Circular No. 02/BKH-DN guiding the implementation of Decree No. 29/CP dated May 12, 1995 on procedures for direct investment in Vietnam by overseas Vietnamese and foreign residents permanently residing in Vietnam.

CIRCULAR

OF THE MINISTRY OF PLANNING AND INVESTMENT

Guidelines for implementing the decree

on procedures for direct investment in Vietnam by overseas Vietnamese and foreign residents in Vietnam

residing long-term in Vietnam

_________________________

Pursuant to Decree No. 29/CP dated May 12, 1995 of the Government detailing the implementation of the Law on Encouraging Domestic Investment.

Pursuant to Decree No. 75/CP dated November 1, 1995 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Planning and Investment.

The Ministry of Planning and Investment guides the procedures for direct investment by overseas Vietnamese and foreign residents in Vietnam as follows:

Article 1. Direct investment under the Law on Encouraging Domestic Investment by overseas Vietnamese and foreign residents in Vietnam referred to in this Circular includes:

1. Establishing new private enterprises (under the Law on Private Enterprises); limited liability companies, joint-stock companies (under the Law on Companies) - hereinafter collectively referred to as enterprises.

2. Expanding scale, enhancing production capacity, research and development, and technological innovation of enterprises that have been legally established under the Law on Private Enterprises and the Law on Companies.

3. Purchasing shares or contributing capital to enterprises, including state-owned enterprises permitted to diversify ownership forms, except in cases with specific regulations.

4. When directly investing in industries listed in Article 5 of the Law on Private Enterprises or Article 11 of the Law on Companies, approval from the Prime Minister is required. For industries requiring a business license, compliance with the relevant regulations issued by the ministries managing the respective economic and technical sectors must be followed.

Article 2. The documents for establishing an enterprise and registering for business include:

1. Application for establishment of an enterprise.

2. For overseas Vietnamese holding passports issued by foreign countries, a certificate of Vietnamese origin issued by the diplomatic or consular agency of Vietnam in that country, or a confirmation from the competent authority of the country where the Vietnamese-origin person resides.

3. Declaration by the applicant for establishment of an enterprise stating that they are not currently being pursued for criminal responsibility or have not been convicted in Vietnam or abroad without having had their record expunged or are still within the period prohibited from engaging in business according to a foreign court's judgment. The declaration must be confirmed by the diplomatic or consular agency of Vietnam in the country where the Vietnamese resides, or by the competent authority of the country where the Vietnamese-origin person resides.

4. For foreign residents in Vietnam who have resided for a long time, a "Residence Certificate" as prescribed in Article 11 of the Ordinance on Entry, Residence, and Travel of Foreigners in Vietnam, and if they have resided for more than one year, an additional confirmation from the police station or commune where they reside stating that they do not fall under the provisions of Article 6, Article 7 of the Law on Private Enterprises; Article 6, Article 7 of the Law on Companies.

5. If the applicant for permission to establish an enterprise is currently the head of a representative office or branch of a foreign company operating in Vietnam, a written opinion from the foreign company setting up the representative office or branch in Vietnam must be provided, indicating its acceptance.

6. Confirmation of investment capital in Vietnam:

If the capital is in cash, confirmation from the bank where the enterprise's headquarters will be located regarding the balance in the account of the applicant for establishment of the enterprise is required.

If the capital is in kind or industrial property rights, confirmation from a notary public regarding the value of the assets (if establishing a private enterprise), or a valuation report of the founders establishing the company (if establishing a company) is required.

7. Initial business plan accompanied by environmental protection measures.

8. Company charter (if it is a company), certified by a notary public.

9. For joint-stock companies, the founders must obtain confirmation from the bank where the company's headquarters will be located that they have deposited into a frozen account an amount not less than 20% of the registered capital.

10. Valid documents regarding the right to use the location for the business premises.

11. Certificates regarding the professional qualifications of the management personnel for certain industries that the law requires.

12. Copy of passport and entry visa (for overseas Vietnamese).

All documents mentioned above, if in a foreign language, must be translated into Vietnamese and confirmed by a notary public.

In cases where the conditions specified in Points 6, 9, 10, and 11 of this Article are not met when applying for permission to establish an enterprise, the investor must supplement all necessary documents when applying for a business registration certificate.

Article 3. The applicant for permission to establish an enterprise shall submit a complete set of documents directly to the Provincial Department of Planning and Investment at the location where the enterprise's headquarters will be situated. The Provincial Department of Planning and Investment will accept the documents, check the passport and the validity of the documents, and issue a receipt for response according to current regulations.

The Provincial Department of Planning and Investment organizes consultations with the industry management department regarding the suitability of the business activities with government regulations and territorial sector planning to present to the People's Committee for consideration of issuing a business establishment permit for the business activities as per current regulations applicable to Vietnamese citizens' enterprises.

In cases where the establishment of an enterprise for certain business activities is not needed in the territorial area, the Provincial Department of Planning and Investment must report specifically to the Chairman of the People's Committee for decision-making.

Business registration for enterprises of overseas Vietnamese and foreign residents in Vietnam residing long-term is carried out according to current regulations applicable to Vietnamese citizens' enterprises and Vietnamese economic organizations.

If the documents comply with the above regulations and the investor wishes to register for business early, the Provincial Department of Planning and Investment will issue a business registration certificate immediately after the People's Committee issues the business establishment permit.

Article 4. Vietnamese persons residing abroad and foreign persons residing long-term in Vietnam who wish to invest in the forms specified in Points 2 and 3 of Article 1 shall have the following documents when participating in investment in a business:

The documents specified in Point 2 and Point 3 of Article 2 (for Vietnamese persons residing abroad).

The documents specified in Point 4 of Article 2 (for foreign persons residing long-term in Vietnam).

The enterprise has the obligation to report to the business registration authority about the participation of these subjects in investing in their own business.

Article 5. The procedures for examining and issuing investment incentive certificates for these enterprises shall be carried out in accordance with Circular No. 06/UB-QLKH dated September 27, 1995, stipulating the procedures for issuing investment incentive certificates under the Law on Encouraging Domestic Investment.

Article 6. This Circular takes effect from the date of issuance.