Can a foreigner set up a company in Vietnam? This article provides the procedures of registering a foreign-invested company or enterprise in Vietnam with 7 tips.
Legal basis
- Vietnam's WTO Commitments on Services;
- Law on Enterprises No. 59/2020/QH14 issued by the National Assembly on June 17, 2020;
- Law on Investment No. 61/2020/QH14 issued by the National Assembly on June 17, 2020;
- Decree No. 31/2021/ND-CP detailing and guiding the implementation of certain articles of the Law on Investment.
There are many forms of investment in the Vietnamese market, among which establishing a company is a form commonly chosen by foreign investors to officially conduct business. However, the procedure for establishing a foreign-invested company is not as simple as setting up a 100% Vietnamese-owned company. Below, Anpha Accounting will guide you on the fastest way to establish a foreign-invested company, helping you save significant time and costs.
Depending on the specific capital contribution conditions, investors can choose one of the following two methods to set up a foreign-invested company:
Method 1: Register for an Investment Certificate
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Applicable subjects
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- Investment projects by foreign investors (100% foreign-owned);
- Investment projects by foreign-invested economic organizations, where:
- Foreign investors hold more than 50% of the charter capital, or
- The majority of general partners are foreign individuals in the case of a partnership company.
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Implementation process
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Step 1: Complete the procedure for registering the investment certificate;
Step 2: After obtaining the investment certificate, proceed with the procedure for registering the enterprise registration certificate.
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Completion time
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From 30-35 days from the date of submission or possibly longer, depending on the industry registered by the investor.
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Results
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Investment registration certificate
Enterprise registration certificate
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Having an investment registration certificate will facilitate investors when participating in bidding for large projects, including some major state-owned projects. However, the cost of setting up a foreign-invested company through this method is relatively high and requires a significant amount of time from the investor.
Method 2: Contributing capital to a Vietnamese company (Establish a company with foreign investment through capital contribution, share purchase, or capital contribution purchase in a Vietnamese company)
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Applicable subjects
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This method should be chosen when a foreign investor and a Vietnamese investor jointly contribute capital to establish a company (known as a joint venture) because it does not require an investment license.
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Implementation process
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Step 1: Establish a 100% Vietnamese-owned company.
Step 2: Transfer shares or capital contributions to the foreign investor.
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Completion time
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From 20-25 days from the date of submission.
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Results
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Enterprise registration certificate
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Establishing a foreign-invested company using this method helps save costs, time, and simplifies accounting procedures compared to Method 1.
If a foreign investor wants to establish a company using this method but does not have friends or cannot hire a Vietnamese person to act as the legal representative of the business, they can consider our foreign-invested company establishment service, with a service fee starting from 9,000,000 VND.
Method 1: Register for an investment certificate
1. Procedure for applying for an investment registration certificate
In this article, Anpha provides the procedure for issuing the investment registration certificate for investment projects that do not require an investment policy decision.
The application for an investment registration certificate includes the following documents:
- A document requesting to implement the investment project;
- Investment project proposal;
- Lease contract for the office, documents proving the landlord's leasing rights (land use rights certificate, construction permit, business registration certificate with real estate business function of the lessor, or equivalent documents);
- A document confirming the balance of the foreign investor's bank account, equivalent to or greater than the investment amount;
- A copy of the investor's ID card/citizen's identity card or passport for individual investors;
For foreign organizational investors, the following documents are required:
- A copy of the business registration certificate, certificate of establishment, or other equivalent documents of the foreign organization;
- A copy of the ID card/citizen's identity card/passport of the representative of the foreign investment organization in Vietnam;
- Financial reports for the last 2 years audited by the foreign organization (must be consular legalized and valid within 90 days).
Note: The documents and reports submitted to the competent state authorities must be in Vietnamese. In case the application for an investment registration certificate includes foreign-language documents, they must be consular legalized, then translated and notarized into Vietnamese.
Submit the application: The investor submits the application directly to the Investment Registration Department at the Department of Planning and Investment, where the business is located.
Resolution time: Within 15 working days from the date of submission, the investment registration authority will check the validity of the application and issue the investment certificate. In case the application is invalid, the investment registration authority will issue a notification guiding the investor to supplement or correct the submitted documents.
2. Procedure for applying for an enterprise registration certificate
After receiving the investment registration certificate, the investor must continue the procedure to obtain the enterprise registration certificate at the Business Registration Authority.
The application for an enterprise registration certificate includes the following documents:
- Application for enterprise registration;
- Company charter;
- List of members (for a limited liability company with 2 or more members) or list of founding shareholders (for a joint-stock company);
- For individual investors, the following are required:
- A valid copy of the ID card/citizen's identity card/passport of the members, founding shareholders, and the legal representative;
- For organizational investors contributing capital to establish the company, the following are required:
- A valid copy of the decision on establishment, business registration certificate, or other equivalent documents of the organization;
- A document appointing the authorized representative; a valid copy of the ID card/citizen's identity card/passport of the authorized representative of the organization;
- Power of attorney for someone to submit the application and receive the result;
- A valid copy of the ID card/citizen's identity card/passport of the authorized person.
