Họ tên: NGUYỄN THÀNH TỰU
Chức danh: GIÁM ĐỐC – LUẬT SƯ - TRỌNG TÀI VIÊN THƯƠNG MẠI
Điện thoại: +84 09.19.19.59.39
Email: tuulawyer@nvcs.vn
Lĩnh vực tư vấn: Đầu Tư Nước ngoài- Sở hữu Trí tuệ -M&A- Tranh chấp tại tòa.
Ngôn ngữ: Tiếng Việt - tiếng Anh
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Mục lục
- 1. Regulations of Vietnamese law on foreign investment activities into Vietnam (2023)
- 2. How long does it take to establish a foreign company in Vietnam?
- 3. Notes when setting up a foreign company in Vietnam
- 4. Legal procedures after establishing a foreign company in Vietnam
- 5. Procedures for registration of compulsory insurance of foreign-invested companies in Vietnam
Regulations of Vietnamese law on foreign investment activities into Vietnam (2023)
In the current economic climate, Vietnam is considered as one of the nations with significant potential to attract foreign investment, among these potentials must be mentioned the country's developing economic conditions, geographical location, abundance of human resources with solid professional knowledge, along with many preferential tax policies for foreign-invested enterprises.
According to the survey to evaluate the state of foreign investment, there are more foreign-invested enterprises in Vietnam. Therefore, in order to assist foreign investors in better understanding the nature and regulations of Vietnam's law on the aforementioned investment activities, as well as to assist investors in choosing the appropriate form of investment, NVCS would like to introduce to you the following article:
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What is the law on foreign investment in Vietnam?
Business investment means that an investor invests capital to carry out business activities, including the establishment of economic organizations; capital contributions, the purchase of shares or capital contribution; and investments in the form of BCC contracts.
In case an economic organization is established to implement a new investment project, the foreign investor shall carry out the procedures for applying for an Investment Registration Certificate for the new investment project at the Department of Planning and Investment in the place where the project is expected to be implemented, as well as carry out the procedures for establishing an economic organization accordance with the regulations specific to each type of economic organization. The charter capital of an economic organization established by a foreign investor to execute an investment project is not necessarily equal to the investment capital of the investment project. Economic organizations established by foreign investors shall contribute capital and mobilize other capital sources for the implementation of investment projects according to the schedule specified in the Investment Registration Certificate.
In case a domestic investor makes an investment in the form of capital contribution, purchase of shares or capital contribution an economic organization established in Vietnam, the investor must carry out procedures for applying for approval by the Department of Planning and Investment where the economic organization is located, approving the capital contribution, purchase of shares and capital contribution to this economic organization. After that, the economic organization where the investor is received will carry out the procedures for changing members and shareholders to the Department of Planning and Investment to adjust the Certificate of Enterprise Registration according to the content of the previously granted written approval.
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Who can establish a company in Vietnam?
Investors who are individuals who are full 18 years of age or older and foreign economic organizations with nationality as one of the WTO members may invest in Vietnam through investment forms according to provisions of the Law on Investment.
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What types of enterprises are foreign investors allowed to establish in Vietnam?
According to the provisions of the Law on Enterprise 2020, foreign investors can establish an enterprise with one of two common types as follows:
- Limited liability company (Company Limited – CO., LTD) comprises two types of entities: Multiple-member limited liability company and Single-member limited liability company. There are:
A multiple-member limited liability company means an enterprise that has 02 – 50 members that are organizations or individuals. A member’s liability for the enterprise’s debts and other liabilities shall be equal to the amount of capital that member contributed to the enterprise.
A single-member limited liability company is an enterprise owned by a single organization or individual ((hereinafter referred to as “owner”). The owner’s liability for the company’s debts and other liabilities shall be equal to the company’s charter capital.
- Joint Stock Company - JSC: A joint stock company is an enterprise in which: The charter capital is divided into units of equal value called shares; Shareholders can be organizations and individuals; the minimum number of shareholders is 03; there is no limit on the maximum number of shareholders; A shareholder’s liability for the company’s debts and liabilities is equal to the amount of capital contributed to the company by the shareholder;
- What documents do foreign investors need to prepare to file when setting up a company in Vietnam?
- In case of establishing an economic organization to implement an investment project, the investor needs to provide the following documents:
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- In case of investment in the form of capital contribution, purchase of shares or contributed capital, the investor needs to provide the following documents:
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How long does it take to establish a foreign company in Vietnam?
In case the investment project is not subject to the application for approval of investment policy, the foreign investor can complete the establishment of a foreign-invested company in Vietnam within 15-20 working days from the date of submission. However, in some cases, NVCS can expedite the time faster than this expected time.
