Required documents and information
The Enterprise Law 2014 provides some changes regarding documents and information required for incorporating a new company in Vietnam. The changes are largely positive changes except for more requirements on investment certificate for foreign investors and details of foreign shareholders in a joint stock company (JSC). Details of the changes are as follows:
- if the new company has a foreign investor then the application documents must include an Investment Certificate issued to the foreign investor presumably to the extent that the foreign investor needs an Investment Certificate under the Investment Law 2014. This requirements that a foreign investor wishing to start a new company in Vietnam will need to apply for an Investment Certificate under the Investment Law 2014 first and then apply to set up the new company under the Enterprise Law 2014;
- the Business Registration Authority may require an individual to submit a certified criminal record, if necessary;
- a company operating in certain conditional businesses (e.g. real estate) no longer needs to provide evidence about paid up minimum legal capital and professional qualifications;
a company no longer requires to submit evidence about their rights to use the head office of the company. In practice, obtaining enough evidence for the right to use the head-office is not always easy under Enterprise Law 2005. Therefore, this could a major change to the licensing procedures under the Enterprise Law 2014;
- Documents certified and legalised in foreign countries are no longer required to be certified and legalised within three months before the date of submission. This change may help foreign investors in preparing application documents as sometimes it takes more than three months to prepare a proper application;
- Information on the number of employees and tax registration details of a company is now required in the application for incorporating a new company;
- Information on the Authorised Representatives of Institutional Shareholders is no longer required; and
- a Joint stock company now needs to submit a list of shareholders being foreign investor.
Timing and procedures
Application for incorporation of a new company still needs to be submitted to the relevant Business Registration Authority. The Enterprise Law 2014 shorten the time for the authority to issue a Business Registration Certificate (BRC) from 10 to three working days. Shortening the licensing timing is always an easy change in paper. However, it may be difficult to implement the change in practice. Because the authority has no clear liabilities if it fails to proceed the application within the time limit. In addition, in practice, the authority often refuses to accept an application until it is happy with the submitted documents.
Enterprise (Business) Registration Certificate
A company is incorporated when the Business Registration Authority issues an Enterprise (Business) Registration Certificate (BRC). Under the Enterprise Law 2014, a BRC now only includes information regarding name of the company, head office, details of legal representative of the company, details of members of a LLC or a partnership company, and charter capital. A BRC under the Enterprise Law 2014 no longer contains information regarding:
- branches and representative offices of the company;
- details of founding shareholders of a JSC;
- details of legal capital for companies operating in conditional business or authorised capital for JSCs; and
- business lines of a company.
Reduced contents of a BRC could hopefully reduce subsequent paper works for companies during its operation.
After a BRC of a new company is issued, the company must make public announcement in the national business registration information portal.