Question 16: I have been recently known that the Ministry of Planning and Investment has issued a guiding document on the mechanism for cooperation in processing of applications for investment registration and enterprise registration submitted by foreign investors. Please refer cases in which the cooperation mechanism is applied?
Answer:
To comply with the provisions of Article 24 Decree No. 118/2015 / ND-CP detailing and guiding the implementation of a number of articles of Investment Law 2014 as well as implementing the tasks assigned by the Government in Resolution No.19-2016/NQ-CP on major tasks and solutions to improve the business environment and raise the national competitiveness in 2016-2017, orienting to 2020, on 18/4/2017, the Ministry of Planning and Investment issued Circular No.02/2017/TT-BKHDT guiding the mechanism for cooperation in processing of applications for investment registration and enterprise registration submitted by foreign investors. Objects of application of this Circular include foreign investors and foreign-invested economic organizations defined in the Investment Law, which make investment registration, enterprise registration, contribute capital, purchase shares or stakes in accordance with regulations of Vietnam law; State management agencies and other organizations and individuals involved in enterprise registration and investment registration.
According to the provisions of Article 4 of the Circular No.02/2017/TT-BKHDT, there are 3 cases of implementation of the inter-related mechanism, including:
a) A foreign investor invests in establishment of a business organization as specified in Article 22 of Law on Investment.
b) A foreign investor makes investment by contributing capital or purchasing shares or stakes as defined in Clause 1 Article 26 of Law on Investment.
c) A foreign investor changes both enterprise registration information and investment registration information.
Question 17: Please indicate the basic principles applied in the cooperation mechanism?
Answer:
In order to ensure that the inter-agency mechanism is implemented and clearly define the responsibilities, scope and authority of the business registration body, the investment registries as well as the enterprises, Basic application in the mechanism of communication as follows:
a) The investor that applies for investment registration and enterprise registration has the right to decide whether to apply the cooperation mechanism stipulated in this Circular or follow the separate procedures specified in Law on Investment, Law on Enterprises and other guiding documents.
b) The investor shall prepare the application and be legally responsible for the legality, truthfulness and accuracy of the information declared in the application for investment registration and enterprise registration. The number of sets of application for investment registration and enterprise registration is specified in regulations of law on investment and enterprises.
c) Investment registration authorities and Business registration authorities shall cooperate, exchange information and only request the investor to submit one copy of the following documents if it is required in both the application for investment registration and the application for enterprise registration.
In such case, the investment registration authority shall keep the copy submitted by the investor and send the copy of the aforesaid paper to the business registration authority. The copy provided by the Investment registration authority is deemed to be the valid one as prescribed in Clause 10 Article 3 of the Decree No. 78/2015/ND-CP
d) Investment registration authorities and Business registration authorities shall be responsible for integrity of the documents in the process of document transfer and cooperating in the confirmation of document transfer when applying the cooperation mechanism.
e) Investment registration authorities and Business registration authorities shall ex officio consider the validity of application, process the application for investment registration and the application for enterprise registration; cooperate, share information and be responsible for the scope of functions and tasks of each agency. The investment registration authority shall specify necessary addition or revision of documents every time such an application is submitted.
f) The uniqueness and clearness of the enterprise’s name shall be verified at the time the Business registration authority notifies the Investment registration authority of the valid application for enterprise registration.
g) The time limit for issuance of the Enterprise Registration Certificate, the written confirmation of changes in enterprise registration contents under the provisions of Clause 1 Article 28 of Decree No. 78/2015/ND-CP shall begin at the time the business registration authority receives information on the Investment Registration Certificate, document of the Department of Planning and Investment on approving the capital contribution or purchase of shares or stakes of the foreign investor.
Question 18: Please provide detailed instructions on the implementation of the mechanism in the case of foreign investors investing in the establishment of economic organizations?
Answer:
The Circular details the sequence of implementation of the cooperation mechanism in each case. Accordingly, in the case of foreign investors investing in the establishment of economic organizations, the inter-agency mechanism is implemented through electronic communication through the use of inter-process information systems. The detailed order and procedures are provided for in Article 6 of the Circular and are summarized in the diagram below:
Step 1: The investor shall submit the application to the Application-receiving division.
Step 2: The Application-receiving division and Business registration authority shall consider the validity of the application.
Step 3: Issuance of the Investment Registration Certificate and send the information to the Business registration office.
Step 4: Issuance of the Enterprise Registration Certificate and transfer to the Application-receiving division.
Step 5: The Application-receiving division delivers the result to the investor.
