Foreigners open companies in Vietnam. When foreigners open a company in Vietnam, the procedures will be different from those of people with Vietnamese nationality. So what are the specific regulations for foreigners establishing companies in Vietnam? What do you need to keep in mind when starting a business for foreigners? With many years of experience in supporting foreigners opening companies in Vietnam, Nam Viet Luat will be the address providing reputable company establishment services for foreign countries that you can rest assured to trust and choose. when you want to register a company. Nam Viet Luat’s article below will help you answer these concerns in detail. If you have any problems during the consultation process, do not hesitate to contact Quoc Bao Law immediately to receive the most dedicated advice and support today!
If you need advice or support on what you are looking for, contact Quoc Bao Law in Vietnam for assistance with business establishment, investing, applying for temporary residence cards and visas, immigration and legal documents. work permit in Vietnam.
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Mục lục
- 1 1. Can foreigners open companies in Vietnam?
- 2 2. Types of businesses that foreigners are allowed to establish in Vietnam
- 3 3. Conditions to be met when establishing a company for foreigners in Vietnam
- 4 4. Notes when establishing a foreign-invested company
- 4.1 4.1 Notes on investment fields
- 4.2 4.2 Note on the value of investment capital contribution and investment capital contribution progress
- 4.3 4.3 Notes on investment subjects
- 4.4 4.4 Notes on investment capital contribution accounts
- 4.5 4.5 Notes on renting company headquarters and locations for implementing investment projects
- 4.6 4.6 Notes on choosing the form of establishing a foreign-invested company
- 5 5. Form of establishing a foreign-invested company
- 6 6. What are the documents to prepare when opening a company for foreigners?
- 7 7. Process of establishing a foreign invested company
- 8 8. Competent authority to issue investment certificates to establish foreign invested companies
- 9 9. When foreign investors invest in these industries, they will receive incentives:
- 10 10. Foreign occupations and business fields are prohibited in Vietnam
- 11 11. Frequently asked questions when establishing a foreign-invested enterprise
- 12 12. Services for establishing foreign-invested enterprises of Quoc Bao Law Company
1. Can foreigners open companies in Vietnam?
According to the provisions of the Investment Law 2020, Vietnam’s WTO Commitments and bilateral free trade agreements between Vietnam and countries in the region and around the world, foreigners can establish businesses in Vietnam. Vietnam. Specifically:
According to the provisions of Clause 1, Article 17 of the Law on Enterprises 2020, all organizations and individuals have the right to establish and manage businesses in Vietnam, except for cases where establishment of enterprises is not allowed as prescribed in Clause 2. Article 17 of the Enterprise Law 2020. At the same time, individuals with foreign nationality conducting business investment activities in Vietnam are considered foreign investors according to Clause 19, Article 3 of the Investment Law 2020.
The fact that foreigners are allowed to establish businesses in Vietnam is also confirmed in the regulations on business investment policies in Article 5 of the Investment Law 2020:
Investors have the right to conduct business investment activities in industries and occupations that are not prohibited by this Law. For conditional business investment industries and professions, investors must meet business investment conditions according to the provisions of law.
Investors are allowed to make their own decisions and take responsibility for their investment and business activities according to the provisions of this Law and other relevant laws; to access and use credit capital sources, support funds, and use land and other resources in accordance with the provisions of law.
Investors may suspend, stop or terminate business investment activities if these activities cause harm or have the risk of harming national defense and security.
The State recognizes and protects ownership of assets, investment capital, income and other legal rights and interests of investors.
The State treats investors equally; Have policies to encourage and create favorable conditions for investors to carry out business investment activities and sustainably develop economic sectors.
The State respects and implements international treaties on investment to which the Socialist Republic of Vietnam is a member.”
2. Types of businesses that foreigners are allowed to establish in Vietnam
Vietnamese law does not have regulations limiting the type of business for foreign investors. Therefore, investors can choose:
2.1 Limited liability company with two or more members
A limited liability company with two or more members is an enterprise with from 02 to 50 members who are organizations and individuals. Members are responsible for the debts and other property obligations of the enterprise within the amount of capital contributed to the enterprise, except in the following cases:
In case there are members who have not contributed capital or have not contributed the full amount of capital as committed, the company must register to change charter capital, with the proportion of members’ capital contribution equal to the amount of capital contributed within 30 days from the date of registration. The last day to contribute the full capital contribution according to regulations (Capital contribution period is 90 days from the date of issuance of the Business Registration Certificate). Members who have not contributed capital or have not contributed the full amount of capital as committed must be responsible in proportion to the committed capital contribution ratio for the company’s financial obligations arising in the period before the date of company registration. Sign changes to charter capital and capital contribution ratio of members.
Members’ capital contributions can only be transferred according to the following regulations:
Buyback of capital contribution: A company member has the right to request the company to buy back his or her capital contribution if that member has voted against the resolution or decision of the Board of Members on the following issues: :
Amending and supplementing contents in the Company’s Charter related to the rights and obligations of members and the Board of Members;
Reorganize the company;
Other cases as prescribed in the Company’s Charter.
Transfer of capital contribution: Company members have the right to transfer capital contribution according to the following regulations:
Offer to sell that capital contribution to the remaining members in proportion to their capital contribution in the company with the same offering conditions;
Transfer with the same offering conditions for the remaining members specified in Point a of this Clause to non-members if the remaining members of the company do not buy or do not buy all within 30 days from the date of purchase. from the date of offering.
In addition, a member’s capital contribution can be handled in some special cases such as inheritance, donation, debt repayment, member being detained or temporarily detained…
A limited liability company with two or more members has legal status from the date of issuance of the Business Registration Certificate.
A limited liability company with two or more members is not allowed to issue shares, except to convert into a joint stock company.
Limited liability companies with two or more members may issue bonds according to the provisions of this Law and other relevant laws; The issuance of individual bonds must comply with the provisions of law.
2.2 One-member limited liability company
A single-member limited liability company is an enterprise owned by an organization or individual (hereinafter referred to as the company owner). The company owner is responsible for the company’s debts and other property obligations within the company’s charter capital.
