What are the procedures for establishing a company with foreign capital in 2024? Are you a foreign investor or partner looking to learn the process of establishing a foreign-invested company? Want to invest in Vietnam but don’t know where to start or which direction to go from? Wondering how to set up? Let Viet My help you find the answer through analysis based on practical experience below. During the implementation process, if you have any problems, please contact Viet My for free consultation.

1. Advantages of procedures for foreign investors to contribute capital and buy shares into Vietnamese companies

The procedure for foreign investors to invest in Vietnamese companies and buy shares has the following advantages compared to establishing a foreign-invested company from the beginning.

• Foreign-invested companies do not need to carry out investment certificate procedures even if the members are foreign investors. Enterprises that do not have an investment certificate will have their procedures shortened if they change the content of their business registration with state agencies.
• Easy amendment steps: If you only have the company registration certificate, you can follow the same procedure as a Vietnamese company by submitting it when changing the company name, company address, owner information, etc.
• There is no need to update investment information in the investment management system.
• It also simplifies and facilitates the process of proving financial capacity.
• If you invest or buy shares in a Vietnamese company that already has a company registration certificate (even up to 100% contributed capital), there is no need to go through procedures. Issuance of Investment Registration Certificate In case a foreign investor purchases 1% of contributed capital, except for enterprises operating in the field of education and training, they must also carry out procedures for issuance of an Investment Registration Certificate.

2. Some notes before establishing a foreign-invested company in Vietnam in 2023

• Foreign investors, including foreign individuals and foreign companies, can establish companies in Vietnam with a capital contribution ratio from 1% to 100%, depending on the investment field.
• Conditions for establishing a foreign investment company depend on the type of business that the investor has created: according to WTO obligations and Vietnamese law, some industries such as trade, import-export, investment consulting Consulting, management consulting can be easily established in Vietnam, software industry, real estate, construction, restaurants, tourism, manufacturing (need factory in industrial park),…
• Except for industries that require legal capital, there is no regulation on the minimum capital of investors, which must correspond to the field of operation of the registered company. However, the amount of investment capital affects the investor’s application for a work permit and temporary residence permit. In this case, the investor, the investment capital management representative, is only exempt from the work permit. and card issuance. If the capital investment is 3 billion VND or more and the investor invests a large amount of capital, the validity period of the temporary residence card will be longer.
• Investors bringing capital at the time of establishment are required to submit financial proof in the following way: For individuals, bank books, deposit balances, etc. For corporations, bank balances, tax returns, profit and loss statements, etc. However,  these documents are not required when foreign investors invest and purchase shares.
• Procedures for establishing a foreign-invested enterprise require additional documents for house, office, or loan contract, as well as real estate documents for rented house, office, and head office, which must be submitted along with the application. Established I have. However, this condition is not mandatory for Vietnamese companies and companies acquiring investments.
• The director, legal representative or capital manager of a foreign-invested enterprise can be a foreigner or Vietnamese.
• Foreign-invested companies also receive an Enterprise Registration Certificate (ERC) where their headquarters is located, just like Vietnamese companies.
• Companies with foreign investors investing 1% of capital from the beginning and foreign-invested companies operating in the field of education must carry out procedures for issuance of an Investment Registration Certificate (IRC).
• The main difference between a foreign company and a Vietnamese company is that the company must open a venture capital account to invest capital and then repatriate profits.
• Unlike Vietnamese capital companies, which are only responsible for investment capital, foreign companies must pay capital into a capital account and capital investment is monitored through investment reports.
• The investment certificate clearly states the capital investment term of the foreign company. Therefore, if the investor has not advanced capital before the deadline, the bank opening the investment capital account will not accept late payment. As a specialized company, to carry out capital investment procedures, the company must adjust the investment registration certificate to extend the capital investment term.
• Procedures for declaring tax, VAT, and corporate income tax are the same as for Vietnamese companies.
• In addition, foreign-invested enterprises that have been granted investment registration certificates must annually complete investment reporting procedures, investment monitoring and evaluation reports, and project implementation reports to submit. at the investment registration office.

3. Documents for establishing a foreign invested company

Most investors when investing in the Vietnamese market have more or less problems with legal procedures and legal business licenses. To solve problems that foreign traders often encounter.

3.1 Documents for foreign investors who are individuals

Foreigners who want to invest directly and establish a foreign-invested company in Vietnam need to prepare the following documents:

• Notarized copy of the foreigner’s passport.
• Lease contract for the company’s headquarters/premises to carry out investment projects.
• Your bank statement should be at least equal to your investment in the company.

