Investment Registration Process in Vietnam for Foreign Investors

Investment Registration Process in Vietnam for Foreign Investors

Vietnam, with its vibrant economy and strategic location in Southeast Asia, has become a magnet for foreign investors seeking lucrative opportunities. The Vietnamese government, in an effort to encourage foreign investment, has established regulations governing the participation of international businesses in domestic projects. Understanding these conditions is essential for foreign investors looking to make the mark in this dynamic market. This article,  Apolo Lawyers - Solicitors & Litigators (Tel:(+84) 903. 419. 479) will explores the key aspects of establishing a foreign-invested enterprise in Vietnam, including the investment regulations.

1. Vietnamese Investment Regulations: A Comprehensive Overview

Vietnam has a well-defined set of regulations to guide foreign investors. These rules, often updated to align with global economic trends, outline the permissible sectors, ownership limits, and necessary licenses for foreign entities. Studying these regulations thoroughly is the first step for any foreign investor considering Vietnam as the investment destination.

2. Investment Projects in Vietnam: A Plethora of Options

Foreign investors in Vietnam have a diverse array of projects to choose from, including manufacturing, real estate, technology, and services sectors. Each sector has its specific set of regulations and guidelines, ensuring that investors can find a niche that aligns with an expertise and interests. Understanding the requirements for each type of project is vital for making informed investment decisions.

Investment Registration Process in Vietnam for Foreign Investors

3. Foreign Direct Investment (FDI) Guidelines: Navigating the Complexities

Foreign Direct Investment (FDI) guidelines in Vietnam are designed to facilitate the smooth entry and operation of international businesses. These guidelines cover aspects like capital requirements, legal structures, and tax obligations. Comprehending the FDI guidelines is crucial for foreign investors aiming to establish a long-term presence in Vietnam and tap into its growing market.

4. Popular and permitted forms of investment for foreign investors:

According to Article 21 of the Investment Law 2020, investment forms include:

• Investing in establishing economic organizations.
• Investing in capital contribution, buying shares, purchasing capital contributions.
• Implement investment projects.
• Investment in the form of BCC contract.
• New forms of investment and types of economic organizations according to Government regulations.

Investment Registration Process in Vietnam for Foreign Investors

5. Investment conditions apply to foreign investors investing

5.1. Ownership Capital Requirements

According to Vietnamese legal regulations, foreign investors are allowed unrestricted ownership of charter capital within economic organizations. However, there are special cases such as ownership in listed companies, public companies, or state-owned enterprises that have undergone ownership conversions; these regulations are adjusted according to specific legal provisions.

5.2. Investment Form Requirements

Foreign investors in Vietnam can choose from various investment forms, including establishing companies with 100% foreign capital or joint ventures with Vietnamese partners. They can also invest through capital contribution, share purchase, or through cooperation contracts such as Public-Private Partnerships (PPP) or Build-Transfer-Operate (BCC) contracts.

5.3. Investment Scope Requirements

Industries committed to by Vietnam have specific investment requirements. Investment registration agencies will review and issue investment registration certificates or certificates for capital contribution and share purchase according to the provisions of the Investment Law. For sectors without commitments, foreign investors must comply with Vietnamese laws.

5.4. Vietnamese Partners in Investment Activities

Another crucial point is that foreign investors often need to enter into joint ventures with Vietnamese enterprises in various sectors. For instance, in the advertising sector, foreign investors are required to collaborate with Vietnamese partners who have been granted licenses, according to the commitments made upon joining the World Trade Organization.

6. Investment Registration Process in Vietnam for Foreign Investors

Investing in Vietnam for foreign investors requires adherence to specific legal regulations and procedures. Below is the investment registration process in Vietnam:

Step 1: Registering for the Investment Certificate

• Before establishing a business in Vietnam, foreign investors must have an investment project and complete the procedures to obtain the Investment Certificate. This process involves the following key steps:
• Document Preparation: Foreign investors prepare a complete and valid set of documents.
• Submission of Documents: The documents are submitted to the Department of Planning and Investment. Within 15 days from the date of receiving the complete and valid documents, the Department of Planning and Investment will issue the Investment Certificate. If the application is rejected, the reasons will be clearly stated in the response document.
• For Capital Contribution/Share Purchase: If foreign investors contribute capital, purchase shares, or become the owner of at least 51% of the charter capital of the Vietnamese company, they only need to submit a report using form I.13 according to Circular No. 16/2015/TT-BKHĐT. The report includes information about the investment project, objectives, scale, capital, location, duration, progress, labor requirements, and investment incentives (if any).

Investment Registration Process in Vietnam for Foreign Investors

Step 2: Registering the Establishment of a Foreign-Invested Company

• After receiving the Investment Certificate, foreign investors proceed to register the establishment of a company with foreign investment. The main steps include:
• Document Preparation: Foreign investors prepare a complete set of documents and submit them to the Business Registration Office in the province/city where the company will be headquartered.
• Document Processing: The Business Registration Office processes the documents within 5-7 working days.
• Issuance of Business Registration Certificate: Once the documents are accepted, the Business Registration Office issues the Business Registration Certificate for the foreign investor.
• The investment registration process in Vietnam ensures that foreign enterprises can participate in the Vietnamese market legally and transparently, benefiting both investors and the Vietnamese economy.

Contact Apolo Lawyers via email: contact@apolo.com.vn and hotline: (+84) 903.419.479 for more information.