General Provisions

In Vietnam, the main legislation system regulating investment activities is the Investment Law and the Corporate Law passed by the National Assembly on 29 November 2005 and has come into effect since 1 July 2006.

 1. Interpretation of terms

- Direct investment is the form of investment whereby the investor invests its invested capital and participate in the management of investment activities.

- Indirect investment is the form of investment through the purchase of shares, share certificates, bonds, and other valuable papers. It can also mean the investment is operated by securities investment fund or through intermediary financial institutions and the investor does not participate directly in the management of the investment activities.

2. Forms of investment

2.1. Forms of direct investment

- Establishing economic organizations with 100% capital from domestic investors or 100% capital from foreign investors.

- Establishing joint venture economic organizations between domestic and foreign investors.

- Investing in the contractual forms of BCC; BO; BTO and BT.

- Investing in business development.

- Purchasing shares or to contribute capital in order to participate in the management of investment activities.

- Investing in the carying out of a merger and acquisition of an enterprise.

 2.1.1. Investments in establishment of economic organizations

- Enterprises organized and operated following the Corporate Law;

- Credit institutions, insurance enterprises, investment fund and other financial organizations pursuant to the company laws;

- Medical services, educational, scientific, cultural, sports and other services establishments which conduct investment activities for profit-making purposes;

- Other economic organizations in accordance with laws.

 2.1.2. Investment in accordance with contract

- An investor shall be permitted to sign a BCC contract in order to cooperate in the production and to share profits or to share products and other forms of business co-operation.

- An investor shall be permitted to sign a BOT, BTO and BT contracts with the competent State bodies in order to implement projects for new construction, expansion, modernization and operation of infrastructure projects in the sector of traffic, electricity production and business, water supply or drainage, waste treatment and other sectors as stipulated by the Prime Minister of the Government.

 2.1.3. Investment in business development

- Expanding scale, increasing output capacity and business capability.

- Renovating technology, improving product quality and reducing environmental pollution.

 2.1.4. Capital contribution, purchase of shareholding, merger and acquisition

- Investors shall be permitted to contribute capital to and to purchase shareholding in companies and branches operating in Vietnam.

- Investors shall be permitted to merge and acquire companies and branches.

2.2. Indirect investment  

- Purchase of shareholding, shares, bonds and other valuable papers;

- Through securities investment funds;

- Through other intermediary financial institutions.

 3. Establishment of economic organizations and implementation of investment projects

a) Foreign investors investing in Vietnam for the first time must have an investment project and shall conduct investment procedures in order to get an Investment Certificate. The Investment Certificate shall act concurrently as the business registration certificate.

 b) With respect to foreign investors that have already had an Investment Certificate in Vietnam:

 - If they wish to carry out a new investment project that does not require the establishment of a new legal entity, they shall conduct investment procedures in order to get an Investment Certificate.

 - If they wish to carry out a new investment project that requires the establishment of a new legal entity, they shall conduct investment procedures to get an Investment Certificate. The Investment Certificate shall act concurrently as the business registration certificate.

  4. Types of business according to the Corporate Law

- Limited Liability Company:

+ One Member Limited Liability Company 

+ Limited Liability Company with more than one member   

- Shareholding Company

- Partnership

- Sole Proprietorship

- Corporate Group:

+ Parent company and subsidiaries

+ Economic group

+ Other forms

        5. Evaluation and registration of Investment Projects:

 

Investment Projects

 

 

 

 

Under VND 15 billion

Between VND 15 billion and under VND 300 billion

VND 300 billion or more

Not included in the list of conditional investment domains and not in the list of projects subject to approval of the Prime Minister

Domestic Projects

No registration

Registration

Evaluation

Foreign Projects

Registration

Registration

Evaluation

Included in the list of conditional investment domains and in the list of projects subject to approval of the Prime Minister

Domestic and Foreign Projects

Evaluation

Evaluation

Evaluation

 

6. Language to be used 

The dossier of a domestic investment project and official documents sent to Vietnamese authorities must be written in Vietnamese; They must be in Vietnamese or in both Vietnamese and a commonly used foreign language for a foreign invested project. If there is any disparity between the Vietnamese and the foreign language versions, the Vietnamese one shall be applied.

 
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Source: yahoo.com