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Establishing a foreign-invested trading company in Vietnam
Which type of trading company must carry out the procedures for issuance of an Investment Registration Certificate?
Enterprises need to apply for an investment certificate when establishing a foreign-invested trading company that:
- Establishing a commercial enterprise with FDI capital from 1% to 100% of capital contributed by foreign investors from the beginning;
- Foreign-owned trading companies (which have been granted investment registration certificates in Vietnam) continue to establish more economic organizations; investment, capital contribution, purchase of shares and contributed capital of economic organizations; Investment under a BCC contract in one of the following cases must carry out the procedures for issuance of an Investment Certificate: Establishing a new FDI trading company or contributing 1% to 100% of the company’s charter capital.
Dossier and procedures for establishing a foreign-invested trading company in Vietnam
Method 1: Establishment of a new foreign-invested trading company, foreign investors contribute capital since inception.
Step 1: Issuance of Investment Registration Certificate of a foreign-invested trading company
- Before carrying out the procedures for issuance of the Investment Registration Certificate of a trading company, the investor shall declare online information about the investment project on the “National Information System on Investment” (according to Official Letter No. No. 8909 /BKHĐT-PC). Within 15 days from the date of online declaration, the investor shall submit the application for the Investment Registration Certificate to the Investment Registration Authority.
- After the Investment Registration Authority receives the application, the investor is granted an account to access the National Information System on Foreign Investment to monitor the processing of the application.
- The investment registration agency uses the National Foreign Investment Information System to receive, process and return investment registration results, update the status of application processing and issue code numbers for projects. Investment project in a trading company with foreign capital in Hanoi.
Dossier of application and place to submit the Investment Certificate for a foreign-invested trading company in Hanoi
The Investment Law 2020 stipulates the documents to be submitted as follows:
| No. | Documents | Number of documents | Type |
| 1 | A written request for implementation of an investment project in a trading company with foreign capital | 2 | Original |
| 2 | ID card or passport (for individual investors); copy of ERC or other equivalent document certifying legal status (for institutional investors); | 2 | Certified copy |
| 3 | Proposal for investment project to establish a trading company with foreign capital, including the following contents: investor implementing the project, investment objectives, investment scale, investment capital and mobilization plan capital mobilization, location, duration, investment schedule, labor demand, proposal for investment incentives, assessment of the project’s socio-economic impact and efficiency;
Note: If the project has been operated, the investor replaces the Investment Project Proposal with the Report on the implementation of the investment project. |
2 | Original |
| 4 | Provide 01 of the following documents proving financial capacity: Financial statement of the last 2 years of the investor; commitment to financial support of the parent company; financial institution’s commitment to financial support; guarantee on the financial capacity of the investor; documents explaining the financial capacity of the investor; | 2 | Certified copy |
| 5 | The lease contract for the office of the trading company and the land use right certificate of the real estate of the lessor | 2 | Certified copy |
In addition, if the enterprise uses technology in its business activities, or has a need to lease land from the state, it is necessary to submit the following additional documents:
- Proposed land use needs. If the project to establish a foreign-invested commercial company does not request the State’s approval for land allocation, land lease, or permission to change the land use purpose, a copy of the location lease agreement or other certificates must be submitted to prove that the investor has the right to use the site to implement the investment project;
- Explanation on the use of technology for investment projects to establish foreign-invested trading company, for projects using technologies restricted from transfer in accordance with the law on transfer technology includes the following contents: technology name, technology origin, technological process diagram; main technical parameters, use status of main machinery, equipment and technological lines
Place of application: According to Article 36 of Decree 31/2021/ND-CP
- Department of Planning and Investment of province/city;
- Or, if the trading investment project is implemented in 02 or more different provincial-level administrative units, it shall be submitted to the Department of Planning and Investment of a province or cities under the central government where the investor implements the project. invest, place or plan to set up an executive office to apply for the Investment Certificate for the project. For example, if an investment project is implemented in Hanoi and Thai Nguyen, the investor can submit an application at the Hanoi Department of Planning and Investment or the Thai Nguyen Department of Planning and Investment.
Total time: 15 days from the date of receipt of complete and valid dossiers
Step 2: Register to establish a commercial enterprise with foreign capital in Hanoi
After obtaining the Investment Registration Certificate, the investor shall submit an application for the Certificate of Business Registration to the Business Registration Office of the Department of Planning and Investment to establish a trading company with foreign-invested capital.
An application file for an enterprise registration certificate includes:
- A copy of the Investment Registration Certificate for the establishment of an FDI commercial enterprise;
- Business registration application form;
- Draft enterprise charter;
- List of members (for limited liability companies with 2 members), list of founding shareholders (for joint stock companies);
- A valid copy of one of these papers:
- For individuals: A valid ID card or passport or a valid passport for an individual;
- For organizations: Certificate of business registration for organizations and enclosed with personal identification papers, authorization decision of the authorized representative of the organization;
- Decision on capital contribution for members of commercial companies, shareholders of the company being organizations;
- The contract authorizes the law firm Siglaw to carry out the procedure.
- Place of application: Business registration office – Hanoi Department of Planning and Investment.
Total time: Completing the preparation of the application file for the Business Registration Certificate: 04 – 06 working days; Processing dossiers: 05-07 working days.
Step 3: Engrave the legal entity’s seal and announce the seal sample
The time limit for engraving the seal of the legal entity and announcing the sample of the company’s seal is 3 working days
Step 4: Post the report after being granted the Enterprise Registration Certificate
Once the Certificate of Business Registration has been successfully issued, the trading company or if authorized by the company, Siglaw will proceed to submit the application for disclosure of information on the establishment of a foreign-invested trading company on the Portal. national business registration in accordance with the law. The content of the announcement includes the following contents:
- Company name;
- Company headquarters;
- Authorized capital;
- Information on the legal representative of the trading company;
- Business sector;
- List of company members (for limited companies), list of founding shareholders and shareholders being foreign investors (for joint stock companies).
Time limit for publishing business registration contents: Compulsory within 30 days from the date of issuance of the business registration certificate.
Method 2: Dossier and procedures for establishing a foreign-invested trading company by foreign investors contributing capital or buying shares of a Vietnamese company
For foreign investors who contribute capital or purchase shares in a Vietnamese trading company that already has an enterprise registration certificate (even in the case of purchasing 100% of the company’s contributed capital), they do not have to carry out procedures for granting an Investment Registration Certificate.
It should be noted that in 2019, if foreign investors jointly contribute capital with Vietnamese companies, enterprises, and investors to establish a company (also known as a joint venture between Vietnam and foreign investors) then the steps to optimize and minimize procedures should be as follows:
- Step 1: Establishment of a Vietnamese trading company;
- Step 2: Apply for a qualified license for conditional occupations;
- Step 3: Transfer of contributed capital to foreign investors;
- Step 4: Apply for a business license for the trades that exercise the right to import, export and distribute (if retailing goods).
The advantage of the above option is that a foreign-invested company, although having a member who is a foreign investor, does not have to carry out the procedures for granting an investment certificate like method 01. This also helps to withdraw Shorten the procedures later when there is a change in some contents of enterprise registration with state agencies. Specifically:
- Simple procedure: A company with an enterprise registration certificate only has to make changes when such company has the same change as a Vietnamese enterprise;
- Not having to perform the obligation to report on project implementation, investment supervision reports, etc.;
- There is no need to carry out the procedures for updating investment information on the investment management system.
Legal basis
- Law on Investment 2020
- Decree 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Investment Law
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