To set up a company in Vietnam, investors need basic knowledge of the legal as well as business environment. The following article summarizes the note when establish 100% foreign invested company in Vietnam.
Read more: Publication of business registration content
1. Vietnam Investment Law
1.1. Better definition of foreign investor
Vietnam Investment Law change the definition of foreign investors. Which shows the difference between individuals and economic organizations.
– Foreign investors are individuals with foreign nationality engaged business activities in Vietnam;
– Foreign-invested economic organizations are economic entity that established under foreign laws and carry out business activities in Vietnam.
1.2. New types of investment when establish 100% foreign invested company
Investment activities in Vietnam are no longer required in the form of direct investment but can be through the following types:
– Establishment economic organizations through investment projects;
– Contributing capital, buying shares or capital contributions in economic entity;
– Investment through cooperation contracts (public-private partnership contracts, business cooperation contracts).
1.3. Simplify investment procedures
Establish 100% foreign invested company in Vietnam requires two types of documents:
– Investment Registration Certificate (IRC) and
– Enterprise Registration Certificate (ERC).
Investors can conduct M&A activities to save time when investing in Vietnam. However, M&A activities may be directly governed by Vietnam Enterprise Law.
1.4. Expand sector on investment
Vietnam Investment Law has reduced the number of prohibited business lines from 51 to 6 and number of conditional businesses decreased from 386 to 243. Investment Law also taken a new approach allows investors do business freely in sector that not prohibited.
2. Vietnam Enterprise Law
2.2. Simplify paper requirements
Business registration contents are posted on the National Business Registration Portal. If an enterprise changes its business line, address or information of a shareholder/member, it is necessary to notify the agency to update the information and issue new Enterprise Registration Certificate (ERC) depending on the case.
2.3. Enterprise seal
Foreign invested company is entitled to decide on the sample, quantity and content of the seal. The management, use and storage of the seal should be stated in the company’s charter. Before using the seal, an enterprise needs to send seal notification to the business registration office to be posted on the National Business Registration Portal.
2.4. More than one legal representative
Vietnam Enterprise Law allows joint stock companies (JSC) and limited liability companies (LLC) have more than one legal representative and at least 01 person required present in Vietnam. If a joint stock company has more than one legal representative, the chairman and director must also be legal representative.
2.5. Time of capital contribution
Within 90 days from the date in Enterprise Registration Certificate (ERC), investors need to fully contribute committed capital in foreign invested company.