Business and Investment

As a dynamic law firm, Apolat Legal has gained extensive experience in advising Foreign Investors on investing in Vietnam or assisting and supporting Vietnamese Enterprises in receiving investment from Foreign Investors. Also, we support Vietnamese Enterprises in conducting outward investment and drumming up their business internationally. Our clients are comprised of companies operating in a variety of business sectors such as banking and finance, real estate, construction, entertainment, insurance, consumer goods, manufacturing, etc. We have constantly provided consultation and support for our clients throughout each stage of the project as well as the entire investment process in determining their management and capitalization structure and dealing with the issues of controlling/dominant right over the business operation and management.

We provide a full range of legal services in the field of foreign investment, such as assistance in market research, measuring benefits and quantifying risks associated with investment policies of the government, determining the effective structure in business transactions of clients, supporting clients in conducting detailed and specific deal diligences on the legal capacity of their counterparts, providing the best consultancy on corporate re-structuring, attaining approvals, business licenses, investment certificates, eligibility certificates for investors in Vietnam. In many circumstances, by having the unique capacity to communicate with the local communities as well as having intensive practice experiences of Apolat’s lawyers, we have succeeded in closely connecting the local authorities with the Clients in reaching a unified agreement, resolving deadlocks and contributing to the success of the clients’ businesses as well.

With many years of practice experience in working with Foreign Investors, we would like to point out several following factual obstacles and difficulties that Foreign Investors may face as investing in Vietnam:

  • Language and culture barriers, the differences in policies and regulations of the law related to investment activities;
  • The difficulties in determining and deciding the optimal place and scale for the investment project, planning the investment project, and forecasting and assessing the project’s feasibility;
  • Failing to prepare well the applications at the initial stage, causing various troubles later on in repatriating the profits and recouping the capital investments of Foreign Investors;
  • Be deluged with endless compulsory procedures as well as problems arising from the local authorities under their sole discretion, prolonging the time for project implementation.

By having a team of experienced lawyers and consultants specializing in the field of investment, Apolat Legal proudly and confidently provides the clients with the best legal advice and consultation in tackling legal issues when deciding to invest in Vietnam and conduct outward investments as well:

  • Establishment of Foreign-Invested Enterprises (FIEs);
  • Legal Advice on FIEs;
  • Corporate Compliance and Governance;
  • Corporate re-structuring, raising investment capitals;
  • Adjustment of the Investment Registration Certificate;
  • Outward investment.

Advising on Conditions and Regulations of the laws 

  • Searching and offering up-to-date advice on policies, pros and cons of policies of Vietnam, the WTO commitments of Vietnam and other Trade Agreements between Vietnam and countries around the world;
  • Advising Investors on forms of direct and indirect investments under the laws of Vietnam with detailed analyses on the pros and cons of each investment form for the Investors’ consideration to opt for the best one for each project;
  • Advising on how to meet statutory conditions of the conditional business line(s) before or after submitting the application dossier for operation;
  • Advising on the possibility of attaining investment approvals or certificates in accordance with the law with the comparison with the practice, providing proposals on adjusting the application, the content of the project necessary to increase the possibility of approvals.

Document Preparations and Negotiations 

  • Advising on the procedures and required documents to implement the project or the establishment of a company;
  • Supporting Investors in drafting documents and preparing dossiers necessary to implement the project, such as the company charter, joint-venture contracts, commercial contracts; engaging in conduct on behalf of the Investors to complete the statutory procedures to implement the project or the establishment of a company in Vietnam or other countries;
  • Advising and representing Investors to negotiate with the business partners on documents and issues related to the project, structure of the organization, voting rights, authority of the Board of Managers, Board of Directors, capital transfers, first refusal rights, etc.;
  • Advising on legal issues related to M&A transactions, including necessary due diligence(s) to identify and quantify legal risks for consideration.

The Attainment of Approval(s) 

  • Submitting application dossiers on behalf of Investors to the Vietnamese authority(es) and following up the process of the appraisal of those application dossiers;
  • Representing Investors in or participating with Investors in discussions and negotiations with the Vietnamese authority(es) on the projects for the purpose of obtaining approvals;
  • Assisting Investors in completing the necessary procedures after the attainment of project-related operating approvals.

Other services 

  • Advising Investors on legal issues relating to contracts of land leases and other land-related matters for construction of projects, office leases, labor and employment, internal regulations of enterprise, construction contracts, etc.;
  • Advising and assisting investors in seeking and locating appropriate land sites that best meet the requirements of each investment project.



