How to Establish a Company in Vietnam?

Foreign investors may invest in the form of 100% capital to establish a limited liability company, joint stock company, partnership company or other forms in investment in Vietnam.

Foreign investors that invest in Vietnam for the first time must have investment projects and fill in investment registration or examination procedures at state agencies in charge of investment in order to be granted investment registration certificates. Investment certificates shall concurrently be business registration certificates.  Company with 100% foreign capital has founded and operated from the date of issuance of the investment certificate.

A project dossier for establishing a company in Vietnam shall comprise:

-Registration/Request for issuance of Investment Certificate;

-A report on financial capability of the investor;

-Draft of the company’s charter;

-List of members of company;

-Copy of the people’s identity card, passport or other lawful personal certification, for individual members;

-Copy of the establishment decision, business registration certificate or other equivalent document, for member organizations;

-Copies of the authorization document, the people’s identity card, passport or other lawful personal certification, for authorized representatives.

-Copies of the business registration certificates of the foreign member organizations must be authenticated within three months before the date of submission of the business registration dossier by agencies where such organizations are registered;

-Written authorization of the investor in case investor is organization and valid copy of the lawful personal certification of the authorized representative. Documents in foreign languages must be translated into Vietnamese, notarized and legalized;

-The joint-venture contract or Business Cooperation Contract (BCC);

-Other documents required by Vietnam law.

The establishment of a company in Vietnam would take from 30 days.  The extra time might be needed in case the investment area is conditional or the State government needs to examine the investment project.  Minimum capital, special licenses or other conditions might be required in certain investment projects.

ANT Lawyers – A Law firm in Vietnam has law offices in Hanoi, Ho Chi Minh City and Da Nang.  The lawyers at each law offices in Vietnam have consistently made valuable and important contributions to our profession through the cases we handled on daily basis to facilitate business transaction or represented our clients to access justice.

Read More

Authorized Representative of the Company Under New Law on Enterprises

In order to raise the standard of business environment in Vietnam, Law on Enterprises 2015 reduced many administrative procedures of establishing and running a business, including the representative authorization of the member or shareholder of the company.

One of the distinguished amendments: authorized representative of the member or shareholder which is legal entity is not required to inform the licensing authority (i.e. Department of Planning and Investment).

Law on Enterprises 2015 provides that the appointment of an authorized representative must be made in written, notified to the Company and take valid from the receipt date of the Company while under Law on Enterprises 2005, the same must be registered at the licensing office.

In addition, any restrictions by the authorizing member on his/her authorized representative in the performance as member in the Members’ Council or shareholder in the Shareholders’ Meeting shall not enforce against the third party.

ANT Lawyers is a law firm in Vietnam with international standards, recognized by IFLR1000 on Financial and Corporate practice. The firm provides a wide range of legal services, including M&A, corporate establishment, business advisory, tax advisory, dispute resolution for multinational and domestic clients.

This publication is designed to provide updated information of legal matters, and does not constitute professional advice.

Read More

Benefits of Representative Offices in Vietnam

Following the trend of international economic integration, foreigners have been attracted by the benefits of doing business in Vietnam through setting up representative office, setting up company, acquiring shares in Vietnam enterprise through M&A activity.

At the initial stage, foreign entity would try to research market, undertake due diligence on its clients, buyers, clients, or other business partners therefore many will be interested in establishing a representative office in Vietnam.

The foundation of representative office of foreign entity in Vietnam is governed under Vietnam Commercial Law 2005 and Decree 07/2016 / ND-CP dated 25 May, 2016.

Advantages of establishment of a representative office:

Establishing a representative office is a tool to research the market. For the first time, foreign enterprises entering the Vietnam market, the primary purpose is understanding the market, undertaking research on clients, or due diligence on their business partners, distributors, monitoring the performance of buyers and being familiar with the Vietnam market. The establishment of representative office in Vietnam turns out to be the most effective option both of cost and time.

The representative office in Vietnam is an effective tool to promote commercial activity, seeking partners, and increasing opportunities to expand business market in Vietnam.

Representative office form in Vietnam has allowed foreign entity to receive benefits such as recruiting Vietnamese employees, foreign employees working in offices whom could apply for work permit in Vietnam, then temporary residence card in Vietnam, opening bank accounts in foreign currencies or Vietnam dong at commercial banks, and to be allowed to use those accounts solely for their operations.

