Currently, Vietnamese law has recognized the investment forms of foreign investors in Vietnam. Specifically, in Article 21 of the Law on Investment 2020, there are 05 following forms of investment:
– 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 contracts.
– New forms of investment and economic organizations according to the Government’s regulations.
1. Investment in the establishment of economic organizations.
According to the provisions of Clause 2, Article 22 of the Law on Investment 2020, foreign investors establishing economic organizations must satisfy the market access conditions for foreign investors specified in Article 9 of this Law.
In addition, before establishing an economic organization, a foreign investor must have an investment project, carry out procedures for issuance and adjustment of the Investment Registration Certificate, except for the establishment of small and medium enterprises innovative startups and innovative start-up investment funds in accordance with regulations on supporting enterprises.
2. Investment in capital contribution, purchase of shares, purchase of contributed capital.
Contribution of capital, purchase of shares or capital contribution to economic organizations is a form of indirect investment by foreign investors.
A foreign investor’s capital contribution, share purchase or capital contribution purchase from an economic organization must satisfy the provisions and conditions specified in Clause 2, Article 24 of the Law on Investment 2020. That is:
– Market access conditions for foreign investors are specified in Article 9;
– To ensure national defense and security according to the provisions of this Law;
– Regulations of the Law on Land in Vietnam on conditions for receiving land use rights, conditions for land use in islands, communes, wards, border towns, communes, wards and coastal townships.
When making this form of investment, investors need to comply with the forms of capital contribution, share purchase, contributed capital purchase specified in Article 25 and the procedures for capital contribution, share purchase and capital contribution purchase as prescribed in Article 25 26 Law on Investment 2020.
See more about form, click here.
3. Implementation of investment projects.
According to Clause 4, Article 3 of the Law on Investment 2020, an investment project is a collection of proposals to invest medium-term or long-term capital to conduct business investment activities in a specific area, within a defined period of time.
The implementation of investment projects can be done through many methods, including the method of investing in establishing a new economic organization as mentioned. If the investor does not choose that form, there will be the following forms to implement the investment project:
– For new investment projects: investors shall apply for the policy of implementing the investment project to the competent authority. Depending on the nature, scale and conditions of each project, investors choose appropriate investment policies. The approval of the investment policy is carried out in accordance with Section 2, Chapter IV of the Law on Investment 2020 and Decree 31/2021/NĐ-CP.
– For an existing investment project, the investor implements the investment project as prescribed in Clause 1, Article 29 of the Law on Investment 2020, that is through: Auction of land use rights in accordance with the Law on Land in Vietnam; Bidding to select investors in accordance with the Law on Bidding in Vietnam.
4. Investment in the form of BCC contracts.
According to Clause 14, Article 3 of the Law on Investment 2020: Business cooperation contract (hereinafter referred to as BCC contract) is a contract signed between investors for business cooperation, profit sharing, and product distribution as prescribed by law without establishing economic organizations.
Thus, investment in the form of BCC contract is an investment form established on the basis of a contract signed between investors but without establishing a new legal entity. In particular, the rights and obligations of the parties are not organizationally binding as in the form of investment to establish a new legal entity but are bound only by contract.
The content of the BCC contract is specified in Article 28 of the Law on Investment 2020.
5. New forms of investment and economic organizations according to the Government’s regulations.
This is a new form of investment specified in the Law on Investment 2020, which was not recorded in the Law on Investment 2014.
For more information about Investment forms of foreign investors in Vietnam, please contact.