SETTING UP JOIN STOCK COMPANY VIETNAM

Recently, Vietnam has been considered to be one of the optimal markets for foreign entrepreneurs to establish their presence in the country. Besides the form of Limited Liability Company and representative office, joint-stock company is also one of the preferable variants. Distinguished from the limited liability company form, joint stock company form is allowed to assign its charter capital into equal portions of shares and is assigned to its shareholders. The shareholders can be anyone, including foreign citizens. Therefore, a joint stock company can be either solely owned by foreigners or can be a joint venture between foreigners and locals. Although foreigners can open a solely foreign-owned joint stock company, there is also a risk of being limited to a number of business lines that a JSC can join.

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Therefore, foreign investors should conduct research and consider designated business lines when applying for a JSC establishment. On the other hand, a joint venture between foreigners and locals is strongly recommended because the locals know which business lines to allow for foreigners, helping the foreign investors to save their time and costs when applying for a JSC establishment.

SETTING UP A JOINT-STOCK COMPANY (JSC) IN VIETNAM IN 2021

Buying shares from a Vietnamese JSC

At present, although the Government has open policies to attract foreigners/foreign companies investing into JSC in Vietnam, there are also some compulsory regulations about following process and procedure that foreign investors must comply with.

Required documents

An application for business registration;
The company's charter;
List of founding shareholders and list of foreign shareholders for JSC;
Copies of the following documents:
+ Personal legal documents of the legal representative of the enterprise;
+ Personal legal papers of company members, founding shareholders, foreign organizational shareholders; Legal documents of the companies for foreign members, founding shareholders, foreign shareholders; Personal legal documents of representatives authorized by members, founding shareholders, foreign organizational shareholders, and documents on the appointment of authorized representatives.
+ Investment registration certificate, in case the company is established or participated in the establishment by a foreign investor following the provisions of the Investment Law and other legal documents; implementation manuals.

Steps, procedures, and processing time
Process and procedure for foreign investors to buy shares of Vietnamese companies

# Step 1: Applying for approval of share buying of a JSC

Application for approval includes:

A registration documents to buy shares includes the following contents: information about the JSC that the foreign investor intends to buy shares;
A copy of the identity card, or passport for an individual investor; a copy of the Certificate of Establishment or other equivalent document certifying the legal status of the organizational investor (notarized translation, consular legalization);
The establishment decision, the Business registration certificate or other equivalent documents of the organization, and the power of attorney; Citizen identity card, passport, or other legal personal identification of the authorized representative member of the company.

Besides, there are some other legal dossiers applying to each case

Place of application: Investors submit dossiers at the Department of Planning and Investment where its head office is located, and carry out procedures to register to buy shares.
Processing time: 10-15 working days from the date of receipt of valid documents.

# Step 2: Foreign investors carry out buying shares of JSC

# Step 3: Change the business registration content on the Business Registration Certificate

A dossier of changing enterprise registration contents includes:
+ Notification of changes in business registration contents;
+ Decision on the change of business registration contents of the company;
+ The reports of the meeting on the change of business registration contents;
+ The stock transfer agreement and documents certifying that the transfer has been completed, confirmed by the legal representative of the company;
+ Payment confirmation of foreign investor;
+ List of foreign shareholders;
Place of application: Submit the dossiers at the Business Registration Department - Department of Planning and Investment where the JSC's head office is located.
Application processing time: 3-5 working days after receiving valid dossier.

SETTING UP A NEW FOREIGN-OWNED JSC
In case you might not want to cooperate with locals, a solely foreign-owned joint stock company will be a good fit although the business lines will be limited for this sub-type of joint stock company. Moreover, the processing time and costs for foreign investors are higher than the former one, which can be considered as an obstacle in setting their presence in Vietnam. Also, there are more mandatory regulations and procedures to which the foreign investors have to adhere.

Required documents
For foreign individual investors:

Notarized true copy of the passport of the investors
Contract to rent the company's headquarters or location for the implementation of the investment project
Legal statement of bank account balance

For foreign investment organizations:

Legalized and notarized true copy of business registration
Legalized of financial statements audited or certified by tax authorities in the latest year
Notarized true copy of the representative's identity card or passport
Charter of the management company
Power of attorney from the organization for the representative of the capital contribution in the company to be established in Vietnam
Documents proving the experience and financial capacity of foreign investment organizations.

Steps and procedures

The establishment process for a solely foreign-owned joint stock company will be conducted with the following steps:

# Step 1: Carry out the procedures for applying for an investment certificate with a business investment project in Vietnam

# Step 2: Carry out the procedures to apply for a business registration certificate

# Step 3: Carry out initial tax declaration procedures and monthly/quarterly/yearly tax reports.

In addition, after the establishment of a foreign-invested company, in the course of operation, if you want to change or add any relevant content, then it is necessary to carry out the procedure for changing the investment certificate.

For further information please contact:

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SETTING UP JOIN STOCK COMPANY VIETNAM

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