Guide To Set Up A 100% Foreign-Owned Company

GUIDE TO SET UP A 100% FOREIGN-OWNED COMPANY

Guide to set up a 100% foreign-owned company, Since the 2014 Investment Law comes into force on July 1st, 2015, in accordance with its provisions, the procedures for establishment of a 100% foreign-owned company are as follows:

Step 1: Register its investment policy with a Provincial People's Committee

A foreign investor who enters Vietnam to invest and implement a project must apply for an investment registration certificate. However, before applying for the investment registration certificate, in some cases, the investor must register its investment policy with a provincial People's Committee.

Required documents include:

·         A request for implementation of the investment project;

·         To individual investors: a copy of ID card or passport;

·         To institutional investors: a copy of Certificate of Registration or other equivalent document confirming their legal status;

·         A proposal of investment, including information as followed: investors who implement the project, investment objectives, scale, capital and capital mobilization plan, location, time limit and progress of investment, labor demand, a proposal for investment incentives, impact assessment, socio-economic efficiency of the project;

·         A copy of one of the following documents:

o    Latest financial statement within the last two years;

o    Commitment of financial support from its parent company;

o    Commitment of financial support from a financial institution;

o    Guarantee of financial capacity of the investor;

o    Documents proving the investor’s financial capacity;

·         Proposal for the land use; in case the project does not request the State to assign or to lease land or to permit change of land use purpose, then, a copy of the lease agreement or other documents confirming that the investor has the right to use the land for the investment projects;

·         Explanation on the use of technology, including the following: name of the technology, origin of the technology, flow chart of the process; main specifications, state of used machinery, equipment and main technological lines for projects using a transfer-restricted technology.

·         Business Cooperation Contract (BCC) in case of implementation projects under a BCC

* Note: To investment projects that don’t require an investment policy, this step is skipped.

Application submitted to: a relevant Agency of Business Registration

Decision received after: 35-40 working days from the date of receipt of valid documents

Step 2: Apply for the Investment Registration Certificate (IRC)

The investor must apply for the IRC in cases as followed:

·         The investment project of a foreign investor;

·         The investment project of an economic institution in which:

o    Foreign investors hold 51% or more of charter capital, or a majority of partners are foreign individuals if the economic organization is a partnership;

o    Economic institutions as defined above hold 51% or more of the charter capital;

o    Foreign investors and economic organizations stipulated as above hold 51% or more of the charter capital.

Required documents include:

·         A request for implementation of the investment project;

·         To individual investors: a copy of ID card or passport;

·         To institutional investors: a copy of Certificate of Registration or other equivalent document confirming their legal status;

·         A proposal of investment, including information as followed: investors who implement the project, investment objectives, scale, capital and capital mobilization plan, location, time limit and progress of investment, labor demand, a proposal for investment incentives, impact assessment, socio-economic efficiency of the project;

·         A copy of one of the following documents:

o    Latest financial statement within the last two years;

o    Commitment of financial support from its parent company;

o    Commitment of financial support from a financial institution;

o    Guarantee of financial capacity of the investor;

o    Documents proving the investor’s financial capacity;

·         Proposal for the land use; in case the project does not request the State to assign or to lease land or to permit change of land use purpose, then, a copy of the lease agreement or other documents confirming that the investor has the right to use the land for the investment projects;

·         Explanation on the use of technology, including the following: name of the technology, origin of the technology, flow chart of the process; main specifications, state of used machinery, equipment and main technological lines for projects using a transfer-restricted technology.

·         Business Cooperation Contract (BCC) in case of implementation projects under a BCC

Application submitted to: a relevant Agency of Business Registration

Result received after:

·         15 – 20 working days from the date of receipt of valid documents in case the project doesn’t require a decision of investment policy.

·         05 – 10 working days from the receipt date of the investment policy decision.

Step 3: Apply for the Certificate of Business Registration to establish the corporation

After obtaining the IRC, the investor must prepare the documents to set up the corporation.

Required documents include:

* To Limited Liability Companies

·         Application for business registration;

·         Company regulations;

·         List of members;

·         Copies of the following documents:

o    ID card, passport or other legal personal identification of individual members;

o    Decision of establishment, business registration certificate or other equivalent document of the institution and letter of authorization; ID card, passport or other legal personal identification of the authorized representative of institutional members

o    To members being foreign institutions, the copy of the business registration certificate or equivalent document must have the consular authentication;

·         IRC in case of foreign investors in accordance with the Law on Investment.

* To Joint Stock Companies

Required documents include:

·         Application for business registration;

·         Company regulations;

·         List of founding shareholders and foreign investing shareholders; (list of authorized representatives if any)

·         Copies of the following documents:

o    ID card, passport or other legal personal identification of individual members;

o    Decision of establishment, business registration certificate or other equivalent document of the institution and letter of authorization; ID card, passport or other legal personal identification of the authorized representative of institutional members

o    To members being foreign institutions, the copy of the business registration certificate or equivalent document must have the consular authentication;

·         IRC in case of foreign investors in accordance with the Law on Investment.

Application submitted to: a relevant Agency of Business Registration

Result received after 05 working days from the date of receipt of full, valid documents

Step 4: Publicize the establishment of the company

Companies, after being granted business registration certificates, shall publicize their establishment on national information portal in accordance with the order and procedures and pay fees according to regulations.

Contents of the announcement include the contents of the business registration certificate and other information as followed:

·         Lines of business;

·         List of founding shareholders and foreign investing shareholders to joint stock companies.

Executing Agency: publishing office of the business registration agency.

Step 5: Make the company seal

After the business registration certificate is issued and the company establishment is publicized, the company carries out seal making at one of the authorized seal making units. The company decides the number and form of the seal to the extent permitted by law.

Step 6: Publicize the company seal sample on the national business registration portal

After the seal is made, the company publicizes the seal sample on the national business registration portal and receives a confirmation of publicized seal sample issued by the Department of Planning and Investment.

Executing Agency: publishing office of the business registration agency.

This step should be done within 03 working days from the date of receipt of full, valid documents.