What is an FDI enterprise in Vietnam? What is a report on investment activities of FDI enterprises in Vietnam?

What is an FDI enterprise in Vietnam?

According to Clause 22, Article 3 of the Investment Law 2020, it explains foreign-invested business organization as follows:

Definitions

For the purposes of this Law, the terms below are construed as follows:

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22. “foreign-invested business organization” means an organization whose members or shareholders are foreign investors.

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According to this Article, an FDI enterprise (Foreign Direct Investment) is an enterprise with foreign direct investment capital.

The following are some of the largest FDI enterprises in our country according to reference statistics:

What are procedures for establishing an FDI enterprise in Vietnam?

According to Article 63 of Decree 31/2021/ND-CP regulating establishment of business organizations by foreign investors as follows:

Establishment of business organizations by foreign investors

1. Except for the case in Article 67 hereof, the foreign investor shall establish a business organization and execute an investment project as follows:

a) In the case of execution of a new investment project, the foreign investor shall follow procedures for approval of investment guidelines and issuance of the investment registration certificate to the new investment project, and procedures for establishing a business organization in accordance with regulations of law corresponding to each type of business organization;

b) In the case of receipt of an investment project and establishment of a business organization, the foreign investor shall follow procedures for issuance of the investment registration certificate (if such project is not issued with the investment registration certificate) or adjustment of the investment registration certificate (if such project has been issued with the investment registration certificate) and procedures for business organization establishment in accordance with regulations of law corresponding to each type of business organization.

2. Documentation and procedures for establishment of the business organization shall comply with regulations of law on enterprises or other law corresponding to each type of business organization.

3. Charter capital of a business organization established by a foreign investor for execution of an investment project is not necessarily equal to the investment capital of the investment project. The business organization established by the foreign investor shall contribute capital and raise capital from other sources to execute the investment project according to the schedule on the investment registration certificate.

According to this Article, to establish an FDI enterprise, there will be the following steps:

In case of implementing new investment projects in Vietnam:

Step 1 : Carry out investment policy approval procedures

Step 2 : Carry out procedures for issuance of Investment Registration Certificate

Step 3 : Carry out business establishment procedures corresponding to each type of business

What is an FDI enterprise in Vietnam? What is a report on investment activities of FDI enterprises in Vietnam? (Image from the Internet)

What is a report on investment activities of FDI enterprises in Vietnam? 

Periodic reports on investment activities are prescribed in Article 72 of the Investment Law 2020 as follows:

1. Reporting entities:

a) Ministries, ministerial agencies and provincial People’s Committees;

b) Investment registration authorities;

c) Investors and business organizations executing investment projects as prescribed in this Law.

2. Periodic reporting:

a) Investors and business organizations executing investment projects shall submit quarterly and annual reports to investment registration authorities and local statistical agencies on the investment project execution, which specify: investment capital, investment results, employees, payment to government budget, investment in R&D, environmental protection, and other professional indicators;

b) Investment shall submit quarterly and annual reports to the Ministry of Planning and Investment and provincial People’s Committees on receipt of applications, issuance, adjustment and revocation of investment registration certificates and the operation of investment projects under their management;

c) Provincial People’s Committees shall submit quarterly and annual consolidated reports on local investment to the Ministry of Planning and Investment;

d) Ministries and ministerial agencies shall submit quarterly and annual reports on issuance, adjustment and revocation of investment registration certificates and equivalent papers (if any) under their management; and on investment activities under their management to the Ministry of Planning and Investment, which submit a consolidated report to the Prime Minister;

dd) The Ministry of Planning and Investment shall submit an annual report to the Prime Minister on investment nationwide and adherence to regulations on investment reporting by the entities mentioned in Clause 1 of this Article.

3. Agencies, investors and business organizations shall make reports in writing via the National Investment Information System.

4. Agencies, investors and business organizations mentioned in Clause 1 of this Article shall make ad hoc reports at the request of competent authorities.

5. If a project is exempt from the investment registration certificate, the investor shall submit a report to the investment registration authority before commencement of the project execution.

Investment activity reporting time specified in Article 102 of Decree 31/2021/ND-CP:

1. Business organizations executing investment projects shall submit reports to local investment registration authorities and statistics authorities.

2. Quarterly reports shall be submitted by the 10th of the first month of the quarter succeeding the reporting quarter, which specify: capital, net revenue, export, import, workers, taxes, amounts payable to state budget, use of land and water surface.

3. Each annual report shall be submitted by March 31 of the next year, which specifies: information on the quarterly reports, profit, income of workers, expenditures on and investment in scientific research and technology development, environmental protection, environmental issues resolution, and origins of technologies used.

Periodic reports of economic organizations implementing investment projects specified in Point a, Clause 2, Article 72 of the Investment Law 2020:

2. Periodic reporting:

a) Investors and business organizations executing investment projects shall submit quarterly and annual reports to investment registration authorities and local statistical agencies on the investment project execution, which specify: investment capital, investment results, employees, payment to government budget, investment in R&D, environmental protection, and other professional indicators;

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