In Vietnam laws, there are a number of investment methods such as establishing economic organizations; investment in the form of capital contribution, purchase of shares or capital contributions in business organizations; Business Cooperation Contract or Public Private Partnership. Investment in establishing economic organizations, capital contribution, purchase of share or capital contributions are most common in our opinion.

Investment in establishing economic organizations

For investment in the establishment of economic organization, an investor invests capital to carry out the establishment of an enterprise, cooperative, cooperative union or other organization to carry out business investment activities. This is a way of direct investment in which investors directly invest capital and directly participate in management activities.

Forms of establishment of economic organizations include two types: Establishing company with 100% foreign capital; or establishing joint ventures between domestic investors or the Government of Vietnam with foreign investors.

Before establishing an economic organization, the foreign investor must have an investment project and carry out the procedures for the grant of an investment registration certificate. Besides, the conditions for the charter capital ownership and the conditions prescribed by international treaties to which Vietnam is a member need to be met. Regarding charter capital, foreign investors are allowed to hold unlimited ownership in economic organizations, except for cases where the investors operate in fields related to listed companies, public companies, securities trading organizations and securities investment funds in accordance with the law on securities; State owned enterprises equitized or transformed under other forms. In addition, investors must check international treaties to which Vietnam is a signatory.

Set-up branch office in Vietnam

Set-up representative office in Vietnam

It should be noted that depending on the amount of investment capital of a foreign investor, the legal status of an economic organization after its establishment will be determined differently. If the foreign investor holds 51% or more of charter capital, the economic organization after its establishment will have to carry out the procedures applicable to foreign investors. Conversely, if foreign investors hold less than 51% of the charter capital, the regulations applicable to economic organizations after their establishment are applied as domestic investors.

Investment in the form of capital contribution, purchase of shares or capital contributions in business organizations

Foreign investors who wish to access the Vietnamese market but do not want to establish an economic organization can contribute capital, buy shares or buy capital contributions to business organizations operating in Vietnam.

With this form, the investor will become a member or shareholder of that economic organization. It requires investors to meet a conditions similar to the form of establishment of economic organizations. Having said that, it must meet the conditions for the charter capital ownership and the conditions prescribed by international treaties to which Vietnam is a member. Depending on each specific case, the investor must follow the procedures for registration of capital contribution, purchase of shares or capital contribution in an economic organization and send to the competent agency for recognition of legal investment.

Understanding the regulations are important for investors to enter the Vietnam market and consulting with Vietnam lawyers would help investors make informed decision for their business plan in Vietnam.

Accordingly, organizations and individuals providing the above services must fully satisfy the 05 following conditions:

– First, the organization was established and operating in Vietnam; has the function of vocational training or college, university or postgraduate education as prescribed.

– Second, has facility and classroom to ensure sufficient seat for students and location for student to practice on professional knowledge and practice.

– Third, has syllabus or teaching materials consistent with training framework program that promulgated by the Ministry of Construction.

– Fourth, has a minimum of 40% of the teachers on the payroll or a contract of indefinite term (has social insurance contribution) in accordance with the training framework program under the guidance of the Ministry of Construction.

– Fifth, being recognized by the Ministry of Construction or the agency authorized by the Ministry of Construction as qualifying for business of condominium management training service.

In addition, this Decree also provides for conditions for business of real estate brokerage practice training service as follows:

– First, the organization was established and operating in Vietnam; has the function of vocational training or college, university or postgraduate education as prescribed.

– Second, has facility and classroom to ensure sufficient seat for students and location for student to practice on knowledge of real estate brokerage and administration of real estate trading floor.

– Third, has syllabus or teaching materials consistent with training framework program that promulgated by the Ministry of Construction.

– Fourth, has a minimum of 30% of the teachers on the payroll or a contract of indefinite term (has social insurance contribution) in accordance with the training framework program under the guidance of the Ministry of Construction.

Decree No. 79/2016/ND-CP officially takes effect upon signing.

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In the process of establishing, businesses need to conduct the declaration of registered business lines as prescribed by law. For ordinary professions, businesses only need to encode the professions according to the encoding system in accordance with the law.

However, for some conditional business lines, in addition to the declaration in accordance with regulations, enterprises have to fully satisfy the prescribed conditions such as legal capital or business licenses (sublicense).

Moreover, enterprises need to pay attention to some lines of business that require sublicense during the business registration process, which includes:

No	Business line	Name of sublicense	Licensing authority
01	Travel service business	International travel business license	Vietnam National Administration of Tourism
		Domestic travel business license	Department of Culture, Sport and Tourism
02	Hotel business	Decision recognizing the star rating for tourism accommodation facilities	Department of Culture, Sport and Tourism
03	Printing service	Printing operation license	Department of Information and Communication – Department of Publication, Printing and Publishing
04	Real estate business: lease for foreigner	Certificate of fire safety	Chamber/Department of Fire Protection, Province/City Police
		Certificate of social security	District Police
05	Security service business	Certificate of social security	City Police (PC 13)
06	Real estate trading floor	Real estate trading floor operating announcement	Department of Construction
07	Bottled drinking water production	Certificate of food safety	Department of Health or District Department of Health
		Certificate of product standard announcement
08	Food production	Certificate of food safety	Department of Health
		Certificate of product standard
09	Restaurant, eateries and coffee shop business	Certificate of food safety	Department of Health
	Restaurant business	Fire safety inspection record	District Police
10	Informatics/Language Center	Informatics/Language Center Operating License	Department of Education
11	Veterinary medicament business	Certificates of satisfaction of business condition	City Veterinary Department
12	Veterinary medicament production	Veterinary medicament production license	Department of Veterinary
13	Preschool	Preschool Establishment License	Department of Education