Nowadays, Vietnam has welcomed more and more foreign investors with variety forms. In order to support foreign investors intending to invest in Vietnam, FDVN Law Firm synthensizes the law provisions in investment field in Vietnam.
I. FORMS AND PROCEDURES OF INVESTMENT:
1. Capital contribution, share or capital purchase:
1.1. The first case:
The investor contributes capital to or purchase shares/stakes of the business organization:
- The investor contributes capital, buy shares or capital contributions of business organizations engaged in business lines subject to conditions applied to foreign investors.
- The contribution of capital, share purchase lead to the ownership ratio of foreign investors and economic organizations stipulated in Points a, b and c, Clause 1, Article 23 of the Law on Investment 2014 rise from less than 51% to 51% or more;
- The contribution of capital, share purchase lead to the ownership ratio of foreign investors and economic organizations stipulated in Points a, b and c, Clause 1, Article 23 of the Law on Investment 2014 rise from 51% or more to a higher level.
[Refer to points a, b and c of Clause 1, Article 23 of Law on Investment 2014:
a) 51% of charter capital or more is held by foreign investors, or the majority of the general partners are foreigners if the business organization is a partnership;
b) 51% of charter capital or more is held by the business organizations mentioned in Point a of this Clause;
c) 51% of charter capital or more is held foreign investors and the business organizations mentioned in Point a of this Clause.]
How to carry out procedures for registration of capital contribution, share purchase, repurchase of contributed capital of foreign investors
1. Document to provide:
|No.||Document||Number of copies||Note|
|A written for registration of capital contribution or purchase of shares/capital contributions, which specify information about the business organization to which investment is made; the holding of the foreign investor after making investment;||
|2.||A copy of the ID card or passport (if the investor is an individual)||03||Copies are legalized by Vietnamese embassy abroad or certified in Vietnam within 6 months before filing.|
|3.||A copy of the Certificate of establishment or an equivalent paper that certifies the legal status of the investor (if the investor is an organization).||03
|Certified in Vietnam within 6 months before filing.|
2. Time for consideration: Within 15 days from the date of receiving valid document.
3. Agency implementing the procedure: Department of Planning and Investment where the capital contribution receiver headquartered.
4. Result of the procedure: Notice on the satisfaction of the investment conditions in the case of capital contribution, share purchase, capital purchase of foreign investors.
* Besides, foreign investors shall meet the additional conditions:
– An investment capital account is required to be opened at a Vietnamese commercial bank. All activities of buying, selling shares, transferring contributed capital, collecting and using dividends, distributing profits, transferring money abroad and other activities related to investment in Vietnamese enterprises are via this account;
– A copy of the business registration certificate or other equivalent document proving the legal status certified by the competent authority of the home country where the organization has registered;
– Other conditions specified in the charter of the enterprises in which foreign investors contribute capital, purchase shares and they are not contrary to the provisions of law.
– Foreign investors are responsible for the validity of the documents provided.
1.2. Procedure of registration on adjudging capital, capital contribution ratio:
In the case that foreign investors carrying out the procedures for registration of capital contribution, share purchase, repurchase of contributed capital meet the investment conditions of capital contribution, purchase of shares, repurchase of contributed capital, they shall register the change of charter capital, change the charter capital contribution as follows:
1. Document to provide
|No.||Document||Number of copies||Note|
|1.||Notice of adjusting the contents of the business registration;
|2.||Decision of the Capital Contribution Council / General Meeting of Shareholders on the adjustment of charter capital
|3.||Meeting minutes on the adjustment of charter capital||03|
|4.||List of founding members / shareholders||03|
|5.||Contract of transfering capital, document proving the completion of the capital transfer.||02|
|6.||Business registration certificate||03||Certified copy in Vietnam within 06 months
|7.||Notice of changing the founding shareholders (signed by the legal representative)
|03||In case of buying shares to change the founding shareholders in joint stock companies
|8.||Written decision on the change of founding shareholders of the General Meeting of Shareholders (signed by the Chairman of the Board of Directors). The decision shall clearly state the amended contents in the company charter.||03|
|9.||Copy of meeting minutes on the change of founding shareholders of the General Meeting of Shareholders (signed by the chairman and meeting secretary or the signatures of the attending shareholders). The minutes shall specify the changes in the company charter.||03|
|10. 10.||List of founding shareholders after changing.|
|11.||Copy of identity card, ID card or passport for individual investors; A copy of an Establishment Certificate or other equivalent document confirming the legal status of an investor being an organization.||03|
|12.||Charter of Vietnamese enterprise||03||Certified copy in Vietnam within 06 months before applying.|
2. Time for considering: Within 05 days from the date of receiving valid document.
3. Agency implementing the procedure: Department of Planning and Investment.
4. Result of the procedure: Business registration certificate if the document is valid.
1.2. The second case:
Foreign investors not fall into one of the cases mentioned in Section 1.1 shall not need to carry out procedures for registration of capital contribution, share purchase, repurchase of contributed capital. They shall carry out the procedures in Section 1.2 on the registration of changes in charter capital, change of capital contribution ratio.
