Procedures and processes for applying for foreign investment licenses

Vietnam is currently considered a politically stable country with impressive economic growth in Southeast Asia.

As a result, Vietnam has become an attractive destination for international investors. Along with the increasing interest from foreign individuals and organizations, the demand for investment certificates in Vietnam is also increasing.

The following article will clarify the process and procedures for applying for an investment license for foreign investors, from documents, approval process to important notes.

1. What is an investment certificate for foreigners?

Investment certificate (or investment registration certificate) is a document or electronic copy issued by a management agency, recording the investor's registration information about an investment project in Vietnam.

This document is a necessary condition for foreign investors to conduct business activities in a certain area and period of time in Vietnam.

This is a mandatory procedure for any foreign individual or organization wishing to establish a foreign-invested enterprise in Vietnam.

2. Forms of foreign investment in Vietnam

Foreign investors wishing to invest in Vietnam can choose one of the following forms:

2.1. Establishing new economic organizations

Investors can establish different types of businesses such as a single-member limited liability company ("LLC"), a two-member LLC, a joint-stock company, or a partnership.

2.2. Contribute capital and buy shares from Vietnamese enterprises

Foreign investors can buy back capital and shares of domestic enterprises or contribute capital to establish new enterprises.

Receiving transfer of investment projects: Foreign investors can receive existing projects from Vietnamese enterprises through transfer.

2.3. Investment under public-private partnership (PPP) contracts

This form of public-private partnership is often applied to large projects in the fields of infrastructure, transportation, and energy.

2.4. Investment under business cooperation contract (BCC)

Foreign investors can cooperate with Vietnamese partners through business cooperation contracts, without requiring the establishment of a new legal entity.

The above forms allow foreign investors to flexibly choose the most suitable way to enter and develop business in Vietnam.

3. What are the conditions for applying for an investment license for foreigners?

To apply for an investment certificate in Vietnam, foreign investors need to meet the following conditions:

3.1. Nationality and Address

• For individuals: Must be a citizen of a country that is a member of the WTO (an organization that Vietnam participates in).
• For organizations: Head office address must be located in a WTO member country.

3.2. Registered investment industry

The intended investment industry must not be on the list of prohibited industries according to Vietnamese law. The industries must be on the WTO commitment list, i.e. industries in which Vietnam has committed to open the market.

4. Procedures for applying for investment registration license for foreigners

4.1. Documents and papers to be prepared

Base Investment Law 2020 According to Vietnamese law, the documents to be prepared include the following:

• Document proposing to implement investment project.
• House/office lease contract to carry out investment project.
• Copy of Vietnamese ID card/CCCD/passport (if the capital contributing partner is Vietnamese).
• Document verifying the foreign investor's bank account balance, ensuring the amount is equal to or greater than the expected investment capital. If the bank account is abroad, the document must be consular legalized, translated and notarized into Vietnamese.
• Investment project proposal, including:
  • Investor information.
  • Investment objectives and scale.
  • Investment capital and capital mobilization plan.
  • Location, duration and progress of investment.
  • Labor demand.
  • Proposal for investment incentives.
  • Assessment of socio-economic impact and efficiency.

For individual foreign investors: Provide a copy of the passport of the individual investor.

For foreign investors who are organizations:

• Copy of business registration certificate of the organization abroad.
• Copy of ID card/CCCD/passport of the representative of capital contribution in Vietnam.
• Audited financial statements within the last 2 years (need consular legalization, valid for 90 days).
• All documents must be in Vietnamese. If the documents are in a foreign language, they must be consular legalized and accompanied by a valid Vietnamese translation.

4.2. Certificate registration process

If foreign individuals or businesses wish to invest in the Vietnamese market, GLA experts will support businesses enthusiastically, effectively, with quick results.

• Submit application: Submit at the Investment Registration Office - Department of Planning and Investment, where the enterprise's head office is located.
• Processing time: Approximately 3-4 business weeks.
• Results received:
  • If the application is valid: The investment registration agency issues an investment certificate.
  • If the application is invalid: The agency will notify and guide the investor to supplement or edit the application.

5. Important notes when applying for a certificate

To increase the chances of successfully receiving an investment registration certificate in Vietnam, individuals and businesses need to note the following 3 points:

1. Wholesale and retail distribution business lines: To conduct retail distribution, investors need to apply for an additional distribution license issued by the Department of Industry and Trade.
2. Opening an investment capital account: After establishing a foreign-invested company, investors need to open a capital account to make capital contributions.
3. Complexity of procedures: Procedures for applying for investment certificates are often complicated and can take longer than expected, making it easy for additional requirements to arise later.
4. Using professional consulting services from GLA experts helps optimize time and costs, and minimize errors during the procedure.

6. How does GLA support foreign businesses and individuals investing in Vietnam?

With extensive expertise, GLA provides comprehensive consulting and support services to foreign investors when entering the Vietnamese market. GLA's support helps ensure a fast, accurate investment process that complies with Vietnamese law.

• Provide optimal investment strategies and support legal issues.
• Draft and complete application for investment certificate and necessary licenses.
• Help investors choose business areas in accordance with WTO commitments and Vietnamese law.
• Support working with authorities, ensuring the licensing process runs smoothly.
• Support necessary procedures for investment capital accounts, ensuring appropriate investment capital.
• Support with legal and management issues required after business establishment.
• Support in applying for distribution license or other license suitable for the investor's business line.

7. Frequently asked questions about the investment license application process for foreigners

Highlights

• Investors must have nationality or headquarters in a WTO country and register for a business line that is not prohibited in Vietnam.
• Required documents include investment proposal, location lease contract, financial documents, and copies of the investor's identification documents.
• The licensing process includes submitting an application to the Department of Planning and Investment, which takes 3-4 weeks or less to process; valid applications will receive an investment certificate.
• Industries like retail require additional licensing, mandatory investment capital accounts, and should consider using professional consulting services to avoid complications.