Client: I am an American citizen wishing to register a new company here in Vung Tau.
The business is consultancy for project construction.
I have an office location already. I carry no overheads other than the office rental and my own accommodation. I simply wish to be registered and request the company chop and open a company bank account. I would like to add operating capital later upon engaging a project. This could be 2 months away. Please advise requirements. I am in Vung Tau now.
Lawyer: We understand that you would like us to advise on establishment of 100% Foreign Invested Company (hereinafter referred to as “FIC’) in Vung Tau Province in order to provide consultancy for project construction.
We are therefore grateful to present you hereinafter our Legal Services Proposal for your review and consideration.
1. SUMMARY OF BACKGROUND
According to information as provided by you, we understand that you would like to set up foreign invested company for providing consultation services for construction project.
Due to that your information as provided does not list in detail scope of services to be provided by the foreign invested company, we assume that the Foreign Invested Company may conduct following works for a construction project:
– Management Consulting Service for construction project;
– Construction supervision consulting services for construction project;
– Engineering consultation services for construction project.
2. PRELIMINARY COMMENTS
2.1. REGULATION ON SETTING UP FOREIGN INVESTED COMPANY IN VIETNAM
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. With respect to Investment Project, total investment capital of which is from 300,000,000,000 VND upward, Investor is required to prepare Feasibility Study for the Investment Project.
Generally, 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. With the respect to Japanese Investors, possibility of granting Investment Certificate also depends on road map of opening market under Vietnam Japan Economic Partnership Agreement (VJEPA).
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.
2.2. SPECIFIC COMMENTS
a. Management Consulting Service for construction project: These services can be classified to Management Consulting Service (CPC 865). According to roadmap of opening market under Vietnam’s WTO commitments, Foreign Investors shall be entitled to setup 100% foreign owned company for providing management consultation services. During the licensing process for setting up foreign invested company for providing this service, foreign investor is required to provide sufficient evidence proving that it has experience in the field. Prior Written Approval from Ministries like Ministry of Industry and Trade, Ministry of Planning and Investment and Ministry of Finance may be required before granting Investment Certificate for the FIC;
b. Construction supervision consulting services for construction project and/or Engineering consultation services for construction project: These services are classified to CPC 8672 under Vietnam-WTO Commitments. Accordingly, Foreign Investor is allowed to setup 100% Foreign Owned Company for providing such services. However, we also would like to note that foreign investors in this case must satisfy following requirements:
+ Having human resources qualified for providing construction supervision consulting services and/or engineering consultation services. Certified copy of Certificate of Construction Supervision Consultant and Certificate of Engineering Consultant must be included in the application dossier for obtainment of Investment Certificate.
+ Foreign Investor must be experienced in the field.
2.3. Licensing Process
The roadmap for the incorporation of the FIC can be described in following steps 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 05 working days.
b. Pre-licensing procedure: Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to People Committee of Vung Tau Province for obtaining In-principal Approval. It shall take about 20 working days from submission of application dossier to People Committee of Vung Tau Province for obtaining the in-principle approval. We would like to note that the Pre-Licensing Procedures shall be applicable to FIC locating outside of Industrial Zone or Export Processing Zone.
c. Licensing Procedure: 02 working days from obtaining In-principle Approval from People Committee of Vung Tau Province, we shall submit the application dossier for starting the licensing procedure. It shall take about 45 working days from submission of application dossier to the competent authority for the provincial licensing authority to grant the Investment Certificate. However, in practice, the licensing procedure can be longer as the competent authority may need prior approval from relevant Ministries.
d. Post licensing: Within 15 working days we shall complete the post licensing procedures such as publishing the FIC in News Paper, obtaining seal and tax code registration.
e. For avoidance of any doubt, in practice, the administrative procedure can be longer due to that the competent authority must consult relevant ministries before granting License. In such case, SB Law shall try its best to accelerate the progress in order to obtain the approval at the soonest.
