ESTABLISHING A 100% FOREIGN-OWNED COMPANY IN THE FASHION RETAIL SECTOR

Nội dung bài viết

I am a foreign investor planning to establish a single-member limited liability company (100% foreign-owned) in the field of fashion retail in Vietnam (including clothing, footwear, accessories, etc.). According to current Vietnamese laws, am I allowed to establish a 100% foreign-owned single-member LLC in this sector? If so, what legal procedures must be followed, and are there any specific conditions or requirements associated with this process?

Answer

Vietnam and Japan are both members of the World Trade Organization (WTO). According to Vietnam’s Schedule of Commitments upon accession to the WTO, as of January 1, 2009, market access restrictions for services under CPC codes 622, 631, and 632 (including commission agency services, wholesale, and retail services) have been removed. Within three years from the date of WTO accession, Vietnam allowed foreign-invested enterprises to provide commission agency, wholesale, and retail services for all goods legally manufactured in Vietnam or legally imported into the country.

Accordingly, foreign investors are deemed to have met the market access conditions for engaging in the above-mentioned business activities.

Regarding the procedure for establishing a foreign-invested company in Vietnam, investors are required to carry out the following steps:

  1. Applying for the Investment Registration Certificate (IRC)
  2. Conditions

The fashion retail sector does not fall under the list of investment projects subject to investment policy approval as stipulated in Articles 30, 31, and 32 of the 2020 Law on Investment. However, you must still meet the following conditions:

  • The investment project does not involve any banned business line
  • There is a location for execution of the investment project

Legal basis: clause 2 Article 38 Law on Investment 2020

  1. Documents
  • An application form for execution of the investment project
  • A document about the investor’s legal status
  • Document(s) proving the financial capacity of the investor
  • Proposal for the investment project

Legal basis: clause 1 Article 33 Law on investment 2020

  1. Procedures

Step 1: The investor shall submit 01 set of application documents for the IRC to the Department of Planning and Investment where the investment project is or is expected to be located, or where the investor’s management office will be established

Step 2: The Department of Planning and Investment shall issue the IRC within 15 working days from the date of receipt of a valid application, provided that the project meets all required conditions.

Legal basis: Article 38 Law on Investment 2020

  1. Applying for the Enterprise Registration Certificate (ERC)
  2. Documents:
  • Application form for enterprise registration
  • The company’s charter
  • Copies of Legal documents of the company’s owner that is an individual/Legal documents of the authorized representative and letter of appointment of authorized representative.

Note: Since you are a foreign individual, copies of your legal documents must be legalized by consular authentication.

  • Investment registration certificate.

Legal basis: Article 24 Decree 01/2021/ND-CP

  1. Procedures

Step 1: Submit the application through the National Enterprise Registration Portal.

03 working days from the date of receipt of a valid application

In case the application is not valid: The business registration authority must provide a written notice to the applicant specifying the required amendments or supplements.If the application is rejected, the authority must issue a written notice stating the reason(s) for the refusal.

Step 2:  Publishing of enterprise registration information

After completing the company registration procedure on the Portal, the next step in establishing a 100% foreign-owned company is to publicly disclose the enterprise registration information.

The announcement shall include the content of the Certificate of Enterprise Registration and The enterprise’s business lines.

The enterprise registration information must be published on the National Enterprise Registration Portal within 30 days from the date the Enterprise Registration Certificate is issued and pay the fee as prescribed by law.

Legal basis: Article 26 và 32 Law on enterprise 2020

See more at: Legal consulting services for establishing foreign-invested companies in Vietnam

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