Common problems in granting business and investment licenses
Currently, establishing a new business is a very common issue for those who want to do business on their own, especially foreign investors who are not familiar with Vietnamese law, especially the management law for foreign enterprises is very strict, so legal procedures become more complicated, moreover, countries must comply with the laws of each country when notarizing, consular legalization requires time is an important factor, so it is necessary to pay attention to avoid mistakes.
Business lines: it is best to invest in fields/industries that Vietnam has clearly committed to in bilateral or/and multilateral international treaties to avoid the risk of being rejected when registering for fields and industries that have not yet opened the market. Each investment field/business line is associated with the requirement for the corresponding amount of feasible investment capital to serve the implementation, the specific investment conditions/Business Licenses if it is on the list of conditional business lines. Therefore, eliminating the registration of business lines that are not yet or are not really necessary will help investors save maximum time and costs to carry out arising legal procedures as well as have the most favorable conditions when registering and implementing investment and business activities in Vietnam.
Investors: there are some business lines with special conditions that have specific investment requirements on the investor’s status as an individual or a company, which can be determined through a synthesis of investment conditions for all fields/lines registered for investment based on the scope of Vietnam’s market opening commitments and the provisions of Vietnamese law, if any.
Investment capital, charter capital for establishment: Vietnam only stipulates the conditions for investment limits of projects to establish foreign-invested companies in certain fields such as education, real estate business, travel, payment intermediary, etc. Therefore, determining the capital in the most beneficial way for investors when disputes arise is extremely important.
Contributing investment capital, charter capital after establishment: contributing investment capital and charter capital must be done within the registered time limit shown on the Investment Registration Certificate o Investors register the time limit but not more than 90 days from the date of being granted the Enterprise Registration Certificate, Investors must contribute investment capital by transferring to the investment capital account opened by the foreign-invested company in Vietnam according to the requirements/instructions of the State Bank of Vietnam
Place of investment and establishment of the company: has a clear address; Select the Lessor with sufficient documents proving ownership and/or the right to lease/sublease if any; the location/office for lease is permitted for lease, designed and constructed in accordance with Vietnamese law, and is not in a state of dispute. The leased office must be located in an area designed and constructed to serve office functions on the basis of a construction permit granted by a competent Vietnamese state agency.
Company seal: has the right to decide on the form, content and number of seals, can have many seals with the same form and content. Before using, changing, canceling the seal model, changing the number of seals, the Company must send a notice to the competent State agency where the company is headquartered to post the notice of the seal model on the National Business Registration Information Portal. After completing the notification procedure and posting the seal sample on the National Business Registration Information Portal, the seal can be used from the effective date recorded in the posted notification.
Employment: If employing foreign workers, the Company must carry out procedures to apply for a Visa, approval to employ foreign workers, Work Permit, Temporary Residence Card according to the conditions and procedures prescribed by Vietnamese law.
Legal representative: The Company must ensure that there is always at least one legal representative residing in Vietnam. In case the Company has only one legal representative, that person must reside in Vietnam and must authorize in writing another person to exercise the rights and obligations of the legal representative when leaving Vietnam. In this case, the legal representative is still responsible for the exercise of the authorized rights and obligations.
Tax obligations: companies in Vietnam will have to pay business license fees (from 2 to 3 million VND depending on registered charter capital); must pay corporate income tax when making a profit; declare and pay value added tax. Depending on the business investment industry, companies in Vietnam may also have to pay taxes such as export tax, import tax, special consumption tax, etc.
Vietnam also has many preferential investment regulations on corporate income tax when investing in industries with investment incentives or investing in areas with difficult or especially difficult socio-economic conditions.
Investment project reporting: Foreign-invested companies in Vietnam established under foreign-invested investment projects must properly and fully implement the investment project reporting regime, must register an account and implement the project reporting regime through the National Investment Information Portal
We have more than 13 years of experience operating in the field of enterprises and investment, always ready to provide investors with the most valuable and optimal advice on the 10 important contents mentioned above and many other related contents to be able to establish foreign companies in Vietnam in accordance with the law, exploit investment incentives to the fullest and develop more and more prosperously.
As our legal partner, customers will be provided with the following comprehensive legal services:
Legal advice and policies on company establishment in Vietnam;
Support in finding a location for the company;
Advice on conditions and procedures for investing and doing business in Vietnam.
