LEGAL FRAMEWORK OF FOREIGN INVESTMENT IN VIETNAM
- Investment registration certificate and Enterprise Registration Certificate
Under the LoI, the former “Investment Certificate” (IC) is replaced by an “Investment Registration Certificate” (IRC). Before establishing a company in Vietnam, a foreign investor is required to have an investment project and apply for the IRC for such investment project.
For an existing company in Vietnam that wishes to conduct investment under the forms as mentioned in Section 3.2.3 herein shall also be required to obtain an IRC in one of the following circumstances:
- 51% or more of its charter capital is held by foreign investors; or
- 51% or more of its charter capital is held by an enterprise as mentioned in the first circumstance above; or
- 51% or more of its charter capital is held by a foreign investor and an enterprise as mentioned in the first circumstance above.
- Amendment of the IRC
Foreign investors may carry out legal procedures for the amendment of the IRC (technically when the contents of the current IRC is changed or needs to be updated).
- Revocation of the IRC
The investment registration authority shall make a decision revoking an IRC where the operation of the investment project is terminated in one of the following cases:
- Where the investor makes the decision to terminate operation of the project;
- Termination on a condition prescribed in the contract or the charter of the enterprise;
- Upon expiry of the operational duration of the investment project;
- The investment project is temporarily suspended but the investor is unable to remedy the conditions causing the suspension of operation;
- The State resumes the land for implementation of the investment project or the investor is no longer permitted to use the investment site and fails to carry out the procedures for changing the investment site within 06 months from the date on which the decision to resume the land is made, or at the time the investor is no longer permitted to use the investment site;
- The operation of the investment project is suspended and the investment registration agency is unable to contact the investor or its lawful representative within 12 months from the date of suspension of operation;
- The investor fails to implement or is unable to implement the project in accordance with the schedule registered with the investment registration agency within 12 months and it is not possible to postpone the implementation schedule of the investment project;
- Under an adjustment or decision of a Court or an arbitration body.
- Licensing authorities
- For the ERC: Division of Business Registration under the Provincial Department of Planning and Investment is authorized to issue ERC to the foreign invested companies established inside and outside industrial zones, export processing zones, high-tech zones and economic zones.
- For the IRC: Management Boards of industrial zones, export processing zones, high-tech, zones and economic zones (“Management Boards”) are authorized to issue Investment Registration Certificates to investment projects inside industrial zones, export processing zones, high-tech zones and economic zones.
Provincial Departments of Planning and Investment, is authorized to issue Investment Registration Certificates to:
- Investment projects outside industrial zones, export processing zones, high-tech zones and economic zones;
- Investment projects which are implemented in locations of various [more than one] provinces and/or cities under the central authority; and
- Investment projects which are implemented both inside and outside industrial zones, export processing zones, high-tech zones and economic zones.
- Time-limit for issuance of ERC and IRC
The statutory time line for issuance of an ERC shall be within 03 working days counted from the date of submission of valid dossiers.
The standard time line for issuance of an IRC shall be within 15 working days counted from the date of submission of valid dossiers, except for investment projects which are required to obtain a decision on investment policies of the National Assembly, the Prime Minister and the Provincial People’s Committee.
- Post-licensing procedures
Seal of an enterprise
- An enterprise has the right to decide on the form, number and contents of its seal.
- The seal shall be used in cases stipulated by law or as agreed by the trading parties.
Mandatory press announcement
Within 30 days as from the issuance of the ERC, the enterprise must make a public announcement on the national enterprise registration information portal.
Initial tax registration
Within 10 working days as from the issuance of the ERC, the enterprise must conduct the initial tax registration with the local competent tax authority.
- Prohibited business lines
Under the LoI, the following business lines are prohibited from investment:
- Business in prohibited drugs;
- Business in prohibited chemicals or minerals;
- Business in prohibited specimens of wild fauna or flora;
- Prostitution business;
- Human trafficking or trafficking parts of the human body; and
- Activities relating to asexual reproduction.
- Remittance of capital and assets abroad
After fulfilling their financial liabilities to the State of Vietnam and third parties,
foreign investors shall be permitted to remit abroad the followings:
- Its income derived from business investment activities;
- Invested capital and proceeds from liquidation of its investments; and
- Other monies and assets lawfully owned by the investors.