If you intend to start a business in Vietnam, do not discount the peculiarities of the checking procedure for foreign investment which is often carried out by local authorities. Ignoring these features is fraught with at least misunderstanding and headaches, and at most - wasted time.
Obtaining approvals is a must
Long-term investment projects in Vietnam are welcome.
Foreign entrepreneurs are invited to carry out investment activities in Vietnam by applying for new investment projects. However, this does not end there. It is also necessary to provide the dossier to the regulators of the industry or industries in which the project is planned to be implemented.
It is worth noting that in some cases, foreign investors may also need to get authorization from senior government officials such as the National Assembly or, in the case of very large projects, even the prime minister. So you won't have to relax - there is a long and sometimes exhausting negotiation process ahead.
How foreigners can acquire a company in Vietnam
Buying a ready-made business in Vietnam is much easier than starting from scratch. If you are planning to buy a company in this fast-growing Asian country, then you should be aware of the restrictions for foreigners.
Restrictions on foreign investment in Vietnam exist mainly in the form of:
- approvals by regulators ;
- limits of foreign ownership;
- special requirements for JVs registered in Vietnam;
- complete ban.
For all of the above points, you will have to go through a thorough testing procedure.
National security issues
2019 was a landmark year for Vietnam in the sense that the country's government took a clear course to improve the quality and efficiency of foreign cooperation and investment, developing a program until 2030. In this program, a large role is assigned to national security issues in the regulation of FDI in Vietnam. It is expected that when issuing investment certificates for new projects or M&A transactions in Vietnam, licensing authorities will be required to verify all projects for reasons of national security.
Crucially, investors need to keep in mind that, as a rule, without preliminary consideration by the regulators, no one will be able to carry out any mergers, acquisitions, consolidations, a JV registration in Vietnam. The supervision of such transactions will be even stricter if the results of such transactions contain the potential to have a serious impact on competition in the Vietnamese market.
All parties involved in an M&A transaction in Vietnam must jointly participate in the permitting process. The legislation does not provide for any speedy options for obtaining permission for investment activities in Vietnam.
If you need more information on FDI regulation in Vietnam, our experienced legal advisors will provide consulting services. We also provide comprehensive assistance at all stages of investment activities in Asia, renowned for its excessive laws which are difficult to comprehend for an investor if he is not a professional lawyer and to figure out all the intricacies, avoid mistakes, and not lose his money.
Legal assistance of investment projects is a special area that is inseparable from investment activities. This is a set of measures aimed at the safest execution of the investment project. Thanks to high-class legal assistance, the company will reduce the risks of disruption to the project, as well as level the likelihood of litigation.