We are requested us to provide legal advice on incorporation of a local company owned by your company (international telecommunication service provider and operator) with headquarters in London, UK (hereinafter referred to as “FIC”). Upon establishment, FIC shall provide voice call and SMS messaging service using your own service platform. The services are provided after interconnecting with existing mobile operators in Vietnam.
We, therefore, are grateful to present you our Legal Services Proposal for your review and consideration.
1. PRELIMINARILY COMMENT OF S&B LAW
1.1 Telecommunication Services
Under the Degree No. 25/2011/ND-CP dated 06 April 2011 of Vietnam Government detailing and guiding the implementation of a number of articles of the telecommunication law, Voice Call and SMS Messaging Service are classified to basic telecommunication services. In case, the Foreign Investor wish to provide basic telecommunication services in Vietnam Territory without setting up network infrastructure, foreign investors are allowed to jointly venture or cooperate the business on the basis of contracts with enterprises established in Vietnam. Thus, it is impossible for you to set up a joint venture company with a local natural person for providing Voice Call and SMS Messaging Service in Vietnam.
According to Vietnam’s Commitments entering WTO, Foreign Ownership in a FIC providing telecommunication services without setting up network facility must not exceed 65% of total investment capital.
We also would like to note that telecommunication services are considered as sensitive services which may affect security and national defense of Vietnam. Thus, generally, Vietnamese Government shall be cautious reviewing the application for setting up FIC providing telecommunication services in Vietnam. According to our practical experiences in previous cases, the possibility of incorporation of FIC in this field shall be much depended on following factors:
Although Vietnam Law does not impose any minimum rate of charter capital for the above mentioned business activities. Accordingly, the foreign investor shall be self responsible for its estimate of sufficient charter capital to be injected into the Company in Vietnam for running its business project. However to our practical experience, with your plan of trading above mentioned products, we are of opinion that you should consider a th and 10th February 2014, from which, you rate of at least 650,000USD. You shall be required to prepare a business plan in the first five years from the date of licensing include the following contents: Market analysis and forecast, business scheme, revenue, total expenditure for investment, expenditure for each year; the form of investment, scheme to raise capital; human resources in order to prove that your proposed investment capital shall be sufficient for the business activity of the FIC.
Investor who acts as owner or shareholder of the Company in Vietnam must provide sufficient evidence that it has good experience in the field, especially those relating to the business activities to be conducted in Vietnam. We would like to note that the Licensing
Authority may ask you to provide a proposed technical plan corresponding to the business plan in the first five years from the date of licensing include the following principal contents: network configuration, equipment for each year, both the main parts and the backup parts; analysis of network capacity, equipment, capacity of transmission lines, telecommunication resources, technologies, standards, applicable technical norms; measures to ensure service quality and information safety or security. In addition, MOU or In-principle Contract with licensed mobile operators in Vietnam regarding lease of network facility for providing telecommunication services will be favored.
1.2. Licensing Procedure
We would like to clarify that the procedure for amendment of Investment Certificate in order to obtain license for conditional investment sectors such as (i) Warehouse Service and (ii) Courier Service shall be about 45 working days. However, the actual process may take a longer time due to that the competent authority must consult other relevant ministries to evaluate the application dossier.
The roadmap for the amendment of Investment Certificate of you 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 10 working days. The prepared documents shall then be sent to you for review, signing and seal.
b. 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 3-4 months from submission of application dossier for the provincial licensing authority to grant the Investment Certificate.
c. Post licensing: Within 13 working days we shall complete the post licensing procedures such as publishing the amendment of Investment Certificate in News Paper.
After completion of Incorporation, the FIC shall be responsible to liaise with the Ministry of Information and Telecommunication to obtain License for providing telecommunication services. SBLaw shall support you this service upon request.
