9th Floor Diamond Plaza Building, 34 Le Duan, Ben Nghe Ward, District 1, Ho Chi Minh City

info@bkclaw.vn

0901 333 341

|

Conditions for Foreigners to Establish a Company in Vietnam

0
(0)

With Vietnam’s rapidly developing economy and increasingly attractive investment environment, the country has drawn significant interest from foreign investors. In particular, the conditions for foreigners to establish a company in Vietnam have been supported by numerous state policies. To open a company in Vietnam, foreign individuals must have a clear understanding of the legal conditions and necessary procedures. Key factors such as the type of enterprise, investment sector, and minimum capital requirements are critical points that investors need to consider. In this article, we will explore the conditions and procedures that enable foreigners to establish a business in Vietnam in the most favorable manner.

Conditions Regarding the Investor (Subject)

Conditions for Foreigners to Establish a Company in Vietnam

Foreign individuals are permitted to establish a company in Vietnam when meeting the following conditions:

For Individuals

  • Age: The foreign investor must be at least 18 years old.
  • Legal capacity: Must possess full legal capacity, meaning the ability to exercise rights and perform obligations in accordance with the law.
  • Judicial record: Must not be included in the list of individuals prohibited from establishing enterprises, and must have no prior convictions for economic crimes or offenses related to enterprise management. Nationality from a WTO member country.

For Organizations

  • Valid documents: The foreign organization must possess a valid business registration certificate or equivalent legal document in accordance with the laws of its home country.
  • Organizational structure: Must have a clear organizational structure, including information on the legal representative.

Related articles:
Comprehensive and Fast APEC Card (ABTC) Service in Ho Chi Minh City
Latest Updated Procedure for Issuing Investment Registration Certificate to Foreign Investors in Vietnam 2024

Sectors and Business Lines Prohibited from Investment in Vietnam

Pursuant to Article 6 of the Investment Law 2020, the following business lines are prohibited from investment and operation:

(1) Trading in narcotics as prescribed in Appendix I of the Investment Law 2020;
(2) Trading in chemicals and minerals as prescribed in Appendix II of the Investment Law 2020;
(3) Trading in specimens of wild fauna and flora species of natural origin as prescribed in Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); specimens of endangered, precious, and rare Group I forest plants, forest animals, and aquatic species of natural origin as prescribed in Appendix III of the Investment Law 2020;
(4) Prostitution business;
(5) Trading in humans, human tissues, corpses, body parts, and human embryos;
(6) Business activities related to human cloning;
(7) Trading in explosive fireworks;
(8) Debt collection services.

The production and use of products specified in points (1), (2), and (3) for analysis, testing, scientific research, healthcare, pharmaceutical production, crime investigation, national defense, and security purposes shall be carried out in accordance with Government regulations.

Market Access Conditions for Foreign Individuals When Establishing an Economic Organization

Conditions for Foreigners to Establish a Company in Vietnam

Pursuant to Article 9 of the Investment Law 2020, market access conditions for foreign investors are governed by the List of sectors and business lines with restricted market access for foreign investors, including:

  • Sectors and business lines with no market access;
  • Sectors and business lines with conditional market access.

Foreign investors in sectors and business lines with restricted market access are subject to the following conditions:

  • Ratio of charter capital ownership by foreign investors in the economic organization;
  • Form of investment;
  • Scope of investment activities;
  • Capacity of the investor; partners participating in the investment activity;
  • Other conditions as prescribed by law, resolutions of the National Assembly, ordinances and resolutions of the National Assembly Standing Committee, Government decrees, and international treaties to which Vietnam is a party.

Accordingly, there are three market access scenarios for foreign individuals establishing a company in Vietnam:

  • Foreign individuals are not permitted to establish a company in Vietnam for sectors and business lines with no market access;
  • Foreign individuals establishing a company in Vietnam to conduct business in sectors with restricted market access for foreign investors must satisfy the conditions set out in Clause 2 above;
  • For all other business sectors, foreign investors are subject to the same market access conditions as domestic investors.

The list of sectors and business lines with no market access or restricted market access for foreign investors is published in Appendix I issued together with Decree 31/2021/ND-CP.

From the date of issuance of the Enterprise Registration Certificate or other legally equivalent documents, the company established by a foreign investor shall implement the investment project as recorded in the Investment Registration Certificate.