Dinh Quang Long

Managing Partner

Pham Hong Manh

Senior Partner


Apolat Legal_Legal retainer service

Business activities of enterprises are always dependent on and regulated by relevant laws. For effective operation, enterprises need to well control legal risks arising from their operations. Large enterprises tend to build a legal team with good lawyers to help them apply for permits, provide legal advice and resolve labour disputes during their operation.

However, not all businesses have the financial resources to build their own legal department. For businesses that do not have their own legal team, legal retainer service of separate law firms will be the smart choice.

Understanding this issue, Apolat Legal offers businesses a comprehensive legal consulting service at a reasonable fee. Each business choosing the legal retainer service of Apolat Legal will be supported by a consistent team during the time of using service. By this way, Apolat Legal can clearly understand the clients and help the clients save time and avoid providing duplicated information. In addition, businesses only have to pay a fixed monthly fee to receive helpful advice from Apolat Legal for all day-to-day legal needs of business.

Legal retainer service of Apolat Legal includes but not limited to the followings works:

  • Answering, consulting on provisions, and policies of law and giving legal solutions for each specific matter according to the Client’s requirements in multiple practice areas such as investment, construction, real estate, bidding, enterprise administration, banking, security, insurance, commerce, labor, sales and other areas relating to the Client’s business operation (excluding financial and tax advice).
  • Examining, reviewing and confirming the legality of documentations which the Client have drafted or implemented in respect of business operation, giving legal advice for such documentations as required by the Client.
  • Supporting the Client in preparation of all documentation for contract negotiations or parleys (if requires).
  • Supporting the Client in drafting documentations relating to business transactions between the Client and any third party.
  • Consulting with the Client about business discussions, negotiations, parleys, claims, disputes or lawsuits with any third party or any competent State agency relating to the Client’s business operation. (Scope of consultancy excludes representing for the Client in implementation of specific matters or of claims at competent State agencies or of litigation procedures at Court or Arbitration).
  • Consulting with the Client about general solutions relating to each specific claim, dispute or lawsuit.
  • In case any Client’s partner needs our legal support, then, as the Client’s request or that of such partner, we shall consider whether providing our legal services for such partner or not; and if we choose providing, we shall be committed to not causing any damage to the Client or any conflict of rights and legal interests between the Client and such partner.
  • Supporting and consulting the Client on drafting the Charter, Internal Working Regulation, regulations relating to enterprise organization, management and administration and other essential documents during Client’s business operation.

By professional services, thoroughness and experiences in various legal fields, Apolat Legal is the trusted partner of all businesses.


Personal investment: be careful with virtual projects and business plans

As an investor, before putting money into a project, a company or signing a business cooperation contract, profitability is always the first aspect to be put into consideration. Therefore, when being proposed a good project, a clear business plan which seems “impossible to make a loss” along with promises of profit…, not all individual investor can be wise enough to verify the information of the proposed project or plan before investing the money. Then, after a few years, when not receiving the promised benefits, and they start seeking assistance from the law and the authorities.

In some cases where the writer participated in resolving and advising for fraudulent investors recently, calling for investment is often based on a motif:

Investors are called upon to contribute capital to the parent company (a limited liability company) whose own subsidiaries which manage the potential projects. In the proposal for calling capital contribution, the party calling for capital contribution often gives evidence of promising projects, as well as a detailed business plan and profit-sharing commitment. Besides, they also put pictures and information of reputable individuals on the call for investment records to increase the trust of investors.

Inconsistencies in the application for capital contribution calling

Regarding the authenticity of projects calling for investment: Although the legal entities recorded in the call for investment application actually exist, the information about the project is often just virtual information and has no evidence to prove. Even in some cases, reputable individuals who are and named in dossiers don’t even know about the calling.

Regarding the form of calling for investment: The form of investment into a company usually through two primary forms: lending and investing capital through cooperation contracts or buying capital from the company. In particular, the capital contribution to a business is often the preferred option by those who call for investment because the money invested will not be returned (unless the parties otherwise agree), and the benefits that the investor enjoys will depend on the business results of the company.

