Along with advantages of geographical area, climate, environment, labor and potential development, Vietnam is a country significantly attracting foreign investors who conduct their investment operations, including Chinese investors. Establishing Chinese companies in Vietnam is one of the common investment methods that Chinese traders are extremely concerned about. Accordingly, what is an establishment of a Chinese company in Vietnam? What are legal regulations and conditions on establishing Chinese companies in Vietnam?
For clearly explaining the above queries, NPLaw would like to send readers (Clients) relevant contents and information on establishing foreign enterprises, specializing
establishments of 100% Chinese-invested enterprises (companies) in Vietnam.
I/ Understanding on establishing Chinese companies in Vietnam
1. How to establish Chinese companies in Vietnam?
Establishing Chinese companies in Vietnam is based on the form of “Investment in establishing economic organizations” as defined by Clause 1, Article 21 of the Law on Investment 2020. Additionally, Chinese investors also need to comply with regulations on
dossiers, processes and procedures for establishing foreign-invested enterprises in Vietnam.
Pursuant to Point c, Clause 1, Article 22 of the Law on Investment 2020, foreign investors are requested to obtain investment projects, implement application procedures, and adjust the Investment Registration Certificate (IRC) before establishing economic organizations, except for starting-up small and medium enterprises according to legal regulations on supporting such enterprises.
Thus, before setting up their companies, Chinese investors need to have investment projects in Vietnam, and fully implement processes and procedures for applying for the Investment Registration Certificate, excluding small and medium enterprises starting up. After receiving the Investment Registration Certificate, such investors have to continuously implement application procedures for the Enterprise Registration Certificate (ERC).
2. What are the conditions on establishing Chinese companies in Vietnam?
In this article, we would like to provide information on establishing 100% Chinese-invested companies. Thus, the establishment of 100% foreign-invested companies by Chinese needs to satisfy the following conditions:
1. Contributing capital into establishing companies by Chinese investors
Pursuant to Clause 19, Article 3 of the Law on Investment 2020, Chinese investors are individuals with Chinese nationality or organizations legally established under Chinese law, implementing business investment activities in Vietnam.
2. Operating legal business lines in Vietnam
To be legally operated in Vietnam, Chinese companies are prohibited from implementing business lines against Vietnamese legal regulations according to Clause 1, Article 6 of the Law on Investment 2020.
3. Fully implementing the application procedures for the Investment Registration Certificate
If Chinese investors expect to establish their companies in Vietnam, they are obliged to fulfill the procedures for applying for the Investment Registration Certificate (IRC), except for small and medium-sized enterprises starting-up and obtaining the innovation investment fund.
4. Registering to establish companies (enterprises)
Investors submit the enterprise registration dossiers to the Business Registration Office under the Department of Planning and Investment in which such investors locate their headquarters.
II/ Legal regulations on establishing Chinese companies in Vietnam
1. What methods can Chinese investors apply for establishing their companies in Vietnam?
Like other foreign investors, Chinese investors may establish their companies in Vietnam according to one of the following types of companies, as defined by the Law on Enterprise 2020:
- Single-member limited liability company
- Multi-member limited liability company
- Joint stock company
- Partnership
In fact, limited liability companies and joint stock companies are more common than partnerships.
2. What are the procedures for establishing Chinese companies in Vietnam?
To establish Chinese companies in Vietnam, investors need to fully implement the following steps:
(1) Implementing the application procedures for the Investment Registration Certificate at the Department of Planning and Investment, where investors locate their project locations (for investment projects beyond the Industrial Park, Export Processing Zone, High-Tech Park, Economic Zone) or at the Board of Management of the Industrial Park, Export Processing Zone, High-Tech Park, Economic Zone (for projects within these areas).
(2) Implementing the application procedures for the Enterprise Registration Certificate at the Department of Planning and Investment, where investors locate their headquarters.
III/ Questions about the establishment of Chinese companies in Vietnam
1. What is a minimum investment capital of establishing Chinese companies in Vietnam?
Law does not regulate a minimum investment capital level for establishing Chinese companies in Vietnam. However, for some business lines requesting a legal capital such as insurance, gold trading, etc., investors are obliged to demand a charter capital level which must be at least equal to the legal capital as stated in specialized legal documents of each specific industry.
2. How long is the establishment of Chinese companies in Vietnam?
Besides the duration for resolving necessary documents and procedures at the competent State authorities as prescribed by legal regulations (excluding adjustment and supplement duration), the time for establishing Chinese companies also depends on the preparation process for infrastructures, locations, leasing contracts, etc. Thus, it is often based on the actual deployment state of investors.
+ Time of applying for the Investment Registration Certificate
+ For projects requesting to obtain the National Assembly’s approval for investment policy: It takes investors 165 days (approximately 5 - 6 months) to receive the investment policy approval. Then, within 05 working days from the date of obtaining the Decision on approving the investment policy, investors shall receive the Investment Registration Certificate.
+ For projects requesting to obtain the Prime Ministry’s approval for investment policy: 58 days (approximately 2 months) are a requested time to have the investment policy approval. Then investors shall receive the Investment Registration Certificate within 05 working days from the date of obtaining the Decision on approving the investment policy.
+ For projects requesting to obtain the provincial People’s Committee’s approval for investment policy: It takes 35 days (approximately 1 month or more) to obtain the investment policy approval. After, within 05 working days from the date of receiving the Decision on approving the investment policy, investors obtain their Investment Registration Certificate.
+ For projects not being subject to the investment policy approval: Time to receive the Investment Registration Certificate is within 15 days from the date of having full and valid documents according to legal regulations.
- Time of applying for the Enterprise Registration Certificate: Within 03 working days from the date of fully receiving valid documents.
IV/ Is it necessary to request Lawyer’s support in establishing Chinese companies in Vietnam?
Commonly, the procedures and process for establishing Chinese companies in Vietnam are extremely complicated, because it depends on each time and area to have accurate guidance and to know whether such establishments are approved or not. Thus, contacting to receive professional Lawyer’s support is a necessary act.
NPLaw is always proud of providing the best legal services on establishing Chinese companies to our Clients along with reasonable fees and prompt implementation. If you have any questions or need to be advised, please hesitate to contact us as soon as possible.