According to the laws of Vietnam, the establishment of representative offices does not require the investor’s capital. Instead, setting up a company in Vietnam, an economic organization requires capital contribution as per business plan, ranging from USD 50 k to million USD. Sometime, if the investment fall under conditional areas, setting up company seems more challenging.  This relieves the foreign trader from advancing too much to achieve the purpose of expanding the market before the business plan has been proved to materialize.

Further, the establishment of representative office follows more simple procedures for licensing in Vietnam than establishing entity in Vietnam. Accordingly, the process has been taken less time which is more favorable for foreign traders.

Challenges of the establishment of representative office in Vietnam?

Vietnam law provides that, in order to establish a representative office in Vietnam, foreign traders have to prove the fulfillment of the financial responsibility in their country. In practice, the foreign entity is expected to provide audited financial statements. In some countries, the financial audited report is not available according to laws. The Vietnam Department of Trade and Commerce, which state authority would grand representative office operation certificate would require documents showing the fulfillment of tax liabilities or financial obligations of the last fiscal year, or equivalent documents as proof of existence and operation of the foreign trader issued or certified by competent authorities where such foreign trader is established. This provision may initially be difficult. However, if the foreign trader has been established and operated legally in their country, the implementation of this provision is not a major obstacle.

As a large potential market such a Vietnam, as well as the current rapid reform in administrative procedures, Vietnam Government has been more flexible to encourage foreign traders doing business in Vietnam, hence the establishment of representative offices is an optimal method to consider for market research, trade promotion and a stepping stone to penetrate the Vietnam market successfully.

The commercial law and other business laws in Vietnam are frequently changing toward attracting more quality investment projects into Vietnam.  ANT Lawyers – A Law firm in Vietnam has law offices in Hanoi, Ho Chi Minh City and Da Nang.  The lawyers at each law offices in Vietnam have consistently made valuable and important contributions to our profession through the cases we handled on daily basis to facilitate business transaction or represented our clients to access justice.

Read More

How to Close a Business in Vietnam?

All corporations, companies, partnerships, branch offices, representative offices and other business entities are legal entities in Vietnam which can only be dissolved through formal procedures.

1. What are the major challenges with closing a business in Vietnam?

The main thing to remember throughout the process is that the dissolving company, a branch office or a representative office, one  should pay close attention to the involvement of all key stakeholders, i.e. the employees, customers, creditors, business partners and relevant authorities.

The following are key information to gather for thorough analysis

- Company size in terms of capital and number of employees?

-Enterprise’s business sector?

-Tax invoice usage declaration?

-Annual profit?

-Compliance with tax procedures?

-Administrative violations in the field of taxation?

-Any outstanding tax?

-Tax document filing records?

-Other tax matters?

2. What does the dissolution process involve?

Once an analysis has been through, the next procedures mostly deal with reporting and submitting the relevant documents to the various regulatories and tax authorities at each step of the process, terminating contracts, liquidating assets and settling liabilities, and general administrative work such as returning the corporate seal, registration certificates, and having the company’s name removed from the system of the license authorities.

3. How to prepare document to close a business in Vietnam?

Documents submitted to the licensing authority in Vietnam:

-Liquidation notice of enterprise;

-Minutes of the meeting of Management Board / Board of Directors decided on the dissolution of enterprises;

-The company’s decision on liquidation;

-Report on enterprise asset liquidation;

-The list of creditors and the paid debt;

-Documents evidencing that enterprise has fulfilled all of its tax;

-Confirmation on social insurance for employees after the dissolution decision;

-The seal and certificate of seal sample registration.

Documents submitted to the tax authority in Vietnam:

-Liquidation notice of enterprise;

-Minutes of the meeting of Management Board/Board of Directors decided on the dissolution of enterprises;

-The company’s decision on dissolution;

-Audit reports and tax settlements;

-The financial statements for the year to date the decision on dissolution;

-The company’s tax liabilities audited by tax authority;

-Verification of tax obligations of the enterprise.

