A Japanese Investor’s Journey to Set Up a 100% Foreign-Owned Company in Vietnam – 5 Steps for Success
Client A, a Japanese investor and restaurant chain operator in Tokyo, decided to expand into Vietnam in early 2024. With a clear business plan, strong financial backing, and a ready management team, he expected to establish a 100% foreign-owned company in Ho Chi Minh City within a month.
However, reality proved more complex: his investment registration was rejected due to vague business descriptions, the licensing process was delayed due to multiple document revisions, and he almost faced penalties for late capital contribution from using the wrong type of bank account.
Upon engaging DEDICA, we successfully supported him through the entire process with the following 5 key steps:
Step 1: Apply for the Investment Registration Certificate (IRC)
We prepared a comprehensive application including business plan, investor profile, lease contract, and 3-year financial projections. Thanks to strategic preparation and coordination with authorities, the IRC was issued in just 15 working days.
Step 2: Apply for the Enterprise Registration Certificate (ERC)
Simultaneously, we pre-drafted all necessary documents. The ERC was approved within 3 working days after obtaining the IRC.
Step 3: Company Seal and Public Disclosure
We arranged for the official company seal and completed public disclosure on the National Business Registration Portal within 24 hours.
Step 4: Open Investment Capital Bank Account and Contribute Capital
We helped the client open a Direct Investment Capital Account (DICA), guided proper fund transfers from Japan, and ensured the capital was contributed on time to avoid legal issues.
Step 5: Obtain Sector-Specific Licenses
As the business was in food service, we obtained additional licenses:
Food Safety Certificate
Retail License (if applicable)
Work permits for foreign staff
Final Result: Fully Licensed and Operational Within 45 Days
The company officially opened its restaurant in District 1, Ho Chi Minh City within 45 days. The entire process was smooth, legally compliant, and cost-effective thanks to DEDICA’s support.
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
Call us now or leave us a message to get advice. Initial consultation is free of charge.
Steps for Foreign Investors to Contribute Capital or Purchase Shares in Vietnamese Enterprises
Capital contributions by foreign investors into Vietnamese companies are increasingly common amid global economic integration. However, to comply with Vietnamese laws, investors must understand the legal procedures, investment conditions, and necessary documentation. This article provides a step-by-step guide to help both investors and enterprises save time and reduce legal risks.
Understanding Foreign Capital Contributions
Before proceeding, investors should fully understand the nature of capital contribution in Vietnam and the conditions applicable to each business sector. This ensures lawful, effective investment and helps avoid unnecessary legal obstacles.
Common Forms of Capital Contribution
Foreign investors may invest in Vietnamese companies through:
Purchasing shares in an existing joint-stock company;
Acquiring capital contributions in a limited liability company (LLC);
Co-founding a new company with local investors.
Depending on the type of enterprise and investment method, investors should choose the most appropriate approach to ensure their rights are protected and legal compliance is maintained.
Conditions for Foreign Investors
Not all business sectors are fully open to foreign investors. Under the Investment Law and Vietnam’s WTO commitments, some sectors are subject to market access conditions such as ownership limits, joint venture requirements, or approvals from specialized authorities.
Therefore, investors should carefully check whether their intended sector is restricted or conditional.
Legal Procedures for Capital Contribution or Share Purchase
After identifying the appropriate business sector, investors must follow the legal procedures for investing in a Vietnamese enterprise. Depending on ownership ratio and business line, the contribution may require registration, but all procedures must be transparent and compliant.
Step 1: Obtain Approval from the Department of Planning and Investment
According to the 2020 Investment Law, if the foreign investor invests in a conditional business sector or acquires 50% or more ownership, they must register the capital contribution with the Department of Planning and Investment (DPI) where the company is headquartered.
Required documents:
Capital contribution/share purchase registration form
Notarized copy of passport/business license
Share transfer or capital contribution agreement
Amended company charter (if any)
Proof of conditional business sector (if any)
Processing time: Approximately 15 working days from the date of receipt of valid documents.
Step 2: Register Changes with the Business Registration Authority
Once approved (if required), the company must carry out further steps with the Business Registration Office under DPI:
For joint-stock companies: update shareholder list, and disclose changes to founding or major shareholders.
For LLCs: register change of members or increase in charter capital.
Documents may include:
Notification of changes in enterprise registration
Resolutions and minutes of the Members’ Council or Board of Directors
Share transfer agreement and payment evidence
Amended charter (if any)
Important Notes for Foreign Capital Contribution
Besides complying with legal procedures, investors must pay special attention to financial and foreign exchange requirements. Technical aspects such as remittance accounts and banking procedures can affect the legality of capital recognition.
Capital Remittance via Investment Account
Foreign investors are required to remit capital via an investment capital account opened at a commercial bank in Vietnam. The account must be funded with lawful capital in convertible foreign currency or VND.
Incorrect remittance may result in invalidation of capital contribution.
Register Foreign Exchange Transactions with the State Bank
In some cases, foreign investors must register foreign exchange transactions with the State Bank or an authorized commercial bank, especially when:
Capital is contributed in foreign currency;
The transaction involves transferring capital, dividends, or profits abroad.
Rights and Responsibilities After Capital Contribution
Completing the capital contribution is just the beginning. Foreign investors must be aware of their rights under the law, as well as responsibilities they must fulfill during their cooperation with the Vietnamese company.
Investor Rights:
Official recognition as a member/shareholder;
Participation in management, profit sharing, and asset control depending on ownership;
Legal protection under Vietnamese laws and international treaties.
Investor Obligations:
Comply with laws on business, taxation, labor, environment, etc.;
Fulfill reporting obligations as required by authorities;
Avoid proxy investments through Vietnamese nationals.
Are You Exploring Foreign Capital Contribution in Vietnam?
Contact DEDICA Law Firm – a professional legal partner specialized in foreign investment, M&A, and business licensing. We assist with industry assessment, document preparation, licensing procedures, and legal support after the transaction.
With hands-on experience and a dedicated team, DEDICA provides effective, transparent, and timely legal solutions tailored for foreign investors.
Foreign capital contributions offer significant opportunities but also involve legal risks. It’s essential to understand current laws, assess the business sector carefully, and choose a suitable investment structure. When necessary, seek legal counsel to ensure compliance and protect your rights throughout the investment process.
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
Call us now or leave us a message to get advice. Initial consultation is free of charge.
A-to-Z Guide to Foreign Investment Registration in Vietnam
Registering foreign investment in Vietnam is the first and mandatory step for foreign investors who wish to establish a company or carry out business projects in Vietnam. This article provides a step-by-step guide to help investors complete the process lawfully, saving both time and costs.
Determine the Investment Plan and Prepare Documentation
Before starting legal procedures, investors must clearly define the investment method, check whether special conditions apply, and prepare the necessary documentation. This stage lays the foundation for the entire investment registration process in Vietnam.
Choose the Right Investment Method
Investors can choose among the following forms of investment:
Establishing a foreign-invested company;
Contributing capital or purchasing shares/equity in a Vietnamese company;
Investing under BCC or PPP contracts.
Accurate identification of the method determines the correct procedures to follow.
