Notes on setting up a foreign-owned company

In recent years, the amount of foreign direct investment capital flowing into the Vietnamese market has continuously increased. According to the latest announcement of the Ministry of Planning and Investment, as of December 20, 2019, the total newly registered capital, adjusted and contributed capital to buy shares by foreign investors is 38.02 billion USD, calculated Accumulated up to this time, the whole country has 30,827 valid projects with a total registered capital of 362.58 billion USD. These statistics have partly shown that Vietnam is gradually becoming a bright spot to attract new investment in the Southeast Asian market. Notes on setting up a foreign-owned company ?
One of the factors that attract many foreign investors, including the mechanism and investment incentive policies in economic sectors, are issued at the right time, suitable to each period and the context of the economy. economy. Accordingly, foreign investors need to be aware of new regulations and investment incentives when investing in Vietnam in order to limit encountering problems in legal procedures, licenses and permits. necessary for its business.

Forms of establishment of foreign-invested companies in Vietnam

Foreign investors are individuals with foreign nationality or organizations established under foreign laws:
  • Investment to establish a company with foreign capital in Vietnam.
  • Investment in the form of capital contribution, purchase of shares, capital contribution from Vietnamese companies.
Note: Foreign investors are allowed to own unlimited charter capital in economic organizations, except for the cases prescribed by the law on securities and the law on equitization and transformation of state-owned enterprises. . At the same time, it must comply with the conditions on investment form, scope of activities, Vietnamese partners participating in investment activities and other conditions under the provisions of international treaties to which Vietnam is a member.

Procedures for setting up a company with foreign capital in Vietnam

According to the provisions of Article 44, Decree 118/2015 Guiding the implementation of the Investment Law 2014, foreign investors need to carry out the procedures for applying for an Investment Registration Certificate in Vietnam before establishing an enterprise. .

Procedures for issuance of Investment Registration Certificate

According to Article 36 of the 2014 Investment Law, detailing cases where an Investment Registration Certificate is required and not required, specifically as follows:

Investment cases requiring an Investment Registration Certificate

  • Investment projects of foreign investors;
  • Investment projects of economic organizations: Economic organizations must satisfy the conditions and carry out investment procedures as prescribed for foreign investors when investing in establishing economic organizations; investment, capital contribution, purchase of shares and contributed capital of economic organizations; investment under a BCC contract in one of the following cases:
  • There are foreign investors holding 51% or more of the charter capital or the majority of general partners are foreign individuals, for economic organizations that are partnerships;
  • Having an economic organization specified in Section 1 holding 51% or more of its charter capital;
  • Foreign investors and economic organizations specified in Section 1 hold 51% or more of charter capital.

Investment cases that do not have to carry out the procedures for issuance of an Investment Registration Certificate

  • Investment projects of domestic investors;
  • Investment projects of foreign-invested economic organizations (not in the case of investment requiring an investment certificate) comply with the investment conditions and procedures prescribed for domestic investors when invest in the establishment of economic organizations; investment in the form of capital contribution, purchase of shares or capital contributions of economic organizations; investment in the form of BCC contract.
  • After being granted an Investment Registration Certificate, investors need to prepare documents to set up a business.
  • For an investment project subject to an investment policy decision, the investment registration authority shall issue an investment registration certificate to the investor within 5 working days from the date of receipt of the written decision on investment policy. investment.

Procedures for issuance of an Enterprise Registration Certificate after the issuance of an Investment Registration Certificate

  • Documents to be prepared:
  • Business registration application form;
  • Charter of the company;
  • List of members or List of founding shareholders and shareholders being foreign investors;
  • Copies of the following documents:
  • Citizen identification cards, people’s identity cards, passports or other lawful personal identification of members or founding shareholders, shareholders being foreign investors are individuals;
  • Establishment decision, business registration certificate or other equivalent documents of the organization and power of attorney; Citizen’s identity card, people’s identity card, passport or other lawful personal identification of the authorized representative of the member being an organization;
  • For a member being a foreign organization, a copy of the Certificate of Business Registration or an equivalent document must be consularly legalized;
  • Investment registration certificates for foreign investors have been granted in accordance with the Law on Investment.
  • Implementation time: 05-07 working days
  • Place of implementation: Business registration office where the enterprise’s head office is located

10 Notes on setting up a foreign-owned company

When investing to establish a foreign-invested company in Vietnam, foreign investors need to learn and hire an experienced local lawyer to consult thoroughly to learn and well implement the regulations. of Vietnam, the necessary legal procedures, in which, special attention should be paid to the following 10 points:

Firstly, in the field of business investment

Based on the scope of commitments to open the market in Vietnam, the need to establish a foreign-owned company in Vietnam and the investment ability, foreign investors should choose investment fields/industries. investment profession necessary and sufficient for implementation; it is best to invest in sectors/industries that have been clearly committed by Vietnam in bilateral or/and multilateral international treaties to avoid the risk of being rejected when registering trades and fields. not yet open to the market.
Each investment field/business line is associated with the requirements for the corresponding amount of feasible investment capital for implementation, the corresponding specific investment conditions/business license if it belongs to the list of industries. conditional business. Therefore, the elimination of unregistered business lines that are not or are not really necessary will help investors save maximum time and costs to carry out arising legal procedures as well as obtain most convenient when registering and implementing business investment activities in Vietnam.