A one-member limited liability company has legal status from the date of issuance of the Business Registration Certificate.
A single-member limited liability company is not allowed to issue shares, except to convert into a joint stock company.
A one-member limited liability company may issue bonds according to the provisions of this Law and other relevant laws; issuance of individual bonds according to the provisions of law.
The charter capital of a one-member limited liability company when registering to establish a business is the total value of assets committed to contribute by the company owner and recorded in the company charter.
The company owner must contribute capital to the company with sufficient and correct types of assets as committed when registering to establish a business within 90 days from the date of issuance of the Business Registration Certificate, excluding operation time. Transfer and import capital contribution assets, carry out administrative procedures to transfer asset ownership. During this period, the company owner has rights and obligations corresponding to the committed capital contribution.
2.3 Joint stock company
A joint stock company is an enterprise in which:
Charter capital is divided into equal parts called shares;
Shareholders can be organizations or individuals; The minimum number of shareholders is 03 and there is no limit to the maximum number;
Shareholders are only responsible for the debts and other property obligations of the enterprise within the amount of capital contributed to the enterprise;
Shareholders have the right to freely transfer their shares to others, except in the following cases:
Within 03 years from the date the company is granted the Business Registration Certificate, common shares of founding shareholders are freely transferable to other founding shareholders and can only be transferred to persons who are not founding shareholders if approved by the General Meeting of Shareholders. In this case, the founding shareholders intending to transfer common shares do not have the right to vote on the transfer of those shares. (Clause 3, Article 120 of the Enterprise Law 2020)
Shares are freely transferable, except for the cases specified in Clause 3, Article 120 of the 2020 Enterprise Law and the Company Charter has regulations restricting the transfer of shares. In case the company charter has restrictions on the transfer of shares, these regulations are only effective when clearly stated in the shares of the corresponding shares. (Clause 1, Article 127 of the Enterprise Law 2020)
A joint stock company has legal status from the date of issuance of the Business Registration Certificate.
A joint stock company has the right to issue shares, bonds and other securities of the company.
2.4 Partnership company
A partnership is an enterprise in which:
There must be at least 02 members who are joint owners of the company, doing business together under a common name (hereinafter referred to as partnership members). In addition to general partners, the company may have additional capital contributing members;
General partners must be individuals, responsible with all their assets for the company’s obligations;
Capital contributing members are organizations and individuals and are only responsible for the company’s debts within the amount of capital committed to contributing to the company.
A partnership company has legal status from the date of issuance of the Business Registration Certificate.
Partnership companies are not allowed to issue any type of securities.
Partnership members and capital contributing members must contribute the committed capital amount in full and on time.
A general partner who fails to contribute the committed capital in full and on time, causing damage to the company, must be responsible for compensating the company for damages.
In case a capital contributing member fails to contribute the committed capital amount in full and on time, the not yet fully contributed capital is considered that member’s debt to the company; In this case, the relevant capital contributing member may be expelled from the company according to the decision of the Board of Members.
3. Conditions to be met when establishing a company for foreigners in Vietnam
For foreigners establishing a company in Vietnam, in addition to the things to note, they also need to meet the following conditions:
Must be a legal citizen, have all documents proving valid personal status, and be certified by the consulate.
Must prove financial capacity and investment ability by providing documents verifying financial capacity such as bank account balance, savings book, and fixed assets.
According to the provisions of investment law and enterprise law of Vietnam; Committed to the WTO and bilateral free trade agreements between Vietnam and countries in the region and around the world, foreigners are allowed to establish businesses in Vietnam in most service and commercial industries. commercial. However, for conditional business lines, it is necessary to fully meet the conditions prescribed by law.
Implementation of investment forms; The scope of activities as well as related procedures must meet the conditions under the Investment Law; Relevant legal documents; other conditions of international treaties to which Vietnam is a member.
4. Notes when establishing a foreign-invested company
4.1 Notes on investment fields
Depending on the investment field, investors can determine their capital contribution ratio in companies established in Vietnam. For each specific field, investors need to meet specific conditions and determine the corresponding investment capital to demonstrate financial capacity in the appropriate investment field for the project to be licensed. At the same time, ensure correct and sufficient capital contribution according to the committed schedule.
For investment fields that are not included in WTO commitments, when investors want to invest, they must seek approval and opinions from the Ministry of Industry and Trade. Therefore, the ability to successfully register these professions is not high, and depends largely on the investor’s ability to explain, experience, and financial capacity.
4.2 Note on the value of investment capital contribution and investment capital contribution progress
Investment capital not only proves the investor’s financial capacity when investing in Vietnam but is also the basis for determining whether the investor must apply for a work permit or not. For investors who contribute investment capital in Vietnam of less than 3 billion VND, they are not exempted from work permits. Investors still have to apply for a work permit and when having a work permit, they will only be granted a temporary residence card. maximum 02 years. The investor’s investment capital ratio is also related to the duration of the temporary residence card issued to investors and representatives of foreign organizations investing in Vietnam, specifically:
For investors with contributed capital worth from 03 billion VND to less than 50 billion VND, temporary residence cards are issued for a term of not more than 03 years;
For investors with contributed capital worth from 50 billion VND to less than 100 billion VND, temporary residence cards are issued for a term of not more than 05 years;
For investors with contributed capital worth 100 billion VND or more, temporary residence cards are issued for a term of no more than 10 years.
In addition, investors must pay attention to contributing investment capital on time according to the progress recorded in the Investment Certificate. In case the investor does not contribute enough capital on time as committed, he or she must extend the investment capital contribution (if there is a legitimate reason). In case of late extension, there will be a penalty for late capital contribution.
4.3 Notes on investment subjects
Investment entities in each field have specific regulations. In some industries, foreign investors can only establish a company in Vietnam as a legal entity, even a legal entity with active operations. active in the investment sector in Vietnam. Therefore, in many cases foreign investors cannot invest as individuals in some investment fields in Vietnam.
For investors with nationalities that are not WTO members, investing in Vietnam must also seek verification from the Ministry of Industry and Trade. The ability to register for these investors is not high, and at the same time, the possibility of registration for these investors is not high. depends largely on the investor’s accountability, experience, and financial capacity.
