How to establish a company, enterprise with foreign investment capital

The article provides detailed information on documents and procedures for establishing a company or enterprise with foreign investment capital in Vietnam and 7 notes you MUST READ.

Legal basis

• WTO Commitment Schedule
• Enterprise Law No. 59/2020/QH14 was promulgated by the National Assembly on June 17, 2020;
• Investment Law No. 61/2020/QH14 was promulgated by the National Assembly on June 17, 2020;
• Decree No. 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Investment Law.

There are many forms of investment in the Vietnamese market, of which establishing a company is the form chosen by many foreign investors to officially do business. However, the procedure for establishing a foreign-invested company is not as simple as establishing a 100% Vietnamese-owned company. Below, fdiinvietnam.com will show you the fastest way to establish a foreign-invested company, helping to save a lot of time and costs.

2 ways to establish a foreign invested enterprise

Depending on the specific capital contribution conditions, investors can choose 1 of the following 2 ways to establish a foreign-invested company:

► Method 1. Register for investment certificate 

Having an investment certificate will facilitate investors when bidding for large projects and some large state projects. However, the cost of establishing a foreign-invested company in this way is relatively high and takes a lot of investors’ time.

► Method 2. Establish a foreign-invested company by contributing capital, purchasing shares, or purchasing capital contributions in a Vietnamese company.

Establishing a foreign-invested company in this way helps save costs, time and simplifies the accounting regime compared to method 1.

If foreign investors want to establish this way but do not have friends or cannot hire a Vietnamese person to be the legal representative of the enterprise, they can refer to the service of establishing a foreign-invested company of fdiinvietnam.com with a service fee of only 9,000,000 VND.

Method 1 – Register for investment certificate

1. Procedures for applying for an investment registration certificate

Within the scope of this article, fdiinvietnam.com would like to provide you with the procedure for granting investment registration certificates for investment projects not subject to investment policy decisions.

Application for investment certificate includes the following documents:

• Document requesting to implement investment project;
• Investment project proposal;
• Head office lease contract, documents proving the lessor’s right to lease (land use right certificate, construction permit, business registration certificate with real estate business function of the lessor or equivalent documents);
• Document verifying the foreign investor’s bank account balance equal to or greater than the investment amount;
• Copy of ID card/citizen identification card or passport for individual investors.

For foreign investors who are organizations, it is necessary to provide:

• Copy of business registration certificate, certificate of establishment or other equivalent document of the foreign organization;
• Copy of ID card/citizen identification card/passport of the representative of capital contribution for foreign investment organization in Vietnam;
• Financial statements within the last 2 years audited by a foreign organization (must be consular legalized, valid for 90 days).

>> FREE DOWNLOAD:  Application for investment certificate.

Note :

Documents and reports sent to competent state agencies must be made in Vietnamese. In case the application for investment certificate has documents in a foreign language, they must be consular legalized, then translated and notarized into Vietnamese.

Submitting documents: Investors submit documents directly to the Investment Registration Office – Department of Planning and Investment, where the enterprise has its headquarters.

Processing time: Within 15 working days from the date of submission of the application, the Investment Registration Authority shall check the validity of the application and issue the investment certificate. In case the application is invalid, the Investment Registration Authority shall issue a notice instructing the investor to supplement or edit the application and resubmit it.

2. Procedures for applying for a business registration certificate

After being granted an investment registration certificate, the investor continues to carry out the procedure to apply for a business registration certificate at the Business Registration Office.

Application for business registration certificate includes: 

• Business registration application;
• Company charter;
• List of members (for LLCs with 2 or more members) or list of founding shareholders (for joint stock companies);
• Individual investors need to provide: Valid copies of ID cards/citizen identification cards/passports of members, founding shareholders, and legal representatives;
• The investor contributing capital to establish the organization must provide:
  • Valid copy of the establishment decision, business registration certificate, other equivalent documents of the organization;
  • Authorized representative appointment document; valid copy of ID card/CCCD/Passport of authorized representative of the member organization.
• Authorization letter for another person to submit application and receive results;
• Valid copy of ID card/citizen identification card/passport of the authorized person.

>> FREE DOWNLOAD:  Application for business registration certificate.

Submitting documents: Investors submit documents directly to the Business Registration Office – Department of Planning & Investment where the enterprise is headquartered or submit online at: https://dangkykinhdoanh.gov.vn/ via business registration account or public digital signature. In many large cities such as Hanoi, Ho Chi Minh City, Binh Duong, 100% of documents are submitted online. Therefore, investors need to understand clearly to save time and effort.

Processing time: 5-7 working days from the date of receipt of the application, the Business Registration Office will check the validity of the application and issue a Business Registration Certificate. In case the application is invalid, the Business Registration Office will issue a notice instructing the investor to amend, supplement the application and resubmit.

Method 2 – Establish a foreign-invested company by contributing capital, purchasing shares, or purchasing capital contributions in a Vietnamese company.

1. Establish a company with 100% Vietnamese capital

Submitting documents: Investors submit documents directly to the Business Registration Office – Department of Planning & Investment where the enterprise is headquartered or submit online at: https://dangkykinhdoanh.gov.vn/ via business registration account or public digital signature. Note that in Hanoi, Ho Chi Minh City, Binh Duong, only online applications are accepted.

