When Vietnam’s Investment Law came into effect on 1 July, 2015, it created a new framework for foreign investors to do business in Vietnam. However, the lack of accompanying guidance led to differing interpretations at the local level across the country.
This issue has been addressed by the promulgation of Decree No.118/2015/ND-CP on the Investment Law, which clarifies key investment and business registration procedures.
Business and Investment Registration
Ministry of Planning and Investment Legislation Department deputy head Quach Ngoc Tuan has clarified that investors are to submit documents pertaining to investment and business registration to the relevant investment registration bodies, which will then send the documents on to relevant business registration agencies within one working day.
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Feedback on the documents is then expected to be given by the business registration agencies within two working days.
Investors will now be permitted to handle the obligatory investment registration and business registration procedures simultaneously.
Foreign investors are required to declare aspects of their investment projects via the national information system before applying for a new or amended business registration certificate. Foreign investors are to submit relevant documentation to the investment registration authorities within 15 days of completing the declaration.
Foreign investors are required to declare capital holdings, the investment model, investment scope, conditions for Vietnamese partners to participate in investment activities, and other conditions.
Capital contribution or purchases of a stake in a business are subject to special conditions. Further investment conditions are to be published on the Ministry of Planning and Investment’s national foreign investment portal.
Security Deposits and Preferential Treatment
For those allocated land by the state, projects with up to VND300 billion in investment capital will be required to make a security deposit at a rate of three percent of project value. A two percent rate will apply to projects with VND300 billion to VND1 trillion, and a one percent rate to projects with over VND1 trillion of investment capital.
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The Decree grants preferential investment treatment to projects in economically disadvantaged areas, projects with at least VND6 trillion in investment capital, and those employing at least 500 full-time workers.
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