4.4 Notes on investment capital contribution accounts
In fact, many foreign-invested enterprises come to Viet An Law in a state of “half crying or half laughing” because during the establishment process they were not consulted about the need to contribute capital through an investment capital account. foreign direct. This leads to a situation where capital is contributed incorrectly and sometimes the capital has already been used up, so overcoming incorrect capital contribution is extremely difficult. Not only that, but there are also penalties for not contributing capital correctly. When a company wants to change or adjust its investment certificate, it must prove that it has fulfilled its capital contribution obligations, facing many difficulties. In many cases, even if it wants to dissolve, the procedure cannot be carried out. Therefore, companies with foreign capital need to pay special attention to opening a foreign direct investment capital account and making timely capital contributions to this account.
4.5 Notes on renting company headquarters and locations for implementing investment projects
Unlike Vietnamese-invested companies, when establishing a foreign-invested company, foreign investors must have documents proving the company’s headquarters and the location of the public project implementation right after submitting the application to establish the company. ty. Accordingly, the company headquarters is not allowed to use an apartment building. Company establishment documents must be submitted with the headquarters lease contract, project location and legal documents (notarized copies) of the lessor. . The location of a production project must have the function of leasing real estate on the land use right certificate and business registration certificate of the lessor and must be located in an industrial cluster or park.
4.6 Notes on choosing the form of establishing a foreign-invested company
Investors who establish a company with foreign investment capital also choose the form of investment as in this article (ie the investor contributes capital from the beginning). Investors who want simpler procedures, especially if foreign investors combine with Vietnamese investors to do business together, should choose to invest in the form of purchasing capital contributions or shares of the company. Vietnam. In this form, the procedure for establishing a company is simpler, proving the company’s headquarters is not required, especially the investor can reduce the procedure for granting an Investment Registration Certificate. Accordingly, during the operation process, many legal procedures and costs will be saved when changes and additions arise.
5. Form of establishing a foreign-invested company
5.1 Foreign investors establish economic organizations (Investors contribute capital from the beginning)
For foreign investors to contribute capital right from the beginning when establishing a company in Vietnam. Accordingly, the capital contribution ratio of foreign investors, depending on the field of activity, can range from 1% to 100% of the company’s charter capital. Investors contribute capital and buy shares in Vietnamese companies
For this form, foreign investors will contribute capital to a Vietnamese company that already has a Business Registration Certificate. Depending on the field of operation, it is possible to contribute capital from 1% to 100% of capital into a Vietnamese company. Foreign investors will carry out procedures to purchase capital contributions and shares. At that time, the Vietnamese company will become a foreign-invested company.
If a foreign investor feels that applying for an Investment Certificate is too complicated, too many documents need to be prepared.
This is the method chosen by most investors to own companies in Vietnam. That is through the form of capital contribution/share purchase of a company that has been established in Vietnam, becoming a foreign-invested company or a 100% foreign-owned company.
In cases where the investor does not carry out an investment project in Vietnam, but carries out business investment through capital contribution/share purchase of an enterprise established in Vietnam. In the 3 cases below, before repurchasing capital contribution/repurchasing shares, investors must carry out notification procedures with the competent authority:
Case 1: Contributing capital, purchasing shares, purchasing capital contributions increases the ownership ratio of foreign investors in economic organizations with conditional business lines for foreign investors;
Case 2: Capital contribution, share purchase, capital contribution purchase leads to foreign investors and economic organizations with foreign investors holding more than 50% of charter capital. For example: increasing the charter capital ownership ratio of foreign investors from below or equal to 50% to above 50%; increase the charter capital ownership ratio of foreign investors when foreign investors already own more than 50% of the charter capital in economic organizations;
Case 3: Foreign investors contribute capital, buy shares, buy capital contributions from economic organizations that have land use rights certificates on islands and border communes, wards and towns; coastal communes, wards and towns; Other areas that affect national defense
6. What are the documents to prepare when opening a company for foreigners?
6.1 For foreign investors to establish economic organizations
Application for Investment Certificate
For projects subject to investment policy decision: The investor submits the Investment Policy Approval Document.
The Department of Planning and Investment issues the Investment Registration Certificate to the investor within 05 working days from the date of receiving the written decision on investment policy.
For projects not subject to investment policy decision: Investors need to prepare the following documents:
Written request for investment project implementation (According to form);
Copy of identity card, ID card or passport for individual investors; Copy of Certificate of Establishment or other equivalent document certifying legal status for institutional investors;
Investment project proposal includes the following contents: Investor implementing the project, investment objectives, investment scale, investment capital and capital mobilization plan, location, term, investment progress , labor needs, proposals for investment incentives, assessment of impact and socio-economic efficiency of the project; For investment projects that have been put into operation, the investor submits a report on the implementation of the investment project from the time of implementation to the time of requesting an Investment Registration Certificate instead of the project proposal. Investment project (According to form).
Copy of one of the following documents: Financial statements of the investor for the last 2 years; commitment to financial support from the parent company; commitment to financial support from financial institutions; guarantee of the investor’s financial capacity; Documents explaining the investor’s financial capacity;
Propose land use needs for projects requesting the state to allocate land, lease land, or allow land use purpose change; In case the project does not request the State to allocate land, lease land, or allow change of land use purpose, submit a copy of the location lease agreement or other documents certifying that the investor has the right to use the location for implementation. current investment project;
Explanation on technology use for projects using technology on the List of technologies restricted from transfer according to the provisions of law on technology transfer (Point b, Clause 1, Article 32 of the Investment Law 2014) includes Contents: Technology name, technology origin, technology process diagram; Main technical parameters, usage status of main machinery, equipment and technological lines;
BCC contract for investment projects in the form of BCC contract.
