A Singapore holding company plans to establish a manufacturing subsidiary in Hai Phong. Its local counsel files the investment registration dossier — and the licensing authority sends it back with a single request: supplement the file with documents proving the parent company’s financial capacity. The Singapore team is caught off guard. They have full financial records, but nobody can tell them precisely which papers the Vietnamese authority will accept, whether audited statements are mandatory, or what a group support letter must contain to pass review.
This is a recurring friction point. Vietnamese investment law requires proof of the investor’s financial capacity at the dossier stage, yet it only lists acceptable document categories without explaining how a parent company should prepare each one in practice.
Scope of this article: This piece covers only the narrow parent-to-subsidiary angle — which papers a parent company needs to demonstrate financial capacity when incorporating a subsidiary in Vietnam, how to legalize and translate them, and what to do when the parent itself is newly established with no financial statements. It does not address financial-capacity proof for individual investors or other investment scenarios.
1. Why the parent company must prove financial capacity — and what “parent company” means
Law on Investment No. 143/2025/QH15 (passed 11 December 2025, effective 1 March 2026, replacing Law on Investment No. 61/2020/QH14) delegates to the Government the detailed rules on conditions, dossiers, and procedures for issuing Investment Registration Certificates (Clause 5, Article 26). Decree No. 96/2026/ND-CP dated 31 March 2026 — the implementing regulation for the new Law on Investment — is the direct legal basis setting out dossier components.
The starting point is the definition. Under Clause 1, Article 195 of the Law on Enterprises No. 59/2020/QH14, a company qualifies as the parent of another company if it: owns more than 50% of the charter capital or total ordinary shares; has the direct or indirect right to appoint the majority or all members of the Board of Directors, the Director or General Director; or has the right to decide amendments to the charter. When a foreign parent company stands as the investor establishing a subsidiary in Vietnam, it is the parent that must evidence financial capacity in the investment dossier.
The operative provision is point c, Clause 1, Article 32 of Decree 96/2026/ND-CP. The dossier for investment policy approval — and, under Clause 1, Article 39 of the same Decree, the dossier for an Investment Registration Certificate for projects not subject to investment policy approval follows the same contents — must include “documents proving the investor’s financial capacity, including at least one of the following: the investor’s financial statements for the two most recent years; a commitment of financial support from the parent company; a commitment of financial support from a financial institution; a guarantee of the investor’s financial capacity; or other documents proving the investor’s financial capacity.”
The law does not mandate a single document type. A parent company may choose at least one of five categories — flexibility that many investors overlook, assuming audited financial statements are compulsory.
2. The five acceptable document types, read from the parent company’s perspective
1. The investor’s financial statements for the two most recent years. The most common choice: the parent files its own two-year financial statements. The critical nuance sits in Clause 7, Article 6 of Decree 96/2026/ND-CP: for financial-capacity documents in administrative procedure dossiers, “no audit shall be required for the investor’s financial statements of the two most recent years.” Unaudited statements are acceptable unless sector-specific legislation provides otherwise. Parent companies often scramble to commission an international audit to meet a filing deadline that does not actually require one.
2. A commitment of financial support from the parent company. In multi-tier groups, “the parent company” here means the investor’s own parent. The textbook case: a newly incorporated intermediate vehicle in Singapore acts as the direct investor setting up the Vietnamese subsidiary. It has no two-year track record, but the ultimate group parent can issue a financial support commitment for the Vietnam project. The letter should identify the committing party, the beneficiary, and the scope of support (capital contribution, lending, guarantees). Notably, Clause 7, Article 6 provides that “no time limit shall be required for the commitment or guarantee” covering a parent company’s financial support commitment. In practice, stating a term that at least covers the charter-capital contribution phase avoids follow-up questions.
3. A commitment of financial support from a financial institution. The parent may obtain a credit or support commitment letter from a bank or financial institution, domestic or foreign. This works well when the parent prefers not to disclose full internal financial statements.
4. A guarantee of the investor’s financial capacity. A bank guarantee — or a guarantee from a financially capable organization — securing the investor’s financial obligations toward the Vietnam project.
5. Other documents proving financial capacity. The Decree’s open door: parent-company bank balance confirmations, the group board’s investment approval resolution, approved capital allocation plans — anything demonstrating financial capability. When relying on this category, attach a short explanatory note so the reviewing officer can assess the file efficiently.
3. The special case: a newly established parent with no two-year statements
This is the most practical headache. A company incorporated eight months ago abroad cannot produce “financial statements for the two most recent years.” The regulation anticipates exactly this through the “at least one of” mechanism. A young parent company may:
- obtain a financial support commitment from its own upper-tier parent (the group), attaching the group’s statements for persuasive weight;
- obtain a financial institution’s support commitment;
- obtain a financial capacity guarantee; or
- submit “other documents”: the owner’s investment decision, bank deposit balance confirmations, an approved capital allocation plan.
The key takeaway: no rule forces a newly established parent to “wait two years” before investing. Choosing the right substitute document from the outset prevents the dossier from being returned.