Processing time: 5-7 working days from the date of receipt of the application, the Business Registration Office will check the validity of the application and issue a business registration certificate. In case the application is invalid, the Business Registration Office will issue a notice instructing the investor to amend, supplement the application and resubmit.

2. Procedures for transferring capital contributions to foreign individuals and organizations

Step 1. Carry out procedures to apply for a document of eligibility to contribute capital to foreign investors.

Prepare documents:

Submit application: Submit directly at the one-stop department of the Investment Registration Office – Department of Planning & Investment where the company’s headquarters is located.

Processing time: Within 10 working days from the date of receipt of the application, the Investment Registration Office shall check the validity of the application and issue a notice on the fulfillment of the conditions for capital contribution, share purchase, and capital repurchase of foreign investors. In case the application is invalid, the Investment Registration Office shall issue a notice of supplementation, the enterprise shall correct the application and resubmit from the beginning as requested.

Note :

At this time, the enterprise continues to carry out procedures to transfer capital from Vietnamese individuals/organizations to foreign individuals/organizations.

Step 2. Carry out procedures to transfer part or all of the capital contribution of Vietnamese individuals/organizations to foreign investors.

Prepare documents:

Submit application: Submit directly at the one-stop department of the Business Registration Office – Department of Planning & Investment where the company’s headquarters is located or submit application online at https://dangkykinhdoanh.gov.vn/ using a business registration account or public digital signature.

Processing time: 5-7 working days from the date of application submission, the Business Registration Office will check the validity of the application and issue a new business registration certificate. In case the application is invalid, the Business Registration Office will issue a supplementary notice, the enterprise must correct the application and resubmit from the beginning as requested.

Note : For joint stock companies, after transferring to new shareholders, the transferring shareholder must complete the procedure of submitting a personal income tax declaration and paying personal income tax (0.1% of the transfer value) to the tax authority.

7 things to note when establishing a foreign invested company

To facilitate the establishment of a company in Vietnam, fdiinvietnam.com has 7 notes for you:

1. Regarding registered investment and business lines

Investors should register for industries that Vietnam has clearly committed to in bilateral and multilateral international treaties to avoid being rejected by the Investment Registration Agency when applying for an investment license.

Do not register business lines that are not yet or are not really necessary. This will help investors save maximum time and costs to carry out legal procedures arising when registering and implementing business investment activities in Vietnam.

After establishing a business, if the investor wants to do business in a registered conditional industry, he/she must apply for a license from the Department of Industry and Trade and ensure that all the prescribed conditions are met to be able to do business in that industry throughout the operation.

2. About investment capital, charter capital

Depending on the scale, development needs and investment field, investors need to register an appropriate investment capital level. They should not register too little, leading to having to make multiple adjustments, wasting time and money.

After establishing a foreign-invested company in Vietnam, investors must contribute capital within the time limit registered on the investment certificate and company charter. Therefore, within 90 days (for both LLCs and joint stock companies) from the date of issuance of the business registration certificate, the company must open a capital account. After that, investors deposit money into the company’s capital account corresponding to their contributed capital.

3. Investment location and company establishment

The location of the investment project/company headquarters in Vietnam must have a clear address; have sufficient documents proving ownership and/or lease/sublease rights, if any; the location/office for lease must be permitted for lease, designed and constructed in accordance with Vietnamese law, and not in a state of dispute. The leased office must be located in an area designed and constructed to serve office functions on the basis of a construction permit granted by a competent Vietnamese state agency.

4. About the company seal

After completing the establishment procedures, the enterprise needs to carve a seal for use. According to the provisions of the Enterprise Law 2020, enterprises have full authority to decide on the form, content and number of seals and do not need to notify the Business Registration Authority when changing, canceling the seal model or changing the number of seals.

5. On labor use

Foreign-invested companies can hire foreign or Vietnamese workers. However, if they employ foreign workers, the company must carry out procedures to apply for a visa, approval to employ foreign workers, work permits, and temporary residence cards according to the conditions and procedures prescribed by Vietnamese law .

6. About the legal representative

The legal representative of a foreign-invested company in Vietnam is an individual. A limited liability company or a joint stock company may have one or more legal representatives.

The company must ensure that there is always at least one legal representative residing in Vietnam. In case the company has only one legal representative, that person must reside in Vietnam and must authorize in writing another person to exercise the rights and obligations of the legal representative when leaving Vietnam. In this case, the legal representative is still responsible for exercising the authorized rights and obligations.

7. About tax obligations

Just like Vietnamese enterprises, foreign-invested enterprises must also pay taxes such as: Business license tax, value added tax, corporate income tax when making profits. In addition, enterprises must also pay other taxes if any such as resource tax, import-export tax, special consumption tax, etc. if any according to the provisions of law.

See more:  Taxes to be paid after establishing a company.

For foreign investors, self-study and implementation of procedures for establishing a company with foreign investors is really quite complicated and time-consuming. If you are interested and have a need to establish a company with foreign investment capital, please contact Online Accounting at 0978 578 866 (North) , 033 9962 333 (Central) or 033 9962 333 (South) for support.

Some frequently asked questions when establishing a foreign invested company