Establish a foreign owned company in Vietnam

Establishing a Foreign-Invested Company in accordance with the Investment Law of 2021,

Investors need to prepare the following steps:
Step 1: Prepare capital to open the company.
Step 2: Name the company.
Step 3: Choose the type of company.
Step 4: Select the address of the company.
Step 5: Choose your legal representative.
Step 6: Choose your business line.

To Establish a company with foreign capital under the Investment Law of 2020
What is the Expat most concerned about? Core Conditions, Type of establishment
Company Limited or Joint Stock Company, Process,
Procedures necessary for foreign investors when starting business in Vietnam …

Establishment of a foreign-invested company is a mandatory legal procedure when foreign investors
(Expat) invest in Vietnam ⇒ Under the new investment law 2020 effective January 1 In 2021,
investors can contribute indirectly capital to a Vietnamese company,
contribute capital to buy shares from 1-99% or set up a limited liability company
(LLc) or Share with 100 foreign capital in Vietnam.
→ Foreign invested company is defined under the Law on Enterprises and the
Law on Investment means a company established by a foreign investor to
carry out investment activities in Vietnam or a Vietnamese enterprise by
Foreign investors buy shares, merge, acquire …

Foreign investors can make direct investment in Vietnam through the form
of contributing one hundred percent (100%) of the capital of foreign investors
or establishing joint ventures between domestic and foreign investors.
Investment under contract forms: BCC, BO, BTO, BT …

Notes when establishing a foreign owned company in Vietnam

1. What industry is expected to do business in Vietnam?

2. Where is the location located? Vietnam (Hanoi, Ho Chi Minh, Da Nang ...)

3. What is the investor's nationality?

4. Charter capital Establish a foreign owned company?

5. Invest as an individual or a company in Vietnam?

Steps of establishment of foreign owned companies in Vietnam

Especially in 2021, Vietnam has a lot of changes in investment procedures and 
"Establish a foreign invested company in Vietnam", here are 8 important steps:

1. Allowing foreign ownership to own 1-100% capital in Vietnam.
2. Minimum capital requirement of 20,000 USD or more
3. The registered address must have a legal lease contract
4. The resident director can be either a foreigner or a Vietnamese person
5. An investment license (IRC) is required
6. Certificate of Business Registration (ERC) issued like a Vietnamese company
7. Tax registration and tax payment for business licenses like Vietnamese companies
8. Contribute capital within the prescribed time limit after opening a capital account.

Note:

Understand the provisions of the law
Find out the type of investment

Find out when the project profile is to be completed

Learn consultant experience

Legal basis for company establishment with foreign investment

. Law on Investment of the National Assembly of the Socialist Republic of Vietnam No.
59/2005 / QH11 dated November 29, 2005
. Law on Bidding of the National Assembly of the Socialist Republic of Vietnam No.
61/2005 / QH11 dated November 29, 2005
. Enterprise Law of the National Assembly of the Socialist Republic of Vietnam No.
60/2005 / QH11 dated November 29, 2005
. Law No. 14/2008 / QH12 dated June 3, 2008 of the XIIth National Assembly of the
Socialist Republic of Vietnam on corporate income tax.
. Decree No. 87/2010 / ND-CP dated August 13, 2010 detailing the implementation of
a number of articles of the Law on Import Tax and Export Tax.
. Decree No. 80/2010 / ND-CP dated July 14, 2010 of the Government on regulations
on foreign cooperation and investment in science and technology.

. Decree No. 61/2010 / ND-CP dated June 4, 2010 of the Government on policies to
encourage enterprises to invest in agriculture and rural areas.
. Decree No. 62/2010 / ND-CP dated June 4, 2010 of the Government amending and
supplementing a number of articles of the Government’s Decree No.
53/2007 / ND-CP dated April 4, 2007 sanction administrative violations
in the field of planning and investment.
. Decree No. 43/2010 / ND-CP dated April 15, 2010 of the Government on business registration.
. Decree No. 115/2009 / ND-CP dated December 24, 2009 of the Government
amending and supplementing a number of articles of Decree No. 48/2000 / ND-CP
detailing the implementation of the Petroleum Law and Bidding mechanism for
oil and gas exploration and exploitation projects, issued together with Decree No. 34/2001 / ND-CP.
. Decree No. 113/2009 / ND-CP dated December 15, 2009 of the Government on
supervision and evaluation of investment.
. Decree No. 108/2009 / ND-CP dated November 27, 2009 of the Government on
investment in the form of Build – Operate – Transfer, Build – Transfer – Operate,
and Build Contracts Construction – Transfer.

. Decree No. 107/2009 / ND-CP dated November 26, 2009 of the Government on trading liquefied petroleum gas.
. Decree No. 103/2009 / ND-CP dated November 6, 2009 of the Government promulgating
the Regulation on cultural activities and provision of public cultural services.
. Decree No. 91/2009 / ND-CP dated October 21, 2009 of the Government on business
and business conditions for transport by car.
. Circular No. 131/2010 / TT-BTC dated September 6, 2010 of the Minister of Finance
guiding the implementation of the Regulation on capital contribution and share
purchase of foreign investors in Vietnamese enterprises.
. Circular No. 17/2010 / TT-BKH dated July 22, 2010 of the Minister of Planning
and Investment on detailed regulations on pilot online bidding.
. Circular No. 14/2010 / TT-BKH dated June 4, 2010 of the Minister of Planning
and Investment guiding a number of contents on dossiers, order and procedures
for enterprise registration according to the provisions of the above.
Decree No. 43/2010 / ND-CP dated April 15, 2010 of the Government on enterprise registration.

