On November 26, 2014 the National Assembly of Vietnam adopted a new law on investment (2014 Investment Law) which will take effect on July 1, 2015 and replace the current 2005 Investment Law. Under this new law, there are many changes designed to open opportunities for foreign investors through new provisions on licensing procedures applicable to certain common investment forms, including investment along with setup of enterprise and investment under the way of capital contribution or shares purchase in enterprises in Vietnam.
Investment along with setup of enterprise
Compared with the procedure for issuance of an investment certificate (IC) under the current 2005 Investment Law, the licensing procedure for an IRC is much simpler and has been slashed from 30-45 days down to 15 days. The required application documents are stipulated transparently under the law. In case of refusal, a written notification to the foreign investor must be returned and must cite specific reasons. Notably, the competent IRC-issuing authority for investment projects outside of industrial zones, export-processing zones, high-tech and economy parks will be the provincial Department of Planning and Investment (DPI), instead of the People’s Committees as required under the current law.
The foreign investor to contribute capital or purchase of shares or portion of capital contribution (M&A transaction) to enterprises in Vietnam
In summary, the above major change is identified as a new step to open up and simplify administrative procedures for foreign investment activities in Vietnam. It is expected to save precious time and cost for foreign investors when joining the local business market.
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