Initial Legal Documentation
Typical documents include:
Passport/ID (for individuals) or Business Registration Certificate (for organizations);
Financial statements, bank balance confirmation, or financial commitment;
Investment project proposal;
Office lease agreement, land use right documents.
Foreign documents must be notarized and legalized per Vietnamese regulations.
Seeking Approvals and Licensing
Once the investment direction is confirmed, the investor must carry out licensing procedures with authorities. This is the core part of the foreign investment registration process and must be done in sequence to avoid legal risks.
Apply for Investment Policy Approval (if required)
Some projects require prior approval, such as:
Projects with investment capital of VND 5,000 billion or more;
Projects located in border areas or affecting national security;
Projects requesting land allocation without auction.
Approval may be granted by the National Assembly, Prime Minister, or Provincial People’s Committee.
Apply for the Investment Registration Certificate (IRC)
This is a compulsory step. The application is submitted to the Department of Planning and Investment (DPI). Processing time is typically 15 working days. After receiving the IRC, investors continue with business registration (ERC) and other legal formalities.
Post-Investment Registration Procedures
After receiving investment approvals, foreign-invested enterprises must complete the remaining steps to operate legally, such as company registration, opening a bank account, capital contribution, and tax registration.
Establishing a Foreign-Invested Enterprise (FIE)
After obtaining the IRC, investors must apply for the Enterprise Registration Certificate (ERC).
Documents required:
Business registration application form;
Company charter;
List of members/shareholders;
IRC and personal/legal documents.
Processing time: 3–5 working days.
Post-Establishment Procedures to Note
After obtaining the ERC, investors should:
Open a bank account and notify the DPI;
Register for taxes, print, and issue VAT invoices;
Make the company seal and register its form;
Contribute capital within 90 days;
Register labor and social insurance if hiring employees.
DEDICA provides comprehensive services for foreign investment registration in Vietnam—from obtaining investment approvals to getting your company operational. With experienced legal experts, we ensure compliance, speed, and optimal solutions for each investment project.
Strictly following post-registration procedures ensures smooth business operations and helps avoid administrative penalties.
Foreign investment registration in Vietnam involves multiple steps and requires legal expertise. Investors are advised to prepare thoroughly and consider using professional legal services to ensure a fast, lawful, and effective process.
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
Call us now or leave us a message to get advice. Initial consultation is free of charge.
5 Steps to Establish a 100% Foreign-Owned Company in Vietnam
Establishing a 100% foreign-owned company in Vietnam has become an increasingly popular investment choice for many foreign businesses and individuals looking to enter this promising market. However, to ensure a smooth and lawful process, investors must clearly understand the procedures, mandatory requirements, and necessary legal documents. In this article, DEDICA outlines the five key steps to help foreign investors successfully and legally establish a 100% foreign-owned enterprise in Vietnam.
Step 1: Determine Business Lines and Check Investment Conditions
Before proceeding, the investor must define the intended business activities. Not all business sectors permit full foreign ownership. Some sectors have ownership restrictions or require a Vietnamese partner.
To assess feasibility, the investor should:
Compare the proposed business lines with Vietnam’s WTO and FTA commitments;
Review the list of conditional investment sectors under the 2020 Investment Law;
Check relevant sector-specific laws (e.g., health, education, logistics).
Thorough preparation at this stage minimizes the risk of investment application rejection.
Step 2: Apply for the Investment Registration Certificate (IRC)
The IRC is the first mandatory legal document to legalize foreign investment activities in Vietnam.
The IRC application typically includes:
Investment proposal letter;
Financial capacity documents (bank statements, financial reports, etc.);
Passport (for individuals) or business registration certificate (for entities);
Office lease agreement;
Technology explanation if the project uses restricted technologies.
Processing time is usually 15–20 working days, but may take longer for conditional sectors.
Step 3: Register the Enterprise and Obtain the Enterprise Registration Certificate (ERC)
Once the IRC is issued, the investor must register the business and obtain the ERC in accordance with the Enterprise Law.
Required documents for the ERC:
Enterprise registration application form;
Company charter (bilingual if applicable);
List of founding members/shareholders;
Legal documents of the investors;
The issued IRC.
The Business Registration Office (under the Department of Planning and Investment) issues the ERC within 3–5 working days if the dossier is valid.
Step 4: Public Disclosure and Company Seal Registration
After receiving the ERC, the company must:
Publicly disclose its registration on the National Enterprise Registration Portal (within 30 days);
Make and register the company seal (optional);
Purchase a digital signature for tax filings and online transactions.
Failure to fulfill these obligations may result in administrative penalties.
Step 5: Post-Incorporation Compliance
This final step enables the company to begin official operations:
Open a corporate bank account and investment capital account;
Contribute charter capital within 90 days as committed;
Register with the tax authority and submit initial tax declarations;
Register to use electronic invoices;
Declare employees and register for social insurance contributions.
Additionally, the company should prepare internal accounting processes, labor contracts, and operational policies.
DEDICA – Your Trusted Partner for Foreign Investment in Vietnam
While the process of establishing a 100% foreign-owned company in Vietnam has become more streamlined, it still contains legal risks, especially if the investor is unfamiliar with local regulations or fails to prepare a proper dossier. Errors in business lines, office address, or incomplete financial documents may delay or derail the process.
DEDICA is proud to be a legal expert specializing in foreign investment. We offer:
Strategic investment consulting tailored to your business goals;
Full support for IRC and ERC applications;
Assistance with bank account setup, capital contribution, tax and invoice registration;
Ongoing legal consultancy for FDI companies.
Let DEDICA support your business journey in Vietnam—from the initial step to full-scale operation. Contact us for personalized, professional assistance.
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
Call us now or leave us a message to get advice. Initial consultation is free of charge.
Understanding Commercial Business Disputes for Effective Resolution
Commercial business disputes are issues that any enterprise may encounter. Without a clear understanding of their nature and appropriate resolution methods, businesses can suffer significant financial and reputational losses. So what exactly is a commercial business dispute? What resolution methods are available? What legal considerations should be kept in mind? This article will help clarify these matters.
Overview of Commercial Business Disputes
Before choosing a resolution approach, businesses must clearly understand what a commercial business dispute entails, its causes, and common types.
Definition
According to Vietnam’s 2005 Commercial Law, commercial business disputes arise between registered business entities during commercial activities such as goods trading, service provision, distribution, agency, franchising, investment, and construction.
Common Sources
Breach of contractual obligations
Late payment
Failure to meet quality or schedule commitments
Intellectual property or branding conflicts
Premature contract termination
Causes of Disputes
Typical causes include:
Vague or incomplete contracts lacking dispute resolution clauses
Poor documentation of transactions
Lack of legal understanding during negotiation and execution
Weak internal risk management mechanisms
Understanding and proactively preventing disputes is essential for any business operating in a complex commercial environment.
Methods of Resolving Commercial Business Disputes
Businesses may consider the following legally recognized resolution methods:
1. Negotiation
Simple and cost-effective. Direct discussion between the parties. Effective only when both sides act in good faith.
2. Mediation
Involves a third-party mediator. Includes:
Commercial mediation (Decree 22/2017/ND-CP)
Independent mediation centers
Pre-litigation mediation
Flexible and confidential, but only binding if both parties agree.
3. Arbitration
Preferred for large-value or international contracts.
