Ho Chi Minh City is the most developed and modern city in Vietnam. With a prime location and a developed economy, this city always attracts investment from Investors around the world. What procedures must Investors do to invest in Ho Chi Minh City?
In this article, CIS Law Firm will provide detailed instructions on the procedure for establishing a foreign-invested company in Ho Chi Minh City.
MỤC LỤC BÀI VIẾT
1. What is a foreign-invested company?
Foreign-invested Company means a company with capital contribution by foreign individuals or organizations established under foreign law.
2. Conditions for establishing a foreign-invested company in Vietnam
When investing in Vietnam in the form of opening a foreign-invested company, Foreign Investors must meet the conditions prescribed by Vietnamese law and international treaties of which Vietnam is a member.
Currently, Investors who want to establish a foreign-invested company needed to meet the following general conditions:
Firstly, they must meet the market access conditions for foreign investors specified in the Investment Law 2020;
Secondly, before establishing a foreign-invested company, Foreign Investor must have an investment project and carry out procedures for applying for an Investment Registration Certificate (also known as an Investment License).
3. Types of foreign-invested company
According to current regulations, when establishing a company in Vietnam, Foreign Investors can choose one of the following four types:
- Joint Stock Company;
- Single member limited liability company;
- Limited liability company with two or more members;
- Partnership
In which, there are 3 types of companies that are often chosen by Foreign Investors:
- Joint stock company is a company established by at least 03 shareholders who are organizations or individuals contributing capital and there is no limit to the maximum number of shareholders. The shareholders may be individuals or Vietnamese companies;
- Single member limited liability company is a company established by a foreign company or a foreign individual;
- Limited liability company with two or more members is a company with at least 02 members contributing capital, and the maximum number of members is 50 members. In which there is at least one foreign company or a foreign individual contributing capital and may have members being Vietnamese individuals or companies.
4. Steps to establish a foreign-invested company in Ho Chi Minh City
In order to establish a foreign-invested company in Ho Chi Minh City, the Investors need to take the following steps:
Step 1: Apply for an Investment Registration Certificate.
As mentioned above, in order to establish a foreign-invested company, the Investors must have an investment project and carry out the procedures for granting an Investment Registration Certificate.
Procedures for applying for an Investment Registration Certificate will be different depending on whether the investment project is subject to the approval of the investment policy or not. The specific order of execution is as follows:
In case the project is subject to investment policy approval:
In case the project is subject to the approval of the investment policy, the Foreign Investors must carry out the procedures for applying for approval of the investment policy.
Depending on factors such as project objectives, scale, impact on the environment, and land use needs, the investment project may subject to the investment policy approval competence of the National Assembly, the Prime Minister or the provincial People’s Committee.
Dossier of application for approval of investment policy of an investment project proposed by the investors includes:
- A written request for implementation of the investment project, including a commitment to bear all costs and risks if the project is not approved;
- Copy of one of the following papers: identity card, citizen identification, passport of the foreign investor for the investor being an individual; Business registration certificate, operation license, establishment license, establishment decision for institutional investors;
- Documents proving the financial capacity of the investors include at least one of the following documents: Financial statements of the last 2 years of the Investor; Commitment to the financial support of the parent company; Commitment to the financial support of financial institutions; Guarantee on the financial capacity of the Investor; Other documents proving the financial capacity of the investors.
- Proposal of investment project. If the construction law provides for the preparation of a pre-feasibility study report, the investors may submit a pre-feasibility study report instead of the investment project proposal;
- In case the investment project does not request the State to allocate or lease land or permit the change of land use purpose, a copy of the paper on land use rights or other documents determining the right to use the site shall be submitted for implementation of the project;
- The explanation of the technology used in the investment project for the project subject to appraisal and consultation on technology in accordance with the law on technology transfer;
- BCC contract for investment project in the form of BCC contract;
- Other documents related to the investment project, requirements on conditions, and capacity of the investor as prescribed by law (if any).
♦ Where to submit the dossier?