2. Investment under PPP contracts (public – private partnership):
“PPP” (Public-Private Partnerships) means any form of investment on the basis of a contract between a regulatory agency and an investor, a special purpose entity to build, innovate, operate and manage infrastructure and public service project.
2.1. Investment sectors under PPP contracts:
- Power plants, transmission lines;
- Public lighting system; clean water supply system; water drainage system; sewage/waste collection and disposal system; parks; parking lots; storage yards; cemeteries;
- Head offices of regulatory bodies; state-owned housing for government employees; social housing; resettlement housing;
- Health; education and training, vocational training; culture; sports; tourism; science and technology, meteorology and hydrology; IT application;
- Infrastructure works for commerce, urban areas, economic zones, industrial parks, industrial complexes, concentrated IT parks; hi-technology zones; incubators, technical facilities, common working areas supporting for SMEs;
- Agriculture and rural development; services enhancing the correlation of agricultural production with farm product processing and sale;
- Other sectors decided by the Prime Minister.
2.2. Conditions for making project proposal:
Except for projects established by Ministries, Departments and provincial agencies, investors can propose PPP projects with the following conditions:
- In conformity with the planning for the development of sectors, regions; and the plan for the local socio-economic development that are approved by competent authorities;
- In conformity with the investment sector prescribed above;
- Free of duplication with projects obtaining an approval for project investment proposal;
- Capital recovery potentials;
- In conformity with ability to balance sources of funds of State contribution to PPP project;
- An environmental impact assessment report is made in accordance with law on environment protection.
2.3. Procedure of project establishment and proposal under PPP contract:
Step 1: Establishing dossier of project proposal.
Dossier consists of:
- A written proposal for the project execution, including commitment to take all risks and bear all costs if the project proposal is not approved.
- Pre-feasibility study report or feasibility study report in case of group C project
- A document confirming legal personality, capacity and experience of the investor.
- Other necessary documents used for explaining the project proposal (if any).
Step 2: Approval for project investment proposal made by investor.
State agencies in charge of investment projects shall decide on investment project proposed by investors, with a maximum duration of 30 days for group B projects, a maximum of 60 days for group A projects from the date of receipt of all valid documents.
Step 3: Announcement of project proposal.
Within 07 working days from the day on which the project investment proposal is approved, ministries and the People’s Committee of province shall issue the announcement about a single project or the project portfolio on the National Electronic Procurement System according to the regulations on bidding.
If a project includes contents relating to the intellectual property rights, trade secret, technology or agreements on mobilizing capital used for a project that needs top secret, then investors shall make a deal with ministry or People’s Committee of province on the contents of the announcement.
Step 4: Establishing contract of project or enterprise/company for emplementation of project (if any).
3. Investment under BCC contracts (Business cooperation contract):
- Business cooperation contracts signed between Vietnamese inventors are executed in accordance with civil laws.
- Procedures for issuance of Certificates of investment registration shall apply to business cooperation contracts signed between a Vietnamese investor with a foreign investor, or between foreign investors.
- Parties to a business cooperation contract shall establish a steering board to execute BCC. Functions, tasks, powers of the steering board shall be agreed by the parties.
3.1. Contents of BCC contract:
- Names, addresses, authorized representatives of parties to the contract; business address or project address;
- Objectives and scope of business;
- Contributions by parties to the contract and distribution of profits;
- Schedule and duration of the contract;
- Rights and obligations of parties to the contract;
- Adjustment, transfer, termination of contracts;
- Responsibilities for breaches of contract; method of dispute settlement.
3.2. Conditions of BCC contract emplementation:
- During the execution of a business cooperation contract, parties may reach an agreement on using assets derived from the business cooperation to establish a company in accordance with regulations of law on companies.
- Parties to a business cooperation contract may reach other agreements that do not contravene law.
3.3. Establishment of foreign investor’s operating office under BCC:
- Foreign investors under a business cooperation contract may establish an operating office in Vietnam to execute the contract. The location of the operating office shall be decided by the foreign investors.
- The operating office of a foreign investor in a business cooperation contract has its own seal; the foreign investor may open an account, hire employees, sign contracts, and do business under the business cooperation contract and Certificate of registration of operating office.
Application for registration of operating office:
- An application form which specifies the name and address of the representative office in Vietnam (if any) of the foreign investor; name, address of the operating office; contents, duration, and operating scope of the operating office; full name, residence, ID number or passport number of the head of the operating office;
- The foreign investor’s decision to establish an operating office;
- A copy of the decision to appoint the head of the operating office;
- A copy of the business cooperation contract.
Agency: The investment registry office where the foreign investor’s operating office intends to be placed.
Time for consideration: Within 15 working days from the receipt of the application, the registry office shall issue the Certificate of registration of operating office to the foreign investor.
II. LEGAL BASIS:
- Law on Emterprises 2014
- Law on Investment 2014
- Law on Public Investment 2014
- Decree No. 63/2018/NĐ-CP on investment in the form of public – private partnership
- Decree No. 118/2015/NĐ-CP on guildlines some articles of the Law on Investment
- Circular No. 16/2015/TT-BKHĐT on regulations on application forms for investment procedures and reporting forms on investment in Vietnam.
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