It can be seen that currently the Vietnamese market is an ideal place for foreign investors and FDI capital flows. Therefore, there is a lot of demand for establishing foreign-invested companies. To assist foreign investors in carrying out procedures for establishing companies and foreign-invested enterprises in Vietnam quickly and accurately, ensuring compliance with the provisions of law.

CPA HCM provides services for establishing foreign-invested enterprises, thereby giving customers everything they need to know about the process and procedures for establishing foreign-invested enterprises through articles. write below.

LEGAL BASIS 

• Schedule of WTO commitments;
• Investment Law 2020, amended and supplemented in 2022 and implementation guidance documents;
• Enterprise Law 2020, amended and supplemented in 2022 and implementation guidance documents;
• Trade agreements with foreign investors' nationalities.

POINTS TO NOTE BEFORE ESTABLISHING A FOREIGN INVESTED COMPANY

Foreign investors, including foreign individuals and foreign companies, can establish companies in Vietnam with 1 - 100% capital ownership depending on the investment field.

Conditions for establishing a foreign-invested company depend on the field in which the investor is establishing: According to WTO commitments and Vietnamese law, some fields can be easily established in Vietnam such as: trade, import-export, investment consulting, management consulting, software, real estate, construction, restaurants, tourism, manufacturing (needs a factory in an industrial park),…

Except for industries requiring legal capital, the capital contributed by investors does not have a minimum level but must be consistent with the scale of operation of the registered company. However, the amount of capital contributed affects the application for a work permit and temporary residence card for the investor, accordingly the investor and the representative managing the capital contribution are only exempted from the work permit and issued a card. If the capital contribution is 3 billion VND or more, if the investor contributes a high capital contribution, the temporary residence card period will also be granted longer.

If foreign investors contribute capital right after establishment, they need to prove their finances through: savings book, deposit balance, etc. For individuals, deposit balances, tax reports, profitable financial reports, etc. for companies. But if a foreign investor contributes capital to buy shares, it is not necessary to provide these documents.

For procedures to establish a foreign-invested company, it is necessary to provide a house or office rental contract or loan contract and real estate documents of the rented house or office to submit with the establishment documents. Meanwhile, for Vietnamese companies or capital contribution purchase procedures, this condition is not required.

The director, legal representative, and capital contribution manager of a foreign-invested company can be a foreigner or Vietnamese.

Foreign-invested companies are also granted Enterprise Registration Certificates (ERC) by the Business Registration Office - Department of Planning and Investment where the company is headquartered as Vietnamese capital companies.

For companies with foreign investors contributing capital from the beginning from 1% and foreign-invested companies operating in the field of education, they must carry out procedures for issuance of Investment Registration Certificate (IRC).

The biggest difference between a foreign-invested company and a Vietnamese-invested company is that the company needs to open an investment capital account to make capital contributions and later transfer profits back to the country.

The capital contribution period of a foreign-invested company is clearly recorded in the Investment Registration Certificate. Accordingly, if the investor has not yet contributed capital by the due date, the bank opening the investment capital account will not accept late capital contributions. To be able to carry out capital contribution procedures as committed, the company needs to make adjustments to the Investment Registration Certificate to extend the capital contribution deadline.

Tax declaration procedures for foreign-invested companies are similar to those of Vietnamese-invested companies. However, foreign-invested companies must audit their year-end financial statements.

In addition, foreign-invested companies that are granted Investment Registration Certificates must annually carry out investment reporting procedures and project implementation status to the investment registration agency.

TWO FORMS OF ESTABLISHING A FOREIGN INVESTED ENTERPRISE

Establishing a foreign-invested enterprise/company in Vietnam is currently divided into two forms as follows:

Establish a foreign-invested company in the form of investors contributing capital from the beginning

Accordingly, foreign investors will contribute capital right from the beginning of establishing a company in Vietnam. Accordingly, foreign investors' capital contribution, depending on the field of activity, can range from 1% to 100% of the company's charter capital.

Establishing a company with foreign investment capital in the form of capital contribution and share purchase

With this form, foreign investors will contribute capital to a Vietnamese company that already has a Business Registration Certificate. Foreign investors, depending on the field of activity, can contribute capital from 1% to 100% of capital into Vietnamese companies. Foreign investors will carry out procedures for purchasing capital contributions and shares of Vietnamese companies. After that, the Vietnamese company became a foreign-invested company.

