In Vietnam laws, there
are a number of investment methods such as establishing economic organizations;
investment in the form of capital contribution, purchase of shares or capital
contributions in business organizations; Business Cooperation Contract or Public
Private Partnership. Investment in establishing economic organizations, capital
contribution, purchase of share or capital contributions are most common in our
opinion.
Investment in
establishing economic organizations
For investment in the
establishment of economic organization, an investor invests capital to carry
out the establishment of an enterprise, cooperative, cooperative union or other
organization to carry out business investment activities. This is a way of direct
investment in which investors directly invest capital and directly participate
in management activities.
Forms of establishment
of economic organizations include two types: Establishing company with 100%
foreign capital; or establishing joint ventures between domestic investors or
the Government of Vietnam with foreign investors.
Before establishing an
economic organization, the foreign investor must have an investment project and
carry out the procedures for the grant of an investment registration
certificate. Besides, the conditions for the charter capital ownership and the
conditions prescribed by international treaties to which Vietnam is a member
need to be met. Regarding charter capital, foreign investors are allowed to
hold unlimited ownership in economic organizations, except for cases where the
investors operate in fields related to listed companies, public companies,
securities trading organizations and securities investment funds in accordance
with the law on securities; State owned enterprises equitized or transformed
under other forms. In addition, investors must check international treaties to
which Vietnam is a signatory.
It should be noted that
depending on the amount of investment capital of a foreign investor, the legal
status of an economic organization after its establishment will be determined
differently. If the foreign investor holds 51% or more of charter capital, the
economic organization after its establishment will have to carry out the
procedures applicable to foreign investors. Conversely, if foreign investors
hold less than 51% of the charter capital, the regulations applicable to
economic organizations after their establishment are applied as domestic
investors.
Investment in the form
of capital contribution, purchase of shares or capital contributions in
business organizations
Foreign investors who
wish to access the Vietnamese market but do not want to establish an economic
organization can contribute capital, buy shares or buy capital contributions to
business organizations operating in Vietnam.
With this form, the
investor will become a member or shareholder of that economic organization. It
requires investors to meet a conditions similar to the form of establishment of
economic organizations. Having said that, it must meet the conditions for the
charter capital ownership and the conditions prescribed by international
treaties to which Vietnam is a member. Depending on each specific case, the
investor must follow the procedures for registration of capital contribution,
purchase of shares or capital contribution in an economic organization and send
to the competent agency for recognition of legal investment.
Understanding the
regulations are important for investors to enter the Vietnam market and
consulting with Vietnam lawyers would help investors make informed decision for
their business plan in Vietnam.
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in the business centers of Hanoi, Danang, Ho Chi Minh city. We provide
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