. WTO commitments
. Enterprise Law 2020 takes effect from January 1, 2021.
. Law on Investment 2020 takes effect from January 1, 2021.

. EVFTA - Free trade agreement between Vietnam and the 
European Union

Hiểu thế nào cho đúng ?

- Establishment of One Member LLC
- Establishment of a two-member limited liability company
- Establishment of a limited liability company with two or more members

What types of licenses are required when establishing a

foreign-owned company in Vietnam.

- Please advocate the Provincial People's Committee (except for cities under central government)
- Investment certificate (IRC)
- Certificate of business registration (PAPER) (ERC)
- Business License (Business License) → (If there is a retail establishment)

This step is very important, so you can get a blue paper (IRC) INVESTMENT CERTIFICATE (WHITE PAPER)

☑ CONDITIONS AND COSTS FOR ESTABLISHING 9 HOT FIELDS IN 2020
1. Industry import and export
- Registered capital 50,000 USD or more.
- Individuals or companies meet the criteria for registration
2. Industry management consulting, investment
- Registered capital from 10,000 USD or more
- Individuals or companies meet the criteria for registration
3. Industry distribution, retail
- Required capital is from 200,000 USD or more
- The company / organization will better meet the conditions for establishment licensing
4. The profession of restaurants, cafes
- Registered capital from 10,000 USD or more
- Individuals or companies meet the criteria for registration
- Ask for a location for a restaurant or cafe

8. Real estate business
- Registered capital from 1,000,000 USD or more
- Individuals or companies meet the criteria for registration
- Project required before inception ....

9. Education and training
- Unlimited registered capital
- Individuals or companies meet the criteria for registration
- Project required before inception ....

Vietnam is seen as an attractive investment destination ...
However, foreign investors who are about to do business in Vietnam should consider the 10 
biggest barriers 
when investing in Vietnam as follows.
First, according to Vietnamese law, there are investment conditions for foreign investors. 
The Investment Law 2014 lists 267 conditional investment areas in Annex 1, which are detailed in 
sector-specific laws or in international commitments, such as WTO commitments. Accordingly, 
there are restrictions on foreign investors investing in Vietnam.
Second, foreign investors may be subject to a number of taxes, namely corporate income tax, 
value-added tax, 
excise tax and import-export tax. Taxes are one of the most cumbersome business processes in 
Vietnam as it 
requires considerable time and money from foreign investors.

Third, applying for a work permit for foreign employees in Vietnam can be hard work. In general, foreign 
employees working for more than 3 months are required to have a work permit. 
It is the employers responsible for these procedures. 
There are pre-employment procedures that require employers to submit annual reports 
proving their need for foreign employees. The term of a work permit lasts only two years. After that, there 
will be conditions to receive license renewal again.

Fourth, intellectual property protection can be a worrying issue when foreign investors target investment in 
Vietnam. Vietnam has access to various international treaties related to intellectual property. In addition, 
under Vietnamese law, a wide range of intellectual property rights including copyrights, trademarks, 
industrial designs and inventions are recognized and protected. In practice, 
infringement of intellectual property rights 
occurs frequently, and the procedures needed to protect foreign investors'
rights to intellectual property can be extremely laborious.

Fifth, the new Competition Law 2018 coming into effect on 1 July 2019 clearly broadens its scope 
by including 
all practices that have or may have an anti-competitive effect in the market. Vietnam. 
Compared with the old law, there have been many changes, especially foreign investors investing
 in Vietnam. Therefore, foreign investors doing business in Vietnam should pay attention to this issue
 in order not to violate the law.

Sixth, obtaining a building permit in Vietnam is not easy. Foreign investors have to work with various 
authorities, such as the Department of Construction, the Department of Fire Protection, the Department of 
Natural Resources and the Environment and the City.

Seventhly, Vietnam's finance and banking industry is still closely controlled. 
Foreign investors cannot set up 
a finance company in the form of a joint stock company through investment in Vietnam. In addition, 
a foreign investor buying shares of a limited liability finance company cannot be a strategic shareholder, 
owner or founding member of any other credit institution in Vietnam.

Eighth, naturalization rights in Vietnam are limited. According to the Vietnamese Constitution, 
all land is the property of all Vietnamese people.

Ninth, sustainable development is gradually raising public interest. 
The Government of Vietnam is developing a law on environmental protection. 
The foreign investors are responsible for more activities, such as implementing environmental 
protection measures in the manner outlined in their environmental impact assessment 
report or environmental protection plan. 
All major investment projects require an approved environmental impact 
assessment report increasing the effort from foreign investors.

Tenth (last), when disputes arise from investment projects in the process of investing in Vietnam, 
questions about governing laws and dispute resolution forums often discourage foreign investors.
 heart. Good choice can have a big impact on their situation. Fortunately, 
foreign investors can call for the help of a law firm in all of the above.

If you still have questions, please contact us for a free consultation, we always bring you 
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