Characteristics of foreign invested enterprises in Vietnam. What is a foreign-invested company? How do you say foreign-invested company in English? What are the characteristics of your business activities? There are many foreign companies operating in the Vietnamese market. Essentially, foreign investors participate partially or fully in the investment. If the company is fully invested, it is a 100 % foreign-owned company. These businesses operate in markets across different industries and sectors.
These activities are regulated by domestic law to ensure Vietnam’s effective participation, purpose and development significance. So, what are the characteristics of foreign-affiliated companies? To understand further, please refer to the following article on Quoc Bao method:
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Mục lục
- 1 Legal basis:
- 2 What is a foreign invested company?
- 3 Foreign-invested companies have the following characteristics:
- 4 Related laws and regulations:
- 5 Foreign direct investment enterprises include:
- 6 How do you say “foreign company” in English?
- 7 What are the characteristics of your business activities?
- 8 Investment license, business establishment legal services – Quoc Bao Law
Legal basis:
Investment Law 2020.
What is a foreign invested company?
A foreign-invested enterprise is an enterprise in which investors from a certain country invest all or part of their capital. Established on the territory of another country for the purpose of profit.
Thus, in the Vietnamese market, all or part of the capital investment of foreign-invested enterprises is carried out by foreign investors.
The term was officially used in the Vietnam Foreign Investment Law of 1996 and was previously called foreign investment enterprise. The types of companies that can be established and operated must also comply with the provisions of the Enterprise Law.
Characteristics of foreign companies in Vietnam
Foreign-invested companies have the following characteristics:
1) Enterprises wholly or partially owned by foreign investors.
2) Established and operated under Vietnamese law. It is carried out based on an investment permit issued by the state management agency with jurisdiction over foreign investment.
3) Has legal status under Vietnamese law.
4) Organized in the form of a limited liability company or joint stock company.
Related laws and regulations:
2020 Investment Law does not directly refer to this type of enterprise, and states in Article 3 , Section 17 : “Foreign investment economic organization means an economic organization that includes foreign investors, foreign members or shareholders.” It’s just defined in a broad sense.
3 , paragraph 21 of this Act : “Economic organization is an organization established and operated in accordance with the provisions of Vietnamese law, and includes enterprises, cooperatives, associations of cooperatives and cooperatives, and other organizations carrying out business investment activities.” .
This allows the state to allow foreigners to establish economic organizations. From these two provisions we can understand the following:
–This company has foreign investors as members or shareholders.
FDI companies are companies that have foreign direct investment capital. It is determined not only by domestic investors but also by the source of investment funds. It does not matter what proportion of the capital is invested by foreign capital.
Foreign direct investment enterprises include:
– Form: Foreign-invested enterprises are established in the form of a company according to the Enterprise Law. You can invest in limited liability companies and joint stock companies.
– invested by an organization established under foreign law (contribution of capital to the establishment, purchase of contributed capital);
– These companies are owned by foreign investors and established by foreign investors in Vietnam. Investors are self-managing and responsible for their performance. We also ensure regulation of business activities in accordance with Vietnamese law.
Currently, foreign companies are very popular in our country’s market. This is the result of economic expansion and consolidation. It also solves the employment needs of workers. At the stage of modernization and industrialization of a country, it not only provides economic benefits to the nation.
How do you say “foreign company” in English?
Foreign investment company in English Enterprise with external investment .
What are the characteristics of your business activities?
About members, shareholders and business owners:
–Foreign invested companies. It is also known as a foreign investment economic organization. This system requires companies to operate with foreign investors as members or shareholders. They participate in investments in search of profits and results from production and business activities.
– Foreign investors in foreign-invested enterprises are individuals of foreign nationality. In other words, it is not run by domestic investors. An organization established under foreign law to carry out business investment activities in Vietnam. However, you must ensure compliance with basic activities according to Vietnamese law. This ensures operational efficiency and positive effects on the economy.
Company organizational form :
2020 Investment Law, all types of domestic companies can participate in the investments of foreign investors. This obtains capital to ensure effective mobilization and use of capital for production and business purposes.
