We understand that you and two other local partners and a Japanese Investor (hereinafter referred to as “Clients”) are now seeking legal advices for establishment of Joint Venture Company (hereinafter referred to as “JVC”) for (i) installation of air condition system; water supply and drainage system; electrical system and (ii) Construction work for civil engineering.
We therefore are grateful to present you our Legal Services Proposal for your review and consideration.
1. BRIEF INTRODUCTION ON ESTABLISHMENT OF JVC
1.1. General Introduction
The establishment of a foreign investment company or a Joint Venture Company in Vietnam requires an Investment Certificate from the licensing authority. Depending upon the location of the company, the licensing authority may be the Provincial People’s Committee (for companies located outside industrial or export processing zones) or the provincial Industrial and Export Processing Zones Management Authority (for companies located in industrial or export processing zones).
We would like to clarify that the procedure for establishment of a JVC in Vietnam generally takes a rather long time in comparison with other countries in the region. Our practical experiences show that although the total time for establishment of a foreign invested company as stipulated under Vietnam Investment Law 2005 is only 45 days, the actual process may take a longer time due to that the competent authority must consult other relevant offices to evaluate the investment project. Possibility of granting Investment Certificate for JVC shall very much depend on following factors:
a. the legal framework including Vietnam’s WTO Commitments, Vietnam Investment Law, Vietnam Enterprise Law, Regulations applicable to specific industries as well as the master economic development plan of the city or province that the JVC shall register its head-office.
b. Financial ability, investment capital to put in the Investment Project, facilities and human resources serving the implementation of such investment project in Vietnam.
c. Head office of the JVC should be in line with master plan of the City.
1.2. Setting up JVC for Installation of air condition system; water supply and drainage system; electrical system and Construction work for civil engineering Installation of air condition system; water supply and drainage system; electrical system and Construction work for civil engineering can be classified to CPC 516 and 513. Under Vietnam WTO’s Commitment, for CPC 516 and 513, Foreign Investor can set up JVC with local partners in which foreign ownership is not limited. For securing possibility of obtaining Investment Certificate for JVC, we highly recommend Client to carefully consider following matters:
– Capital: Vietnam Law does not stipulate minimum capital amount for this industries.
However, according to our practical experience in previous case, an amount of 150,000USD upward should be reasonable;
– Clients must have sufficient documents proving that Client has enough financial ability to make capital contribution to JVC. Furthermore, experience in the same field of Clients is also considerable during the licensing process.
– Head office address of the JVC in Vietnam must be compliant with master plan of Vietnam.
With the reference to road map for obtaining the Investment Certificate, it can be described as follows:
a. Preparing the application dossier: We shall collect necessary information and documents from you. Upon receipt of necessary information and documents from you, we shall translate documents from English into Vietnamese and prepare the application dossier under the standard forms. The initial drafted application dossier shall be sent to you for your comments. Then, after updating the application dossier based on your comments, we shall obtain the preliminary comments from the competent authority and send the finalized application dossiers for you to sign and seal. We anticipate that this phase shall be completed within 7 working days. The prepared documents shall then be sent to you for review, signing and seal.
b. Licensing Process: Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority. It shall take about 30 working days from submission of application dossier for the provincial licensing authority to grant the Investment Certificate. In practice, the licensing process can last longer as it requires competent authorities to consult relevant ministries before granting the Investment Certificate.
c. Post licensing: Within 15 working days we shall complete the post licensing procedures such as placing establishment of JVC on News Paper, Tax code registration and obtaining Seal Sample.
2. Our scope of work
In light above, following works are proposed based on the request of Client. However, depending on the specific position/situation of Client, several work items may not be necessary. Meanwhile, other works may be required. However, any additional works shall not fall under the scope of this Legal Service Proposal, but could be provided upon request.
3.SCOPE OF SERVICES
3.1.Preparation of the application documents:
Notifying application documents required in accordance with Vietnamese law;
Drafting application documents required for submission purpose in English language;
Liaising with you to discuss the draft application documents;
Amending the application documents based on your comments;
Obtaining preliminary comments from the licensing authority on the draft application documents;
Finalizing the application documents following comments from the licensing authority; and
Translating the final version of the application documents into Vietnamese for execution.
3.2.Licensing procedures:
Submitting the application dossier to the licensing authority on your behalf;
Monitoring and following up with the relevant authorities on the approval process;
Keeping you updated on the developments and additional requirements, if any; and
Assisting you in obtaining Investment Certificate.
3.3.Post-licensing procedures:
Placing an announcement on establishment of JVC in the newspaper;
Obtaining Tax Code Registration for JVC;
Obtaining Seal Sample and Certificate of Seal Sample Registration.
