In the rapidly changing global economy, Vietnam is becoming a new favorite among international investors with its unique geographical advantages, steady economic growth, and potential-filled market. Whether aiming to seize opportunities in the ASEAN market or hoping to secure a position in the new global supply chain layout, Vietnam is an investment destination that cannot be ignored.

However, investment enthusiasm alone is not enough; knowing how to enter the Vietnamese market legally and compliantly is key to success. The process of applying for an investment license in Vietnam may seem complex, but once you master the correct methods and steps, you can pave the way for your business plan.

This guide will unveil the mysteries of applying for an investment license in Vietnam, analyzing in detail the key points and considerations at each step. It will not only help you understand how to successfully obtain a license but also assist you in steadily advancing in this opportunity-filled market. Whether you’re a multinational corporation or a startup, this guide will become a powerful ally in your Vietnamese investment journey.

Determining the Investment Project

Before starting the application for a Vietnamese investment license, investors need to clearly define their investment project. This process is crucial, as the nature, objectives, scale, and expected return on investment of the project will directly affect the success of the application and subsequent operational effectiveness. Investors should carefully consider the following aspects to ensure that the chosen project can succeed in the Vietnamese market.

Nature of the Investment Project:

The nature of the investment project refers to the industry and field involved. In Vietnam, investment projects can cover multiple sectors, including manufacturing, services, agriculture, technology, tourism, etc. Investors need to choose suitable areas based on their expertise, experience, and market demand. For example:

• Manufacturing: Vietnam has attracted a large amount of manufacturing investment in recent years, especially in industries such as electronics, textiles, and automotive parts. Due to its low labor costs and advantageous geographical location, Vietnam has become an important link in the global supply chain. However, investors need to consider the level of infrastructure development, workforce skill level, and potential environmental and social responsibility issues.
• Agriculture: Vietnam is one of the world’s major agricultural product exporters, especially in rice, coffee, pepper, and seafood. Agricultural investment opportunities are not limited to production but also include processing, packaging, and export. However, investors need to pay attention to land use rights, environmental regulations, and the interests of local communities.
• Services and Technology: With the development of Vietnam’s economy, the service and technology industries are also rapidly expanding. Financial services, information technology, and telecommunications industries are full of opportunities. Investors should understand local regulations, especially provisions regarding data protection, intellectual property, and technology transfer.

Objectives of the Investment Project:

Clearly defining the objectives of the investment project is key to developing an effective investment strategy. Investors’ goals may include entering the Vietnamese market, utilizing Vietnam’s cheap labor, developing Vietnam’s natural resources, or establishing brand influence. Different objectives will determine the investor’s market entry strategy and operational model. Common objectives in Vietnam include:

• Entering the Southeast Asian Market: Vietnam is a gateway to the Southeast Asian market, and its geographical location makes it a regional logistics hub. For companies hoping to expand their business in Southeast Asia, Vietnam is an ideal starting point.
• Reducing Production Costs: Vietnam’s labor and operational costs are relatively low, and many manufacturing and labor-intensive industries choose to set up production bases here. However, investors need to balance costs with potential risks, such as labor mobility, skills training, and government regulatory requirements.
• Resource Development: Vietnam has abundant natural resources, especially in the mineral and agricultural sectors. If investors plan to conduct business in these areas, they should focus on the sustainability of resource development and environmental protection requirements.
• Brand Building and Market Share: For brand-oriented enterprises, Vietnam’s young consumer group and rapidly developing economy provide huge market potential. Investors can establish and expand market share through localization strategies, digital marketing, and customer service.

Scale of the Investment Project:

The scale of the investment project directly affects the required financial and human resources. Investors need to determine the appropriate scale based on their financial situation, market capacity, and competitive environment. Projects that are too large may lead to tight cash flow and increased operational risks, while projects that are too small may not achieve economic benefits. Therefore, investors should conduct detailed market analysis, assess the demand and competitive situation of the target market, and reasonably plan the project scale. For example, when entering an emerging market, investors can choose small-scale pilot projects to reduce risks and gradually expand investment.

