In recent years, Vietnam has become an attractive destination for foreign investors due to its stable political environment, young population, potential consumer market, and competitive labor costs. Foreign Direct Investment (FDI) plays a crucial role in driving economic growth and transforming Vietnam's economic structure. However, establishing an FDI enterprise in Vietnam requires investors to have a clear understanding of investment forms, investment policies, and tax regulations. Let's explore the FDI business establishment services at CPA HCM through the article below!

1. WHAT IS FDI ENTERPRISE?

FDI (Foreign Direct Investment) enterprises are businesses with direct investment from abroad, including forms such as:

• 100% foreign-owned companies
• Joint ventures between foreign investors and Vietnamese investors.

Establishing FDI enterprises in Vietnam offers many opportunities but also faces numerous challenges regarding legal procedures and regulations. Therefore, collaborating with a professional consulting unit like CPA HCM will help investors effectively overcome these obstacles.

2. FORMS OF DIRECT AND INDIRECT INVESTMENT

2.1. Direct Foreign Investment (DFI)

Direct Foreign Investment (DFI) is a form in which foreign investors directly participate in business activities in Vietnam by establishing new enterprises or investing in existing businesses in Vietnam. Direct investors typically have the right to control and manage the business operations of the enterprise, while also being responsible for the profits and risks from those activities.

Common forms of direct investment include:

• Establishing a 100% foreign-owned enterprise: This is a form where the foreign investor fully owns the business in Vietnam.
• Establishing a joint venture: The foreign investor and the Vietnamese partner contribute capital to establish a joint venture, with the capital contribution ratio and the rights of the parties clearly agreed upon and specified.
• Purchasing shares or contributing capital to a Vietnamese enterprise: The foreign investor buys shares or contributes capital to a Vietnamese business to participate in management or hold controlling shares.

2.2. Indirect Foreign Investment (IFI)

Indirect foreign investment is a form in which foreign investors participate in the Vietnamese market by investing in financial instruments such as stocks, bonds, investment funds, or other financial products without directly engaging in the operation and management of the business.

Common forms of indirect investment include:

• Buying stocks and bonds: Foreign investors can purchase stocks on the Vietnamese stock market without needing to participate directly in the management of the company.
• Investing in investment funds: Investors choose to invest in funds managed by reputable financial institutions in Vietnam, without needing to directly engage in business activities.
• Contributing capital to intermediary financial organizations: Investors can contribute capital to financial organizations such as fund management companies and credit institutions, indirectly participating in investment activities in Vietnam.

3. PROCEDURE FOR ESTABLISHING FDI ENTERPRISES AT CPA HCM

3.1. Establishing a direct foreign direct investment (FDI) enterprise

Step 1: Consultation and evaluation of the investment project.

CPA HCM provides consulting services to evaluate and analyze important factors before deciding to establish a direct business, including:

• Business sector: Consulting on conditions and restrictions in the proposed business field.
• Capital scale and location: Analyzing the suitability of investment capital and the location for project implementation.
• Investment form: Assisting in selecting a business model (limited liability company, joint-stock company, etc.) that aligns with the investor's development goals.

Step 2: Prepare the application for the Investment Registration Certificate

• Request for the issuance of an investment registration certificate.
• Documents confirming financial capacity.
• Passport or business registration certificate of the investor. Draft investment project, specifying the scale, capital, objectives, and duration of the project.

CPA HCM will assist the investor in drafting and completing all documents in accordance with legal requirements in Vietnam.

Step 3: Submit the application for the Investment Registration Certificate.

CPA HCM will represent the submission of documents to the competent authority, usually the Department of Planning and Investment or the Management Board of industrial zones and export processing zones.

Step 4: Register the establishment of an FDI enterprise.

CPA HCM will assist investors in carrying out the procedures for business registration, including:

• Applications for business registration, company charter, and information about capital contributions and shareholders.
• List of shareholders and members participating in the capital contribution.

Step 5: Carry out procedures after establishment.

