Opportunities of investment environment in Vietnam
According to statistics in recent years, it can be said that Vietnam is an ideal investment environment for foreign investors. Foreign-invested companies and enterprises in Vietnam are increasing day by day and have not cooled down yet. The following article of S4B aims to assist foreign investors to easily carry out transactions and procedures for establishing foreign-invested enterprises. When setting up a foreign-invested business, there are a few things to keep in mind to ensure a smooth start-up process and compliance with legal regulations. Here are some important things to consider about investment environment in Vietnam.
1. Regarding requirements for Investment environment in Vietnam
1.1 Investment Capital
Investment capital includes two main types of equity and debt capital, in which the equity capital must be at least 20% of the total investment capital. Investors who want to establish a company in Vietnam or find Investment environment in Vietnam must obtain an investment certificate from a licensing agency. The normal time limit for issuance of an Investment Certificate is 15 days for an investment project that is not subject to an investment decision, but in practice the licensing time is usually longer depending on the consultation process and assessment by the relevant authority.
Vietnam offers an ideal investment environment for foreign investors
Current law does not require a minimum amount of capital to set up a company or find Investment environment in Vietnam, except for certain investment sectors or conditional business lines. According to the experience of long-term experts, in order to facilitate the process of applying for an Investment Certificate, the Investor should consider a capital level sufficient to successfully realize the intended business objectives.
1.1 Legal basis
The establishment of a foreign-invested enterprise looking for Investment opportunities in Vietnam must be consistent with the following legal documents and legal bases:
- Schedule of WTO commitments – Vietnam’s commitments on trade and services in the WTO
- Multilateral trade agreements committed to investment issues
- Enterprise Law 2020, amendments and supplements in 2022 with guiding documents
- Investment Law 2020, amendments and supplements in 2022 with guiding documents
- Trade agreements with foreign investors with nationality
2. Regarding the contribution of investment capital and charter capital after the establishment of a foreign-owned company
Foreign investors are obliged to contribute capital according to the schedule stated in the Investment Certificate. In case, the time limit for capital contribution is not in accordance with the commitment, the competent authority may apply relevant sanctions, including the revocation of the Investment Certificate.
There are some cases where the progress of capital contribution is delayed due to objective reasons, so investors need to estimate the time limit for capital contribution as well as the time for project implementation to avoid being inspected and fined by competent authorities. and must adjust the Investment Certificate related to the new capital contribution term in order to transfer the investment capital.
3. Forms of establishment of foreign-invested companies/enterprises
There are 2 forms of establishment of foreign-invested companies and enterprises, specifically:
3.1 Establishment of a foreign-invested company in the form of capital contribution or share purchase
With this form of capital contribution, foreign investors will contribute capital to a Vietnamese company that has a certificate of business registration.
- Foreign investors can contribute from 1-100% of capital to the desired company (depending on the field of operation of the company).
- Foreign investors purchase contributed capital or shares of Vietnamese companies. As a result, the company became a foreign invested company.
3.2 Establishment of a foreign-invested company in the form of capital contribution from the beginning
- Foreign investors carry out capital contribution procedures as soon as the company is established in Vietnam.
- Depending on the field of operation and the company’s charter, investors can contribute from 1-100% of the capital.
Points to note when setting up a foreign-owned company in Vietnam
4. Frequently asked questions when setting up a foreign-invested enterprise
4.1 How can foreign investors invest in Vietnam and what is investment environment in Vietnam?
- Buy shares, buy capital contribution, invest to contribute capital
- Invest in the establishment of an economic organization
- Investment in the form of BCC contract
- Implementation of investment projects
- New types of organizations and forms of economic investment must comply with the Government’s regulation
4.2 Do foreign-invested companies receive investment incentives?
These companies DO receive incentives. However, companies are only entitled to the same investment incentives as Vietnamese enterprises. And in order to receive incentives, Investment opportunities in Vietnam companies must fully meet the conditions prescribed by Vietnamese law.
4.3 What taxes should a foreign-invested company pay?
Similar to Vietnamese-owned enterprises, foreign-invested companies must pay the following basic taxes: Value Added Tax (VAT), Import and export tax (if there is an organization engaged in import and export activities), Corporate income tax.
4.4 When establishing a foreign-invested company, an investment certificate is required?
Some cases where foreign-invested companies need to carry out procedures for issuance of an Investment Certificate:
- Investment projects of economic organizations
- Investment projects of foreign investors
4.5 Can a foreign-invested company establish a representative office or business branch?
- Legal basis: Schedule of WTO commitments
- Foreign-invested companies have the right to establish their own representative offices, branches and business locations.
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Contact us now to embark on your seamless business journey and Investment environment in Vietnam. Our team of experienced professionals is eager to guide you through every aspect of setting up your foreign-invested enterprise. With S4B by your side, you can confidently navigate the local regulations, tap into the thriving market, and elevate your business to new heights. Together, let’s build your dream venture in Vietnam – the land of endless possibilities!
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