Setting up a company in Vietnam for Foreign Investors

Relating to the application for investment registration, the foreign investors need to prepare works as follows:

1) The location for the project:

The size of the location depends on each project, and the competent agency does not require any fixed size for each kind of project. However, it should be suitable for the project, and the investor needs to explain the project's location in the Application for Investment Registration.

The documents required for the project’s locations are as follows:

• The certified copy of the certificate of ownership of land use rights;
• The certified copy of the leasing contract; or other document identifying the right to use the location for the execution of the investment project is required to be submitted.

The foreign investor cannot use the virtual office for registering the investment project in Viet Nam.

2) The line of business:

The business’s areas of investors must not be on the List of industries and trades banned from investment under the Law on Investment 2020 and other related regulations.

Some common sectors that foreign investing in Vietnam as follows:

1. i. IT;

2. ii. Technology;

3. iii. Energy;

4. iv. Manufacturing;

5. v. Healthcare;

6. vi. Education;

7. vii. Restaurant;

8. viii. Retail stores;

9. ix. Tourism.

3) The capital of the project:

Foreign investors must show their financial obligation to establish a company in Viet Nam. Individual investors need to prepare the bank balance showing the money in their bank account. The enterprise investors must prepare: the investor’s financial statements for the last two years; commitment of a parent company to provide financial support; commitment of a financial institution to provide financial support; guarantee for the investor’s financial capacity; other documents proving the investor’s financial capacity

According to the Law of Vietnam, there are no minimum requirements for foreign investment in Vietnam. However, the registered capital in the company cannot be less than around 30% of the total investment amount. Besides, the investors need to explain the capital investment in Vietnam to conduct the project in Application. If the amount of money invested is too low, the competent agency does not approve the Project.

4) The dossier for applying for the investment registration certificate includes the following:

4.1 An application for registering the investment registration in Viet Nam (forms under the Law of Viet Nam);

- An application form for execution of the investment project, including a commitment to incur all costs and risks if the project is not approved

- The documents verifying the investor’s legal status, such as the passports or the company registration certificate;

- The bank balance for verifying the financial ability for an individual or the investor’s financial statements for the last two years for enterprise;

- The certified copy of the certificate of ownership of land use rights;

- The certified copy of the leasing contract; or other document identifying the right to use the location for execution of the investment project is required to be submitted.

The foreign documents need to be legalized and translated into Vietnamese for use in Viet Nam.

The investment registration authority responds to the application for the Investment Registration Certificate to the investor within 15 days from the date of receipt of a valid dossier.

.4.2 An application for registering the Enterprise registration in Viet Nam:

Step 2 of setting up a company in Viet Nam is to submit the Application for Enterprise Registration Certificate. It takes 05 working days from the date on which the application is accepted by the competence agency under the Law of Enterprise. In this step, the legal conditions are more straightforward than submitting the Investment Registration Certificate. The foreign investor has to prepare the documents as follows:

- The Application for registering the company (forms under the Law of Enterprise);

- The company’s charter;

- The documents verifying the investor’s legal status, such as the passports or the company registration certificate issued from the country where the investor comes from;

- The Lists of investors;

- The Investment Registration Certificate.

The Dossier for the enterprise registration Certificate can be submitted in person at the Department of Investment and Planning or submit it online on the website of the national registration business.

5) Frequently Asked Questions relating to setting up a company in Vietnam:

a- How long does it take to set up a company in Vietnam?

It depends on what type, or whether or not conditions are required. Normally, it takes from 30-45 days for opening a company in Vietnam.

b- Who will be granting the Investment Certificate in Vietnam?

For most investment projects, the Department of Investment and Investment will be the competent agency to issue the Investment Registration Certificate in Vietnam.

c- How much capital is required for setting up a company in Vietnam?

In general, the regulation does not specify the minimum capital needed to establish a company in Vietnam for a non-conditional investment area. However, the competent agency could reject the investment project which is not feasible. In some business areas such as real estate, banking, and finance, minimum capital is required.

d- Where should I register the address of the business in Vietnam?

The address of the project must be clear and has to be an address of a house with a leasing agreement or an office building in which the owner has a license to operate as an office building. The virtual office is not accepted for registering the project in Vietnam.

6) In Summary:

With the reduction of the administrative barrier, foreign investors can establish an enterprise in Viet Nam with a short time and with simple documents. However, foreigners have to comply with the Laws of Viet Nam for the process to establish an enterprise. Foreign investors should ask Vietnamese lawyers to assist in carrying out investment and Enterprise registration procedures to save time and efficiency in preparing the dossiers.