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Simplification of Administrative procedures for foreign investors in Vietnam

February 25, 2018 | Legal Updates

The Ministry of Planning and Investment signed Circular No. 02/2017 / TT-BKHTT on April 18, 2017 guiding the coordination mechanism of investment registration and enterprise registration procedures for foreign investors in Vietnam. The circular includes 12 articles and one appendix and will take effect from 15/06/2017.

The Ministry of Planning and Investment signed Circular No. 02/2017 / TT-BKHTT on April 18, 2017 guiding the coordination mechanism of investment registration and enterprise registration procedures for foreign investors in Vietnam. The circular includes 12 articles and one appendix and will take effect from 15/06/2017.

According to the Circular, there are three cases of investment projects subjecting to the coordination mechanism:

  1. Investment in establishment of a business organization in accordance with Article 22 of Law on Investment.
  2. Foreign investors and foreign-invested business organization in the form of contributing capital, buying shares, or buying capital contributions of business organizations as stipulated in Clause 1, Article 26 of the Investment Law.
  3. Foreign investors, foreign-invested business organization adjust the contents of business registration and investment registration simultaneously, including:

a)      Changing the business lines and objectives of the investment project;

b)      Changing the address of the enterprise’s headquarter and the location of the investment project;

c)      Changing charter capital and capital investment in the project;

d)     Changing members, founding shareholders, shareholders being foreign investors in enterprise and investors in Certificate of Investment Registration.

Accordingly, foreign investors may choose the coordination mechanism for investment and business registration under this Circular or carry out a registration procedure base on the Law on Investment and the Law on Enterprises.

The benefits of this Circular for foreign investors have been seen as follow:
Firstly, minimize the number of documents to submit. If there are duplicates of documents such as: passport, personal identification (for investors being individuals) or establishment decision or certificate of enterprise registration (for investors being organizations) and the authorization letter to carry out investment registration and business registration procedures, investors can submit one (01) copy instead of two (02) copies as before.

Secondly, investors shall submit the application for investment registration together with business registration at the Service of Planning and Investment of province the headquarter of the business organization is situated. If the application satisfies the conditions, the investor receives both the Certificate of Investment Registration or the acceptance letter of capital contribution or purchase of shares/capital contributions and the Certificate of Business Registration or the Certificate of Business Registration changing information about contents of Business Registration.

Thirdly, shorten the processing time for investors. Prior to the issuance of the circular, foreign investors must submit an application for investment registration to the competent authority. After obtaining the certificate of investment registration or the acceptance letter of capital contribution or purchase of shares/capital contributions, the investor have right to make the application for business registration or changing information in the Certificate of Business Registration such as: shareholders, members, the percentage of capital charter. This affect badly to investors when they have to complete each application step by step and it wastes money for the postal fee and wastes time of travelling, etc.

Hopefully after this Circular take effect, It will reduce administrative barriers to foreign investors and attracting a lot of foreign investors to Vietnam.

 

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