Process/Steps to establish a company in Vietnam.
- For the case of becoming an economic organization with an investment project, the process will include the following steps:
Step 1: Apply for an investment registration certificate to the investor;
Step 2: Apply for a Certificate of Enterprise Registration to establish a project implementation company granted in step 1;
Step 3: Make the company seal;
Step 4: Initial tax declaration for the company and digital signature registration for the company. Simultaneously, the company and the investor open a direct investment capital account to make the capital contribution of foreign investors according to the time limit committed on the issued investment registration certificate.
- In case of capital contribution, purchase of shares or capital contribution:
Step 1: Establish a company with 100% Vietnamese capital and apply for a Certificate of Enterprise Registration. In case foreign investors have found an economic organization established in Vietnam to which they want to contribute capital, purchase shares or contributed capital, this step is not required.
Step 2: Carry out the procedures to apply for approval of capital contribution, purchase of shares or capital contribution to a Vietnamese company established in Step 1;
Step 3: Adjust the Certificate of Enterprise Registration;
Step 4: Open a direct investment capital account for economic organizations or an indirect investment capital account for investors to transfer capital to Vietnam.
Notes when setting up a foreign company in Vietnam
About the location when establishing a foreign company in Vietnam
The investor must have the exact address of the company's registered office, in case the address is in Ho Chi Minh City, it must have a specific house number and street name. At the same time, the investor must provide the office lease agreement in case the investor wants to establish a Vietnamese company in the form of establishing an economic organization with an investment project.
Note: The Law on Housing prohibits the use of the address of the apartment building as the address of the company's headquarters, so if the investor wants to use the address located in the apartment, the investor must provide one of the documents to certify the address has a commercial business function, such as receipt from the investor, a rental contract with the investor...
About charter capital when establishing a foreign company in Vietnam
The Vietnamese legislation does not limit the amount of charter capital as well as the amount of investment capital that foreign investors intend to invest in Vietnam, this depends on the demands of business investors in which fields and industries to have suficient financial capability to be able to operate and carry out the company's operations.
For the form of establishment of an economic organization to implement an investment project: The charter capital of an economic organization established by a foreign investor to execute an investment project is not necessarily equal to the investment capital of the investment project. Economic organizations established by foreign investors shall contribute capital and raise other capital sources for the implementation of investment projects according to the schedule specified in the Investment Registration Certificate.
In the case of investment in the form of capital contribution, purchase of shares or capital contributions, the investor will depend on the charter capital of the economic organization established in Vietnam and his/her financial capacity to decide appropriate amount of investment capital, in this case the investor's investment capital will become a part of the charter capital in that economic organization.
Business lines/fields of foreign investors in Vietnam
Foreign investors are allowed to invest in Vietnam to perform the professions specified in Schedule 318/WTO/CK services between Vietnam and WTO members.
(Refer to the schedule of commitments under the following link:
https://thuvienphapluat.vn/van-ban/Dau-tu/Cam-ket-318-WTO-CK-dich-vu-15435.aspx)
Conditional business lines/fields for foreign investors in Vietnam
Sectors and trades with conditional market access for foreign investors include 59 trades according to the WTO schedule of commitments as follows:
1. Manufacture and distribution of media products, including video recordings.
2. Manufacture, distribute, and broadcast TV programs, stage performances, and cinematic works.
3. Provision of audio and television broadcasting services.
4. Insurance; banking; securities trading and relevant services
5. Postal and telecommunications services;
6. Advertising services
7. Printing and publishing services.
8. Geodesy and cartography services.
9. Aerial photography services.
10. Education services
11. Survey, extraction and processing of natural resources, minerals and petroleum.
12. Hydropower, offshore wind power and nuclear power.
13. Transport of goods and passengers by rail, air, road, river, sea, pipeline.
14. Fisheries.
15. Forestry and hunting.
16. Betting and casino business.
17. Security services.
18. Construction, operation and management of river ports, seaports and airports.
19. Real estate business
20. Legal services
21. Veterinary services.
22. Trade in goods and activities directly related to trade in goods of foreign service providers in Vietnam.
23. Technical analysis and inspection services.
24. Tourism services
25. Health and social services
26. Sports and entertainment services
27. Paper production.
28. Manufacture of vehicles with more than 29 seats.
29. Development and operation of traditional markets.
30. Operation of Goods Exchanges
31. LCL consolidation services.
32. Audit, accounting, and tax services;
33. Valuation services; valuation of enterprises serving equitization.
34. Services relevant to agriculture, forestry, aquaculture.
35. Manufacture of airplanes.
36. Manufacture of locomotives and railway carriages.
37. Manufacture, sale tobacco products, tobacco ingredients, equipment for tobacco industry.
38. Publisher’s activities.
39. Building and repair of seagoing ships.
40. Waste collection services, environmental monitoring services.
41. Commercial arbitration services, arbitration mediation services
42. Logistics services.
43. Coastal transport services.
44. Farming, manufacture or processing of rare and valuable plants, breeding of rare, valuable wild animals and processing thereof, including live animals and their products;
45. Manufacture of building materials.
46. Construction and relevant technical services.
47. Motorcycle assembly.
48. Services relevant to sports, fine art, performing art, fashion show, beauty pageant and other entertainment activities.
49. Auxiliary services for air transport; ground services at airports; catering services on aircraft; navigation information services, air navigation and control services, meteorological services.
50. Shipping agencies; towing services
51. Services relevant to cultural heritages, copyrights and related rights, photography, video recording, audio recording, art exhibitions, festivals, libraries, museums;
52. Services relevant to tourism promotion and advertising.
53. Representation, recruitment, scheduling, management services for artists and athletes.
54. Family-related services.
55. E-commerce activities.
56. Cemetery business, cemetery services and funeral services.
57. Aerial application.
58. Marine pilotage;
59. Business lines in which investment is under pilot mechanisms of the National Assembly, Standing committee of the National Assembly, the Government or the Prime Minister.
For more details about the requirements for investing in these industries in Vietnam, you can visit the following link or contact us for specific advice:
https://vietnaminvest.gov.vn/SitePages/News_Detail.aspx?ChuyenMuc=3&ItemId=16
Legal procedures after establishing a foreign company in Vietnam
Procedures and documents for opening of offshore investment capital accounts and transferring investment capital to Vietnam
Investment capital contribution in cash of foreign investors must be made through the form of transfer to the direct investment capital account:
+ It is required to open a direct investment capital account in foreign currency at 01 (one)authorized bank to carry out legal receipt and payment transactions in foreign currency related to foreign direct investment activities in Vietnam;
+ Corresponding to the foreign currency of capital contribution only 01 (one) direct investment capital account can be opened in the same foreign currency at 01 (one) authorized bank.
In case of making investment in Vietnam dong, it is allowed to open 01 (one) direct investment capital account in Vietnam dong at the authorized bank where the direct foreign capital investment account in foreign currency has been opened to perform legal receipt and payment transactions in Vietnam dong related to foreign direct investment activities in Vietnam;
Currently, NVCS has an association with United Overseas Bank (UOB) to support customers to open direct or indirect investment capital accounts for free.
Tax declaration procedures and documents for companies with foreign capital in Vietnam
- Activities that the company must do immediately after its establishment:
+ Hang company signs;
+ Buy digital signature (digital certificate/token)
+ Open a company bank account
- Companies established from 2021 onwards will be exempt from license tax of the first year. The amount of license tax will depend on the charter capital of the company, specifically:
+ 2,000,000 VND for companies with charter capital of 10,000,000,000 VND or less;
+ 3,000,000 VND for companies with charter capital over 10,000,000,000 VND.
- After the company is established, the company is obliged to submit the initial tax return to the company, the dossier components include:
+ Register the method of depreciation of fixed assets
+ Accounting form
+ Decision to appoint director/in charge of accounting
+ Register for a bank account (form 08)
- Similar to companies with 100% Vietnamese capital, companies with foreign capital in Vietnam are obliged to prepare and send monthly, quarterly and annual tax reports to tax authorities as prescribed. Particularly for the company's year-end financial statements, it is mandatory to be audited by a unit with audit function in accordance with regulations.
Procedures for registration of compulsory insurance of foreign-invested companies in Vietnam
The company needs to prepare the dossier including the following documents:
- Declaration of participation in social insurance/information adjustment (Form TK3-TS);
- A detailed list of employees registered to participate in social insurance, health insurance, occupational accident and occupational disease insurance. (according to Form D02-TS)
- List of information (Form D01-TS)
- A copy of the business registration license of the enterprise
- Copy of Citizen Identification of employees participating in social insurance
Notes:
Form TK3-TS is applied to enterprises that need to register for a unit code when participating in social insurance for the first time.
Form D02-TS is used to declare the list of employees eligible to participate in social insurance according to compulsory regulations. This is a mandatory form in the registration procedure for the first time to participate in social insurance for businesses.
Form TK1-TS applies to employees who do not have a social insurance number.