Application for Business Registration Certificate
Based on the regulations in Decree 01/2021 on business registration, depending on the type of business, company documents that need to be prepared include:
Application for establishment of a business;
Draft company charter depending on the type of business (Single member LLC; LLC with two or more members; Joint stock company) according to the Enterprise Law 2020
List of members (For LLCs with two or more members and List of founding shareholders for Joint Stock Companies);
Certified copy of personal identification documents (ID card/CCCD/Passport) of the company’s legal representative, the owner of the one-member limited liability company, and the members of the second limited liability company members or more, founding shareholders of a Joint Stock Company, authorized representatives;
Investment registration certificate if capital contributing members/founding shareholders are foreigners or foreign companies;
Business registration certificate, power of attorney for the representative to be named on the capital contribution/shares of the capital contributing organization (if any)
Based on the regulations in Decree 01/2021 on business registration, depending on the type of business, company documents that need to be prepared include:
Application for establishment of a business;
Draft company charter depending on the type of business (Single member LLC; LLC with two or more members; Joint stock company) according to the Enterprise Law 2020
List of members (For LLCs with two or more members and List of founding shareholders for Joint Stock Companies);
Certified copy of personal identification documents (ID card/CCCD/Passport) of the company’s legal representative, the owner of the one-member limited liability company, and the members of the second limited liability company members or more, founding shareholders of a Joint Stock Company, authorized representatives;
Investment registration certificate if capital contributing members/founding shareholders are foreigners or foreign companies;
Business registration certificate, power of attorney for the representative to be named on the capital contribution/shares of the capital contributing organization (if any)
Application for registration of capital contribution and share purchase
Economic organizations with foreign investors contributing capital, purchasing shares, purchasing capital contributions submit 01 set of registration documents to the investment registration agency where the economic organization is headquartered. Profile include:
Document to register capital contribution, share purchase, purchase of capital contribution;
Copies of legal documents of individuals and organizations contributing capital, purchasing shares, purchasing capital contributions (investors) and economic organizations with foreign investors contributing capital, purchasing shares, purchasing capital contributions ;
Document of principle agreement on capital contribution, share purchase, purchase of capital contribution between foreign investors and economic organizations with foreign investors contributing capital, purchasing shares, purchasing capital contributions or between investors. foreign investment with shareholders or members of that economic organization;
Copy of the Certificate of land use rights of the economic organization with foreign investors contributing capital, purchasing shares, purchasing capital contributions (in case there is a Certificate of land use rights in an island, commune, ward, border towns and coastal communes, wards and towns; other areas affecting national defense and security).
Records of changes to members and shareholders of the company
Notice of change in business registration content;
List of new members/list of new shareholders;
Transfer contract or documents proving completion of transfer;
Copies of the individual’s invalid documents in case the new member is an individual or copies of the organization’s legal documents, copies of the individual’s legal documents for the authorized representative and copies of legal documents of the individual. Appoint an authorized representative in case the new member is an organization;
For members that are foreign organizations, copies of the organization’s legal documents must be consularly legalized;
Document from the Investment Registration Authority approving capital contribution, share purchase, purchase of capital contribution of foreign investors, economic organizations with foreign investment capital (document results in step 1)
Document to change legal representative
Notice of change of legal representative;
Copies of personal legal documents for the new legal representative;
Resolutions, decisions and copies of minutes of meetings of the Board of Members/minutes of meetings of the General Meeting of Shareholders on changing the legal representative.
Notice of change in business registration content;
List of new members/list of new shareholders;
Transfer contract or documents proving completion of transfer;
Copies of the individual’s invalid documents in case the new member is an individual or copies of the organization’s legal documents, copies of the individual’s legal documents for the authorized representative and copies of legal documents of the individual. Appoint an authorized representative in case the new member is an organization;
For members that are foreign organizations, copies of the organization’s legal documents must be consularly legalized;
Document from the Investment Registration Authority approving capital contribution, share purchase, purchase of capital contribution of foreign investors, economic organizations with foreign investment capital (document results in step 1)
Document to change legal representative
Notice of change of legal representative;
Copies of personal legal documents for the new legal representative;
Resolutions, decisions and copies of minutes of meetings of the Board of Members/minutes of meetings of the General Meeting of Shareholders on changing the legal representative.
7. Process of establishing a foreign invested company
7.1 For foreign investors establishing economic organizations (Investors contribute capital from the beginning)
Step 1: Apply for an investment certificate
Application for an Investment Certificate: We will provide detailed advice on the components of the application for an Investment Certificate in another part of this article.
Step 2: Apply for a business registration certificate
If the above items are theoretical, then this will definitely be the part for you to practice. Let’s start preparing a complete set of documents before going to the more important step of submitting to a state agency!
Based on the regulations in Decree 01/2021/ND-CP on business registration, depending on the type of business, the company profile that needs to be prepared includes:
Application for establishment of a business;
Draft company charter depending on the type of business (Single member LLC; LLC with two or more members; Joint stock company) according to the Enterprise Law 2020
List of members (For LLCs with two or more members and List of founding shareholders for Joint Stock Companies);
Certified copy of personal identification documents (ID card/CCCD/Passport) of the company’s legal representative, the owner of the one-member limited liability company, and the members of the second limited liability company members or more, founding shareholders of a Joint Stock Company, authorized representatives;
Investment registration certificate if capital contributing members/founding shareholders are foreigners or foreign companies; (Original photo taken)
Business registration certificate, power of attorney for the representative to have his/her name on the capital contribution/shares of the capital contributing organization (if any)(Take a photo of the original)
Step 3: Announce the establishment of the business
Information announcing the establishment of a business will be posted on the National Business Registration Portal after the investor completes the procedures and is granted a Business Registration Certificate.
Step 4: Engrave the business seal
After receiving the Business Registration Certificate, the company carries out procedures for seal engraving and seal management according to the provisions of the Enterprise Law.
The company has the right to decide on the form, quantity and content of the company seal. The content of the seal must show the following information: Company name; Company code, place of company headquarters
This is the method chosen by most investors to own companies in Vietnam. That is through the form of capital contribution/share purchase of a company that has been established in Vietnam, becoming a foreign-invested company or a 100% foreign-owned company.
