Vietnam Can Issue Residence Card to Foreign Investors to Set up business in Phu Quoc

 The Ministry of Planning and Investment proposed a series of preferential mechanisms for Phu Quoc special economic zone.

The Ministry of Planning and Investment has just submitted to the Government a draft Law on Special Administrative Units. In this draft, the Ministry proposes a series of mechanisms to attract investment capital and foreign experts set up business in Phu Quoc, to live and work in Phu Quoc special economic zone.

Specifically, according to the draft law, Phu Quoc is prioritized investment to become a center for trade, high-end services and international procurement. This will be the only special zone to be prioritized for the development of fisheries, aquaculture and processing and fishery logistics.

Why encourage to set up business in Phu Quoc?

According to the Ministry of Planning and Investment, the potential advantages of Phu Quoc can completely develop into a commercial center, even though Phu Quoc is located far from the land and there are only two main lines of transportation that are airway and sea. Phu Quoc also has favorable conditions for hydro-meteorology, natural environment, mountains, forests, marine and ecosystems; moderate weather, favorable for year-round tourism development. Especially, Phu Quoc has a large fishing ground and potential for aquaculture.

In addition, Phu Quoc has fertile farmland, large forest land, occupies 63.2% of the total natural land area, facilitates the development of agricultural economy and sustainable eco-tourism development.

Like other two special economic zones, which are Van Don (Quang Ninh), Van Phong (Khanh Hoa), the Ministry of Planning and Investment proposed a series of incentives for Phu Quoc such as income tax exemption for 5 years, but not exceed 2030 for individuals who have taxable income arising in the special economic zone. In subsequent years, the personal income tax payable will be reduced by 50%.

For managers, scientists and highly qualified experts with income subject to personal income tax in the 3 special economic zones mentioned above, they are also entitled to tax exemption until the end of 2030 and 50% reduction of tax amount in the remaining years.

In addition to the application of general incentives for special economic zones, Phu Quoc has also been proposed to enjoy a separate mechanism, such as raising the level of allowances from 30% to 50% of the basic salary for officials and employees working here.

In particular, in order to encourage investment, the Government of special economic zone will issue permanent residence cards to individual foreign investors with investment projects of 5 million USD or above, with the residence time of 5 years or more in Phu Quoc and not violating the law.

Regarding infrastructure, according to the Ministry of Planning and Investment, infrastructure of Phu Quoc has been invested quite synchronously to meet the needs of large-scale tourism development. Many high-class and large-scale resorts have come into operation. The Politburo has agreed to open casino project in Phu Quoc for the Vietnamese.

For Van Don special economic zone, according to the Ministry of Planning and Investment, priority will be given to develop island eco-tourism, innovative industries and high-tech agriculture.

Van Phong, in particular with its location, will be promoted to develop deep-water ports, logistics services, medical services, high-quality resort…

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Positive Changes in Da Nang that Attract Foreign Investors

 The bustling city of Da Nang on the central coast of Vietnam has long been a popular destination for both international tourists and business investors alike. Over the past few years, however, the local government has made important strides towards improving the city’s infrastructure and creating an environment where investors and businesses can prosper.

This represents a new and improved investment environment for foreign investors who wish to invest in Da Nang and set up a company in Da Nang. Foreign investors who wish to do business in Da Nang would need to have legal support from lawyers in Da nang in order to make sure that all procedures are compliant with local laws and regulations.

Initiatives from Da Nang authorities to boost investment

The government of Da Nang has implemented a number of positive development policies to create better opportunities for businesses to thrive. One of the most significant developments in Da Nang in recent years has been the policies and guidance that support businesses from the initial process of setting up a company in Da Nang to obtaining work visas and work permits in Da Nang for foreign employees. The Da Nang authorities have also simplified the registration of businesses and reduce bureaucracy.

All these efforts show the government’s dedication to creating favorable investment conditions. Furthermore, Da Nang is rapidly modernizing and becoming a regional hub for digital, technology and start-up businesses. It has established a “Smart City” program with the intention of turning the city into a technological powerhouse. This digital transformation includes the introduction of advanced infrastructure, access to high-speed internet, and specialized programs for entrepreneurs and businesses.

