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:
(i) The essence of the establishment of a foreign owned company lies in the “YIINH” of the investor
(ii) When investing in Vietnam, they approach quickly or follow slowly
Quick access: Investor will Prepare capital, investment industry (ideas), human resources, and headquarter location
If you do not understand, ask a reputable lawyer.
Approach slowly: Ask, or invest by “OPEN REP OFFICE” then, depending on the results, decide whether to invest or not.
No matter how investors do it, they need to read through to understand and find the right direction
(because it is the law and practice)
Find out what? Prepare the industry to be invested, capital, and location in order
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 ?

– The investor chooses the investment sector because each industry will be clearly 
specified in the WTO commitments and then further study the Specialized Law 
(for example, the real estate business must have 20 billion VND) to know the option. 
Exact and requires investment.
– After selecting the business lines, switch to choose the type of investment
– The usual type of investment would be Establishment of a limited company 
(One member and 2-50 members) or Joint Stock Company.

Select the type of company to establish

Normally, there are three main types of selection of the form of company establishment 
with foreign capital in Vietnam
1. One Member LLC (For 1 individual investor or 1 investment organization)
2. Company Limited 2-50 Members (List for 2 or more individuals or 2 organizations or 
more or 1 individual + 1 organization)
3. Joint Stock Company has 3 or more shareholders (List for 3 individuals or more or 3 organizations or 
more or 1 individual + 2 organizations …)

Established a limited liability company with 100 foreign investment capital

- Establishment of One Member LLC
- Establishment of a two-member limited liability company
- Establishment of a limited liability company with two or more members
1. A limited liability company with two or more members is an enterprise with 2 
to 50 members being organizations or individuals. Members are responsible for 
the debts and other liabilities of the enterprise up to the amount of capital 
contributed to the enterprise, except for the case specified in Clause 4, 
Article 47 of this Law. The members’ contributed capital amounts may only 
be transferred in accordance with Articles 51, 52 and 53 of this Law.
2. A limited liability company with two or more members has the legal status 
from the date of being granted the Enterprise Registration Certificate.
3. A limited liability company with two or more members may not issue shares, 
except for the case to be converted into a joint stock company.
4. Limited liability companies with two or more members may issue bonds in 
accordance with this Law and other relevant laws; The private issuance of 
bonds must comply with Articles 128 and 129 of this Law.
Article 74. One member limited liability companies
1. One member limited liability company is an enterprise owned by an organization 
or individual (hereinafter referred to as the company owner). The company owner 
is responsible for the debts and other liabilities of the company to the extent 
of the company’s charter capital.
2. One member limited liability company has the legal status from the date of 
being granted the Enterprise Registration Certificate.
3. A single member limited liability company may not issue shares, except for 
the case to be converted into a joint stock company.
4. One member limited liability company may issue bonds in accordance with 
this Law and other relevant laws; private bond issuance under Articles 128 and 129 of this Law.
Article 111. Joint-stock companies
1. A joint stock company is an enterprise in which:
a) The charter capital is divided into equal parts called shares;
b) Shareholders can be organizations or individuals; the minimum number of shareholders is 
03 and the maximum number is not limited;
c) Shareholders are only responsible for the debts and other liabilities of the enterprise 
up to the amount of capital contributed to the enterprise;
d) Shareholders have the right to freely assign their shares to others, except for the cases 
specified in Clause 3, Article 120 and Clause 1, Article 127 of this Law.
2. A joint-stock company has a legal status from the date of being granted the Enterprise 
Registration Certificate.
3. A joint stock company has the right to issue shares, bonds and other securities of the company.

