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The World is Your Oyster: Navigating the Path to Overseas Investment

If you're curious about the requirements and procedures for investing overseas, join us as we delve into this insightful article.

Administrator

4 September, 2024

Vietnamese enterprises are gaining recognition in the international market, so it’s no surprise that they are expanding globally. Let’s take a closer look at the conditions and procedures for overseas investment to better understand the process.

1Requirements for Obtaining the Certificate of Registration for Overseas Investment

Requirements for obtaining the certificate of registration for overseas investment

According to Article 52 of the 2020 Investment Law, the following conditions must be met to obtain the certificate of registration for overseas investment:

Overseas investment activities must comply with the principles of overseas investment as stipulated by law.
Overseas investment activities must not fall under the prohibited sectors for investment.
Investors must arrange foreign currency themselves or have a credit institution guarantee the arrangement of foreign currency for their investment. If the amount of foreign currency transferred abroad exceeds 20 billion VND and is not within the authority of the decision-making body for investment policy, the Ministry of Planning and Investment will consult with the State Bank of Vietnam for a decision.
There must be a decision on foreign investment by the competent authority.
Completion of tax obligations is necessary.

2Forms of Overseas Investment

What are the forms of overseas investment?

According to Article 52 of the 2020 Investment Law, the forms of overseas investment include:

Establishing an economic organization as decided by the host country.
Implementing a Business Cooperation Contract (BCC) abroad.
Purchasing a portion or the entirety of an economic organization abroad to continue investment and business activities.
Trading securities or other valuable papers, investing through intermediary financial institutions or securities companies.
Other forms of investment as stipulated by the host country.

3Overseas Investment Projects

Mytel – a collaboration between Viettel and the Myanmar government

Based on the contributed capital, overseas investment projects can be categorized into 8 types:

Projects with an overseas investment capital of less than 20 billion VND.
Projects with an overseas investment capital of more than 20 billion VND (with the approval of the State Bank of Vietnam).
Projects that require approval of investment policy by the Government.
Projects in the fields of banking, insurance, securities, journalism, broadcasting, television, and telecommunications with an overseas investment capital of 400 billion VND or more.
Projects in fields other than banking, insurance, securities, journalism, broadcasting, television, and telecommunications with an overseas investment capital of 800 billion VND or more.
Projects that require approval of investment policy by the National Assembly.
Projects with an overseas investment capital of 20,000 billion VND or more.
Projects that require special mechanisms and policies, which need to be decided by the National Assembly.

4Application File for the Certificate of Overseas Investment

What do enterprises need to prepare?

To apply for the certificate of overseas investment, enterprises need to prepare the following documents:

Application for overseas investment registration (using the prescribed form)
Copy of identity card (for individuals) or enterprise establishment license (for organizations).
Proposal for the investment project.
Copies of documents proving financial capacity: Financial reports for the last 2 years, or commitment letter for financial investment from the parent company, or letter of commitment for financial support and guarantee of financial capacity from the investor.
Commitment letter for arranging foreign currency or a letter of commitment from a permitted credit institution for arranging foreign currency.
Investment decision according to Clause 1 and Clause 2, Article 57 of the 2014 Investment Law.
For overseas investment projects in the fields of banking, securities, insurance, science and technology, investors must submit a document of approval from the competent state agency on meeting the conditions for overseas investment as stipulated by the Law on Credit Institutions, Securities Law, Law on Science and Technology, and Law on Insurance Business.

5Authority for Receiving and Processing the Application File

Headquarters of the Ministry of Planning and Investment

The authorities competent to grant the certificate of registration for overseas investment include: The Ministry of Planning and Investment and the Management Boards of industrial parks, export processing zones, high-tech zones, and economic zones.

However, to accurately determine the competent authority for granting the certificate of registration for overseas investment, the implementing subjects must develop an investment project and clearly define the scope and location of the project to avoid confusion in identifying the competent authority for receiving and granting the certificate.

6Procedure for Applying for the Permit for Overseas Investment

Procedure for applying for the permit for overseas investment

The procedure for overseas investment is as follows:

Step 1 Obtain Approval for Investment Policy (if the project requires policy approval)

The following projects require approval from the Government or the National Assembly:

Projects with an investment capital of 20,000 billion VND or more
Projects that require special mechanisms and policies

The following projects require approval from the Prime Minister:

Investment projects in the fields of banking, insurance, securities, journalism, broadcasting, television, and telecommunications with an overseas investment capital of 400 billion VND or more
Investment projects in fields other than those mentioned above, with an overseas investment capital of 800 billion VND or more

Step 2 Procedure for Applying for the Certificate of Overseas Investment

For investment projects that require approval of the investment policy overseas:

The Ministry of Planning and Investment shall grant the Certificate of Registration for Overseas Investment to the investor within 05 working days from the date of receipt of the document approving the investment policy and the decision on overseas investment as stipulated in Article 59 of this Law.

For cases that do not require approval of the investment policy:

The investor shall submit the application file for the Certificate of Registration for Overseas Investment to the Ministry of Planning and Investment, including:

Application for overseas investment registration
Documents on the legal status of the investor
Decision on overseas investment
Commitment letter for self-balancing foreign currency sources or a commitment letter from a permitted credit institution for arranging foreign currency for the investor
For overseas investment projects in the sectors specified in Clause 1, Article 54 of the Foreign Investment Law, the investor shall submit a document of approval from the competent state agency on meeting the conditions for overseas investment as stipulated by relevant laws (if any)

Some notes on overseas investment:

In cases where the foreign currency amount transferred abroad is equivalent to or exceeds 20 billion VND, the Ministry of Planning and Investment shall obtain the written opinion of the State Bank of Vietnam.
Within 15 days from the date of receipt of the application file specified in Clause 2 of this Article, the Ministry of Planning and Investment shall grant the Certificate of Registration for Overseas Investment; if the application is rejected, the Ministry must notify the investor in writing and state the reasons.
The Government shall detail the procedures for evaluating overseas investment projects, as well as the granting, adjustment, and termination of the validity of the Certificate of Registration for Overseas Investment.

The above information covers the procedures for applying for the Certificate of Overseas Investment. Hopefully, individuals and organizations intending to invest overseas will find this information useful.

See also:

Frequently asked questions

The phrase ‘The world is your oyster’ is used to encourage individuals to explore international investment opportunities. It implies that there are abundant opportunities and possibilities available worldwide, and one should not limit themselves to their domestic market.

Investing overseas offers a multitude of benefits. It allows individuals to diversify their investment portfolio, reduce risk by spreading assets across different markets, and potentially gain higher returns by tapping into emerging markets or industries that may not be present in their home country.

There are several factors to consider, including political and economic stability, cultural and legal differences, tax implications, and foreign exchange rates. Conducting thorough research, seeking expert advice, and understanding the regulatory environment of the target country are crucial steps in the process.

Navigating the complexities of international investment requires careful planning and a strategic approach. Individuals should consider seeking professional guidance from financial advisors or international investment firms. Additionally, staying informed about global market trends, utilizing technology for efficient portfolio management, and diversifying investments across multiple countries can help mitigate risks and optimize returns.

Overseas investment carries certain risks, including political and economic instability, unfavorable currency fluctuations, cultural and regulatory barriers, and liquidity issues. Proper due diligence, risk assessment, and diversification strategies can help minimize these risks.