This is reference to our meeting from which we were requested to advice on possibilities of setting up a 100% foreign invested company providing foreign language training services and coffee shop in Hanoi, Vietnam.
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. For Language Training Center
It is our understanding that you are now considering possibilities of setting up a foreign invested foreign language training Center in Hanoi, Vietnam.
Foreign Language Training Services under Vietnamese law can be classified to short term training services. According to the Decree No. 73/2012/ND-CP dated September 26, 2012, on foreign cooperation and investment in education, you are entitled to set up a wholly foreign invested Foreign Language Training Center in Vietnam.
In order to setup a Foreign Language Training Center in Vietnam, you must satisfy following conditions:
(a) Investment Capital: Capital investment must be at least 20 million VND (about 1,000USD) per student (exclusive of the expense on land tenancy). The total minimum capital is calculated based on the total quantity of students when the estimated education scale is greatest;
(b) Facilities and equipment:
– The light, furniture, and teaching equipment in classrooms must be appropriate; – The minimum average area for teaching must be 2.5 m2 per student;
– Having offices for the Board of Directors, teachers, libraries, and other functional rooms;
– Having necessary equipment serving the teaching and management.
(c) Education program
– The education program must demonstrate the educational target, without damaging the national security and public interests; without spreading religion, distorting history; without negatively affect the cultures, ethics, and traditional customs of Vietnam, and must ensure the connection between the levels and grades.
(d) The teaching staff – The teachers must have college degrees, or the equivalent, in the profession suitable for the subjects that they teach;
– The maximum ratio of students to teachers is 25 students per teacher.
– Foreign Teachers must have at least 5 years experience in the field and must be recognized by the Ministry of Education and Training in Vietnam.
Establishment of Foreign Language Training Center in Vietnam must undergo three phases, i.e. (i) obtaining Investment Certificate; (ii) Approval for establishment of Foreign Language Center and (iii) Approval for provision of education services.
1.2 For Coffee Shop
The service of Coffee Shop under Vietnamese law can be classified to restaurant service. According to Vietnam commitment to WTO, foreign investors wish to invest in the field of restaurant to provide food and beverage, they must invest in construction or renovation or restoration or acquisition of a hotel in parallel with the activity of providing restaurant service.
This limitation will be end of validity from 2015. It means that at this time you cannot lease only one house/place to do both of aforesaid services except for your leased place is a hotel.
Therefore, in our opinion, at this time you should set up company with only one target of providing foreign language training services. After having the Investment Certificate, you can supplement the service of coffee shop at next stage.
Besides, as our advised on the meeting, the foreign language training service is not related to the service of coffee shop. Therefore, under this light you also should separate two steps as aforesaid.
2. PROCEDURES FOR ESTABLISHMENT OF FOREIGN LANGUAGE CENTER IN VIETNAM.
2.1. Obtaining Investment Certificate:
Before establishing a Foreign Language Training Center in Vietnam, Foreign Investor is required to setup a Foreign Invested Company (hereinafter referred to as “FIC”) which shall manage and operate the Foreign Language Training Center. The establishment of the FIC requires an Investment Certificate from the licensing authority.
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 FIC as stipulated under Vietnam Investment Law 2005 is only 20 – 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. Especially, with regard to the conditional business as training service and restaurant, the total time for establishment may be 3 or 4 months.
Under Vietnam Law on Investment, for incorporating a FIC, you are required to propose an Investment Project initially to obtain Investment certificate. The relevant licensing authority shall evaluate the legitimacy and the feasibility of such Investment Project to determine on granting of the Investment Certificate on the following factors:
a. The Investment Project must be in conformity with the socio-economic development and the educational Center network planning approved by competent State agencies;
b. Pre-feasibility study on the establishment of the educational Center;
c. Available land in the locality to give or to lease out, or the agreement on leasing available facilities; d. Your financial ability, investment capital to put in the Investment Project, and human resources serving the implementation of such investment project in Vietnam.
The roadmap for the incorporation of the FIC for trading activities can be described in following steps as follows:
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 05-07 working days.
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. It shall take about 50 workings days 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 Planning and Investment, Ministry of Finance and Ministry of Training and Education, Hanoi Department of Training and Education and the People’s Committee of District where the Center will be located.
3. Post licensing: Within 13 working days we shall complete the post licensing procedures such as publishing the New Company in News Paper, obtaining seal and tax code
2.2. Approval for establishment of Foreign Language Training Center
After obtaining Investment Certificate from the competent authority, you must submit application dossier for approval for establishment of Foreign Language Training Center to the Provincial Department of Education and Training.
In this phase, you must prepare detailed project of the establishment of the educational Center, specifying name, educational targets; qualifications and certificates being issued; the designed structure of the managerial mechanism and the detailed plan for the development and scale of the educational Center in each period, specifying the fulfillment of the conditions for facilities and equipment, education programs, and teaching staff.
Within about 50 working days from the date of submission of valid application dossier to the competent authority, the provincial People’s Committee shall grant
Decision on establishment of Foreign Language Training Center.
2.3. Approval for provision of education services
Within 24 months from being issued with the Decision on approving the establishment of the Foreign Language Training Center, you must apply for approval for providing education services.
The approval for providing education services shall be granted upon the satisfaction of following conditions:
The organizational structure of the educational Center or its campus has been completed;
The Regulation on organization and operation of the educational Center is conformable with law;
The conditions of capital, facilities and equipment, education programs, and teaching staff are satisfied;
The conditions for establishing new faculties are satisfied, applicable to educational Centers that establish new faculties.
Within 30 working dates from the submission of application dossier, the competent authority shall approve the provision of education services.
Then, your Foreign Language Training Center can officially provide training courses to students.
3. SCOPE OF WORKS 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;
Liaising with S&B Law 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 your company updated on the developments and additional requirements, if any; and
Assisting you in obtaining the Investment certificate and Approval for
Establishment of Foreign Language Center. Post-licensing procedures: Upon the issuance of the investment certificate, the FIC shall be required to carry out immediate administrative procedures.
Our services include:
Obtaining the seal of the FIC ;
Obtaining the FIC’s tax code; and
Placing an announcement on the establishment of the FIC in the newspaper.
4. DELIVARABLES
The Deliverables will include documents prepared in Vietnamese as required for submission to licensing bodies. You will review, approve and where necessary sign these documents.
SBLaw may provide English translations of these documents (or extracts thereof), but the translated documents should be used for reference other the purposes of discharging your responsibility for the positions taken and the underlying company information.
