Forms of Foreign Investment in Vietnam

   From 01/01/2021, the Law on Investment 2020 in Vietnam came into force. According to the Vietnam Law on Investment 2020, there are five types of foreign investment in Vietnam.

Investment in the establishment the economic organizations:

This type comprises two methods: Establishment of a company with 100% capital from foreign investors or establishment of a company between the domestic investors or the domestic government and foreign investors. Before establishing the economic organizations, the investors must have the investment project, perform the procedures for issuance of the Investment Registration Certificate, satisfy the conditions on the percentage of charter capital ownership according to the Law on Securities, on equitization and transformation of state-owned enterprises, and the other conditions according to the international treaties that Vietnam signed (if any).

Investment in the capital contribution, purchase shares, purchase contributed capital:

Capital contribution, purchase shares, purchase contributed capital are the types of indirect investment for foreign investors through the purchase of stocks, bonds, and other valuable documents. Investors must conform to the legal provisions on capital contribution, purchase share, and purchase contributed capital.

Implementation investment project:

Foreign investors can sign the PPP contract. This is an investment method based on limited-term cooperation between the State and private investors through the signing of PPP contracts to attract private investors to participate in the implementation of investment PPP projects.

Investment under the BCC contract:

BCC contract is signed between the domestic investors according to the Civil Law. BCC contract with at least one party being a domestic investor that performs the procedures for granting the Investment Registration Certificate.

New forms of investment and economic organizations according to the Government’s rules.

We could assist the client to set up company in Ha Noi, Ho Chi Minh City, Da Nang or in other provinces in Vietnam.

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The processing and manufacturing industry leads in attracting foreign investment in Vietnam

 

In the first 05 months of 2021, the processing and manufacturing industry continues to be the leading industry in attracting foreign investment, with a total investment capital of 6.14 billion USD.

According to the General Statistics Office, in the first 05 months of 2021, the foreign investors have invested in 18 industries and fields, of which the processing and manufacturing industry leads the way with a total investment of 6.14 billion USD, accounting for 43.9% of total registered investment capital.

The field of electricity production and distribution ranked second with a total investment of 5.43 billion USD, accounting for 38.8% of the total registered investment capital. Followed by real estate, wholesale and retail business with a total registered capital of 1.05 billion USD and nearly 522 million USD.

According to statistics, until the end of May 2021, the total newly registered capital, adjusted and contributed capital, bought shares, purchased capital contribution of foreign investors reached nearly 14 billion USD, up by 0. 8% over the same period in 2020, realized capital of foreign direct investment projects were estimated at 7.15 billion USD, up 6.7% over the same period in 2020.

In the first 5 months of 2021, there were 613 new projects granted investment registration certificates, the total registered capital reached nearly 8.83 billion USD (up 18.6% over the same period), 342 projects registered to adjust investment capital, the total registered capital increased to 3.86 billion USD, and 1,422 times of capital contribution to buy shares from foreign investors, total value of capital contribution reached 1.31 billion USD.

According to investment partners, there are 70 countries and territories have invested in Vietnam, of which Singapore leads with a total investment capital of 5.26 billion USD, Japan ranks second with a total investment capital of 2.59 billion USD, Korea ranked third with a total registered investment capital of 1.83 billion USD, followed by China, Hong Kong, Taiwan…

In 2021, although still affected by the Covid-19 epidemic, with many policies to restore the economy and support foreign investors, Vietnam has made many outstanding achievements in attracting FDI. With this achievement, Vietnam hopes that many international investors choose Vietnam as an investment destination for setting up company not only in the field of processing and manufacturing but also in many other investment fields so that they can contribute to promoting the country’s economy and investors in the future.

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Policies to Attract Foreign Investment in Hanoi

 Over the years, Hanoi city has organized quality conferences of foreign investment attraction, focusing on implementing measures to attract transnational corporations engaged in investment and business in Hanoi.

To perform domestic and international cooperation activities on investment promotion. Hanoi is constantly promoting and improving the efficiency of investment promotion activities, creating a reasonable and effective connection between domestic and foreign investment promotion activities in Hanoi in all fields, economic sectors; connecting investment promotion activities with trade promotion, tourism, and other related activities.

