1. Concepts

Pursuant to Clause 19, Article 3 of the 2020 Investment Law as follows:

Foreign investors are individuals with foreign nationality, organized to establish foreign laws to carry out business investment activities in Vietnam.

2. General conditions about hire machinery workshops

The provisions of the Real Estate Business Law 2020 and the 2020 Investment Law and related guiding documents. Pursuant to Article 9, Article 10 of the Law on Real Estate Business 2020:

“Article 9. Conditions of real estate put into business

1. Houses and construction works put into business must have the following conditions:
2. a) Having registration of ownership of houses and construction works attached to land in the certificate of land use rights. For houses and constructions available in real estate business investment projects, only need to have a certificate of land use rights in accordance with the land law;
3. b) There is no dispute over land use rights, ownership of houses and construction works attached to land;
4. c) No distraint to ensure judgment execution.
5. The types of land allowed for land use rights must have the following conditions:
6. a) Having a certificate of land use rights in accordance with the land law;
7. b) There is no dispute over land use rights;
8. c) Land use rights are not distrained to ensure judgment execution;
9. d) Within the land use term.

Article 10. Conditions of real estate business organizations and individuals

1. Real estate business organizations and individuals must set up businesses or cooperatives (hereinafter collectively referred to as enterprises), except for the case specified in Clause 2 of this Article.
2. Organizations, households, individuals selling, transferring, leasing, leasing to buy real -scale real estate, not often, they do not have to establish a business but must declare and pay tax according to the provisions of France the law.

Thus, if you want to rent a factory, you must have a certificate of land use rights, ownership of houses and other properties attached to the land to be eligible for factory rental.”

3. Some other conditions about hire machinery workshops

• Legal conditions

– Foreign investors must be legal entities established legally according to the laws of the host country.

– Foreign investors must have a valid investment license issued by competent state agencies of Vietnam.

– Foreign investors must have sufficient financial capacity to implement investment projects.

– Foreign investors must comply with the provisions of Vietnamese law on investment, business, environment, labor, etc.

• Conditions for workshop rental contracts

– Machinery workshop lease contracts must be made in writing, full of terms and regulations on rights and obligations of the two parties.

– Machinery workshop lease contract must be signed between foreign investors and the owner of the machinery workshop.

– Machinery factory lease contract must comply with the provisions of Vietnamese law on contracts.

• Recommendations

– Foreign investors must have a clear and feasible business plan.

– Foreign investors must have a highly qualified management team.

– Foreign investors must ensure labor safety and environmental sanitation during operation.

– In addition, foreign investors should pay attention to some issues after renting machinery workshops in Vietnam:

• Factory rental price may change over time, so investors need to take measures to limit this risk.
• There may be a dispute between investors and factory owners on issues such as repair and maintenance of machinery workshops, etc.
• Machinery workshops can be affected by natural disasters such as floods, storms, …
• Learn information about the industrial real estate market in Vietnam.
• Choose a reputable brokerage company to find suitable machinery workshops.
• Consult the lawyer to ensure that the workshop lease contract is made in accordance with the regulations.
• Buy insurance to prevent risks.
• Compliance with Vietnamese laws and regulations on environmental protection and labor safety.

4. Procedures for foreign investors hire machinery workshops in Vietnam

Step 1. Prepare records

– Investment license or investment registration certificate in accordance with the law on investment;

– Machinery workshop lease contract;

– Certificate of land use right or certificate of house ownership and property attached to the land;

– Documents proving the origin of owning machinery workshops;

– Documents proving the operating status of the machine workshop;

– Documents proving the financial capacity of foreign investors;

– Other documents at the request of competent state agencies.

Step 2. Apply

Foreign investors apply at the Department of Planning and Investment of the province or city where the factory is hired.

Step 3. Time for settlement

Within 15 working days from the date of receipt of valid dossiers, the competent state agency will handle and reply in writing to foreign investors.

Note:

– Foreign investors are allowed to hire machinery workshops in Vietnam to implement investment projects that are granted investment licenses or investment registration certificates.

– Foreign investors are not allowed to hire machinery workshops in Vietnam to carry out banned business activities in accordance with the law.

– The rental workshop is not meeting the conditions of safety and environmental sanitation in accordance with the law.

– The documents in the dossier must be translated into Vietnamese and notarized or certified as prescribed by law.

Above is Kalf’s advice on Foreign investors renting workshops and machines in Vietnam and related issues. All of our advice is based on current laws. If customers have any questions and requirements on legal issues, please contact us for timely answers.