Question: Dear lawyer, some of my friends who are foreigners are planning to invest in Vietnam in the form of capital contribution and directly engage in the management of investment activities. I would like to know what rights and obligations they are going to have when making investments in Vietnam. Hope to receive the answer from the lawyer soon. Thank you.
Answer: PL&Partners would like to thank you for trusting and sending questions to us. For your question, we would like to reply as follows:
A. FOREIGN INVESTOR’S RIGHTS:
1. Right to choose business lines:
The investors are entitled to conduct investment and business activities in one or more business lines not prohibited by the Law on Investment.
Particularly for conditional business lines, it is necessary to meet the conditions for business investment as prescribed by law.
2. Right to self-determination in business investment activities:
- To decide and take self-responsibility for business investment activities in accordance with the Law on Investment and other relevant laws.
- To access and make use of loan capital, assistance funds, land, and other resources as prescribed by law.
- To contribute capital, purchase shares, buy capital contributions of economic organizations.
- To transfer all or part of an investment project to other investors when all conditions are met.
- During the implementation of an investment project, the investors are entitled to adjust the target, transfer part of the whole investment project, merge projects or divide or separate a project into many projects, make use of land use rights and assets on land belonging to investment projects to contribute capital to establish an enterprise, business cooperation or other contents that comply with the provisions of law.
- Termination of investment activities and investment projects.
- Establishment/termination of operating office in Vietnam to perform BCC contract.
3. The ownership of assets, capital, income, another the lawful rights and interests of investors are recognized and protected by the State:
As prescribed, investors’ legal assets shall not be nationalized or confiscated by administrative measures.
Where an asset is bought or requisitioned by the State for reasons of national defense and security, national interests, state of emergency or natural disaster management, the investor shall be reimbursed or compensated in accordance with regulations of law.
To be entitled to transfer assets abroad after fulfilling all financial obligations to the State of Vietnam.
4. Right to equitable treatment:
The State of Vietnam treats investors equitably, introduces policies to encourage and enable investors to carry out business investment activities and ensure sustainable development of economic sectors.
5. Right to enjoy incentives:
Enjoy investment incentives when investing in sectors encouraged by the Government.
6. The right to be granted a temporary residence card:
To be granted a temporary residence card with a term of three years to ten years depending on the amount of money invested in Vietnam. With this temporary residence card, investors can live, work and travel in Vietnam without having to apply for a visa.
B. INVESTOR’S OBLIGATIONS:
- To comply with Vietnamese laws during business investment process.
- To fully satisfy the conditions for conditional business lines during the investment process.
- To ensure financial capacity and contribute investment capital according to the registered project schedule.
- To carry out investment activities in accordance with investment information registered and investment registration certificate.
- To pay a deposit or have a bank guarantee from a credit institution or foreign bank branch established under Vietnamese law for assurance of investment project execution if the project uses land allocated or leased out or transferred by the State.
- To open a direct investment capital account at an authorized bank to conduct lawful revenue and expenditure transactions related to direct investment activities in Vietnam.
- To fully declare and pay taxes and other financial obligations.
- To report on investment projects in accordance with the law.
- To perform other obligations as prescribed by relevant laws.
In conclusion, when conducting a direct investment activity in Vietnam, your friends shall exercise rights and perform basic obligations as mentioned above. In addition, depending on the form of investment, the specific business lines, the investor shall be required to have additional rights and obligations as prescribed by law.