Temporary residence cards for investors (symbol: DT) are issued to foreign investors who are owners, members, or shareholders contributing capital to enterprises in Vietnam. Temporary residence cards (DT) allow foreign investors to reside in Vietnam for a period of time and is valid as a visa substitute.

However, the 2019 amendments the law concerning entry, exit, transit and residence of foreigners in Vietnam (The Revised Law on Entry and Exit) No. 51/2019/QH14 (effective July 1, 2020) and the Labor Code No. 45/2019/QH14 (effective January 1, 2021) have resulted in fundamental changes to the process of applying for temporary residence cards for foreign investors. The following article will provide an overview of the significant changes and general guidance for foreign investors when applying for a temporary residence card according to the new regulations.

Change of symbols for temporary residence cards, grouping investors by the value of capital contributions

The 2014 Law of Entry, Exit, Transit, and Residence of Foreigners in Vietnam, No. 47/2014/QH13 (The 2014 Law on Entry and Exit), allocates the DT symbol when issuing visas/temporary residence cards to all foreign investors and foreign lawyers practicing in Vietnam.  However, the Revised Law on Entry and Exit separates foreign lawyers into the symbol LS, while investor’s visa/temporary residence cards are divided into 04 different groups according to the value of contributed capital, specifically:

  • DT1 – Issued to foreign investors in Vietnam and representatives of foreign organizations investing in Vietnam and contributing capital of VND 100 billion or more, or investing in business lines benefiting from investment incentives, or in administrative divisions benefiting from investment incentives determined by the Government.
  • DT2 – Issued to foreign investors in Vietnam and representatives of foreign organizations investing in Vietnam and contributing capital of between VND 50 billion to less than VND 100 billion or investing in business lines benefiting from investment incentives determined by the Government.
  • DT3 – Issued to foreign investors in Vietnam and representatives of foreign organizations investing in Vietnam and contributing capital of between VND 3 billion to less than VND 50 billion.
  • DT4 – Issued to foreign investors in Vietnam and representatives of foreign organizations investing in Vietnam and contributing capital of less than VND 3 billion.

Correspondingly, the duration of the temporary residence cards is no longer more than 5 years for all investors. The Revised Law on Entry and Exit now stipulates the term of the new temporary residence cards according to the value of contributed capital as follows:

  • Temporary residence cards with the symbol DT1 are valid for not more than 10 years.
  • Temporary residence cards with the DT2 symbol are valid for not more than 05 years.
  • Temporary residence cards with the DT3 symbol are valid for not more than 03 years.

Investors with a capital contribution of less than 3 billion need a work permit to apply for a temporary residence card

It is notable that The Revised Law on Entry and Exit does not mention the term for temporary residence cards for the group of investors with a contributed capital of less than VND 3 billion (DT4). Thus, investors of the DT4 group may only apply for a visa with a term of no more than 1 year.

In addition, Article 154 of the 2019 Labor Code and Article 7 of Decree 152/2020/ND-CP stipulate cases where foreigners are exempt from work permits as follows:

  • He/she is the owner or capital contributor of a limited liability company with a capital contribution value of at least 3 billion dong;
  • He/she is the Chairperson or a member of the Board of Directors of a joint-stock company with a capital contribution value of at least 3 billion dong;

Thus, according to the new regulations, DT4 investors (with contributed capital of less than 3 billion dong) are required to apply for a work permit (managers) if they wish to obtain a temporary residence card in Vietnam. The duration of a temporary residence card with the symbol LD2 (issued to foreigners working in Vietnam and now applying to DT4 investors) is currently no more than 2 years according to the term of the work permit.

Additional representatives for foreign organizations investing in Vietnam are entitled to apply for temporary residence cards with the DT symbol

One of the signficant changes contained in The Revised Law on Entry and Exit is that when adding representatives of foreign organizations investing in Vietnam, they are entitled to apply for temporary investment cards. However, there is currently no specific guidance as to whether these “representatives of foreign organizations” are defined as the legal representatives of a foreign organization (the investor is an organization) or an authorized representative of the stakes/shares of a foreign organization in a Vietnamese company to which this organization contributes capital (Vietnamese company).

In fact, the legal representative of a foreign organization and the authorized representative of the stakes/shares of a foreign organization in a Vietnamese company have two independent and different roles. As such, the documents proving the roles of these two positions are also different, specifically:

  • Legal representative of a foreign organization: Documents proving that the legal documents of the foreign organization are consularly legalized and/or the information of the legal representative of the investor (foreign organizations) are contained in the Investment Registration Certificate (if any);
  • The authorized representative of the stakes/shares of a foreign organization in a Vietnamese company: The document required to show proof is the list of authorized representatives of the stakes/shares of the foreign organization in the Vietnamese company.

Because there are currently no specific instructions concerning the role of this representative, both businesses and the authorities remain uncertain when carrying out the procedures for additional representatives.

In addition, according to the second definition, the documents to prove are also difficult to access. This is because the information about the list of authorized representatives of the stakes/shares of the foreign organization in the Vietnamese company is not currently displayed in the Certificate of Business Registration, instead, the information is recorded in the National Business Registration Portal system or online announcements on the portal. Further, the temporary residence card-issuing agency often requires companies to obtain a written confirmation from the Department of Planning and Investment where the Vietnamese company is located. However, not all local Departments of Planning and Investment have a clear process for granting the written confirmation of the above information. Therefore, in the future it will be necessary for the competent authorities to add flexibility and simplify the administrative procedures.

These are the important changes and necessary notes for foreign investors when applying for a temporary residence card according to the latest regulations. Do not forget to follow the updates and obtain more useful information on our website. Please contact us for more information at: letran@corporatecounsels.vn