Establishing a foreign-invested company in Vietnam, Set up company in Vietnam

1. ESTABLISHING A FOREIGN INVESTED COMPANY
IN VIETNAM
In case of need (Expat) → To Establish A Foreign Invested Company In Vietnam, what are
they most interested in (when meet a lawyer)? Core requirements, Enterprise
Structure ☛ LLc or JSc, the required procedures, processes for foreign investors when starting
a business in Vietnam and “ESTABLISHING A FOREIGN INVESTED COMPANY” →
Establishing a foreign invested company is a required legal procedure for foreign
investors (Expat) to invest in Vietnam ⇒ In accordance to the Law on Investment
2014, the investors could contribute capital indirectly to Vietnamese companies,
contribute capital to purchase from 1-99% of the shares or establish a Limited
Liability Company (LLc) or a 100% foreign owned Joint Stock Company in
Vietnam→ A foreign invested company defined by the Law on Enterprise and the Law on
Investment is a company established by foreign investors in order to carry out investment
activities in Vietnam or a Vietnamese company purchased the shares, merged, repurchased by
foreign investors
→ Establishing a foreign invested company in Vietnam (8 essential steps)
# 1 Foreign ownership ratio is allowed from 1% to 100% in Vietnam
# 2 Minimum capital requirement is 20,000 USD or higher
# 3 There must be a legal lease agreement for a registered address
# 4 The resident Director could be a foreigner or a Vietnamese individual
# 5 Investment Registration Certificate (IRC) is obligated
# 6 Enterprise Registration Certificate (ERC) is issued as Vietnamese companies
# 7 Registering for taxes and paying taxes as Vietnamese companies
# 8 Contributing capital properly in terms of the agreement within 90 days from the day on
which the capital account is issued.
Understand & Implement
(i) The essence of establishing a foreign invested company is in the investors’ initial
"CONCEPT"
(ii) When investing in Vietnam, they want to approach quickly or slowly

2. ☝ APPROACHING QUICKLY: The investors should prepare a capital budget, line of
business (idea), staff, and headquater location ==> CONTACTING THE
PRESTIGIOUS LAWYERS IMMEDIATELY
☋ APPROACHING SLOWLY: Asking or investing by "OPENING REP OFFICE"
after that, considering the result to make a final decision whether they should invest or
not
NO MATTER WHAT THE INVESTORS DO, THEY NEED TO READ IN ORDER
TO UNDERSTAND AND FIND THE RIGHT APPROACH (BECAUSE THESE
ARE PROVISIONS OF LAWS AND PRACTICE)
? PREPARE THE INVESTED BUSINESS LINES, CAPITAL AND COMPANY
ADDRESS IN ORDER.
(i) GET TO KNOW THE LAW
(ii) GET TO KNOW THE TYPES OF INVESTMENTS
(iii) GET TO KNOW WHEN THE PROJECT’S DOCUMENTS ARE COMPLETED
(iv) GET TO KNOW THE EXPERIENCE OF THE CONSULTING AGENCIES
☇☇☇
☑ LEGAL BASIS FOR ESTABLISHING FOREIGN-INVESTED
COMPANIES
1. WTO commitments
2. The Law on Enterprise 2014
3. The Law on Investment 2014
★ HOW TO UNDERSTAND EXACTLY?
- The investor has to select the business lines of investment because all each business
line is regulated differently in WTO commitment. After that, he or she has to do
research on the Law regulating those business lines (for example: the charter capital
of a company doing business in real estate must be at least 20 billion VND) for the
investment requirements and the accuracy of the selected business.
- After choosing the business lines, the next step is selecting the types of investment
- The popular type of investment is to establish a Limited Liability Company (1
member or 2 to 50 members LLC) or a Corporation.
→ WHAT TYPES OF THE STRUCTURE
THAT FOREIGN INVESTORS SHOULD
CHOOSE TO ESTABLISH A COMPANY?