From tax incentives to relaxed labor laws, there has been a marked increase in foreign interest in Da Nang due to these government policies. As a result, there is a great opportunity for businesses to benefit from the favorable environment that the government has created.

In order to encourage foreign suppliers to invest in Da Nang, the city’s government has implemented numerous incentives and regulations. One such measure is the plan to propose the formation of the Da Nang Free Trade Zone (FTZ).  The FTZ allows for companies to set up operations in the city without being subject to certain taxes and fees. Additionally, companies that set up operations within the FTZ are eligible for financial incentives and subsidies. This policy has been expected in encouraging foreign businesses to make investments in Da Nang, establish business in Da Nang.

In addition to tax, labor incentives, FTZ plan, the government of Da Nang has taken a number of other steps in order to make the city attractive to investors. For example, the local government has relaxed the regulations surrounding the leasing of certain industrial and commercial sites. This allows businesses to find suitable areas in which to set up their operations in Da Nang.

In order to attract even more foreign investors and businesses to Da Nang, the government has also made it easier for them to gain access to a number of services in the city. Da Nang is the first city in Vietnam that launch bicycle for rent and for the first time, a company has also launched electric bike service for transport.  Those are part of the eco-friendly initiatives which are in line with the overall strategy of sustainable development of the city.

For business owners and foreign investors looking to establish operations in Da Nang, it is important to ensure that all legal considerations are taken into account. This is why it is essential to hire lawyers in Da Nang who is experienced in the area of investment and business. Such a lawyer will be able to advise on issues surrounding company formation, lease agreements, work permits, and temporary residence cards. They will also be able to review contracts with local businesses in order to ensure that the best interests of the foreign investor are being taken into consideration.

How lawyers in Da Nang could help?

Vietnam appears to be an attractive destination for investment because of its impressive economic growth.  Da Nang, a coastal city in center of Vietnam attracts foreign investors because of its friendly and clean environment.  When considering living and investing in Da Nang, the investors would engage the legal help from experienced lawyers in Da Nang for the setting up of company in Da Nang, leasing of worksites or factories, obtaining work permits and temporary residence cards, reviewing contracts, or handling dispute and other legal matters in Da Nang.  

The law firms in Da Nang also provides advice on the current laws and regulations on investment and taxation, helping foreign investors to stay up to date with the changes in the local business environment.  They offer practical legal services and advice and assist clients in finding solutions that best meet their needs and requirements in doing business in Da Nang in particular and doing business in Vietnam as general.

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How to Apply for Investment License in Vietnam?

 The procedure to apply for investment license in Vietnam is the procedure for applying for an Investment Registration Certificate in Vietnam under the Investment Law.

Depending on the size, nature, and great impact on the environment, projects need special mechanisms and policies, projects that need land allocation, or projects that need to relocate large numbers of people, projects of foreign investors in the sea and islands that affect national defense and security, the procedures to apply for investment license in Vietnam may require approval of an investment policy.

In the framework of this article, we only refer to the procedure to apply for investment license in Vietnam, which is not subject to approval of investment policy.

What is an Investment Registration Certificate?

Investment registration certificate means a license issued by a competent State agency to organizations and individuals that fully satisfy the conditions for implementing an investment project, being foreign investors, or foreign organizations, organizations invest in projects in which foreign investors hold more than 50% of charter capital, or the majority of general partners are foreign individuals, for economic organizations that are partnerships.

The investment certificate contains information such as project name, investor’s name and address, investment project code, project location, land use area, objectives, and scale of project, project investment capital, project operation duration, investment project implementation schedule (capital and implementation of operational objectives), incentives, support and project conditions investment.

What are the forms of investment in Vietnam?

-Investment in establishing economic organizations.

-Investment to contribute capital, buy shares, or acquire capital contribution.

-Investment in the form of BCC contract.

-New investment forms and economic organizations according to the Government’s regulations.

What are the conditions for granting an investment registration certificate?