Investors submit documents to one of the following agencies:
– For projects under the investment approval authority of the People’s Committee of Ho Chi Minh City:
- Investors submit dossiers at the Department of Planning and Investment of Ho Chi Minh City if the investment project is outside the industrial zones, export processing zones, high-tech zones, or economic zones;
- Investors submit dossiers to the Management Board of the High-tech zone of Ho Chi Minh City if the investment project is in the hi-tech zones.
- Investors submit dossiers to the Management Board of Industrial and Export Processing Zones of Ho Chi Minh City if the investment project is in an industrial zones, export processing zones, or economic zones.
– For projects under the investment approval competence of the National Assembly or the Prime Minister, the investor shall submit dossiers to the Ministry of Planning and Investment.
In case the project is not subject to investment policy approval:
If the project is not subject to the approval of investment policies, the application for an Investment Registration Certificate includes:
- A written request for implementation of the investment project;
- Proposal of the investment project;
- Documents on Investor’s legal status: Copy of identity card/citizen identity/passport of the foreign investors being the individual; Copy of Business Registration Certificate/ Operation License/ Establishment License/ Establishment Decision for institutional investors.
- Documents proving the financial capacity of the Investor include at least one of the following documents: Financial statements of the last 2 years of the Investor; Commitment to the financial support of the parent company; Commitment to the financial support of financial institutions; Guarantee on the financial capacity of the Investor; Other documents proving the financial capacity of the investor.
- Copy of Certificate of Land Use Right and Location Lease Agreement/ Office Lease Contract/ Factory Lease Contract and other documents proving the lessor’s right to lease, unless the land is allocated by the State, lease land, permit change of land use purpose;
- Explain the technology used in the investment project for the project subject to appraisal and collection of opinions on technology in accordance with the law on technology transfer;
- BCC contract for investment projects in the form of the BCC contract.
♦ Where to apply the dossier?
After fully preparing the application, the Investor submits the application to one of the following agencies:
- For investment projects in industrial zones, export processing zones, and economic zones: Investors submit dossiers at the Management Board of Industrial and Export Processing Zones of Ho Chi Minh City, address: 35 Nguyen Binh Khiem, Da Kao Ward, District 1, Ho Chi Minh City;
- For investment projects in high-tech parks: Investors submit dossiers to the Management Board of Hi-Tech Parks of Ho Chi Minh City, address: D1 Street, Hi-Tech Park, Tan Phu Ward, Thu City Germany, Ho Chi Minh City;
- For investment projects outside industrial parks, export processing zones, high-tech zones, and economic zones: Investors submit dossiers at the Department of Planning and Investment of Ho Chi Minh City, address: 32 Le Thanh Ton, Ben Nghe Ward, District 1, Ho Chi Minh City.
The time for issuance of the Investment Registration Certificate is 15 days from the date the competent authority receives the complete and valid dossier from the Investors.
Step 2: Establish the company
After being granted an Investment Registration Certificate, the Investors need to carry out procedures to apply for an Enterprise Registration Certificate to establish a company. Depending on the type of company as mentioned in Section 3, the Investors prepare the following documents:
If the Investors establish a limited liability company with two or more members, it is necessary to prepare documents including:
- Business registration application form;
- Company charter;
- List of members for limited liability companies with two or more members;
- Copy of the following documents: Identity card/Citizen identity card/Passport of the legal representative of the company; Identity card/Citizen ID/Passport of the member being an individual; Business registration certificate/Establishment license of members being organizations; Identity card/Citizen ID/Passport of the authorized representative of the member being organizations and the document appointing the authorized representative.
- Copy of Investment Registration Certificate.
If the Investors establish a one-member limited liability company, it is necessary to prepare documents including:
- Business registration application form;
- Company charter;
- Copy of the following documents: Identity card/Citizen identity card/Passport of the legal representative of the company; Identity card/Citizen identity card/Passport of the owner being an individual; Business registration certificate/Establishment license of the owner being an organization; Identity card/Citizen ID/Passport of the authorized representative of the owner being an organization and the document appointing the authorized representative.
- Copy of Investment Registration Certificate.
