries and territories that are WTO members, unless otherwise prescribed by law and international treaties between Vietnam and that country or territory;
• For service sectors and sub-sectors that have not yet committed or are not specified in Vietnam’s Schedule of Commitments in the WTO and other international investment treaties for which Vietnamese law does not have regulations on investment conditions for For foreign investors, the Investment Registration Authority consults with the Ministry of Planning and Investment and the related industry-managing ministries for consideration and decision;
• In cases where foreign investors have been allowed to carry out investment activities in uncommitted service sectors and sub-sectors and these service sectors and sub-sectors have been announced on the National Information Portal on Foreign Investment. In addition to regulations, the Investment Registration Authority shall consider and decide on investment activities of foreign investors in the same industry or occupation without having to consult the industry-managing ministries.

After searching, if the investor belongs to a conditional business line according to the provisions of Vietnamese law in Decree 09/2018/ND-CP, the investor must take the additional step of applying for a Business License so operations can be carried out.

Note:

• Japanese investors are subject to the same investment conditions as domestic investors, except for restrictions on industries and sub-sectors specified in Appendix I and II attached to the Agreement on Freedom, Promotion and Protection. Vietnamese – Japanese investment households;
• US investors investing in service sectors and sub-sectors may choose to apply the investment conditions specified in Vietnam’s Schedule of Commitments in the WTO or Chapter III, Appendix G of the Agreement on Vietnam Trade Relations – USA. For issues related to investment in the service sector that are not regulated in Chapter III, Appendix G of the Agreement on Vietnam-US Trade Relations, US investors are subject to the following investment conditions: invest as domestic investors, except for issues specified in Chapter IV Appendix H of the Agreement on Vietnam-US Trade Relations. US investors investing in non-service sectors are subject to the same investment conditions as domestic investors, except for issues specified in Chapter IV Appendix H of the Agreement on Vietnam Trade Relations. South – United States;
• Except in the case of choosing to apply the Free Trade Agreement between ASEAN and its partners or other international treaties on investment, investors from countries that are ASEAN members investing in service sectors and sub-sectors shall comply with provisions of the ASEAN Framework Agreement on Services. Investors from countries that are ASEAN members investing in manufacturing industries, sub-sectors, agriculture and forestry, fishery, mining and quarrying and services related to the above industries are subject to the following conditions: invest like domestic investors, except for some restrictions specified in Vietnam’s Reservation List in the ASEAN Comprehensive Investment Agreement.

Prepare investment registration documents and submit documents for Investment Registration Certificate

Documents include for foreign investors who are individuals:

• Document requesting implementation of investment project;
• Passport consular legalization, notarized translation;
• Proposing investment projects;
• Copy of the most recent 02 years of financial statements or commitment to financial support from the parent company or financial institution or guarantee of the investor’s financial capacity or documents explaining the investor’s financial capacity invest;
• Documents proving the company’s headquarters: House lease contract, Certified copy of the lessor’s real estate documents: Land use right certificate, Construction permit; If the lessor is a company: need to provide a copy of the business registration certificate with real estate business function;
• For projects that lease land from the state, additional submissions are required: Proposal for land use needs; In case the project does not request the State to allocate land, lease land, or allow change of land use purpose, submit a copy of the location lease agreement or other documents certifying that the investor has the right to use the location for implementation. current investment project;
• If the project uses technology on the list of technologies restricted from transfer, submit an explanation on technology use.

Documents for foreign investors who are organizations:

• Copy of Certificate of Establishment or other equivalent document certifying legal status for institutional investors;
• Investor’s most recent 2-year financial statements; commitment to financial support from the parent company; commitment to financial support from financial institutions; guarantee of the investor’s financial capacity; Documents explaining the investor’s financial capacity;
• Documents proving the company’s headquarters: House lease contract, Notarized copy of lessor’s real estate documents: Certificate of land use rights, Construction permit; If the lessor is a company: need to provide a copy of the business registration certificate with real estate business function;
• For projects that lease land from the state, additional submissions are required: Proposal for land use needs; In case the project does not request the State to allocate land, lease land, or allow change of land use purpose, submit a copy of the location lease agreement or other documents certifying that the investor has the right to use the location for implementation investment project;
• If the project uses technology on the list of technologies restricted from transfer, submit an explanation on technology use.

Location to submit application: Department of Planning and Investment where the headquarters is expected to be located.

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

Establishing new company in Hanoi and Ho Chi Minh City

Currently, Hanoi and Ho Chi Minh have provided online business registration services. However, while Ho Chi Minh provides level 4 public services, Hanoi only provides level 3 public services.

At level 3 public services, the service ensures full provision of information about processes and procedures; file; duration; service performance fees and charges; Allows users to download document and declaration samples to complete their records as required. Once completed, the dossier is sent directly, sent by post to the service providing agency or organization or sent online with document samples to the service providing agency or organization. Transactions in the process of processing documents and providing services are carried out in the network environment. Payment of fees (if any) and receipt of results are done directly at the agency or organization providing the service.

For level 4 public services, in addition to the features provided by level 3 public services, users can pay fees (if any) online. Returning results can be done online, sent directly or by mail to the user.

Therefore, if you want to establish an enterprise In Hanoi, customers can choose to register directly or register online via the website. Records are scanned and sent online to the competent authority. However, paying fees and receiving results must go directly to the state agency to be done. Therefore, online registration is still not complete and cannot be done 100% on the electronic website.

Unlike Hanoi, Ho Chi Minh has upgraded its services and provided public services to level 4 for users since January 2, 2014. In other words, customers can register and pay fees (if any) at home 100%, just need an internet connection and then receive and return application results at home.

Besides, since the end of 2016 until now, the City Department of Planning and Investment. Ho Chi Minh City has been providing 5-in-1 business registration services. That means businesses can carry out procedures for registering business establishments, disclosing business registration information, making seals and publicizing business registration. Announce stamp form, Open bank account and Register for social insurance in one application. Currently, the time to complete the above 5 procedures only takes a maximum of 3 working days, instead of 9 working days as before. However, in Hanoi, we are still moving towards learning and replicating this model to reduce the procedural burden for businesses.

Above is the consulting of Viet An Law about some keynotes when setting up a company in Hanoi and Ho Chi Minh. If customers have any questions, please contact Viet An Law for specific advice!