Chapter V
ESTABLISHMENT OF BUSINESS ORGANIZATIONS AND CONDUCT OF INVESTMENT ACTIVITIES BY FOREIGN INVESTORS
Article 63. Establishment of business organizations by foreign investors
1. Except for the case in Article 67 hereof, the foreign investor shall establish a business organization and execute an investment project as follows:
a) In the case of execution of a new investment project, the foreign investor shall follow procedures for approval of investment guidelines and issuance of the investment registration certificate to the new investment project, and procedures for establishing a business organization in accordance with regulations of law corresponding to each type of business organization;
b) In the case of receipt of an investment project and establishment of a business organization, the foreign investor shall follow procedures for issuance of the investment registration certificate (if such project is not issued with the investment registration certificate) or adjustment of the investment registration certificate (if such project has been issued with the investment registration certificate) and procedures for business organization establishment in accordance with regulations of law corresponding to each type of business organization.
2. Documentation and procedures for establishment of the business organization shall comply with regulations of law on enterprises or other law corresponding to each type of business organization.
3. Charter capital of a business organization established by a foreign investor for execution of an investment project is not necessarily equal to the investment capital of the investment project. The business organization established by the foreign investor shall contribute capital and raise capital from other sources to execute the investment project according to the schedule on the investment registration certificate.
Article 64. Execution of investment projects and business investment activities of foreign-invested business organizations
1. If there is a new investment project other than the investment project issued with the investment registration certificate, the foreign-invested business organization shall follow the procedures below:
a) The business organizations specified in Point a through c Clause 1 Article 23 of the Law on Investment shall follow procedures for issuance of the investment registration certificate as set out in this Decree;
b) Business organizations other than those specified in Point a of this Clause shall implement the reporting regulation specified in Clause 5 Article 72 of the Law on Investment. The report shall specify: The project’s name, investment objectives, investment scale, investment capital, location, schedule, labor demand, and investment incentives (if any).
2. A foreign-invested business organization is entitled to adjust the contents of enterprise registration at the business registration authority without necessarily having an investment project. The addition of business lines by the foreign-invested business organization must satisfy market access conditions (if any) applied to a foreign investor.
3. A foreign-invested business organization is entitled to establish branches, representative offices and business locations outside its headquarters without necessarily having an investment project. Applications and procedures for establishment of a branch, representative office or business location of the business organization shall comply with regulations of law on enterprises or other law corresponding to each type of business organization.
4. When making investment or trading securities on the securities market, every foreign-invested business organization shall comply with regulations of law on securities regarding investment procedures and holding of charter capital, unless otherwise prescribed by international investment-related treaties regarding holding of charter capital.
Article 65. Conditions and rules for conducting investment activities by contributing capital, purchasing shares or purchasing stakes
1. Any domestic investor that invests in contributing capital, purchasing shares or purchasing stakes in a business organization established in Vietnam shall comply with the conditions and procedures specified in the Law on Enterprises and other law applicable to each type of business organization.
2. The contribution of capital, purchase of shares or stakes on the securities market shall comply with regulations of law on securities.
3. Wholly state-owned enterprises and representatives of state capital invested in enterprises shall comply with the conditions and procedures prescribed by regulations of law on management and use of state capital invested in manufacturing and business activities of enterprises; law on management and use of public property and other relevant law upon conducting investment activities by contributing capital, purchasing shares or purchasing stakes in business organizations or transferring the stakes or shares to other organizations and individuals.
4. A foreign investor contributing capital or purchasing shares or stakes in a business organization established in Vietnam shall satisfy the conditions set out in Clause 2 Article 24 of the Law on Investment, including:
a) Market access conditions applied to foreign investors upon capital contribution, and purchase of shares and stakes in business organizations established in Vietnam as prescribed in Clause 3 Article 9 of the Law on Investment and Articles 15, 16 and 17 of this Decree;
b) Conditions concerning assurance of national defense and security and conditions for land use applied to a business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors in case such business organization has the certificate of rights to use land on the island, in border commune, ward or town and coastal commune, ward or town; other areas that affect defense and security, except for the business organization executing the investment project in an industrial park, export-processing zone, hi-tech zone or economic zone established under the Government’s regulations.
5. Any foreign organization or individual that receives shares or stakes in a business organization established in Vietnam by a gift or exchange or another contract of transfer of ownership rights as prescribed by law or through inheritance shall satisfy the conditions set out in Clause 4 of this Article and follow procedures in accordance with regulations applicable to foreign investors making investment in the form of capital contribution, purchase of shares or stakes.