Step 1: Register to contribute capital and buy shares
Application for registration of capital contribution and share purchase
Economic organizations with foreign investors contributing capital, purchasing shares, purchasing capital contributions submit 01 set of registration documents to the investment registration agency where the economic organization is headquartered. We will guide you in detail below.
Authority to approve registration of capital contribution and share purchase
Economic organizations with foreign investors contributing capital submit applications for capital contribution/share purchase registration at the Foreign Economic Relations Department – Department of Planning and Investment where the economic organization is headquartered.
Time to carry out procedures for notification of registration of capital contribution and share purchase
Within 15 working days from the date of receipt of valid documents. The written notice of approval is sent to foreign investors and economic organizations with foreign investors contributing capital, purchasing shares, or purchasing capital contributions.
Step 2: Change members and shareholders of the company
Investors who contribute capital, buy shares, or purchase capital contributions from economic organizations must meet the conditions and carry out procedures for changing members and shareholders according to the provisions of law corresponding to each type of organization. economic function. As follows:
Authority to carry out procedures for changing members and shareholders of the company
Economic organizations with foreign investors contributing capital submit applications for registration of change of members/change of shareholders at the business registration office – Department of Planning and Investment where the economic organization is headquartered.
Time to carry out procedures for changing members and shareholders of the company
03 working days from the date of receiving valid documents.
Step 3: Change the company’s legal representative
In case an economic organization changes members/shareholders due to receiving foreign investors, leading to a change in the legal representative of the company, the procedure for changing the legal representative must be carried out. .
Step 4: Declare and pay personal income tax for the purchase and sale of shares and capital contributions
When transferring capital at a LLC or transferring shares at a joint stock company of a foreign investor, whether taxable income arises or not, the transferring individual must submit a declaration to the agency. tax to declare personal income tax.
Duration:
For individuals who are required to directly declare tax to the tax authority, no later than 10 (ten) days from the date the capital transfer/securities transfer contract takes effect according to the provisions of law.
In case an enterprise pays taxes on behalf of an individual, the latest time to submit tax declaration documents is before carrying out procedures to change the list of members/list of shareholders.
Procedures and agencies receiving documents: individuals transferring and businesses submitting documents to the tax agency managing the enterprise. The dossier includes the following documents:
Personal income tax declaration for capital/share transfer (according to prescribed form);
Capital contribution/share transfer contract;
Payment vouchers;
Identity card of the seller (true copy);
Business registration certificate (true copy).
Thus, there are “3 IMPORTANT PROCEDURES” that investors need to note after being approved for capital contribution/share purchase registration.
First, change the company’s members/shareholders
Second, change the company’s legal representative
Third, declare personal income tax
Investors who contribute capital, buy shares, or purchase capital contributions from economic organizations must meet the conditions and carry out procedures for changing members and shareholders according to the provisions of law corresponding to each type of organization. economic function. As follows:
Authority to carry out procedures for changing members and shareholders of the company
Economic organizations with foreign investors contributing capital submit applications for registration of change of members/change of shareholders at the business registration office – Department of Planning and Investment where the economic organization is headquartered.
Time to carry out procedures for changing members and shareholders of the company
03 working days from the date of receiving valid documents.
Step 3: Change the company’s legal representative
In case an economic organization changes members/shareholders due to receiving foreign investors, leading to a change in the legal representative of the company, the procedure for changing the legal representative must be carried out. .
Step 4: Declare and pay personal income tax for the purchase and sale of shares and capital contributions
When transferring capital at a LLC or transferring shares at a joint stock company of a foreign investor, whether taxable income arises or not, the transferring individual must submit a declaration to the agency. tax to declare personal income tax.
Duration:
For individuals who are required to directly declare tax to the tax authority, no later than 10 (ten) days from the date the capital transfer/securities transfer contract takes effect according to the provisions of law.
In case an enterprise pays taxes on behalf of an individual, the latest time to submit tax declaration documents is before carrying out procedures to change the list of members/list of shareholders.
Procedures and agencies receiving documents: individuals transferring and businesses submitting documents to the tax agency managing the enterprise. The dossier includes the following documents:
Personal income tax declaration for capital/share transfer (according to prescribed form);
Capital contribution/share transfer contract;
Payment vouchers;
Identity card of the seller (true copy);
Business registration certificate (true copy).
Thus, there are “3 IMPORTANT PROCEDURES” that investors need to note after being approved for capital contribution/share purchase registration.
First, change the company’s members/shareholders
Second, change the company’s legal representative
Third, declare personal income tax
Depending on each case, the competent authority issuing investment certificates to establish foreign-invested companies and foreign-invested enterprises will be different:
The Management Board of industrial parks, export processing zones, high-tech zones, and economic zones issues, adjusts, and revokes Investment Registration Certificates for investment projects in industrial parks, export processing zones, and industrial parks. high-tech, economic zones, except in cases where the investment registration agency where the investor implements the investment project places or plans to locate an executive office to implement the investment project according to the mentioned projects. in section 3.
The Department of Planning and Investment issues, adjusts, and revokes Investment Registration Certificates for investment projects outside industrial parks, export processing zones, high-tech zones, and economic zones, except for the cases specified in Clause 3 of this Article.
The investment registration agency where the investor implements the investment project, places or plans to locate an executive office to implement the investment project shall issue, adjust and revoke the Investment Registration Certificate for the project. following investment projects:
Investment projects implemented in 02 or more provincial administrative units;
Practical investment projects inside and outside industrial parks, export processing zones, high-tech parks and economic zones;
Investment projects in industrial parks, export processing zones, high-tech zones, economic zones where the Management Board of industrial parks, export processing zones, high-tech zones, economic zones has not been established or is not under the scope of management Management Board of industrial parks, export processing zones, high-tech zones, and economic zones.
The agency receiving investment project documents is the agency competent to issue the Investment Registration Certificate, except for the cases specified in Article 34 and Article 35 of this Law.
9. When foreign investors invest in these industries, they will receive incentives:
*** Industry with special investment incentives:
High Technology, Information Technology, Supporting Industry:
High-tech applications in the High-tech List are given priority for investment and development according to the Prime Minister’s decision.
