To legally invest and set up a business in Vietnam, foreign investors must not only comply with the general regulations for establishing a company but also the specific conditions for foreign investors.
1. Conditions for foreign investors contributing capital from the beginning of establishing the company
Clause 1, Articles 22 of the 2020 Investment Law stipulates that a foreign investor that establishes a business organization shall satisfy market access conditions applied to foreign investors specified in Article 9 of this Law. This means that foreign investors are only allowed to invest in a number of industries and occupations permitted by the state and may not invest in prohibited ones.
To prepare for establishing a company, foreign investors need to have an investment project and carry out procedures to apply for the Investment Registration Certificate.
2. Conditions for foreign investors purchasing contributed capital or shares
- According to the provisions of Article 24, Investment Law 2020, foreign investors must meet the market access conditions specified in Clause 3, Article 9 of this code and Articles 15, 16, 17 of the Decree. 31/2021/ND-CP;
- Comply with the provisions of land law on conditions for receiving land use rights and land use conditions in islands, communes, wards, border towns, communes, wards and coastal towns;
- Ensure national defense and security according to the provisions of the Investment Law 2020.
3. Conditions for foreign investors
Foreign investors must be individuals over 18 years old, organizations, businesses holding the nationality of WTO members or having signed bilateral international treaties related to investment with Vietnam.
However, there are some industries in which only foreign investors who are legal entities may invest in Vietnam.
Individual investors holding passports with the “cow tongue line” will not be allowed to contribute investment capital in Vietnam. They also cannot take on the role of representative to manage investment capital for established organizations or companies established in Vietnam.
Foreign investors must also have sufficient financial capacity to invest and need to prove their financial capacity to invest in Vietnam depending on the chosen industry.
4. Conditions for the company’s headquarters and project location
Foreign investors need to have a location to carry out investment projects in Vietnam through a location lease agreement, house lease agreement, land lease agreement, and legal real estate documents of the lessor to serve as a public headquarter and project location.
For investment projects in the manufacturing sector, investors must demonstrate eligibility to rent factories and have factory lease contracts in industrial clusters and zones.
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