For foreign investment in Vietnam
According to the investment law 2020, there are five forms of investment in Vietnam
1) Investment in the establishment of economic organizations.
2) Investment to contribute capital, buy shares, buy contributed capital.
3) Implementation of investment projects.
4) Investment in the form of BCC contract.
5) New investment forms and economic organizations according to the Government’s regulations.
According to Article 23 of the Investment Law 2020, if a (domestic) economic organization makes an investment in the forms (1), (2), and (4) and falls into one of the following cases, it must satisfy the following conditions: conditions and carry out investment procedures in accordance with regulations for foreign investors:
i. Having a foreign investor holding more than 50% of the charter capital or having the majority of general partners being foreign individuals, for economic organizations being a partnership;
ii. Having an economic organization in the case of (i) holding more than 50% of charter capital;
iii. There are foreign investors and economic organizations specified in case (i) holding more than 50% of charter capital.
Firstly, for the form of investment to establish an economic organization: Pursuant to Clause 1, Article 22 of the Law on Investment 2020:
Before establishing an economic organization, a foreign investor must have an investment project and carry out procedures for granting and adjusting the Investment Registration Certificate, except for the case of setting up a small and medium-sized enterprise that is just starting out. Creation and innovative start-up investment funds in accordance with the law on supporting small and medium enterprises.
Foreign investors establishing economic organizations must satisfy the market access conditions for foreign investors specified in Article 9 of the Law on Investment 2020.
Domestic investors shall establish economic organizations in accordance with the provisions of the law on enterprises and the law corresponding to each type of economic organization.
Note: From the date of being granted the Certificate of Business Registration or another document of equivalent legal validity, the economic organization established by the foreign investor is the investor implementing the investment project in accordance with the law. specified in the Investment Registration Certificate.
Secondly, for the form of investment in the form of buying shares, buying a part of capital specified in Clause 1, Article 25 of the Law on Investment 2020, which includes the following forms:
– Purchase of shares issued for the first time or additionally issued by a joint-stock company;
– Contributing capital to limited liability companies and partnerships; or
– Contributing capital to other economic organizations that do not fall into the above cases.
Forms of share purchase and purchase of capital contributions from foreign investors as prescribed in Clause 2, Article 25 of the Law on Investment 2020 include:
– Buy shares of a joint-stock company from the company or shareholders;
– Purchase of contributed capital of a member of a limited liability company to become a member of a limited liability company;
– Purchase of capital contributions of capital-contributing members in a partnership to become a capital-contributing member of a partnership;
– Purchase of capital contributions from members of other economic organizations that do not fall into the above cases.
Third: For the form of implementing investment projects
When implementing a number of investment projects, foreign investors must carry out procedures for approval of investment policies.
Fourth for Investment in the form of BCC contract
BCC contract is a business cooperation contract, is a contract signed between investors for business cooperation, profit sharing, product distribution without establishing an economic organization, etc. It depends on the subject of the contract. contract to which the law governing the contract will be different. According to Clauses 2 and 3, Article 27 of the Law on Investment 2020, the law regulating investment forms under BCC contracts is as follows:
– For BCC contracts signed between domestic investors, the provisions of civil law shall be complied with;
– For BCC contracts signed between domestic investors and foreign investors or between foreign investors, carry out the procedures for granting investment registration certificates according to the provisions of Article 38 of the Law on Investment. 2020.
The parties to the BCC contract establish a coordination committee to implement the BCC contract. The functions, tasks and powers of the coordination board shall be agreed upon by the parties.