Pursuant to the Investment Law No. 61/2020/QH14 dated June 17, 2021, foreign investors are allowed to invest in Vietnam in many forms: investing in establishing economic organizations; Invest by contributing capital, buying shares, or capital contributions of economic organizations; investment under business cooperation contracts, etc. In case foreign investors include individuals and organizations that want to establish projects with foreign direct investment in Vietnam, the following regulations need to be considered.
1. Some industries have market access restrictions applicable to foreign investors
Foreign investors establishing economic organizations must meet market access conditions applicable to foreign investors according to the provisions of the Investment Law. Decree No. 31/2021/ND-CP guiding a number of articles of the Investment Law (hereinafter referred to as Decree 31) regulating the List of industries and occupations with limited market access applicable to foreign investors in Appendix I (“List of market access restrictions” ).
The limited market access list includes two sub-lists:
(A) List of industries not allowed to access the market: includes 25 industries such as trading in goods and services on the list of State-monopolized goods and services in the field of commerce, journalism activities, collecting information in all forms, fishing, employment brokerage services under foreign contracts, temporary import and re-export business;
(B) List of business lines with market access conditions: includes 58 specific business lines such as production and distribution of cultural products, including video recording, insurance, banking, and brokerage securities, telecommunications services, printing services, e-commerce business; and business lines licensed under the Pilot Project.
In addition, Decree 31 clarifies market opening principles applicable to foreign investors as follows:
For the List of industries that do not have market access: Foreign investors are not allowed to invest;
For the List of industries and business lines with market opening conditions: Foreign investors are allowed to invest if they meet all conditions;
For business lines that do not have a commitment from the Vietnamese Government to open the market to foreign investors:
+ In case domestic law does not have regulations restricting foreign investors’ market access: foreign investors have the same market access as domestic investors;
+ If there are regulations restricting foreign investors’ market access according to Vietnam’s domestic laws: foreign investors must comply with those regulations.
2. Procedures for establishing projects with foreign direct investment
Step 1: Establish an investment project in Vietnam at the Provincial Investment Registration Office;
Step 2: Establish a company at the Provincial Investment Registration Office after being granted an Investment Registration Certificate;
Step 3: Carve the seal;
Step 4: Carry out the first tax registration procedure at the Tax office.
3. Dossier for establishing a foreign investment project includes:
Application for implementation of an investment project including a commitment to bear all costs and risks if the project is not approved;
Documents on the investor’s legal status;
Documents proving the investor’s financial capacity include at least one of the following documents: the investor’s 02 most recent financial statements; Parent company’s commitment to financial support; commitment by the financial institution to provide financial support; guarantee of the investor’s financial capacity; Other documents proving the investor’s financial capacity;
– Investment project proposal includes the following main contents: investor or investor selection method, investment objective, investment scale, investment capital and capital mobilization plan, location, duration and progress of investment project implementation, information on current land use status at the project location and proposed land use needs (if any), labor needs, proposed investment incentives investment, impact and socio-economic efficiency of the project and preliminary assessment of environmental impacts (if any) according to the provisions of law. environmental protection law. In case the law on construction stipulates that a Pre-Feasibility Study Report must be prepared, the investor has the right to submit a Pre-Feasibility Study Report instead of the investment project proposal;
In case the project does not require the State to allocate land, lease land, or allow change of land use purpose, a copy of land use rights documents or other documents determining the right to use the location is required for implementation. current investment project;
• Explanatory content about the technology used in the investment project in case the project must be appraised and consulted on technology according to the provisions of the Law on Technology Transfer;
• Business cooperation contract if the investment project is implemented under a business cooperation contract;
• Other documents related to the investment project and requirements on the status and capacity of the investor according to the provisions of law (if any).
4. Investment project establishment consulting services of Pham Consult
With many years of experience advising foreign investors on establishing foreign direct investment projects, Pham Consult provides consulting services at competitive prices, supporting you:
• Consulting on conditions, procedures and issues arising when establishing a company with foreign direct investment in Vietnam;
• Prepare all necessary documents in bilingual (Vietnamese and English) to ensure foreign investors can easily monitor and evaluate work progress (if customers request)
• Support customers with notarization, consular legalization and notarized translation;
• Submit and receive results at state agencies on behalf of customers;
• Consulting and explaining to state agencies when problems arise.
If you are interested in establishing a foreign direct investment company in Vietnam and still have many problems with this procedure, please contact us via the following information for free consultation. Pham Consult always wants and commits to providing customers with the best services and support to help you optimize operating costs to serve your business goals.