In the current era of globalization, many businesses are pursuing foreign investment activities to expand and develop markets, enhance the ability to export goods and services, and tap into technical potential. This activity is becoming increasingly popular and is always encouraged by the government for integration. Additionally, in order to invest, businesses need to obtain a foreign investment license. In the following article, Viet My Law and Accounting will share the most detailed information with you!

1. Legal Basis

• Investment Law 2020
• Decree 31/2021/ND-CP guiding the Investment Law
• Circular 03/2021/TT-BKHDT regulating document templates and reports related to investment activities in Vietnam, investment from Vietnam abroad, and investment promotion.
• Circular 25/2023/TT-BKHDT amending Circular 03/2021/TT-BKHDT regarding document templates and reports related to investment activities in Vietnam, investment from Vietnam abroad, and investment promotion issued by the Minister of Planning and Investment.

2. Concept of Foreign Investment License

A foreign investment registration certificate is understood as a business operating license issued by the competent Vietnamese authorities to individuals or companies with foreign capital in Vietnam, provided they meet all the necessary conditions to conduct investment and business activities in Vietnam.

The Department of Planning and Investment will issue the Investment Registration Certificate in either paper or electronic form, clearly stating the registration information of the investor.

According to Article 40 of the Investment Law 2020 in Vietnam, the foreign investment license includes the following key information:

• Investment Project Name: The exact name of the investment project.
• Investor: The full name of the investor or business executing the investment project.
• Investment Project Code: A unique identification code for the investment project.
• Investment Project Location: The specific location where the investment project will be carried out, including the land area used.
• Objectives and Scale of the Investment Project: A brief description of the objectives and scale of the investment project.
• Investment Project Capital: The total capital for the project, including both the investor’s contribution and any raised capital.
• Project Duration: The projected duration of the investment project.
• Investment Project Implementation Progress: The timeline for capital contribution and fundraising, as well as the timeline for achieving the project’s main operational goals. If the project is divided into stages, the timeline for each stage should be clearly stated.
• Investment Incentives and Support: Information on any discounts or support the investment project will benefit from, along with the conditions and basis for such incentives (if applicable).
• Conditions for the Investor: Any conditions the investor must adhere to or fulfill during the implementation of the investment project (if applicable).

3. Conditions for Obtaining a Foreign Investment License

According to the provisions in Article 60 of the Investment Law 2020, to be granted a foreign investment registration certificate, the investor must meet the following conditions:

• The foreign investment activity must comply with the principles specified in Article 51 of the Investment Law 2020.
• The investment must not fall under industries or sectors prohibited for foreign investment as stated in Article 53 of the Investment Law 2020, and it must meet the specific conditions for foreign investment in sectors with conditions as prescribed in Article 54 of the Investment Law 2020.
• The investor must commit to arranging foreign currency or ensure the arrangement of foreign currency for the foreign investment activity through an authorized credit institution.
• There must be a foreign investment decision as stipulated in Article 59 of the Investment Law 2020.
• A document from the tax authority confirming the investor’s compliance with tax obligations to the state. The tax authority’s confirmation must be no more than three months old from the date of submission of the investment project documents.

4. What are the forms of Vietnamese enterprises investing abroad?

• Establishing a company abroad according to the regulations of the host country’s laws.
• Establishing a branch of a Vietnamese company abroad in accordance with the regulations of the host country’s laws.
• Entering into a Business Cooperation Contract (BCC) abroad.
• Acquiring part or all of the equity capital of a foreign economic organization to participate in the management, operation, and business activities abroad.
• Buying and selling securities, bonds, or other financial instruments, or investing through securities investment funds or other financial intermediaries abroad.
• Other forms of investment as prescribed by the laws of the host country.

5. Types of foreign investment projects you may want to know

Based on the investment capital, foreign investment projects are classified into four groups:

• Projects not requiring state approval, with foreign investment capital under 20 billion VND.
• Projects not requiring state approval but with foreign investment capital over 20 billion VND. For these projects, approval from the State Bank of Vietnam is needed.
• Projects requiring approval from the Prime Minister:
  • In sectors such as banking, insurance, securities, media, broadcasting, telecommunications, with foreign investment capital of 400 billion VND or more.
  • In sectors outside the above, with foreign investment capital of 800 billion VND or more.
• Projects requiring approval from the National Assembly:
  • Projects with foreign investment capital of 20,000 billion VND or more.
  • Projects requiring the application of special mechanisms and policies that must be reviewed and approved by the National Assembly.

6. What documents are required to apply for a foreign investment license?

For registering foreign investment, investors need to prepare the following documents:

• Investment registration confirmation document.
• For individual investors: a copy of the ID card, citizenship card, or passport; for corporate investors: a copy of the business registration certificate or other legal documents proving legal status.
• Investment project proposal.
• A document from the customs authority confirming that the investor has fulfilled their tax obligations from the time of submission.
• A commitment to self-arrange foreign currency or a document from a permitted financial institution confirming foreign currency arrangement for the investor.
• Documentation confirming the investment project location, applicable for sectors such as energy, agriculture, forestry, fisheries, minerals, construction, manufacturing, real estate, and infrastructure. Required documents include: investment licenses, land allocation decisions, land lease contracts, principle land agreements, and investment cooperation contracts from relevant authorities in the host country or region.
• Investment decision for foreign investment.
• For projects in banking, securities, insurance, and technology sectors: approval documents from government authorities for foreign investment conditions according to related laws.
• Power of attorney for Vietnam Law and Accounting if necessary.

7. Procedures for applying for a foreign investment license in 2024

To obtain a foreign investment license, investors must follow these steps:

Step 1: Prepare the necessary documents as required.
Step 2: Submit the foreign investment application to the Ministry of Planning and Investment.
Step 3: The Ministry of Planning and Investment reviews the application:

• Within 3 working days of receiving the project documents, the Ministry sends the application for review by relevant government agencies.
• Within 15 days of receiving the project documents, the reviewing agencies provide feedback on aspects under their management.
• For projects requiring government approval, the Ministry completes a report for the Prime Minister within 30 days.
• For projects requiring National Assembly approval: the Ministry reports to the Prime Minister within 5 days to establish a State Evaluation Council. The Council will evaluate the project within 90 days, and the Government will send the investment proposal to the National Assembly for review (at the opening of the National Assembly session within 60 days).

Step 4: Issue the foreign investment license or a rejection letter (with reasons for denial).
Step 5: Register foreign exchange transactions for transferring investment funds:
After obtaining the foreign investment certificate, the investor must submit a foreign exchange registration with the State Bank if they wish to transfer capital or foreign currency abroad.

8. What should you pay attention to when applying for a foreign investment license? 

The process of obtaining a foreign investment license is often complex and involves many paperwork steps. To expedite the process, investors should be aware of the following:

• For distribution and wholesale business projects: Investors can register as usual. However, retail activities require approval from the Department of Industry and Trade.
• After completing the foreign investment company setup procedures, the company must open an investment capital account, and the investor must deposit an amount corresponding to their share in the capital.

“Applying for a foreign investment license” for foreign individuals and organizations can be complex and time-consuming, often taking longer than the prescribed legal time frame, and there may be further issues to address later. Therefore, Viet My Law and Accounting recommends hiring professional and reputable units to optimize time and costs. You can refer to our foreign investment certificate services.

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