PROCEDURES FOR REGISTRATION OF ESTABLISHMENT OF A FOREIGN INVESTED COMPANY

Procedures for registering to establish a foreign-invested company are carried out according to the following steps:

Step 1: Apply for an Investment Registration Certificate associated with the establishment of a foreign-invested economic organization

The investment registration agency issues an Investment Registration Certificate to the investor within 15 days from the date of receipt of valid documents when the project meets the following conditions:

• Not belonging to industries or occupations banned from business investment as prescribed in Article 6 of the Investment Law and international treaties on investment;
• Have a location for implementing the investment project determined on the basis of a valid copy of documents on land use rights or a valid copy of the location lease agreement or other documents or documents determining the right to use the location to implement investment projects;
• The investment project is in accordance with the planning as prescribed in Clause 7, Article 31 of this Decree;
• Meet the conditions for investment rate per land area prescribed by the Provincial People's Committee based on actual local conditions and approved by the Standing Committee of the Provincial People's Council (if any), quantity Labor used (if any);
• Meet market access conditions for foreign investors.

Step 2: Apply for a Business Registration Certificate

Documents to establish a foreign company applying for a Business Registration Certificate:

• Application for business registration;
• Company rules;
• List of founding members/shareholders of the company;
• Authorization letter;
• Notarized copy of investment registration certificate;
• Notarized copy of personal documents of legal representative.

Step 3: Apply for a Business License for certain conditional business lines

According to the provisions of Decree 09/2018/ND-CP regulating activities of buying and selling goods and activities directly related to buying and selling goods of foreign investors and economic organizations with investment capital foreigners in Vietnam:

• Retailing is the activity of selling goods to individuals, households, and other organizations for consumption purposes.
• Investors are not required to issue a Business License for export, import of goods, wholesale of goods (not including goods: Oil, lubricants; rice; sugar; recorded items; books). , newspapers and magazines).
• Investors shall issue a Business License when carrying out retail activities and setting up retail establishments.

Step 4: Engraved company seal

Stamps include stamps made at a seal engraving facility or stamps in the form of digital signatures in accordance with the law on electronic transactions.

Enterprises decide on the type, quantity, form and content of seals of the enterprise, branches, representative offices and other units of the enterprise.

The management and storage of seals is carried out in accordance with the provisions of the company charter or regulations issued by the enterprise, branch, representative office or other unit of the enterprise with the seal. Enterprises use seals in transactions according to the provisions of law.

Step 5: Open a foreign direct investment capital account

After completing the procedures for establishing a foreign-invested company, the investor opens a foreign direct investment capital account. The investor transfers capital to this capital account according to the capital contribution period recorded in the Investment Certificate.

Step 6: Foreign-invested companies carry out the following procedures for establishing a company

After the company is established, investors need to follow the same post-establishment procedures as a Vietnamese company. Specifically:

• Hang signs at headquarters.
• Register for a digital signature to pay taxes electronically and report taxes via the Internet.
• Buy electronic digital signatures to make electronic tax payments.
• Proposal to issue electronic invoices.
• TReport on project implementation status according to regulations in the Investment Registration Certificate.
• Declare and pay taxes according to regulations.

SERVICES TO ESTABLISH A PRESTIGE FOREIGN CAPITAL COMPANY AT CPA HCM

CPA HCM is proud to have many years of experience in the field of applying for licenses to establish foreign-invested companies in Vietnam, and has supported establishment consulting for hundreds of businesses. CPA's foreign-invested company establishment services include:

- Consulting on conditions for establishing foreign-invested companies for investors according to each specific business field or according to the investor's nationality;

- TConsulting on the capital contribution ratio of foreign investors in Vietnam according to Vietnamese law and WTO commitments;

- Consulting on choosing the right company type for investors: Limited Company or Joint Stock Company, headquarters address, capital, business lines, opening a capital transfer account, capital contribution period;

- Consulting on conditions and guiding investors to prepare necessary documents to establish a foreign-invested company;

- Consulting and drafting company establishment documents for investors;

- Comprehensive consulting on activities arising during the process of conducting business in Vietnam for investors.

Please contact CPA HCM via Hotline: 1900 0380 to receive advice and support from dedicated experts..