WHAT ARE THE TYPES OF BUSINESS INVESTMENT IN VIETNAM, AND HOW DOES THEIR PROCESS WORK?

I. Forms of business investment in Vietnam 

According to the provisions of Article 21 of the Law on Investment 2020, forms of investment include: 

- Investment in the establishment of economic organizations; 

- Investment in capital contribution, share purchase, purchase of contributed capital; 

- Implementation of investment projects; 

- Investment in the form of BCC contract; 

- New forms of investment and types of economic organizations according to the Government's regulations. 

II. Conditions and procedures for implementation of forms of business investment in Vietnam 

For the form of investment in the establishment of economic organizations, investors shall comply with the provisions of Article 22 of the Law on Investment 2020 as follows: 

(i)Before establishing an economic organization, foreign investors must have investment projects, carry out procedures for issuance and adjustment of investment registration certificates, except for the case of establishment of innovative start-up small and medium-sized enterprises and innovative start-up investment funds in accordance with the law on supporting small and medium-sized enterprises. 

(ii) Domestic investors shall establish economic organizations in accordance with the law on enterprises and laws corresponding to each type of economic organization; 

(iii) Foreign investors establishing economic organizations must satisfy market access conditions for foreign investors specified in Article 9 of this Law; 

(iv) From the date of issuance of the Certificate of Business Registration or other papers of equivalent legal validity, the economic organization established by the foreign investor is the investor implementing the investment project as prescribed in the Investment Registration Certificate. 

For the form of investment in capital contribution, share purchase, purchase of contributed capital, investors must comply with Article 24 of the Law on Investment 2020 as follows: 

(i) Investors have the right to contribute capital, buy shares, buy contributed capital of economic organizations. 

(ii) Foreign investors' capital contribution, share purchase or capital contribution purchase by economic organizations must satisfy the following regulations and conditions: 

- Market access conditions for foreign investors specified in Article 9 of this Law; 

- Ensuring national defense and security in accordance with this Law; 

- Provisions of land law on conditions for receiving land use rights and conditions for land use in islands, communes, wards, border towns, communes, coastal towns and communes.  

For the form of investment in the form of BCC contract, investors must comply with the provisions of Article 27 of the Law on Investment 2020 as follows: 

(i) BCC contracts signed between domestic investors comply with the provisions of civil law. 

(ii) BCC contracts are signed between domestic investors and foreign investors or between foreign investors carrying out procedures for issuance of Investment Registration Certificates as prescribed in Article 38 of this Law. 

(iii) The parties to the BCC contract establish a coordinating committee to perform the BCC contract. The functions, tasks and powers of the coordinating board shall be agreed upon by the parties. 

Above is an article that provides some basic information about the forms and processes of business investment according to Vietnamese law.

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Hoang Pham (James) / Managing Partner at: hoang.pham@vselawyers.com

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Attention: This legal update is not an advice and should not be treated as such.