Production of products on the List of high-tech products encouraged for development according to the decision of the Prime Minister.
Production of supporting industrial products according to the Prime Minister’s decision.
Incubating high technology, incubating high-tech businesses; venture capital for high technology development; apply, research and develop high technology in accordance with the law on high technology; production of biotechnology products.
Producing software products, digital information content products, key information technology products, software services, information security incident recovery services, and information security protection according to regulations of the Government. information technology law.
Producing renewable energy, clean energy, energy from waste destruction.
Production of composite materials, light construction materials, and rare materials.
Agriculture:
Plant, care for, nurture, protect and develop forests.
Cultivation, processing, and preservation of agricultural, forestry, and aquatic products.
Producing, multiplying and cross-breeding plant varieties, livestock breeds, forestry plant breeds and aquatic breeds.
Production, exploitation and refining of salt.
Offshore fishing combines the application of advanced fishing methods; fisheries logistics services; Construction of fishing shipbuilding and fishing shipbuilding facilities.
Sea rescue service.
Environmental Protection, Infrastructure Construction:
Collect, process, recycle and reuse waste centrally.
Construction and business of infrastructure of industrial parks, export processing zones, high-tech zones, and functional areas in economic zones.
Investing in the development of water plants, power plants, water supply and drainage systems; bridges, roads, railways; airports, seaports, river ports; airports, railway stations and other particularly important infrastructure projects decided by the Prime Minister.
Develop public passenger transportation in urban areas.
Investment in construction, management and business of markets in rural areas.
Culture, Society, Sports, Health:
Construction of social housing and resettlement housing.
Investing in business establishments implementing hygiene and disease prevention.
Scientific research on preparation technology and biotechnology to produce new drugs.
Production of medicinal materials and main drugs, essential drugs, drugs to prevent and control social diseases, vaccines, medical biological products, drugs from medicinal materials, oriental medicine; the drug’s patent or related exclusivity is about to expire; Applying advanced technology and biotechnology to produce human medicines meeting international GMP standards; Production of packaging in direct contact with drugs.
Invest in methadone production facilities.
Investing in the business of high-performance sports training and coaching centers and sports training and coaching centers for people with disabilities; building sports facilities with equipment, training and competition facilities that meet the requirements of organizing international tournaments; professional gymnastics and sports practice and competition facilities.
Investing in business centers for geriatrics, psychiatry, and treatment of patients infected with Agent Orange; Care centers for the elderly, people with disabilities, orphans, and homeless children.
Investment in business centers for Treatment – Education – Social Labor; drug addiction and smoking detoxification facilities; HIV/AIDS treatment facility.
Investing in the business of national museums and ethnic cultural houses; ethnic singing, dancing, and music troupes; theaters, studios, film production and film printing facilities; art and photography exhibition house; producing, manufacturing, and repairing traditional musical instruments; maintain and preserve museums, ethnic cultural houses and art and culture schools; establishments and craft villages to introduce and develop traditional trades.
*** Industry with investment incentives
Science and Technology, Electronics, Mechanical, Materials Production, Information Technology:
Manufacturing products on the List of key mechanical products as decided by the Prime Minister.
Invest in research and development (R&D).
Producing steel billets from iron ore, high-grade steel, and alloys.
Production of coke and activated carbon.
Production of energy saving products.
Production of petrochemicals, pharmaceutical chemicals, basic chemicals, technical plastic and rubber components.
Manufacturing products with added value of 30% or more (according to instructions from the Ministry of Planning and Investment).
Manufacturing cars, auto parts, shipbuilding.
Producing accessories, electronic components, and electronic assemblies does not belong to the special investment incentive industries mentioned above.
Manufacturing machine tools, machinery, equipment, spare parts, machines serving agricultural, forestry, fishery, salt production, food processing machines, and irrigation equipment that are not included in special incentive industries investment mentioned above.
Production of materials to replace Asbestos materials.
Agriculture
Raising, growing, harvesting and processing medicinal herbs; protect and preserve genetic resources and rare and endemic medicinal species.
Producing and refining animal, poultry and aquatic feed.
Scientific and technical services on planting, animal husbandry, aquaculture, crop and livestock protection.
New construction, renovation and upgrading of slaughterhouses; preserving and processing industrially concentrated poultry and livestock.
Build and develop concentrated raw material areas to serve the processing industry.
Seafood harvesting.
Environmental Protection, Infrastructure Construction:
Construction and development of industrial cluster infrastructure.
Construction of apartments for workers working in industrial parks, export processing zones, high-tech zones, and economic zones; building student dormitories and housing for social policy beneficiaries; Invest in building functional urban areas (including kindergartens, schools, hospitals) to serve workers.
Handling oil spills, overcoming mountain landslides, dyke landslides, riverbanks, coastlines, dams, reservoirs and other environmental incidents; Apply technology to reduce greenhouse gas emissions that cause greenhouse effects and destroy the ozone layer.
Investment and business in commodity exhibition centers, logistics centers, warehouses, supermarkets, and trade centers.
Education, Culture, Society, Sports, Health:
Investment and business in infrastructure of educational and training establishments; Invest in the development of non-public education and training establishments at all levels: preschool education, general education, vocational education.
Producing medical equipment, building warehouses to preserve pharmaceuticals, reserve medicines for humans to prevent natural disasters, catastrophes, and dangerous epidemics.
Producing raw materials for making medicines, plant protection drugs, and pesticides; Prevention and treatment of diseases for animals and aquatic products.
Invest in biological testing facilities and evaluate drug bioavailability; Pharmaceutical facilities that meet good practice standards in drug production, storage, testing, and clinical trials.
Invest in research to prove the scientific basis of Oriental medicine and traditional medicines and develop standards for testing Oriental medicine and traditional medicines.
Investment and business in fitness and sports centers, gyms, sports clubs, stadiums, swimming pools; establishments that produce, manufacture, and repair equipment and facilities for physical training and sports.
Investing in the business of public libraries and cinemas.
Investing in construction of cemeteries, cremation and cremation service facilities.
Other Industry: Activities of People’s Credit Fund and microfinance institutions.
