Vietnam investment law: improving the situation of foreigners from 1 July 2015
The new Vietnam investment law improves the situation for foreign investors. It relaxes investment rules in Vietnam, cutting red tape and protecting foreign capital.
Relaxation of rules of Vietnam investment law
The National Assembly of Vietnam on November 26, 2014 passed a law on investment in Vietnam, that came into force on 1 July 2015. This law improves the investment environment for foreign investors. It is part of the attraction policy of the country to attract international investment. The Vietnam investment law now offers a serious guarantee for investors willing to develop economic activity in Vietnam, namely:
- Fewer activities are “prohibited” and “conditional”: It effectively reduces the number of activities prohibited to foreigners, from 51 to 6, and decreases the number of open activities in a limited way to foreigners and requiring approval, which fell from 391 to 267.
- Clarification: The law of 2014 brings some clarifications and defines in particular the foreign investor as a natural or legal person whose registered office is abroad. Thus, any Foreign Invested Enterprises that are more than 50% owned by a foreign investor will be considered a “foreign investor”. However, the FIE owned less than 50% by a foreign investor will benefit from a treatment equivalent to that from which national companies benefit.
Simplification of investment procedures in Vietnam
The investor is a natural or legal person.
- Investment certificate: it is mandatory to invest in Vietnam. To get it, investors should build a case which will be submitted for consideration by the competent authorities. Each business creation represents a specific investment that will be subject to requirements and specific regulations established by the Vietnamese government. A distinction is made between major projects and smaller projects, foreign investment projects deemed important are subject to an assessment procedure, case-by-case and with stricter conditions. Projects considered as less consequential are subject to a registration procedure in which the competent authority checks the conformity of the project with objective criteria laid down by national legislation.
- Permission from the Vietnamese government: Investors wishing to establish a branch or a representative office in Vietnam must also submit their application to the Vietnamese administration, but the conditions are alleviated and the investment certificate/license is not required: only the agreement of the Vietnamese Government is required. When examining the case, particular attention will be paid to the interest of the parent company’s activity for the country.
- Visa: To enter the territory, a stranger in principle needs a visa issued by an embassy or consulate of Vietnam. Nationals of some countries, however, are exempted for short stays. Different types of visas exist depending on the profession and the subject of the applicant’s request.
- Residency permit: temporary residence permits will be granted by the immigration management department, police station with durations corresponding with the issued visas. An applicant for a residence permit must present evidence that he/she works/invests in Vietnam.
- Work permit: In Vietnam, foreign workers must hold a work permit issued by the Vietnamese government, with the exception of head of a representative office or subsidiary established in Vietnam, foreign lawyers who have a certificate of practice of the legal profession in Vietnam, foreigners being members/owner of LLC, members of the Board of management of SC, foreigners who are internally transferred within a company and within the scope of the List of Commitments of Services of Vietnam with WTO. The employer is in charge to submit the file to the Department of Labour, War Invalid and Social Affairs in both cases: request for issuance of work permit and certification of work permit exception.
Vietnamese-Attorney.com can assist you in your efforts with the Vietnamese government and ensure the rapid obtaining of these documents, required to start your business.
Foreign Investment Protection
The ownership of capital is guaranteed by the Law on Vietnamese investment. This contributes to the country’s policy to attract foreign investors. For this it was necessary to provide a legal framework for the protection of foreign investment. The country is working to constantly improve and modernise protection mechanisms in order to have the full confidence of investors.
Vietnamese-Attorney.com helps you overcome these weaknesses through its knowledge of the local business and its privileged relations with the Vietnamese Government and ensures fast processing of paperwork. Ask online for a free no-obligation quote.