In the above cases, the call for capital contribution is made in the form of dividing the investment and the investment is implemented based on the share mechanism. According to current law, depending on the type of enterprise, that enterprise may be able to perform different types of capital mobilization. In particular, if the investor contributes capital to a limited liability company, the investor should be noted that the type of limited liability company is not allowed to issue shares to raise capital (Clause 3, Article 47 of the 2014 Enterprise Law). Besides, for each time of receiving additional capital and new members, the Limited Company must carry out the registration procedures at the Department of Planning and Investment. And the maximum number of members of the Company must not exceed 50. However, in many cases, after transferred the full capital contribution, the investor neither being recorded as a member of the Company, nor allowed to participate in the management and administration of the company, or even entitled to received profit as committed or according to the business plan given because the company “is at a loss” – as reported by the executives, who usually are the same the individuals called for investment earlier.

Regarding the value of the investment: in the above-mentioned investment calling application, the amount of money that the investor must contribute in an investment rate is often significant, while the percentage of the capital contribution that the investor owns in the company usually only 5-10%. If the investment capital is used to evaluate the company’s value, the valuation of the parent company is generally pushed up to a very high level, while the company’s charter capital is low and The Company’s project is still on paper, there is no basis to determine.

Regarding profit commitment: In addition to information about the project or operators, the investment callers also have very compelling business models along with the promise of profit which investors are entitled to receive from the Company’s business activities. But before starting a business, no one can guarantee that the Company will always be profitable, the figures shown in the investment plan table are just paper figures.

It is not rare for the caller to make commitments on profits to earn the trust of investors for investment, but when receiving the full investment, the caller does not pay back to earnings to investors as promised and having signs of closing the Company and running away.

The above is just an example of taking advantage of the cover of calling for investment to appropriate investors’ assets. In fact, the forms and tricks of using virtual business projects, business plans and commitment to virtual profits to earn the trust of investors are even much more diverse and sophisticated assets. Therefore, individual investors need to stay alert and be careful to check project information before investing, consult lawyers or experts to minimize the risk of investing in virtual projects.

If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.

This article is for general information only and is not a substitute for legal advice.


Investment through nominee structure in Vietnam

To quickly engage in the business in Vietnam, some foreign investors (“Foreign Investor”) are considering the implementation of the investment through nominee structure as follows:

(1) Firstly, a Vietnamese partner of the foreign investor, under an agreement between such Vietnamese partner and the foreign investor, shall establish a local company under the name of the Vietnamese partner (“Local Company”) in order for such Local Company to carry out the business in Vietnam.

(2) Then, the Foreign Investor shall acquire 100% shares/capital contribution in the Local Company in order to be the sole owner of the Local Company replacing the Vietnamese partner (“Acquisition”).

With our practical experience in advising similar cases, there may be some notable legal issues and potential legal implications and conditions occurring from the process of conducting the above steps (1) and (2) in Vietnam applied to the Local Company and the Foreign Investor, such as specific business conditions, licensing procedures, taxation matters, money remittance, foreign exchange, and so on.

1.1. About procedures

  • Step 1: The Vietnamese partner shall establish the Local Company (Establishment).
  • Step 2: The Foreign Investor shall extend a fund to the Vietnamese partner/the Local Company, in the form of a foreign loan (Funding).
  • Step 3: The Local Company shall register the foreign loan from the Foreign Investor (when the loan is made between the Foreign Investor and the Local Company with the term of 1 year or more, if applicable) (Registration of Loan).
  • Step 4: The Foreign Investor shall acquire 100% capital contribution/share in the Local Company from the Vietnamese partner to be the sole owner of the Local Company (Acquisition).

1.2. About legal implications

(a) Establishment

– Assuming that there is one individual Vietnamese partner, the Local Company is likely to be incorporated under the form of a limited liability company with one member. For the establishment and operation of the Local Company under the form of a limited liability company with one member, the Vietnamese partner is required to conduct the below procedures step-by-step: 

(i) Applying for an Enterprise Registration Certificate (ERC) 

  • The Vietnamese partner shall submit a dossier to the local licensing authority to apply for an ERC to set up the Local Company.
  • Statutory timeline: 03 working days from the receipt date of a valid and complete dossier by the local licensing authority.

(ii) Initially tax declaring 

  • The Vietnamese partner shall directly or authorize a third party to liaise with the local tax department for the initial tax declaration.
  • Deadline: Last day of the calendar month in which the Local Company comes into operation.

– After completing the said procedures for the Local Company establishment, during the course of operation, the Local Company shall be required to strictly comply with the Vietnamese corporate regulations such as: labour, management, fire fighting and fire preventing, environment protection, taxation, periodical reporting, etc. Besides, for the purpose of maintaining the stable operation of the Local Company, the Local Company shall need to pay the costs, fees relevant to the Local Company’s operational activities (e.g. recruiting and employing employees, paying taxes applicable to enterprise, etc.).