In addition, if the investor carries out special industries with preferential investment incentives in the area and also meets other conditions such as implementing the project in an area with difficult socio-economic conditions or In particularly difficult situations, many investment incentives will be applied and the incentive level that is most beneficial to investors will be chosen. During the investment registration process, investors need to base on legal regulations to determine the investment incentives they are entitled to and propose to the Investment Registration Authority.
10. Foreign occupations and business fields are prohibited in Vietnam
Clauses 1 and 2, Article 9 of the Investment Law 2020 regulate industries, occupations and market access conditions for foreign investors:
1. Foreign investors are subject to market access conditions as prescribed for domestic investors, except for the cases specified in Clause 2 of this Article.
2. Pursuant to laws and resolutions of the National Assembly, ordinances and resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a member, the Government The Government announced the List of industries and occupations that restrict market access for foreign investors, including:
a) Industries and occupations that have not yet accessed the market;
b) Sectors and occupations with conditional market access.”
Prohibited industries and occupations are those that have not yet accessed the market. According to Section A, Appendix I of Decree 31/2020/ND-CP, there is a list of industries and professions that have not yet had market access for foreign investors, including:
1. Trading in goods and services on the list of goods and services subject to state monopoly in the field of commerce.
2. Journalism and news gathering activities in all forms.
3. Fishing or exploiting seafood.
4. Investigation and security services.
5. Judicial administrative services, including judicial appraisal services, bailiff services, asset auction services, notary services, and asset administrator services.
6. Service of sending workers to work abroad under contract.
7. Invest in the construction of cemetery and graveyard infrastructure to transfer land use rights associated with the infrastructure.
8. Garbage collection service directly from households.
9. Public opinion polling service (public opinion poll).
10. Blasting service.
11. Production and trading of weapons, explosives and support tools.
12. Importing and dismantling used ships.
13. Public postal service.
14. Goods transshipment business.
15. Temporary import and re-export business.
16. Exercise of export rights, import rights, and distribution rights for goods on the List of goods in which foreign investors and foreign-invested economic organizations are not allowed to exercise export rights or distribution rights. import and distribution rights.
17. Collect, purchase, and handle public property at units of the armed forces.
18. Production of military materials or equipment; trading in military equipment and supplies for the armed forces, military weapons, equipment, techniques, weapons, specialized military and police vehicles, components, parts, spare parts, supplies and special equipment and specialized technology to manufacture them;
19. Business of industrial property representation services and intellectual property assessment services.
20. Services of establishing, operating, maintaining and maintaining navigational aids, water areas, water areas, public navigation channels and maritime routes; Survey services of water areas, water areas, public navigation channels and maritime routes to serve the publication of Notices to Mariners; Services of surveying, building and publishing nautical charts of water areas, seaports, maritime channels and maritime routes; Developing and publishing maritime safety documents and publications.
21. Regulation services to ensure maritime safety in water areas, water areas and public navigation channels; maritime electronic information services.
22. Inspection services (inspection, testing) and issuance of certificates for means of transport (including systems, components, equipment, and components of the vehicle); Inspection services and issuance of technical safety and environmental protection certificates for vehicles, specialized equipment, containers, and packaging equipment for dangerous goods used in transportation; inspection services and issuance of technical safety and environmental protection certificates for vehicles and equipment for exploration, exploitation and transportation of oil and gas at sea; Technical inspection services for labor safety for machines and equipment with strict requirements on labor safety installed on means of transportation and exploration, exploitation and exploitation vehicles and equipment. transporting oil and gas at sea; Fishing vessel registration service.
23. Services for investigation, assessment and exploitation of natural forests (including logging and hunting and trapping of rare wild animals, management of gene funds of plants, livestock and microorganisms used in agriculture).
24. Research or use new livestock genetic resources before being appraised and evaluated by the Ministry of Agriculture and Rural Development.
25. Travel service business, except international travel services serving international tourists to Vietnam
Thus, there are 25 industries and professions that foreign investors are prohibited from investing in Vietnam.
1. Foreign investors are subject to market access conditions as prescribed for domestic investors, except for the cases specified in Clause 2 of this Article.
2. Pursuant to laws and resolutions of the National Assembly, ordinances and resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a member, the Government The Government announced the List of industries and occupations that restrict market access for foreign investors, including:
a) Industries and occupations that have not yet accessed the market;
b) Sectors and occupations with conditional market access.”
Prohibited industries and occupations are those that have not yet accessed the market. According to Section A, Appendix I of Decree 31/2020/ND-CP, there is a list of industries and professions that have not yet had market access for foreign investors, including:
1. Trading in goods and services on the list of goods and services subject to state monopoly in the field of commerce.
2. Journalism and news gathering activities in all forms.
3. Fishing or exploiting seafood.
4. Investigation and security services.
5. Judicial administrative services, including judicial appraisal services, bailiff services, asset auction services, notary services, and asset administrator services.
6. Service of sending workers to work abroad under contract.
7. Invest in the construction of cemetery and graveyard infrastructure to transfer land use rights associated with the infrastructure.
8. Garbage collection service directly from households.
9. Public opinion polling service (public opinion poll).
10. Blasting service.
11. Production and trading of weapons, explosives and support tools.
12. Importing and dismantling used ships.
13. Public postal service.
14. Goods transshipment business.
15. Temporary import and re-export business.
16. Exercise of export rights, import rights, and distribution rights for goods on the List of goods in which foreign investors and foreign-invested economic organizations are not allowed to exercise export rights or distribution rights. import and distribution rights.
17. Collect, purchase, and handle public property at units of the armed forces.
18. Production of military materials or equipment; trading in military equipment and supplies for the armed forces, military weapons, equipment, techniques, weapons, specialized military and police vehicles, components, parts, spare parts, supplies and special equipment and specialized technology to manufacture them;
19. Business of industrial property representation services and intellectual property assessment services.
20. Services of establishing, operating, maintaining and maintaining navigational aids, water areas, water areas, public navigation channels and maritime routes; Survey services of water areas, water areas, public navigation channels and maritime routes to serve the publication of Notices to Mariners; Services of surveying, building and publishing nautical charts of water areas, seaports, maritime channels and maritime routes; Developing and publishing maritime safety documents and publications.
