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Foreign investors establish a single-member Limited Liability company
With the principle of limited liability of capital contributors, a limited liability company (LLC) is an attractive type of enterprise for foreign investors when establishing FDI enterprises in Vietnam. According to Vietnamese law, LLCs are classified into LLCs with two or more members and LLCs with one member. The following article by Siglaw Law Firm will provide customers with information on foreign investors establishing LLCs with one member in Vietnam.
Understanding Single Member LLCs under Vietnamese Law
A single member limited liability company is an enterprise owned by one organization or individual, who is responsible for the company’s debts and other property obligations within the scope of the company’s charter capital.
Conditions for foreign investors to establish a single-member limited liability company
Conditions on market access
According to Article 9 of the Investment Law 2020, foreign investors establishing a single-member LLC in Vietnam must pay attention to the List of industries and occupations with restricted market access for foreign investors, including: industries and occupations that have not yet had market access and industries and occupations with conditional market access.
Conditions on prohibited and restricted business industries
Investors should note that industries and occupations prohibited from investment in Vietnam include those specified in Article 6 of the Investment Law 2020. In addition, industries and occupations with restricted investment in Vietnam are currently specified in Appendix IV of the Investment Law 2020, so investors need to carefully research to meet all conditions before investing in this area.
Procedures for Foreign Investors to Establish a Single-Member LLC
The establishment of a single-member LLC with foreign investment includes 2 steps: investment registration and business registration.
Step 1: Investment registration
*In cases where investment policy approval is not required:
Investors will submit an application for investment registration to the competent authority that issues the Investment Registration Certificate. The application for the Investment Registration Certificate includes:
– A written request to implement an investment project to establish a single-member LLC with foreign capital;
– Investment project proposal;
– Documents proving the financial capacity of the investor;
– Certified copy of personal identification documents for individual investors; copy of Enterprise Registration Certification for institutional investors;
– Lease contract or other document confirming the investor’s right to use the business location;
– Authorization letter for individuals and organizations to submit documents to the Department of Planning and Investment.
– Business cooperation contract (BCC contract) for investment projects in the form of BCC contracts.
– Proposal for land use needs (if any);
– Explanation of technology use for investment projects using technology on the List of technologies with restricted transfer (if any).
After preparing all documents, investors will submit the documents to the competent authority. The competent authority for investment registration is one of the following two agencies: the Department of Planning and Investment of the province or centrally run city; or: Management Board of industrial parks, export processing zones, high-tech zones, economic zones. Investors need to consider the specific regulations of the locality where they invest to submit the documents to the correct competent authority.
Within 15 working days from the date of receipt of the dossier, the competent authority shall consider and issue the investment registration certificate; in case of refusal, it must be made in writing and clearly state the reasons.
*In case of investment policy approval
The investor shall submit the investment policy approval dossier to the state agency. The investment policy approval dossier includes documents similar to the investment registration application dossier. After preparing all the dossiers, the investor shall submit the dossier to the competent authority receiving the dossier, which may be one of the following agencies:
– Ministry of Planning and Investment;
– Department of Planning and Investment of the province or centrally run city;
– Management Board of industrial parks, export processing zones, high-tech zones, economic zones.
The investor needs to consider the specific type of project in which he/she is investing to submit the dossier to the correct competent authority. If the enterprise is approved for investment policy, it is no longer necessary to carry out investment registration procedures.
Step 2: Registering a single-member Limited liability company with foreign investment
The application for a certificate of business registration includes:
– Application for business registration;
– Company charter;
– A valid copy of one of the documents proving the legal status of the organization or the certification of the individual who owns the company.
– The granted investment registration certificate.
After preparing all the documents, the investor will submit the documents to the Department of Planning and Investment of the province or centrally-run city; and at the same time, submit the documents online at the National Business Registration Information Portal (dangkykinhdoanh.gov.vn).
After receiving the business registration documents, the Business Registration Office will issue a Receipt of receipt of the documents to the applicant. Within 03 working days from the date of receipt of valid documents, the investor will be granted a business registration certificate. In case the competent authority refuses to grant, it must notify in writing stating the reasons.
Completing procedures after establishing a foreign-invested LLC
– Opening a bank account: A foreign-invested company is required to open a direct investment capital account for investors to transfer capital into, then transfer to a payment account to pay for the company’s operating expenses.
– Labor registration: Carry out labor registration, report and apply for Work Permits for foreign employees and social insurance for employees.
– Apply for Sub-licenses: Apply for necessary sub-licenses for conditional industries (if any).
For comprehensive advice on procedures for foreign investors to establish a single-member LLC, please contact:
Phone: (+84) 961 366 238
Email:
Headquarters: No.44/A32-NV13, Gleximco A, Le Trong Tan street, An Khanh, Hoai Duc, Ha Noi, Vietnam.
Southern branch: A9.05 BLOCK A, SkyCenter Building, 5B Pho Quang Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam.
Central branch: 177 Trung Nu Vuong, Hai Chau District, Da Nang City
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