Foreign-invested enterprises in Vietnam must be organized in the form of enterprises in accordance with the provisions of Vietnamese law. Regulations for organizing effective operations. As well as determining the factors and investment characteristics of foreign investors. Furthermore, companies must operate their business in accordance with the relevant regulations of our country’s market.
Foreign investors have the right to choose the type of company that suits their needs to carry out business activities in Vietnam. If you feel there is potential or merit in a business activity, you will participate in investment. Mobilizing foreign investment capital can also be more effective and faster than businesses. The types of companies in which foreign investors participate include:
+ Private companies ;
+ Partnership company ;
+1 member limited liability company .
+ A limited liability company with two or more members.
+ Co., Ltd.
Legal status:
Foreign-invested companies in Vietnam may or may not have legal status, depending on the type of company established and registered under Vietnamese law. This is because the legal status must be determined depending on the type of business. Therefore:
+ Foreign investors choose a type of private company that does not have legal status. This is because, according to the provisions of the Enterprise Law 2020 , the individual who owns the business must be a domestic investor.
+ Foreign-invested enterprises established in the form of limited liability companies, joint stock companies and partnerships have legal status. Investors can then contribute funds or purchase shares as members of the company.
Capital adequacy ratio:
Foreign investors are allowed to own unlimited charter capital in economic entities. However, the following cases are excluded.
– Ownership percentage of foreign investors in listed companies, public companies, securities exchange institutions and securities investment funds under the Securities Act.
– The ownership percentage of foreign investors in state-owned enterprises that are equitized or converted into other forms shall be in accordance with the Law on Equitization and Transformation of State-Owned Enterprises.
– The proportion of foreign investors that do not fall into the above two cases shall comply with other provisions of relevant laws and international treaties to which the Socialist Republic of Vietnam is a party.
Investment registration certificate :
issuing investment registration certificates in accordance with the provisions of Article 38 of the Investment Law 2020 , and only then can an enterprise with investment capital be established. Determine the appropriate targets to be controlled and grant the right to establish a company in Vietnam.
If a foreign-invested enterprise changes the contents of its business registration, which is investment registration information, it must amend the investment registration information recorded in the investment registration certificate at the competent state agency. Properly fulfill investment properties, investment targets, and related rights and obligations.
work:
Foreign-invested enterprises are not permitted to carry out business investment activities in the industries and trades specified in Article 6 of the Investment Law and Schedules 1 , 2 , and 3 . This is both a regulation and a specific benefit established for domestic investors. This provides effective access to many specific industries in national activities and ensures their economic activity.
For foreign investors, for service sectors and sub-sectors that are not yet committed to or specified in Vietnam’s Schedule of Commitments in the WTO and other international treaties on investment, where Vietnamese law already provides investment conditions . The provisions of Vietnamese law shall apply. . Determine the rights and obligations related to foreign-invested enterprises operating in the market of our country.
Foreign investors conducting investment activities in Vietnam in non-WTO member countries are entitled to the same investment conditions as those stipulated for investors from WTO member countries and regions. However, unless otherwise provided by law or international treaty between Vietnam and that country or region.
These regulations aim to clarify how the interests of investors and foreign-invested companies are addressed and accessed. From there, you can stably participate in the market and be active in your business field.
Characteristics of foreign companies in Vietnam
Investment license, business establishment legal services – Quoc Bao Law
“ Law Quoc Bao Legal Services – Legal partner for investment license and business establishment”
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With professionalism and dedication, we accompany our clients from the investment process to business establishment, ensuring that all legal issues are resolved in the best possible manner. Quoc Bao Legal Services brings peace of mind and success to your business journey.
Begin your journey of discovery regarding investment procedures in Vietnam, where opportunities await and success is not far away !
Do you need advice or support on what you are looking for ? For help setting up a business in Vietnam, investing, applying for temporary residence cards and visas, entry permits and work permits, please contact Vietnam Contact Luật Quốc Bảo .
Please contact hotline /zalo : 0763387788 .
Address : 528 Le Van Sy , District 14 , District 3 , Ho Chi Minh City
Facebook fan page : https://www.facebook.com