Provide policies on tax, labor, etc. to serve the company’s operations in Vietnam;
Draft documents and files for investment registration and company establishment in Vietnam;
Authorized representative to submit documents, explain documents at the licensing authority and monitor the licensing process for the company in Vietnam;
Other support services: translation, legalization, notarization, etc.
In addition, we also provide customers with support activities after establishment such as:
Regular consultation for the company during its operation;
Advice on business operation and management mechanisms;
Other consultations as agreed with the customer.
How to set up a foreign company in Vietnam
Prepare documents
Document components, including:
1. Application for business registration according to the form prescribed in Appendix I-3 of Circular No. 02/2019/TT-BKHĐT;
2. Company charter (with full name and signature of individual members and legal representative or authorized representative of organizational members);
3. List of members according to the form prescribed in Appendix I-6 of Circular No. 02/2019/TT-BKHĐT;
4. Valid copies of the following documents:
a. One of the personal identification documents prescribed in Article 10 of Decree No. 78/2015/ND-CP in case the enterprise founder is an individual;
b. Decision on establishment or Certificate of business registration or other equivalent documents, one of the personal identification documents specified in Article 10 of Decree No. 78/2015/ND-CP of the authorized representative and the corresponding authorization document in case the enterprise founder is an organization;
c. Investment registration certificate in case the enterprise is established or participated in by a foreign investor or an economic organization with foreign investment capital in accordance with the provisions of the Investment Law and guiding documents.
Submission of documents
Implementation method: The enterprise founder or the authorized person carrying out the enterprise registration procedure submits the enterprise registration dossier directly to the Business Registration Office where the enterprise has its head office or the Legal Representative submits the enterprise registration dossier electronically according to the process on the National Enterprise Registration Information Portal. Implementation sequence:
+ In case of direct registration:
The business founder or the authorized person to carry out the business registration procedure submits the business registration dossier and pays the fee at the Business Registration Office where the business is headquartered
Upon receiving the dossier, the Business Registration Office shall issue a Receipt.
+ In case of registration via the electronic network using a public digital signature:
A valid online business registration dossier is specified in Article 36 of Decree No. 108/2018/ND-CP;
The legal representative declares information, downloads electronic documents, digitally signs the electronic registration dossier and pays the fee via the electronic network according to the process on the National Business Registration Information Portal.
After completing the submission of the registration dossier, the legal representative will receive a Receipt of the online business registration dossier.
+ In case of online registration using a Business Registration Account:
A valid online business registration dossier is specified in Article 36 of Decree No. 108/2018/ND-CP;
The legal representative declares information, downloads electronic documents of personal identification documents at the National Business Registration Information Portal to be granted a Business Registration Account.
The legal representative uses the Business Registration Account to declare information, download electronic documents and authenticate the online business registration dossier according to the process on the National Business Registration Information Portal.
After completing the submission of the registration dossier, the business founder will receive a Receipt of the online business registration dossier.
Processing time: Within 03 (three) working days from the date of receipt of a complete and valid dossier.
Get results
In case of direct registration:
- In case of receiving sufficient valid documents, the Business Registration Office shall issue the Business Registration Certificate within 03 (three) working days.
- If the Business Registration Certificate is refused, the Business Registration Office shall notify the business founder in writing within 03 (three) working days.
In case of online registration using public digital signature:
- In case the dossier meets the conditions for granting a Certificate of Business Registration, the Business Registration Office sends information to the tax authority to automatically generate a business code. After receiving the business code from the tax authority, the Business Registration Office issues a Certificate of Business Registration and notifies the enterprise of the issuance of the Certificate of Business Registration.
- In case the dossier is invalid, the Business Registration Office sends a notice via the electronic network to the enterprise requesting amendments and supplements to the dossier.
In case of online registration using Business Registration Account:
- The Business Registration Office is responsible for reviewing and sending electronic notifications to the enterprise to request amendments and supplements to the dossier in case the dossier is invalid. When the dossier meets the conditions for granting a Business Registration Certificate, the Business Registration Office sends information to the tax authority to create a business code. After receiving the business code from the tax authority, the Business Registration Office notifies the enterprise via the electronic network about the granting of the Business Registration Certificate.
- After receiving the notification of the granting of the Business Registration Certificate, the legal representative shall submit a set of paper business registration dossiers with the Business Registration Receipt and the Notice of Valid Documentation via the electronic network to the Business Registration Office. The legal representative may directly submit the paper business registration dossier and the Business Registration Receipt via the electronic network to the Business Registration Office or submit it by post.
