Foreign investors can invest in Vietnam through many different forms. Especially for investors who are foreign companies, they can invest in one of the following forms: Establishment of a 100% foreign owned company, Joint venture with domestic investors, investment in accordance with business cooperation contract… In fact, one of the investment forms that foreign companies often choose is to establish subsidiary companies in Vietnam.
Please contact VN Law Firm (luatvn) for the best advice and support. hotline / Zalo number; 0763387788 -email@example.com
- 1 Legal grounds
- 2 Holding company subsidiaries
- 3 Procedures for setting up subsidiary companies in Vietnam
• WTO commitments;
• Relevant Free Trade Agreements;
• Law on investment 2014;
• Enterprise Law 2014
Holding company subsidiaries
First of all, we must understand the parent company and subsidiary company like? Unlike a branch or representative office of a foreign company, the parent company – subsidiary company is two independent entities with separate legal status. However, the parent company has a certain economic interest in the subsidiary (the capital contribution of the parent company in the subsidiary); Depending on the legal type of the subsidiary, the parent company exercises its rights and obligations as a member, owner or shareholder in the relationship with the subsidiary; The parent company has the right to dominate the decisions of the subsidiary in many forms.
Under the provisions of the Enterprise Law 2014, a company is considered the parent company of another company if it falls into one of the following cases:
• Owning more than 50% of the charter capital or total common shares of that company;
• Have the right to directly or indirectly decide to appoint the majority or all members of the Board of Directors, Director or General Director of that company;
• Have the right to decide on any amendment or supplement to the company’s Charter.
Procedures for setting up subsidiary companies in Vietnam
Step 1: Procedures for issuance of Investment Registration Certificate
Step 2: Business registration certificate issuance procedures
Step 3: Procedure to engrave the legal entity seal and publish the company’s seal sample
• Subsidiaries are not allowed to invest in capital contribution or purchase shares of the parent company. Subsidiaries of the same parent company are not allowed to contribute capital or purchase shares to cross-own each other;
• Subsidiaries with the same parent company that owns at least 65% of state capital are not allowed to contribute capital to establish an enterprise in accordance with the Law on Enterprises.
• The parent company has limited liability to its subsidiary;
• The parent company has basic rights and obligations toward the subsidiary as prescribed in Article 190 of the 2014 Law on Enterprises.
Above is the advice of Vietnam Law Firm (luatvn). If you have any questions or need to use legal services, please contact VN Law Firm (luatvn) for the best advice and support. hotline / Zalo number; 0763387788 – firstname.lastname@example.org
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