- What is a 100% foreign company?
- Why you should start a 100% foreign company
- Records needed to set up a company
- The process of establishing a 100% foreign-invested company
What is a 100% foreign company?
A 100% foreign-invested company is a foreign-owned enterprise established by a foreign investor in Vietnam and is self-responsible for business results.
The 100% foreign-invested company has a number of key characteristics as follows:
- Subject to the rule of Vietnamese law and international treaties that Vietnam recognizes.
- Established by one or more foreign investors (organizations and individuals). The assets of the company are 100% foreign-owned by one or more foreign-owned organizations/individuals.
- Can be established as a limited company, joint stock company, partnership company and only liable for limited liability equal to the amount of capital put into business.
- Foreign individual organizations control their own operations and take responsibility for the results of their business activities. (The State of Vietnam only manages through the issuance of investment licenses and checks the implementation of the law. The State of Vietnam does not interfere with the management of the 100% foreign-owned company).
Why you should start a 100% foreign company
The establishment of a 100% foreign-owned company in Vietnam is increasingly promoted by foreign organizations and individuals because of the following outstanding advantages:
Firstly, compared to other forms of investment, establishing a 100% foreign-owned company is a sustainable, long-term and organized form of investment.
Secondly, due to the absolute amount of ownership, foreign investors will have full control over business activities and operation management of enterprises. Taking control of and directly making investment decisions is a condition for investors to implement their business strategy optimally. Therefore, compared to other forms of investment, investors can be more proactive in managing and implementing business strategies.
According to statistics, most of the way of organization and management of 100% foreign-owned companies often brings higher economic efficiency.
Third, with large, long-term investment capital with little fluctuation, foreign investors can be proactive about capital sources and manage their own investment capital.
Fourthly, with the form of investment to establish a 100% foreign-owned company, investors can apply modern scientific and technological advances, business processes and production to exploit the advantages of the market and other favorable conditions to achieve the highest efficiency. This is one of the competitive advantages of 100% foreign-owned companies compared to Vietnamese enterprises.
Records needed to set up a company
In case the foreign investor is an individual.
- Certified copy of the passport of the member contributing capital to the company
- Bank certificate (proving financial capacity – bank account balance).
In case the foreign investor is a legal officer
- Business Registration Certificate
- Company Charter or equivalent documents
- Financial statements audited last fiscal year
- Bank certificate related to account balance equivalent to the amount of capital contributed to the Company to be established in Vietnam
- The Company's decision regarding the investment in establishing the Company in Vietnam and sending a representative to manage that contributed capital in Vietnam
- The passport of the legal representative (in case of being appointed director of the Company) or in the case of the representative managing the capital contribution.
* Note: The above documents should be certified and consular legalized.
The process of establishing a 100% foreign-invested company
Step 1: Apply for an Investment Registration Certificate
Submit an application for investment registration certificate to the investment registration agency.
- The written request for the implementation of the investment project, including the commitment to bear all costs and risks if the project is not approved.
- Documents on the legal status of investors.
- Documents demonstrating the financial capacity of the investor.
- Proposed investment project.
Step 2: Establish a 100% foreign-invested company
After obtaining the Enterprise Registration Certificate, the investor submits the prepared dossier to the Business Registration Department under the Department of Planning and Investment.
Step 3: Apply for a license for some special occupations
After establishing a foreign-invested enterprise, depending on each business activity, the enterprise needs to take another step to apply for a business license.
Thanhlap.wacontre.com consulting services
- Advising on state policies and policies related to foreign investment in Vietnam
- Advising on the conditions for establishment of a 100% foreign-owned company.
- Advising on the steps of establishing a 100% foreign-owned company including procedures for applying for investment registration certificates, business registration certificates, business licenses.
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