– Within 90 days from the establishment date of the Local Company under the ERC, the Vietnamese Partner shall be required to be contribute the registered capital of the Local Company in full upon the Local Company’s establishment. Since the Foreign Investor shall acquire the capital/share in the Local Company, to facilitate the acquisition, it is recommended that the Local Company registers to engage in the business line(s), which the Foreign Investor is fully permitted to own 100% of its capital as provided in the WTO Commitments and the local laws of Vietnam.

– By law, the Vietnamese partner, as the current company’s owner, shall be entitled to regulate and decide all material corporate matters relating the Local Company, including but not limited to: deciding development investment projects, sale and purchase of assets, taking or granting company’s loans, and other rights prescribed in law and the company’s charter.[1] Provided the large power of the company’s owner as prescribed by law, for the Foreign Investor’s interest, the parties may enter into a business co-operation agreement or nominee agreement (“Master Agreement”) with call & put option arrangement (“Capital Option”). In addition, the Foreign Investor shall step-by-step exercise the Capital Option to buy out all capital contribution of the Vietnamese partner in order to physically and legally control and fully own the Local Company. Upon the exercise completion of the Capital Option, the Local Company shall become a foreign-invested company.

– To avoid the risk that the Vietnamese partner may take inappropriate actions against the benefits of the Foreign Investor and/or the Local Company, by reaching an agreement with the Vietnamese partner in the Master Agreement, the Foreign Investor may consider arranging an appointed person as the General Director/Director cum the legal representative of the Local Company to legally manage the daily operation of the Company.[2]

(b) Funding

  • For the purpose of offering a fund for Vietnamese partner to establish the Local Company and to enable the Local Company to arrange the business activities, the Foreign Investor and the Local Company/the Vietnamese partner can have an arrangement on cash flow (if the Vietnamese partner could not arrange his/herself) as a nominee/loan agreement.[3]
  • Upon the Acquisition by the Foreign Investor, the loan provided by the Foreign Investor may be offset against the transfer price payable by the Foreign Investor in relation to the share/capital contribution transfer in the below step of Acquisition under the agreement of the parties in the Master Agreement.

(c) Registration of Loan

  • Accordingly, if the loan is made between the Foreign Investor and the Local Company, such loan transaction shall be treated as a foreign loan of a Vietnam-based enterprise and may be subject to registration procedures at the State Bank of Vietnam (“SBV”) if the loan term is from 1 year or more.[4] In addition, the loan must be wired to the foreign loan borrowing and repaying account of the Local Company.[5]

(d) Acquisition

– Upon the entry into of a share/capital contribution purchase and sale agreement (“Capital Purchase Agreement”) between the Vietnamese partner and the Foreign Investor and the completion of the registration for changing shareholding structure of the Local Company, the Foreign Investor may become the sole owner of the Local Company replacing the Vietnamese partner.

– As the Local Company is an existing and operating company before the Acquisition, despite a short operational period only from the incorporation date to the date of the Acquisition, there may still be outstanding legal compliance and financial matters that the Foreign Investor should verify via legal and/or financial due diligence process.

– For the Acquisition, the Foreign Investor and the Vietnamese Partner are required to conduct the below procedures step-by-step:

(i) Obtaining an approval letter for the Acquisition (“Approval Letter”)

  • By law, the Acquisition of 100% capital in the Local Company requires the obtainment of an Approval Letter for such Acquisition.[6] The Foreign Investor and the Local Company shall have to prepare and submit an application dossier to the local licensing authority for the same paper.
  • Statutory timeline: 15 days from the receipt date of a valid and complete dossier by the local licensing authority.[7]

(ii) Applying for an amended Enterprise Registration Certificate (“Amended ERC”)

  • Upon obtaining the Approval Letter as aforesaid, the Local Company shall submit a dossier to the local licensing authority to apply for an amended ERC recording the Acquisition and the Foreign Investor as the new owner of the Local Company.
  • Statutory timeline: 03 working days from the receipt date of a valid and complete dossier by the local licensing authority.[8]

1.3. About tax implications

  • Upon the Acquisition, the Vietnamese partner, as the party receiving income from the Acquisition (if any), may be subject to personal income tax (PIT) at the rate of 20% levied on the taxable income arising from the Acquisition.[9]

If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.

This article is for general information only and is not a substitute for legal advice.


[1] Article 75 of the Law on Enterprises

[2] Article 81.2 of the Law on Enterprises

[3] The Foreign Investor should carefully consider this option and require the Local Company and/or the Vietnamese partner to pledge its/their assets (such as capital contribution/shares in the Local Company) as a security for the loan.

