Forms of foreign investment in Vietnam in 2020

In the present, Vietnam is considered as the most attractive investment destination after Covid pandemic.

August 3, 2020 /MarketersMedia/ —

Anyone interested in investing money in Vietnam, especially foreign investors and businesses, must know about new provisions of Vietnam's legal policies on foreign investment as well as advantages in infrastructure development in Vietnam. This article below will inform you guys the main form of foreign investment in Vietnam.
4 types of investment forms in Vietnam

The 2014 Investment Law clearly stipulates forms of investment in Vietnam. Accordingly, there are 4 forms of investment as follows:

a) Investment in the establishment of economic organizations
b) Investing in the form of capital contribution, purchase of shares or capital contributions in business organizations
c) Investment in the form of PPP contract
d) Investment in the form of BCC contract

1. Investment in establishing economic organizations

Forms of investment in establishment of economic organizations are prescribed in Article 22 of the 2014 Law on Investment and are guided in detail in Article 44 of Decree No. 118/2015 / ND-CP of November 12, 2015 of the Government details and guides the implementation of a number of articles of the Investment Law. Accordingly, before establishing an economic organization, a foreign investor must have an investment project, carry out the procedures for the grant of an investment registration certificate and must meet the following conditions:
a) Regarding the charter capital ownership

Foreign investors may own an unlimited charter capital in an economic organization, except for the following cases:
Ownership ratio of foreign investors in listed companies, public companies, securities trading organizations and securities investment funds in accordance with the law on securities.
Ownership ratio of houses Foreign investment in equitized or transformed state owned enterprises in accordance with the law on equitization and transformation of state enterprises
Ownership ratio of investors Foreign countries not belonging to the above-mentioned regulations shall comply with other relevant laws and treaties to which the Socialist Republic of Vietnam is a contracting party.

b) Investment form, scope of activities, Vietnamese partners participating in the implementation of investment activities and other conditions under the provisions of international treaties to which the Socialist Republic of Vietnam is a member.
2. Investment in the form of zapital contribution, purchase of shares or capital contributions to economic organizations

This is the form of investors contributing capital, buying shares, or buying capital contributions of business organizations to carry out investment activities. The investment in capital contribution, purchase of shares or capital contributions to economic organizations is prescribed in Articles 24, 25 and 26 of the 2014 Law on Investment and is guided in detail in Article 46 of Decree No. 118/2015 / ND- CP. Accordingly, foreign investors may contribute capital to economic organizations in the following forms:

a) Purchase of first-time shares or additionally issued shares of a joint-stock company;
b) Contributing capital to limited liability companies and partnerships
c) Contributing capital to other economic organizations not falling into the cases prescribed at Points a and b of this Clause.
Foreign investors may purchase shares or capital contributions of business organizations in the following forms:

a) Purchase of shares of joint-stock companies from the companies or shareholders;
b) Purchase of capital contributions by members of the limited liability company to become a member of the limited liability company;
c) Purchase of capital contributions of partners in a partnership to become a limited partner of the partnership;
d) Purchasing capital contributions of members of other economic organizations not falling into the cases prescribed at Points a, b and c of this Clause.

The capital contribution, purchase of shares or stakes of foreign investors in the above forms must meet the same investment conditions applicable to foreign investors as in the case of institutional establishment investment economy.
3. Investment in the form of PPP contract (Public Private Partnerships)

Forms of investment under PPP contracts are prescribed in Article 27 of the 2014 Law on Investment and are specifically guided in the Government's Decree No. 15/2015 / ND-CP of February 14, 2015, on investment in the form of public-private partners. Accordingly, public-private partnership (PPP) investment is a form of investment made on the basis of a contract between a competent state agency and a project investor or enterprise for implementation of management and operation of infrastructure projects and provision of public services.
4. Investment in the form of BCC (Business Cooperation Contract)
According to the Law on Investment 2014, a business cooperation contract (BCC) is a contract signed between investors in order to conduct business cooperation to share profits and products without establishing an economic organization. Parties to a BCC contract establish a coordinating board to carry out the BCC contract. The functions, duties and powers of the coordinating board are agreed by the parties.
Thus, investment in the form of a BCC contract is an investment form established on the basis of a contract signed between investors but without establishing a new legal entity. In particular, the rights and obligations of the parties are not subject to organizational constraints as in the form of investment in establishing new legal entities but are only bound by contracts.
The final words
For foreign investors who are concerned about investing money in Vietnam Navigos Search, choosing the best investing categories could be the hard things. In case you want to avoid risk in investing in other countries, asking for help from the investment group Vietnam will bring you the best benefits. For foreign investors who want to focus on cheap labor in Vietnam, they need to ask for help from domestic employment services or recruitment consulting and solutions to support them to acquire large staff who have enough quality. In Navigos Search, we help our client businesses in finding their right talent employees as well as consulting services. To meet our professional consultant team, please feel free to get in touch with us by filling the form in the contact page or visit us on floor 20, e.town Central Tower, 11 Doan Van Bo, Ward 12, District 4, Ho Chi Minh

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