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)
For a Business License (BL) LHD Law Firm please guide the basic documents required
first. Application file for Business License (Business License)
The addition of goods sale and purchase objectives and activities directly related to 
the purchase and sale of goods is an 
adjustment of the enterprise’s operational objectives, the dossier includes:
2. Investment project appraisal dossiers comply with the Government’s Decree 
No. 108/2006 / ND-CP of September 22, 2006, guiding the implementation of a number of 
articles of the Investment Law.
An application for a business license under the provisions of Circular No. 09/2007 / TT-BTM should include:
a) An application form for a business license, made according to form MD-1 enclosed 
with Circular No. 09/2007 / TT-BTM;
b) Statement of compliance with the business lawsuit. The content of the justification for 
the satisfaction of business conditions is in the Appendix attached to this Official Letter;
c) The registration of contents of goods sale and purchase and activities directly related to 
the sale and purchase of goods: clearly stating the form of operation is wholesaling, retailing, setting up retail establishments of groups of goods. chemistry; commercial advertising; commercial inspection …
In case the project is not associated with the investment in the construction of facilities 
(not associated with the construction of factories, installation of machinery and equipment 
for production), it is now requested to supplement the purchase and sale of goods and For 
activities directly related to the purchase and sale of goods, in addition to the documents 
mentioned in items 1 and 2 above, it is necessary to supplement documents on legal entities 
or relevant papers to prove the owner’s capacity and experience. investment in realizing operational goals.
 
Note where the license is for the correct authority
– The Investment Certificate is appraised and issued by the Investment Department 
of the Provincial Department of Planning and Investment
– The Business Registration Certificate is appraised and issued by the Department 
of Domestic Enterprises of the Department of Planning and Investment
– Business license issued by the Department of Industry and Trade

The process of establishing a company with foreign investment

Step 1: Register investment policy with the People’s Committee of the province

A foreign investor, when entering Vietnam to invest in a project, must apply for 
an investment registration certificate. However, before applying for an investment 
registration certificate, in some cases the investor must register for an investment 
policy with the Provincial People’s Committee (The first process in the setting up a foreign capital company)
Foreign-invested company registration dossier
The legal documents for the establishment of a foreign-invested company in Vietnam 
exclusively for individuals and organizations are as follows:
☑ Individuals are foreign investors
For individuals there are 3 types of important documents
Passport
Office lease contract
Bank confirmation with an amount similar to the Charter capital invested in Vietnam.
The organization is a foreign investor
For organizations, there are the following 5 types of documents
Business registration certificate
Operation charter of foreign company (m & a)
Note: These two documents must be consularly legalized when brought to Vietnam for use
Profitable financial statements or Bank confirmation equal to the amount intended to invest in Vietnam.
Lease contract based in Vietnam
Decision on appointment of legal representative for enterprises in Vietnam.
The above are the basic conditions for establishing a company with foreign members.
☑ Time to establish a company with foreign capital
For investment projects not subject to investment policy decision: 15 – 20 working days from the date 
of receipt of complete application.
For an investment project subject to investment policy decision: 05 – 10 working days from the date 
of receipt of the decision on investment policy.
 

NOTE

– POLICY OF THIS PROJECT PLEASE ONLY APPLY TO OTHER PROVINCES AND CITIES
(EXCEPT HO CHI MINH CITY AND HANOI, DO NOT APPLY)
– LAW ON INVESTMENT IN 2020, REQUIREMENTS TO CONSULT WITH THE MINISTRY OF DEPARTMENT OF
LOCATION (EXCEPT THE TRAVEL OF OFFICE OF A FOREIGN INVESTOR CAPITAL)

Step 2: Issue the Investment Registration Certificate (IRC)

Application for business registration.
Company rules.
List of founding shareholders and shareholders being foreign investors 
(list of authorized representatives, if any)
Copies of the following documents:
Passport or other legal personal identification of members who are individuals;
Certificate of business registration (ERC)
If the member is a foreign organization, the copy of the Certificate of Business 
registration or an equivalent document must be consularly legalized;
This step is very important, so you can get a blue paper (IRC) INVESTMENT CERTIFICATE (WHITE PAPER)

Step 3: Issue the business registration certificate (ERC)

After the decision on the policy of the Provincial People’s Committee proceeds to 
register the company establishment
This step includes REGISTRATION OF BUSINESS CERTIFICATE ⇒ YELLOW PAPER (ERC)
Time to apply for ERC is 5 working days.

Step 4: Post the report on the incorporation of a foreign owned company

After being granted an enterprise registration certificate, an enterprise must make a 
public announcement on the National Business Registration Portal according to the order 
and procedures and pay fees according to regulations.
The contents of the announcement include the contents of an Enterprise Registration 
Certificate and the following information:
☑ Lines of business;
List of founding shareholders and shareholders who are foreign investors to a joint stock company.
Implementing agency: Reporting section of the Business Registration Authority

Step 5: Engrave the seal of the foreign capital enterprise

After obtaining the business registration certificate and publishing the enterprise establishment announcement. 
The enterprise proceeds to engrave seal at one of the licensed seal making units. Enterprises decide by themselves
the number and the form of the seal within the scope of the law.

