HOW TO ESTABLISH A FOREIGN ENTERPRISE IN VIETNAM?
Recently, “How to establish a foreign enterprise in Vietnam?” is a question that many investors around the world are interested in. So, is it difficult to establish a foreign enterprise in Vietnam? Steps to do it? Please refer to our article below to understand.
Vietnam is a country in Southeast Asia, with abundant labor force, stable politics, open economic development policies, especially a strong developing economy. Being one of the favored places for foreign investment on the world in recent years, Vietnam has become an attractive destination for investors.
Is it difficult to establish a foreign enterprise in Vietnam? How?
- No, it's not difficult if you are well-prepared.
Foreign individuals and organizations establishing enterprises in Vietnam will need to learn about Vietnam’s business sector commitments in international treaties, specific regulations of Vietnamese law, operating locations, taxes, and other related issues. Based on the information collected, Investors get the most general assessment of the conditions for doing business in Vietnam and determine the exact time and costs required to complete establishment procedures or adjust plans when found inappropriate.
PROCEDURES FOR ESTABLISHING A FOREIGN COMPANY IN VIETNAM INCLUDE THE FOLLOWING STEPS
Step 1 to establish a foreign enterprise in Vietnam: Prepare documents
The investor should prepare a list of documents as listed above, including documents that shall be translated and consular legalized.
Consider the operation locations, the lessor’s right to lease, and the right to do business at the proposed location.
In addition, investors also need to determine Vietnam’s tax incentives for foreign investors when doing business in Vietnam to select operating locations to enjoy tax incentives.
Step 2 to establish a foreign enterprise in Vietnam: Application for Investment Registration Certificate (Investment Project Fomulation)
The dossier will be submitted at the investment registration office of the Department of Planning and Investment or the Management Board of Industrial Parks, depending on the location of operation of the enterprise. Normally, the settlement time will be about 15 working days, but if the expected sector is in case Vietnam has not committed, the investment registration agency can collect opinions of specialized management agencies, and this time will last longer from 2-3 months.
Step 3 to establish a foreign enterprise in Vietnam: Submission of Enterprise Establishment Registration dossier
After completing the investment registration and having been granted the Investment Registration Certificate, the Investor submits the dossier for Enterprise Establishment Registration.
The settlement time will be 03 working days and the result received by the investor will be the Enterprise Registration Certificate. This document recognizes the legal entity status of the investment project management organization according to the granted Investment Registration Certificate.
Step 4 to establish a foreign enterprise in Vietnam: Information disclosure and corporate seal
Immediately after receiving the Enterprise Registration Certificate, the Investor proceeds to publish enterprise information on the national portal on enterprise registration and make a seal
Step 5 to establish a foreign enterprise in Vietnam: Carry out the initial tax registration procedure
The law currently sets a certain time limit to force enterprises to complete initial tax declaration procedures for newly established enterprises. At this step, enterprises also need to complete the obligation to pay license tax and register digital signatures and electronic invoices. This is a condition for enterprises to be allowed to issue invoices to clients as well as other tax-related activities.
Step 6 to establish a foreign enterprise in Vietnam: Apply for licenses to do business in Vietnam
In addition, enterprises shall carry out procedures to issue Enterprise Registration Certificates (ERC), and Investment Registration Certificates (IRC). In some cases, the law sets mandatory requirements for foreign enterprises and investors to carry out procedures to be licensed and approved by specialized management agencies before actual business activities, such as: retail business license, Car rental business license, …
LIST OF DOCUMENTS
To prepare for establishing a foreign enterprise in Vietnam, individual/organizational investors will need to prepare the following documents:
Investor’s legal information, including:
- Passport (for individual investors);
- Establishment license, business license, or equivalent documents (for institutional investors);
- Passport/ID card/ citizen identification card of investor’s authorized representative (for institutional investors);
- Passport/ID card/ citizen identification card of legal representative of economic organization.
Documents proving the Investor’s financial capacity are one of the following documents:
- Financial statements of the most recent 02 years of the institutional investor;
- Commitment to financial support from the parent company;
- Commitment to financial support from the financial institution;
- Guarantee of the investor’s financial capacity;
- Confirm the bank account balance or bank account statement of the individual investor.
Legal documents on the expected location of the headquarters and documents recording the Investor’s leasing status:
- Lease contract for the location of the investment project;
- Land use rights Certificate;
- House Ownership Certificate;
- Documents proving the lessor’s right to sublease in case the lessor is the sublessee from the investor of the building intended to be the company’s headquarters.
With the investment registration procedure, the submission of documents about the proposed headquarters is mandatory, so at the time when the company has not been established, the parent company (Investor being an organization) or one of its members (Investor being an individual) establishes a document to lease headquarters with the lessor.