Forms of foreign investment in Vietnam

Hi DMS Law office in Vietnam! Can you advise on forms of investment which foreign companies, foreign investors can make to conduct investment, business activities in Vietnam ?

Hi!

Law on Investment in Vietnam No. 67/2014/QH13 dated November 26, 2014 stipulated forms of investment for foreign investors conducting business activities in Vietnam, as follows:

Investment for establishment of an economic organization in Vietnam (set up a company in Vietnam):

Investors may establish an economic organization in accordance with law. Before establishment of an economic organization, a foreign investor(s) must have an investment project, carry out procedures for issuance of an Investment Registration Certificate according to provisions in Article 37 of this Law and satisfy the following conditions:

- Percentage of ownership in charter capital prescribed in Clause 3 of this Article;

- Form of investment, scope of activities, Vietnamese partners participating in implementation of investment activities and other conditions in accordance with international treaties of which the Socialist Republic of Vietnam is a member.

A foreign investor is permitted to own unlimitedly the charter capital of an economic organization, except for the following cases:

The percentage of ownership of foreign investors in listed companies, public companies, securities trading organizations and securities investment funds is subject to the law on securities;

The percentage of ownership of foreign investors in State enterprises which conduct equitization or convert their ownership into another form is subject to the law on equitization and conversion of State enterprises;

The percentage of ownership of foreign investors not covered by Points (a) and (b) of this Clause is subject to other relevant laws and international treaties of which the Socialist Republicof Vietnam is a member (Clauses 1, 2 Article 22 Law on Investment No. 67/2014/QH13 dated November  26, 2014).

Investment in the form of capital contribution or purchase of shares or portion of capital contribution to an economic organization in Vietnam:

A foreign investor may make capital contribution to an economic organization in the following forms:

Purchase of shares on the initial public offering or of additional shares issued by shareholding companies;

Capital contribution to limited liability companies or partnerships;

Capital contribution to economic organizations other than those prescribed in Points (a) and (b) of this Clause.

A foreign investor may purchase shares or portion of capital contribution to an economic organization in the following forms:

Purchase of shares in a shareholding company from such company or its shareholders;

Purchase of a portion of capital contribution of members of a limited liability company to become a member of such limited liability company;

Purchase of a portion of capital contribution of a capital contributing member of a partnership to become a capital contributing member of such partnership;

Purchase of a portion of capital contribution of members of other economic organizations not covered by Points (a), (b) and (c) of this Clause (Points 1, 2 Article 25 Law on Investment No. 67/2014/QH13 dated November 26, 2014).

Investment in the form of a Public Private Partnership contract (PPP contract):

Investors or project enterprises shall sign a PPP contract with the competent State agency for implementation of an investment project for new construction, or renovation, upgrading, expansion, management and operation of infrastructure facilities or provision of public services (Clause 1 Article 27 Law on Investment No. 67/2014/QH13 dated November 26, 2014).

Investment in the form of business co-operation contract (BCC contract) in Vietnam:

A BCC contract signed between domestic investors shall be performed in accordance with the civil law.

A BCC contract signed between a domestic investor and a foreign investor or foreign investors shall require the procedures for issuance of an IRC to be carried out in accordance with Article 37 of this Law.

The parties to a BCC contract shall establish a co-ordinating board to perform the BCC contract. The functions, duties and powers of the co-ordinating board shall be agreed by the parties  (Article 28 Law on Investment No. 67/2014/QH13 dated November 26, 2014).

Therefore, you may research provisions in the Law on Investment and choose the form of investment in Vietnam that best suits your interests.

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Forms of foreign investment in Vietnam