According to Article 21 of the Investment Law 2020, forms of investment in Vietnam, including investment in establishing economic organizations; investing capital, buying shares, capital contributions; implementing investment projects; investment in the form of BCC contracts and other documents of investment and new types of economic organizations according to the Government’s regulations.
Individuals can choose one of the following investment forms, register investment as a foreign investor or domestic investor, and comply with the corresponding regulations.
Clause 18, Article 3 of the Investment Law 2020 stipulates: “Investors are organizations and individuals carrying out business investment activities, including domestic investors, foreign investors and economic organizations with foreign investment capital”.
Clause 19, Article 3 of the Investment Law 2020 stipulates: “Foreign investors are individuals with foreign nationality or organizations established under foreign law that conduct business investment activities in Vietnam.”
Clause 20, Article 3 of the Investment Law 2020 stipulates: “Domestic investors are individuals with Vietnamese nationality, economic organizations that do not have foreign investors as members or shareholders.”
Article 21 of the Investment Law 2020 regulates forms of investment in Vietnam, including investment in establishing economic organizations; investing capital, buying shares, capital contributions; implementing investment projects; investment in the form of BCC contracts and other documents of investment and new types of economic organizations according to the Government’s regulations.
Individuals can invest in establishing a new business in Vietnam in one of the following three ways:
Investing as a domestic investor
Domestic investors establish economic organizations in accordance with the provisions of the law on enterprises and laws corresponding to each type of economic organization (Point a, Clause 1, Article 22 of the Investment Law 2020).
Clause 2, Article 16 of Decree No. 31/2021/ND-CP dated March 26, 2021, regulates the right to choose to apply market access conditions and investment procedures.
Investing as a foreign investor
Foreign investors establishing economic organizations must meet market access conditions for foreign investors as prescribed in Point b, Clause 1, Article 22 of the Investment Law 2020.
- According to Clauses 1 and 2, Article 9 of the Investment Law 2020, foreign investors are subject to market access conditions as prescribed for domestic investors, except for the cases specified in Clause 2 of this Article (List of categories of industries and occupations that limit market access for foreign investors, including industries and occupations that do not have market access and industries and occupations that have conditional market access).
- Before establishing an economic organization, foreign investors must have an investment project and carry out procedures for granting and adjusting the Investment Registration Certificate, except for the establishment of innovative small and medium-sized start-up enterprises and creative start-up investment funds according to the provisions of the law on supporting small and medium-sized enterprises (Point c, Clause 1, Article 22 of the Investment Law 2020).
- From the date of issuance of the Business Registration Certificate or other documents of equivalent legal value, the economic organization established by the foreign investor is the investor implementing the investment project according to regulations in the Investment Registration Certificate.
Investing in the name of an economic organization with foreign investment capital
- Must meet conditions and carry out investment procedures according to regulations for foreign investors when investing in establishing other economic organizations; Investing in capital contribution, purchasing shares, purchasing capital contributions from other economic organizations; Invest in the form of BCC contract if that economic organization falls into one of the following cases:
- There are foreign investors holding more than 50% of charter capital or the majority of partners are foreign individuals for economic organizations that are partnerships;
- There is an economic organization specified in Point a of this Clause that holds more than 50% of the charter capital;
- There are foreign investors and economic organizations specified in Point a of this Clause holding more than 50% of the charter capital.
- If the economic organization does not fall into the cases specified above, then implement the investment conditions and procedures as prescribed for domestic investors when investing in establishing another economic organization; investment in the form of capital contribution, share purchase, purchase of capital contribution from other economic organizations; Investment in the form of BCC contract.
- If a foreign-invested economic organization has been established in Vietnam, if it has a new investment project, it must carry out procedures to implement that investment project without necessarily establishing a new economic organization.