Client: I Singaporean like to register a travel agent with my Vietnam partner in Vietnam.
May I know your charges and service in-order for us to operate a Online travel agent in Vietnam.
Thank you & best regards.
Lawyer: This is with regards to your email, from which you requested to advice on possibilities of setting up a foreign invested company for providing Travel Agent Services (hereinafter referred to as “FIC”) in Vietnam. Therefore, we are grateful to set our legal services proposal for your review and consideration as follows:
1. BRIEF SUMMARY OF BACKGROUND AND OUR COMMENTS
1.1. General introduction to establishment of FIC
The establishment of a FIC 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 FIC 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.
Under Vietnam Law on Investment, for incorporating a foreign invested company (Hereinafter referred to as “FIC”), you are required to propose an Investment Project initially to obtain Investment certificate. The relevant licensing authorities shall evaluate the legitimacy and the feasibility of such Investment Project to determine on granting of the Investment Certificate on the following basis:
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 FIC shall register its head-office.
b. Your 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 FIC should be in line with master plan of the City.
1.2. Establishment of FIC for providing travel agent services
Travel agent service is classified to CPC 7471. Under Vietnam WTO Commitment, foreign investor is required to setup joint venture company with a local partner for providing travel agent service. Capital Contribution Percentage of Foreign Investor in such Joint Venture Company is not restricted. It does mean that Client can own up to 99.9% of total capital of the Joint Venture Company. Vietnam Law does not impose any minimum capital rate for FIC providing travel agent service.
According to our practical experience, following factors should be satisfied for securing possibility of establishment of Joint Venture Company for providing travel agent service:
– Client must be experienced in the same field for at least 02 years upwards;
– Charter capital of the Joint Venture Company should be 100,000USD upwards;
– Profit of the Client according to the latest audited financial statement should be positive.
– Client should have at least 02 MOU with licensed Travel Operators in Vietnam stating that Travel Operator shall appoint the Joint Venture Company as its travel agent.
– Local Partner should hold at least 10% of total charter capital of the Joint Venture Company;
– Local Partner should be also experienced in the field of tourist.
2. The roadmap for the incorporation of such Joint Venture Company can be described in following steps as follows:
2.1.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 07 working days.
2.2.Submission of application dossier:
Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority.
2.3. Licensing Process:
It shall take about 3-4 months from submission of application dossier to the competent authority for the provincial licensing authority to grant the Investment Certificate. In some case the process can be longer as it takes time to consult relevant Ministries such as Ministry of Industry and Trade, Ministry of Culture, Sport and Tourism, Ministry of Planning and Investment, and the Ministry of Finance.
Within 13 working days we shall complete the post licensing procedures such as publishing the FIC in News Paper, obtaining seal and tax code registration.
3. SCOPE OF WORKS
With regards to the establishment of FIC in Vietnam, our scope of work shall be as follows:
3.1.Preparation of the application documents:
Notifying application documents required in accordance with Vietnamese law;
Drafting application documents required for submission purpose;
Liaising with Client 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.
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 the investment certificate. Post-licensing procedures: Upon the issuance of the investment certificate, the FIC shall be required to carry out immediate administrative procedures.
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