Foreign investors, as prescribed in Clause 19, Article 3 of the Investment Law 2020 are individuals with foreign nationality or organizations established under foreign laws that conduct investment and business activities in Vietnam. With trade between economies, Vietnam is an ideal investment destination for foreigners, attracting foreign currency capital flows for socio-economic development. FOREIGNERS INVEST IN VIETNAM
With the experience of accompanying customers who are foreign investors from many countries around the world, LawPlus would like to send to you the legal regulations on the form in which foreign investors can conduct investment in Vietnam.
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Table of Contents/Mục lục
1. Forms of investment
Foreign investors can conduct investment activities according to the investment forms specified in Article 21 of the Investment Law 2020 as follows:
– Investment in establishment of a business organization.
– Investment in the form of capital contribution or purchase of shares or stakes.
– Execution of an investment project.
– Investment in the form of a business cooperation contract.
– New forms of investment and types of business organizations prescribed by the Government’s regulations.
2. Investment in establishment of a business organization
a. Conditions for establishing economic organizations in Vietnam by foreign investors
According to the provisions of Article 22 of the Investment Law 2020, foreign investors establishing economic organizations must satisfy the market access conditions applicable to foreign investors specified in the List of industries and trades restricted from market access for foreign investors:
– Rate of ownership of charter capital of foreign investors in economic organizations;
– Investment form;
– Scope of investment activities;
– Investor’s capacity; partners participating in investment activities;
– Other conditions prescribed in laws and resolutions of the National Assembly, ordinances and resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a member.
In addition, before establishing an economic organization, a foreign investor must have an investment project and carry out procedures for granting and adjusting the Investment Registration Certificate, except for the case of setting up a small and medium-sized enterprise, creative start-ups and innovative start-up investment funds in accordance with the law on supporting small and medium enterprises.
b. Establishment of economic organizations of foreign investors
According to the provisions of Article 63 of the Investment Law 2020, then:
– In case of implementing a new investment project, the foreign investor must:
+ Carrying out procedures for approving investment policies and granting investment registration certificates for new investment projects
+ Carry out the procedures for establishing economic organizations according to the provisions of law corresponding to each type of economic organization;
– In case of transfer of investment projects and establishment of economic organizations, foreign investors must:
+ Carrying out procedures for issuance of an Investment Registration Certificate (in case the project is not granted an Investment Registration Certificate) or an adjustment of the Investment Registration Certificate (in case the project has already been granted an Investment Registration Certificate). issue investment registration certificate)
+ Carry out the procedures for establishing an economic organization according to the provisions of law corresponding to each type of economic organization.
3. Investment in the form of capital contribution, share purchase, purchase of contributed capital
a. Conditions for capital contribution, share purchase, purchase of contributed capital
Investors have the right to contribute capital, purchase shares or purchase capital contributions from economic organizations when satisfying the conditions specified in Clause 2, Article 24 of the Law on Investment 2020:
– Market access conditions for foreign investors are specified in Article 9 of this Law;
– Ensuring national defense and security in accordance with this Law;
– Regulations on land law on conditions for receiving land use rights, conditions for using land in islands, communes, wards, border towns, communes, wards and coastal townships.
b. Form of capital contribution, share purchase, purchase of contributed capital
– Capital contribution to economic organizations: Investors may contribute capital to economic organizations in the following forms:
+ Buy shares issued for the first time or additionally issued shares of a joint-stock company;
Contribute capital to limited liability companies, partnerships;
+ Contributing capital to other economic organizations other than those specified at Points a and b of this Clause.
– Purchase of shares, purchase of capital contributions of economic organizations: Investors purchase shares or purchase capital contributions of economic organizations in the following forms:
+ Buy shares of a joint-stock company from the company or shareholders;
+ Buy the capital contribution of a member of a limited liability company to become a member of a limited liability company;
+ Purchase of capital contributions of capital-contributing members in a partnership to become a capital-contributing member of a partnership;
+ Purchase of capital contributions from members of other economic organizations that do not fall into the cases specified in the above cases.FOREIGNERS INVEST IN VIETNAM
c. Procedures and documents for registration of capital contribution, purchase of shares or contributed capital:
– Economic organizations with foreign investors making capital contribution, purchase of shares or contributed capital, shall submit 01 application for registration of capital contribution, purchase of shares or contributed capital to the investment registration authority of the locality where the organization is located. economic headquarters. Profile include:
+ Written registration for capital contribution, share purchase, contributed capital portion
+ Copies of legal papers of individuals and organizations contributing capital, buying shares, purchasing capital contributions and economic organizations with foreign investors contributing capital, buying shares or purchasing capital contributions;
+ Written agreement on capital contribution, share purchase, purchase of capital contributions between foreign investors and economic organizations receiving capital contribution, purchase of shares or contributed capital;
+ Declaration document (enclosed with a copy) Certificate of land use right of the economic organization receiving capital contribution, shares or capital contribution portion of foreign investors (for the case specified at Point b and c Clause 2, Article 24 of the Law on Investment in 2020).FOREIGNERS INVEST IN VIETNAM
4. Investment in the form of BCC contract
– A BCC contract can be concluded between:
+ Domestic investors comply with the provisions of civil law
+ Between domestic investors and foreign investors or between foreign investors, the procedures for issuance of an Investment Registration Certificate shall be carried out according to the provisions of Article 38 of this Law.
– The parties to the BCC contract establish a coordination.committee to perform the BCC contract. The functions, tasks and powers of the coordination board shall be agreed upon by the parties.FOREIGNERS INVEST IN VIETNAM
Contents of BCC contract: A BCC contract includes the following main contents:
+ Names, addresses and authorized representatives of the parties to the contract; transaction address or location of the investment project;
+ Objectives and scope of business investment activities;
+ Contributions of the parties to the contract and distribution of business investment results between the parties;
+ Progress and duration of contract performance;
+ Rights and obligations of the parties to the contract;
+ Amending, transferring, and terminating the contract;
Liability for breach of contract, method of dispute settlement.
Note:
During the implementation of the BCC contract, the parties to the contract may agree to use the assets formed from the business cooperation to establish an enterprise in accordance with the law on enterprises.
The parties to the BCC contract have the right to agree on other contents that are not contrary to the provisions of law.
Above is LawPlus’ analysis of investment forms that foreigners.can make investment activities in Vietnam. With the experience of accompanying many foreign investors,.LawPlus wishes that customers can better understand the provisions of the law to apply in practice. For detailed advice, please contact LawPlus at hotline +84 2862 779 399, +84 3939 30 522 or email info@lawplus.vn.
