How is the procedure for establishing a foreign-invested company implemented?

The procedure for establishing a foreign-invested company is a mandatory legal process for foreign investors wishing to conduct business in Vietnam. Current laws require investors to prepare a complete dossier, comply with specific procedural steps, and pay statutory fees. The following article enables readers to properly understand the applicable regulations, avoiding legal risks, saving time, and ensuring smooth investment operations.

I. General overview of the procedure for establishing a foreign-invested company

The procedure for establishing a foreign-invested company in Vietnam involves foreign investors contributing capital to establish a new enterprise or acquiring capital contributions in an existing enterprise. Such a procedure is governed by the Law on Investment, the Law on Enterprise, and relevant guiding regulations.

Due to the foreign investment element, the establishment process is generally more complex than one applicable to domestic enterprises, often involving additional steps such as obtaining approval of investment policy and issuance of an Investment Registration Certificate. 

II. Legal regulations on the procedure for establishing a foreign-invested company

1. Dossier components for establishing a foreign-invested company

The dossier for establishing a foreign-invested company in Vietnam includes:

• Application for enterprise registration;
• Charter of the 100% foreign-owned company;
• List of members / founding shareholders and shareholders who are foreign investors;
• Copies of:
  + Citizen Identification Cards or Passports of members who are individuals;
  + Establishment decisions, Enterprise Registration Certificates of organizations, and letters of authorization; lawful personal identification documents of authorized representatives of organizational members;
• Enterprise Registration Certificates or equivalent documents of organizational members, which must be consularly legalized;
• Investment Registration Certificate for foreign investors.

2. Procedures for establishing a foreign-invested company

The procedure for establishing a foreign-invested company in Vietnam is conducted in a strict sequence to ensure transparency and compliance with legal regulations. The basic steps are as follows:

- Step 1: Preparation of the dossier

• After obtaining the Investment Registration Certificate, the investor must prepare the dossier for establishing the foreign-invested company, including:
• Application for enterprise registration;
• Charter of the foreign-invested company;
• List of members / founding shareholders and shareholders who are foreign investors;
• Copies of: Citizen Identification Cards or Passports of individual members; establishment decisions, Enterprise Registration Certificates of organizations, letters of authorization, and lawful personal identification documents of authorized representatives of organizational members;
• Enterprise Registration Certificates or equivalent documents of organizational members, duly consularly legalized;
• Investment Registration Certificate for foreign investors.

Note: Documents issued or certified by competent foreign authorities must be consularly legalized and translated and notarized in accordance with Vietnamese law. Depending on specific cases, additional documents may also be required.

- Step 2: Submission of the dossier to the Department of Planning and Investment (Business Registration Division)

• Processing time: 5–7 working days from receipt of a complete and valid dossier.

- Step 3: Publication of enterprise registration information

• After completing enterprise registration procedures with the Department of Planning and Investment, the next step is publication of enterprise registration information.
• Enterprise registration information must be publicly disclosed on the National Business Registration Portal within 30 days from the date of issuance of the Enterprise Registration Certificate.
• Implementing authority: Announcement division of the Business Registration Authority;
• Processing time: within 30 days.

- Step 4: Company seal

This is the final step in the procedure for establishing a 100% foreign-owned company. It is conducted after the Enterprise Registration Certificate has been issued and the establishment announcement has been published.

The company arranges for seal engraving and notifies the use of its seal specimen on the National Business Registration Portal. The company has the right to decide on the seal design and the number of seals.

• Receiving authority: Business Registration Division – Department of Planning and Investment where the company’s headquarters is located;
• Processing time: approximately 5–8 working days.

This process requires accuracy and full compliance with administrative procedures. Therefore, support from a professional consultancy firm helps investors save time, avoid errors, and promptly commence lawful operations.

3. Fees payable for establishing a foreign-invested company

Pursuant to Article 32 of Decree No. 01/2021/ND-CP, companies must pay registration fees upon submission of establishment dossiers. Specifically, under Circular No. 47/2019/TT-BTC, applicable fees include:

• Fee for publication of enterprise registration information: 100,000 VND (approximately USD 4.09), payable upon dossier submission to the Business Registration Division;
• If an enterprise establishment is registered online, only the publication fee is required; no enterprise registration fee is payable.

