Capital contribution and share purchase in enterprises established in Vietnam are considered as one of the popular forms of investment in Vietnam and are understood as indirect investments. Conditions on Vietnam’s commitment regarding business sectors at WTO schedule and business license are applied for indirect investment the same as direct investment. However, capital contribution or share purchase is currently chosen by many investors because of its simple legal procedures (not to set up an investment project as a direct investment) as well as inheriting strengths in capacity, experience, customers, brand, etc. from the enterprises in which investors contribute capital or purchase shares.
Procedures for Capital contribution, share purchase in Vietnamese enterprises
| Process | Detailled description |
| Step 1 | Prepare documents
The investor should prepare a list of documents as listed above, including documents that shall be translated and consular legalized. Consider the operation locations, the lessor’s right to lease, and the right to do business at the proposed location. In addition, investors also need to determine Vietnam’s tax incentives for foreign investors when doing business in Vietnam to select operating locations to enjoy tax incentives. |
| Step 2 | Application for Investment Registration Certificate (Investment Project Formulation)
The dossier will be submitted at the investment registration office of the Department of Planning and Investment or the Management Board of Industrial Parks, depending on the location of operation of the enterprise. Normally, the settlement time will be about 15 working days, but if the expected sector is in case Vietnam has not committed, the investment registration agency can collect opinions of specialized management agencies, and this time will last longer from 2-3 months. |
| Step 3 | Submission of Enterprise Establishment Registration dossier
After completing the investment registration and having been granted the Investment Registration Certificate, the Investor submits the dossier for Enterprise Establishment Registration. The settlement time will be 03 working days and the result received by the investor will be the Enterprise Registration Certificate. This document recognizes the legal entity status of the investment project management organization according to the granted Investment Registration Certificate. |
| Step 4 | Information disclosure and corporate seal
Immediately after receiving the Enterprise Registration Certificate, the Investor proceeds to publish enterprise information on the national portal on enterprise registration and make a seal |
| Step 5 | Carry out the initial tax registration procedure
The law currently sets a certain time limit to force enterprises to complete initial tax declaration procedures for newly established enterprises. At this step, enterprises also need to complete the obligation to pay license tax and register digital signatures and electronic invoices. This is a condition for enterprises to be allowed to issue invoices to clients as well as other tax-related activities. |
| Step 6 | Apply for individual licenses
In addition, enterprises shall carry out procedures to issue Enterprise Registration Certificates (ERC), and Investment Registration Certificates (IRC). In some cases, the law sets mandatory requirements for foreign enterprises and investors to carry out procedures to be licensed and approved by specialized management agencies before actual business activities, such as: Certificate of food safety conditions is a mandatory condition that enterprises providing food services, restaurants, processing… must comply with. Business license When foreign-invested enterprises carry out business activities related to several special service sectors and goods purchase and sale activities, they are required to carry out procedures for applying for a business license before actual operations, typically we can mention logistics services, commercial intermediaries, e-commerce…And several other types of licenses depending on the specific field of operation of the enterprise |