Advantages:
Speed, confidentiality
Expert arbitrators
Binding and final award
Requires an arbitration clause agreed upon in the contract.
4. Court Litigation
Used when no other method is viable or agreed.
Pros: legally enforceable
Cons: time-consuming, public, complex procedures.
Contact DEDICA for Professional Dispute Resolution Support
With years of experience handling complex commercial business disputes, DEDICA Law Firm offers end-to-end legal solutions: from contract drafting, negotiation support, to representing clients in arbitration or litigation.
We are committed to safeguarding your legal rights, saving your time, and minimizing your risks.
Legal Considerations in Dispute Resolution
To mitigate risk, businesses should pay attention to:
Statute of Limitations
Two years from the date the dispute arises or the rights are violated. After this, the case may be dismissed.
Evidence and Documentation
Prepare:
Contracts, annexes, emails, meeting notes
Invoices, receipts, delivery records
Audio/video (if any)
More evidence = higher chance of success.
Dispute Resolution Clauses
Always include:
Arbitration or mediation terms
Named arbitration center (e.g., VIAC, PIAC)
Designated court jurisdiction if no arbitration is agreed upon.
Conclusion
Commercial business disputes are a natural part of doing business. By preparing early, choosing the right resolution path, and understanding legal frameworks, companies can protect their interests and maintain long-term partnerships.
Contact DEDICA Law Firm for Expert Legal Consulting!
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, and Zalo)
🏢 Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City
🕒 Working Hours: Monday – Friday (8:30 AM – 6:00 PM)
What Is Legal Consulting? Roles and Benefits for Businesses
In today's complex legal environment, businesses face significant risks without professional legal consulting. A single misstep can lead to substantial financial losses, reputational damage, or administrative penalties. Legal consulting is not merely a "lifesaver" during disputes but a strategic solution to prevent risks and ensure efficient operations.
What Is Legal Consulting?
Legal consulting involves providing information, analysis, evaluation, and legal solutions tailored to specific situations faced by individuals, organizations, or businesses. Consultants may include lawyers, legal experts, or licensed legal service organizations as per Vietnamese law.
This service can take various forms: direct consultations, email correspondence, written opinions, representation before government agencies, or ongoing support akin to an in-house legal department.
In an ever-evolving legal landscape, legal consulting plays a pivotal role in helping businesses proactively comply with laws, mitigate risks, and operate effectively.
DEDICA is a professional law firm offering regular legal consulting services to businesses in Vietnam and internationally. Our services encompass contract review, legal issue resolution, administrative procedures, and compliance system development. With an experienced team of lawyers, DEDICA is committed to partnering with businesses to prevent risks and foster sustainable growth.
Common Forms of Legal Consulting:
Depending on objectives and needs, legal consulting services for businesses may include:
Corporate Legal Consulting: Company formation, business registration changes, organizational structuring.
Contract Consulting: Reviewing, drafting, negotiating, and managing contracts.
Investment Consulting: Advising domestic and foreign investors on procedures, licensing, and investment incentives.
Compliance Consulting: Ensuring adherence to regulations on taxation, labor, social insurance, environment, etc.
Dispute Resolution Consulting: Assisting in mediation, negotiation, and representation in courts or arbitration.
Businesses can opt for case-by-case consulting or regular legal consulting services on a monthly, quarterly, or annual basis.
Roles and Benefits of Legal Consulting for Businesses
1. Risk Prevention
Lack of legal knowledge can lead to serious violations affecting a business's finances, reputation, and survival. Legal consulting helps businesses:
Analyze potential risks in transactions, contracts, and internal policies.
Verify the legality of business decisions.
Minimize disputes by establishing stringent control mechanisms.
2. Efficient Operations and Cost Savings
Proactive legal compliance saves time and money. Legal consulting aids businesses in:
Developing standardized internal processes aligned with legal requirements.
Streamlining administrative procedures.
Strategizing with legal considerations in mind.
Outsourcing legal services can be more cost-effective than maintaining an in-house legal department.
3. Enhanced Strategic Decision-Making
Legal consulting supports business leaders in:
Assessing project feasibility from a legal standpoint.
Identifying legal risks early and devising contingency plans.
Safeguarding interests in investment, mergers, and acquisitions.
4. Dispute Protection
Despite preventive measures, disputes may arise. Legal consulting provides:
Solutions for negotiation and mediation.
Representation in dealings with stakeholders.
Advocacy in courts or arbitration to protect business interests.
Legal consulting is integral to a modern business's sustainable development strategy. Proactively engaging legal consulting services helps businesses minimize risks, reduce costs, enhance competitiveness, and assert professionalism in the marketplace.
Contact DEDICA Law Firm for Expert Legal Consulting!
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, and Zalo)
🏢 Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City
🕒 Working Hours: Monday – Friday (8:30 AM – 6:00 PM)
Guide to Trademark Registration Procedures in 2025
In today’s fiercely competitive business environment, trademark registration is an essential step to protect intellectual property and build a strong brand presence. If you’re not yet familiar with the process, this article from DEDICA LAW will help you fully understand the registration procedure, required documents, and key legal considerations in 2025.
Overview of Trademarks and Why Registration is Necessary
What is a Trademark?
Under Vietnam's Intellectual Property Law, a trademark is a sign used to distinguish the goods or services of different organizations or individuals. A trademark may consist of words, images, symbols, colors, or a combination of these elements.
Registering a trademark is a legal process to establish ownership through the Intellectual Property Office. Unlike “copyright” (which applies to creative works), trademarks fall under industrial property rights.
Why Should You Register a Trademark?
Trademark registration offers significant practical benefits:
Grants exclusive legal protection within Vietnam’s territory;
Prevents copying, imitation, or unauthorized use;
Becomes a transferrable, contributable, and brand-valuable intangible asset;
Provides a legal basis for international registration through the Madrid System;
Enhances business value in the eyes of investors and partners.
Trademark ownership is only recognized upon issuance of a Trademark Registration Certificate by the Intellectual Property Office.
Trademark Registration Procedure in 2025
Required Dossier
A valid application includes the following:
Trademark registration application (Form No. 08 per Decree No. 65/2023/NĐ-CP);
Five (05) color trademark samples (80 x 80 mm);
List of goods/services under the trademark (classified under Nice Classification – 12th edition);
Power of attorney (if submitted through an industrial property representative);
Documentation proving the right to file (e.g., assignment, inheritance, etc.);
Documentation for claiming priority right (if applicable);
Proof of fee payment as per regulations.
Applications can be submitted in person, by post, or via the online public service portal of the IP Office.
Processing Timeline at the IP Office
Formality examination: 1 month from date of filing;
Publication: Within 2 months after passing formality check;
Substantive examination: 9–12 months after publication;
Decision on grant or refusal of protection;
Payment of registration fee and issuance of certificate.
Total average processing time: 13–16 months.
Term and Validity
The certificate is valid for 10 years from the filing date;
Renewable unlimited times, each for 10 years – must renew before expiration.
Important Notes on Trademark Registration in 2025
Conduct Similarity Search Before Filing
Conducting a search helps reduce the risk of rejection. Options include:
Free online search through reputable websites;
Professional trademark search services from law firms such as DEDICA LAW.
