Set up a company in Vietnam is not simple, there are a number of important steps that must be taken in order to ensure proper compliance with the country’s laws. Here is our guide for setting up a business in Vietnam step by step.
1. Investment Certificate
For first time foreign investors must have an investment project before being granted an investment certificate. The investment certificate also serves as the business registration certificate. The investment certificate shall be issued as part of the investment registration and/or evaluation processes based on (i) the type of project, (ii) the scale of invested capital and (iii) whether such project is in a conditional investment sectors.
The investment certificate for foreign invested project will have a fixed term not longer than 50 years, which by law may be extended up to 70 years with the approval of the Government.
The investment certificate will set out the specific scope of business activities that a foreign investor is permitted to undertake in Vietnam, the amount of investment capital, the location and the land area to be used, and the relevant incentives (if any). The investment certificate must also indicate the project implementation schedule for the investment.
The licensing authority shall issue an investment certificate within a time limit of 15 working days (for cases of a foreign project subject to the registration process) or 30 working days (for cases of a foreign project subject to the evaluation process) from the date of receipt of a complete and valid application.
The registration process applies to a foreign-invested project with invested capital of less than VND300 billion and is not included in the list of conditional business sector. The evaluation process applies to the two following cases:
- Foreign projects with capital of at least VND300 billion: the evaluation process will in substance focus on the project’s compliance with the applicable infrastructure master plan, land use master plan and the master plan for raw materials and other natural resources. Other factors to be considered include land use requirements, project implementation schedule and environmental impact.
- Foreign projects included in the list of conditional business sectors regardless of the scale of the invested capital: The evaluation process will focus on compliance with applicable sector conditions. If the project has capital exceeding VND 300 billion other factors as discussed above shall also be considered.
3. Licensing Authority
The licensing authority is further decentralized to provincial people’s committees and provincial boards of management of industrial zones, export processing zones and hi-tech zones (“Board of Management”). With respect to certain important or sensitive business sectors, the grant of investment certificate by a provincial people’s committee or a Board of Management must be based on an investment policy or economic plan that has already been approved by the Prime Minister.
a. Prime Minister’s Approval
The following projects are required to be obtained the approval on the investment policy from the Prime Minister:
(i) Construction and commercial operation of airports; air transportation;
(ii) Construction and commercial operation of national sea ports;
(iii) Exploration, production and processing of petroleum; exploration and mining of minerals;
(iv) Radio and television broadcasting;
(v) Commercial operation of casinos;
(vi) Production of cigarettes;
(vii) Establishment of university training establishments;
(viii) Establishment of industrial zones, export processing zones, high-tech zones and economic zones.
If any of these projects listed above are already included in an economic plan approved by the Prime Minister and are consistent with the conditions in an international treaty to which Vietnam is a signatory, the provincial people’s committee or the Board of Management can proceed to grant the investment certificate without obtaining a separate approval from the Prime Minister. If any of these projects are not included in an economic plan approved by the Prime Minister or does not meet conditions of an international treaty to which Vietnam is a signatory, the provincial people’s committee or the Board of Management must obtain approval from the Prime Minister prior to the grant of the investment certificate and concurrently coordinate with the MPI and other ministries to propose to the Prime Minister to decide on any supplement or adjustment to the economic plan.
b. Provincial People’s Committee
The provincial people’s committee has the authority to consider and grant an investment certificate to any investment project within its provincial territory regardless of the amount of investment capital or intended investment activities. In particular, a provincial people’s committee is authorized to license:
Investment projects located outside industrial zones, export processing zones and high-tech zones; and
Investment projects to develop infrastructure for industrial zones, export processing zones and high-tech zones where the Board of Management in that province has not been established.
The provincial Department of Planning and Investment is responsible for receiving application documents for investment certificates for and on behalf of the relevant people’s committees.
c. Board of Management
The Board of Management will consider and grant investment certificates to investment projects made in an industrial zone, export processing zone and high-tech zone.