The Vietnamese market is currently attracting many establishments of organizations and businesses. In particular, the concept of joint venture companies with foreign speculators is no longer strange to Vietnamese investors. Foreign investors investing in Vietnam can do so in the form of 100% foreign capital contribution or joint venture with organizations and individuals in Vietnam. In case a foreign investor contributes capital to a Vietnamese investor to establish an organization, it is often called establishing a joint venture with a foreign country. This is a form of cooperation between domestic and foreign organizations. So, is the procedure for establish joint venture companies with foreign countries simple or not? Please follow the article below from Luat va Ke toan Viet My.

1. What is understood as a joint venture company?

Establishing a joint venture company is specifically understood as a company where two or more parties cooperate to establish a company in Vietnam. The company was established on the basis of a joint venture contract or cooperation agreement between a foreign government and the Vietnamese government. Either by a foreign-invested enterprise with a Vietnamese enterprise or by a joint venture enterprise with a foreign investor on the basis of a joint venture contract.

A joint venture company is established as a limited liability company. The characteristic of a joint venture company is that each party will be responsible to the extent of committed capital in the legal capital. The company has legal status in accordance with the provisions of Vietnamese state law. At the same time, it was established and operated from the date the investment license was granted.

2. Conditions required to establish a joint venture company with foreign countries

2.1. Conditions on the ratio of joint venture capital contribution between foreign investors and Vietnamese investors

In addition to the provisions contained in the WTO commitments, investors must also comply with legal documents relating to the majors of some investment industries that are required to have foreign investors’ capital contribution rates. In this case, foreign investors and Vietnamese investors will have to compromise on their own capital contribution rates in the joint venture company. This is also one of the conditions for establishing a pre-emptive foreign joint venture company to establish a joint venture company.

Here are some areas where the percentage of foreign investors’ capital contributions will be limited, namely:

• Not more than 51 percent for the road freight business;
• Not more than 49% in the area of road passenger transport business;
• Not more than 51 percent for agricultural related services;
• Not more than 65% for telecom services without network infrastructure;

2.2. Conditions for Foreign Investor to Be Established as a Joint-venture company in Vietnam

Not only does it require foreign investors to be financially competent, but it also has to meet a number of different conditions because it depends on the type and area in which they invest. If you need more information, please contact the Luat va Ke toan Viet My for specific advice on the conditions for establishing a foreign joint venture company immediately!

2.3. Conditions for Vietnamese Investors in a joint venture company need to demonstrate financial capacity when making joint venture capital contributions

In addition to foreign investors, Vietnamese investors must also make capital contributions to joint venture companies. Therefore, Vietnamese investors also need to prepare a complete document to establish a joint venture company in order to have documents proving their financial capacity when making joint venture capital contributions.

3. Documents for establishing joint venture companies with foreign countries in 2024

In order to establish a joint-venture company with foreign countries, investors need to prepare documents in accordance with law:

• Written requests for issuance of investment certificates in accordance with the provisions of the competent authority.
• Written certification of the legal status of an investor.
• Investors’ financial statements for the last 2 years.
• Legal capital certification document with competent agencies and organizations.
• Professional certificates of members and individuals for enterprises engaged in business activities in accordance with law.
• The company charter.

4. Procedures for establish joint venture companies with foreign countries

Step 1: Prepare the profile

In order for the process of establishing a joint venture company to proceed smoothly and rapidly to be issued an investment certificate to a joint venture company, investors must complete the process in a transparent and accurate manner in terms of documentation and declaration (item 3).

Step 2: Apply to the Department of Planning and Investment

After thoroughly and completely preparing the documents, the investor shall submit the application for establishment of a joint venture company at the Department of Planning and Investment where the enterprise is located.

Step 3: Receive the results and proceed with carving the corporate seal

The processing and issuance period of investment registration certificates is from 5 to 15 days from the date of submitting the set of dossiers, the Department will conduct a review of dossiers.

If the results are not satisfactory, the investor will receive a written notice of correction and supplementation, stating the reason for the failure.

If the results are satisfactory, the Department will issue a business registration certificate to investors.

The investor then published a report on the National Portal for Enterprise Registration to be recognized by the state and marked the completion of the procedure for establishing a foreign joint venture company in Vietnam. Validation in transactions that cannot be considered is the engraving of seals, contents and quantities that are arbitrarily decided or authorized by investors for Viet My service. After that, the investor made a stamp notice to the Department to be recognized.

5. Some notes when carrying out procedures to establish a joint venture company with a foreign country

5.1. About procedures for granting investment certificates

Unlike foreign investors who have participated in establishing companies from the beginning with Vietnamese investors, whether they contribute 1% or 99.99% of capital, they must request the issuance of an Investment Certificate. In contrast, foreign investors who contribute capital or buy shares in Vietnamese companies already have a Certificate of Enterprise Registration (including the purchase of up to 100% of the company’s capital) do not have to perform the procedures for issuing an Investment Certificate (except for the company doing business in the field of education and training, if a foreign investor purchases from 1% of the capital contribution also needs to carry out procedures for issuing an Investment Registration Certificate). Thus, when foreign investors choose to buy capital shares or shares, they will save some money on the procedures for issuing Investment Certificates. In particular, if the company does not have an Investment Certificate, during the business process, if there is a change, it will save procedures for adjusting the investment certificate, reducing unnecessary costs, procedures, and time.

5.2. Demonstrate financial capacity when establishing a company, contributing capital, buying shares

If foreign investors participate in the establishment of the company with Vietnamese investors from the beginning, they must submit documents to prove their financial capacity, including having a savings book or confirming a bank account balance equivalent to the amount of capital contributed in Vietnam. However, when foreign investors contribute capital or buy shares in Vietnamese companies, they do not need to present procedures to demonstrate their financial capabilities.

5.3. Regarding the implementation of capital contribution to the investment capital account

The general characteristic is that most foreign investors contribute capital or investment in Vietnam is that they must make capital contributions through the investment capital account in Vietnam.

Thus, Luat va Ke toan Viet My has reviewed the procedures for establishing joint venture companies with foreign countries, as well as other useful related information. We hope that our above article will contribute to bringing useful information to foreign joint venture enterprises on the above issue. Viet My is proud to be the most professional company establishment service provider, with the most reasonable price and fastest implementation time.

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