Licensing Procedures for Foreign-Invested Enterprises in Vietnam
Mar. 25 – As part of establishing a 100 percent foreign-owned enterprise (100% FOE) or a joint venture (JV) in Vietnam, a foreign investor must go through a series of licensing procedures before being entitled to conduct business in Vietnam.
An investor must first engage in an investment project and prepare an application dossier (file) to apply for an Investment Certificate (IC), which is also considered to be the business registration for the enterprise. The IC is the official license allowing foreign investors to carry out business activities in Vietnam.
The application dossier shall comprise:
- Investment registration request on the stipulated form
- Report on financial capability of the investor (which the investor shall prepare and for which the investor shall be liable).The content of this report must include information on the investment capital’s source, and must confirm the financial ability of the investor to implement the investment project.
- Draft Charter of the enterprise corresponding to the particular form of the enterprise (limited liability company, joint stock company or partnership company)
- List of company members corresponding to the form of the enterprise
- Documents certifying the legal status of each founding member
- Power of attorney made by the investor to be the authorized representative for the capital contribution in cases where the investor is an organization/company; and the notarized copy of the passport or ID card of the authorized representative.
- In the case of a JV, the joint venture contract signed by all parties
- In the case of a JV engaged in an investment project with partial capital contributions from the State, an acceptance paper issued by the relevant authority on the use of state capital for the investment must be included.
- Other files stipulated in the relevant laws and regulations
The duration of an investment project can be up to 50 years depending on the business sector for which the investor(s) applies. This duration must be clearly stated in the charter. The government can grant extensions to this period but these cannot exceed 70 years at this point.
For projects that require registration, the issuance of an IC takes about 15 working days. For projects subject to evaluation, the time it takes to obtain an IC is likely to vary. Projects not requiring the Prime Minister’s approval take 20 to 25 working days, while projects that do need such approval take approximately 37 working days.
Registration is required for the following projects involving investment capital of below VND300 billion:
- Projects in non-conditional sectors
- Non-special investment projects
Evaluation is required for:
- Projects involving an investment capital equal to or above VND300 billion
- Investment projects in conditional sectors
- Special projects (i.e., projects of national importance)
Special projects will be evaluated and approved by the Prime Minister. The application-receiving body, approving agency and licensing agency differs according to the location and sector of the project.
Once the IC has been issued, the following additional steps have to be taken to complete the procedure and start business operations.
In order to carve a seal, companies need a seal-making license from the Administrative Department for Social Order (ADSO) under the Municipal Police Department. The documents required for the seal application include:
- Application form (provided by ADSO, if any)
- Notarized copy of the business registration certificate or IC
Tax Code Registration
Tax code registration must be undertaken with the tax department within 10 working days from the issuance date of the IC. The documents required for tax code registration include:
- Application form
- Notarized copy of the business registration certificate or IC
Bank Account Opening
After obtaining the seal and tax code, companies need to open a bank account. The application documents for opening a bank account are:
- Bank issued application form;
- Business registration certificate or IC;
- The company charter, seal and tax code certificates;
- The Board of Management resolution for the authorized signatory of the bank ; and
- Other documents required by the bank.
Newly set-up enterprises need to register employees at the local labor office. They also need to register employees with the Social Insurance Agency for the payment of social, health and unemployment insurance.
To finalize the procedure, a newspaper announcement should be published announcing the establishment of the company. The announcement should include the following information:
- Company name;
- Headquarters address and address of any branches or representative offices;
- Registered business activities;
- Charter capital;
- Full name, address, nationality, identification card number, passport or other relevant personal certification and the establishment or business registration number of the company’s owner or members or founding shareholders; and
- Full name, residential address, nationality, identification card number, passport or other relevant personal certification of the company’s legal representative.
Material for this article was taken from Vietnam Briefing’s Doing Business in Vietnam technical guide, and the January 2012 issue of the Vietnam Briefing Magazine, titled “100% FOEs, JVs and the Promotion of Supporting Industries.” Both of these publications are available as a PDF download on the Asia Briefing Bookstore.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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