3. # A 100% foreign owned Limited Liability Company
Chapter III, Article 47. Limited liability companies with two or more members
1. A limited liability company with two or more members is an enterprise in which:
a/ Members may be organizations or individuals; the number of members must not
exceed 50;
b/ Members must be liable for the debts and other property obligations of the
enterprise within the amount of capital contributed to the enterprise, except the case
specified in Clause 4, Article 48 of this Law;
c/ The contributed capital amount of each member may only be transferred in
accordance with Articles 52, 53 and 54 of this Law.
2. A limited liability company with two or more members has the legal person status
from the date it is granted an enterprise registration certificate.
3. A limited liability company with two or more members may not issue its shares.
Section 2, Chapter III, Article 73. Single-member limited liability companies
1. A single-member limited liability company is an enterprise owned by
one organization or individual (below referred to as company owner); the
company owner must be liable for all debts and other property obligations of
the company within the amount of the charter capital of the company.
2. A single-member limited liability company has legal entity status from
the date it is granted an enterprise registration certificate.
3. Single-member limited liability companies may not issue shares.
# A 100% foreign owned Joint Stock Company
Chapter V, Article 110. Joint stock companies (The Law on Enterprise 2014 takes
effect on July 1, 2015).
1. A joint stock company is an enterprise in which:
a/ The charter capital is divided into equal portions called shares;
b/ Shareholders may be organizations or individuals; the minimum number of
shareholders is three and there is no restriction on the maximum number;
c/ Shareholders are liable for debts and other property obligations of the enterprise
only within their amounts of capital contributed to the enterprise;
d/ Shareholders may freely assign their shares to other persons, expect the cases
specified in Clause 3, Article 119, and Clause 1, Article 126, of this Law.
2. A joint stock company has legal entity status from the date of grant of the enterprise
registration certificate.

4. 3. A joint stock company may issue all types of shares to raise funds.
→ What types of licenses are required when establish a foreign invested
company
- Investment Registration Certificate (IRC)
- Enterprise Registration Certificate (ERC)
- Business License
☖ Regarding the Business License (BL), LHD Law Firm would like to give
some guidelines on the required documents
1 #. The applications for Business License.
Changing or adding the new business activities means modifying the enterprise’s goals or
missions, which needs the following documents:
2 #. The applications for investment project examination according to Decree
108/2006/NĐ-CP dated September 22nd 2006 by the Government giving guidelines on
implementing some articles of Law on Investment
The application for Business License according to Circular Number 09/2007/TT-BTM includes:
a) Application for Business License in the template of MĐ-1 accompanied by Circular number
09/2007/TT-BTM
b) An account of the satisfaction of business requirements. The content is about how
your project meets the business requirements listed in the appendix of the circular;
c) The application of resisting the business activities of goods trading and those
directly related: specify whether the trading is wholesale, retails, establishing retail
agency of groups of goods; commercial advertising, commercial inspection…
In case the project is not associated with the investment in construction of facilities
(like construction of workshops, installation of machinery and equipment’s for
production), it is recommended to supplement the trading of goods and related

5. activities, in addition to the records mentioned in Items 1 and 2 above, with
documents about legal entities or relevant papers to prove the investor’s competence
and experience.
Note the licensing agency
- Investment Registration Certificate issued by the Department of Investment - Department
of Planning and Investment
- Enterprise Registration Certificate issue by the Department of Domestic Enterprise -
Department of Planning and Investment
- Business License issuedby the Department of Industry and Trade
→ EXPLORING THE PROCEDURE OF ESTABLISHING FOREIGN-
INVESTED COMPANY
Step #01: Registration of investment objective statement with the
Provincial People's Committee
Foreign investors entering Vietnam to implement a project must apply for an
Investment Registration Certificate. However, before carrying out the
application for an Investment Registration Certificate, in some cases, the
investor must register the investment objectives statement with the People's
Committee of the province (the first step of foreign-invested company
establishment)
☑ Application for foreign-invested (Viet Nam)
Documents for FOREIGN-INVESTED ENTERPRISE REGISTRATION for
individuals and organizations are the followings:
☑Individuals
☑Organization’s
For individuals, there are 3 important documents:
# Passport
# Vietnam’s office leasing contract
# Banks’ confirmation of same amount of capital with the invested capital in Vietnam