After the business is established, necessary procedures must be carried out for the business to operate legally:

• Announce business information.
• Create a seal and register the seal sample.
• Open a bank account and register a digital signature.

Step 6: Support accounting and legal consulting

Not only do we offer business establishment services, but we are also ready to advise on the following services if the business uses our services:

• comprehensive accounting, periodic tax declaration, legal consulting
• Compliance with foreign investment regulations.

3.2. Establishment of indirect FDI enterprises

Step 1: Consult and assess the target business.

CPA HCM will advise and assist foreign investors in assessing the potential, scale, and capabilities of the Vietnamese company they intend to acquire shares in. We will analyze:

• The financial capacity, business operations of the target company, legal aspects and risks related to the share acquisition
• The opportunities and challenges in managing 
• Operating the target company.

Step 2: Prepare the application for approval to purchase shares/contributions.

• Application for share purchase.
• Information about the Vietnamese enterprise (business license, financial situation, etc.).
• Documents proving the investor's financial capacity.

Step 3: Request approval from the competent authority.

The completed application will be submitted to the Department of Planning and Investment for approval. CPA HCM will take on the role of representative, monitoring the approval process and addressing any additional requests from the authorities.

Step 4: Carry out the transfer and update the business records.

After approval, we will guide foreign investors in completing the procedures for transferring shares or capital contributions:

• Signing the transfer contract between the parties.
• Updating the information of the new shareholders/members with the Department of Planning and Investment.
• Announcing the changes in the business as required by law.

Step 5: Support for management and accounting after the acquisition of the business.

After acquiring shares or equity, CPA HCM will continue to accompany foreign investors in managing, tax declaration, and financial reporting of the enterprise:

• Consulting on corporate governance post-transfer.
• Assisting in business planning and optimizing financial operations.

4. Types of Businesses Supported by CPA HCM

• Manufacturing enterprises: Enterprises engaged in the production of goods in Vietnam with foreign investment.
• Trading enterprises: FDI enterprises operating in the field of import and export, distribution, and retail of goods.
• Service enterprises: Enterprises providing services in various fields such as education, healthcare, information technology, tourism, etc.

=> The results obtained when using FDI business establishment services.

• Business registration certificate;
• Company seal (company round stamp);
• Registration of the seal on the national information portal;
• Announcement of company establishment information;
• Company sign, director's title stamp.
• Support for post-establishment procedures such as: purchasing a digital signature at agency price, registering for electronic tax payment, declaring business license tax, paying business license tax, declaring accounts with the business registration authority; notification of issuing value-added tax (VAT) invoices;
• Guidance on tax declaration procedures and financial reporting.

5. WHY CHOOSE CPA HCM'S FDI BUSINESS ESTABLISHMENT SERVICE?

5.1. In-depth understanding of FDI laws and procedures.

With many years of experience in consulting for the establishment of FDI enterprises, CPA HCM has a detailed understanding of current legal regulations, the process of handling documents, and licensing procedures. This ensures that the procedures are carried out accurately, on time, and in compliance with Vietnamese law.

5.2. Comprehensive support from preparation to completion of the documents.

CPA HCM assists clients from the initial preparation steps, such as advising on the appropriate type of business, preparing legal documents, to handling licensing procedures and completing the business registration process.

5.3. Accurate and clear advice on rights and obligations.

Investors will receive detailed advice on their rights, obligations, and the preferential policies related to FDI enterprises, thereby gaining a comprehensive view of investment activities in Vietnam.

5.4. Saving time and costs

We are committed to optimizing the process to shorten the time for business establishment while helping investors save costs through effective solutions.

CPA HCM – A trusted partner for foreign investors

With many years of experience and a deep understanding of the Vietnamese legal system, CPA HCM is proud to be a trusted partner of many foreign direct investment (FDI) enterprises from around the world. We are committed to providing high-quality services, ensuring a quick and efficient process that saves time and costs for investors.

Contact CPA HCM today for detailed advice on the FDI business establishment process and to start your investment journey in Vietnam smoothly and effectively!