Request for issuance of Investment Certificate in Vietnam

With a favorable geographical location and an abundant labor force, Vietnam is increasingly demonstrating its potential for development and attracting foreign investors. Therefore, complying with legal regulations when investing in Vietnam is an important first step to facilitate economic development for investors. The following article by Taga will provide foreign investors with a basic understanding of the process and procedures for investing in Vietnam:

Table of contents

1. WHAT IS AN INVESTMENT REGISTRATION CERTIFICATE?

An Investment Certificate is an approval document for investment activities, issued by a competent authority to individuals or organizations that meet the necessary conditions. It is typically closely associated with investment projects and is especially important for individuals or organizations involving foreign elements.

This means that the Investment Certificate is a crucial prerequisite for establishing a foreign company in Vietnam. In cases where legal regulations require it, completing the procedures for obtaining an Investment Certificate before setting up a business is an essential and mandatory step.

2. FORMS OF FOREIGN INVESTMENT IN VIETNAM

The Investment Law 2020 clearly stipulates various forms of investment to encourage diversity and flexibility in the investment process. Specifically, the forms include:

Investment in establishing an economic organization

This form includes establishing a company with 100% foreign investor capital, or establishing a company between domestic investors and the government with foreign investors.

Before proceeding, the investor needs to have an investment project and comply with the procedures to ensure the ownership ratio of charter capital in accordance with securities law, equitization and conversion of state-owned enterprises, along with the conditions of international treaties.

Investment through capital contribution, share purchase, or capital contribution purchase

This form of indirect investment allows foreign investors to participate through purchasing stocks, bonds, and other valuable papers without directly engaging in the management of

investment activities. For this form, investors must fully comply with the forms and procedures related to capital contribution, share purchase, and capital contribution purchase.

Implementing an investment project

Foreign investors can participate in investment through the form of an investment contract under the public-private partnership (PPP) model. This is an investment method implemented through cooperation between the government and private investors, typically through signing a PPP contract to attract private investors to participate in implementing investment projects.

Investment under the BCC contract

Investment Contract Cooperation (BCC) is a form of collaboration among investors that does not require the establishment of a new legal entity.

The BCC contract allows participating parties to swiftly engage in investment activities without the time and costs associated with establishing and managing a new legal entity.

BCC contracts adhere to civil law regulations, and at least one party must be a domestic investor who undergoes the procedures for obtaining an investment registration certificate.

Conditions for isuancing an Investment Certificate

To propose an application for an Investment Registration Certificate, investors must ensure compliance with the following conditions:

Condition 1: Not belonging to prohibited sectors or industries for investment
The investment project must not operate in sectors or industries prohibited for business

investment under current legal regulations Condition 2: Legal implementation location

Investors must have a legal implementation location for the investment project as stipulated by the law.

Condition 3: Compliance with planning
The investment project must comply with planning regulations, with specific reference to

Article 33(3) of the 2020 Investment Law. Condition 4: Investment capital and labor scal

Ensure compliance with investment capital requirements on specific land area and the number of employed workers (if applicable).

Condition 5: Market access
Adhere to conditions related to market access, especially for foreign investors seeking

investment licenses.

These conditions are established to ensure legality, alignment with planning and market access, and compliance with relevant laws governing business investment.

3. PROCEDURES FOR ISSUING AN INVESTMENT CERTIFICATE FOR FOREIGN INVESTORS

Step 1: Check if the business sector meets market access conditions.

According to Article 9 of the Investment Law 2020, the business sectors and market access conditions for foreign investors are stipulated as follows:

“1. Market access conditions applied to foreign investors are the same as those applied to domestic investors, except for the case specified in Clause 2 of this Article.

2. Pursuant to Laws and Resolutions of the National Assembly, Ordinances and Resolutions of the Standing Committee of the National Assembly, Decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a signatory, the Government shall promulgate a Negative List for Market Access, including:

a) Prohibited business lines; b) Restricted business lines.

