Must foreign investors adjust their investment registration certificate before establishing a business organization in Vietnam?

 Must foreign investors adjust their investment registration certificate before establishing a business organization in Vietnam? (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Must foreign investors adjust their investment registration certificate before establishing a business organization?

Pursuant to Article 22 of the Law on Investment 2020 regulations on investment in establishment of a business organization, every investor shall establish a business organization in accordance with the following regulations:

- A domestic investor shall establish a business organization in accordance with regulations of law on enterprises and law corresponding to each type of business organization;

- A foreign investor that establishes a business organization shall satisfy market access conditions applied to foreign investors specified in Article 9 of the Law on Investment 2020;

- Before establishing a business organization, the foreign investor must have an investment project and follow the procedures for issuance or adjustment of an investment registration certificate, except for establishment of a small and medium-sized start-up enterprise and a  startup investment fund in accordance with regulations of the Law on Small and Medium-sized Enterprises.

Note: From the date on which the enterprise registration certificate or an equivalent document is issued, the business organization established by a foreign investor shall be the investor that executes the investment project set out in the investment registration certificate.

Thus, according to the above regulations, before establishing a business organization, the foreign investor must have an investment project and follow the procedures for issuance or adjustment of an investment registration certificate, except for establishment of a small and medium-sized start-up enterprise and a  startup investment fund in accordance with regulations of the Law on Small and Medium-sized Enterprises.

2. Procedures for establishment of business organizations by foreign investors in Vietnam

Except for cases of establishment of, capital contribution or purchase of stakes in start-up SMEs and startup investment funds specified in Article 67 of Decree 31/2021/ND-CP, tf there is a new investment project other than the investment project issued with the investment registration certificate, the foreign-invested business organization shall follow the procedures below as specified in Article 63 of Decree 31/2021/ND-CP:

- 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;

- 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.

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.

Note: 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.

Nguyen Ngoc Que Anh

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