According to the  Investment Law 2014, there are four forms of foreign investment in Vietnam, namely investment in establishment of economic organizations; investing in the form of capital contribution, purchase of shares or capital contributions in business organizations; Investment in the form of PPP; Invest under BCC contracts. Depending on the needs of investors to choose the most appropriate form of investment. Each form of investment has different characteristics, conditions and order. Thanh Do Lawfirm would like to present the content of foreign investment in Vietnam for customers to understand.

I. INVESTMENT IN THE FORMS OF ESTABLISHING ECONOMIC ORGANIZATIONS

  Establishment of a company with 100% foreign capital Establishment of a joint venture company between domestic and foreign investors
Same – As a form of direct investment;

– Investor establishes a new economic organization (Joint Stock Company, Limited Liability Company, Partnership Company);

– Before establishing a foreign investor holding 51% or more of charter capital, there must be an investment project, carrying out the procedures to apply for an Investment Registration Certificate;

– Satisfying the conditions specified in Article 22 of the 2014 Investment Law;

Different – Capital ownership ratio of foreign investors: 100%; – Proportion of foreign investors’ ownership: Over 0% and less than 100%
– Business lines do not have any limitation on the percentage of capital contribution; – Compulsory application for business lines with restrictions on capital ownership;

For example: The advertising service industry requires foreign investors to enter into joint ventures with an advertising company in Vietnam.

– Investors: foreign individuals and organizations – Investors: Foreign individuals and organizations; Vietnamese individuals and organizations;

II. INVESTMENT IN THE FORM OF CONTRIBUTION TO CAPITAL, PURCHASE OF SHARES AND CAPITAL CONTRIBUTED TO ECONOMIC ORGANIZATIONS

Foreign investors Contributing capital, buying shares, or buying capital contributions of business organizations can take two forms:

(1) Indirect investment by purchasing stocks, bonds and other valuable papers that investors are not directly involved in managing investment activities;

(2) Direct investment by contributing capital, buying shares, or buying capital contributions of an economic organization in Vietnam and investors participating in the management of investment and operations of enterprises.

This capital contribution, share purchase or capital contribution may lead to the establishment of a joint venture company between a foreign investor and a domestic investor or result in the establishment of a company with 100% foreign capital.

Investors investing in this form need to comply with the same conditions of charter capital ownership as the form of investment to establish an economic organization.

Investors make capital contribution, purchase shares, or contribute capital to an economic organization that is not required to apply for an Investment Registration Certificate in accordance with Clause 2 Article 37 of the 2014 Investment Law.

Reference: Some concepts of investment registration certificates 

III. INVESTMENT IN THE FORM OF PPP CONTRACT

PPP contract is a contract signed between a competent state agency and a project investor or enterprise to execute an investment project. This is a form of investment cooperation to provide high quality public services, which benefits both the state and the people, so it requires complicated sequences and procedures. The state agency will announce the investment project and select qualified contractors. For projects proposed by investors, the Government, the People’s Committees at all levels together with the provincial departments and branches shall coordinate and consider and evaluate the project dossiers to decide on investment policies. If the project meets the requirements, it will be announced and the contract will be signed.

Reference: Decree 63/2018 / ND-CP on public-private partnership investment

III. INVESTMENT IN THE FORM OF CONTRACT OF BCC

BCC is a form of investment signed between foreign investors and domestic investors or between foreign investors in order to cooperate in business, profit distribution and product distribution without success. new legislative entity. The advantage of this form is to help investors conduct investment activities quickly without losing time and capital to establish and manage a new legal entity.

A BCC contract with at least one party being a foreign investor must carry out the procedures for applying for an investment registration certificate in accordance with the Investment Law.

The above is all advice on forms of investment from abroad into Vietnam compiled by the Thanh Do Lawfirm based on current law provisions. Customers who need further advice about Foreign Investment in Vietnam can contact the Thanh Do Lawfirm Hotline for advice and answers to questions.