Licensing procedure
Depending on the size and the sector of investment, different licensing and registration procedures will be applied:
i) Investment registration; or
ii) Investment evaluation
Foreign investors investing in Vietnam for the first time must have an investment project and carry out either registration or evaluation procedures, in order for an IC to be issued.
Investment registration
Foreign investment projects with a total invested capital of less than VND 300 billion (approximately USD 15 million) not falling in a conditional sector are subject to “investment registration” and foreign investors of such projects must carry out the procedures for investment registration in order to be granted an investment certificate. The investment certificate also serves as the business registration of the corporate entity.
Domestic investment projects with a total invested capital from VND 15 billion to less than VND 300 billion are also subject to “investment registration”. Subject to a request of the local investor, the Licensing Authority will issue an investment certificate to such investor.
Enterprises can subsequently register additional investment projects without the need to create a separate entity.
The procedure for “investment registration” is set out in Decree 108. Accordingly, the investor must submit application documents for investment registration to the Licensing Authority. The Licensing Authority shall check the documents and issue the investment certificate to the investors within 15 working days of receiving the valid application.
Chart 1: Investment Registration Procedures
Evaluation procedures
Any investment project with a total invested capital of VND300 billion (approximately USD15 million) or more or investment projects falling in conditional sectors must undergo “an investment evaluation” by the Licensing Authority and other relevant authorities. There are two different types of evaluation:
i) Evaluation for investment projects regardless of total invested capital falling into conditional sectors; and
ii) Evaluation for investment projects with total invested capital of VND300 billion or more that do not fall into conditional sectors.
For the evaluation of investment projects with total invested capital of VND 300 billion or more, along with the application documents, the applicant must also submit an “economic – technical explanation” of the investment project to the Licensing Authority. This covers the economic – technical explanatory statement, objectives, scale, location, investment capital, implementation schedule, land use needs, and technological and environmental solutions of the investment project.
For the evaluation of investment projects falling in conditional sectors, in addition to the application documents, the investor must also demonstrate compliance with requirements specific to that conditional sector.
When assessing the application documents, the Licensing Authority may liaise with other relevant Ministries and authorities in evaluating the proposed investment project. Items to be evaluated shall comprise:
i) Compliance with master planning/zoning for technical infrastructure, master planning/zoning for land use, master planning for construction, master planning for utilization of minerals and other natural resources;
ii) Land use requirements;
iii) Project implementation schedule; iv) Environmental solutions.
The LOI stipulates that the time-limit for evaluation of investment shall not exceed thirty (30) days from the date of receipt of a complete and valid file. In necessary cases, the above time-limit may be extended, but not beyond forty five (45) days.
Chart 2: Investment Evaluation Procedures
Application dossier
In general, the following documents are required for the establishment of a 100% FOE:
i) Obtaining the seal and the seal registration
ii) Placing an announcement of its establishment in a print or electronic newspaper permitted to be circulated in Vietnam in three consecutive issues
iii) A list of investors in the prescribed format
iv) A report of the financial capability of the investors
v) An economic and technical explanation of the project “Feasibility Study”
vi) An explanation of how the conditions will be satisfied
vii)The investor’s Certificate of Incorporation
Post licensing procedures
Upon obtaining the IC, an FOE is required to conduct certain administrative formalities, including, but not limited to:
i) Request for the issuance of an IC in the prescribed form
ii) A draft charter of the company to be established
iii) Opening a bank account
iv) Registering the tax code
v) Arranging accounting team/policy
vi) Recruitment/register employees with relevant labor authorities.