Expected Return on Investment:

Assessing the profitability and risks of the project is an important part of investment decision-making. Investors need to conduct comprehensive market research and financial analysis of the project to ensure that the expected return on investment meets their own goals and risk tolerance. This includes analyzing factors such as market demand, competitors, pricing strategies, and cost structures. Investors should also consider potential risk factors such as policy changes, market fluctuations, supply chain issues, etc., and develop corresponding risk management strategies.

For example, through market demand analysis, study the market demand for products or services, understand consumer buying behavior, preferences, and payment capabilities. Through financial analysis, calculate financial indicators such as return on investment (ROI), cash flow, net present value (NPV), etc., to ensure the feasibility of the project. Through risk management, identify risk factors that may affect the success of the project, such as policy changes, market fluctuations, exchange rate fluctuations, supply chain disruptions, etc., and develop countermeasures.

By carefully considering these aspects, investors can more clearly determine their investment projects, thus laying a solid foundation for the subsequent application process. A clear project positioning not only helps to smoothly obtain an investment license but will also provide guidance for subsequent market operations, making investors more competitive in the Vietnamese market.

Preparing Application Materials

When applying for a Vietnamese investment license, investors need to prepare two main types of materials: Investment Registration Certificate (IRC) application materials and Enterprise Registration Certificate (ERC) application materials. These materials cover various aspects of the investment project and lay the foundation for the subsequent approval process. Investors should carefully prepare each document, ensuring comprehensive and accurate content to increase the success rate of the application.

1.Investment Registration Certificate (IRC) Application Materials

Application Form: Fill out the standard format application form according to Vietnamese legal requirements, including key information such as the investor’s basic information, project overview, objectives, scale, and expected benefits. The application form should be concise while ensuring accurate information.

Investor Qualification Documents: Provide documents such as the investor’s company registration certificate and legal representative identification. These documents must be notarized or certified to prove their authenticity and legality. For foreign investors, financial statements of the parent company or other supporting documents may also be required.

Investment Project Proposal: This is a core document that should describe in detail the purpose of the investment project, industry background, market analysis, implementation plan, expected returns, etc. The proposal not only needs to show the commercial potential of the project but also demonstrate the investor’s professionalism and thorough preparation for the project.

Proof of Economic Capacity: Investors need to provide financial statements for the past two years, bank credit certificates, or financial support commitments from the parent company. These documents must be notarized or certified to prove that the investor has sufficient economic strength to support the implementation of the project.

Land Use Demand Proposal: If the project involves land use, investors need to state the required land area, location, and purpose. This information will help local governments assess the feasibility of the project.

Site Lease Agreement: If the project implementation site is leased, investors need to provide a copy of the site lease agreement or other supporting documents to ensure that the investor has the legal right to use the site.

2. Enterprise Registration Certificate (ERC) Application Materials

Application Form: Fill out the standard format ERC application form, which should include information such as company name, address, business scope, shareholder information, etc.

Company Charter: Formulate the company charter according to Vietnamese law, clearly stating the company’s business scope, equity structure, management model, etc. The company charter is a fundamental document for the legal operation of the enterprise and should be detailed and compliant.

Copy of Investment Registration Certificate: Provide a copy of the IRC as proof of having obtained the IRC.

Other Documents Related to Company Structure and Operations: These documents may include the company’s organizational chart, resumes of key management personnel, cooperation agreements, etc., aimed at demonstrating the company’s operational capabilities and management level.

By carefully preparing these application materials, investors can enhance the persuasiveness of their application and lay a solid foundation for the subsequent approval process. At the same time, investors should also pay attention to document format requirements, notarization or certification, and other matters to ensure that the materials comply with local laws and regulations.