3.2 Documents for foreign investors who are organizations

• Notarized copy of company registration license, consular legalization
• Last year’s financial statements were certified or approved by the tax authority and consularly legalized
• Certified copy of the representative’s identity card or passport
• Terms of association of the receiving company
• Authorization document for a representative to invest capital in a company established in Vietnam
• Documents proving the experience and financial capacity of the foreign investor

4. Procedures for establishing a company with foreign capital

Procedures for establishing a company with foreign capital in which foreign investors invest 1% to 100% of capital immediately after establishment are as follows:

4.1 Procedures for establishing a foreign-invested company/enterprise when investors contribute capital from the beginning

Step 1: Prepare documents to apply for an investment registration certificate

Step 2: Apply for an investment registration certificate at the competent authority

Step 3: Process of granting investment registration certificate

The Investment Registration Office issues the Investment Registration Certificate within 15 days from the date of receipt of complete documents. Investors must be informed of the refusal in writing and clearly explained.

Step 4: Draft and submit application for business registration certificate

After granting an investment certificate to a foreign-invested company, the investor must carry out procedures for issuing a company registration certificate similar to the procedures for establishing a Vietnamese company.

Step 5: Declare the content of company registration information

After receiving the company’s registration certificate, the company must make a public announcement on the national company registration portal. Publishing fees must also be paid in accordance with the law.

Step 6: Carve the company seal

Step 7: Issue Business License or Business Qualification License

The issuance of business licenses is only valid for companies engaged in retailing goods to consumers or establishing retail establishments.

In some industries, foreign investors must apply for an operating license after completing company establishment procedures.

Step 8: Open a foreign investment capital account

• Investors will open a foreign direct investment capital account after completing the procedures for establishing a foreign-invested enterprise. The investor transfers capital to this capital account according to the investment term specified in the Investment Certificate.
• In addition, foreign-invested companies must receive money from investment capital accounts in Vietnam and open additional transaction accounts to perform revenue and expenditure operations.

Step 9: The foreign-invested company carries out the following procedures to establish a company according to regulations

After the company is established, investors need to follow the same post-establishment procedures as a Vietnamese company.

4.2 Procedures for establishing a foreign-invested company in the form of capital contribution and share purchase

Step 1: Establish a company with domestic capital

Foreign investors can only invest capital to buy shares if there is a Vietnamese company. If the company establishment procedures have not yet been completed, the Vietnamese partner must establish a company with 100% Vietnamese capital.

Step 2: Prepare documents to register to buy shares or shares of foreign investors

Step 3: Submit application to register to buy shares or shares of foreign investors

• Foreign investors submit documents to the Investment Registration Office – Department of Planning and Investment, where the company’s headquarters is located.
• Within 15 working days from the date of receipt of valid documents, the Department of Planning and Investment will issue a notice on capital investment, share purchase, invested capital and compliance with the conditions of Vietnamese company.

Step 4: Foreign investors invest, buy shares, attract capital to Vietnamese companies.

Vietnamese companies are allowed to open direct investment capital accounts if foreign investors contribute more than 51% of the capital. Investors contribute and transfer capital through direct investment capital accounts.

Partners and shareholders transferring capital must declare and pay taxes according to the provisions of the law on corporate income tax and corporate income tax (if any) at the time of transfer.

Step 5: Certificate of enterprise change registration

After the foreign investor’s investment is completed, the company will carry out procedures to change business registration. Change company registration to record investment or share purchase by foreign investors in company registration documents with relevant government agencies.

Step 6: Issue business license and operating license

5. Frequently asked questions about procedures for establishing a foreign-invested company

5.1 Do foreign-invested companies receive investment incentives like Vietnamese companies?

Foreign companies entering Vietnam will enjoy the same investment incentives as Vietnamese companies. To enjoy incentives, companies must meet the conditions prescribed by Vietnamese law.

5.2 What taxes must foreign companies pay according to regulations?

As a Vietnamese company, a foreign-invested company must pay property taxes as follows: VAT, registration tax, corporate tax, import-export tax (if there is import-export tax),…

5.3 When is an investment certificate required when establishing a foreign company?

• Projects of foreign investors.
• Investment projects of business associations: Foreign investors own 50% or more of the equity capital (business organizations with foreign investors) or the majority of partnership members are foreign individuals .

5.4 What types of foreign companies are likely to be established today?

There are many types of options, including: Forming a partnership. Establish a limited liability company with 1 member and two or more members. Establishment of a joint stock company.

5.5 Can foreign companies establish representative offices, branches, or sales departments?

According to the list of WTO obligations and Vietnamese law, foreign-invested companies have the right to establish their own branches, representative offices and offices. While some industries previously had limited market access, Vietnam only had a limited number of years to establish branches, representative offices and agents before joining the WTO.

VIETNAMESE LAW AND ACCOUNTING, with many years of experience in consulting on procedures for establishing a company with foreign capital, is committed to helping you clearly understand the procedures, legal regulations and investment environment of Vietnam. most clearly. If you have difficulty getting acquainted with the procedures for establishing a foreign-invested company, please contact us for advice on any questions. Thank!