Trademark Must Be Distinctive
A trademark may be refused if:
It is descriptive of the product/service (e.g., “Delicious”, “High Quality”);
It is identical or similar to prior registered marks, causing confusion;
It violates public morals, order, or lacks distinctiveness.
Do Not Confuse Trademark with Copyright
Trademark registration is an industrial property procedure and not a copyright process. If your brand includes artistic or design elements (such as a logo), you can also register copyright with the Copyright Office for dual protection.
Registering a trademark in 2025 is not only a legal necessity for brand protection but also a strategic tool for business growth. If you're seeking a reliable partner to assist in searching, document preparation, and filing, DEDICA LAW is ready to support you throughout the entire process.
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
What is M&A? What are the steps to conduct a successful M&A transaction?
M&A (short for Mergers and Acquisitions) refers to the activity where two or more companies either merge (merger) or one company acquires another (acquisition).
What is the difference between a merger and an acquisition?
A merger is when two or more companies combine into a new legal entity, and the old companies cease to exist legally. All assets, rights, and obligations are transferred to the new entity.
An acquisition is when one company gains control of another by purchasing its shares or assets. The acquired company may continue to exist as a separate legal entity.
In Vietnam, M&A can be implemented in various flexible forms such as: acquiring shares or capital contributions, acquiring business assets or projects, merging under the Enterprise Law, or transferring part or all of a business. The choice of form depends on the strategy, legal structure, and business sector of the parties involved.
What values can a successful M&A bring to a business?
A well-executed M&A transaction can bring significant benefits such as quick scale and market share expansion, reduced initial investment costs, better use of existing resources, expansion into new sectors or geographic areas, and elimination of direct competition. However, if not carefully prepared, M&A may involve legal disputes, business inefficiencies, and cultural clashes.
What steps should be taken in an M&A transaction?
To ensure a smooth, legal, and effective M&A transaction, businesses should follow the six-step process below:
Step 1: Define objectives and identify a target – Determine the strategic goals such as market expansion, technology acquisition, or revenue growth, and evaluate target businesses based on their industry, financials, and growth potential.
Step 2: Legal and financial due diligence – Assess the target company’s legal status (licenses, disputes, contracts, labor) and financials (statements, debts, cash flow, taxes) to identify risks and determine true value.
Step 3: Negotiate and execute transaction documents – Negotiate terms such as price, payment method, post-closing obligations, and dispute resolution. Essential documents include a memorandum of understanding (MoU), share/asset transfer agreement, and representations and warranties.
Step 4: Obtain regulatory approvals (if required) – Some transactions may require investment approval from the Department of Planning and Investment or Industrial Zones Authority, antitrust filing with the National Competition Commission, or approval for transferring capital in conditional business sectors.
Step 5: Execute the transaction and make payment – After negotiations, parties proceed with share/asset transfer and payment (typically via bank transfer, possibly in multiple tranches).
Step 6: Complete post-transaction legal procedures – Make necessary updates to business registration, investment certificates, tax authorities, banks, and insurance agencies; and transfer contracts, assets, HR, and offices.
Key legal notes: The transfer must be approved by the company’s Members’ Council or General Meeting of Shareholders as per its charter; foreign investor involvement must meet investment and ownership conditions; economic concentration must be notified if thresholds are met; and applicable taxes (corporate income tax, personal income tax, contractor tax) must be considered.
If enterprises find the full M&A process complicated, it is recommended to consult with reputable law firms. With extensive experience in successful M&A transactions, DEDICA Law Firm is a trusted partner for your high-value deals.
In conclusion, M&A is not just a financial transaction but a long-term development strategy. For success, businesses need clear planning, thorough due diligence, and full legal compliance. DEDICA Law Firm is ready to support you at every stage – from planning and negotiation to legal completion – ensuring your M&A deal is safe, efficient, and compliant.
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
Capital Increase Procedure for Foreign-Invested Companies: What Needs to Be Prepared?
Increasing charter capital is a crucial step in the development of any business, especially for companies with foreign investment. However, this process requires strict compliance with Vietnam's prevailing legal regulations. This article provides a detailed guide on the procedures for increasing capital in foreign-invested companies in Vietnam.
1. Does a Capital Increase Require Amending the Investment Registration Certificate?
According to Article 40 of the Law on Investment 2020, the Investment Registration Certificate (IRC) includes details of the project's total investment capital, comprising both the investor’s contributed capital and mobilized capital. Therefore, when a foreign-invested company increases its capital, this change must be reflected in the IRC. As such, the company must first carry out procedures to amend the IRC to reflect this adjustment.
2. Procedures for Amending the Investment Registration Certificate
a. For Projects Subject to Investment Policy Approval
Under Clause 1, Article 35 of Decree No. 31/2021/ND-CP, for projects subject to investment policy approval, the investment registration authority will amend the IRC within five (05) working days from the date of receiving the decision approving the adjustment.
b. For Projects Not Subject to Investment Policy Approval
According to Clause 2, Article 47 of Decree No. 31/2021/ND-CP, for projects not requiring investment policy approval, the investor must submit one set of adjustment documents to the investment registration authority. The authority will amend the IRC within ten (10) working days from the date a valid application is received.
3. Online Procedure for Amending the Investment Registration Certificate
Pursuant to Article 40 of Decree No. 31/2021/ND-CP, investors may carry out the IRC amendment procedure online via the National Investment Information System. The process includes:
Logging in or registering an account on the system;
Declaring required information and uploading necessary electronic documents;
Submitting the application and receiving a confirmation receipt;
The investment registration authority processes the application within the prescribed timeframe.
4. Procedure for Increasing Capital in a Foreign-Invested Company
When increasing charter capital, a foreign-invested company must complete the following steps:
Declare project information online via the National Investment Information System;
Amend the Investment Registration Certificate to reflect the updated capital;
Carry out enterprise registration changes at the Business Registration Office where the company’s head office is located.
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
Call us now or leave us a message to get advice. Initial consultation is free of charge.
Business Cooperation Contract (BCC): A Flexible Investment Solution for Enterprises
Introduction
In the context of global economic integration, selecting the right form of investment plays a crucial role in an enterprise’s development strategy. In Vietnam, the Business Cooperation Contract (BCC) is increasingly becoming a popular investment option among both domestic and foreign investors due to its flexibility and effectiveness.
What is a Business Cooperation Contract (BCC)?
According to Clause 14, Article 3 of the 2020 Investment Law, a Business Cooperation Contract (BCC) is an agreement between investors for business cooperation and profit or product sharing under legal provisions without establishing a new legal entity.
This is a form of direct investment, where parties collaborate based on mutual agreement to carry out a business project without forming a new legal organization.
Advantages of a BCC
1. No Need to Establish a New Economic Entity
One of the biggest advantages of a BCC is that it does not require the creation of a new company. This helps investors save time, reduce costs, and avoid complicated legal procedures associated with business establishment.
2. High Flexibility in Cooperation
BCCs allow the parties to freely negotiate rights and obligations, profit-sharing methods, project management, and other terms in line with their mutual business goals. This makes BCCs ideal for collaboration between investors with different resources and expertise.
3. Suitable for Short-Term or Fast-Track Projects
As BCCs do not require the formation of a new legal entity, they are particularly suitable for short-term projects or those requiring rapid implementation, helping investors quickly put projects into operation.