21. Regulation services to ensure maritime safety in water areas, water areas and public navigation channels; maritime electronic information services.
22. Inspection services (inspection, testing) and issuance of certificates for means of transport (including systems, components, equipment, and components of the vehicle); Inspection services and issuance of technical safety and environmental protection certificates for vehicles, specialized equipment, containers, and packaging equipment for dangerous goods used in transportation; inspection services and issuance of technical safety and environmental protection certificates for vehicles and equipment for exploration, exploitation and transportation of oil and gas at sea; Technical inspection services for labor safety for machines and equipment with strict requirements on labor safety installed on means of transportation and exploration, exploitation and exploitation vehicles and equipment. transporting oil and gas at sea; Fishing vessel registration service.
23. Services for investigation, assessment and exploitation of natural forests (including logging and hunting and trapping of rare wild animals, management of gene funds of plants, livestock and microorganisms used in agriculture).
24. Research or use new livestock genetic resources before being appraised and evaluated by the Ministry of Agriculture and Rural Development.
25. Travel service business, except international travel services serving international tourists to Vietnam
Thus, there are 25 industries and professions that foreign investors are prohibited from investing in Vietnam.
11. Frequently asked questions when establishing a foreign-invested enterprise
What are the forms of foreign investors investing in Vietnam?
Investing in establishing economic organizations.
Invest capital, buy shares, buy capital contributions.
Implement investment projects.
Investment in the form of BCC contract.
New forms of investment and types of economic organizations according to Government regulations.
Do foreign-invested companies receive investment incentives?
Have. However, foreign-invested companies only enjoy the same investment incentives as Vietnamese enterprises. To enjoy incentives, companies need to meet the conditions according to Vietnamese law.
What taxes must foreign invested companies pay?
Like Vietnamese-invested enterprises, foreign-invested companies must also pay the following basic taxes: Value-added tax, license tax, corporate income tax, import-export tax (if any). import and export activities),…
When to establish a company with foreign capital, must an investment certificate be issued?
Cases where procedures for issuance of an Investment Registration Certificate must be carried out include:
Investment projects of foreign investors;
Investment projects of economic organizations: Have foreign investors (economic organizations with foreign investors) holding more than 50% of charter capital or have a majority of partners being foreign individuals. with an economic organization that is a partnership;
What types of companies can be established with foreign capital?
Establish a partnership company (in fact, this type is rarely chosen by investors).
Established a one-member limited liability company
Establishing a LLC with 2 or more members;
Establishment of a joint stock company.
Can a foreign-invested company establish a representative office, branch, or business location?
According to the WTO Commitment Schedule and Vietnamese law, foreign-invested companies have the right to establish their own branches, representative offices, and business locations. Although in the past some industries still had limited market access, there was a limit on the number of years Vietnam joined the WTO, and the number of years a company was established before it was established to establish branches, representative offices, and business locations. joint.
What are the conditions for foreign-invested companies to operate commercially and distribute goods in Vietnam?
Foreign-invested companies operating in trade and distribution of goods in Vietnam have the following conditions:
Investors from countries and territories participating in international treaties of which the Socialist Republic of Vietnam is a member have committed to opening the market for goods purchase and sale activities.
Distributed goods are not on the list of prohibited business items and do not have the right to distribute according to international treaties, but must be distributed according to the commitment schedule of the international treaty if they are on the list of goods with a distribution schedule. coordinate.
Scope of distribution: wholesale and retail.
Issued with a Business License by a competent state agency.
Can foreign investors establish business households?
According to Vietnamese law, foreign investors are not allowed to establish business households.
What are the taxes that foreign invested companies must pay?
Similar to Vietnamese companies, foreign-invested companies must pay the following basic taxes:
License tax (according to registered charter capital);
Value added tax (according to the company’s output and input balance);
Corporate income tax (only payable when the company is profitable, 20% of company profits);
Export and import taxes (if there are import and export activities);
Natural resources tax (if using natural resources);
Special consumption tax (if doing business in a special restricted business line).
12. Services for establishing foreign-invested enterprises of Quoc Bao Law Company
Consulting on conditions for establishing foreign-invested companies for investors according to each specific business field or according to the investor’s nationality;
Consulting on the capital contribution ratio of foreign investors in Vietnam according to Vietnamese law and WTO commitments;
Consulting on choosing the appropriate company type for investors: Limited Company or Joint Stock Company, head office address, capital, business lines, opening a capital transfer account, capital contribution period;
Consulting on conditions and guiding investors to prepare necessary documents to establish foreign-invested companies;
Consulting and drafting company establishment documents for investors;
Investor representative works with competent Vietnamese state agencies in the process of establishing a business for the investor (Applying for an Investment Registration Certificate, Business Registration Certificate, making legal entity seal, announcement of seal samples, procedures after establishing a company, legal consulting services on tax – accounting, transferring profits abroad, labor – insurance, issues related to ownership wisdom…;
Register a foreign loan for a business to borrow from a parent company or foreign organization.
Comprehensive consulting on activities arising during the process of conducting business in Vietnam for investors.
Consulting on the capital contribution ratio of foreign investors in Vietnam according to Vietnamese law and WTO commitments;
Consulting on choosing the appropriate company type for investors: Limited Company or Joint Stock Company, head office address, capital, business lines, opening a capital transfer account, capital contribution period;
Consulting on conditions and guiding investors to prepare necessary documents to establish foreign-invested companies;
Consulting and drafting company establishment documents for investors;
Investor representative works with competent Vietnamese state agencies in the process of establishing a business for the investor (Applying for an Investment Registration Certificate, Business Registration Certificate, making legal entity seal, announcement of seal samples, procedures after establishing a company, legal consulting services on tax – accounting, transferring profits abroad, labor – insurance, issues related to ownership wisdom…;
Register a foreign loan for a business to borrow from a parent company or foreign organization.
Comprehensive consulting on activities arising during the process of conducting business in Vietnam for investors.
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