Forms of establishing a foreign-invested company in Vietnam

Currently, when foreign investors wish to establish a company in Vietnam, they can choose one of two methods: direct establishment or indirect establishment, as follows: 

1. Direct Establishment of a Company⁽¹⁾: 

Step 1: Apply for an Investment Registration Certificate (“IRC”): 

Required documents include⁽²⁾:  

• A written request to implement the investment project, including a commitment to bear all expenses and risks if the project is not approved; 
• Documents proving the investor’s legal status: Copy of legal identification (ID card/passport for individuals; Certificate of incorporation or equivalent for organizations); 
• Documents proving the investor’s financial capacity, including at least one of the following: The investor’s financial statements for the last two years; Commitment of financial support from the parent company; Commitment of financial support from a financial institution; Guarantee of financial capability from a third party; Other documents demonstrating financial capacity, such as bank statements; 
• Investment project proposal, including: Investor identity or investor selection method; Investment objectives; Investment scale; Investment capital and funding plan; Project location, duration, implementation timeline; Information on current land use at the project site and proposed land use needs (if any); Labor needs; Proposed investment incentives; Socio-economic impacts and effectiveness of the project; Preliminary environmental impact assessment (if applicable under environmental law); 
• Land use right documents or other evidence proving the right to use the project site. 

Competent authority⁽³⁾: The Department of Finance of the province/city where the company’s head office is intended to be located, or the Management Board of an industrial zone, export-processing zone, high-tech zone, or economic zone (if the project is located in such zones). 

Processing time⁽⁴⁾: 15 days from the date of receiving a complete and valid application. 

Step 2: Apply for an Enterprise Registration Certificate (“ERC”): 

Required documents depend on the type of enterprise and include⁽⁵⁾:  

• Application form for enterprise registration; 
• Company charter; 
• List of members (for multi-member limited liability companies) or list of founding shareholders and foreign shareholders (for joint stock companies); 
• The IRC obtained in Step 1; 
• Legal documents of the members/shareholders (ID card/passport for individuals; Certificate of incorporation or equivalent for organizations); 
• Power of attorney and legal documents of the authorized representative (if any). 

Competent authority⁽⁶⁾: At the Business Registration Office under the Department of Finance of the province/city where the company’s head office is located. 

Processing time⁽⁷⁾: 03 working days from the date of receiving a complete and valid application. 

Step 3: Opening a direct investment capital account at a licensed commercial bank and proceed with capital contribution. 

2. Indirect Establishment of a Company⁽⁸⁾: 

Step 1: Establish a 100% Vietnamese-owned company, similar to Step 2 above. 

Step 2: Register for foreign investors to contribute capital or purchase shares/equity in the Vietnamese company. 

Foreign investors must complete the registration procedure before changing the members/shareholders in the following cases:  

• The contribution/purchase increases foreign ownership in sectors subject to conditional market access for foreign investors; 
• The contribution/purchase results in foreign investors holding over 50% of the charter capital, including: An increase from ≤ 50% to > 50%; any increase if foreign investors already hold > 50% of the charter capital. 

Required documents include⁽⁹⁾:  

• Application for capital contribution/share purchase/equity acquisition; 
• Legal documents of the foreign investor (ID card/passport for individuals; Certificate of incorporation or equivalent for organizations); 
• ERC issued in Step 1; 
• Preliminary agreement on the capital contribution/share purchase between the foreign investor and the current owners/shareholders/members of the Vietnamese company. 

Competent authority⁽¹⁰⁾: The Department of Finance of the province/city where the Vietnamese company is located or the Management Board of the relevant zone (if applicable). 

Processing time⁽¹¹⁾: 15 days from the date of receiving a complete and valid application.. 

Step 3: Open a direct or indirect investment capital account at a licensed commercial bank and carry out capital contribution or transfer payment transactions. 

Step 4: Amend the ownership/member/shareholder/capital information in the ERC within 10 days from the date of change⁽¹²⁾. 

⁽¹⁾ Clause 1, Article 21 of the Investment Law 2020.

⁽²⁾ Clause 1, Article 33 of the Investment Law 2020. 

⁽³⁾ Clause 1, Clause 2, Article 39 of the Investment Law 2020.

⁽⁴⁾ Clause 3, Article 36 of Decree 31/2021/ND-CP.

⁽⁵⁾ Article 23, Article 24 Decree 01/2021/ND-CP.

⁽⁶⁾ Clause 5 Article 26 Law on Enterprises 2020.

⁽⁷⁾ Clause 5 Article 26 Law on Enterprises 2020.

⁽⁸⁾ Clause 2 Article 21 Law on Investment 2020.

⁽⁹⁾ Article 66 of Decree 01/2021/ND-CP.

⁽¹⁰⁾ Clause 2 of Article 66 of Decree 01/2021/ND-CP.

⁽¹¹⁾ Clause 3 of Article 66 of Decree 01/2021/ND-CP.

⁽¹²⁾ Clause 2 of Article 30 of the Enterprise Law 2020.

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