The LOE 2014 has laid down a general rule for the establishment and operation of enterprises without distinction between domestic and foreign investors.
Therefore, regarding procedures for application for ERC, there are almost no significant differences between domestic and foreign investors. Accordingly, after being issued the IRC, foreign investors wishing to establish enterprises shall only need to submit 01 application to the competent BRA (BRA pertaining to the DPI) of
55 Clause 6 Article 33 Law on Investment 2014
56 See more: Article 33, Article 34, Article 35 Law on Investment 2014 and Article 30, Article 31 Decree No.
118/2015/ND-CP
57 Point a clause 2 Article 37 Law on Investment 2014
58 Clause 2 Article 37 Law on Investment 2014; Clause 1, Clause 3 Article 29 Decree No. 118/2015/ND-CP
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the province where the enterprises’ headquarters are situated.59 In addition, foreign investors shall take responsibility for the truthfulness and accuracy of information in the application for business registration.60
Depending on the type of enterprises which foreign investors wishing to establish, there are a number of different contents related to enterprise registration dossiers. Particularly, application for registration of a sole proprietorship is specified in Article 20 LOE 2014, Article 21 Decree No. 78/2015/ND-CP.
Application for registration of multi-member limited liability companies, joint-stock companies, and partnerships is specified in Article 21, Article 22, Article 23 LOE 2014, Article 22 Decree No. 78/2015/ND-CP. Application for registration of single- member limited liability companies is specified in Article 23 Decree No.
78/2015/ND-CP. Basically, a dossier of enterprise registration includes the following documents:
An application form for enterprise registration;
The company’s charter;
Legitimate copies of: ID paper if the founder is an individual; the decision on establishment or ERC or an equivalent document, ID paper of the authorized representative and the letter of attorney if the founder is an organization;
the IRC if the enterprise is founded or co-founded by foreign investors or foreign- invested business organizations according to the LOI and its instructional documents.
List of members of the multi-member limited liability company or partnership; list of founding shareholders and foreign shareholders of the joint-stock company; list of authorized representatives of foreign shareholders being organizations.
In principle, the BRA must not request the enterprise or its founder to submit more applications or documents other than those in the application for enterprise registration as prescribed in the LOE 2014 and the Decree No. 78/2015/ND-CP.61 When receiving dossiers of foreign investors, the BRA shall consider the legitimacy of the application for enterprise registration and updated on National Enterprise Registration Information System. Accordingly, the BRAs shall issue the ERC within 03 working days when the application is satisfied with following conditions:
The registered business lines are not banned;
59 Clause 1 Article 27 Law on Enterprises 2014; Clause 1 Article Decree 78/2015/ND-CP
60 Clause 7 Article 8 Law on Enterprises 2014
61 Clause 2 Article 9 Law on Enterprises 2014
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The enterprise’s name is conformable with regulations in Articles 38, 39, 40, and 42 of the LOE 2014. Accordingly, foreign investors cannot pick a name that is the same as or confused with another enterprise’s name which has been registered, or use names of regulatory bodies, the armed forces, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations as the whole or part of the enterprise’s proper name, unless otherwise permitted by such organization, or use words or symbols that offend the history, tradition, culture of Vietnam;
The application for business registration is satisfactory;
The fee for enterprise registration is fully paid as prescribed by regulations of law on fees and charges.
Besides that, foreign investors can also submit the application for enterprise registration online via the National Business Registration Portal. Accordingly, applicants shall use public digital signatures or business registration accounts to apply enterprise registration online.62
According to the LOE 2005 and the Decree No. 43/2010/ND-CP, foreign investors shall be issued the BRC within 05 working days as from the date the BRA receive valid dossiers.63 As a result, the reduction of the time in issuance of the ERC is regarded as an important step in the reform of procedures for establishment of enterprises in the LOE 2014, thus reducing the time and cost for investors when they join the market. Furthermore, from a legal point of view, the time limit for issuance of ERC of the LOE 2014 represents its progress in comparison with other LOE of some countries in the world. In India, for instance, the time for the BRA to announce the results of satisfaction of business registration dossiers for investors is up to 30 days;64 or in Indonesia, the time for issuance of ERC is 14 days;65 or in Russia, such time is 05 working days.66
The establishment of enterprises not only recognizes its registration in the National Enterprise Registration Information System but also notifies to the relevant state agencies for carrying out the inspection and evaluation of the operation of such enterprise. Therefore, after being granted the ERC, in order to declare its birth as well as inform the market, such enterprise must make an announcement on the
62 See more: Chapter V Decree 78/2015/ND-CP
63 Clause 1 Article 28 Decree No. 43/2010/ND-CP
64 Section 83.2 Chapter VI the Companies Act 2013 of India dated August 30, 2013
65 Clause 6 Article 10 of Law of the Republic of Indonesia Number 40 of 2007 concerning limited liability companies
66 Article 8 Federal Law on the State registration of legal entities 2001 of Russian Federal (amended and supplemented in 2005)
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National Business Registration Portal and pay the fee as prescribed. Accordingly, such announcement shall be made within 30 days from the day on which it is disclosed and contain the information on the ERC and the following information:67
The business lines;
A list of founding shareholders and shareholders being foreign investors if the enterprise is a joint-stock company.
The announcement on the one hand is to contribute to improve the National Enterprise Registration Database to ensure the transparency of information and on the other hand is to help the introduction of the advertisement for the market entry of such new enterprises. Once the enterprise information system is complete, post- inspection activities of tax authorities, customs administrations and other state agencies can be carried out more conveniently. Furthermore, entities that need to find out details of an enterprise to consider a transaction with such enterprise also have a formal basis for conducting the verification of information related to the enterprise of their interest.
Additionally, to ensure the fairness for all economic sectors when engaging in production and business activities, the LOE 2014 and the Decree 78/2015/ND-CP has asserted that Ministries, ministerial agencies, the People’s Councils and the People’s Committees are not permitted to promulgate their own regulations on enterprise registrations. Concurrently, regulations on enterprise registration promulgated by Ministries, ministerial agencies, the People’s Councils and the People’s Committees against this Clause shall be annulled from the effective date of the Decree No. 78/2015/ND-CP.68 This regulation will minimize the ministries and localities issuing regulations on enterprise registration applied specifically to their branches and localities, thereby ensuring fair competition for all investors when entering the market, and at the same time uniformly implement the regulations on business registration in all localities nationwide.69