WHAT ARE IRC AND ERC? DOCUMENTS AND PROCEDURES FOR APPLYING FOR IRC AND ERC

WHAT ARE IRC AND ERC? DOCUMENTS AND PROCEDURES FOR APPLYING FOR IRC AND ERC

 

IRC and ERC are essential documents for foreign investors intending to invest in Vietnam. So, what are IRC and ERC? What are the procedures and documents required to apply for these two types of certificates? Join Siglaw to explore the details in this article.

 

What is IRC?

IRC, or Investment Registration Certificate, is a type of certificate (either in paper or electronic form) issued by the competent authority in Vietnam for foreign investors’ projects. It confirms the registration information of the foreign investor regarding that investment project.

 

What is ERC?

ERC stands for Enterprise Registration Certificate. This is essentially the business registration certificate issued by the competent authority in Vietnam to enterprises with foreign investment after they complete the IRC registration, allowing them to officially operate and invest in Vietnam.

 

Distinguishing between IRC and ERC

To differentiate between IRC and ERC, we can consider the following criteria:

	IRC	ERC
When is it needed?	Article 37 of the Investment Law 2020 requires the following cases to register for IRC: Investment projects by foreign investors. Investment projects by economic organizations where: foreign investors hold more than 50% of the charter capital, or the majority of general partners in a partnership are foreign individuals; or an economic organization holds 50% or more of the charter capital; or the total charter capital held by foreign investors and the aforementioned economic organization exceeds 50%.	After completing the IRC registration, foreign investors must register for ERC. For enterprises with 100% Vietnamese capital, they can register for ERC directly without needing to register for IRC.
Purpose	To certify that foreign enterprises with investment projects in Vietnam can implement specific projects, including their scale, rights, obligations, and the incentives they are entitled to, etc.	To certify that foreign investors are allowed to establish enterprises in Vietnam to carry out their investment activities.
Licensing authority	Typically, the Department of Planning and Investment (DPI) is authorized to issue IRCs. However, for foreign investment projects located in industrial zones, export processing zones, etc., the Management Boards of industrial zones, export processing zones, high-tech zones, and economic zones are the authorities that issue IRCs.	Department of Planning and Investment (DPI) of provinces or centrally governed cities Examples: DPI in Hanoi: 258 Vo Chi Cong Street, Xuan La Ward, Tay Ho District, Hanoi. Phone: 024.38256637 DPI in Ho Chi Minh City: 32 Le Thanh Ton, District 1; Contact numbers: +84 283 822 7495 / +84 283 827 2192
Conditions for issuing	The conditions for issuing an IRC in Vietnam are quite simple, specifically stipulated in Article 38 of the Investment Law 2020, which includes: Foreign investment projects must not fall under prohibited business sectors such as trading chemicals, minerals; trading wild plants and animals; prostitution, etc. There must be a specific location where the investment project will be implemented. The foreign investment project must align with the planning requirements stipulated in Article 33(3)(a) of the Investment Law 2020, meaning it must comply with national, regional, provincial, urban, and special administrative-economic zone planning. It must meet the investment capital requirements per land area and the necessary workforce (if required). It must satisfy requirements related to market access for foreign investors. Note on Project Duration: A maximum of 70 years for foreign investment projects in economic zones. A maximum of 50 years for foreign investment projects outside economic zones. A maximum of 70 years for projects in areas with special socio-economic difficulties or projects with large investment capital but slow capital recovery.	Meet the investment capital requirements, such as the minimum capital requirement if the business sector mandates it. For example, the vocational training sector requires a minimum capital of 2 billion VND. Comply with the specific professional conditions of each business sector. Prepare sufficient documents to apply for ERC. Meet similar requirements as those for IRC.
Content	The IRC Contains the Following Information (Article 40 of the Investment Law 2020): Name of the foreign investment project. Information about the foreign investor. Project code of the foreign investment project. Objectives and scale of the investment project. Location of project implementation and specific land area used. Total investment capital of the project (including the investor’s contribution and raised capital). Duration of the investment project. Progress of project implementation, including: Schedule for capital contribution and raising funds. Schedule for achieving the main operational objectives of the investment project. Specifically, if the investment project is divided into phases, the timeline for each phase must be clearly defined. Forms of investment incentives and support, along with the grounds and conditions for application (if any). Conditions for investors to implement the investment project (if any).	The ERC contains the following information: Name of the enterprise. Address of the enterprise. Charter capital of the enterprise. Tax identification number of the enterprise. Information about the legal representative (name, date of birth, address, position, etc.).
Issuance time	Within 5 days from the date of receiving the investment policy approval document, the competent authority will issue the IRC for projects that require investment policy approval. Within 15 days from the date of receiving a valid IRC application, the competent authority will issue the IRC for projects that do not require investment policy approval.	Within 15 working days from the date of receiving a valid application, the competent authority will issue the ERC for projects that do not require investment policy approval.

 

Procedures for Applying for IRC

The process for applying for an IRC consists of the following two steps:

Step 1: Prepare the IRC Application Documents

• Application letter for the investment project.
• A certified copy of the ID card/Passport (if the investor is an individual); or a certified copy of the Business Registration Certificate or equivalent documents confirming the legal status (if the investor is an organization).
• An investment project proposal, which includes the following contents: the investor executing the project, investment objectives, investment scale, investment capital and funding plan, location, duration, investment progress, labor demand, proposed investment incentives, impact assessment, and the socio-economic efficiency of the project.
• A copy of one of the following documents: financial statements for the last two years of the investor; financial support commitment from the parent company; financial support commitment from a financial institution; guarantee of financial capacity from the investor; documents explaining the financial capacity of the investor.
• A proposal for land use; if the project does not request the State to allocate land, lease land, or allow the change of land use purpose, then submit a copy of the site lease agreement or other documents confirming the investor’s right to use the site for the investment project.
• An explanation of technology use for projects specified in point b, clause 1, Article 32 of this Law, including: technology name, technology origin, technology process diagram, main technical specifications, condition of machinery, equipment, and main technology lines.
• A BCC contract if it is an investment project under a BCC contract.

Step 2: Submit the IRC Application

The applicant submits the documents to the Department of Planning and Investment or the Management Board of the industrial zone, export processing zone, etc., depending on whether the investment project is located inside or outside an industrial zone or export processing zone.

 

Procedures for Applying for ERC

The process for applying for an ERC consists of the following two steps:

Step 1: Prepare the ERC Application Documents

• Application for enterprise registration.
• A certified copy of the ID card/Passport (if the investor is an individual); or a certified copy of the Enterprise Registration Certificate or equivalent documents confirming the legal status (if the investor is an organization).
• Company charter.
• List of company members.
• Any other relevant documents.

Step 2: Submit the ERC Application

The applicant submits the documents to the Department of Planning and Investment where the project is implemented.

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