Vietnam is a country in the period of strong economic development, attracting a lot of international investment capital. So what is the latest foreign investment law in Vietnam? Follow the following article of Luatvn.vn to understand better.
What are foreign investors?
Foreign investor is simply understood as a foreign individual or organization bringing into Vietnam capital in foreign currency or any property accepted by the Vietnamese government based on a contract on production and business cooperation. between parties. Foreign investors can be a joint venture or a form of 100% foreign investment.
Foreign organizations and individuals may invest in Vietnam in the following forms:
1. To do business on the basis of a business cooperation contract;
2. Enterprise or joint venture company, collectively referred to as a joint venture enterprise;
3. The enterprise has 100% foreign capital.
Foreign parties and Vietnamese parties are allowed to do business on the basis of business cooperation contracts such as production cooperation and division of products and other forms of business cooperation.
Business objects, contents, interests, obligations and responsibilities of each party and the relationship between the two parties shall be agreed upon by the two parties and stated in the business cooperation contract.
The two sides are allowed to cooperate with each other to establish a joint venture enterprise.
A joint venture enterprise has the legal status of Vietnam.
The 7th rule
Foreign parties participating in a joint venture enterprise contribute legal capital by:
1. Foreign money;
2. Factories, other construction works, equipment, machinery, tools, and parts;
3. Patents, technical know-how, technological process, technical service.
A Vietnamese party participates in a joint venture enterprise to contribute its legal capital by:
1- Vietnamese money;
3. Construction materials, equipment and amenities;
4. Right to use the land, water surface and sea surface;
5. Factories, other construction works, equipment, machinery, tools, and parts;
6. Construction services and putting the factory into operation; patents, technical know-how, technological process, technical service.
The two parties may also agree to contribute capital in other forms.
The capital contribution of a foreign party to the legal capital of the joint venture enterprise is not limited to the maximum extent, as agreed by the two parties but not less than 30% of the total capital.
The value of each party’s capital contribution is determined on the basis of the international market price and recorded in a document of establishment in Vietnamese currency or a foreign currency as agreed by the two parties.
The property of the joint venture enterprise is insured at the Vietnamese insurance company or in other insurance companies as agreed upon by the two parties.
The latest foreign investment law in Vietnam stipulates that the two sides share profits and bear the risks of joint venture enterprises in proportion to each party’s capital contribution.
The two sides have agreed on the export rate and the product consumption rate of the joint venture enterprise in the Vietnamese market, on the principle of self-assuring the demand for foreign money. Foreign currency income by exports and other sources must meet the enterprise’s foreign currency demands in order to ensure the normal operation of the enterprise and the interests of the foreign party.
The leading body of the joint venture enterprise is the Board of Directors.
Each party appoints its own person to join the Board of Directors in proportion to the capital contribution but at least two members in the Board.
The Chairman of the Council shall be appointed by agreement between the two parties.
The General Director and Deputy General Directors are appointed by the Board of Directors to manage the daily operations of the enterprise and are responsible to the Board for the operation of the enterprise.
The General Director or the First Deputy General Director is a Vietnamese citizen.
The most important issues in the organization and operation of a joint venture enterprise such as the direction of operation, business plan, and key staff of the enterprise are decided by the Board of Directors on the principle of consensus.
Foreign organizations and individuals that are established in Vietnam with a 100% foreign-owned enterprise, manage the enterprise by themselves, are controlled by the State agency in charge of foreign investment, enjoy the benefits of and must fulfill the obligations stated in the investment license.
Enterprises with 100% foreign capital have the legal status under Vietnamese law.
The operation duration of a foreign-invested enterprise must not exceed 20 years. In case of necessity, this time limit can be longer.
Vietnamese citizens are given priority to recruit into foreign-invested enterprises.
For jobs requiring high technology but not yet able to satisfy Vietnamese side, the enterprise may recruit foreigners.
The rights and obligations of Vietnamese employees working in foreign-invested enterprises are guaranteed by labor contracts.
Salaries and other allowances of Vietnamese workers are paid in Vietnamese currency with foreign currency origin.
Foreign-invested enterprises open accounts in Vietnam dong and foreign currency at banks for foreign trade of Vietnam or at branches of foreign banks located in Vietnam approved by the State Bank of Vietnam.
Foreign-invested enterprises open their accounting books according to popular international principles and standards recognized by the Ministry of Finance of the Socialist Republic of Vietnam and subject to the examination of the Vietnamese financial agency. .
Foreign-invested enterprises may be established, operate, transfer capital, and dissolve in accordance with the company’s charter and Vietnamese law.
A foreign-invested enterprise has the legal status from the date of registration of its charter at the State agency in charge of foreign investment.
Viet Nam is a country on a strong development momentum, attracting a lot of foreign investment capital FDI. To achieve the goal of strong growth in the current economy, businesses and organizations must have solutions to attract investment capital from abroad. Luatvn.vn will offer some of the most effective solutions, as follows:
Vietnam’s legal system and mechanism need to be revised to suit the global economy, creating a favorable business environment for foreign individuals and organizations to invest in production models. business of Vietnam. In addition, it is necessary to synchronously respond to the economy in different types of markets, without too much separation between domestic and international markets, and to be favorable on the path of integration and reaching out to the world.
Quickly and promptly handling documents related to investment certificates. At the same time, the contingent of state cadres and civil servants need to improve their skills, grasp and strictly comply with the latest foreign investment law in Viet Nam.