To carry out the work of nationalization – modernization, Vietnam needs to have an amount of investment capital beyond its ability to provide.In fact, in recent times, foreign direct investment has become a very important additional capital channel for the economy. It meets the needs of development consulting and economic growth. However, investors are still very apprehensive about Vietnam’s legal system. Especially about administrative procedures related to business investment. Understanding this, we would like to provide investment consulting invest in Vietnam, investing việt nam, vn investment, investment vietnam. Is help client to complete the mind of your way fast, cost-effective.
I. Investment concept, general concept of investor:
Investment means an investor who invests capital and assets according to the formula and working method prescribed by law. To perform activities for profit or other economic and social benefits.
Foreign investor means an organization or individual of one country that invests capital in different forms in another country to carry out business activities in order to earn profits. Foreign investment is made in the form of direct investment or indirect investment.
Foreign-invested enterprise is an enterprise in which an investor of one country invests all or part of its capital and is established in the territory of another country to conduct profitable business activities.
Foreign investors are defined in Clause 19, Article 3 of the Law on Investment in 2020 as follows:y
“foreign investor” means an individual holding a foreign nationality or an organization established under foreign laws and carrying our business investment activities in Vietnam.”
II. Conditions for foreigners to invest in Vietnam, investing việt nam, vn investment, investment vietnam:
– Investors are individuals with foreign nationality. Organizations established under foreign law conducting business investment activities in Vietnam.
– Investment in fields not on the list of industries and trades banned from business investment such as: Drug business. Trading in chemicals and minerals. Trading in specimens of wild plants and animals. Prostitution business. Buying and selling people, tissues and organs. Business activities related to asexual reproduction in humans. Business firecrackers.
If the investment project belongs to special fields such as: Projects of foreign investors in the fields of shipping business. Trading in telecommunications services with network infrastructure, planting forests. Publishing, journalism, establishing science and technology organizations. Science and technology enterprises with 100% foreign capital are subject to appraisal by the Prime Minister.
III. Investment form of foreign investors when invest in Vietnam, investment vietnam:
3.1. Forms of foreign direct investment by establishing economic organizations when invest in Vietnam, vn investment, investment vietnam :
The Investment Law allows investors to establish economic organizations. Before establishing an economic organization, a foreign investor must have an investment project and carry out procedures for issuance of an investment registration certificate.
Foreign investors may own unlimited charter capital in economic organizations, except for the following cases of investment in organizations/enterprises:
– Listed companies, public companies, securities trading organizations and securities investment funds.
– State-owned enterprises equitized or transferred ownership.
– Other cases according to other provisions of relevant laws and international treaties to which the Socialist Republic of Vietnam is a signatory.
3.2. Forms of foreign indirect investment by capital contribution, purchase of shares, capital contribution to economic organizations when invest in Vietnam, investment vietnam:
The forms of foreign indirect investment are:
– Foreign investors can buy shares issued for the first time or additionally issued shares of a joint-stock company.
– Foreign investors can purchase shares of a joint stock company from the company or its shareholders.
– Foreign investors can purchase capital contributions of members in limited liability companies to become capital contributors.
– Foreign investors can purchase capital contributions of capital-contributing members in a partnership to become a capital-contributing member.
– Foreign investors may purchase capital contributions from members of other economic organizations that do not fall into the above cases.
– Foreign investors can contribute capital to limited liability companies and partnerships.
3.3. Form of foreign direct investment by investment in the form of public-private partnership contract
when invest in Vietnam (PPP):
When investing in the form of public-private partnership, investors sign contracts with competent state agencies and Vietnamese investors to implement, manage and operate infrastructure projects, provide public service provision. For example, a project to build new or renovate, upgrade an infrastructure facility or provide public services.
Because these are large and important projects, foreign investors must meet strict conditions such as:
– The investor is responsible for contributing equity capital and mobilizing other capital sources to implement the project.
– The investor’s equity ratio must not be less than 15% of the total investment capital.
In addition, the PPP project itself must satisfy other conditions such as:
– The project must be consistent with regional, sectoral and local development master plans and plans.
– The project must be able to attract and receive commercial and technological capital.
– The project must be able to provide products and services continuously, stably, with quality to meet the needs of users.
– The project must have a total investment capital of 20 billion VND or more, except for investment projects under O&M contracts and a number of projects in the agricultural sector.
3.4. Form of foreign direct investment by participating in BCC contract:
– When making an investment by participating in a BCC business cooperation contract, the investor contributes capital and shares profits with a Vietnamese partner without establishing an economic organization. During the implementation of the BCC contract, the parties to the contract may agree to use the assets formed from the business cooperation to establish an enterprise in accordance with the law on enterprises.
V. Restrictions for foreign investors when invest in Vietnam, investing việt nam, vn investment, investment vietnam :
– Restrictions on business lines:
According to the provisions of Clause 1, Article 6 of the Law on Investment 2014, investors have the right to conduct business and investment activities on their own, in which sectors and trades banned from investment include: trading in wild animals on the banned list. invest; trading in narcotics; trading people, human body parts; prostitution; firecrackers.
– Limit on capital ownership ratio:
In Clause 3, Article 22 of the Investment Law 2014, the current investment law of Vietnam allows foreign investors to own unlimited charter capital in companies in Vietnam. Except for the following cases:
TH1: The percentage of foreign investors’ ownership in public, listed companies, securities trading organizations and securities investment funds as prescribed by law.
TH2: The percentage of foreign investors’ ownership in equitized state-owned enterprises; or convert ownership in other forms as prescribed by law.
TH3: The percentage of foreign investors’ ownership shall comply with other provisions of relevant laws and treaties to which the Socialist Republic of Vietnam is a contracting party.
VI. Foreign investment consulting services in Vietnam:
Vietnamese law has strict regulations on investment activities in general and foreign investment activities in Vietnam in particular. Without understanding Vietnam’s investment law, foreign investors can easily commit illegal acts. Accordingly, must bear the consequences according to the provisions of the law. For full advice related to foreign investment activities in Vietnam market, invest in vietnam – investment vietnam – investing việt nam – vn investment please contact directly Ba Dinh Law for advice.