- After receiving the paper dossier, the Business Registration Office shall compare the dossier items with the dossier items that the enterprise has sent via the electronic network and issue the Business Registration Certificate to the enterprise if the comparison content is consistent.
- If the Business Registration Office does not receive the paper dossier within 30 days from the date of sending the notice of issuance of the Business Registration Certificate, the enterprise’s electronic registration dossier is no longer valid.
- The legal representative is responsible for the completeness and accuracy of the paper dossier compared to the dossier sent via the electronic network. In case the paper dossier is not accurate compared to the dossier sent via the electronic network and the applicant does not notify the Business Registration Office at the time of submitting the paper dossier, it is considered a forged dossier and will be handled according to the provisions of Clause 1, Article 63 of Decree No. 108/2018/ND-CP.
After business registration
After being granted a Business Registration Certificate, in order to officially operate, the enterprise needs to carry out the following procedures:
Within 30 days from the date of establishment or registration of changes to business registration contents, the enterprise must post the business registration contents on the National Business Registration Information Portal as prescribed in Article 28 of the Law on Enterprises, Clause 2, Article 1 of Decree No. 05/2013/ND-CP and pay the fee for publishing the business registration contents;
After having a business code (which is also a tax code), the enterprise needs to carry out a number of tax procedures at the Tax Authority to declare and pay taxes according to the notice of the Provincial/Municipal Tax Department (procedures for creating and issuing invoices; procedures for purchasing and issuing invoices; procedures for declaring and paying taxes, etc.).
Enterprises, branches, and representative offices that carry out seal engraving procedures must contact relevant agencies and the police agency to carry out seal engraving procedures and register seal samples according to the provisions of Decree No. 58/2001/ND-CP.
For conditional business lines: after being granted a Business Registration Certificate, the enterprise must contact the specialized management agency for guidance.
Obligations of enterprises:
- Conduct business activities in accordance with the business lines and professions stated in the Business Registration Certificate; ensure business conditions according to the provisions of law when conducting business in conditional business lines and professions.
- In case the content of the Business Registration Certificate is found to be inaccurate compared to the content of the business registration dossier, the enterprise shall send a notice requesting the business registration authority to make appropriate corrections. Arbitrarily changing the content of the Business Registration Certificate is a violation of the law and will be subject to administrative sanctions.
Hang a sign at the enterprise’s headquarters. - When changing the business registration content, the enterprise founder must go to the business registration authority to promptly and accurately register the change within 10 days from the date of the decision to change.
- Organize accounting work, prepare and submit financial reports honestly, accurately, and on time according to the provisions of the law on accounting.
- Register tax declarations, pay taxes and perform other financial obligations according to the provisions of law.
- Ensure the rights and interests of employees in accordance with the provisions of the law on labor; implement social insurance, health insurance and other insurance for employees in accordance with the provisions of the law on insurance.
- Ensure and be responsible for the quality of goods and services according to registered or announced standards.
- Implement the statistical regime in accordance with the provisions of the law on statistics; periodically report full information about the enterprise and the financial situation of the enterprise to the competent state agency according to the prescribed form; when discovering that the declared or reported information is inaccurate or incomplete, it must promptly amend and supplement such information.
- The legal representative of the company must notify in writing the progress of the registered capital contribution to the business registration agency within fifteen days from the date of capital contribution commitment and must be personally responsible for any damage to the company and others due to late notification or inaccurate, dishonest or incomplete notification.
- Comply with the provisions of law on national defense, security, order, social safety, protection of resources, environment, protection of historical and cultural relics and scenic spots. Enterprises must keep their documents at their headquarters as prescribed in Article 12 of the Law on Enterprises.
(Prescribed in Article 9, Article 28, Law on Enterprises).
How to set up a representative office
Prepare documents
I. The dossier for registration of representative office activities includes:
Notice of registration of representative office activities (Appendix II-11, Circular No. 02/2019/TT-BKHĐT);
Decision and valid copy of the minutes of the meeting of the Board of Members for a limited liability company with two or more members, of the company owner or the Board of Members or the Chairman of the company for a one-member limited liability company, of the Board of Directors for a joint stock company, of the partners for a partnership company on the establishment of a representative office;
Valid copy of the decision to appoint the head of the representative office;
Valid copy of one of the personal identification papers specified in Article 10 of Decree No. 78/2015/ND-CP of the head of the representative office.