Question 19: Please provide detailed guidance on the implementation of the mechanism in case the foreign investor invests in capital contribution or purchase of shares or stakes?
Answer:
The sequence of the cooperation mechanism when a foreign investor invests in capital contribution or purchase of shares or stakes is regulated on Article 7 of Circular No. 02/2017/TT-BKHDT. As follows:
1. The investor shall submit the application to the Application-receiving division under the Department of Planning and Investment.
The foreign investor investing in capital contribution or purchase of shares or stakes shall submit the application for registration of capital contribution or purchase of shares or stakes and the application for revision of the enterprise registration information of the company receiving contributed capital at the Application-receiving division under the Department of Planning and Investment.
The Application-receiving division under the Department of Planning and Investment shall check validity of the application for registration of capital contribution or purchase of shares or stakes as stipulated in Law on Investment and written guidelines for execution; validity of the application for enterprise registration contents changed as prescribed in the Decree No. 78/2015/ND-CP. In such case, the application for enterprise registration contents changed does not include the Documents of Department of Planning and Investment on approving the capital contribution or purchase of shares or stakes of the foreign investor.
If the application is valid, the Application-receiving division under Department of Planning and Investment shall issue the note of receipt to the applicant.
2. The Application-receiving division under Department of Planning and Investment shall transfer the application for enterprise registration to the Business registration authority.
On the same working day as the day on which the application is received, the Application-receiving division under Department of Planning and Investment shall transfer the application for enterprise registration to the Business registration authority.
3. Consideration of validity of the application
a) For the Application-receiving division under the Department of Planning and Investment:
The Application-receiving division under Department of Planning and Investment shall process the application for capital contribution or purchase of shares or stakes through National Information System on investment in accordance with procedures as stipulated in the Law on Investment and written guidelines.
b) For Business registration authorities:
Within 02 working days from the day on which the application for enterprise registration is transferred, the Business registration authority shall process the application for enterprise registration through National Enterprise Registration Information System and inform the Application-receiving division under Department of Planning and Investment of the validity of the application.
- If the application is valid:
The Business registration authority shall inform the Application-receiving division under Department of Planning and Investment of the validity of the application, and wait for the Department of Planning and Investment’s Approval for contributing capital or purchasing shares or stakes by the foreign investor for enterprise registration.
- If the application is invalid:
The Business registration authority shall notify the Application-receiving division under Department of Planning and Investment of necessary addition or revision of documents. The Application-receiving division shall instruct the applicant to complete their application accordingly. If the investor revises the application for enterprise registration, the Application-receiving division under Department of Planning and Investment shall receive and send the application to the Business registration authority.
4. Issuance of the Approval for the capital contribution or purchase of shares or stakes of foreign investors
If the capital contribution or purchase of shares or stakes of the foreign investor meet the validity as defined in Point a and Point b Clause 1 Article 22 of Law on Investment, the Department of Planning and Investment shall issue the Approval for contributing capital or purchasing shares or stakes by the foreign investor.
If the capital contribution or purchase of shares or stakes of the foreign investor do not meet the requirements as defined in Point a and Point b Clause 1 Article 22 of Law on Investment, the Application-receiving division under Department of Planning and Investment shall notify the Business registration authority for removing the information of the application for enterprise registration through the National Enterprise Registration Information System.
On the same working day as the day on which the Approval for contributing capital or purchasing shares or stakes by the foreign investor is issued, the Application-receiving division under Department of Planning and Investment shall send it to the Business registration authority.
5. Issuance of Enterprise Registration Certificate, the written confirmation of changes in enterprise registration contents
On the same working day as the day on which the Department of Planning and Investment’s Approval for contributing capital or purchasing shares or stakes by the foreign investor is received, the Business registration authority shall issue the Enterprise Registration Certificate, the written confirmation of changes in enterprise registration contents; and transfer the Certificate, the written confirmation to the Application-receiving division under Department of Planning and Investment at the same time.
6. Delivery of the result to the investors
Within 01 working day from the day on which the Enterprise Registration Certificate is received, the written confirmation of changes in enterprise registration contents, the Application-receiving division under Department of Planning and Investment shall deliver the Approval for contributing capital or purchasing shares or stakes by the foreign investor and Enterprise Registration Certificate, the written confirmation of changes in enterprise registration contents to the enterprise. The enterprise may receive the Approval for contributing capital or purchasing shares or stakes by the foreign investor in advance if necessary.
Hoang Thanh Tuan
(Source: Agency for Business Registration)