Second, about Investors

Foreign investors investing in Vietnam can be individuals (also known as entrepreneurs) or foreign companies. Most of the normal investment and business lines that have been fully opened by Vietnam are regulated to allow investors to be individuals or to set up foreign capital companies in Vietnam, unlimited. as an individual or corporate investor. However, there are still some business lines with special conditions that have specific investment requirements in terms of investment status must be individuals or companies, which can be determined through a combination of investment conditions. for all sectors/industries registered for investment on the basis of Vietnam’s commitment to market opening and the provisions of Vietnamese law, if any.

Third, about Investment capital, Charter capital to establish a foreign company in Vietnam

Currently, Vietnam’s market-opening commitments and Vietnamese law only stipulate the investment limit conditions of projects to establish foreign-invested companies in certain fields such as education, business, etc. real estate business, travel, payment intermediary, ….; For the rest of other normal business lines, there are no regulations on investment limits, investors only need to ensure the feasibility of the amount of investment capital commensurate with the scope and scale of the project. In order to determine the appropriate amount of investment capital and charter capital, Investors need to determine the sum of investment limit conditions, if any, for all investment fields/lines, if any, and a plan.
Specific financial planning ensures feasibility when implementing the project, avoiding registration too little, leading to many adjustments, which is time consuming and costly. The experienced lawyers of Luatvn.vn Law can help Investors estimate a reasonable minimum number so that Investors have an easier basis when determining the total investment capital and charter capital to be registered. sign.

Fourth, about the contribution of investment capital and charter capital after the establishment of a foreign-owned company in Vietnam

It should be noted that the contribution of investment capital and charter capital must comply with the registered deadline shown on the Investment Registration Certificate, the company’s charter and Vietnamese law. Accordingly, it should be noted that the time limit for investors to contribute investment capital and to contribute the Company’s charter capital in Vietnam (for both limited liability companies and joint stock companies) is posted by the Investors. for a period not exceeding 90 days from the date of issuance of the Certificate of Business Registration.
Investors will have to contribute investment capital via wire transfer to an investment capital account opened by a foreign-invested company in Vietnam as required/instructed by the State Bank of Vietnam. The deadlines and procedures for investment capital contribution will be advised and guided by the lawyers of Luatvn.vn Law.

Fifth, about choosing an investment location and establishing a company

Investors should choose investment locations, establish foreign capital companies in Vietnam with clear addresses; select a lessor with sufficient documents to prove ownership or/and the right to lease/sublease if any; The place/office for lease is permitted for lease, designed and built in accordance with Vietnamese law, and is not in dispute. The leased office needs to be in the area designed and built to serve the office function on the basis of which the construction permit has been granted by the competent state agency of Vietnam. Lawyers of  Luatvn.vn Law will advise and assist Investors in choosing a suitable investment location and meeting the conditions if any to register an investment project.

Sixth, about using the company’s seal

Companies with foreign capital may use the company’s seal. Specifically, a foreign-invested company in Vietnam has the right to decide on the form, content and number of seals, and may have many seals with the same form and content. Notes on setting up a foreign-owned company ?

Seventh, about employer

Foreign capital companies in Vietnam may hire foreign or Vietnamese workers to work at the Company. However, if there is a foreign worker, the Company must carry out the procedures to apply for Visa, apply for approval to use foreign workers, work permit, temporary residence card according to the following conditions and procedures. customs prescribed by Vietnamese law.

Eighth, about the legal representative

The legal representative of the Company in Vietnam is an individual representing the company to exercise rights and obligations arising from the company’s transactions, representing the company as a plaintiff, defendant, persons with related rights and obligations before the Arbitration, Court and other rights and obligations as prescribed by law. Limited liability companies and joint stock companies in Vietnam may have one or more legal representatives. The company must ensure that there is always at least one legal representative residing in Vietnam.
In case the Company has only one legal representative, that person must reside in Vietnam and authorize in writing another person to perform the rights and obligations of the legal representative when leaving Vietnam. Male. In this case, the legal representative is still responsible for the performance of the authorized rights and obligations.

Ninth, on the implementation of tax obligations

Every year, each company in Vietnam will have to pay a license fee (from 2 to 3 million VND depending on the registered charter capital); enterprise income must be paid when there is a profit; declare and pay value added tax. Depending on the business and investment industry, companies in Vietnam may also have to pay taxes such as export tax, import tax, excise tax, etc.
Vietnam also has many regulations on investment incentives on corporate income tax when investing in industries eligible for investment incentives or investing in areas with difficult socio-economic conditions, especially difficult ones. towel.

Tenth, about the investment project report

A foreign-owned company in Vietnam established under a foreign-invested investment project must strictly and fully comply with the investment project reporting regime, register an account and comply with the project reporting regime. project through the National Investment Portal. Notes on setting up a foreign-owned company ?

Established in 2007, with offices in Hanoi and Ho Chi Minh City, with many years of experience in business and investment, always ready to provide investors with valuable advice. The most valuable and optimal value of the 10 mentioned important contents and many other related contents to be able to establish a foreign company in Vietnam in accordance with the law, make the most of investment incentives and develop more and more. prosperous.

If you have any 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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Mr. Phan
Email: luatvn.vn02@gmail.com

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