Two popular ways for foreign-invested enterprises to operate in Vietnam

You want to start a business? You have foreign investment but don't know how to set up a business? Are you an investor who wants to set up a business without understanding the legal aspects? YNN Global will answer your questions. What is the procedure for foreign-invested enterprises to come into operation?

There are many ways for foreign-invested enterprises to operate in Vietnam, below YNN Global will introduce you to 2 popular forms to invest in Vietnam, which is the form of investors contributing capital right from the start. capital contribution or purchase of shares or contributed capital in Vietnamese enterprises.

Method 1: Establishing a foreign-invested company in the form of investors contributing capital from the beginning

Characteristics

Establishing a foreign-invested company in the form of investors contributing capital from the beginning is the form in which foreign investors will contribute capital right from the beginning of establishing a company in Vietnam. Foreign investors, depending on the field of operation, the capital contribution of foreign investors can contribute from 1% to 100% of the total charter capital of the company.

Investment procedures

Procedures for establishing a foreign-invested enterprise in the form of investors contributing capital from the outset need to follow these steps:

Step 1: Prepare documents related to Investment Registration Certificate

Prepare the following documents:

• A written request for the implementation of an investment project.
• Documents proving legal status
• Investment project proposal
• Documents proving the financial capacity of the investor
• Office lease contract, documents proving the lessor's right to lease
• Explanation on the use of technology for investment projects
• Proposing land use needs

Step 2: Submit the application for the Investment Registration Certificate

The following documents need to be prepared:

• Online declaration of investment project information on the national information system on foreign investment.
• Submit an application for the Investment Registration Certificate.

Submit applications at:

• Department of Planning and Investment in the province where the company's head office is located.
• The management board of industrial parks, export processing zones, high-tech zones and economic zones of the province where your company is headquartered.

Step 3: Issuing Investment Registration Certificate

Within 15 days after receiving the complete dossier, the investment registration agency will issue the Investment Registration Certificate. If it is refused, it must notify the investor in writing and clearly state the reasons why.

Step 4: Prepare documents and submit the application for the Certificate of Business Registration

After being granted an investment registration certificate, the investor must carry out the procedures for issuance of an enterprise registration certificate, including:

• Business registration application form.
• Articles of the company's charter and decisions on capital contribution, appointment of representatives and managers.
• List of members.
• Copies of required documents.
• Certificate of business registration or equivalent documents of the organization, authorization documents.

Step 5: Publish information for business registration

After being granted an enterprise registration certificate, an enterprise must pay a publication fee in accordance with the law, including the contents of the enterprise registration certificate and the following information:

• Business.
• List of founding shareholders, foreign investors for joint-stock companies.

Step 6: Engrave company seal

The enterprises themselves decide on the type, quantity, form and content of the seal of the enterprise, branch, representative office and other units of the enterprise.

Step 7: Issuing a Business License or a Qualified License to Operate

Issuing a business license only applies to companies operating in the field of retailing goods to consumers or setting up retail establishments.

Step 8: Open a foreign direct investment capital account

Step 9: Carry out the following procedures to establish a company

• Signboard at headquarters.

• Register digital signature.

• Buy digital signatures.

• Proposal to issue e-invoices.

• Report on the status of project implementation according to regulations.

• Tax declaration.

Method 2: Establishing a foreign-invested company in the form of capital contribution or share purchase

Characteristics

The characteristic is that foreign investors contributing capital to Vietnamese companies that have obtained an enterprise registration certificate, depending on the field of operation, can contribute capital from 1%-100% of capital to a Vietnamese company. Foreign investors will carry out the procedures for buying contributed capital and buying shares of Vietnamese companies. After that, the Vietnamese company will become a foreign invested company.

Investment procedures

Procedures for establishing a foreign-invested company in the form of capital contribution or share purchase need to follow these steps:

Step 1: Establish a company with Vietnamese capital

Foreign investors can only contribute capital by buying shares or contributed capital when a Vietnamese company has been established.

Step 2: Prepare registration documents to purchase capital contribution or share purchase from foreign investors

• Registration documents for capital contribution, share purchase, capital contribution.

•  Copies of required documents.

• Written agreement on capital contribution, share purchase, purchase of contributed capital.

• Declaration documents.

Step 3: Submit registration form

• Submit the application file at the Investment Registration Office - Department of Planning and Investment at the place where the enterprise's head office is located.

• Within 15 working days from the date of receipt of a valid application, a notice will be issued on the satisfaction of conditions for capital contribution, share purchase, contributed capital and Vietnamese enterprises.

Step 4: Foreign investors and Vietnamese enterprises.

• If foreign investors contribute more than 51% capital, the Vietnamese company will open a direct investment capital account.

• Members and shareholders transferring capital must declare and pay tax upon transfer in accordance with the law on personal income tax and corporate income tax.

Step 5: Change the business registration certificate

Records include:

• Notice of change of business registration contents.
• The company's decision to change.
• Minutes of meeting on company change.
• Transfer contract and related documents.
• Contributing members list.
• Copies of relevant documents.

Step 6: Issuing a Business License and an Eligible License for Operation.

Above is all information about the most popular ways to set up foreign-invested enterprises in Vietnam. Customers wishing to establish the most popular foreign-invested enterprise in Vietnam, please contact YNN GLOBAL for advice. 

Related: Advice on setting up a joint stock company or a limited liability company

 

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