FOREIGN INVESTMENT IN THE FORM OF ESTABLISHMENT OF AN ECONOMIC ORGANIZATION IN VIETNAM

Investment in establishing an economic organization is currently one of the forms chosen by many foreign investors when investing in Vietnam. However, the conditions and procedures for foreign investors when making investments in this form are complex and more demanding than domestic investors. Foreign investors should be aware of the provisions of Vietnamese law on this form so that investment activities are convenient and effective. This article will help you better understand this issue!

What is the investment in establishing an economic organization?

According to the Law on Investment 2020, an economic organization is an organization established and operating in accordance with Vietnamese law, including enterprises, cooperatives, cooperative unions and other organizations carrying out business investment activities.

Therefore, it can be understood that investment in establishing an economic organization is the investor's capital to carry out the establishment of enterprises, cooperatives, cooperative unions or other organizations carrying out business investment activities.

Conditions for establishment of economic organizations in Vietnam for foreign investors

Foreign investors wishing to establish an economic organization in Vietnam must meet a number of the following conditions:

• Before establishing an economic organization, foreign investors must have investment projects, carry out procedures for granting and adjusting investment registration certificates, except for the establishment of innovative small and medium-sized enterprises and innovative start-up investment funds in accordance with the law on supporting small and medium-sized enterprises.
• Foreign investors establishing economic organizations must meet market access conditions for foreign investors. Specifically, it is necessary to consider the restricted occupations of foreign investors including: Industries and occupations that have not yet accessed the market and industries and occupations with conditional market access.
• Meet the conditions for establishment of economic organizations in accordance with the corresponding provisions of law.

Reasons to choose to invest in the form of the establishment of an economic organization

• Establishing a new economic organization foreign investors will have legal status in Vietnam, making it easier for them to exercise their rights.
• There is no scale limit. The profit and liability of the company will be divided according to the proportion of capital contributed by each party should ensure fairness.
• Create favorable conditions for investment projects when performing contracts for business cooperation contracts.

Order of procedures for establishment of economic organizations

Step 1: Apply for an Investment Registration Certificate

Submit an application for investment registration certificate to the investment registration agency.

Profiles include:

• 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 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.

Dossiers corresponding to each type of company that foreign investors intend to establish in accordance with law

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.

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