There are many 100% foreign-owned companies that have been established in recent years in Vietnam. However, because the procedures are relatively complicated and take a lot of time for organizations and individuals to carry out the procedures themselves without clearly understanding the regulations. If you are having difficulty establishing a company with 100% foreign capital, please refer to Viet My’s detailed guide to establishing a company with 100% foreign capital below.

1. Things to know about 100% foreign-owned companies

Before establishing a 100% foreign-owned company, investors need to understand what a 100% foreign-owned company is?

1.1 What is a 100% foreign-owned company?

A company with 100% foreign capital is an enterprise owned by foreign investors and established by foreign investors in Vietnam as well as self-managed and responsible for business results. A 100% foreign-owned company is established in the form of a limited liability company or a joint stock company, with legal status according to Vietnamese law. The company with 100% foreign capital was established and operated from the date of issuance of the Investment Registration License.

The legal capital of a 100% foreign invested company must be at least 30% of the investment capital. For some special cases, the legal capital may be less than 20% of the investment capital but must be approved by the Department of Planning and Investment.

1.2 What cases are considered 100% foreign-owned companies?

• Foreign individuals invest 100% capital to establish a company in Vietnam.
• Foreign legal entities invest 100% of capital to establish a subsidiary in Vietnam.
• Foreign individuals or legal entities invest 100% of capital to establish a new legal entity in Vietnam.

2. Conditions for establishing a company with 100% foreign capital

• To establish a company with 100% foreign capital, there must be a specific and feasible investment project in Vietnam, approved by a competent authority.
• The investor must prove their financial capacity to implement the project.
• Commitment to tax obligations and compliance with Vietnamese laws
• The company commits to obligations regarding the use of local labor, land use…
• Must complete registration procedures to establish a 100% foreign-owned company according to Vietnamese law.

3. Instructions for establishing a company with 100% foreign capital

The process of establishing a foreign-invested company is carried out in accordance with the provisions of the Investment Law 2020, Decree 31/2021/ND-CP, accordingly, the process of establishing a 100% foreign-invested company includes the following steps:

Step 1: Ask for a decision and investment policy.

Note: Instructions for establishing a 100% foreign-owned company

When investing in Vietnam to implement a project, foreign investors must apply for an Investment Registration Certificate. However, before applying for an Investment Registration Certificate, in some cases the investor will have to register investment policies under the authority of the Prime Minister or the Provincial People’s Committee.

Only the following projects require investors to register investment policies at the provincial level:

• Projects that are allocated or leased land by the State without auction, bidding or transfer activities; Projects that require changing land use purposes;
• The project uses technologies on the List of technologies restricted from transfer according to legal regulations on technology transfer.

In the case of foreign investors’ projects in the fields of telecommunications service business with network infrastructure, shipping business, afforestation, journalism, publishing, establishment of scientific and technological organizations technology, science & technology enterprises with 100% foreign investment. Accordingly, in case of establishing a company with 100% foreign investment related to the above issues, the investment policy must be registered with the Prime Minister according to the provisions of the Investment Law 2020.

Step 2: Apply for Investment Registration Certificate

Dossier to apply for an Investment Registration Certificate for a company with 100% foreign capital includes:

• Written request for implementation of the investment project, including a commitment to bear all costs and risks if the project is not approved.
• Documents to prove the investor’s legal status.
• Documents proving the investor’s financial capacity.
• Proposal on investment projects. In case of preparing a pre-feasibility study report, the investor submits the pre-feasibility study report instead of the investment project proposal.
• In case the investment project does not request the State to allocate or lease land or allow change of land use purpose, copies of land use rights documents or other documents and papers to determine land use rights must be submitted. Use the location to carry out investment projects.
• Explanation content about the technology used in the investment project, for projects subject to appraisal, must seek opinions on technology according to legal regulations on technology transfer.
• BCC contract for investment projects in the form of BCC contract.
• Other documents related to the investment project, conditions and capacity requirements of the investor according to the provisions of law (if any).

Note: For investment projects that have been implemented, investors must submit documents according to the above regulations, in which the investment project proposal will be replaced by a report on the implementation of the investment project. investment from the time of starting implementation to the time of applying for an investment registration certificate.