For an investment project that is not subject to approval of investment policies, an investor shall be granted an Investment Registration Certificate if it meets the following conditions:

-Investment projects that are not in industries or trades banned from business investment;

-Having a location for the implementation of the investment project;

-Investment projects in accordance with the planning;

-Satisfy the conditions on investment rate per land area and number of employees (if any);

-Meeting market access conditions for foreign investors.

What is the timeline for granting an investment registration certificate?

15 days from the date of receipt of the investor’s request for an Investment Registration Certificate, for an investment project that is not subject to a written approval of investment policies.

Steps to apply for investment license in Vietnam?

Normally, the procedure to apply for investment license for an investment project that is not subject to approval of investment policies is carried out as follows:

Step 1: The investor submits 01 application for the Investment Registration Certificate to the investment registration agency.

In case the investment project is implemented in 02 or more provincial-level administrative units, the investor shall submit a dossier to the Department of Planning and Investment of a province or centrally run city where the investor implements the project to set up an executive office to apply for the Investment Registration Certificate for the project.

Step 2: For an investment project that has already been operated, the investor submits a dossier according to regulations in which the investment project proposal is replaced by a report on the implementation of the investment project from the time of implementation.  The declaration is up to the time of application for the Investment Registration Certificate.

Step 3: The investment registration authority shall issue the Investment Registration Certificate to the investor within 15 days from the date of receipt of the valid dossier when the project meets the conditions.

What authority to issue an Investment Registration Certificate?

The authority to issue, amend and revoke the Investment Registration Certificate is as follows:

-Management Boards of industrial parks, export processing zones, hi-tech zones and economic zones shall grant, adjust and revoke investment registration certificates for investment projects in industrial parks, export processing zones and zones, hi-tech, economic zones, unless otherwise specified.

-The Department of Planning and Investment shall grant, adjust and revoke the Investment Registration Certificate for investment projects outside industrial parks, export processing zones, hi-tech zones, and economic zones, unless otherwise prescribed other.

-The investment registration agency where the investor implements the investment project, locates or is expected to set up an executive office for the implementation of the investment project, issues, adjusts and revokes the Investment Registration Certificate for the following investment projects: i) Investment projects implemented in 02 or more provincial-level administrative units; ii) Investment projects implemented inside and outside industrial parks, export processing zones, high-tech zones and economic zones; iii) Investment projects in industrial parks, export processing zones, high-tech zones, economic zones where the management board of industrial parks, export processing zones, hi-tech zones, economic zones has not been established or is not within the scope of management of the Management Board of industrial parks, export processing zones, high-tech zones and economic zones.

The agency receiving investment project dossiers is the agency competent to issue the Investment Registration Certificate, unless otherwise specified.

Why the investors need to apply for investment license in Vietnam?

The procedure to apply for investment license in Vietnam, or the procedure for granting an investment registration certificate in Vietnam, is an important procedure for foreign investors. It is therefore imperative that they understand the requirements and procedures of the application process. According to the historic data, investing in Vietnam can be beneficial for companies that want to penetrate a fast-growing market like Vietnam. Applying for an investment registration certificate is the first step that an investor must take to participate in the market.

When applying for an investment registration certificate in Vietnam, there are a number of documents and information that an investor must provide. Information such as legal documents, business plans and other financial documents must be provided for the investment registration to be approved.

Completing the application for an investment registration certificate is a complicated process and requires knowledge and experience. It is important that foreign investors seek the help of experts or legal advisors who are lawyers in Vietnam who understand the procedure and required documents while doing business in Vietnam.

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Why Investors Would Find Phu Quoc a Place for Investment?

The improvement in infrastructure system along with the preferential policies have stimulated investors to come to  set up company in Phu Quoc.

Phu Quoc, an island in Kien Giang of Vietnam is in the top of three islands having tourism potential in Southeast Asia comparable to Phuket in Thailand and Bali in Indonesia.  Phu Quoc has become a magnet for attracting huge investment flows from foreign investors in the area of real estate, entertainment, casinos, restaurant or food and beverage service business.

