Today, establishing a foreign capital company in Vietnam is one of the great needs of investors. Along with the development of the national economy and international organizations, the formation of foreign-funded industries in Viet Nam is also increasing. Foreign-invested companies are one of the types of economic organizations and foreign investments. Steps to establish a foreign capital company must be in accordance with law and must meet certain conditions of establishment. To better understand this issue, Luat va Ke toan Viet My sends the following article to readers to learn about this activity.

1. How is foreign capital company interpreted?

According to Clause 22, Article 3 of the Investment Law defines: “A foreign-invested economic organization is an economic organization with foreign investors as members or shareholders“. It is understandable that the Foreign Capital Company can understand that the company is established with foreign capital contributed by the entity, the capital share can be 100% of the capital contributed by the foreign investor and may also be less depending on the area of operation, size, and the investor’s needs when capital contribution or establishment.

2. Conditions to be met when establishing a foreign capital company in Vietnam

Foreign investors who establish a company in Vietnam need to meet the conditions of market access in Vietnam to foreign investors. The NPI should consider the limited sectors for foreign investors, including: sectors and occupations that have not yet had access to the market and sectors and occupations with conditional market access.

Prior to establishing a company in Viet Nam, foreign investment projects were required to carry out procedures for the issuance of Investment Registration Certificates (GCNs), but no procedures were required for small and medium-sized companies. Creative start-ups and innovative start-up investment funds shall be governed by the law on supporting small and medium enterprises.

3. Documents for establishing a foreign invested company in Vietnam

Documents and records to establish a foreign-invested company in Vietnam will include:

• Request for implementation of an investment project (including a commitment to bear all costs and risks if the project is not approved)
• Proofs of investor legal status (For example, a copy of passport certification, business license, operating license or other equivalent document that can confirm the investor’s legal status);
• The document proving the financial capacity of the NPI includes at least one of the following documents: the investor’s last two-year financial statements; the financial assistance commitments of the financial institution; the parent company’s financial assistance guarantee, etc.
• Propose an investment project
• If the project in the case of investment does not require the State to allocate land, lease land or permit land use-use-use-use-use-use-use-use-use of land (QSDD) documents or other documents to be submitted for the implementation of the investment project;
• For projects subject to assessment and consultation on technology, explanations on technology used in investment projects shall be required in accordance with the law on technology transfer;
• Other documents related to investment projects and requirements on conditions and capacities of investors as stipulated by law (if any).
• Application for issuance of Certificate of business registration;
• The company charter (this charter is consistent with the type of company selected) and a list of shareholders, partners and authorized representatives (If any)

4. Procedures for establishing a foreign company in Vietnam

Step 1: Apply for an Investment Registration Certificate (GCND)

Investors must declare project information on foreign investment on the National Information System (NTP) before applying for an Investment Registration Certificate.  After that, submit the application form to the Investment Registration Agency for 15 working days (from the date of declaration of the online application)

After the competent authority receives the dossier, the NPI will be granted an account to access the National Information System for Foreign Investment. The NPI can then monitor the processing of the records. The competent authority shall use this information system to receive investment projects, process and issue codes for such investment projects.

The deadline for processing dossiers of investment registration certificates shall be within a period of 15 working days from receipt of all dossiers. Investment registration agency will issue GCNN DPI. If the dossier is not approved, the competent authority will notify the NPI in writing and clearly state the reason for refusal.

Step 2: Apply for a Certificate of Enterprise Registration (GCN)

In order to establish a foreign capital company in Vietnam, it is necessary to first apply for GCN. The application for GCN will include documents such as:

• Written request for registration of an enterprise
• Company charter
• List of founding members/shareholders of the company
• Authorization if this procedure is not carried out manually
• Certificate of investment registration (Notary copy)
• Some personal documents of legal representatives such as CCCD, passport (Notary Copy)

Enterprise registration dossier resolution agency is the Provincial/City Business Registration Office where the enterprise is located.

Time to process and issue a certificate of business registration: 5-8 business days.

Step 3: Apply for a business license when doing business in a number of conditional industries

As stipulated in Decree 09/2018/ND-CP on the activities of buying and selling goods and activities directly related to the purchase and sale of goods by foreign-invested economic organizations in Vietnam:

The NPI is not a Business License (GPKD) for Export, Import and Wholesale of Goods (excluding those of goods: Oil, lubricating fat; rice; sugar; recorded articles; books, newspapers and magazines).
The NPI performs GPKD level when carrying out retail activities of goods and establishing retail facilities for goods.

Step 4: Opening the Foreign Investment Capital Account

After completing the procedures for establishing an enterprise, the investor shall open a foreign direct investment account. In this account, capital is transferred in accordance with the time limit stated on the Investment Certificate. In addition to opening a foreign direct investment capital account, a foreign-invested company needs to open an additional transaction account to receive money from an investment capital account for revenue and expenditure transactions in Vietnam. It helps to efficiently and comfortably manage the company’s finances in the country’s business.

Step 5: Perform the following procedures when establishing a company

After completing the process of establishing the company, the NPI needs to carry out the following procedures: Place a sign at the headquarters address; Register a digital signature for electronic tax payment and online tax return; Execute tax declaration and payment; Register for electronic invoices to be used with the tax administrative agency, etc.

5. Fast, reputable foreign company establishment service in Vietnam

At present, many foreign investors set up businesses in Vietnam. There have been many cases where after preparing the documents, investors need to declare and provide proper establishment information to get approval. Many customers have been denied investment registration certificates by the investment management agency because: project location does not match business objectives; financial capacity does not match business size; investment discount does not match project information; and as a Legal Service Provider. Viet My Law and Accounting will carry out procedures for establishing foreign companies for customers, specifically implementing the following items:

• Consulting for investment registration information: Consulting investors about the types of enterprises in Vietnam today and relying on information such as business sectors, capital contribution, investor projects, addresses, etc. we will advise the type best suited to the needs of the NPI (either Limited Company or Joint Stock Company);
• To advise and instruct investors to prepare documents and documents necessary for establishing a foreign-invested company;
• Once an agreement is reached, we will prepare on behalf of our customers the company establishment dossier for foreign investors quickly and comply with the regulations in Vietnam
• Authorized representatives and on behalf of investors working with competent authorities in the process of establishing enterprises in Vietnam for investors;
• Consultation and implementation of procedures after establishment of a company, legal advice on taxation and accounting or matters on overseas transfer of profits, etc. for investors;
• Legal advice on activities arising from business implementation in Vietnam to investors if there is a need.

The above is the details of the establishment of a foreign capital company in Vietnam that Luat va Ke toan Viet My have compiled for your reference. We hope this article provides useful information and knowledge to readers, especially investors. If there is a need to use our legal and accounting services, please contact us immediately at the number shown on the screen.

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