Streamlining Establishment Procedures for Foreign-Invested Enterprises in Vietnam

When foreign investors venture into establishing companies in Vietnam, there are distinct procedures to adhere to. To make the process comprehensible, we’ll delve into the key aspects of these procedures and how they apply in different scenarios.

1. Investment Certificate Application:

Foreign investors looking to establish a foreign-invested company in Vietnam must initiate the process of securing an Investment Certificate. This certificate becomes mandatory for the following cases:

When foreign investors initially contribute capital ranging from 1% to 100% to establish a new company.

When foreign-invested companies in Vietnam decide to set up additional economic organizations, invest in capital contribution, purchase shares, or contribute capital under the Business Cooperation Contract (BCC).

For foreign investors involved in education and training, even a 1% capital contribution necessitates an Investment Certificate application. However, for companies operating in other sectors, including those engaged in various economic activities, this may not be a requirement.

In 2020, a more efficient plan for foreign investors collaborating with Vietnamese counterparts in the establishment of companies was introduced. This plan minimizes the procedural complexities as follows:

• Step 1: Establish Vietnamese Companies: Establish a Vietnamese company with domestic partners.
• Step 2: Apply for Conditional Trade Business License: Once the Vietnamese company is established, apply for a business license in cases where conditional trades are involved.
• Step 3: Transfer Capital to Foreign Investors: Transfer the contributed capital to foreign investors.
• Step 4: Apply for a Business License: If the company is engaged in retailing goods to end-consumers or setting up retail outlets, apply for a business license specific to this activity.

By following this streamlined plan, foreign-invested companies, even when owned by foreign investors, can avoid the cumbersome process of obtaining Investment Certificates. Enterprises operating under this model can enjoy reduced procedures when making changes to their business registrations, similar to Vietnamese enterprises. These simplified procedures encompass changes in business activities, do not necessitate reporting on project implementation or investment supervision, and eliminate the need to update investment information in the investment management system.

This approach aims to make the establishment of foreign-invested companies in Vietnam more efficient and appealing to investors while maintaining the required regulatory oversight in specific sectors.

Should you need any support, please contact Sophie Dao, Senior Partner at Global Business Services LLC in Vietnam via phone number: +84903189033 or email: sophie@gbs.com.vn. You can also visit the company website at: https://gbs.com.vn