3. Market access conditions applied to foreign investors specified in the Negative List for Market Access include:

a) Holding of charter capital by the foreign investor in a business organization; b) Investment method;
c) Scope of investment;
d) Capacity of investors and their partners participating in investment activities;

đ) Other conditions specified in the Laws and Resolutions of the National Assembly, Ordinances and Resolutions of the Standing Committee of the National Assembly, Decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a signatory.

4. The Government shall elaborate this Article.”

Thus, foreign investors are subject to market access conditions as prescribed for domestic investors, except for cases listed in the List of sectors and industries with restricted market access for foreign investors, as stipulated in laws, resolutions of the National Assembly, ordinances, resolutions of the Standing Committee of the National Assembly, decrees of the Government, and international treaties to which Vietnam is a member.

Step 2: Prepare the application dossier

According to Article 36 of Decree No. 31/NĐ-CP detailing and guiding the implementation of the Investment Law and Clause 1, Article 33 of the Investment Law 2020, foreign investors need to prepare one set of application documents for the issuance of the Investment Registration Certificate, including the following documents:

• Written proposal for the investment project, including a commitment to bear all costs and risks if the project is not approved.
• Documents proving the legal status of the investor*: (1) For individual foreign investors: A valid copy of one of the following: passport, ID card, or other legal personal identification documents; (2) For organizational foreign investors: A valid copy of one of the following: Business Registration Certificate, Establishment Certificate, Decision of Establishment, or other legally equivalent documents.
• Documents proving the investor’s financial capacity, including at least one of the following: Financial statements of the last two years; Commitment of financial support from the parent company; Commitment of financial support from a financial institution; Guarantee of the investor’s financial capacity; Other documents proving the investor’s financial capacity.
• Investment project proposal, including: Investor or method of selecting investors; Investment objectives; Investment scale; Investment capital and capital mobilization plan; Location, duration, and progress of implementation; Information on the current land use status at the project location and the proposed land use demand (if any); Labor requirements; Proposed investment incentives; Economic and social impact and effectiveness of the project; Preliminary environmental impact assessment (if any) according to environmental protection law. If pre- feasibility study reports are required by construction law, the investor can submit them instead of the project proposal.
• Copy of the document on land use rights or other documents determining the right to use the location for the investment project, if the project does not request the State to allocate, lease land, or change land use purposes.
• Explanation of technology used in the investment project, for projects subject to appraisal and opinion on technology as per technology transfer law.
• Other documents related to the investment project, including requirements on the conditions and capacity of the investor as prescribed by law (if any).

Note: Documents issued by foreign authorities must be consularly legalized, translated into Vietnamese, and notarized according to Vietnamese law.

Step 3: Submit the application According to Clause 1, Article 38 of Decree 31/2021/NĐ-CP guiding the Investment Law, “Before carrying out procedures for the issuance or adjustment of the Investment Registration Certificate, the investor must declare the project information online on the National Foreign Investment Information System. Within 15 days from the date of online declaration, the investor must submit the application for issuance or adjustment of the Investment Registration Certificate to the investment registration agency. If the agency does not receive the application within 15 days from the date of online declaration, the online declared application is no longer valid.” Thus, before submitting the application for the Investment Registration Certificate, the foreign investor must declare the project information online on the National Foreign Investment Information System. Within 15 days from the date of online declaration, the investor must submit the application for the Investment Registration Certificate to the Investment Registration Agency.

Step 4: Receive the result Within 15 days from the date of receiving a complete application, the investment registration agency will issue the Investment Registration Certificate. In case of refusal, the agency must notify the investor in writing and clearly state the reasons.

SERVICE FEES AND PROCESSING TIME AT TAGA

The procedure for applying for an investment certificate in Vietnam for foreign individuals and organizations is quite complex and often takes longer than the stipulated time, not to mention potential subsequent issues. Therefore, hiring a professional service provider can help investors save time and avoid unexpected costs. Specifically:

• Fee for applying for an Investment Registration Certificate in Vietnam: 35,000,000 VND
• Completion time: 20 – 30 working days
• Delivered results:

+ Investment Registration Certificate + Business Registration Certificate
+ Company seal