Establishing a foreign-invested company in Vietnam

What is foreign investment capital?

Foreign investment capital is money and other assets according to the provisions of civil law and international treaties to which the Socialist Republic of Vietnam is a member to carry out business investment activities, contributed by foreign investors or economic organizations with foreign investors.

What is a company with 100 foreign investment capital?

A 100% foreign-invested company is a company in which foreign investors who are members or shareholders hold 100% of the charter capital. A 100% foreign-invested company is an economic organization established and operating based on the provisions of the Law on Investment 2020, Law on Enterprises 2020 and guiding documents. At the same time, it is governed by international treaties to which Vietnam is a member.

Documents and procedures for establishing a foreign-invested enterprise, including:

1. A written request to carry out an investment project, including a commitment to bear all costs and risks if the project is not approved;
2. Documents on the investor’s legal status (Authenticated copy of the individual investor’s passport and a copy of the business license business, operating license of the investor or other equivalent documents confirming the investor’s legal status);
3. Documents proving the investor’s financial capacity include at least one of the following documents: the investor’s 02 most recent financial statements; commitment to financial support from the parent company; commitment to financial support from financial institutions; guarantee of the investor’s financial capacity; Other documents proving the investor’s financial capacity;
4. Investment project proposal includes the following main contents: investor or form of investor selection, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, implementation progress, information on current land use at the project location and proposed land use needs (if any), labor needs, proposals for investment incentives, impact, economic efficiency socio-economic status of the project, preliminary assessment of environmental impacts (if any) according to the provisions of law on environmental protection. (In case the construction law stipulates the preparation of a pre-feasibility study report, the investor may submit the pre-feasibility study report instead of the investment project proposal);
5. In case the investment project does not request the State to allocate land, lease land, or allow change of land use purpose, submit a copy of land use rights documents or other documents determining the right to use the location to carry out the initial project. investment;
6. Explanatory content on technology used in investment projects for projects subject to appraisal and consultation on technology according to the provisions of law on technology transfer;
7. Other documents related to investment projects, requirements on conditions and capacity of investors according to law (if any).
8. Request for issuance Business registration certificate;
9. Company charter appropriate to the type of business chosen;
10. List of shareholders, members and list of authorized representatives
11. Copy of citizen identification card or ID card or Passport of individual members: To verify the identity of participating individuals join.

Conditions for establishing a foreign invested company:

1. Conditions on Investor’s Nationality:

Foreign investors must come from countries that are members of the World Trade Organization (WTO) and can invest in forms such as business contracts, establishing a company with 100% foreign capital, establishing a joint venture company, or establishing a representative office/company branch in Vietnam.

2. Conditions for project development location and company headquarters:

Foreign consultants are not allowed to register a company with the goal of manufacturing the company if the project development location is located in offices or small residential houses and manufacturing companies when renting the company headquarters or renting a project development location outside the industrial park. Choosing a location that suits your business goals is very important in this process.

3. Conditions on financial capacity of the consultant:

Foreign consultants must present documents proving their primary capacity for the amount of capital expected to contribute to the project. This document can be confirmation of account balance, foreign bank guarantee or other documents. In addition, there need to be regulations on the total investment capital of the project and the duration of the sufficient investment capital.

4. Conditions on consultant experience:

Foreign consultants need to provide information about their business experience, especially in the field of the investment project under consideration. This experience can help regulators evaluate the ability to successfully implement a project.

5. Conditions on business lines and conditional investment fields:

Need to add according to regulations on business lines and conditional investment fields, specifically stipulated in Investment Law No. 61/2020/QH14, Decree 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Law on Investment 2020 and investment field titles. This may involve the application of industry- or business-specific regulations, limitations or requirements.

These conditions require careful preparation and strict legal regulations to establish a 100% foreign-owned company in Vietnam.