Closing a business in Vietnam might be a lengthy process and more complicated than setting up a company in Vietnam.  Sometimes, it is important to make a decision to exit and start a new venture.  As a law firm in Vietnam, we do assist clients to close the business, exit the investment and deal with pending issues with licensing authorities including department of planning and investment, department of labour, tax bureau and others.

 

Read More

ANT Lawyers Participating in ASEAN Rail Infrastructure & Expansion 2019

In the year 2017, ANT Lawyers, a law firm in Vietnam has been participating in the event of GRS Rail Extension Summit and Thomas Giglione presented about Alternative Dispute Resolution in executing contracts. In the year of­ 2019, ASEAN Rail Infrastructure & Expansion 2019 will bring to Hanoi the most exclusive and influential railway gathering in ASEAN region on May 30th -31st, 2019.

Asia is seeing rapid growth and urbanization, and there is an increasing need to develop transport services to match. And rail is an increasingly viable option to meet the demand for both urban commuting as well as long distance travel. Throughout Southeast Asia, countries are making upgrades to increase freight and passenger rail capacity, extending and rehabilitating existing rail infrastructure, developing urban rail, and pursuing cross border rail and transport linkages.

Vietnam is a country with a relatively complete and early railway system in the Southeast Asia region. On 16 June 2017, the National Assembly of the Socialist Republic of Vietnam officially approved the Revised Railway Laws which supplements many preferential and breakthrough mechanisms and policies. This is the opportunity for Vietnam Railways to open a new page, the period of construction and development so that the railway sector can play its rightful role as the backbone of transport sector, contributing to the reduction of logistics expenses and enhancement of national competitiveness. At the same time, the Vietnamese Government is also planning to allocate a medium-term capital package of USD 350-450 million to Vietnam Railways in order to improve and upgrade the existing infrastructure network to increase railway interval capacity.

Event Highlight

➢ Forecast the Future Plans of the ASEAN Government in Rail Expansion

➢ Provide New Partnership Opportunities with Governments and Project Developers

➢ Feasibility of Rail Project Financing and Investment Opportunities

➢ Focus on Highly Technical Sessions on Track& Infrastructure Upgrades, Rolling Stock, Signals and Communications from Key Solution Providers

➢ Discuss Design and Construction Challenges for ASEAN Rail Projects from Leading Consultants and Engineers

At the event, among other speakers, Mr. Giglione, a Mediator and Mediation Trainer of ANT Lawyers shall be presenting about APEC’s New (O.D.R) Online Dispute Resolution Framework for Resolving Cross Border Construction Disputes. It is obvious that, any contracts would involve potential disputes. Court or arbitration litigation is always the last resort while resolving dispute through mediation could be utilized to encourage parties to maintain relationship and continue the business. Since 2012, ANT Lawyers has been promoting mediation to resolve.

Read More

How to Handle Trademark Infringement in Vietnam?

Counterfeit destroys businesses, business environments, markets as well as the image of the country. Handling trademark infringement in Vietnam has been practically challenging.

Vietnam government has been trying to curb the counterfeits however the results are limited.  The counterfeit business generates huge profits due to the gap price anywhere in the world.   Almost goods which is either popular or luxury, high or low-value of either domestic or foreign brands are being counterfeited, imitated in Vietnam.  Falsification of household goods, food, cosmetics, shoes and items of higher value such as bags, watches, glasses, etc may be found all over Vietnam. For effective anti-counterfeit, we need a close cooperation among the authority agencies in inspection, control of production, import and circulation in the market.  The Southern Department of Goods Quality Control in Vietnam in one of its regular inspections when cooperating with competent agencies in Ho Chi Minh City found after checking 79 stores with 416 items including: oil, helmets, toys, electronic devices that 33.89% of goods of unsatisfactorily labeled, 14.5% unsatisfactory quality. Where the consumers buy counterfeit goods, they could and should report to State authorities, Anti-Counterfeit and Brand Protection Association as an effort to contribute to curbing counterfeit in Vietnam.  The international brands being infringed could request assistance from local law firms in Vietnam.

ANT Lawyers’ Intellectual Property lawyers in Vietnam have assisted a number of clients being foreign brands in its effort to protect their intellectual property and industrial property rights in Vietnam under Intellectual Property Law through advisory, and implementation service.

Read More