Establishing an FDI company enables international investors to set up a fully legal business entity in Vietnam, facilitating smooth business and investment operations. In this article, VNJ International Law Firm will provide a comprehensive guide to the latest procedures for establishing an FDI enterprise in Vietnam in 2024.
In recent years, Vietnam has become an attractive destination for foreign investors due to its stable economic development, favorable geographical location, and open-door policies. According to a report by the Ministry of Planning and Investment, by January 2024, Vietnam had attracted more than $300 billion in FDI (Foreign Direct Investment), with sectors like manufacturing, real estate, and information technology drawing the most attention from investors.
1. Conditions for establishing FDI enterprises
- Conditions for capital contribution in the formation of a new enterprise: According to Article 24 of Investment Law No. 61/2020/QH14, foreign investors must meet the following requirements:
- Market access: Investors are only allowed to participate in specific industries permitted by law and cannot invest in prohibited sectors.
- Investment project preparation: Investors must prepare an investment project and apply for or adjust the investment registration certificate before establishing an enterprise.
- Conditions for purchasing shares or contributed capital: Based on Article 24 of the 2020 Investment Law, the following conditions must be met:
- Market access: Investors must comply with market access regulations in accordance with the Investment Law.
- National security and defense: Ensure compliance with national security and defense requirements.
- Land law compliance: Adhere to regulations regarding land use rights in specific areas such as communes, wards, townships, borders, islands, or coastal areas.
- Conditions regarding the investor’s identity and nationality:
- Investor identity: The investor can be an individual over 18 years old or an organization from a WTO member country or a country that has signed a bilateral investment treaty with Vietnam.
- Investor nationality: There are no specific regulations on nationality, meaning investors from any country can invest in Vietnam as long as they comply with legal regulations and receive approval.
- Financial capacity conditions: Investors must demonstrate sufficient financial capacity to invest in Vietnam, including assessments and compliance with investment-related regulations.
- Conditions regarding the office and project location: Investors must have a project location in Vietnam, supported by a rental agreement and legal documents from the lessor.
- Capacity conditions: Investors must meet the requirements for conditional business sectors under current regulations.
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2. Forms of FDI enterprise establishment
- Establishing a foreign-invested company through capital contribution from the beginning: In this case, the foreign investor will contribute capital right from the company’s formation in Vietnam. The foreign investor’s capital contribution ratio can range from 1% to 100% of the charter capital, depending on the company’s business sector.
- Establishing a foreign-invested company through capital or share purchase: In this form, foreign investors will invest in a Vietnamese company that has already been granted an Enterprise Registration Certificate. The capital contribution ratio can range from 1% to 100% of the company’s capital, depending on the business sector. Investors will complete the necessary procedures to purchase the contributed capital or shares. Once completed, the Vietnamese company will become a foreign-invested company.
3. Procedures for Establishing an FDI Enterprise in Vietnam in 2024
Step 1: Prepare documents to apply for an Investment Certificate Investors must prepare an investment certificate application dossier in accordance with Article 33 of the 2020 Investment Law, including:
- Investment project proposal: Contains information on the investor, investment objectives, capital, project size, financing plan, timeline, project location, economic-social impact assessment, and investment incentives request.
- Legal status documents:
- For individuals: A copy of ID/CCCD/Passport.
- For organizations: A copy of the Certificate of Establishment or equivalent legal document.
- Financial capacity proof:
- For individuals: Savings book, account balance certificate, etc.
- For organizations: Financial statements for the last two years, financial commitment from a financial institution, or supporting documents from the parent company.
Step 2: Submit the investment certificate application to the investment registration authority as per Article 36 of Decree 31/2021/ND-CP. The investment registration authority will review the dossier and issue an investment certificate within 15 days.
Step 3: Apply for an Enterprise Registration Certificate following Chapter IV of Decree 01/2021/ND-CP.
Step 4: Publicly announce the company’s information as required.
Step 5: Make the company seal.
Step 6: Open a foreign direct investment account at an authorized bank.
Step 7: Complete post-establishment procedures, including capital contribution commitments, digital signature registration, e-invoice issuance, tax declaration, and other relevant processes.
4. VNJ International Law Firm’s Services for Establishing a Foreign-Invested Enterprise in Vietnam
With over 20 years of experience in foreign investment consultancy, VNJ International Law Firm is committed to providing comprehensive support to investors, from document preparation to handling legal procedures, ensuring smooth business operations.
- Consultation on conditions for establishing a foreign-invested company: This includes the foreign investor’s capital contribution ratio in Vietnam, business sector requirements, project location, and the necessary procedures before and after company establishment.
- Representation in dealing with state authorities: Representing the investor in dealing with Vietnamese authorities to complete procedures such as obtaining the Investment Registration Certificate, the Enterprise Registration Certificate, the Business License, industry-specific licenses, corporate seal, post-establishment procedures, opening a direct investment capital account, and reporting on the investment project’s status.
- Consultation on choosing the type of company: Guiding investors in choosing between a Limited Liability Company and a Joint Stock Company that aligns with their investment objectives.
- Consultation on opening accounts and capital contribution deadlines: Assisting investors in opening capital transfer accounts and ensuring compliance with the prescribed capital contribution deadlines.
- Guidance on preparing necessary documents: Advising on the documents required for establishing a foreign-invested company.
- Comprehensive consulting services: Providing ongoing consultation and full-service packages, including accounting, legal, and tax services for activities arising during the course of business in Vietnam.
- Drafting company establishment documents: Offering document drafting services necessary for company establishment on behalf of the investor.
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VNJ International Law Firm with a team of experienced lawyers and a solid track record, specializes in advising on all matters related to various fields such as international investment consulting, land advisory, handling legal documents, service procedures, obtaining permits, and other legal matters. VNJ is committed to providing the most optimal and effective solutions for clients in any legal situation.
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