4. Maximized Resource Utilization
Under a BCC, the parties can fully leverage each other's resources, including capital, manpower, technology, and management experience, to achieve the highest business efficiency.
Disadvantages to Consider
Lack of a Common Legal Entity: Since no new company is established, each party must individually sign and perform transactions, which can make it difficult to determine legal liability and representation.
Challenges in Joint Management: Without a centralized management structure, coordinating activities and resolving disputes between parties can be more complicated.
Key Contents of a BCC
According to Article 28 of the 2020 Investment Law, a BCC should include the following primary elements:
Names, addresses, and authorized representatives of the parties;
Objectives and scope of the business investment activities;
Contributions from each party and allocation of business results;
Timeline and duration of the contract;
Rights and obligations of the parties;
Terms for contract modification, transfer, and termination;
Liabilities for breaches and dispute resolution mechanisms.
The parties may also agree on other provisions that are not contrary to the law to accommodate specific project needs.
Investment Procedures under a BCC
For Domestic Investors: A BCC between domestic investors is executed in accordance with the provisions of Vietnamese civil law.
For Foreign Investors: A BCC involving a foreign investor—either with a local partner or among foreign investors—must follow the investment registration certificate process as stipulated in Article 38 of the 2020 Investment Law.
Establishment of a Coordination Committee: Parties to a BCC must establish a coordination committee to oversee the contract's execution. The committee’s functions, responsibilities, and authority are agreed upon by the parties involved.
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Foreign Investors Contributing Capital to Vietnamese Enterprises: Is an Investment Registration Certificate Required?
Introduction
Vietnam is increasingly becoming an attractive destination for foreign investors. However, understanding the legal regulations related to capital contributions in Vietnamese enterprises is essential to ensure compliance and maximize investment benefits.
When Is an Investment Registration Certificate Required?
According to Article 37 of the Law on Investment 2020, foreign investors must apply for an Investment Registration Certificate (IRC) in the following cases:
Establishing a new investment project in Vietnam.
Investing in an economic organization that already has foreign investment and falls under the provisions of Clause 1, Article 23 of the Law on Investment.
However, for investment in the form of capital contribution, share purchase, or purchase of capital contributions into a Vietnamese enterprise, foreign investors are not required to obtain an Investment Registration Certificate.
When Must Capital Contribution Be Registered?
Although an IRC is not required, foreign investors must still carry out capital contribution registration procedures in the following cases:
When the investment increases the foreign ownership ratio in an economic organization operating in a conditional business sector applicable to foreign investors.
When the contribution results in the foreign investor holding more than 50% of the charter capital of the economic organization.
When contributing capital to or purchasing shares in an economic organization that holds land use rights in areas sensitive to national defense and security, such as islands, border communes/wards/towns, or coastal areas.
What Documents Are Required for Capital Contribution Registration?
According to Clause 2, Article 66 of Decree 31/2021/NĐ-CP, a capital contribution registration dossier includes:
A written registration for capital contribution, share purchase, or purchase of capital contributions.
A copy of the investor’s legal documents (passport, certificate of incorporation, or equivalent).
A copy of the business registration certificate or equivalent document of the enterprise receiving the investment.
A copy of the agreement on capital contribution, share purchase, or purchase of capital contributions.
Documents proving land use rights (if applicable).
Conclusion
Understanding the legal framework for foreign capital contributions in Vietnamese enterprises is critical for lawful and efficient investment. Dedica Law Firm, with its team of experienced lawyers, is ready to support clients in consulting and carrying out all legal procedures related to foreign investment in Vietnam.
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Legal Due Diligence in M&A: A Decisive Step Toward a Successful Deal
Introduction to Legal Due Diligence (LDD)
In Mergers & Acquisitions (M&A) transactions, conducting Legal Due Diligence (LDD) is a crucial step to ensure the transparency and legality of the deal. LDD enables stakeholders to thoroughly assess the legal aspects of the target company, providing a solid foundation for informed investment decisions and minimizing legal risks.
Objectives and Benefits of Legal Due Diligence
1. Assessing the Legal Status of the Target Company
LDD helps determine whether the target company is legally operating, whether it is undergoing dissolution or bankruptcy, or facing any legal issues.
2. Identifying Legal Risks
By reviewing contracts and legal documents, LDD helps uncover potential risks such as ongoing disputes, contractual violations, or regulatory compliance issues.
3. Supporting Valuation and Negotiation
LDD findings offer critical insights for accurately valuing the target company and serve as a valuable basis for negotiating the terms of the M&A deal.
4. Recommending Risk Mitigation Solutions
Based on the LDD findings, legal professionals can propose remedial measures to reduce legal exposure and facilitate a smoother transaction process.
Key Areas Covered in Legal Due Diligence
1. Basic Legal Information
Business registration certificate
Company charter
Organizational and management structure
2. Business Activities and Licensing
Verification of primary and secondary business activities
Review of required licenses and compliance with business conditions
3. Contracts and Commitments
Examination of critical contracts such as employment agreements, vendor contracts, and lease agreements
Evaluation of financial obligations and legal commitments
4. Assets and Ownership
Verification of ownership rights for assets including real estate, intellectual property, and other tangible/intangible assets
Assessment of any disputes over asset ownership
5. Disputes and Litigation
Identification of ongoing or potential legal proceedings
Evaluation of the impact of these disputes on the M&A transaction
Conclusion
Conducting Legal Due Diligence is a vital step in M&A transactions that helps investors understand the target company’s legal standing, enabling sound decision-making and risk mitigation. With extensive experience and deep expertise, Dedica Law Firm is committed to delivering high-quality LDD services that support your success in any M&A deal.
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Bar Business Licensing Requirements: How to Legally Open a Bar in Vietnam
1. What Is Bar Business?
Running a bar involves providing beverage and entertainment services in an environment characterized by music and lighting. This is a conditional business line in Vietnam, subject to strict legal regulations to ensure public order, security, and social hygiene.
2. Latest Bar Business Requirements in Vietnam
According to current regulations, individuals or organizations wishing to legally open a bar must meet the following conditions:
2.1. Business Registration Requirements
You must register under the correct business line, specifically "bar service."
Obtain a valid Enterprise Registration Certificate or Household Business Certificate.
2.2. Security and Order Requirements
Obtain a Certificate of Eligibility for Security and Order issued by the police authority.
The person in charge of the business must not have any criminal record related to drugs, gambling, prostitution, or similar offenses.
2.3. Fire Prevention and Fighting (FPF) Requirements
The business premises must pass a fire safety inspection and receive a written certificate of compliance.
Must be fully equipped with fire safety systems, emergency exits, warning signs, etc.
2.4. Environmental Protection Requirements
Commit not to generate noise levels exceeding the legal threshold.
Install adequate wastewater and waste treatment systems to meet environmental standards.
3. Procedures to Obtain a Bar Business License
To legally operate a bar, businesses must go through the following steps:
Step 1: Register a Household Business or Company
Submit a business registration application to the Business Registration Office under the Department of Planning and Investment.