Phu Quoc has temperate weather throughout the year. There are also fresh and friendly forest – sea ecology and the modern transport system on the island with international airport and international hospital. Moreover, many infrastructure projects and international schools are under construction, which are necessary and favorable conditions to invite and attract investors to the Pearl Island for doing business.

Why set up company in Phu Quoc?

Capital inflows to Phu Quoc have really exploded after the “knots” in investment were removed. The new airport went into operation that can welcome larger aircraft and serve more flights, in which there are more international direct flights from China, Singapore, Russia and Cambodia. The 51km long radial route on the island has been basically completed; the road around the island and the branch roads are also being deployed. The power grid was pulled from the mainland to the island, replacing the very high cost gasoline power in the past.

The real estate and tourism consultants all agree that Phu Quoc fully convergent elements of an attractive beach for tourist with year-round sunshine, many beautiful beaches such as Long Beach, Truong Beach, Khem Beach and immense virgin forest. Moreover, Phu Quoc has a strategic location with just 1-2 hours flight to the key tourism markets in Southeast Asia.

Both investment and tourism in Phu Quoc have entered the acceleration phase. By the end of July 2015, Phu Quoc has attracted nearly 200 investment projects, including 136 projects that are being implemented in the area of over 5,100 ha with total registered capitals of 6.5 billion USD. Just one part of those projects become reality then it will make Phu Quoc to become a leading tourist destination in Vietnam, ahead of Da Nang and Nha Trang, competing with the top destinations in the area as Phuket and Bali.

Some of the largest Vietnam corporations such as Vingroup, Sun Group, CEO Group, BIM Group are implementing the huge projects that could alter the appearance of the island. In which the giant in real estate sector – Vingroup has invested projects as: Vinpearl Resort on an area of 300 ha in Long Beach, the combining of golf course and safari zoo on an area of more than 2,000 ha, and the 80 ha commercial complex.

The improvement in infrastructure system along with the preferential business and legal environments i.e. favourable land rental rates, corporate income tax, exemption of visa for foreign tourists make Phu Quoc island of Kien Giang, Vietnam a new attractive place for investment.

The actual time for processing paper at the State authority would also last longer in practice when the State authority evaluate the project plan of the investor to ensure that its investment purpose is achievable economically and in accordance to the regulations of Vietnam.  It is advised that the client engage professional law firms in Vietnam to assist with advisory and to apply investment certificate in Vietnam for doing business in Vietnam.

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Invest Confidently: The Role of Due Diligence Lawyers in Vietnam

 In today’s globalized economy, Vietnam has emerged as an attractive destination for foreign investors seeking new opportunities to set up business in Vietnam, to acquire capital contribution in Vietnam or to acquire shares in an existing business in Vietnam through M&A activities. With its dynamic market, strategic location, and a growing middle class, this Southeast Asian nation offers a promising environment for businesses looking to expand. However, like any investment, there are risks involved. This is where due diligence lawyers in Vietnam come into play, ensuring that investors navigate the complexities of the Vietnamese legal landscape with confidence and success.

Vietnam’s Rising Appeal to Foreign Investors

Vietnam’s rapid economic growth, political stability, and commitment to trade liberalization have made it a magnet for foreign capital. In the past decade, the country has attracted significant investments across various sectors, including manufacturing, real estate, retail, finance, and technology. While the opportunities are abundant, so are the potential pitfalls, which necessitate a comprehensive due diligence process.

The Crucial Role of Due Diligence Lawyers

Due diligence lawyers in Vietnam play a pivotal role in helping foreign investors mitigate risks, ensure compliance with local laws, and maximize their return on investment. Their expertise in navigating the intricacies of the Vietnamese legal system is invaluable, providing investors with the confidence they need to make informed decisions.

Understanding the Local Legal Landscape

Vietnam’s legal environment is unique, and it’s imperative for foreign investors to understand the nuances of the local legal system. One significant aspect is the law on land use rights, which stipulates that land in Vietnam is owned by the state. Investors can obtain land use rights for a specified duration, typically 50 to 70 years, which can be extended. Due diligence lawyers in Vietnam help investors secure these rights, ensuring that land-related issues do not hinder their operations.

