Can an FDI company invest to establish a new company in Vietnam ?

Hi DMS Law firm in Vietnam! Can a foreign invested company in Vietnam jointly invest capital with other individuals, other enterprises to set up a new company in Vietnam ? Is it required to carry out procedures for issuance of Investment Registration Certificate in Vietnam ?

Hi! 

Conditions and Procedures for investment in Vietnam:

An economic organization must satisfy the conditions and carry out investment procedures in accordance with regulations applicable to foreign investors upon investment for establishment of an economic organization; investment in the form of capital contribution or purchase of shares or portion of capital contribution to an economic organization; or investment on the basis of a BCC contract in any one of the following cases:

51% or more of its charter capital is held by a foreign investor(s), or a partnership has a majority of partners being foreign individuals in respect of economic organizations being a partnership;

51% or more of its charter capital is held by an economic organization(s) prescribed in Point (a)  of this clause;

51% or more of its charter capital is held by a foreign investor(s) and an economic organization(s) prescribed in Point (a) of this clause.

Foreign invested economic organizations other than those prescribed in Points (a), (b) and (c) of Clause 1 of this Article shall satisfy the conditions and carry out the investment procedures in accordance with regulations applicable to domestic investors upon investment for establishment of an economic organization; investment in the form of capital contribution or purchase of shares or portion of capital contribution to an economic organization; or investment on the basis of a BCC contract (Clauses 1, 2 Article 23 Law on Investment No. 67/2014/QH13 dated 26 November 2014).

Cases in which procedures for issuance of Investment Registration Certificate (IRC) are carried out:

Investment projects of foreign investors;

(Investment projects of economic organizations prescribed in Clause 1 Article 23 of this Law.

Cases which do not require the procedures for issuance of an Investment Registration Certificate (IRC) to be carried out:

Investment projects of domestic investors;

Investment projects of economic organizations prescribed in Clause 2 Article 23 of this Law;

Investment in the form of capital contribution or purchase of shares or portion of capital contribution to an economic organization.

With respect to investment projects prescribed in Articles 30, 31 and 32 of this Law, the domestic investors and economic organizations prescribed in Clause 2 Article 23 of this Law shall implement the investment project after a decision on the investment policy is made.

Where there is a need for an IRC to be issued for an investment project prescribed in Points (a) and (b) Clause 2 of this Article, the investor shall carry out the procedures for issuance of an IRC prescribed in article 37 of this Law (Article 36 Law on Investment No. 67/2014/QH13 dated 26 November 2014).

The issuance of decisions on investment policies to projects that are not required to have Investment Registration Certificates is specified in Article 30 and Article 31 of this Decree (Clause 1 Article 32 Decree No. 118/2015/NĐ-CP dated 12 November 2015).

A foreign investor shall establish an economic organization as follows: Follow procedures for issuance of an Investment Registration Certificate as specified in Articles 29, 30 31 of this Decree; Follow procedures for establishment of an economic organization after being granted the Investment Registration Certificate as specified in Point a of this Clause in order to launch the project and business operations (Clause 1 Article 44 Decree No. 118/2015/NĐ-CP dated 12 November 2015).

If there is new project besides the project granted the Investment Registration Certificate, the foreign-invested economic organization shall follow these procedures:

The economic organization specified in Points a, b and c Clause 1 Article 23 of the Investment Law shall follow procedures for issuance of the Investment Registration Certificate as set out in Articles 29, 30 and 31 of this Decree;

An economic organization other than those specified in Point a of this Clause shall make a report in accordance with Clause 5 Article 71 of the Investment Law. The report shall specify: The project’s name, objectives, scale, investment capital, location, period, schedule, labor demand, and investment incentives, if any (Clause 2 Article 45 Decree No. 118/2015/NĐ-CP dated 12 November 2015).

Therefore, subject to each particular situation, foreign invested enterprises in Vietnam shall or shall not carry out procedures for issuance of Investment Registration Certificate upon making capital contribution to establish a new company in Vietnam./.

Consulting services:

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