Foreign investors establish mining companies

Vietnam is known as a country rich in natural resources, especially mineral resources. Therefore, the State always encourages investors to participate in mineral exploitation activities with the goal of developing the economy. Therefore, in order to both promote economic development and protect the natural environment, Vietnamese law has set regulations for foreign investors to establish mining companies.

Conditions for foreign investors to establish mineral exploitation companies

Foreign investors establish mining companies

According to the provisions of Clause 2, Article 53 of the Law on Minerals 2010, conditions for granting mineral exploitation licenses to both domestic and foreign investors are:

• Having equity capital equal to at least 30% of the total investment capital of mineral exploitation investment projects;
• Having an environmental impact assessment report or a written environmental protection commitment in accordance with the law on environmental protection;
• Having mineral exploitation investment projects in areas where reserves have been explored and approved in accordance with relevant plannings in accordance with the law on planning;
• Mineral exploitation investment projects must have plans on the use of specialized human resources, equipment, technologies and appropriate advanced exploitation methods; for hazardous minerals, written permission must also be obtained from the Prime Minister.

In addition, foreign investors should note some additional conditions for establishing a foreign-invested mineral exploitation company in Vietnam as follows:

• Foreign investors need to apply for an Investment Registration Certificate before applying for an Enterprise Registration Certificate (company establishment) and must apply for a mineral exploitation license before officially going into business operation;
• Foreign-invested enterprises in mineral exploitation may only establish enterprises of the following types: joint-stock companies or limited liability companies or partnerships with the investment capital ratio from 1% to 100%.

Procedures for foreign investors to establish mineral exploitation companies

• Step 1: Apply for an Investment Registration Certificate to establish a foreign-invested mineral exploitation enterprise.
• Step 2: Apply for a Certificate of establishment of a mining enterprise
• Step 3: Publish business registration information on the National Portal
• Step 4: Enterprises engrave seals and announce seal samples
• Step 5: Apply for a mineral exploitation license

The particular steps are as follow:

Step 1: Apply for an Investment Registration Certificate for establishment of a foreign-invested mineral exploitation enterprise

✔️A written request for implementation of an investment project on mineral exploitation;

✔️Copy of ID card / CCCD or passport for individual investors and documents confirming legal status for institutional investors;

✔️A document of proposal for a mineral exploitation investment project includes detailed contents;

✔️Copies of documents on financial matters of the foreign investor;

✔️Documents on land use needs, site lease agreements or site use rights for the implementation of investment projects.

Applicant agency: Department of Planning and Investment or Management Board of industrial parks, export processing zones, economic zones and hi-tech parks if the investment projects are in such zones.

Time: For investment projects not subject to investment policy decisions, the time limit for returning dossiers is 15-20 working days from the date of receipt of complete dossiers.

Step 2: Apply for a Certificate of establishment of a mining enterprise

✔️Application for registration of an enterprise on mineral exploitation;

✔️The company’s charter contains the mining industry code ;

✔️List of company members (2-member limited liability company)/List of founding shareholders and shareholders being foreign investors (joint stock companies);

Copies of the following documents:

• CCCD/ID card, passport of individual members;
• CCCD/ID card, passport of the authorized representative;
• A copy of the Business Registration Certificate for members of foreign organizations.

✔️Certificate of investment registration with foreign investors as prescribed;

✔️Written authorization if the enterprise does not directly submit the application.

Applicant agency: Business Registration Office under the Department of Planning and Investment

Time: 03 – 06 working days from the date of receipt of complete and valid documents

Step 3: Publish business registration information on the National Portal

Information on the establishment of a foreign-invested mineral exploitation enterprise must be published on the National Enterprise Registration Portal within 30 days from the date of issuance of the Certificate of Business Registration. According to Clause 1 Article 26 of Decree 50/2016/ND-CP, in case an enterprise fails to announce or does not publish on time the prescribed enterprise registration contents on the National Business Registration Portal, such enterprise will be fined from VND 1,000,000 to VND 2,000,000.

Step 4: Enterprises engrave seals and announce seal samples

Enterprises can authorize or engrave the seal themselves and notify the Department of Planning and Investment of their company’s seal samples. Enterprises can decide for themselves the form, quantity and content of the seal but must show the name and enterprise code. After receiving the notice of the enterprise’s seal samples, the Business Registration Office will issue a Receipt to the enterprise, post the enterprise’s notice on the National Business Registration Portal and issue a notice of posting information of the enterprise’s seal samples to the enterprise.

Step 5: Apply for a mineral exploitation license

Before officially coming into operation, foreign investors must apply for a sublicense in the mining industry. The issuance of mineral exploitation licenses must ensure the following principles according to Clause 1, Article 53 of the Law on Minerals 2010:

• Do not divide mineral areas that can be invested in exploitation on a large scale in order to grant mineral exploitation licenses to organizations and individuals exploiting on a small scale;
• Mineral exploitation licenses shall only be granted in areas where there are no organizations or individuals to explore and exploit minerals and not in areas banned from mineral activities, areas temporarily banned from mineral activities or areas where national mineral reserves are located.

A dossier of application for a mineral exploitation license includes:

⭕Map of the mining area;

⭕An application for a mineral exploitation license;

⭕Certified copy of investment registration certificate;

⭕Certified copy of the enterprise registration certificate;

⭕Safety appraisal documents in case of radioactive ore mining;

⭕Mineral exploitation investment projects; Decision approving investment policies;

⭕Environmental impact assessment report; Plan committed to environmental protection;

⭕Written confirmation of winning the auction in case of winning the auction of exploitation rights;

⭕Decisions approving mineral reserves by competent state agencies;

⭕A written confirmation that the owner’s charter capital is at least equal to 30% of the total investment capital of the project.

Applicant Agency:

• Provincial-level People’s Committees shall have the authority to grant licenses for exploitation of minerals for use as common construction materials, peat, scattered and small minerals in areas zoned and announced by the Ministry of Natural Resources and Environment;
• The Ministry of Natural Resources and Environment has the authority to grant mineral exploitation licenses in cases not under the competence of provincial-level People’s Committees.

Time: Within a maximum of 90 days after receiving a complete and valid dossier, the competent authority shall grant mineral exploitation licenses to foreign investors.

For free COMPREHENSIVE ADVICE ON THE SERVICE OF ESTABLISHING A MINING BUSINESS FOR FOREIGN INVESTORS IN VIETNAM, PLEASE CONTACT:

Siglaw Law Firm Head Office: 12A Floor, Sao Mai Building, No. 19 Le Van Luong Street, Nhan Chinh Ward, Thanh Xuan District, Hanoi City.

Hotline: 0961 366 238 Email: vphn@siglaw.com.vn

Southern Branch: Commercial service and residential complex at 16/9 Bui Van Ba Street, Tan Thuan Dong Ward, District 7, Ho Chi Minh City.

Central Branch: 177 Trung Nu Vuong, Hai Chau District, Da Nang City

Siglaw Law Firm

Phone: (+84) 961 366 238

Email:

• vphn@siglaw.com.vn
• vphcm@siglaw.com.vn

Headquarters: Floor 12A Sao Mai Building, 19 Le Van Luong Street, Nhan Chinh Ward, Thanh Xuan District, Hanoi City.

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