[what you need to know] Setting Up And Operating In Vietnam

How to create a company in Vietnam and how the basic rules to operate it.

 

CHAPTER ONE - INVESTMENT REGIME

This chapter sets out the framework for foreign investment. This outline should be seen as simply a point of reference, as special projects will have special needs.


1.1. Enterprise Law ("EL") and Investment Law ("IL")

The EL creates a unified legal framework to conduct business. The EL provides various business structures from which both foreign and domestic investors can choose. Special forms of business structures that are available for foreign investors are discussed in Section 1.7 below. The EL also provides rather complete regulations on corporate governance. The EL is best understood as a broad law that covers all business structures, whether foreign-owned or domestically-owned.


The IL specifically addresses investment. It provides details on procedures to carry out investment activities, the rights and obligations of investors, assurances of the legitimate rights and interests of investors, investment incentives, state management of investment in Vietnam, and rules on offshore investment from Vietnam.


Except for the establishment of a small or medium-sized creative start-up1 enterprise or a creative start-up investment fund in accordance with the Law on Supporting Small and Medium-sized Enterprises, a foreign investor which invests in Vietnam by establishing a new legal entity first needs to apply for an investment registration certificate ("IRC") for its investment project. After the IRC is issued, the Investor will then apply for an enterprise registration certificate ("ERC") which allows it to establish the company. Licensing procedures are discussed in Section 1.6 below.


The EL and the IL have been supplemented. Some of the key regulations include:


  • Decree No. 01/2021/ND-CP (January 4, 2021), provides detailed guidelines for enterprise registration ("Decree 01/2021/ND-CP");

  • Decree No. 31/2021/ND-CP (March 26, 2021), detailing and guiding the implementation of a number of articles of the Law on Investment ("Decree 31/2021/ND-CP");

  • Decree No. 47/2021/ND-CP (April 1, 2021), details and guides the implementation of a number of articles of the EL ("Decree 47/2021/ND-CP")

  • Circular No. 03/2021/TT-BKHDT (April 9, 2021), issuing standard forms necessary to comply with investment procedures and investment reports, outward investment activities and investment promotion activities ("Circular 03/2021/TT-BKHDT"); and

  • Decision No. 29/2021/QD-TTg (October 6, 2021, on special investment incentives ("Decision 29/2021/QĐ-TTg").

Setting up and operating enterprises are subject to industry-specific legislation. Industry-specific legislation includes, for example:


  • Law on Credit Institutions;

  • Law on Petroleum;

  • Law on Civil Aviation;

  • Law on Publishing;

  • Law on Press;

  • Law on Education;

  • Law on Securities;

  • Law on Insurance Business;

  • Law on Lawyers;

  • Law on Notarization.

If there are any differences among the IL, the EL, and industry-specific legislation on procedures and conditions to establish an enterprise, its ownership structure, or its re-structuring or dissolution, then industry-specific legislation will prevail.