If the Investors establish a joint stock company, it is necessary to prepare 01 set of documents, including:
- Business registration application form;
- Company charter;
- List of founding shareholders and list of shareholders being foreign investors;
- Copy of the following documents: Identity card/Citizen identity card/Passport of the legal representative of the company; Identity card/Citizen ID/Passport of the founding shareholder being individual; Business registration certificate/Establishment license of founding shareholders being organization; Identity card/Citizen ID/Passport of the authorized representative of the founding shareholder being organization and the document appointing the authorized representative.
- Copy of Investment Registration Certificate.
♦ Where to submit the dossier?
Investors can submit an online application on the National Business Registration Portal or apply directly at the Business Registration Office of Ho Chi Minh City, address: 32 Le Thanh Ton, Ben Nghe Ward, District 1, Ho Chi Minh City.
Within 3 working days from the date of receipt of complete and valid documents, the Business Registration Office will issue a Enterprise Registration Certificate to the company.
Step 3: Apply for a Business License
In some cases, in order for a company to be eligible to operate, it must apply for a Business License (also known as a Sublicense).
According to current regulations, a company with foreign capital must apply for a business license in the following cases:
- Exercising the right to the retail distribution of goods;
- Exercising the right to import and wholesale distribution of goods being lubricating oils and greases;
- Providing logistics services; except for logistics service sub-sectors to which Vietnam has committed to open the market in international treaties to which Vietnam is a member;
- Leasing of goods, excluding financial leasing; except for rental of construction equipment with operators;
- Providing trade promotion services, excluding advertising services;
- Providing commercial intermediary services;
- Providing e-commerce services;
- Providing services of organizing tenders for goods and services.
An application file for a business license includes:
- An application for a business license;
- An explanation with the following contents: Explanation of the conditions for granting the corresponding business license as prescribed; Business plan: Describe the content and method of conducting business activities; present business and market development plans; labor demand; assess the impact and socio-economic efficiency of the business plan; Financial plan: Report on business results on the basis of audited financial statements of the latest year in case it has been established in Vietnam for 01 year or more; explanation of capital, capital sources, and capital mobilization plans; accompanied by financial documents; the Business situation of goods purchase and sale activities and activities directly related to the purchase and sale of goods; the financial situation of the foreign-invested economic organization up to the time of application for a business license, in the case of grant of a business license specified in Clause 6, Article 5 of Decree No. 09/2018/ND-CP.
- Documents from tax authorities prove that there are no past-due tax debts.
- Copy of Enterprise Registration Certificate; Investment Registration Certificate.
♦ Competent agency:
Department of Industry and Trade of Ho Chi Minh City, address at 163 Hai Ba Trung, Ward 6, District 3, Ho Chi Minh City.
♦ Processing time:
From 25 to 30 working days from the date the Department of Industry and Trade receives the complete and valid dossier.
5. Service of establishing foreign-invested company in Ho Chi Minh City by CIS Law Firm
With a wealth of experience in the field of investment consulting, CIS Law Firm has supported many foreign investors from many different countries to invest successfully in Vietnam.
CIS Law Firm will assist clients in the following tasks:
- Consulting on conditions, dossiers, and procedures for applying for an investment license, adjusting or changing the investment license, contributing capital, buying shares; establishing of a representative office/branch of a foreign company;
- Complete and quick drafting of documents;
- Representing investors to carry out procedures at competent state agencies;
- Monitoring the processing of dossiers by competent state agencies, explaining to state agencies issues related to dossiers;
- Guiding investors to carry out legal procedures arising after carrying out the procedures;
- Consulting, carrying out procedures for applying for new licenses, and adjusting relevant sub-licenses;
- Support for legal issues arising in the course of business activities for investors.
Above is a detailed guide on the procedures for establishing a foreign-invested company in Ho Chi Minh City. If you have any questions about the process of establishing a foreign-invested company in Ho Chi Minh City or you have any unclear content or need legal assistance, please immediately contact a lawyer of CIS Law Firm with the following information:
CIS LAW FIRM
109 Hoang Sa, Da Kao Ward, District 1, City. Ho Chi Minh
Phone: 028 3911 8580 – 091 911 8580
Email: info@cis.vn