Submit the application: The investor submits the application directly to the Business Registration Department at the Department of Planning & Investment where the business is headquartered or submits it online at: https://dangkykinhdoanh.gov.vn/ using a business registration account or a public digital signature. In major cities like Hanoi, Ho Chi Minh City, and Binh Duong, 100% of applications are submitted online. Therefore, investors should thoroughly research to save time and effort.
Resolution time: From 5 to 7 working days from the date of receipt of the application, the Business Registration Department will check the validity of the application and issue the enterprise registration certificate. In case the application is invalid, the Business Registration Department will issue a notification guiding the investor to amend, supplement, and resubmit the application.
Method 2: Contributing capital to a Vietnamese company
1. Establish a 100% Vietnamese-owned company
The company establishment application includes the following documents:
- Application for enterprise registration;
- Company charter;
- List of members (for a limited liability company with 2 or more members) or list of founding shareholders (for a joint-stock company);
- A valid copy of the ID card/citizen's identity card/passport of the Vietnamese capital contributors and the legal representative;
- Power of attorney for someone to submit the application and receive the result (if applicable);
- A valid copy of the ID card/citizen's identity card/passport of the authorized person.
Submit the application: The investor submits the application directly to the Business Registration Department at the Department of Planning & Investment where the business is headquartered or submits it online at: https://dangkykinhdoanh.gov.vn/ using a business registration account or a public digital signature. Note that in Hanoi, Ho Chi Minh City, and Binh Duong, only online submissions are accepted.
Resolution time: From 5 to 7 working days from the date of receipt of the application, the Business Registration Department will check the validity of the application and issue the enterprise registration certificate. In case the application is invalid, the Business Registration Department will issue a notification guiding the investor to amend, supplement, and resubmit the application.
2. Procedure for transferring capital contribution to foreign individuals or organizations
➤ Step 1: Complete the procedure for obtaining the document confirming the conditions for capital contribution by foreign investors.
Prepare the application includes the following documents:
- Document registering capital contribution, share purchase, or capital contribution of the foreign investor;
- A valid copy of the ID card/citizen's identity card/passport of the foreign investor;
- A valid copy of the establishment decision, business registration certificate, or other equivalent documents of the foreign organization (these must be consular legalized at the Vietnamese Embassy abroad, then translated and notarized);
- Power of attorney for performing the procedure (if the legal representative is not directly handling the procedure).
Submit the application: Submit directly at the one-stop department of the Investment Registration Department - Department of Planning & Investment where the company's headquarters is located.
Resolution time: Within 10 working days from the date of receipt of the application, the Investment Registration Department will check the validity of the application and issue a notification regarding the fulfillment of the conditions for capital contribution, share purchase, or capital transfer by foreign investors. In case the application is invalid, the Investment Registration Department will issue a notice for supplementation, and the business must amend the application and resubmit it according to the requirements.
Note: At this point, the business continues with the procedure for transferring capital from a Vietnamese individual/organization to a foreign individual/organization.
➤ Step 2: Complete the procedure for transferring part or all of the capital contribution from a Vietnamese individual/organization to a foreign investor.
Prepare the application includes the following documents:
- Notification of meeting the conditions for capital contribution, share purchase, or capital transfer by the foreign investor (originally received in Step 1).
- For a one-member LLC: The owner's decision regarding the transfer of part or all of the capital contribution to a foreign investor.
- For a two-member or more LLC, or a partnership: The meeting minutes and decision of the members' council regarding the transfer of part or all of the capital contribution to a foreign investor.
- For a joint-stock company: The meeting minutes and decision of the general meeting of shareholders regarding the transfer of shares or capital contributions to a foreign investor.
- Transfer contract and minutes of the transfer contract liquidation.
- A valid copy of the ID card/citizen's identity card/passport of the foreign investor.
- A valid copy of the establishment decision, business registration certificate, or other equivalent documents of the foreign organization (these must be consular legalized at the Vietnamese Embassy abroad, then translated and notarized).
- Power of attorney for performing the procedure in case the legal representative is not directly handling the procedure.
- A valid copy of the ID card/citizen's identity card/passport of the authorized person, if the legal representative is not directly handling the procedure.
Submit the application: Submit directly at the one-stop department of the Business Registration Department - Department of Planning & Investment where the company's headquarters is located, or submit the application online at https://dangkykinhdoanh.gov.vn/ using a business registration account or a public digital signature.
Resolution time: From 5 to 7 working days from the date of submission, the Business Registration Department will check the validity of the application and issue a new enterprise registration certificate. In case the application is invalid, the Business Registration Department will issue a notice for supplementation, and the business must amend the application and resubmit it according to the requirements.
Note: For joint-stock companies, after completing the transfer to new shareholders, the transferring shareholder must complete the procedure by submitting the personal income tax declaration form and paying the personal income tax (0.1% of the transfer value) to the relevant tax authority.
