Along with the stable and sustainable development of the country’s economy, Vietnam has increasingly attracted investment sources from abroad. Many investors have chosen to establish foreign-invested companies in Vietnam to start their business operations. However, the actual procedure for establishing a company is not easy at all if you do not have an in-depth understanding of Vietnamese law. Through the article below, Luat va Ke toan Viet My will help you better understand the issues surrounding the order and procedures for establishing a foreign company in Vietnam.

1. What is understood as establishing a foreign company?

Pursuant to the provisions of Clause 17, Article 3 of the Investment Law 2020: “An economic organization with foreign investment capital is an economic organization with a foreign investor as a member or shareholder of that organization“. More specifically, a company is established by a foreign investor to do business in Vietnam or a Vietnamese enterprise is acquired, merged or purchased shares by a foreign investor.

2. Forms of establishing foreign companies in Vietnam

2.1. Type of investor to contribute capital in the first place

With this form, foreign investors need to contribute capital right from the beginning of establishing a business in Vietnam. Depending on each field of activity, the capital contribution ratio of foreign investors will range from 1 – 100% of the company’s charter capital. The form of investors contributing capital from the beginning is also known as foreign direct investment (FDI).

2.2. Forms of capital contribution and share purchase

In the form of capital contribution and share purchase, foreign investors will contribute capital to companies in Vietnam that have been issued Certificates of Enterprise Registration. Accordingly, the company located in Vietnam will now become a foreign-invested company. At the same time, the company must carry out procedures to adjust the Certificate of Enterprise Registration in accordance with law. This is also known as FPI through the acquisition of shares and bonds.

3. Current conditions for establishing a foreign company in Vietnam

To establish a foreign company in Vietnam, foreign investors must meet the following conditions in the business investment industry:

– Investors who do not invest in business activities prohibited from doing business are:

• Deal in narcotics
• Business of chemicals and minerals
• Business of specimens of all kinds of plants and wildlife
• Be engaged in prostitution
• Buying, selling, buying and selling human tissues, body parts.
• Business related to cloning in humans.

– It should be noted that conditional investment and business sectors need to meet the necessary conditions for the reasons of national defense, security, order, social safety, social ethics, and health of the community. Conditions for business investment shall be applied in such forms as licenses, certificates, certificates, and documents certified/approved by the competent State agency.

– It should be noted that business sectors restricting foreign investment include sectors and occupations that do not have access to markets, sectors and occupations that do not have access to conditional markets. To be able to do business in sectors and occupations subject to foreign investment, investors must meet all conditions for the charter capital ownership rate of foreign investors in economic organizations, investment form, scope of investment activities, capacity of investors and partners to carry out investment activities.

4. Documents to establish a foreign company in Vietnam

A complete and standard set of documents to establish a foreign company in Vietnam includes the following documents and papers:

– Document requesting implementation of investment project in Vietnam

– Legal documents related to investors: Copy of passport, ID card for individual investors. Certificate of business establishment or other legal document of equivalent value.

– Project proposal: investor, objectives, scale, capital and capital mobilization method, time and location, investment progress, labor and assessment of socio-economic efficiency, impact impact the environment.

– Document proving financial capacity: Can prepare one of the following documents:

• Financial statements of operations for the most recent 2 years
• Commitment to financial support from the parent company
• Commitment to financial support from financial institutions

– Propose land use needs. In case the project does not request land allocation from the State, a copy of the location lease agreement to carry out the project must be submitted.

– Document explaining the technologies used, if any, including name, origin, technological process diagram, technical specifications, usage status of equipment, machinery and production lines.

– BCC contract if the investment project is in this form.

– Draft Company Charter corresponding to each different type of business (1-member LLC, LLC with 2 or more members, Joint Stock Company).

– List of members corresponding to each type of business.

Note: For documents of foreign organizations, the above documents must be consular legalized (notarized copy or certified copy by the issuing agency no more than 3 months before the date of submission).

5. Procedures for establishing a foreign company in Vietnam in 2024.

Step 1: Prepare the dossier of establishing a foreign company in Vietnam

Step 2: Submit your application to the Department of Planning and Investment (Business Registration Division)

Working hours: 05-07 working days from the date of receipt of a valid application.

Step 3: Publish the contents of the company’s registration

After completing the procedures for company establishment registration at the Department of Planning and Investment, the next step in the process of establishing a foreign company is to publish the contents of the company’s registration.

Information on enterprise registration must be made public on the National Portal within 30 days from the date of issuance of the Certificate of Enterprise Registration.

Implementing Agency: The declaration department of the business registrar.

Working hours: within 30 days.

Step 4: Company seal

This is the final step in the process of establishing a foreign company. This step was followed by a Certificate of Enterprise Registration and a declaration of establishment of the enterprise was made.

The company implements stamp carving and notification on the National Portal for business registration. The company has the right to decide on stamp patterns and the number of seals.

Receiving agency: Business registration department – Department of Planning and Investment where the enterprise is located.

Working hours: about 5-8 working days.

6. Is the service of establishing a foreign company in Vietnam reputable?

The service to establish a foreign company in Vietnam is the optimal solution for foreign investors who are in need of entry into the Vietnamese market. The reason for choosing the service to establish a prestigious and professional foreign capital company is:

• A team of experienced and highly specialized professionals who are familiar with Vietnamese legal regulations;
• Save time and cost for foreign investors in implementation of company establishment procedures. The service unit shall perform procedures on behalf of the enterprise and work with the competent authority;
• Avoid administrative violations during procedures;
• Delivering optimal and appropriate solutions to each customer’s needs;
• To promptly and continuously update legal changes;

Above, Luat va Ke toan Viet My has compiled the most detailed information about documents and procedures for establishing foreign companies in Vietnam. Hopefully this article has provided a lot of useful information for investors. If you need advice on legal issues about establishing a foreign-invested enterprise, please contact Viet My immediately for specific support and advice!

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