Step 6: Open a bank account (payment account) and declare the original

tax invoice issue.

1. Declaration and payment of License fees
License fee is declared once when the new fee payers start their business activities, 
no later than the last day of the month of commencement of production and business activities.
If the fee payer has just established the business but has not yet engaged in production and business, 
the license fee must be declared within 30 days from the date of issuance of the business registration 
certificate or the date of issuance of the certificate. receive investment registration and tax registration.
The deadline for paying license fees when starting a business is the last day of the deadline for filing a 
fee declaration dossier.
License tax declaration dossiers are license fee declarations.
After being put into operation, the enterprise shall annually pay the license fee no later than 
January 30 every year.2. Notice of application of value added tax calculation method (Form 06 / GTGT)
(Note on Form 06 / GTGT from November 5, 2017, enterprises are not required to submit Form 06 / GTGT to 
register and convert VAT calculation method. 2017 / TT-BTC dated September 19, 2017 by the Ministry of Finance.)
There are two methods of calculating VAT: the deduction method (using VAT invoices) and the direct method 
(using sales invoices).
In order to apply the deduction method, the enterprise must notify the tax authority according to form 06 / GTGT; Deadline
for submission of Form 06 / GTGT before deadline for submission of first tax declaration arises.
Form 06 / VAT
3. Notice of the use of tax agent services (if any)
If a taxpayer uses tax procedures through a tax agent, he / she shall notify the direct managing agency in 
writing together with a photocopy of the service contract with the taxpayer’s confirmation within 05 working days.
before the tax agent performs the tax procedures stated in the contract for the first time.
4. Register for a personal tax code
Enterprises are obliged to withhold personal income tax when paying income from salaries and wages to employees 
and register tax codes for employees (if the employees do not have a tax code). .
Individuals earning income from salaries or wages shall authorize through the income-paying unit to carry out 
procedures for tax registration and dependent registration with tax offices.
 
5. Register for electronic transactions with tax authorities
Ho Chi Minh City is an area with full information technology infrastructure, so businesses established in the 
city must declare tax online and pay taxes electronically.
When having a public digital signature, the enterprise will conduct online tax declaration and electronic tax 
payment at: http://nhantokhai.gdt.gov.vn/

Step 7: Open a capital account and transfer money to contribute capital

(This step is very important)

Regulations on capital accounts of foreign investors are specified in Circular 05/2014 / TT-NHNN dated 12/03/2014 
of the State Bank guiding the opening and use of capital accounts for indirect investment. to implement foreign 
indirect investment activities in Vietnam and Circular 19/2014 / TT-NHNN dated 11/08/2014 of the State Bank 
guiding foreign exchange management for direct investment activities foreign countries entering Vietnam.
1. The Company proceeds TO OPEN THE CAPITAL ACCOUNT (Note Clearly the Bank About the Capital Account)
2. Transferring capital contribution to the CAPITAL ACCOUNT → MUST BE TRANSFER FROM ABOVE INTO VIETNAM
3. Notify DPI that the COMPANY has contributed FULL AND Punctual Capital (PENALTY)
 
NOTE: OTHER NOTES
1. ENFORCEMENT OF INSURANCE FOR EMPLOYEES
2. PROCEDURE FOR APPLYING WORK PERMIT (WORK PERMIT) FOR FOREIGNERS
3. MONTHLY TAX REPORT PROCEDURE
4. FOREIGN COMPANIES MUST BE AUDITED EVERY YEAR
☑ 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
5. Industry training
– Registered capital from 20,000 USD or more
– Individuals or companies meet the criteria for registration
– Need to consult the Ministry of Education and local site planning
6. Construction industry, architecture
– Registered capital from 10,000 USD or more
– Individuals or companies meet the criteria for registration
– Ask for more comments from the construction ministry
7. Industry of production
– Registered capital from 10,000 USD or more
– Individuals or companies meet the criteria for registration
– Ask for more comments on the production location
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 ....

Barriers to investing in Vietnam are we support investors

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 the best service, 
with a team of experienced lawyers, you completely trust luatvn hotline. / zalo: 0763387788

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