Foreign-Invested Enterprise Establishment

In the context of deep international economic integration, Vietnam is becoming an attractive destination for foreign investors to establish foreign-invested enterprises. However, administrative barriers and differences in legal regulations often pose major challenges for investors when commencing project implementation.

This article is a detailed guide and precise legal roadmap for obtaining investment registration certificates and establishing foreign-invested enterprises in Vietnam.

1. Essential Information for Establishing a Foreign-Invested Enterprise

Before proceeding with investment procedures to establish an enterprise in Vietnam, foreign investors should take note of the following matters:

• Lines of business: Specifically, whether the operations involve manufacturing, packaging, processing, or commercial trading, buying and selling, and import-export.
• Capital amount: Depending on each line of business, there may be requirements for a minimum capital amount to proceed with the investment.
• Capital source: Is the intended investment capital owned by an individual or an organization? What is the nationality of the contributing individual or organization? How is the capital proportion allocated?
• Intended location: Location for setting up the headquarters, factory, workshop, or direct business activity premises.

In case you are still contemplating, please contact Simple Law immediately for consultation aligned with your intentions, objectives, and legal procedures.

2. Procedures for establishing a foreign-invested enterprise

Unlike domestic enterprises, foreign investors establishing a foreign-invested enterprise in Vietnam for the first time must execute the following steps:

Step 1: Procedures for issuance of the Investment Registration Certificate for the foreign-invested enterprise establishment project

Pursuant to Article 38 of the Law on Investment 2020, the investor must carry out procedures for issuance of the Investment Registration Certificate (IRC) to record the investment project’s information.

• Competent authority: Department of Finance of the province/city or Management Board of Industrial Parks/Export Processing Zones (if the project is located within an industrial park).

• Processing time: From 15 to 20 working days from the receipt of a complete and valid application.

• Assessment criteria: Project objectives, execution location, capital scale, capital contribution schedule, and technology utilized.

Step 2: Procedures for issuance of the Enterprise Registration Certificate for the foreign-invested enterprise

After obtaining the IRC, the investor registers the establishment of the legal entity to execute the project in accordance with the Law on Enterprises 2020.

• Competent authority: Business Registration Office under the Department of Finance.

• Processing time: 03 to 05 working days.

• Result: The enterprise officially acquires its tax identification number and legal status to conduct transactions in Vietnam.

3. Required documents

To optimize processing time and ensure accuracy, investors need to prepare the following documents:

1. Application documents for project approval to establish a foreign-invested enterprise: In accordance with the provisions of the Law on Investment 2020 and the Law on Enterprises 2020.

2. Legal status documents: Passport for individual investors; business registration certificate/license for organizational investors.

3. Financial capacity report: Financial statements for the last 02 years or bank balance confirmation equivalent to the intended investment capital amount.

4. Documents on project execution location: Office/factory lease contract or principal agreement on the location.

5. Explanation on technology: (Applicable to projects subject to restrictions or high-technology requirements).

4. Key Considerations for Investors

• Capital Contribution: Pursuant to Article 47 and Article 75 of the Law on Enterprises 2020, investors must contribute the fully committed charter capital within 90 days from the issuance date of the Enterprise Registration Certificate (ERC).

• Investment Capital Account: FDI enterprises are strictly required to open a Direct Investment Capital Account (DICA) at an authorized bank to execute capital injections and profit remittances overseas.

• Conditional Business Lines: Certain business sectors such as retail trading, education, travel and tourism services, etc., require additional sub-licenses (business licenses/operating permits) following company establishment.

Are you hesitant about proving financial capacity, unclear about restricted business lines, or concerned about whether your project requires sub-licenses? Are administrative procedures causing you concern? Every query will be thoroughly addressed and advised by the Simple Law team. Contact us immediately to receive a comprehensive package quote:

Hotline/WhatsApp: (+84) 934.636.130

Website: simplelaw.vn

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Implementation steps:

Step 1

Consultation

Advising on procedures based on scale and lines of business

Step 2

Investment Registration

Applying for the Investment Registration Certificate

Step 3

Enterprise Establishment

Registering the enterprise with the Department of Finance

Step 4

Results

Final result