Establishing a foreign-invested company in Vietnam requires careful preparation and strict compliance with the law. Foreign investors must understand the investment conditions, procedures, and key legal notes to avoid potential risks. DNP Viet Nam Law Firm will help you identify the essential points to ensure a smooth and lawful investment process.
1. Choose a Suitable Business Sector
- Permitted business sectors: Foreign investors may only engage in industries permitted under Vietnamese law. Investment is not allowed in sectors prohibited by law. The list of restricted or unopened sectors for foreign investors is provided in Appendix I of Decree No. 31/2021/NĐ-CP.
- Conditional business sectors: If the project falls under a conditional sector, foreign investors must meet the specific legal requirements before applying.
- Market commitments: Investors should prioritize sectors where Vietnam has opened its market under international commitments. This increases the likelihood of approval. Avoid registering restricted sectors to reduce the risk of license rejection.
2. Investor and Capital Requirements
2.1. Legal status of the foreign investor
Foreign investors may be individuals (over 18 years old) or organizations established under foreign law. There is no nationality restriction – investors from most countries can invest in Vietnam if they comply with legal requirements and obtain approval.
2.2. Capital contribution ratio and investment forms
Foreign investors can contribute from 1% to 100% of charter capital, depending on the business sector. Some industries have statutory limits on foreign ownership. Investors must study these limits carefully to ensure their capital ratio complies with legal requirements.
2.3. Financial capacity and investment capital
Investors must prove they have sufficient financial capacity to carry out the project. Individual investors may submit bank statements or savings books; organizations may provide audited financial statements. Vietnamese law does not impose a universal minimum capital requirement for all FDI companies, except for certain regulated sectors. Therefore, investors should register a charter capital level that matches the project’s scale and their financial ability.
2.4. Timely capital contribution
Investors must contribute the committed capital within 90 days from the issuance date of the Enterprise Registration Certificate. Capital contributions by foreign investors must be transferred through an investment capital account opened at a licensed Vietnamese bank in accordance with foreign exchange regulations. Failure to contribute capital on time may result in administrative penalties, and the company may have to adjust its charter capital if the full amount is not contributed.
3. Business Location and Legal Documents
3.1. Office and project location
Before registration, investors must have a registered office address and project site in Vietnam. The business location must comply with zoning regulations and intended use. The lessor must have valid documents proving legal ownership and the right to lease the premises.
3.2. Lease contracts and related documents
Investors should sign a lease agreement or land-use agreement and prepare documents proving the lessor’s ownership rights. These documents must be attached to the investment license application to prove that the company has a legitimate business location.
3.3. Complete documentation preparation
The dossier for establishing an FDI company is relatively complex and includes various documents:
- Investment registration application;
- Certified copy of the investor’s passport (for individuals) or Certificate of Incorporation (for organizations);
- Project proposal including details such as objectives, scale, capital, and progress;
- Proof of financial capacity;
- Office lease contract;
- Draft company charter and list of shareholders.
Some projects may require additional documents depending on the sector and location.
3.4. Additional (sub-)licenses (if applicable)
Depending on the business sector, an FDI company may need to obtain additional specialized licenses after incorporation.
Examples include:
- Retail establishment license (for trading and retail activities);
- Security and order certificate (for security service providers).
Investors should study all industry-specific legal requirements to complete necessary procedures before commencing official operations. Establishing a foreign-invested company in Vietnam requires careful planning and full legal compliance. Each step must be carried out precisely to prevent legal risks. DNP Viet Nam Law Firm is committed to accompanying investors, helping your business invest safely, lawfully, and effectively.
DNP VIET NAM LAW FIRM
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