Step 2: Apply for a Certificate of Eligibility for Security and Order
The application dossier typically includes:
Application form for the certificate;
Notarized copy of the business registration certificate;
Personal background and judicial record of the legal representative;
Documents proving compliance with facility requirements.
Submit to the Division of Administrative Management on Social Order (Police Department).
Step 3: Fire Safety Registration
Contact the local Fire Prevention and Fighting Police Department to arrange for an inspection and obtain a certificate of compliance.
Step 4: Fulfill Tax Obligations and Public Disclosure of Business Information
Open a bank account and register for a digital signature;
Submit the business license tax declaration, register for invoices, etc.
4. Important Notes When Opening a Bar
Bars must not operate after midnight unless permitted by local authorities;
It is strictly forbidden to organize or allow any illegal activities such as drug use or prostitution;
Maintain public order and security in the vicinity of the bar.
5. Bar Business Licensing Support Services
If you're having trouble preparing the required documents or are unclear about the legal procedures, contact Dedica Law Firm. We offer comprehensive consulting and support services for obtaining bar business licenses, with a commitment to:
Accurate legal advice on all applicable requirements;
Full support in preparing a compliant and complete application dossier;
Representing clients in submitting documents and working with government agencies.
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Legal Considerations When Acquiring a Business: What Investors Should Not Overlook
Mergers and Acquisitions (M&A) are common strategies for expanding business operations. However, without a thorough understanding of legal regulations or proper preparation, investors may face significant legal risks. In this article, Dedica Law Firm outlines key legal considerations when acquiring a business in Vietnam.
1. Conduct Thorough Due Diligence on the Target Company
Before proceeding with an acquisition, investors should conduct a comprehensive due diligence process, including:
Legal status: business registration certificate, charter, and licenses for conditional business lines.
Financials: financial statements, debts, and tax obligations.
Labor: employment contracts, social insurance obligations, and potential labor disputes.
Assets: ownership of assets, capital contributions, and mortgaged properties.
Legal disputes: ongoing lawsuits or complaints.
Due diligence helps investors assess potential risks and determine the actual value of the business prior to making a final decision.
2. Review Investment Laws and Market Access Restrictions
For foreign investors, it is crucial to verify:
Whether the target company's business sector is restricted or conditional for foreign investment;
The maximum allowable ownership ratio under Vietnam’s laws and WTO commitments;
Whether capital contribution or share purchase must be registered with the Department of Planning and Investment.
Failure to comply with these legal requirements may result in invalid transactions or administrative penalties.
3. Draft a Clear and Comprehensive Transfer Agreement
The acquisition agreement serves as the main legal document binding the parties. It should clearly specify:
Purchase price and payment method;
Seller's liabilities regarding debts and outstanding obligations;
Time of ownership transfer;
Confidentiality commitments;
Dispute resolution clauses.
It is strongly recommended to engage legal counsel to draft and review the agreement to protect your interests and minimize legal risks.
4. Complete All Legal Procedures After the Acquisition
Once the transaction is finalized, investors must update relevant corporate information, including:
Changes in shareholders or capital-contributing members;
Change of legal representative (if applicable);
Updates to the Enterprise Registration Certificate (ERC);
Fulfillment of tax declaration and capital transfer obligations (if profits are earned).
These steps are essential to legally record the transaction and avoid future disputes.
5. Engage a Legal Advisor Throughout the M&A Process
With extensive experience in both domestic and cross-border M&A transactions, Dedica Law Firm offers professional support in:
Legal due diligence of the target business;
Investment strategy and transaction structuring;
Drafting transfer agreements;
Representing clients before competent authorities;
Advising on tax and post-acquisition procedures.
Conclusion
Acquiring a business is a fast-track way to growth, but it also comes with potential legal challenges. Investors should be proactive in legal preparation, conduct thorough due diligence, and work with a reputable legal advisor to ensure a smooth and successful acquisition.
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Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
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Can Foreign Investors Establish Startups in Vietnam?
In recent years, Vietnam’s startup ecosystem has gained increasing interest from foreign investors. However, many still wonder whether foreign investors can directly establish a startup in Vietnam, and whether it is mandatory to do so through a venture capital fund. This article will help clarify these questions based on current legal regulations.
1. What is a Startup Enterprise?
According to the Law on Supporting Small and Medium Enterprises 2017, a startup enterprise is defined as a business that:
Is established to realize an idea based on the exploitation of intellectual property, technology, or a new business model;
Has high growth potential; and
Aims for innovation.
This is a special type of enterprise that often receives support from the government, venture capital funds, or startup accelerators.
2. Can Foreign Investors Directly Establish a Startup in Vietnam?
The answer is YES.
According to Article 19 of Decree No. 38/2018/NĐ-CP, foreign investors are not required to invest through a startup investment fund in order to establish a startup enterprise in Vietnam.
Foreign investors can:
Directly contribute capital, purchase shares or equity to establish a startup enterprise;
Participate in the management or operation of the business, provided they meet conditions under Vietnamese investment law and international treaties.
However, they must still comply with investment conditions and foreign ownership limitations as specified in Vietnam’s WTO Commitments, the Law on Investment 2020, and related legal documents.
3. Is It Mandatory to Invest Through a Startup Investment Fund?
According to Article 18 of Decree No. 38/2018/NĐ-CP, foreign investors are not required to go through a startup investment fund. Such funds are optional financial support channels, not a mandatory route for establishing startups.
In other words:
Foreign investors may invest directly if they meet all legal requirements;
There is no need for an intermediary such as a venture capital fund or startup investment fund.
4. Legal Considerations When Establishing a Startup in Vietnam
To establish a startup in Vietnam, foreign investors should pay attention to the following legal aspects:
Check whether the intended business sector is subject to investment restrictions;
Review the maximum foreign ownership percentage allowed by law;
Complete investment registration procedures and apply for an Investment Registration Certificate (IRC) if required;
Follow procedures to establish the company and obtain an Enterprise Registration Certificate (ERC);
Ensure compliance with regulations on intellectual property, technology transfer, and profit remittance abroad.
5. Legal Consulting Services for Foreign Startup Investors in Vietnam
With extensive experience supporting startups and foreign investors in Vietnam, Dedica Law Firm offers comprehensive legal services, including:
Advising on investment conditions and suitable business sectors;
Preparing and drafting legal documents for company formation;
Representing clients in dealings with Vietnamese authorities throughout the investment process;
Providing ongoing legal support on IP protection, share transfers, and other post-investment legal matters.
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
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Legal Framework for Mergers and Acquisitions (M&A) in Vietnam: What You Need to Know
1. What is M&A?
M&A stands for Mergers and Acquisitions, which refers to the consolidation or purchase of one business entity by another. It is a form of corporate restructuring aimed at expanding scale, increasing market competitiveness, or entering new markets.
In Vietnam, the law does not provide a specific legal definition for M&A. However, M&A activities are governed by several key legal instruments, including:
Law on Enterprises 2020
Law on Competition 2018
Law on Investment 2020
Law on Securities 2019
Law on Foreign Trade Management 2017
Law on Credit Institutions 2010 (as amended in 2017)
2. Common Forms of M&A under Vietnamese Law
Vietnamese law recognizes several types of M&A transactions:
a. Merger of enterprises
A merger involves one or more companies merging into another existing company by transferring all assets, rights, obligations, and legitimate interests to the receiving company, while the merged companies cease to exist.
b. Consolidation of enterprises
Consolidation occurs when two or more companies combine to form a new entity, and all original companies are dissolved.
c. Acquisition of enterprises
This may include:
Acquiring all or part of the capital contribution in a limited liability company (LLC)
Acquiring shares in a joint stock company (JSC)
Such acquisitions may result in a change of ownership, controlling shareholders, or the management structure of the business.