[4] Article 9 of Circular No. 03/2016/TT-NHNN dated 26 February 2016 of the SBV on providing several instructions on foreign exchange administration in respect of enterprise’s foreign borrowing and foreign debt repayment of enterprises (Circular 03)

[5] Article 24.3 of Circular 03

[6] Article 26.1 of the Law on Investment

[7] Article 26.3(b) of the Law on Investment

[8] Article 27.2 of the Law on Enterprises

[9] Article 21.2 and Article 23 of the Law on PIT


Direct investment capital account and difficulties of enterprises

Since July 1st, 2015, when the Investment Law 2014 took effect and replaced the Investment Law 2014, the investment conditions, order and procedures applied to foreign investors have become clearer and more transparent. Although the Investment Law 2014 did a good job of solving the problem of opening a clear mechanism to encourage foreign investment in Vietnam, there was still a problem that makes it difficult for the majority of foreign investors and foreign-invested enterprises to strictly comply with the provisions of law, which is the implementation of capital contribution and capital transfer transactions through direct investment capital accounts.

Under the provisions of the Ordinance on Foreign Exchange 2005 amended and supplemented in 2013, foreign direct investment enterprises are required to open direct investment capital accounts and the capital contribution and the transfer of principal capital, profits and other lawful revenues must be made through this account. However, this provision is inconsistent with the Investment Law 2014 when the definitions of “direct investment” and “indirect investment” has no longer been applied by the Investment Law 2014, leading to the majority of commercial banks are confused in determining which case the enterprise is allowed to open a direct investment capital account. To be safe, most banks at this time require foreign-invested enterprises to have an investment registration certificate to be allowed to open a direct investment capital account, and consequently Vietnamese companies that are partially or wholly acquired by foreign investors are not permitted to open direct investment capital accounts unless having investment registration certificates even though the Investment Law 2014 does not require enterprises, in this case, to register the investment registration certificates in accordance with Article 36 of the Investment Law 2014.

It was not until June 26th, 2019, when the State Bank issued Circular No. 06/2019/TT-NHNN, there is a regulation explaining “foreign direct investment enterprises” include:

  • Enterprises established in the form of investment of establishing a business organization whose members or shareholders are foreign investors and issued the investment registration certificate in accordance with the law on investment;
  • Enterprises that have foreign investors contributing capital, buying shares or capital contributions to enterprises (operating in business lines subject to conditional business or not applicable to foreign investors) lead to foreign investors owning 51% or more of charter capital of enterprises but not having to carry out procedures for issuing investment registration certificates in accordance with the law on investment;
  • Enterprises which are established after a division, merger or consolidation lead to foreign investors owning 51% or more of the charter capital of the enterprise and not required to carry out procedures for issuing investment registration certificates in accordance with the law on investment;
  • Enterprises newly established under the provisions of specialized laws that have foreign investors owning 51% or more of their charter capital and are not required to carry out procedures for issuing investment registration certificates in accordance with the law on investment.

Therefore, the enterprises mentioned above are required to open a direct investment capital account to perform capital transactions, with the notable transactions include:

  • To receive directly contributed capital in foreign currencies of foreign investors and Vietnamese investors;
  • To receive capital surplus from additional shares in order to raise the charter capital;
  • To transfer the profits and legal revenues in foreign currency from foreign investors’ foreign direct investment in Vietnam;
  • To transfer the investment capital in foreign currencies by foreign investors in case of capital reduction, finish, termination of investment projects, BCC, PPP contracts in accordance with the law on investment;
  • To transfer and receive revenues and expenditures of payment value of the capital transfer between non-resident investors and resident investors.

In case foreign direct investment enterprises fail to strictly comply with the provisions of the law on foreign exchange, investors may find it difficult to transfer profits abroad strictly according to regulations of law.

In fact, although there have been specific provisions on foreign direct investment enterprises according to Circular No. 06/2019/TT-NHNN, some foreign-invested enterprises not having Investment registration certificates still faces difficulties when a number of commercial banks have not yet fully implemented the provisions of Circular No. 06/2019/TT-NHNN and forced enterprises to still provide investment registration certificates to open a direct investment capital account. Therefore, in the current period, it is very important for foreign-invested enterprises to pay attention to the issues related to direct investment capital accounts in order to comply with the provisions of law in capital transactions.

If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.

This article is for general information only and is not a substitute for legal advice.


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