Agency submits application for investment registration certificate to 100% foreign-owned company at the investment registration agency:

• If the company’s headquarters is located in an industrial park, it is the Industrial Park Management Board.
• If the company’s headquarters is located outside the industrial park, it is the Department of Foreign Economic Relations – Department of Planning and Investment at the provincial level.

Time for issuance of investment registration certificate for 100% foreign-owned companies

• For investment projects that do not require a decision on investment policy: 15 – 20 working days from the date of receiving complete documents
• For investment projects requiring investment policy decision: 05 – 10 working days from the date of receiving the investment policy decision document.

Step 3: Establish a 100% foreign invested company

After obtaining the investment registration certificate, investors need to prepare the following documents to establish a business.

Documents for establishing a limited liability company with 100% foreign capital:

• Application for company registration;
• Charter of the company;
• List of company members;
• Copies of the following documents: Citizen identification card, ID card, passport or other legal personal identification of company members who are individuals;
• Establishment decision, business registration certificate or other equivalent documents and papers of the organization + authorization document; Citizen identification card, ID card and passport or other legal personal identification of the authorized representative of the company member being an organization;
• For members that are foreign organizations, a copy of the business registration certificate or equivalent documents must be consularly legalized;
• Investment registration certificate for foreign investors according to the provisions of the Investment Law.

Agency submitting application for business registration certificate for 100% foreign-owned companies: Business registration agency – Provincial Department of Planning and Investment.

Time to issue business registration certificate for 100% foreign-owned companies: 05 working days from the date of receiving complete and valid documents.

Step 4: Disclosure of information on establishment of a 100% foreign-invested company

After being granted a business registration certificate, the company must publicly announce on the National Information Portal about business registration according to procedures and pay fees according to regulations.

The published content includes the contents of the business registration certificate and the following information:

• Registered business lines and professions;
• List of founding shareholders and shareholders who are foreign investors in joint stock companies.

Implementing agency: Announcement publishing department of the Business Registration Authority – Provincial Department of Planning and Investment.

Step 5: Engrave the seal of the 100% foreign invested company

After obtaining the business registration certificate and announcing the business establishment information. The company carries out seal engraving at state-licensed seal engraving units. The Company decides on its own the number and form of the seal within the scope permitted by law.

According to the provisions of the Enterprise Law 2020, the company engraves its own seal and will be responsible for how to use the company’s legal seal.

4. Frequently asked questions related to establishing a 100% foreign-owned company

4.1 Can a 100% foreign-owned company lease land to build apartments for sale and lease?

Companies with 100% foreign capital are allowed to do real estate business in Vietnam in prescribed forms but must ensure the conditions in Clause 1, Article 10 of the Law on Real Estate Business 2014 (amended and supplemented). by Point a, Clause 2, Article 75 of the Investment Law 2020) and other relevant regulations.

4.2 Can a company with 100% foreign capital become a member of the Union?

According to the provisions of Article 17 of Decree 45/2010/ND-CP, if a 100% foreign-owned company operates in Vietnam, contributes to the development of the association, and approves the association’s charter. association, will be considered and recognized as an associate member by the association of economic organizations.

4.3 Is it possible to establish a representative office for a company with 100% foreign capital?

Clause 1, Article 45 of the Enterprise Law 2020 does not specifically regulate domestic or foreign enterprises to establish representative offices. Therefore, 100% foreign-owned companies are allowed to open representative offices in Vietnam.

4.4 For a company with 100% foreign capital, can the legal representative be Vietnamese?

According to Clause 3, Article 13 of the Enterprise Law 2020, Vietnamese people have the full right to be the legal representative of a 100% foreign-owned company.

4.5 How is the name of a representative office of a 100% foreign-owned company regulated?

Naming a representative office of a 100% foreign-invested company is carried out in accordance with the provisions of Article 40 of the Enterprise Law 2020.

Above is Viet My’s detailed guide to establishing a company with 100% foreign capital in 2024. If you have difficulty establishing a 100% foreign-owned company or other related issues, please contact VIET MY LAW AND ACCOUNTING.