In the context that Vietnam is strongly entering the international market through bilateral and multilateral agreements, with more open domestic policies, more and more foreign investors are interested in investing and developing business in Vietnam.

Therefore, the increasing of the need for the establishment of a foreign-invested company is inevitable. In order to help foreign investors and domestic partners better understand this type of business and the policies and legal procedures related to foreign-invested companies in Vietnam, we would like to answer the above issues through this article.

1. Distinguish foreign companies and foreign-invested companies.

Currently, there are still some investors who are not aware of the definition and having confusion between foreign companies and foreign-invested companies, that lead to unidentified or incorrectly defined Vietnamese legal policies and law that apply to each type of business.

Foreign companies are a type of foreign organization and are defined in Clause 26 Article 4 Enterprise Law 2014 as follows: "Foreign organization is an organization established abroad under foreign law."

On the other hand, a foreign-invested company is a type of economic organization established and operating in accordance with the laws of Vietnam under different types of enterprises, cooperatives, cooperative unions and other organizations carry out business investment activities and have foreign investors being members or shareholders.

Accordingly, it can be seen that these two types of companies have big differences based on the law regulating the establishment process of each type. Specifically, foreign companies are established in accordance with procedures and processes of foreign laws, while foreign-invested companies in Vietnam are companies established and operating under Vietnamese legal regulations.

In this article, we will explain the current processes, procedures and policies with the establishment of a foreign-invested company in Vietnam.

2. Conditions for establishing a foreign-invested company in Vietnam

Foreign investors, including foreign individuals and organizations, are allowed to establish companies in Vietnam in accordance with the law, before the establishment of a company, foreign investors must have investment projects and proceed procedures for granting Investment Registration Certificates (IRC) according to the law. In addition, investors must meet the following conditions:

- Owning unlimited charter capital, except for the following cases:

  • Ownership ratio of foreign investors in listed companies, public companies, securities business organizations and securities investment funds shall be in accordance with the law on securities;
  • The ownership ratio of foreign investors in equitized state-owned enterprises or in other forms of ownership conversion shall comply with the provisions of law on equitization and transformation of state enterprises;
  • The percentage of ownership of foreign investors not in the above two cases shall comply with other provisions of related laws and international treaties which the Socialist Republic of Vietnam is a member.

- Form of investment, the scope of operation, Vietnamese partners participating in the implementation of investment activities and other conditions in accordance with the international treaties to which the Socialist Republic of Vietnam is a member.

Thus, whether foreign investors can establish a foreign-invested company will depend on the business lines that investors intend to do business in Vietnam. For example, with business service activities in sending workers to work abroad, investors are not allowed to establish foreign-invested companies to conduct this activity because the current law stipulates only enterprises established and operating under the Enterprise Law with 100% of the charter capital owned by Vietnamese organizations and individuals shall be issued a license to operate (according to Article 2 Decree 126/2007/ND-CP). Or with the film production service business, foreign investors are only allowed to invest in the form of business cooperation contracts or joint ventures with Vietnamese partners to establish a company and the capital contribution of the foreign investors must not exceed 51% of the company's charter capital (according to Point a Division D. Audiovisual service, Item 2. Information services, Commitment 318 / WTO / CK service).

3. Where to register to establish a foreign-invested company?

Minh Khue Law Firm is currently a reputable and quality service provider to establish a foreign-invested company in Vietnam. Foreign investors, business partners of foreign investors in Vietnam can come to Minh Khue Law Firm for advice and guidance on implementing procedures.
The establishment of a foreign-invested company is carried out by Foreign Investment Department of Minh Khue Law Firm at Room 2007, 20th Floor, C2 Building, Vincom Tran Duy Hung, Tran Duy Hung Street, Trung Hoa Ward, Cau Giay District, Hanoi street implemented.

Person in charge of Foreign Investment Department of Minh Khue Law Firm:

Lawyer: To Thi Phuong Dzung

Email: dung@luatminhkhue.vn ;

Phone number: 0986 386 648

The dossier is filed in:

Department of Planning and Investment of provinces and cities under central authority where investors intend to establish a company.

4. Process of establishing a foreign-invested company in Vietnam.

The process of establishing a foreign-invested company is carried out by Minh Khue Law Firm's Foreign Investment Department through the following steps:

Step 1: Prepare and submit the application for Investment Registration Certificate

Dossiers of application for investment registration certificates include:

a. Request Form for investment project implementation ;

b. Investment projects proposal;

c. Copy of passport for an individual investor or copy of Establishment Certificate or other equivalent document confirming legal status for investor being an organization;

d. Copies of one of the following documents: financial statements for the last 2 years of investors; commitment to financial support of the parent company; commitment to financial support of financial institutions; guarantee of financial capacity of investors; documents explaining financial capacity of investors (can provide confirmation of bank account balance of investors granted by foreign banks);

e. Location lease contract where the investor intends to locate the head office;

f. Power of attorney issued by the investor to Minh Khue Law Firm to submit the application to the competent authority.

Investors prepare papers at section c, d and e; documents issued by foreign agencies or organizations must be consular legalized and notarized translations.

Ming Khue Law Firm will prepare the papers at section a, b, f and on behalf of investors submit at the Foreign Economic Relations Office - Department of Planning and Investment.

Step 2: Track the application and receive the Investment Registration Certificate

In case the application is not sufficient or denied, the investment registration agency will notify the investor in writing and state the reason. Minh Khue Law Firm will on behalf of investors to receive Notification and adjust dossiers according to regulations.

Within 15 days after receiving a complete and valid dossier, the investment registration agency will issue the Investment Registration Certificate.

Step 3: Prepare and submit the application file for the establishment of a foreign-invested company

Dossiers for registration of establishment of foreign-invested companies include:

a. Request form for registration of enterprise;

b. Company Charter;

c. Valid copy of one of the following documents: personal identification of the foreign investor is an individual, legal representative, the company member (for a limited liability company) or the founding shareholders (for the Join Stock Company);

d. A copy of an Establishment Certificate or other equivalent document confirming the legal status of an investor being an organization;

e. List of company members for limited liability companies with two or more members or List of founding shareholders and List of shareholders as foreign investors for joint stock companies;

f. Copy of Investment Registration Certificate (issued in Step 2);

g. Documents appointing individuals to act as authorized representatives of the owner, member, shareholder as an organization (if any);

h. Power of attorney for Minh Khue Law Firm to implement and submit documents at competent authorities.

Investors prepare papers at section c; documents issued by foreign agencies or organizations must be consular legalized and notarized translations.

Ming Khue Law Firm will prepare the papers at section a, b, d, e, f, g, h and on behalf of investors filed in Business Registration Office - Department of Planning and Investment.

Step 4: Receive the result of the Business Registration Certificate (BRC)

For a complete and valid application file, the Business Registration Office will issue a Business Registration Certificate within 03 working days from the date of receipt of a valid application file.

5. Contact to establish a foreign-invested company in Vietnam

Please contact: Minh Khue Law Company Limited

Address: Room 2007, 20th Floor, C2 Building, Vincom Tran Duy Hung, Tran Duy Hung Street, Trung Hoa Ward, Cau Giay District, Hanoi.

Phone number: 0986 386 648 - Lawyer: To Thi Phuong Dzung

Email: dung@luatminhkhue.vn

Sincerely thank you,

Foreign Investment Department - Minh Khue Law Company Limited