In the context of Vietnam’s rapidly developing economy, foreign investors are increasingly looking for opportunities to establish their business presence here. The article below provides a comprehensive guide to help you understand the requirements, procedures, and processes for obtaining a business license in accordance with current legal regulations.
Vietnam has become one of the most attractive investment destinations in Southeast Asia, thanks to its strategic location, stable political environment, and robust economic growth. Understanding the business registration process is essential for foreign investors looking to enter this dynamic market.
II. Legal Framework
The relevant laws, decrees, and guiding documents for foreign investment in Vietnam include:
According to the latest data from the General Statistics Office (GSO):
Q2/2024: Real GDP increased by 6.93% compared to the same period.
Q1/2024: Growth reached 5.87%.
Q4/2023: Growth was 6.72%.
In the same period in 2023: Growth was 4.05%.
First half of 2024: Overall economic growth reached 6.42%, significantly surpassing the 3.84% in the first half of 2023.
This strong recovery reflects the effectiveness of economic policies, investment reforms, and a stable business environment, which in turn creates favourable conditions for enterprises, especially foreign investors. This data is referenced from “Vietnam Maintains Sustainable Growth, Continuing to be an Attractive Destination for Foreign Investors”
IV. Requirements Before Registration
1. Eligibility Criteria
a) Conditions for Issuing the Investment Registration Certificate (IRC) for Foreign Investors
According to:
Clause 2, Article 38 of the Investment Law 2020
Clause 3, Article 36 of Decree 31/2021/ND-CP
Foreign investors must meet the following conditions:
Legitimate Investment Sectors: The investment project must not belong to the list of prohibited sectors as stipulated in Article 6 of the Investment Law 2020 and international investment commitments to which Vietnam is a party.
Project Location: The investor must have a clear project location, established through a land use rights certificate, land lease contract, or other legally valid documents.
Compliance with Planning Requirements: The investment project must comply with planning regulations, including national, regional, provincial, urban planning, or special administrative-economic planning if applicable.
Investment Ratio Requirements: The investor must meet the minimum investment ratio per unit area of land as determined by the Provincial People’s Committee and approved by the Provincial People’s Council (if applicable).
Labor Conditions: The project must ensure the required quantity and quality of labor in accordance with legal requirements for the specific sector.
Market Access Conditions: Foreign investors must comply with market access conditions, especially for sectors included in the restricted market access list as stipulated by the Investment Law.
b) Market Access Conditions for Foreign Investors
According to Clause 10, Article 3 of the Investment Law 2020 and the detailed provisions in Annex I, Decree 31/2021/ND-CP:
Sectors with No Market Access: As specified in Part A, Annex I.
Sectors with Conditional Market Access: As specified in Part B, Annex I.
Additional requirements may include:
Foreign Ownership Limitations: Certain sectors impose limits on the percentage of foreign ownership in an economic organization in Vietnam.
Forms of Investment: Some sectors stipulate specific investment forms, not allowing a company to be established with 100% foreign capital.
Scope of Investment Activities: Some fields restrict the scope of activities for enterprises with foreign investment.
Investor and Partner Capabilities: Certain sectors require foreign investors to demonstrate professional competence or provide proof of legal eligibility.
Other Conditions: Additional requirements may be imposed depending on the specific sector as per Vietnamese law.
2. Required Documents
a) General Regulations on the Investment Dossier
- Investment Procedure Dossier: This dossier is prepared by the investor to carry out the procedures for issuing, amending, or revoking the Investment Registration Certificate in accordance with the Investment Law and related guiding documents. A valid dossier must include all required documents, and the content must be fully and accurately declared as per legal regulations
- Language Requirements:
All documents and reports submitted to state agencies must be in Vietnamese.
In cases where any document is in a foreign language, the investor must attach a Vietnamese translation.
If documents are provided in both Vietnamese and a foreign language, the Vietnamese version shall be used for the registration process.
The investor is responsible for any discrepancies between the translation or copy and the original document, as well as between the Vietnamese and foreign language versions.
b) Cases Requiring the Issuance of the Investment Registration Certificate (IRC)
The procedure for issuing an IRC applies to:
Investment projects by foreign investors;
Investment projects by economic organizations in which:
Foreign investors hold more than 50% of the charter capital, or in the case of partnerships, the majority of the general partners are foreign individuals.
The economic organization, as defined in the relevant clause, has foreign investors holding more than 50% of the charter capital.
