In the context of increasingly deep global economic integration, establishing a company with 100% foreign capital in Vietnam has become one of the attractive options for international investors. Vietnam, with its increasingly favorable business environment, open policies, and various tax incentives, has been drawing the attention of foreign enterprises. Therefore, choosing a reputable consulting service is a crucial factor for investors to ensure the company establishment process proceeds smoothly and effectively. The following article will provide consultation on the procedures for establishing a company with 100% foreign capital in Vietnam, helping businesses grasp legal regulations, prepare documentation, and carry out procedures accurately and promptly.
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What is 100% foreign capital?
A company with 100% foreign capital is an enterprise in which the entire charter capital is held by foreign investors. This type of company is established and operates in accordance with the provisions of the Investment Law 2020 and its guiding documents. Additionally, the company must comply with international treaties to which Vietnam is a member.
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Conditions for establishing a 100% foreign capital?
- The investment sector must not fall under the prohibited sectors for investment, which include:
- Investing in projects that are harmful or potentially harmful to national defense and security.
- Foreign investors investing in conditional investment sectors must comply with the specified investment conditions.
- Before establishing a company, foreign investors must have an investment project and carry out investment registration procedures, except in cases of establishing small and medium-sized enterprises for innovative startups and venture capital funds for innovative startups as stipulated by the law on supporting medium-sized enterprises[1].
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Required document and procedure for establishing a 100% foreign capital company
According to the provisions of the Law on Investment 2020 and the Decree No. 31/2021/ND-CP issued by the Government on 26 March 2021, detailing and guiding the implementation of certain provisions of the Law on Investment, the required document and procedure for establishing a 100% foreign capital company are as follows:
Step 1: Conducting Procedures for Investment Approval
For investment projects requiring investment approval, foreign investors must base their actions on the type of project, its scale, and project requirements to apply for and register decisions and investment with the corresponding competent authority. The authorities responsible for approving investment include the National Assembly, the Prime Minister, and the People’s Committee at provincial level[2].
Foreign investors submit a dossier requesting investment approval to the Ministry of Planning and Investment in cases where the project falls under the jurisdiction of the National Assembly or the Prime Minister for investment policy approval, and to the provincial People’s Committee Investment Registration Authority in cases under their jurisdiction for investment policy approval.
Step 2: Completing procedures for issuance of Investment Registration Certificate
Foreign investors submit a dossier requesting the issuance of an Investment Registration Certificate to the Investment Registration Authority, including:
- An application to implement the investment project;
- Documentation proving the legal status of the investor;
- Documentation demonstrating the financial capacity of the investor;
- Investment project proposal or feasibility study report in cases the law requires;
- If the investment project does not require state allocation of land, land lease, or land use conversion, submit a copy of land use rights certificate or other documents identifying the right to use the location for implementing the investment project;
- Explanation of the technology to be used in the investment project for projects subject to technology assessment and opinion on technology transfer as stipulated by technology transfer laws.
- BCC Contract for investment projects under the BCC Contract form;
- Certified copy of the Decision on investment policy approval and certified copy of the Decision on investor approval (if applicable) in cases where the project requires investment policy approval;
- Other relevant documents related to the investment project, requirements on conditions, and investor capabilities as stipulated by law (if applicable).
Step 3: Completing procedures for issuance of Enterprise Registration Certificate
After being issued the Investment Registration Certificate, investors need to prepare a dossier to obtain the Enterprise Registration Certificate, including:
- Notification requesting enterprise registration;
- Company charter;
- Certified copy of the Decision on establishment/Enterprise Registration Certificate/Business Registration Certificate or equivalent documents;
- List of founding shareholders and shareholders who are foreign investors/List of members; and
- Certified copy of personal legal documents.
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Lead time
| Step |
Lead time |
| 1 | (i) Project under the investment approval of the National Assembly:
– Within 15 days from the date of receiving a complete dossier, the Ministry of Planning and Investment reports to the Prime Minister for state appraisal. – Within 90 days from the date of establishment, the State Appraisal Council organises the appraisal of the dossier and prepares an appraisal report, including the appraisal contents stipulated in Article 33 of the Law on Investment, to submit to the Government. – At least 60 days before the opening of a session of the National Assembly, the Government prepares and submits the dossier requesting investment approval to the competent agency responsible for scrutiny by the National Assembly. (ii) Project under the investment approval of the Prime Minister – Within 3 working days from the date of receiving a complete dossier, the Ministry of Planning and Investment sends the dossier to relevant state agencies for their appraisal opinions on the appraisal contents specified in Article 33 of the Law on Investment. – Within 15 days from the date of receiving the dossier, the agency providing opinions provides its appraisal on matters within its scope of state management and sends it to the Ministry of Planning and Investment. – Within 40 days from the date of receiving the dossier, the Ministry of Planning and Investment organises the appraisal of the dossier and prepares an appraisal report, including the appraisal contents stipulated in Article 33 of the Law on Investment, to submit to the Prime Minister for investment approval. (iii) Project under the investment approval of the Provincial People’s Committee – Within 3 working days from the date of receiving a complete dossier, the investment registration authority sends the dossier to relevant state agencies for their appraisal opinions on the appraisal contents specified in Article 33 of the Law on Investment. – Within 15 days from the date of receiving the dossier, the relevant agency provides its appraisal opinion on matters within its scope of state management and sends it to the investment registration authority. – Within 25 days from the date of receiving the dossier, the investment registration authority prepares an appraisal report, including the appraisal contents specified in Article 33 of the Law on Investment, to submit to the Provincial People’s Committee. – Within 7 working days from the date of receiving the dossier and the appraisal report, the Provincial People’s Committee approves the investment. |
| 2 | Within 15 working days from the date of receiving a complete and valid dossier |
| 3 | Within 03 working days from the date of receiving a complete and valid dossier |
The above is an overview of our legal perspective on Consulting on procedures for establishing a company with 100% foreign capital in Vietnam that Phuoc & Partners share with readers. If you have difficulties in finding a Law Firm to advise and support in the relevant legal field, please contact us. Phuoc & Partners is a professional consulting firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Danang. Phuoc & Partners is also rated as one of the leading consulting firms specialising in business law in Vietnam that has leading practice areas in the legal market such as Labour and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing Clients with optimal and effective service.
[1] Article 30, Article 31, Article 32 Law on Investment 2020
[2] Article 30, Article 31, Article 32 of Law on Investment 2020
