Currently, establishing a foreign company is becoming a popular choice for investors who want to invest in Vietnam. This is an attractive process, offering many advantages. However, many people still ask questions about the cost and specific process of this. What papers and documents do you need to prepare? The article below from LUAT VA KE TOAN VIET MY will answer all your questions in the clearest and most detailed way.

1. Concept of establishing a foreign company?

Establishing a foreign company according to the law is understood as follows: According to the Investment Law 2020, Clause 17, Article 3 stipulates that “Economic organization with foreign investment” is an economic organization that has foreign investors. be a member or shareholder of that organization. This means the company is established by a foreign investor to do business in Vietnam or the Vietnamese enterprise is acquired, merged or shares purchased by a foreign investor.

2. Form of opening a foreign company

Based on current Vietnamese law, there are 2 forms of establishment of foreign companies. Specifically, as follows:

2.1. Type of investors who contribute capital from the beginning

In this case, when foreign investors want to establish foreign companies in Vietnam, they must make capital contributions from the initial stage. The capital contribution of foreign investors will depend on the operating sector and may range from 1% to 100% of the charter capital of the company. This is also known as FDI.

2.2. Forms of acquisition of shares and capital contribution

By capital contribution or share purchase, foreign investors can invest in companies in Vietnam that already have Certificates of business registration. At that time, the company in Vietnam will become a foreign-invested enterprise. At the same time, this company must follow the process of adjusting the Certificate of business registration in accordance with law. This method is also known as FPI, through repurchase of shares or bonds.

3. Legal standard process of establishing a foreign company

Before considering costs, it is important to understand the general steps in this process. The current procedures for establishing a foreign company are as follows:

Step 1: Obtain an investment certificate from the State management agency, which takes about 30-45 working days.
Step 2: Apply for a business registration license, usually from 3-5 days.
Step 3: Publish the business registration information on the national portal, taking one day.
Step 4: Obtain a stamp and apply for a stamp form, which usually takes 3 working days.
Step 5: Obtain a Tax Number, usually from 5-7 business days.
Step 6: Open a bank account for the company, taking 1 business day.
Step 7: Declare the subject tax, usually from 5-10 working days.

4. Documents required when starting a foreign company

When customers use the service or learn about the cost of establishing a foreign company, many people ask about the documents to be prepared. When registering to use services to establish 100% foreign capital companies under the US Law, customers need to prepare the following documents: :

• Legitimate passport as stipulated by law of foreign investors (in cases where foreign investors are individuals).
• The company’s legal business license, accompanied by its 2-year Financial Statements, was audited and legalized, and was consularized (in the case of an institutional investor).
• Agreement/contract on renting the office and the head office of the company.
• Confirmation from the competent bank of the balance in the bank account of the individual investor in Vietnam.

With LUAT VA KE TOAN VIET MY, customers only need to prepare the above documents. We will then provide specific guidance on procedures and costs related to the establishment of a foreign-invested company.

5. Conditions for establishing a foreign company

In order to establish a foreign company, foreign investors need to comply with the following business sector conditions:

• Do not invest business in prohibited industries, including:

• • Transactions of addictive substances, drugs and chemicals and minerals are prohibited.
  • Endangered or unlicensed wildlife trade.
  • Organization, brokerage or support for prostitution.
  • Trafficking in illegal human tissues, body parts.
• Business related to cloning in humans.
• It should be noted that conditional business sectors must meet the necessary requirements for national defense, security, order, social safety, social ethics and public health reasons. These conditions apply through the licensing, certification or written confirmation of the competent State agency.
• It should be noted that there are limited foreign investment business sectors, including those that do not have access to the market or those that do not have access to the market. In order to invest in sectors and occupations subject to foreign investment, investors must meet all requirements for the charter capital share of foreign investors in economic institutions, the form of investment, the scope of investment activities, the capacity of investors and partners to carry out investment activities.

6. Types of documents to prepare when establishing a foreign company

To establish a foreign business, besides paying attention to the costs of establishing a company. Investors need to pay attention to obtaining an investment certificate before proceeding with procedures related to business establishment activities in the usual order.

6.1. Application for a Certificate of Establishment of a foreign company

When conducting a manufacturing business project in Vietnam, foreign investors need to comply with legal procedures to be granted an investment registration certificate. Records include:

• Application for investment license for foreigners according to the form issued by the state.
• Detailed proposal for investment projects in Vietnam.
• Proof of the investor’s financial capacity from competent authorities.
• ID card or passport of the investor, or related legal documents such as establishment decision, business license.

The agency responsible for receiving and processing this dossier is the Investment Registration Authority.

6.2. Application for opening a foreign company

Investing businesses and individuals need to prepare the following documents before submitting the application:

• Charter of the respective company.
• Documents requesting company registration.
• Copies of documents such as:
  • Certificate of registration for business establishment procedures or equivalent legal document of the organization.
  • Passport or other legal documents of participating individuals.
• For foreign investors, an investment registration certificate is required according to legal regulations.
• For members that are foreign organizations, a copy of the business establishment registration certificate or corresponding legal document, legalized from the consulate, is required.
• Full list of members participating and contributing capital to establish the company.
• Procedure time is from 3 to 5 working days after receiving complete documents.

In the above article, LUAT VA KE TOAN VIET MY has compiled the most detailed information about documents and procedures for establishing a foreign company. Hopefully this article has brought a lot of useful information to investors. If you need advice on legal issues related to establishing a foreign-invested enterprise, please contact us at Viet My immediately to receive specific support and advice! 

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