Vietnam Update - Changes to FOC Incorporation Procedures Under the Law on Investment and Law on Enterprises

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Under the former Law on Investment, investors that wish to incorporate a foreign­owned company are required to apply for and obtain an Investment Certificate, which comprises of proof of the incorporation and approval of their project. The new Law on Investment and Law on Enterprise (which came into effect on 1 July 2015) now requires a two­step procedure.

Provided it is not a project of some national significance, investors generally now need to obtain (1) an Investment Registration Certificate as proof of approval of the investor's project; and (2) an Enterprise Registration Certificate, akin to an incorporation certificate, that all local and foreign corporations need to obtain.

While the two­step process appears to complicate the incorporation procedure, the law envisages a much faster processing time for incorporation. However, as of the date of this round¬up, there has been no guiding legal instrument as to how the licensing authorities would implement the new laws, thereby causing delays as the authorities are at a limbo on how to deal with applications ­ particularly for those that had been lodged prior to the new law's effectiveness and where there is no clear transitional procedure in place. The guiding decrees for the new laws are expected to come out soon, which will shed some light on the process.

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