Despite the complicated situation of the Covid-19 epidemic, Vietnam is still one of the countries that control the pandemic quite well. At the same time, Vietnam is gradually becoming a fertile market attracting foreign investors in many fields. Therefore, the form of investment is an issue that many foreign investors are interested in. With this article, Phuc Cau Law would like to introduce you to a form of foreign investment in Vietnam according to Vietnamese Law:
According to the provisions of the Enterprise Law 2020, the forms of foreign investment include: Investment in the establishment of economic organizations; Investment in capital contribution, purchase of shares, purchase of contributed capital; Implementation of investment projects; Investment in the form of BCC contract and New forms of investment and economic organization according to the Government’s regulations.
1. Form of investment in Vietnam by establishing a new enterprise
Investment in establishing a new enterprise with foreign capital includes: Enterprise with 100% foreign capital or Enterprises with a part of the capital of foreign investors.
Before establishing an economic organization, a foreign investor must have an investment project, carry out the procedures for granting and modifying the Investment Registration Certificate (except for the case of establishing a small and medium-sized enterprise that is just starting a small business). Creation and investment funds for innovative start-ups by the law on supporting small and medium-sized enterprises) and must meet the following conditions:
– Satisfy the conditions on the ratio of ownership of charter capital as prescribed by law;
– Investment firm, the scope of activities, Vietnamese partners, and other aspects are consistent with international treaties to which Vietnam is a member.
2. Investment in the form of capital contribution, share purchase, capital contribution to economic organizations
This is the form of investor contributing capital, purchasing shares, capital contribution to economic organizations to carry out investment activities.
Foreign investors may contribute capital to economic organizations in the following forms:
- Purchasing initially or additionally issued shares of joint-stock companies;
- Contributing capital to limited liability companies and partnerships;
- Contributing capital to other economic organizations not in the above cases.
Foreign investors may purchase shares or capital contributions at economic organizations in the following forms:
- Purchasing shares of joint-stock companies from such companies or their shareholders;
- Purchasing capital contributions of members of limited liability companies to become members of such companies;
- Purchasing capital contributions of capital-contributing members in partnerships to become capital-contributing members of such partnerships;
- Purchasing capital contributions of members of other economic organizations not in the above cases.
3. Implementation of investment projects
Foreign investors who want to invest in infrastructure projects usually choose this type of investment, which gives them the chance to institute a direct relationship with the Government.
4. Form of investment under business cooperation contract (BCC)
A BCC means a contract signed between a foreign investor and a Vietnamese partner which does not establish a separate legal entity. The parties to a business cooperation contract are licensed to operate and implement a specific project in Vietnam to share the revenue or profits arising from such activities. The parties to the BBC contract will form a steering committee to implement the BBC.
Foreign investors can invest through BBC contracts. BBC contracts can be written agreements between domestic investors and foreign investors.
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