3. Conditions and Procedures for M&A under Vietnamese Law
a. General conditions:
The transaction must not fall under any prohibited or restricted categories (e.g., conditional business sectors).
Compliance with competition regulations is required in the case of economic concentration.
For foreign investors, certain conditions apply regarding ownership limits, investment forms, and operational scope.
b. Basic procedures:
Negotiate and sign the M&A agreement
Conduct legal due diligence
Carry out capital/share transfer procedures or establish a new entity
Update business registration information
Notify or reorganize the business post-M&A
Depending on the specific case, additional steps such as amending the investment registration certificate or obtaining approval from competition authorities may be required.
4. Is M&A Notification with Competition Authorities Mandatory?
Yes. According to the Law on Competition 2018, if the M&A transaction constitutes economic concentration, and meets any of the following thresholds, it must be notified to the National Competition Commission before implementation:
Total assets or revenue of the involved parties exceed the legal threshold
The M&A transaction value surpasses a specified limit
The combined market share exceeds the control threshold
Failure to comply with the notification requirement may lead to penalties and remedial measures.
5. Key Considerations for Enterprises Engaging in M&A
Conduct thorough legal and financial due diligence on the target company
Draft a comprehensive M&A agreement with clear rights and obligations
Assess potential risks relating to taxes, human resources, assets, and liabilities
Ensure strict compliance with all relevant laws, especially in cases involving foreign elements or conditional business sectors
6. Legal Advisory Services for M&A Transactions
M&A is a complex and high-stakes transaction that requires in-depth knowledge of corporate, investment, competition, and tax laws. Therefore, it is highly recommended that businesses engage reputable law firms for professional legal support, including:
Strategic advice and deal structuring
Legal due diligence
Drafting, negotiating, and resolving issues in M&A contracts
Representation before competent authorities
7. Conclusion
M&A has become a prominent trend in today’s business environment, offering a strategic pathway to growth and market expansion. However, to ensure successful and legally compliant transactions, enterprises must understand the applicable legal conditions and procedures, and seek guidance from experienced M&A legal professionals.
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
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Are FDI Enterprises Allowed to Open Direct Investment Capital Accounts in Vietnam?
Opening a direct investment capital account is a mandatory requirement for foreign-invested enterprises (FDIs) when conducting investment activities in Vietnam. This is a critical legal procedure to ensure proper management of investment capital and compliance with Vietnam’s financial regulations.
1. Are FDI Enterprises Required to Open a Direct Investment Capital Account?
According to Clause 1, Article 5 of Circular 06/2019/TT-NHNN, as amended by Circular 03/2024/TT-NHNN:
“Foreign investors making direct investments in Vietnam through capital contribution, share purchase, or capital contribution purchase in economic organizations must contribute capital in foreign currency or Vietnamese dong through a direct investment capital account opened at a licensed credit institution or foreign bank branch operating in Vietnam.”
Therefore, FDI enterprises must open a direct investment capital account at a bank in order to contribute capital and conduct transactions related to their investment activities.
2. What Is a Direct Investment Capital Account?
A direct investment capital account is a payment account in either foreign currency or Vietnamese dong, opened at a commercial bank or a licensed foreign bank branch operating in Vietnam.
This account is used to:
Receive capital contributions from foreign investors
Remit profits and dividends abroad
Make capital contributions, purchase shares or equity
Receive capital transfers
Conduct other transactions related to direct investment activities
3. When Is It Not Necessary to Open a Direct Investment Capital Account?
According to current regulations, not all enterprises with foreign elements are required to open a direct investment capital account. Specifically, if an enterprise does not fall into the following categories, it is not obligated to open such an account:
Enterprises with foreign investors participating in the establishment of a company in Vietnam
Enterprises receiving capital transfers from foreign investors
Enterprises with foreign investors contributing capital or purchasing shares or equity
In short, if an enterprise no longer has any foreign ownership or does not engage in foreign capital investment activities, it is not required to open a direct investment capital account.
4. Where Can FDI Enterprises Open a Direct Investment Capital Account?
FDI enterprises may open a direct investment capital account at:
Commercial banks operating in Vietnam
Licensed foreign bank branches operating in Vietnam
Note: Each enterprise may open only one direct investment capital account per type of foreign currency at a single bank.
5. Legal Advisory on Opening Direct Investment Capital Accounts for FDI Enterprises
Opening a direct investment capital account is not just a standard administrative procedure—it has direct implications for the financial and legal operations of FDI enterprises in Vietnam.
If your company is planning to establish a presence in Vietnam or is preparing to receive investment from foreign investors, contact Dedica Law Firm for professional assistance:
Advisory on eligibility and requirements for opening investment capital accounts
Preparation of related legal documentation
Guidance on banking procedures
Assistance with capital transfers, capital contributions, and remittance of profits abroad
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
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Do Foreign-Invested Enterprises Need an Investment Registration Certificate When Establishing a Branch or Representative Office in Vietnam?
As part of their market expansion and business development strategies in Vietnam, many foreign-invested enterprises (FIEs) are exploring the establishment of branches or representative offices across different localities. However, one frequently asked question is:
Does an FIE need to obtain an Investment Registration Certificate (IRC) when setting up a branch or representative office in Vietnam?
In this article, Dedica Law Firm provides a detailed analysis of the legal basis and required procedures, helping foreign investors understand the regulatory framework and make informed decisions when expanding into Vietnam.
1. Legal Basis
The establishment of branches or representative offices by foreign-invested enterprises in Vietnam is governed by the following legal documents:
Law on Enterprises 2020
Law on Investment 2020
Decree No. 01/2021/NĐ-CP on enterprise registration
Decree No. 31/2021/NĐ-CP guiding the implementation of the Investment Law
Official Letter No. 8909/BKHĐT-PC dated December 10, 2014, issued by the Ministry of Planning and Investment
2. Is an IRC Required for Establishing a Branch or Representative Office?
Under Article 41 of the Law on Investment 2020, an Investment Registration Certificate is only required for investment projects in which investors establish a new economic organization to implement the project.
In contrast, establishing a branch or representative office is an expansion of an already-established entity and does not constitute a new investment project. As such, it does not fall under the requirement to obtain an IRC.
Additionally, the Ministry of Planning and Investment clarified in Official Letter No. 8909/BKHĐT-PC:
“The establishment of branches or representative offices by foreign-invested enterprises is a matter of internal organizational management and does not constitute a new investment project. Therefore, it is not subject to the issuance of an Investment Registration Certificate.”
3. Procedures for Establishing a Branch or Representative Office of an FIE
Although an IRC is not required, the enterprise must still register the operation of its branch or representative office with the Department of Planning and Investment in the locality where it intends to operate.