In addition, Hanoi has issued the preferential policies according to priority development groups in each locality based on the advantages and potentials of each locality; innovating the implementation method to well perform the works of attracting, calling and directing foreign investment; renovating mechanisms and policies to attract maximum financial resources from all economic sectors, especially mobilize idle capital from the population to develop production and business.

Hanoi is one of the cities that has favorable business conditions for high technology investors. The improvement of the business environment has greatly contributed to attracting domestic enterprises, foreign enterprises, and corporations to invest in industrial areas in Hanoi. Hanoi not only focuses on developing preferential policies for investors but also promotes the completion of industrial areas, especially high-tech parks. Many FDI enterprises and corporations investing in Hanoi appreciate the improvement of the business environment of Vietnam in general and Hanoi in particular. So the FDI corporations have affirmed that they will choose Hanoi as a place to expand their investment and business in the coming years, especially in the high-tech field.

According to the government in Hanoi, in recent years, Hanoi has become a center of attracting FDI of Vietnam. Currently, this city has more than 6,300 valid FDI projects with a total registered capital is more than 46,8 billion USD. In 2020, despite the Covid-19 epidemic influence, Hanoi still has attracted 4 billion USD of FDI capital and 145,000 billion of domestic capital.

Based on the attracting FDI schedule, from 2021 to 2025, Hanoi will attract 30-40 billion USD of foreign investment capital, in which 20-30 billion USD of disbursed capital. To achieve this goal, Hanoi will promote the investment attraction, focus on the investment in economic infrastructure development, developing the high-tech parks, industrial areas, industrial clusters according to planning, making the investment attraction lists for regions, fields, and products, selecting the investment for the projects using high technology which help the investors could make the investment in the city in an easy way.

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Foreign Investment in Education Sector in Vietnam

 Foreign cooperation and investment in education are not new to Vietnam. There has been a number of schools and education institutions such as BVIS, Hanoi Academy, International School in Hanoi, Japanese International School, Vietnam-Australia School. Since Aug 1st, 1018, the decree 86/2018/ND-CP on international cooperation and investment in education in Vietnam will be effective, replacing Decree 72/2012/ ND-CP.

According to Decree 86/2018/ND-CP, foreign organizations and individuals are allowed to cooperate in investment in the field of education in accordance with Vietnamese law and treaties to which Vietnam is a member. However, with the education sector in the security, defense, political and religious sectors, the law does not allow foreign organizations to cooperate, or invest.

The law open ways for enterprise to cooperate in education services in Vietnam including pre-school education establishments;primary and secondary education establishments, and educational establishments operating in foreign countries, which are accredited; and post graduate programs that offer master and doctoral training courses and examination centers with foreign language certificates.

Foreign organizations and individuals cooperating and investing in Vietnam in education services must meet the requirements of the Vietnam laws, including facilities in service of educational activities; the educational program and the quality of teachers. Accordingly, the integrated educational program must be a program that has been accredited, ensure meeting the objectives of the educational program of Vietnam; and meet the requirements of the foreign educational program and must be approved by the Vietnam competent authority. Teachers must be qualified and have diplomas and certificates as prescribed by law. Foreigner and foreign organizations which cooperate in the field of education for a joint term of no more than 5 years from the date of approval. Upon the expiry of the extended time limit, each extension time shall not exceed 5 years.

Forms of foreign-invested educational establishments permitted are include short-term training and vocational training; pre-school education establishment; General education establishments (primary schools, secondary schools, primary and secondary schools; higher education institutions. The duration of operation shall not exceed 50 years. For the establishment of foreign educational organizations, foreign organizations and individuals must meet conditions on capital, facilities and equipment, educational program; teachers must meet the requirements of the Vietnam Ministry of Education and Training.

For pre-school and primary and secondary education establishments, which accept Vietnamese pupils, and study the foreign educational programs, the number of Vietnamese pupils studying in the foreign educational program must be lower 50% of the total number of students enrolled in the foreign educational program at the institution. Vietnamese pupils studying in this group must study compulsory subjects according to regulations.

Foreign investors in education service have to apply for investment registration certificate in Vietnam. Depending on the nature of the educational business, other licenses will need to be applied at Department of Education and Training before operation.

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