Many foreign investors preparing to establish a company in Vietnam often encounter difficulties right from the initial stage of preparing the application for an Investment Certificate (IRC). Even the absence or errors in a few crucial documents, such as proof of financial capacity, lease agreements, or legal documents that have not been properly legalized by the consulate, can lead to repeated requests for clarification or additional documents, significantly delaying business plans.
What is an Investment Registration Certificate (IRC)?
An Investment Registration Certificate (IRC) is a document recording information about an investment project by a foreign investor in Vietnam. According to the 2020 Investment Law, this is a mandatory legal document for foreign organizations and individuals to be permitted to conduct business, contribute capital, or implement large-scale projects.
Investors need to make a clear distinction. What is the difference between IRC and ERC? To ensure proper implementation, while the IRC records information related to the project (such as objectives, scale, investment capital, and location), the ERC verifies the legal status of the enterprise. For most new FDI projects, obtaining an IRC is a prerequisite for subsequently obtaining an ERC.
In which cases is it necessary to go through the procedure of issuing an investment certificate?
Identifying the correct entities that need to apply for an Investment Regulatory Document (IRC) helps businesses optimize processes and avoid unnecessary procedures. According to Article 37 of the 2020 Investment Law, mandatory cases include:
- Foreign investor investment project.
- Projects of economic organizations with foreign investment exceeding 50% in charter capital (or with a majority of partners being foreign individuals in the case of partnerships).
- The investment project is in the form of a BCC contract (Business Cooperation Contract).
For forms of investment such as capital contribution or share purchase in existing Vietnamese businesses, investors usually only need to register the capital contribution instead of applying for a new IRC, significantly shortening the legal processing time.
Detailed list of documents required for an investment certificate application.
According to Article 33 of the 2020 Investment Law, the Investment Review Contract (IRC) dossier must be meticulously prepared, ensuring consistency between the documents and meeting standards for translation and consular legalization. The basic dossier components include:
Documents proving the legal status of the investor.
Depending on the investor's legal status, they may need to provide the following identification documents:
- For individual investors: A copy of a valid Citizen Identification Card/National Identity Card or Passport (with a minimum validity of 6 months). This document must be legalized by the Vietnamese diplomatic mission in the host country and translated into Vietnamese by a certified translator.
- For institutional investors: A copy of the Certificate of Incorporation or equivalent document. This must be accompanied by the parent company's charter and a letter of authorization for a representative to manage the capital contribution in Vietnam.
Demonstrate financial capacity to implement the project.
The investment registration authority will assess the financial capacity based on the following documents to ensure the project has sufficient resources for implementation:
- Confirm that the investor's bank account balance is equivalent to the expected capital contribution.
- Audited financial statements for the two most recent years are required for institutional investors.
- Commitment of financial support from the parent company or reputable financial institutions; or a guarantee of the investor's financial capacity.
Investment project proposals and sample documents
These are the most important documents in the application because the investment registration authority will directly assess the feasibility and contribution level of the project:
- Application for investment project implementation (according to the form prescribed in Circular 03/2021/TT-BKHĐT).
- Investment project proposal: Explanation of business objectives, scale, investment capital, capital mobilization plan, location, progress, labor requirements, and socio-economic impact.
- Explanation of technology: This only applies if the project uses machinery and technology that are on the list of restricted transfer categories as stipulated by law.
Documents regarding the location for the investment project.
The project site must conform to local planning regulations and have full legal validity:
- A copy of the Memorandum of Understanding (MOU) for the lease of the premises or the formal office/factory lease agreement; or documentation proving the right to use the premises.
- Legal documents of the lessor: Land use right certificate, construction permit, and business registration certificate with the function of leasing real estate.
Procedure for applying for an investment certificate for foreigners.
Currently, this procedure combines online declaration and submission of hard copy documents, making it easier for government agencies to manage project data nationwide. You can refer to the details below. Instructions for carrying out administrative procedures Visit the National Public Service Portal to find out the necessary forms.
| Step | Content of implementation | Processing agency | Estimated time |
|---|---|---|---|
| 1 | Declare project information online on the National Investment System. | Ministry of Planning and Investment | 1-2 business days |
| 2 | Submit one complete set of official paper documents after the online system approves them. | Department of Planning and Investment or Industrial Park Management Board | 1 workday |
| 3 | Review the application and seek opinions from relevant departments and agencies. | Investment registration authority | 15-25 business days |
| 4 | Receive the Investment Registration Certificate (IRC) results. | Investment registration authority | As scheduled |
Note: For projects requiring investment policy approval, the process will be more complex, including an additional step of seeking approval from the Provincial People's Committee, the Prime Minister, or the National Assembly before proceeding with the IRC issuance procedure.
The competent authority for issuing investment certificates.
Where to submit the IRC application depends entirely on the project location:
- Department of Planning and Investment: Receives projects located outside industrial parks, export processing zones, high-tech zones, and economic zones.
- Industrial Park, Export Processing Zone, High-Tech Industrial Park, and Economic Zone Management Boards: Receive projects located within the management scope of these zones.
In reality, many applications are delayed due to project locations not conforming to planning regulations or inconsistencies in financial documents. To optimize time, businesses need to thoroughly research these factors. Conditions for becoming a foreign direct investment (FDI) enterprise in each specific area before implementation.
How long does it take to get an investment certificate and what are the costs?
Time and budget are two factors that FDI businesses pay particular attention to when planning their market entry.
Actual processing time
According to Article 38 of the 2020 Investment Law, the time limit for issuing an Investment Receipt (IRC) is 15 working days from the date of receipt of a complete and valid application. However, in practice, this process often takes 20 to 35 days due to site verification and expert appraisal. Therefore, preparing a complete application from the outset is crucial to shortening the waiting time.
Government fees and ancillary charges
Currently, the government does not charge a direct fee for the initial issuance of an IRC. However, investors need to budget for related costs such as:
- Fees for certified translation and consular legalization of documents from foreign countries.
- The cost of renting space or paying a deposit to reserve a location and obtain site documents.
- Personnel costs or authorization service fees for acting on behalf of someone to deal with government agencies.
Important notes to avoid having your IRC application rejected.
To ensure a smooth process, investors should carefully review the following areas that are prone to errors:
- Consistency of information: The project address on the lease agreement must absolutely match the information in the project proposal document.
- Legal validity of documents: Any document issued abroad without a consular legalization stamp will be considered legally invalid in Vietnam.
- Business sectors: Carefully review the list of restricted market access sectors to ensure that the foreign investor's equity stake complies with international commitments.
Experts at MAN – Master Accountant Network assist businesses in reviewing all these bottlenecks, ensuring that documents are in the best possible state of readiness before submission to the authorities.
Frequently Asked Questions about Investment Certificate Application
Is it necessary to rent an office before applying for an IRC?
Can I use my apartment address to register an investment?
Is it mandatory to submit IRC documents online?
Is an investment registration certificate the same as a business license?
Conclude
If the application is properly and completely prepared from the outset, the time required to issue the IRC can be significantly shortened, allowing the business to commence operations sooner. Investors should take the time to carefully review the industry requirements, the legal status of the location, and their financial capacity before submitting the application. Carefulness at this early stage is crucial for the success of any foreign investor's business operations in the Vietnamese market.
Contact information for MAN – Master Accountant Network
- Address: 19A, 43rd Street, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content production is overseen by: Mr. Le Hoang Tuyen – Founder & CEO of MAN – Master Accountant Network, CPA Vietnam auditors with over 30 years of experience in accounting, auditing, and financial consulting.