Article 66. Procedures for conducting investment activities by contributing capital, purchasing shares or purchasing stakes applicable to foreign investors
1. Except for the case specified in Clause 2 Article 26 of the Law on Investment, a business organization in which foreign investors invest in the form of capital contribution, purchase of shares or stakes shall follow procedures for registration of a change of members or shareholders in accordance with regulations of law on enterprises and other law corresponding to each type of business organization.
2. The business organization in which foreign investors invest in the form of capital contribution, purchase of shares or stakes in the case specified in Clause 2 Article 26 of the Law on Investment shall submit 01 set of application for registration of capital contribution or purchase of shares or stakes to investment registration authority of the administrative division where the business organization’s headquarters is located. The application includes:
a) A registration form for capital contribution/purchase of shares/stakes, which contains: enterprise registration information of the business organization to which the foreign investors expects to contribute capital or whose shares/stakes are expected to be purchased by the foreign investors; business lines; list of owners, members and founding shareholders, list of owners, members and founding shareholders that are foreign investors (if any); holding of charter capital by foreign investors before and after the capital contribution/purchase of shares/stakes in the business organization; expected transaction value of the contract for capital contribution/purchase of shares/stakes; information about the business organization’s investment project (if any);
b) Copies of legal documents of the individual or organization that contributes capital or purchases shares/stakes and of the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors;
c) A principal agreement on capital contribution or purchase of shares/stakes between the foreign investors and the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors or between the foreign investors and the shareholders or members of such business organization.
d) A copy of the certificate of land use rights of the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors (in the case specified in Point b Clause 4 Article 65 of this Decree).
3. For the cases specified in Points a and b Clause 2 Article 26 of the Law on Investment, within 15 days from the receipt of the valid application specified in Clause 2 of this Article, the investment registration authority shall consider the satisfaction of the conditions for capital contribution or purchase of shares or stakes set out in Clause 2 Article 24 of the Law on Investment and Clause 4 Article 65 of this Decree, and notify the investors, except for the case in Clause 4 of this Article. The notification shall be sent to foreign investors and business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors.
4. If the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors has the certificate of rights to use land on an island or in a border or coastal commune; in a coastal commune; in another area that affects national defense and security, the investment registration authority shall follow the procedures below:
a) Within 03 working days from the receipt of the valid application specified in Clause 2 of this Article, the investment registration authority shall seek opinions of the Ministry of National Defense and Ministry of Public Security about the satisfaction of the conditions specified in Point b Clause 4 Article 65 of this Decree.
b) Within 07 working days from the receipt of the investment registration authority’s request, the Ministry of National Defense and Ministry of Public Security shall give their opinions about the satisfaction of the conditions for national defense and security assurance by the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors; in case of failure to give any opinion by the aforementioned deadline, it is considered that it concurs with the satisfaction of the conditions for national defense and security assurance by the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors;
c) Within 15 days from the receipt of the valid application, the investment registration authority shall consider the satisfaction of the conditions for capital contribution or purchase of shares or stakes specified in Clause 2 Article 24 of the Law on Investment and Clause 4 Article 65 of this Decree, and notify investors according to the opinions given by the Ministry of National Defense and Ministry of Public Security. The notification shall be sent to foreign investors and business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors.
5. After foreign investors are granted the approval for capital contribution or purchase of shares or stakes as prescribed in Clauses 3 and 4 of this Article, the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors shall follow procedures for change of members or shareholders at the business registration authority in accordance with regulations of law on enterprises and other law corresponding to each type of business organization. Rights and obligations of foreign investors that act as members or shareholders of the business organization shall be established after completing the procedures for change of members or shareholders.
Article 67. Procedures for establishment of, capital contribution or purchase of stakes in start-up SMEs and startup investment funds
1. If a start-up SME is established to execute an investment project as specified in Clause 8 Article 19 hereof or contributes capital or purchases shares or stakes in a start-up SME to execute the investment project as specified in Clause 8 Article 19 hereof, the foreign investor shall follow the procedures applicable to domestic investors in accordance with regulations of Law on Enterprises without having to follow the corresponding procedures specified in Articles 22 and 26 of the Law on Investment and Articles 63 through 66 of this Decree.
2. When establishing an enterprise for the only purpose of managing a startup investment fund in Vietnam in accordance with regulations of law on provision of assistance for SMEs or contributing capital to this fund, the foreign investor shall follow the procedures in accordance with the corresponding regulations of the Law on Provision of Assistance for Small and Medium-sized enterprises without having to follow the procedures specified in Articles 22 and 26 of the Law on Investment and Articles 63 through 66 of this Decree.
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