7 important notes when setting up a company with foreign investment
To make it easier to establish a company in Vietnam, there are 7 tips for you:
1. Regarding registered investment and business activities
Investors should register business activities that Vietnam has clearly committed to in bilateral and multilateral international agreements to avoid having the Investment Registration Authority reject their investment license application.
It is advisable not to register unnecessary or non-essential business activities. This will help investors save time and costs associated with the legal procedures that may arise when registering and implementing business activities in Vietnam.
After establishing the company, if the investor wants to engage in a conditional business activity they have registered, they must apply for a license from the Department of Industry and Trade and ensure they meet all the required conditions to operate in that field throughout the business's lifecycle.
2. Regarding investment capital and charter capital
Depending on the scale, development needs, and investment sector, investors should register an appropriate investment capital amount. They should avoid registering too little capital, as this may lead to multiple adjustments, which will incur additional time and costs.
After establishing a foreign-invested company in Vietnam, investors must contribute capital within the time frame specified in the investment certificate and the company’s charter. Therefore, within 90 days (for both LLCs and joint-stock companies) from the date of the business registration certificate issuance, the company must open a capital account. Investors should then deposit funds into the company’s capital account in accordance with their capital contribution.
3. Regarding investment location and company formation
The location for the investment project or the company’s headquarters in Vietnam must have a clear address and sufficient documents proving ownership and/or rental rights (if applicable). The rental location or office must be permitted for lease, designed, and constructed in accordance with Vietnamese law, without any ongoing disputes. The leased office must be in an area approved for office use by the competent Vietnamese authorities.
4. Regarding company seals
After completing the establishment procedures, the company must have a seal made for official use. According to the 2020 Enterprise Law, the company has full authority to decide the form, content, and number of seals, and there is no need to notify the Business Registration Authority when changing, canceling, or adjusting the number of seals.
5. Regarding employment
Foreign-invested companies can hire both foreign and Vietnamese workers. However, if foreign workers are employed, the company must complete procedures for issuing visas, obtaining approval for foreign workers, work permits, and temporary residence cards in accordance with Vietnamese laws.
6. Regarding Legal Representative
The legal representative of a foreign-invested company in Vietnam must be an individual. LLCs and joint-stock companies can have one or more legal representatives.
The company must always have at least one legal representative residing in Vietnam. If the company has only one legal representative, that person must reside in Vietnam and must authorize another individual in writing to perform the legal representative's rights and obligations when leaving Vietnam. In this case, the legal representative is still responsible for the exercise of the rights and obligations that have been delegated.
7. Regarding Tax Obligations
Similar to Vietnamese enterprises, foreign-invested companies are also required to pay various taxes, including:
- Business license tax
- Value-added tax (VAT)
- Corporate income tax (on profits)
Additionally, businesses may also be subject to other taxes, such as resource tax, import-export duties, and excise tax, if applicable, as prescribed by Vietnamese law.
For foreign investors, understanding and completing the procedures to establish a company with foreign investment can be quite complex and time-consuming. If you're interested in setting up a foreign-invested company, please contact Anpha Accounting at 0984 477 711 (Northern) - 0903 003 779 (Central) - 0938 268 123 (Southern) for assistance.
>> Service details: Establishing a company in Vietnam
Frequently asked questions when establishing a FDI company
1. How to start a business in Vietnam as a foreigner?
There are 2 ways to establish a foreign-invested company in Vietnam:
- Method 1: Register for an investment certificate first, then proceed with the procedure to obtain the enterprise registration certificate.
- Method 2: Establish a foreign-invested company by contributing capital, purchasing shares, or capital contributions from a Vietnamese company.
>> See detail: 2 methods to establish a FDI company in Vietnam
2. How long does it take to establish a foreign-invested company?
- If following method 1: Completing the procedures to register the investment certificate first and then applying for the business registration certificate, the total time may take 30-35 days from the date of submission.
- If following method 2: Establishing a foreign-invested company through capital contribution, share purchase, or buying shares from a Vietnamese company, the completion time is from 20-25 days from the date of submission.
3. What taxes does a foreign-invested company have to pay?
Similar to Vietnamese enterprises, foreign-invested companies are also required to pay basic taxes such as: business license tax, value-added tax, corporate income tax, import-export tax (if involved in import-export activities), and others as applicable.
>> See more: Tax & Accounting Service
4. Which projects require an investment certificate when establishing a business?
The requirement for an investment certificate depends on the investor's needs. However, an investment certificate must be obtained for the following types of projects:
- Projects by foreign investors (100% foreign-owned capital);
- Projects by economic organizations with foreign investment, where the foreign investor holds more than 50% of the charter capital, or where the majority of partners are foreign individuals in the case of a partnership.
5. What are the fees for establishing a foreign-invested company?
At Anpha, the fees for establishing a foreign-invested company are as follows:
- Registering an investment certificate and business registration certificate in Hanoi: from 20,000,000 VND
- Establishing a 100% Vietnamese-owned company and then transferring shares to a foreign investor: only 9,000,000 VND
>> See detail: Service of setting up a company in Vietnam
Contact us at 0984 477 711 (Northern) - 0903 003 779 (Central) - 0938 268 123 (Southern) for assistance.