Under Law on Investment 2020 and Law on Enterprises 2020, Accession of Vietnam to the WTO, and Free Trade Agreements between Vietnam and other countries, foreign investors are allowed to open a new company in Vietnam in most of the services and commercial sectors.
Notes for foreign investors
- Each investment sectors have its own conditions on procedures, capital contribution ratio, documents to be prepared.
- When opening a new company in Vietnam, foreign investors must prove their financial ability to be able to invest in Vietnam by confirming the balance of the bank account.
- The legal representative of the company must reside in Vietnam.
- Companies may only be established in Vietnam for industries that are not prohibited.
- The minimum capital amount has no specific regulations. However, the suggested capital is not lower than 20000 USD.
General conditions and documents
- Notarized copy of a passport;
- Financial ability: foreign investors prove by confirming the balance of the bank account or savings account book bearing the investor’s name with the corresponding amount invested in Vietnam;
- Registered address in Vietnam: a lease contract or office lease in Vietnam to register the company’s headquarters.
Registration process for opening a new company in Vietnam
- Before registering for Registration Investment Certificate, investors have to public information about the investment on the National Foreign Investment Information System. Within 15 days from the date of online declaration, the investor shall submit the application for Investment Registration Certificate to the Investment Registration Authority.
- After the Investment Registration Authority receives the documents, the investors is granted an account to access to the National Foreign Investment Information System to follow the application processing.
- The Investment Registration Authority uses the National Foreign Investment Information System to receive, process, return the investment registration outcome, update the registration processing and issue codes for investment projects.
- Request to do investment project;
- Copy of ID, ID card or passport for individual investor; Certificate of Establishment or equivalent legal documents for organization investor.
- Proposal for investment project includes: Investor(s) responsible for the project, project goal, scope, capital, financing, location, duration, progress, labor, request for investment incentives, assessment of impact on social-economy of the project, etc.
- Copy of 1 of the following documents: Financial Statements most recent 2 years of the investor; Commitment to give financial support from parent company; Commitment to give financial support from Financial institution, Provision of guarantee for investor’s financial capacity, proof of financial capacity, etc.
- Request for land use; in the case that the project does not require the Government to give land, lease land or allow to change land use purpose, the Investor submit the copy of rental agreement or equivalent documents confirming that the Investor has the rights to use the requested location to do the investment project.
Processing Time of opening a new company in Vietnam
Within 15 days after receiving a complete dossier, the investment registration agency shall grant an investment registration certificate; In case of refusal, it must be notified in writing to the investor, clearly stating the reason.
After obtaining the investment registration certificate, the investor needs to prepare a dossier to establish an enterprise. There are 2 most common types of enterprises that foreign investors open in Vietnam: (i) Limited liability company (LLC); (ii) Joint-stock company (JSC).
Limited liability company (LLC)
|When investor is a company||When investor is an individual|
|1. A registered business address: a physical or a virtual address (depends on the business license requirements)||1. A registered business address: this can be a physical or virtual address. It also depends on the business license requirements.|
|2. Business Certificate or an equivalent paper that can certify the legal status.||2. Legal Representative in a management role or higher, living in Vietnam full time, regardless of nationality.|
|3. Charter Capital: the amount must be high enough to cover the company’s expenses, such as office lease, salaries, operational expenses, etc, for at least the next six months.||3. Charter Capital: this amount must be high enough to cover the company’s expenses, such as office lease, salaries, operational expenses, etc.|
|4. Financial documents: the bank statement with the same or bigger amount of charter capital intended to invest in Vietnam. The investor(s) must submit any legalised copies of their financial documents.||4. Legalised Bank Statement: a legalised copy of your bank statement with the balance showing it is larger than the Charter Capital amount. The bank statement will need to be legalised at the Vietnamese Embassy in the country of your bank statement and then translated and notarised in Vietnam.|
|5. Legal Representative in a management role or higher, living in Vietnam full time, regardless of nationality.||5. Notarised or legalised copies of the Official Identity of the Investor and Legal Representative(s).|
|6. Official Identity: notarised copies of the Investor and Legal Representative(s)’s official ID (i.e. passport).|
Joint-stock company (JSC)
- A bank certificate as proof of funds.
- Proposal of investment project.
- Documents required for an Investment Registration Certificate application.
- Personal details of every shareholder and their respective amount of shares.
- Legal status certificate for all founding shareholders.
- A capital bank account.
- Proposal of land use.
- A Foreign Investment Certificate.
- Financial statements that have been audited.
- Submission of annual return.
It’s important to understand the requirements and process of establishing a foreign-owned company in Vietnam to make sure your time and money are not wasted for unnecesary mistakes.