FORMS OF INVESTMENT UNDER LAW ON INVESTMENT 2014
1. Legal basis:
Article 22, 24, 27, 28 of Law on Investment 2014
2. Content:
According to Law on Investment 2014, there are four formalities of investment, which are investment by establishing a business organization, contributing capital, buying shares or buying capital contributions of business organization, investment under PPP contracts and investment under business cooperation contracts. Compared to Law on Investment 2004, Law on Investment 2014 reduced forms of investment.
Firstly, about establishment of business organization. This is a form of investment that investor will set up a business organization in accordance with law. By establishment of business organization, investor can execute investing activities. Before establishing a business organization, the foreign investor must have an investment project and apply for a Certificate of investment registration. Besides, they must satisfy two conditions. These conditions are the investor’s charter capital satisfies the requirements and the form of investment, operating scope, Vietnamese partners and other aspects which are conformable with the international agreements to which Vietnam is a signatory.
Secondly, about investment by contributing capital, buying shares or buying contributions of business organization. Foreign investors are entitled to contribute capital, buy shares or buy capital contributions of business organizations. Investors can buy shares and capital contributions from joint-stock companies
Thirdly, investment under PPP contracts. Investment under PPP contracts is the form by which the investor can sign a contract with authority agent to implement a new construction project, operating infrastructure facilities or providing public services. Procedures of investments under PPP contract shall comply with provisions of law in Decree No.63/2017/ND-CP on investment in the form of public-private partnerships.
Fourthly, investment under BCC contract. BCC contract is a business cooperate contract, which is signed between investors for business cooperation in order to distribute profits and divide products without establishing a business organization. BCC contracting parties will set up a steering board to execute BCC. Functions, tasks, power of the steering board shall be agreed by the parties.