The application dossier includes:
Notification of establishment of a branch/representative office
Resolution and meeting minutes of the parent company on the establishment
A certified copy of the Enterprise Registration Certificate
A certified copy of the ID/passport of the head of the branch/representative office
Power of attorney for the applicant (if applicable)
Processing time:
From 3 to 5 working days after the submission of a complete and valid dossier.
4. Key Notes for Foreign-Invested Enterprises
The name of the branch or representative office must be appropriate and not duplicate any existing registered entities.
The head office of the branch or representative office must not be located in a residential apartment building, unless that building is officially approved for commercial use.
The head of the branch or representative office must possess full legal capacity and is responsible for representing the entity in all legal and business matters.
5. Legal Support Services for Setting Up Branches or Representative Offices in Vietnam
Properly establishing a branch or representative office in compliance with Vietnamese law is a critical factor for FIEs seeking to expand operations in a smooth and lawful manner.
With a team of experienced lawyers and legal consultants specializing in foreign investment and corporate law, Dedica Law Firm is committed to offering comprehensive support:
Full legal consultation on the conditions, procedures, and documentation required to establish a branch or representative office
Preparation and submission of all application documents in accordance with legal regulations
Post-registration assistance, including seal engraving, bank account setup, and activity reporting
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
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Guide To Establishing A Foreign-Invested Company In Vietnam
With open investment policies and an increasingly favorable business environment, Vietnam has become an attractive destination for foreign investors. However, establishing a foreign-invested company in Vietnam requires compliance with a detailed legal process. This article provides a step-by-step guide to help investors understand and follow the correct procedures in accordance with Vietnamese law.
1. Legal Basis
The establishment of a foreign-invested enterprise in Vietnam is governed by the following key legal documents:
Law on Investment 2020
Law on Enterprises 2020
Decree No. 31/2021/ND-CP guiding the implementation of the Law on Investment
Decree No. 01/2021/ND-CP on enterprise registration
2. Determine the Appropriate Form of Investment
Before proceeding with the procedures, foreign investors must identify the most suitable investment form. The most common options include:
Establishing a new economic organization in Vietnam (wholly foreign-owned or joint venture)
Contributing capital, purchasing shares or capital contributions in an existing Vietnamese company
This article focuses on the process of establishing a new foreign-invested economic organization in Vietnam.
3. Procedures for Establishing a Foreign-Invested Company
Step 1: Obtain Investment Policy Approval (if required)
Not all investment projects require policy approval. However, investors must obtain approval from the People’s Committee of the province if the project falls under one of the following categories:
Investment capital of VND 300 billion or more
Projects related to national defense or security
Projects that require land use in sensitive areas or involve land use conversion
Step 2: Apply for the Investment Registration Certificate (IRC)
Required documents include:
Application for implementation of the investment project
Documents proving the investor’s financial capacity
Proposal for the investment project (objectives, scale, location, etc.)
Copy of passport (for individuals) or business registration certificate (for organizations)
Authority in charge: Department of Planning and Investment (DPI) where the company’s head office is located
Processing time: 15 working days from the date of receiving a valid application
Step 3: Apply for the Enterprise Registration Certificate (ERC)
After obtaining the IRC, the investor shall proceed with the standard enterprise registration process, submitting the following documents:
Application for enterprise registration
Company charter
List of members or founding shareholders
Copy of the legal representative’s identity document
Capital contribution decision (for institutional investors)
Processing time: 3 – 5 working days
Step 4: Post-Incorporation Procedures
After being granted the ERC, the enterprise must complete the following steps:
Create and register the company seal
Announce enterprise registration information on the National Business Registration Portal
Register for tax, open a bank account, and obtain a digital signature certificate
Contribute capital in full within 90 days from the date of establishment
4. Notes for Foreign Investors
Certain business lines are subject to foreign investment conditions. Investors should carefully check regulations on ownership limits, investment forms, and technical requirements.
If the company is located in an industrial park, export processing zone, or high-tech zone, the procedures shall be carried out at the management board of the respective zone instead of the Department of Planning and Investment.
Investors must provide consular legalized documents and certified Vietnamese translations when submitting documents for use in Vietnam.
5. Legal Support Services for Establishing Foreign-Invested Companies
Handling foreign investment procedures independently in Vietnam requires both legal knowledge and practical experience. With a team of lawyers specializing in foreign investment and enterprise establishment, Dedica Law Firm is committed to assisting investors with:
Comprehensive consulting on procedures, investment sectors, locations, and investment forms
Drafting and submitting applications for IRC and ERC in compliance with legal requirements
Post-establishment support: bank account opening, tax registration, company seal creation, capital contribution reporting, and more
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
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Handling Surplus Materials During the Dissolution of Export Processing Enterprises: Practical Considerations
When dissolving an export processing enterprise, one of the key legal issues that needs careful attention is the handling of imported materials remaining in inventory. For foreign-invested enterprises (FDIs) operating under the export production model, the treatment of surplus materials not only impacts the dissolution process but is also directly tied to tax obligations and customs procedures.
The Challenge: Unused Imported Materials
DEDICA had the opportunity to support an FDI client during the dissolution of its factory in Binh Duong Province, while restructuring operations to another factory within the same group in Binh Phuoc Province. At the time of dissolution, the company still had a quantity of unused imported materials in stock.
These materials had been imported under the export production regime, which qualified them for import duty and VAT exemptions. The client was reluctant to sell the surplus materials on the domestic market, as changing their intended use would trigger additional tax liabilities.
Difficulties with the Traditional Approach
In the past, companies within the same corporate group often opted for the domestic export-import model (xuất khẩu – nhập khẩu tại chỗ) to transfer materials between factories. However, customs authorities have recently tightened regulations on this method, making the procedures more complex and difficult to implement.
Proposed Solution: Bonded Warehouse Export and Re-Import
After thoroughly reviewing applicable laws and evaluating various alternatives, DEDICA advised the client to handle the surplus materials using the following approach:
Export the surplus materials to a bonded warehouse;
Then, the factory in Binh Phuoc would re-import the materials from the bonded warehouse.
Although current legislation does not provide explicit guidance on this approach, DEDICA assisted the client in preparing and submitting an official request for clarification to the customs authority, based on a detailed legal analysis and direct communication with the relevant agency.
In response, the customs authority confirmed that the proposed solution complies with existing regulations and is permissible in practice.
Conclusion: The Need for Flexible, Practical Legal Solutions
The dissolution of an export processing enterprise often raises complex legal issues, especially regarding the handling of remaining imported materials. It is therefore critical for businesses to carefully consider solutions that are not only compliant with the law but also cost-effective and operationally feasible.
📝 DEDICA remains committed to delivering practical, tailored legal solutions to help clients navigate regulatory challenges in manufacturing and investment activities in Vietnam.
👉 Official Customs Response Letter: https://drive.google.com/file/d/16x_cU4-I3ZlP0C3EkirpsDRl1xQNzNOr/view?usp=sharing
Contact DEDICA Law Firm today for expert legal advice!
Phone: (+84) 39 969 0012 (We are available on WhatsApp, WeChat and Zalo)
Head Office: 144 Vo Van Tan Street, Vo Thi Sau Ward, District 3, Ho Chi Minh City, Vietnam
Hours: Monday–Friday (8:30 am – 6:00 pm)
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