Ownership Ratio Limitations and Conditional Investment Areas

Another important consideration for foreign investors is the ownership ratio limitations in certain conditional investment areas. Vietnamese law restricts foreign ownership in specific sectors, such as media, telecommunications, and banking. Due diligence lawyers in Vietnam are well-versed in these restrictions and can guide investors on the most suitable investment structures, including joint ventures and partnerships, to comply with these regulations.

Navigating Restricted Business Lines

Vietnam’s legal framework also imposes limitations on foreign investment in certain business lines. These restrictions vary by industry, and understanding them is vital for investors. Due diligence lawyers in Vietnam provide clarity on which sectors are subject to conditions, allowing investors to tailor their business strategies accordingly.

Protection of Employees in Labour Relationships

Labour law in Vietnam places significant emphasis on employee rights and protections. Foreign investors must adhere to these regulations, which cover areas such as working hours, wages, and social insurance. Due diligence lawyers in Vietnam ensure that investors are in compliance with these laws, helping to prevent potential labor disputes and legal issues that could arise in the future while implementing M&A activities.

Intellectual Property Rights

Protecting intellectual property rights is a critical aspect of business operations in Vietnam. Due diligence lawyers in Vietnam assist investors in safeguarding their patents, trademarks, copyrights, and trade secrets. They also provide guidance on navigating potential IP-related disputes or infringements in the Vietnamese market.

Contractual Agreements and Dispute Resolution

Contracts and agreements form the backbone of any business operation. Due diligence lawyers in Vietnam work closely with investors to draft, review, and negotiate contracts that protect their interests when conducting M&A activities. In the event of disputes, these legal experts also facilitate dispute resolution in Vietnam through negotiation, mediation, arbitration, or litigation, ensuring that investors’ rights are upheld.

Government Relations and Regulatory Compliance

Navigating government relations and regulatory compliance can be a complex and time-consuming process. Due diligence lawyers in Vietnam have extensive experience in dealing with government agencies, helping investors obtain necessary licenses, permits, and approvals. Their expertise streamlines interactions with authorities and reduces bureaucratic obstacles.

Risk Assessment and Mitigation

Perhaps the most crucial role of due diligence lawyers in Vietnam is risk assessment and mitigation. They conduct thorough due diligence to identify potential legal, financial, and operational risks associated with an investment. Once risks are identified, lawyers develop strategies to mitigate them, providing investors with a clear path forward.

In an increasingly competitive global business landscape, due diligence lawyers in Vietnam serve as trusted partners for foreign investors. Their role extends far beyond legal counsel; they are strategic advisors who ensure that investments are made confidently and responsibly. With their expertise in local laws, regulations, and business practices, due diligence lawyers in Vietnam empower investors to navigate the complexities of this thriving market and achieve long-term success. In Vietnam, where opportunities abound but challenges persist, these legal experts are the key to unlocking the nation’s full potential for foreign investors.

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What Foreign Investors Should Consider to Open a Business in Vietnam

 In the context of integration and globalization, the number of foreign investors whom wish to make investment and open a business in Vietnam has increased due to the attractiveness of the business environment.

Business considerations to open a business in Vietnam

Foreign investors often consider Vietnam an attractive destination to register businesses for several compelling reasons:

1. Robust Economic Growth: Vietnam has experienced consistent and robust economic growth over the past few decades. It is one of the fastest-growing economies in Southeast Asia and offers ample opportunities for foreign investors to tap into a growing consumer market.

2. Favorable Demographics: Vietnam boasts a young and increasingly affluent population, making it a promising market for various industries, including consumer goods, technology, and services for investors to open a business in Vietnam.

3. Strategic Location: Vietnam’s strategic location in Southeast Asia provides easy access to other fast-growing markets in the region, including China, Thailand, and Singapore. Its proximity to major shipping routes is also advantageous for trade.

4. Investment-Friendly Policies: The Vietnamese government has implemented a range of investment-friendly policies, including tax incentives and preferential treatment for foreign investors in specific sectors. These policies aim to attract foreign capital and technology.