After establishment, the company must also pay annual business license tax based on its charter capital:

• Charter capital exceeding 10 billion VND: Business license tax of 3,000,000 VND /year (approximately USD 122.77);
• Charter capital of 10 billion or less VND: Business license tax of 2,000,000 VND/year (approximately USD 81.85).

Note: The above fees are as a preference, without applying for cases.   

III. Certain questions regarding the procedure for establishing a foreign-invested company

1. Are there sanctions for failure to properly implement the establishment procedure?

Failure to properly comply with procedures for establishing a foreign-invested company may result in sanctions under Vietnamese law, including:

• Violations: Failure to obtain an Investment Registration Certificate or lawful investment license may lead to administrative sanctions under the Law on Investment 2020;
• Sanctions: Competent authorities may impose warnings, fines, or suspension of operations until compliance is achieved. Fines may range from several million to hundreds of millions of Vietnamese dong, depending on the severity;
• Revocation of investment certificates: In serious cases, investment licenses may be revoked or invalidated;
• Legal and financial risks: Non-compliance may adversely affect business operations and corporate reputation.

Accordingly, proper compliance with establishment procedures is essential to ensure lawful operations and avoid legal consequences.

2. How long does it take to complete the procedure for establishing a foreign-invested company?

Enterprises should ensure that dossiers for the Investment Registration Certificate and Enterprise Registration Certificate are complete and valid to enable timely processing by competent authorities. Incomplete or incorrect dossiers will be rejected, requiring resubmission and extending the establishment timeline.

• Issuance of Investment Registration Certificate: 15–25 working days;
• Issuance of Enterprise Registration Certificate: 5–7 working days;
• Company seal engraving: 1 day;
• Initial tax declaration, digital signature registration, and e-invoice registration: 3–5 working days.

Note: The aforesaid time can be adjusted due to change in laws or each case’s complex.  

3. What steps must be taken after completing establishment procedures?

After completing establishment procedures, the company must implement the following steps to operate lawfully and effectively in Vietnam:

• Tax registration with local tax authorities;
• Open of bank accounts, including a capital account to contribute charter capital as committed in the Investment Registration Certificate;
• Registration and use of the company seal;
• Establishment of accounting records and compliance with accounting obligations;
• Notification of labor usage if employees are hired;
• Registration of social insurance, health insurance, and unemployment insurance for employees;
• Environmental declarations or registrations, if applicable.

4. Is leasing office space mandatory when establishing a foreign-invested company?

Pursuant to Article 23 of the Law on Investment 2020 and Article 23 of Decree No. 31/2021/ND-CP, foreign investors must have a lawful location for the company’s headquarters. It may be evidenced by office lease agreements, house or land lease contracts, or lawful property documents of the lessor. For manufacturing projects, investors must provide factory lease agreements within industrial zones or clusters.

Accordingly, leasing office space or having a lawful location is mandatory for completing the dossier and obtaining the Investment Registration Certificate.

5. What conditions must foreign investors meet to establish a foreign-invested company?

Foreign investors must satisfy the following conditions:

• Investment sectors: Compliance with permitted investment sectors; prohibited or restricted sectors are not allowed;
• Nationality and investor status: Investors may be individuals or organizations from WTO member countries or countries having bilateral treaties with Vietnam; certain sectors require investors to be legal entities;
• Financial capacity: Investors must demonstrate sufficient financial capacity for the investment project;
• Project location: Lawful premises for the headquarters and project implementation;
• Special conditions: Compliance with sector-specific requirements, including professional experience where applicable;
• National security and environmental compliance: Investors must comply with regulations on national security and investment environment protection.

IV. Legal advisory services for establishing a foreign-invested company

NP Law’s legal advisory services for establishing foreign-invested companies support investors in dossier preparation, procedural implementation, compliance with investment conditions, and resolution of legal issues, ensuring lawful, efficient, and timely establishment procedures.