FOREIGN INVESTORS ESTABLISH ONE-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 a business in Vietnam. Under Vietnamese law, limited liability companies are classified into two-member or more limited liability companies and one-member limited liability companies. The article of Siglaw Law Firm below will provide you with information about the establishment of a limited liability company as a member of a foreign investor in Vietnam.
One-member limited liability company under Vietnamese law
A one-member limited liability company is an enterprise owned by an organization or an individual, responsible for debts and other property obligations of the company to the extent of the amount of the company’s charter capital.
Conditions for foreign investors to establish a one-member LLC
Market access conditions
According to the provisions of Article 9 of the Law on Investment 2020, foreign investors establishing a one-member limited liability company in Vietnam must pay attention to the list of industries and trades restricted from market access for foreign investors, including industries and trades that have not yet had market access and industries, conditional market access profession.
Industry conditions prohibited or restricted from doing business
Investors should note that industries prohibited from business investment in Vietnam include those specified in Article 6 of the Law on Investment 2020. In addition, industries restricted from investing in Vietnam are currently specified in Appendix IV of the Investment Law 2020, so investors need to research carefully to meet the conditions before investing in this area.
Foreign investors establish one-member limited liability companies
The establishment of a one-member limited liability company consists of 2 steps: investment registration and enterprise registration.
Step 1: Investment registration
*For cases where investment policy approval is not required:
The investor shall submit a dossier of application for investment registration to the competent authority issuing the Investment Registration Certificate. A dossier of issuance of an Investment Registration Certificate includes:
– A written request for implementation of an investment project;
– Investment project proposal;
– Documents proving the financial capacity of the investor;
– Certified personal identification documents for individual investors; copy of enterprise registration for institutional investors;
– Site lease agreement or other document confirming that the investor has the right to use the business location;
– A written authorization for individuals and organizations to submit dossiers at the Department of Planning and Investment.
– Business cooperation contract (BCC contract) for investment projects in the form of BCC contract.
– Proposing land use needs (if any);
– Explanation on the use of technology applied to investment projects, for projects using technologies on the list of technologies restricted from transferring (if any).
After preparing all documents, investors will submit dossiers to the competent authority. The agency competent to register investment is one of the following two agencies: the Department of Planning and Investment of provinces and centrally-run cities; or: Management boards of industrial parks, export processing zones, hi-tech parks, and economic zones. Investors need to consider the specific regulations of the locality in which they invest to apply to the right competent authority.
Within 15 working days from the date of receipt of the dossier, the competent agency shall consider and issue the investment registration certificate; In case of refusal to grant a license, it must be made in writing and clearly state the reasons.
*In case of an application for approval of investment policy
The investor will apply for approval of the investment policy to the state agency. A dossier of application for approval of an investment policy includes documents similar to a dossier of application for investment registration. After preparing a complete dossier, the investor will submit the dossier to the competent authority receiving the dossier, which may be one of the agencies:
– Ministry of Planning and Investment;
– Department of Planning and Investment of provinces/cities;
– Management boards of industrial parks, export processing zones, hi-tech parks, and economic zones.
Investors need to consider specifically the type of project they invest in to apply to the right authority. If the enterprise is approved for investment policy, there is no need to carry out investment registration procedures anymore.
Step 2: Register your business
A dossier of applications for an enterprise registration certificate includes:
– An application for business registration;
– The company’s charter;
– A valid copy of one of the documents proving the legal status of the organization or an attestation document of the individual who is the company owner.
– The investment registration certificate has been issued.
After preparing all dossiers, investors will submit dossiers at the Department of Planning and Investment of provinces/cities; at the same time, apply online at the National Business Registration Portal (dangkykinhdoanh.gov.vn).
After receiving the enterprise registration dossier, the Business Registration Office shall hand over the receipt of the application to the applicant. Within 03 working days from the date of receipt of a valid dossier, the investor will be issued an enterprise registration certificate. In case the competent authority refuses to grant it, it must issue a written notice clearly stating the reason.
Complete post-establishment procedures
– Open 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 current account to pay the company’s operating expenses.
– Labor registration: Carry out labor registration, report, and apply for work permits for foreign workers and social insurance for employees.
– Apply for sublicenses: Apply for the necessary sublicenses for conditional occupations (if any).
For advice on the procedures for establishing a one-member limited liability company comprehensively, please contact:
Phone: (+84) 961 366 238
Headquarters: Floor 12A Sao Mai Building, 19 Le Van Luong Street, Nhan Chinh Ward, Thanh Xuan District, Hanoi City.
Southern branch: No. 21 N4 street, Commercial and service complex and housing 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