4. The parent’s legal-status papers — file them together
Alongside financial proof, the dossier requires “documents on the investor’s legal status” (point b, Clause 1, Article 32, Decree 96/2026/ND-CP). Clause 13, Article 2 of the Decree spells this out: for an organization, “a lawful copy of one of the following: the business registration certificate, the establishment certificate, the establishment and operation license, the establishment decision, or other documents of equivalent legal validity.” A foreign parent typically submits the business registration certificate issued by its home jurisdiction. “Lawful copy” is defined in Clause 1, Article 2: a copy issued from the master register, a copy certified from the original by a competent authority or organization, or data extracted from a national database where the original information is stored in the national databases on population, enterprise registration, investment, or specialized databases as prescribed by law.
5. Consular legalization and translation — where dossiers most often stall
Documents issued by foreign authorities or organizations (the parent’s business registration, financial statements, commitment letters) must undergo consular legalization under Decree No. 111/2011/ND-CP on consular certification and legalization (as amended by Decree No. 196/2025/ND-CP, effective 3 August 2025) before use in Vietnam, unless exempted under an international treaty to which Vietnam is a party. The usual sequence: notarization or certification by the home-country competent authority, then legalization at the Vietnamese diplomatic mission in that country (or under an applicable bilateral exemption mechanism).
On language, Article 5 of Decree 96/2026/ND-CP provides that investment procedure dossiers are made in Vietnamese, and any foreign-language document must be accompanied by a Vietnamese translation. The investor bears responsibility for discrepancies between the translation and the original (Clause 4, Article 5). Translations of financial documents — figures and indicators in particular — therefore need careful, consistent terminology across the whole dossier.
One investor-friendly safeguard sits at point b, Clause 1, Article 6 of Decree 96/2026/ND-CP: the receiving authority “may not require the investor to submit additional papers beyond those in the dossier as prescribed in the Law on Investment and this Decree.” If you have filed one of the five financial-capacity document types and are still asked for off-list extras, this provision is your answer.
6. Preparation checklist for the parent company
- Confirm the parent meets the Article 195(1) Law on Enterprises definition (over 50% capital, appointment rights, or charter-amendment rights over the planned subsidiary).
- Select at least one of the five document types under point c, Clause 1, Article 32, Decree 96/2026/ND-CP, matched to the parent’s age and group structure.
- Prepare lawful copies of the parent’s legal-status papers (Clause 13, Article 2).
- Legalize all foreign-issued papers (Decree 111/2011/ND-CP as amended by Decree 196/2025/ND-CP), unless treaty-exempt.
- Translate everything into Vietnamese, attach the foreign-language originals, and cross-check figures between translation and original (Article 5).
- Review commitment/guarantee letters: name the committing party and scope, and preferably state a term covering the capital-contribution phase (not legally mandatory, but practically persuasive).
- File the Investment Registration Certificate application under Clause 1, Article 39 (contents per Clause 1, Article 32).
Getting this right the first time spares the parent company the exhausting “file — return — supplement” loop, especially when originals sit abroad and each legalization round trip takes weeks.
Frequently asked questions
Must the parent submit audited financial statements?
No. Clause 7, Article 6 of Decree 96/2026/ND-CP states that no audit is required for the two most recent years’ financial statements in administrative procedure dossiers, unless other legislation provides otherwise. The parent’s internal (unaudited) statements are acceptable.
Our parent company was incorporated six months ago. How do we prove financial capacity?
Use a substitute under point c, Clause 1, Article 32 of Decree 96/2026/ND-CP: a financial support commitment from the upper-tier group parent, a financial institution’s commitment, a financial capacity guarantee, or other documents such as bank balance confirmations or an approved investment decision.
Does the group’s support commitment letter need a stated term?
The law does not require a time limit for the commitment (Clause 7, Article 6, Decree 96/2026/ND-CP). Still, covering at least the charter-capital contribution period in the letter makes the dossier more convincing at review.
Does the parent’s foreign business registration certificate need consular legalization?
Yes, unless exempted under an international treaty. Foreign-issued papers must be legalized under Decree 111/2011/ND-CP (amended by Decree 196/2025/ND-CP, effective 3 August 2025) before use in a Vietnamese dossier, with a Vietnamese translation attached per Article 5 of Decree 96/2026/ND-CP.
Can the receiving authority demand extra papers beyond the statutory list?
No. Point b, Clause 1, Article 6 of Decree 96/2026/ND-CP prohibits the receiving authority from requiring documents beyond those prescribed in the Law on Investment and the Decree.
A parent holding 51% of the subsidiary’s charter capital — does it count as a parent company?
Yes. Under point a, Clause 1, Article 195 of the Law on Enterprises 2020, owning more than 50% of charter capital or total ordinary shares is one of three alternative tests for a parent-subsidiary relationship, regardless of which company was established first.
This article has been quality-reviewed by the FLAW AI Legal Council