In addition, foreign investors must have an investment project and carry out the procedure for issuance or amendment of the Investment Registration Certificate, except in cases of establishing small and medium-sized innovative startup enterprises and innovative startup investment funds in accordance with the law on support for small and medium-sized enterprises.

Related articles:
Latest 2024 Procedure and Process for Establishing a Foreign Company in Vietnam
Service for Amending and Adding Investment Business Lines in Foreign-Invested Companies

Procedure for Establishing a Foreign-Invested Company in Vietnam

There are two ways to establish a foreign-invested company in Vietnam:

Method 1: Establish a Company with Vietnamese Capital and Then Transfer

**Step 1:** Establish a company with Vietnamese capital
**Step 2:** Prepare the dossier for registration of capital contribution purchase or share purchase by foreign investors
**Step 3:** Submit the dossier for registration of capital contribution purchase or share purchase by foreign investors
**Step 4:** Amend the Enterprise Registration Certificate
**Step 5:** Issue Business License and License for Sufficient Conditions to Operate

Method 2: Directly Establish a Company with Foreign Capital from the Beginning

**Step 1:** Prepare the dossier for issuance of Investment Registration Certificate
**Step 2:** Submit the dossier for issuance of Investment Registration Certificate
**Step 3:** Issuance of Investment Registration Certificate
**Step 4:** Prepare and submit the dossier for issuance of Enterprise Registration Certificate
**Step 5:** Public disclosure of enterprise registration information
**Step 6:** Engrave the company seal
**Step 7:** Issue Business License or License for Sufficient Conditions to Operate
**Step 8:** Open a foreign direct investment capital account

Important Notes When Investing in Vietnam

1. Do Foreign-Invested Companies Receive Investment Incentives?

These companies may receive numerous incentives. However, they are entitled to the same investment incentives as domestic enterprises. To qualify for incentives, foreign-invested companies must fully meet the conditions prescribed by Vietnamese law.

2. What Forms of Investment Are Available to Foreign Investors in Vietnam?

  • Purchase of shares, purchase of capital contributions, or capital contribution investment
  • Investment in the establishment of an economic organization
  • Investment in the form of a BCC contract
  • Implementation of investment projects
  • Other new types of organizations and investment forms as prescribed by the Government

3. Can Foreign-Invested Companies Establish Representative Offices or Business Branches?

  • Legal basis: WTO Commitments
  • Foreign-invested companies are entitled to establish representative offices, branches, and business locations.

4. What Taxes Must Foreign-Invested Companies Pay?

Similar to domestic enterprises, foreign-invested companies are subject to the following basic taxes:

  • Business license tax
  • Value-added tax (VAT)
  • Import-export tax (if engaged in import-export activities)
  • Corporate income tax…

5. In Which Cases Is an Investment Registration Certificate Required for Establishing a Foreign-Invested Company?

In certain cases, foreign-invested companies must carry out the procedure for issuance of an Investment Registration Certificate:

  • Investment projects of economic organizations
  • Investment projects of foreign investors

Investment Consultation Services for Foreign-Invested Enterprises at BKC Law

At BKC Law, we provide professional investment consultation services for foreign-invested enterprises, helping clients navigate the complex legal regulations in Vietnam. Our team of experienced lawyers supports clients from the planning stage, licensing, to compliance with current legal requirements. We are committed to delivering optimal solutions that save time and costs while ensuring the legitimate rights and interests of the enterprise during its operations.

To receive free legal consultation at BKC Law, please contact our lawyers using the following information:

Telephone: 0901 3333 41
Email: info@bkclaw.vn
Branch in District 1: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, District 1, Ho Chi Minh City
Branch in Binh Tan: 41 Ten Lua Street, Binh Tan District, Ho Chi Minh City

Related articles:
Comprehensive Corporate Legal Consulting Services in Binh Tan District
Dedicated Lawyer Services for Enterprises
Latest Procedure and Process for Establishing an FDI Company in Vietnam

 

Facebook Comments Box

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

Not found

Liên hệ
Hotline:0901 333 341

What the press says about us

Binh Tan District Office

41 Rockets, Binh Tri Dong B, Binh Tan District, Ho Chi Minh City.

info@bkclaw.vn

0901 3333 41

District 1 Office

9th Floor, Diamond Plaza Building, 34 Le Duan, Ben Nghe Street, District 1, Ho Chi Minh City.

info@bkclaw.vn

0901 3333 41

GET LEGAL ADVICE

Please leave the information below. BKC Law will contact you immediately.
Form tư vấn EN