[Vietnam] Vietnam’s Foreign Investment Approvals – Do You Need an IRC & ERC?

Vietnam has become a top destination for foreign investors looking to establish businesses. However, before launching operations, foreign investors must navigate Vietnam's regulatory framework, which includes obtaining two key certificates: the Investment Registration Certificate (IRC) and the Enterprise Registration Certificate (ERC). Understanding these requirements is crucial for a smooth business setup process.

Understanding the Investment Registration Certificate (IRC)

IRC is an important legal document that records the implementation of an investment project by an investor in Vietnam. According to Vietnam’s Law on Investment 2020, foreign investors and economic organizations with foreign investment, in certain cases, are required to register and obtain an IRC before implementing their projects. For domestic economic organizations, obtaining an IRC is generally not required. However, in certain specific circumstances, such as investing in conditional business sectors or projects eligible for investment incentives as stipulated by law, domestic economic organizations may also need to complete this procedure. The IRC details key aspects of the investment, including:

• Investment project name and identification code

• Investor details

• Project implementation location and land use

• Investment capital and contribution schedule

• Project objectives and implementation schedule

• Operation duration of the project

• Investment incentives (if applicable)

• Conditions on the investor implementing the project.

Term of the IRC

Based on the objectives, scale, location, and operational requirements of the investment project, the investment registration authority shall review and decide on the project's duration, which must not exceed the maximum period specified by the Law on Investment as follows:

• Investment projects in economic zones can have a maximum duration of 70 years.

• Investment projects outside economic zones are typically limited to 50 years.

• Projects in disadvantaged areas or requiring significant capital investment may be granted an extension up to 70 years.

During the project implementation, investors have the right to shorten the investment duration compared to the period stated in their IRC or apply for an extension, provided that the total investment duration does not exceed the maximum period stipulated by the law.

Understanding the Enterprise Registration Certificate (ERC)

ERC is an official document issued to investors by Vietnam’s business registration agency after they have obtained the IRC. It formalizes the establishment of a business and contains essential information, including:

• Enterprise name and identification number

• Registered head office address

• Business lines and charter capital

• Types and details of shares

• Tax registration details

• Legal representatives’ full names, citizenship, and identification details.

The ERC is a mandatory requirement for all enterprises operating in Vietnam. It serves as a business’s legal foundation and must be obtained before commencing commercial activities.

Final Thoughts

Securing the IRC and ERC is a critical process that reflects Vietnam's commitment to legal transparency and economic growth. While navigating these regulatory frameworks can be complex, compliance ensures a stable foundation for foreign investment ventures. By adhering to these prerequisites, investors can minimize risks and enhance operational efficiency. TWL Law Group is ready to assist with facilitating IRC & ERC applications, offering expertise to streamline company formation and regulatory adherence.