In addition to the above-mentioned documents, in their dossiers, enterprises need to attach:
Labor contract signed by the enterprise with the employee
Procedures for implementation
Pursuant to Articles 31 and 32 of Decision 595/QD-BHXH 2017 (amended and supplemented), the first time registration procedure for participation in compulsory social insurance includes the following steps:
Step1. Prepare and submit documents
Employees working at the employer: Prepare a dossier of registration for participation in social insurance for the first time for employees; submit the application to the employer.
Employees working abroad: Prepare dossiers of registration for participation in social insurance for the first time for employees; pay through the unit sending workers to work abroad or directly to the social insurance agency where the worker resides before going to work abroad.
Employers: Enter the social insurance number in the corresponding forms for employees who have been granted social insurance numbers; Guide employees to make a declaration of participation and adjustment of information on social insurance and health insurance (Form TK1-TS) for employees who have not been granted a social insurance number (even if the employee does not remember the social insurance number); submit the application to the social insurance agency. In case the unit has not been granted the unit code participating in social insurance, the unit will submit the declaration TK3-TS to the social insurance agency to apply for the unit code.
Step 2. The social insurance agency receives the dossier and settles it.
According to the provisions of Point 1.2, Clause 1, Article 23 of Decision 595/QD-BHXH 2017, the time limit for settlement shall not exceed 5 days from the date the social insurance agency receives a complete dossier as prescribed.
Step 3. Sign up for an electronic account
1. After sending the application by post, the social insurance agency will receive the dossier and process it as follows (within 5 days after receiving it):
- Case 1: Social insurance agency calls to read Unit Code
- Case 2: Social insurance agency sends the application code with the unit code to the registered email
Register for an electronic account:
- Access the public service page by following the link:
https://dichvucong.baohiemxahoi.gov.vn/#/index
- Perform account registration (see instruction file)
- Log in
- Select “Import from social insurance” to download labor data:
+ If labor information appears, the profile is complete => Look up the process to see if it is correct
+ If no labor information appears: then check with the social insurance agency => if the social insurance agency says to make an electronic dossier, submit the application under the new code 600
Electronic file declaration
Create new workers information
- Samples in labor management and points to note
- Employee information
- Enter the social insurance number in case the person already has a social insurance number
- Status: Select the content suitable for the current status of the employee
- Department and position: Enter according to the content sent by the customer
- Information on participation in social insurance and health insurance
- Contract number: write according to the contract number provided by the customer
In the contract without labor contract, the rules for writing contract number are as follows:
Convention on how to write the Contract number:
+ The first new increase in the year will take the contract number as 01 and so on
+ The effective date will be the first day of the month of joining
*Example: Employee joined from February 2023, is the first increase in employees of the Unit in 2023
Contract number is as follows: Contract No. 01/2023/HDĐ
- Type of contract: definite term/indefinite term (depending on the information provided by the customer)
- Effective date: The first day of the month starting to register for social insurance for employees
- Where to register for Primary healthcare service establishment: Enter according to the information provided by the customer (Remember to check if the code is registered or not)
Step 4. Get Social Insurance Book
- Registration period
Total registration time is from 7-8 working days. In which, the time for the social insurance agency to issue the unit code is about 1-2 working days, the time for the social insurance agency to issue the social insurance book and the health insurance card is 5 days.
- Insurance payment method
Employees: Pay monthly. For employees who go to work abroad and have signed a labor contract, the payment shall be made every 3, 6 or 12 months. Or according to Article 85 of the Law on Social Insurance 2014, employees who go to work abroad can also pay 1 time according to the time limit stated in the contract.
Employer: paid monthly. Or according to Article 86 of the Law on Social Insurance 2014, the employer can pay monthly, every 3 or 6 months when paying employees by contract or by product. This applies to companies operating in a number of sectors such as agriculture - forestry - fishery - salt production.
- Procedures and documents to apply for a business visa for foreign investors in Vietnam
To complete the application for a visa to enter Vietnam, please provide NVCS the following documents:
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Note: Please send a photo or copy of your company's documents via Zalo so that NVCS can review them before providing you with an estimate..
- Procedures and documents for applying for a work permit for foreign workers in Vietnam
To complete the profiles for granting work permits to foreigners, customers please give NVCS following documents:
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(*) If the period of residence of foreigners in VN under 6 months do not need this item.
(**)If the health certificate issued in Viet Nam, health certificate must be made by the examinations of 1 in hospitals following: Cho Ray Hospital, Thong Nhat Hospital, Vietnamese – French Hospital, 115 Hospital, Van Hanh Hospital, Columbia International Hospital, Thu Duc Hospital.
