What is the definition of "business organization"? What are regulations on investment in establishment of a business organization in Vietnam? Thank you!
Pursuant to Article 3 of the Law on Investment in 2020 stipulating as follows:
- “Business organization means an organization established and operating in accordance with Vietnam’s laws. Business organizations include enterprises, cooperatives, cooperative unions and other organizations that carry out business investment activities.
- Foreign-invested business organization means an organization whose members or shareholders are foreign investors.
Currently, there are forms of investment in Vietnam as follows:
- Investment in establishment of a business organization.
- Investment in the form of capital contribution or purchase of shares or stakes.
- Execution of an investment project.
- Investment in the form of a business cooperation contract.
- New forms of investment and types of business organizations prescribed by the Government's regulations.
Pursuant to Article 22 of the Law on Investment in 2020 stipulating investment in establishment of a business organization in Vietnam as follows:
- Every investor shall establish a business organization in accordance with the following regulations:
+ A domestic investor shall establish a business organization in accordance with regulations of law on enterprises and law corresponding to each type of business organization;
+ A foreign investor that establishes a business organization shall satisfy market access conditions applied to foreign investors specified in Article 9 of this Law;
+ Before establishing a business organization, the foreign investor must have an investment project and follow the procedures for issuance or adjustment of an investment registration certificate, except for establishment of a small and medium-sized start-up enterprise and a startup investment fund in accordance with regulations of the Law on Small and Medium-sized Enterprises.
- From the date on which the enterprise registration certificate or an equivalent document is issued, the business organization established by a foreign investor shall be the investor that executes the investment project set out in the investment registration certificate.
- When establishing a business organization, when making investment by contributing capital, purchasing shares or purchasing stakes of a business organization or when making investment under a business cooperation contract in one of the following cases, the foreign investor must satisfy the conditions and follow investment procedures applied to foreign investors:
+ Over 50% of its charter capital or more is held by a foreign investor(s) or the majority of the general partners are foreigners if the business organization is a partnership;
+ Over 50% of its charter capital or more is held by a business organization(s) mentioned in Point a of this Clause;
+ Over 50% of its charter capital or more is held by a foreign investor(s) and a business organization(s) mentioned in Point a of this Clause.
- Business organizations other than those mentioned in Points a, b and c Clause 1 of this Article shall satisfy conditions and follow investment procedures applied to domestic investors when establishing a business organization, when making investment by contributing capital, purchasing shares or purchasing stakes of a business organization or when making investment under a business cooperation contract.
- If a foreign-invested business organization that is established in Vietnam has a new investment project, procedures for executing such investment project shall be followed without having to establish a new business organization.
- The Government shall elaborate procedures for establishing business organizations, and conduct of investment activities by foreign investors and foreign-invested business organizations.
Best regards!