Establishing a foreign-invested enterprise in Vietnam would not be too stressful if the Investor understands the below steps and its order.

Step 1. Conduct a survey

This is an initial step that may help the Investor having the basic insight about the industry, location, complexity of the administrative procedure, estimated lead time to obtain a license, etc. Based on the collected data, the Investor would have a comprehensive assessment on the conditions for doing business in Vietnam, determining the feasible time and cost consuming to complete the establishment procedure or adjust the investment plan if any to meet the target.

Step 2. Prepare information

Based on the survey results, the Investor will prepare the necessary documents for establishing the company, including but not limited to the following:

• Information about the legal capacity of the Investor. If the Investor is an individual, a passport is required. In case the Investor is an organization, it should be: a document stating the Investor’s legal status (Business License, Charter, or any other similar documents), documents proving the Investor’s financial capacity, and a Passport of the person(s) that will representing for the Investor in Vietnam.
• Legal documents on the proposed location of the head office and the supporting document proving its lawful use of such premises (i.e lease agreement). Such document is required to be attached in the dossier for applying the investment registration certificate, so at the pre-licensing period when the company in Vietnam has not been established yet, the lease agreement would be made between the lessor/landlord and the parent company (in case the Investor is an organization) or one of the members (in case the Investors are individuals or both individual and organization). Of note, when working with the lessor, the Investor may need to make a deposit or payment and set out some binding terms. Hence, the survey is necessary for the Investor to estimate a schedule for approving the application for business establishment in Step 3.

Step 3. Apply for business establishment

Practically, the Investor must complete the licensing procedure for operating the business including 02 processes:

• Investment Registration:

The dossier will be filed to the Department of Planning and Investment to apply for the Investment Registration Certificate (“IRC”). Typically, the processing time will be about 15 working days following the application date, however, if the intended business line is subjected to the areas that Vietnam has not committed yet, the investment registration agency will need to longer time to consult with other management authorities.

• Enterprise Registration:

After completing the investment registration and being granted the Investment Registration Certificate, the Investor must submit a dossier for applying the Enterprise Registration Certificate (“ERC”). The estimated time to obtain the Enterprise Registration Certificate is 03 working days. Accordingly, the ERC evidences the legal status of the organization managing the investment project under the granted IRC.

After having the ERC, the Investor needs to conduct other steps in making the company’s stamp.

Step 4. Open the bank account

After completing the works mentioned in Step 3, the newly established enterprise may enter into the contracts and transactions. However, in order to contribute the investment capital into and make payments from the enterprise’s bank account, the Investor must open the enterprise’s bank account at any commercial bank. Please be noted that 02 separated bank accounts should be opened, including a Direct investment capital account and a Current account, for the purposes of capital contribution and payment for the enterprise’s transaction, respectively.

Step 5. Register the tax information

According to the regulations of Vietnam, the Enterprise must complete the registration of initial tax information within legal timeframe. Meanwhile, the license tax should be paid and the Investor must register the digital signature and e-invoice for the enterprise. This is a fundamental condition for the enterprise to be eligible in issuing invoices and conduct other tax-related activities.

We hope that the necessary information and the must-do-steps mentioned hereinabove, the Investor can determine the expected time and costs consuming for your success of investment in the form of establishing a newly enterprise, and you would have the awareness on the related services should be considered for engaging with the service providers, including but not limited to office lease.

Time of writing: 16/02/2023

The article contains general information that is of reference only. If you need any official legal opinion on this topic or any other legal matters, please contact to our lawyer at info@cdlaf.vn