Note: All documents issued by foreign countries must be consularly legalized, except for the cases in which consular legalization is expired according to the International Agreements, be translated into Vietnamese, and authenticated in accordance with Vietnam’s law.
How to do
- Step 1:
At least 15 working days before the date the foreign worker is expected to start working for the employer, the applicant for a work permit shall submit a dossier to the Department of Labour, War Invalids and Social Affairs where the foreign worker is expected to work.
- Step 2:
Within 05 working days from the day on which the complete application for a work permit is received, the Department of Labor, War Invalids and Social Affairs shall issue a work permit to the foreign worker using the form provided by the Ministry of Labor – War Invalids and Social Affairs are uniformly printed and distributed (the content of the work permit is made according to Form No. 12/PLI, Appendix I issued together with Decree No. 152/2020/ND-CP). In case of refusal to issue a work permit, a written reply clearly stating the reason.
For a foreign worker working under labor contracts, after the foreign worker is issued with a work permit, the employer and the foreign worker must sign a written employment contract as per Vietnam’s labor law before the date on which the foreign worker is expected to work.
The employer shall send that employment contract to the competent authority that issued that work permit. The employment contract is the original or a certified true copy.
Place to receive and return results:
One-stop-shop - Department of Labor –War Invalids and Social Affairs of Ho Chi Minh City, address: 159 Pasteur, Vo Thi Sau ward, District 3
Fees: 600,000 VND (Six hundred thousand VND)
- Procedures and documents to apply for a residence card for foreign investors in Vietnam
To complete the profiles for temporary residence cards, customers please give NVCS following documents:
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How to do
Step 1: Prepare documents according to the provisions of law.
Step 2: Submit your application:
1. Agencies, organizations and individuals submit dossiers at one of the two working offices of the Immigration Department - the Ministry of Public Security:
333-335-337 Nguyen Trai, District 1, Ho Chi Minh City.
a) Application submission time:
- From Monday to Saturday morning (except New Year and public holidays).
b) Time to return results:
From Monday to Friday every week (except New Year and public holidays).
- Dossiers:
+ Profile composition:
a) Official Correspondence and the letter of application for temporary residence card (form NA6 for agencies or organizations, NA7 for individuals);
b) Declaration of application for a temporary resident card for foreigners (NA8)
c) Papers proving eligibility for temporary residence card consideration is one of the following documents: work permit or other valid papers proving eligibility for temporary residence card;
đ) 02 photos of size 2x3 cm (01 photo glued to the declaration, 01 separate photo);
+ Number of dossiers: 01 (one) set.
- Time limit for settlement: no more than 07 working days from the date of receipt of complete dossiers.
- Fees/Charges (if any):
+ Temporary residence card valid for no more than 2 years: 145 USD/card
+ Temporary residence card with term from over 02 years to 05 years: 155 USD/card
+ Temporary residence card with term from over 05 years to 10 years: 165 USD/card
III. Other notes on foreign investment activities in Vietnam;
- Legal documents issued by foreign agencies must be consularly legalized at the Vietnamese consulate or embassy in the host country and then these documents must be notarized into Vietnamese. .
- Investors must pay attention to the time limit for capital contribution committed according to the contents of the issued investment registration certificate to avoid penalties for late capital contribution as prescribed.
- Regarding the transfer of profits and investment capital of foreign investors in Vietnam:
Investors can transfer profits back to their home country at one of the following times:
+ Annual profits remittance abroad
+ Profits remittance abroad when finished direct investment activities in Vietnam
Conditions for Profits remittance abroad:
+ Annual profits remittance abroad
Foreign investors can annually remit abroad profits they are shared or earn from their direct investment in Vietnam when fiscal year is over after enterprises in which foreign investors join investment have completed financial obligations to the State of Vietnam under the provisions of law and submitted audited financial statements and enterprise income tax finalization declarations of that year to direct managing tax offices.
+ Profits remittance abroad when finished direct investment activities in Vietnam:
Foreign investors can remit abroad profits when finished direct investment activities in Vietnam after enterprises in which foreign investors join investment have accomplished financial obligations towards the Vietnam State under law, submitted audited financial statements and enterprise income tax finalization declarations to direct managing tax offices and implement fully all the obligations under the Law on Tax Administration.
Methods of transferring profits abroad:
Profits transferred from Vietnam to foreign countries can be in cash or in kind.
+ Profits remitted abroad in cash must be transferred through the direct investment capital account.
+ Profits are remitted abroad in kind and the value in kind is converted according to the provisions of the law on import and export of goods and relevant laws.
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