IMPORTANT CONSIDERATIONS WHILE FOREIGNERS WANT TO INVEST IN VIETNAM

Vietnam is a potential market and worth investing in, so the number of foreign investors investing in Vietnam is increasing significantly. So when you want to invest in Vietnam, what should foreign investors pay attention to? Let's find out through our article!

Investors

According to the Investment Law 2020, foreign investors are understood as individuals with foreign nationality and organizations established under foreign laws to conduct business investment activities in Vietnam. Most of the normal business investment lines that have been fully opened by Vietnam are regulated to allow investors to be individuals or organizations, i.e. there are no restrictions on the status of investors as individuals or companies. However, there are still some specially conditional business lines with specific investment requirements on investment status that must be individuals or organizations, which can be determined through the synthesis of investment conditions for all sectors and industries registered for investment on the basis of the scope of Vietnam's commitment to open the market. and the provisions of Vietnamese law if any.

Investment capital, charter capital for establishing foreign companies in Vietnam

Currently, the law does not require a minimum capital level to establish a company in Vietnam, except for some conditional investment sectors or business lines under Vietnam's market opening commitments and laws such as education and real estate business, travel, payment intermediary, …. Other common business lines do not have investment limits, investors only need to ensure the feasibility of the amount of investment capital commensurate with the scope and scale of the project.

Contribute investment capital and charter capital after establishing a foreign capital company in Vietnam

Foreign investors are obliged to contribute capital in accordance with the roadmap stated in the Investment Certificate. It should be noted that the time limit for contributing investment capital of investors is also the charter capital contribution of the Company in Vietnam registered by investors but not more than 90 days from the date of issuance of the Enterprise Registration Certificate. Investors will have to contribute investment capital through transfer to investment capital accounts opened by foreign-invested companies in Vietnam under the guidance of the State Bank of Vietnam. In case the time limit for capital contribution is not in accordance with the commitment, the competent authority may apply the relevant sanctions, including the withdrawal of the Investment Certificate.

Business investment sector

Based on the scope of market opening commitments in Vietnam, the need to establish a foreign capital company in Vietnam and the ability to invest, foreign investors should choose investment areas. Investment needs and is sufficient to be done; It is best to invest in sectors and industries that have been clearly committed by Vietnam in bilateral and multilateral treaties to avoid the risk of being rejected when registering industries and sectors that have not yet been opened to the market.

For legal provisions related to business lines, foreign investors can do business in any industry that is not prohibited by law. In addition, there are a number of specific professions that are required to meet in order to register their business.

Investment location and company establishment

Investors should choose investment locations, establish foreign capital companies in Vietnam with clear addresses; select a lessee with sufficient documents proving ownership, lease rights, and sub-lease rights if any; locations and offices for lease are allowed to be leased, designed and built in accordance with Vietnamese law, not in dispute. The leased office should be in the area designed and built to serve the office function on the basis that it has been licensed for construction by competent State agencies of Vietnam.

Use the company seal.

The foreign-owned company is entitled to use the company's seal and has the right to decide on the form, content and number of seals, which may have many seals with the same form and content. Before using, change, cancel the seal sample or change the number of seals; the company must send a notice to the business registration authority where the company is headquartered for public posting on the National Portal on enterprise registration. After completing the notification procedure and posting the seal form to the National Business Registration Portal, the seal may be used from the effective date noted in the posted notice.

Employer

For start-ups, labor management is one of the most important issues that investors need to pay attention to. The company needs to carry out a number of procedures in accordance with labor law such as: declaring the employer at the beginning of operation; making and using the labor management book; formulate and announce salary scales and payrolls; formulate and announce labor norms; develop and register labor regulations; Forming a union in the company. The company may hire foreign or Vietnamese workers to work at the company. If there is a foreign employer, the company must carry out the procedures for applying for a visa, applying for approval of foreign employers, work permits, temporary residence cards according to the conditions and procedures prescribed by Vietnamese law.

Legal representative

The legal representative of the Company in Vietnam is the individual representing the company in the exercise of rights and obligations arising from the company's transactions, representing the company as a plaintiff, defendant, person with related rights and obligations before arbitration, Courts and other rights and obligations in accordance with the law. Limited liability companies and joint stock companies in Vietnam may have one or more legal representatives. The company must ensure that there is always at least one legal representative residing in Vietnam. In case the Company has only one legal representative, he/she must reside in Vietnam and must authorize in writing others to exercise the rights and obligations of the legal representative upon exiting Vietnam. In this case, the legal representative shall still be responsible for the exercise of authorized rights and obligations.

Fulfilling tax obligations

Tax obligations are one of the basic obligations for any company. Therefore, every year, Vietnamese companies have to pay a lot of different taxes and fees. For example, the subject fee, corporate income tax when there is a profit; declaration and payment of value-added tax. Depending on the business investment industry, companies in Vietnam can also pay taxes such as export tax, import tax.

Vietnam has a commitment to open the market as well as many investment incentives related to corporate income tax for certain industries or investment in localities with difficult socio-economic conditions.

Investment project report

Foreign-owned companies in Vietnam made according to foreign-invested investment projects must strictly and fully implement the regime of reporting investment projects in accordance with Vietnam's investment law. This report will be carried out periodically and must be carried out through the National Investment Portal. The contents of the report include: investment capital, results of business investment activities, information on labor, state budget payment, investment in research and development, handling and environmental protection and specialized indicators according to the field of operation.

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