Applying for the Investment Registration Certificate: Process and Considerations

Submitting the Application to the Local Department of Planning and Investment or Industrial Park Management Committee

After preparing the IRC application materials, investors need to submit these documents to the local Department of Planning and Investment or the Industrial Park Management Committee. The specific submission department depends on the location of the investment project. If the project is located in an industrial park, it should be submitted to the park management committee; if it is in other areas, it should be submitted to the local Department of Planning and Investment.

After receiving the application materials, the local agency will review them. Generally, the review time is 15 working days, but the actual situation may be longer. During the review process, investors may need to provide supplementary materials or answer questions. Therefore, investors should maintain communication with the approval department and promptly provide the required information.

If the IRC application is approved, investors will receive an Investment Registration Certificate. This certificate confirms the legality of the investment project and is the basis for subsequent applications for other licenses. The IRC is usually valid for 15 years, and investors should keep it safe.

Applying for the Enterprise Registration Certificate: The Foundation for Legal Operation

After obtaining the Investment Registration Certificate, investors need to apply for the Enterprise Registration Certificate from the local Business Registration Office. ERC application materials include the application form, company charter, a copy of the IRC, and other documents related to the company’s structure and operations. These documents should comply with Vietnamese laws and regulations.

After receiving the ERC application materials, the local Business Registration Office will review them. Usually, the review time is 5 working days. If the application materials are complete and meet the requirements, the Business Registration Office will approve them.

If the ERC application is approved, investors will receive an Enterprise Registration Certificate. This certificate confirms the company’s legal status and is a prerequisite for conducting business. The ERC is usually valid for 50 years, and investors should keep it safe.

Completing Other Necessary Registrations: Ensuring Compliant Operations

Depending on specific business needs, investors may need to apply for other licenses, such as tax registration. After obtaining the ERC, investors need to apply for a tax code from the tax office, which is used for paying corporate income tax, value-added tax, and other taxes.

Social insurance registration: If the company employs staff, it needs to register with the social security agency to pay social insurance fees for employees. Depending on the specific nature of the company’s industry, it may also need to apply for specific industry operating licenses, such as food safety licenses, environmental permits, etc. The application processes and required materials for these licenses vary, and investors need to apply according to specific circumstances. For example, tax registration requires documents such as the company charter, ERC, tax registration application form, etc.; social insurance registration requires documents such as the company charter, ERC, social insurance registration application form, employee list, etc.

Subsequent Operations and Compliance Requirements: Maintaining Legality and Transparency

Obtaining an investment license and enterprise registration certificate is only the beginning of the investment process. Investors need to comply with the following compliance requirements in their long-term operations in Vietnam:

Companies need to submit annual business reports to local governments, including financial conditions, operating results, employee situations, etc. These reports not only reflect the company’s operational status but also relate to the company’s reputation and legality in Vietnam.

Declare and pay corporate income tax, value-added tax, personal income tax, and other taxes on time. Comply with Vietnamese tax law requirements to avoid penalties for tax violations.

Comply with Vietnamese labor law regulations, pay employee wages on time, and provide necessary social insurance, medical insurance, and other benefits. For projects involving environmental impacts, investors need to comply with environmental regulations, avoid pollution, and protect local natural resources. If the project may have a significant impact on the environment, an Environmental Impact Assessment (EIA) may be required.

Local governments or relevant departments may conduct regular or irregular inspections and checks on the company to ensure compliant operations. Investors need to maintain complete records and clear accounts to be prepared for inspections at any time.

Finally, throughout the process of applying for a Vietnamese investment license, investors need to pay attention to the following points: Investors should prepare all application materials in advance to ensure that the materials are complete and comply with local legal requirements. This can avoid delays in the application process. Different industries and projects may have additional review requirements. Vietnam’s laws and regulations will adjust with economic development and changes in the international situation, and investors need to continuously pay attention to policy changes and adjust their business strategies in a timely manner. If investors are not familiar with the application process, they can seek help from professionals. Some law firms and consulting companies provide Vietnamese investment license application services, which can help investors complete the application smoothly.