Application for supplementing and updating business registration information (Appendix II-18, Circular No. 02/2019/TT-BKHĐT) for enterprises operating under Investment Licenses, Investment Certificates or other documents of equivalent legal value that have not supplemented or updated business registration information to be granted business registration to replace the business registration content in the Investment License, Investment Certificate or other documents of equivalent legal value.
II. In case an enterprise establishes a representative office abroad, the dossier includes:
Notice of establishment of a representative office abroad (Appendix II-12, Circular No. 02/2019/TT-BKHĐT).
A valid copy of the Certificate of registration of representative office operations or equivalent documents.
Submitting documents
Implementation procedures:
When registering a representative office, the enterprise must send a Notice of establishment of a representative office to the Business Registration Office where the representative office is located. The Notice must be accompanied by the documents stated in the dossier.
In case the enterprise establishes a representative office abroad, it must comply with the provisions of the law of that country. Within 30 working days from the date of officially opening a representative office abroad, the enterprise must send a Notice of establishment of a representative office abroad to the Business Registration Office where the enterprise has registered (Appendix II-12, Circular No. 02/2019/TT-BKHĐT). The Notice must be accompanied by a valid copy of the Certificate of registration of representative office activities or equivalent documents to supplement information about the enterprise’s representative office in the National Database on Business Registration.
Implementation method: The legal representative directly submits the Notice of registration of representative office activities to the Business Registration Office or via the electronic network according to the process on the National Business Registration Information Portal.
Number of documents: 01 set
Fee:
100,000 VND (Circular No. 176/2012/TT-BTC) (Submitted at the time of registration).
Receive results
Within 03 working days from the date of receiving valid documents, the Business Registration Office shall issue a Certificate of registration of representative office activities to the enterprise.
In case the enterprise establishes a representative office abroad: The Business Registration Office shall supplement information about the enterprise’s representative office in the National Database on Business Registration.
How to set up an agency, business location
Notification Form
The Notification Form on Establishing a Business Location is specified in Appendix II-11, Circular No. 02/2019/TT-BKHĐT.
Submission of Notification
Implementation procedure:
The business location of an enterprise may be outside the registered address of the head office. An enterprise may only establish a business location in the province or centrally-run city where the enterprise has its head office or branch.
Within 10 working days from the date of deciding to establish a business location, the enterprise shall send the Notification on Establishing a Business Location to the Business Registration Office.
How to do it: The legal representative shall directly send the Notification on registering the operation of a branch, representative office/establishing a business location to the Business Registration Office or via the electronic network according to the process on the National Business Registration Information Portal.
Number of documents: 01 set.
Processing time: Within 03 (three) working days from the date of receipt of valid documents.
Fee:
+ VND 50,000/time for documents submitted directly to the Business Registration Office (Pay at the time of submission).
+ Exemption from fees for documents registered online
(Circular No. 130/2017/TT-BTC)
Receive results
Upon receiving valid documents from the enterprise, the Business Registration Office enters information into the National Information System on Business Registration to request a business location code.
Within 03 working days from the date of receipt of valid documents, the Business Registration Office issues a Business Location Registration Certificate to the enterprise.
Law on Enterprises of the National Assembly of the Socialist Republic of Vietnam No. 68/2014/QH13 dated November 26, 2014 (Law on Enterprises);
Decree No. 78/2015/ND-CP dated September 14, 2015 of the Government on business registration (Decree No. 78/2015/ND-CP);
Decree No. 108/2018/ND-CP dated August 23, 2018 of the Government amending and supplementing a number of Articles of Decree No. 78/2015/ND-CP dated September 14, 2015 of the Government on business registration
Circular No. 20/2015/TT-BKHĐT dated December 1, 2015 of the Ministry of Planning and Investment guiding on business registration (Circular No. 20/2015/TT-BKHĐT);
Circular No. 02/2019/TT-BKHĐT dated January 8, 2019 of the Ministry of Planning and Investment Amending and supplementing a number of articles of Circular No. 20/2015/TT-BKHĐT dated December 1, 2015 of the Ministry of Planning and Investment guiding on business registration
Circular No. 176/2012/TT-BTC dated December 23, 2012 of the Ministry of Finance stipulating the collection rates, collection, payment, management and use of fees for business registration, business household registration and fees for providing business information (Circular No. 176/2012/TT-BTC).
Solution
Whether the preparation of documents is quick or not depends on identifying all the risks of the business characteristics. Contact us for a more detailed discussion of the Company’s situation and guidance on documents and work steps to be implemented in accordance with the actual situation.