Foreign companies seeking partnership with Vietnamese firms – How to legally establish a joint venture in Vietnam?

Jun 9

Client B, a Japanese enterprise, intended to collaborate with a Vietnamese partner to establish a mechanical component manufacturing company in Binh Duong. The two parties agreed on a 60:40 capital ratio and aimed to expand their market presence across Southeast Asia starting from Vietnam.

However, when initiating the registration process, the Japanese side encountered difficulties in understanding the legal framework related to joint ventures: investment procedures, capital contribution, governance rights, and particularly, intellectual property issues surrounding jointly developed products. Concerned about legal risks and cultural differences, Client B turned to DEDICA for expert legal guidance.

Establishing a Joint Venture in Vietnam – What Should Foreign Investors Prepare?

Setting up a joint venture is a common investment form for foreign investors seeking to collaborate with Vietnamese partners. It allows leveraging local market knowledge and resources while maintaining control over technology and capital.

However, this model requires thorough legal preparation, a strategic partnership approach, and clear delineation of rights and obligations between parties.

When to Choose a Joint Venture Model?

The business sector is restricted to foreign investors under WTO commitments or Vietnamese law
The need to leverage the local partner’s market, licenses, or relationships
One side contributes capital or technology while the other manages local operations

Benefits and Risks of Joint Ventures

Benefits:

Resource and cost optimization
Faster market entry
Local support in procedures, regulations, and workforce

Risks:

Conflicting interests or management styles
Lack of clarity in profit sharing or decision-making
Disputes over IP and intangible assets

How DEDICA Helped Client B Successfully Launch a Joint Venture

We collaborated with both parties to thoroughly review their cooperation content and long-term goals, from which we proposed a legal structure that balanced the interests of both sides.

Step 1: Define the Joint Venture Structure and Draft the Charter

We assisted in developing a detailed charter addressing:

Voting rights and decision-making mechanisms
Profit and cost allocation
Capital withdrawal and share transfer processes
Internal dispute resolution procedures

Step 2: Obtain Investment Registration Certificate (IRC)

As a foreign-invested enterprise, Client B needed to apply for an IRC at the Department of Planning and Investment (DPI) or Industrial Zone Authority. DEDICA prepared:

Joint venture agreement
Legal profiles of both parties
Financial capacity documents and investment plans

Step 3: Obtain Enterprise Registration Certificate (ERC)

Once the IRC was granted, DEDICA completed the enterprise registration, seal engraving, tax code registration, and disclosure on the National Business Registration Portal.

Step 4: Open an FDI Capital Account and Contribute Capital

We guided the client in opening a compliant FDI account at a Vietnamese bank, ensuring the capital transfer process met foreign exchange regulations.

Step 5: Obtain Sub-licenses (If Any) and Assist Early Operation

Depending on the business scope, we supported:

Licenses related to environment, fire safety, labor...
Trademark registration, internal policies, contract templates, and initial operational procedures

Outcome and Lessons Learned

The joint venture was successfully incorporated within 20 working days. Client B was satisfied with the transparent distribution of rights and profits, balanced authority, and pre-agreed conflict resolution mechanisms.

Key takeaways include:

Drafting a comprehensive joint venture agreement
Not overlooking corporate culture compatibility
Having legal counsel throughout both setup and operation stages

Thinking of starting a joint venture in Vietnam?
Let DEDICA accompany you from negotiation to full legal establishment and smooth operational launch.

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.