6. For organizations, there are 5 documents as follows:
# Business Registration Certificate
# Foreign-invested company operating charter (m&a)
Note: the 2 above documents must be consular legalized for use in Vietnam
# Financial statements with profits or banks’ confirmation of same amount of money
invested in Vietnam.
# Vietnam’s office leasing contract
# The decision of appointing the Company’s legal representative in Vietnam
Above is the basic conditions for establishing companies with foreign members
☑ Time for establishing foreign-invested company in Vietnam
For projects that do not need approved investment objective statements: 15 – 20 working days
since the date of receiving complete documents
For projects that need approved investment objective statements: 5 – 10 working days since the
date of receiving the improvement of the investment objectives statement
Step #2: Issue the Enterprise Registration Certificate (ERC)
After the issuing of decision of investment objectives by the Provincial People’s
Committee.
This step includes APPLYING FOR ENTERPRISE REGISTRATION
CERTIFICATION ⇒ THE YELLOW PAPER (ERC)
Step #3: Issue the Investment Registration Certification (IRC)
Application for Enterprise Registration
Company’s charter
The list of founding shareholders and shareholders being foreign investors (the list of
the authorized representative if any)
The copies of the following documents:
The people’s identity card, passport or other lawful personal certification, for
shareholders being individuals;
Enterprise Registration Certificate (ERC)
The copies of the business registration certificate or similar documents of the
shareholder being a foreign organization must be consular legalized.
This is a really important step for getting the certificate called (IRC) INVESTMENT
REGISTRATION CERTIFICATE

7. Step #4: Publish the establishing of foreign invested company
After the date of receiving the Enterprise Registration Certificate, the enterprise must
publish enterprise registration content on the national business registration
information portal in accordance with the processes and procedures of the Enterprise
Law and pay the fee for such publication.
The public contents including the content of Enterprise Registration Certificate and
the following information:
☑ Business lines;
☑ The list of founding shareholders and shareholders being foreign investors for the
Joint Stock Company
Implementing agency: Department of Publication - Enterprise Registration Office
Step #5: Get the foreign invested company’s seal
After the date of receiving the Enterprise Registration Certificate and publishing the
establishing of foreign invested company, the enterprise must get the enterprise’s seal
at the authorized units. The enterprise could independently decide the quantity and the
form of seal in accordance to the provisions of law.
Step #6: Publish the enterprise’s seal in the National Business
Registration Portal.
After getting the seal, the enterprise must publish the design and content of the seal in
the National Business Registration Portal and the Department of Planning and
Investment will issue a 01 certification letter regarding having published the design
and content of the seal
The implementing agency: Department of Publication - Enterprise Registration
Office
The progress of work: 03 working days from the date of receiving sufficiently valid
documents
Step #7: Open a bank account (checking account and capital account)
and declare tax, issue the invoice→
WHY SHOULD CHOOSE LHD LAW FIRM
LHD Law Firm is ranked in the top 10 Law Firm in Vietnam regarding consulting
establishing foreign invested company in Vietnam is ranked in Legal500 và Hg.org,
with more than 10 years of experience and office system in Ho Chi Minh City, Ha Noi, Da
Nang, Vung Tau etc LHD Law Firm commit to satisfy foreign investors in Vietnam

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# OTHER SERVICES SHOULD USE AFTER ESTABLISHING THE
FOREIGN INVESTED COMPANY
Personal Income Tax, Company Income Tax and Tax report monthly, quarterly, yearly
consulting
Social Insurance, payroll consulting
Recruitment Consulting
Trademark registration and protection, industrial designs, patents consulting
Labor, Tax, Contract consulting
Virtual Office for rent, used for putting the foreign invested companies headquarter,
commit to buy invoices.
☉ CONTACT US TO USE THE SERVICE