What Foreign Investors Should Know When Setting up company in Vietnam in 2022?

 

In the period of global economic integration, especially Post-Covid-19 era, Vietnam – a developing country is considered one of the countries with potential markets that foreign investors choose to establish the business here taking advantage of the government policy to promote the economy i.e. “new normal” adaption living with Covid-19, quick opening of border allowing tourists to visit Vietnam since Apr 2022, tax reduction, public investment increase…

Whom can set up business in Vietnam?

First, the objects allowed to establish and manage enterprises in Vietnam are all organizations and individuals who are not in the following cases: (i) Minors; people with limited legal capacity; incapacitated people; people having difficulties controlling their behaviors; organizations that are not juridical persons; (ii) People who are facing criminal prosecution, kept in temporary detention, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, has limited legal capacity or is incapacitated, is not able to control his/her own behaviors, is banned by the court from holding certain positions or doing certain works; other cases prescribed by the Law on Bankruptcy and the Anti-corruption Law. At the same time, individuals with foreign nationality implementing business investment activities in Vietnam are considered foreign investors. The implementation of investment forms; the scope of operation as well as related procedures must meet the conditions under the Investment Law; related legal documents; other conditions of international treaties that Vietnam is a member.

How to invest and set up business in Vietnam?

Second, foreigners, foreign investors must explore legal forms of investment in Vietnam including: (i) Investing in establishing economic organizations; (ii) Invest in capital contribution, share purchase and purchase capital; (iii) Implementing investment project; (iv) Investment in the form of BCC contract; (v) Forms of investment and new economic organizations according to the Government’s regulations. They need to consider projects planning to invest in Vietnam in case of requesting approval of investment policy of 2020 Investment Law. The investment project of foreign investors is required to carry out procedures for granting investment registration certificates. If the case must be proposed to approve the investment policy, they must prepare dossiers and carry out procedures to request approval of investment policies. When completing the procedure, they will be granted a written decision on investment policy and investment registration certificates. If not falling in the case of approval of investment policy, foreign investors conduct procedures for applying for investment registration certificates.

What documents required to set up company in Vietnam?

Third, after being granted a certificate of foreign investment registration, foreign investors shall continue the procedures for enterprise registration. Vietnam laws do not have to limit the type of enterprise to foreign investors, hence investors can choose: One member limited liability Company; Two-member limited liability companies or more; Joint stock company; Partnerships. Each type of business has different advantages and disadvantages, and foreign investors should base on the purpose and investment scale to choose the type of suitable form of investment. In addition, the investment under the conditional business lines need to fully meet the conditions according to the provisions of law. Depending on the type of business, there will be the document requirements that need to register accordingly. And most importantly, foreign investors must prepare necessary conditions and sufficient conditions (validated documents for use in Vietnam, business name, head office address, business line, charter capital, legal representative,…) attached to the understanding and implementation of the order and procedures when they want to establish a certain type of enterprise in accordance with the Enterprise Law 2020.

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