5. Bilateral and Multilateral Trade Agreements: Vietnam has signed numerous trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), which offer preferential trade terms and access to a broader market.

6. Skilled and Cost-Effective Labor: Vietnam’s workforce is known for its relative affordability compared to some neighboring countries. It also boasts a pool of skilled and diligent labour, making it an attractive location for manufacturing and outsourcing operations.

7. Infrastructure Development: The Vietnamese government has invested significantly in infrastructure development, including transportation, logistics, and energy. These improvements enhance the ease of doing business and connectivity within the country.

8. Political Stability: Vietnam has maintained political stability for many years, providing a secure environment for foreign investment. The government’s commitment to economic reform and openness to foreign participation adds to this stability.

9. Supportive Investment Agencies: Local investment promotion agencies provide assistance and support to foreign investors in navigating the investment process.

10. Diverse Investment Sectors: Vietnam offers investment opportunities across various sectors, including manufacturing, technology, agriculture, tourism, and renewable energy. This diversity allows investors to choose sectors that align with their expertise and interests.

11. Growth of the Middle Class: The rising middle class in Vietnam is driving increased consumer spending, creating a demand for a wide range of products and services.

12. Improving Business Environment: Vietnam has made efforts to improve its business environment, streamline administrative procedures, and reduce bureaucracy to make it easier for foreign investors to open a business in Vietnam

13. Access to Global Value Chains: Vietnam’s participation in global value chains, particularly in electronics, textiles, and manufacturing, makes it an attractive destination for companies seeking to integrate into these supply chains.

14. Tourism Potential: Vietnam’s natural beauty, rich cultural heritage, and historic sites contribute to its growing tourism industry, attracting foreign investment in hotels, resorts, and related services.

15. Green Energy Initiatives: Vietnam is increasingly focusing on renewable energy projects, presenting opportunities for foreign investors in wind, solar, and hydroelectric power to open a business in Vietnam.

Vietnam’s strong economic growth, favorable investment policies, strategic location, and diverse opportunities across various sectors make it an appealing choice for foreign investors looking to open a business in Vietnam and expand their businesses in Southeast Asia. However, it’s essential for investors to conduct thorough market research, understand local regulations, and seek professional legal advice in Vietnam to navigate the complexities of the Vietnamese business landscape successfully.

Legal considerations to open a business in Vietnam

To open a business in Vietnam, however, foreign investors must meet the requirements of Vietnam and international treaties to which Vietnam is a party.

Firstly, the field in which foreign investors wish to conduct business must not be on the list of industries that have been denied entry to the market for foreign investors or are prohibited from doing so under the Law on Investment.

Secondly, foreign investors may be restricted to the percentage of charter capital ownership in some economic organizations.  For example, foreign investors ownership could only be up to 30% of charter capital of a commercial bank in Vietnam.  Limiting the amount of charter capital is indirectly restricting the management and control rights of investors. Instead of freely making policies or decisions, foreign investors have to depend on other members of the company, namely domestic investors. The investors are suggested to consult with corporate lawyers in Vietnam or banking and finance lawyers in Vietnam for specific details in the specialized area like banking or finance.

Thirdly, foreign investors must consider the type of business they want to register. A foreign insurance enterprise, for example, may operate in Vietnam as an insurance limited liability company or as a branch of a foreign non-life insurance enterprise.

If the investor registers the establishment of an enterprise that is not under Vietnam law and the international treaties that Vietnam has signed, the application for registration is considered invalid.

In addition, each type will also have certain limitations. For example, setting up a joint stock company might not be suitable for all investors. In the governance of a joint stock company, the decision-making process is complicated and time-consuming with different sequences and procedures.

Finally, the Vietnam law also have requirements on the legal status, financial status, and competence of investors in certain professions. To open a business in Vietnam, foreign investors must meet all the prescribed conditions.

In conclusion, the foreign investors would need to undertake the legal research into the business it wish to register in Vietnam, and make strategic decision considering the legal and business requirements to maximize the benefits Vietnam would bring to open a business in Vietnam.

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