Both foreign investors and the economic organization collectively hold more than 50% of the charter capital.
Note: “Economic organization” refers to entities established and operating in accordance with Vietnamese law, including enterprises, cooperatives, cooperative unions, and other organizations engaged in investment and business activities.
c) Procedures for Issuing the Investment Registration Certificate
The registration process is divided into two main cases:
Investment Projects Not Subject to Investment Policy Approval:
Dossier Components: a) A proposal letter for implementing the investment project. b) Documents verifying the legal status of the investor. c) Financial capacity documents of the investor. d) The investment project proposal; in cases where construction regulations require a feasibility study report, this report may substitute the project proposal. e) A copy of the documents proving land use rights or other documents establishing the right to use the project site (in cases where the project does not request state allocation, lease, or permission to change land use purpose). f) An explanation of the technology to be used in the project (for projects subject to technology assessment as per technology transfer regulations). g) A BCC contract (if the project is implemented under a BCC contract). h) Other documents related to the project’s requirements regarding conditions and investor capacity (if any).
Number of Dossiers: 1 set.
Submission Location:
The Management Board of industrial parks, export processing zones, high-tech zones, or economic zones (for projects located within these areas).
The Department of Planning and Investment (for projects outside these zones).
Processing Time: The investment registration authority shall issue the IRC within 15 working days from the receipt of a complete dossier.
Investment Projects Subject to Investment Policy Approval: Depending on whether the approval is within the jurisdiction of the Provincial People’s Committee, the Prime Minister, or the National Assembly, the dossier requirements (4, 8, or 20 sets) and processing times are specified as follows:
For Provincial People’s Committees:
The dossier for obtaining investment policy approval shall be processed within 35 days from the receipt of a complete dossier.
Subsequently, the IRC will be issued within 5 working days from the receipt of the approval letter.
For the Prime Minister:
The processing time includes various stages of assessment (3, 15, and 40 days) as prescribed.
The IRC is issued within 5 working days after receiving the approval letter.
For the National Assembly:
The dossier for investment policy approval and the assessment stages (15 days, 90 days, and submission before the opening of the National Assembly session) are clearly defined, after which the IRC will be issued within 5 working days.
Note: In cases where the investment project falls under the approval jurisdiction of two or more Provincial People’s Committees, the Prime Minister will designate the investment registration authority of one centrally governed city or province to issue the IRC for the entire project.
V. Step-by-Step Registration Process
1. Investment Registration Certificate (IRC):
For projects not subject to investment policy approval: Submit 1 set of the dossier; the registration authority (Department of Planning and Investment) processes the dossier within 15 working days.
For projects subject to investment policy approval: Once the approval letter is obtained, the IRC is issued within 5 working days.
In cases where the dossier is rejected, the authority must notify the investor in writing with clear reasons.
2. Enterprise Registration Certificate (ERC):
After obtaining the IRC, the enterprise must register for an ERC in accordance with Article 26 of the Enterprise Law 2020 by:
Submitting the ERC application dossier at the Business Registration Office of the Department of Planning and Investment.
Registering the company seal in accordance with Article 43 of the Enterprise Law 2020.
Opening a corporate bank account (as per Circular 23/2014/TT-NHNN).
3. Post-License Procedures:
Registering for a tax code (according to Circular 105/2020/TT-BTC).
Registering labor in compliance with the Labor Code 2019.
Registering for social insurance (according to the Social Insurance Law 2014).
Paying the business license tax (as per Decree 139/2016/ND-CP).
VI. Legal Considerations
Foreign Ownership Restrictions:
Some sectors have limits on foreign ownership as per WTO and FTA regulations.
Certain fields require cooperation with domestic partners (e.g., transportation, publishing, advertising).
Some sectors require special approval from state management agencies.
Anticipated Costs:
Official registration fees (as per the Ministry of Finance’s regulations).
Legal advisory fees.
Translation and notarization fees.
Minimum capital requirements (depending on the sector).
VII. Expert Tips for Success
Hire an experienced lawyer to assist with the registration process.
Prepare a complete and accurate dossier.
Establish good relationships with local management authorities.
Regularly update yourself on changes in legal regulations.
VIII. Conclusion
Although the process for obtaining a business license in Vietnam demands careful attention, patience, and thorough preparation, with professional support and a full understanding of the legal requirements, investors can complete the registration process smoothly and efficiently.
Need professional support? Contact Harley Miller Law Firm for detailed consultation and guidance on foreign investment procedures in Vietnam!
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