Is there anyway you could provide him with more details as in, the charges, steps, procedure, etc.
Answer: I would like to refer you to the meeting from which we discussed on possibilities on setting up Restaurant under your own name and the other option to set up under a Vietnamese local name. Therefore, we are grateful to present you our Legal Service Proposal for your review and consideration as follows:
1. OUR PRELIMINARY COMMENTS OF SBLAW
1.1. BRIEF INTRODUCTION ON SETTING UP FOREIGN INVESTED ENTERPRISE IN VIETNAM
We would like to clarify that the procedure for establishment of a foreign invested enterprise in Vietnam generally takes a rather long time in comparison with other countries in the region.
Our practical experiences show that actual process may take a longer time due to that the licensing authority must consult other relevant departments to evaluate the investment project. Generally, the licensing authorities shall evaluate the legitimacy and the feasibility of investment project 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/province where the restaurant is located;
b. Financial ability, investment capital to put in the investment project, facilities and human resources serving the implementation of such investment project in Vietnam. According to applicable Law on Investment 2014, an investment in the form of the establishment of an economic organisation will require a foreign investor to go through a two-step licensing process as follows:
(i) application for obtaining an Investment Registration Certificate (IRC); and
(ii) registration for establishment of an enterprise by obtaining an Enterprise Registration Certificate (ERC).
In addition to the mentioned-above licenses, depends on actual business the NewCo operates, it is required to obtain other relevant sub-license/permission after incorporation of the NewCo. For example, a restaurant has to obtain the following sub-licenses including
(i) Certificate of satisfaction on food safety and hygiene;
(ii) Certificate of satisfaction on conditions for fire fighting and prevention, and (iii) Commitment on environment protection before officially operating.
1.2. SPECIFIC CONDITIONS FOR INVESTMENT REGISTRATION
Under Vietnam-WTO Commitments, Food & Beverage (F&B) services is classified to CPC 642. From 01 January 2015, Vietnam undertakes to open its market for foreign investors to setup foreign invested company for running F&B business in Vietnam without strict accompanying requirements.
In this case, in order to secure the high success possibility, we highly recommend Client to carefully account the following factors:
(i) Location of the restaurant: In Vietnam, location of a foreign invested company is very important. Location of the restaurant in Vietnam must strictly comply with master plan of the city/province. We highly recommend Client to locate the restaurant within Trading Centre or oriented places for restaurant. In case Client selects location out of Trading Centre then parking lot, architecture and fire fighting system of the restaurant should be carefully accounted. The Licensing Authority may refuse to grant approval if Client fails to provide sufficient explanation on such matters. We highly recommend Client to look for locations having enough area for motorbike/car parking. If internal parking lot is not available, the nearby parking lot is acceptable provided that it is in compliance with the local government’s planning.
(ii) Serving liquor in restaurant is considered as one of the most sensitive matters when operating restaurant in Vietnam, especially, those relating to foreign invested company. Generally, in order to serve liquor in restaurant, the NewCo is required to obtain a License for retail sale of liquor. This sub-license is granted only if the restaurant satisfies strict conditions about storage, food hygiene and safety, fire fighting and prevention, etc.
However, we also further note that on 27th December 2014, the Ministry of Industry and Trade adopted the Circular No. 60/2014/TT-BCT further guiding on manufacturing and distribution of alcohol goods, serving alcohol for customer in restaurant was removed from requirement for obtainment of sub-license. This Circular shall be effective from 1st March 2015. However, this circular does not clearly state that serving alcohol in restaurant is exempted from requirement of obtainment of License for retail sale of liquor. This may cause confusion to the Licensing Authority.
Thus, for avoidance of this unclear issue during the licensing process, in the application dossier for setting up the NewCo, we should not mention about serving alcohol in the restaurant. Later, the NewCo shall obtain the License for retail sale of liquor when officially operating the restaurant.
(iii) Investment capital: Under Vietnam Law, F&B business does not require for a minimum rate of investment capital. However, Client should register a feasible capital depends on scale of the investment project. For example, if the restaurant’s capability is about 50 pax per day, then investment capital should not less than 150,000 USD. Our former Clients usually invested at least 200,000 USD for the same project. In addition, according to Law on Enterprise, 100% charter capital must be fully contributed within 90 days upon incorporation of the NewCo.
(iv) Experience of Client: Having experience in the field of F&B is also one of important factor that determining feasibility of the case. The foreign investor having no relevant experience is generally not favoured by the Licensing Authorities.
(v) Other factors to be accounted: Under Vietnam Law, prior to officially operate the restaurant, the NewCo shall need to obtain necessary sub-license/permission included but not limited to
(-) Certificate of satisfaction on food safety and hygiene;
(-) Certificate of satisfaction for fire fighting and prevention; and (iii) Commitment on environment protection.
1.3. LICENSING PROCESS
The roadmap for incorporation of NewCo can be described in the following steps:
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 provide finalized application dossiers for your execution. We anticipate that this phase shall be completed around 10 working days.
b. Licensing procedure: It shall take around 30-45 working days from submission of final application dossier to the competent authority for obtaining the Investment Registration Certificate. Following the Investment Registration Certificate, it takes around 07 working days for obtaining the Enterprise Registration Certificate. 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, we shall try its best to accelerate the progress in order to obtain the approval at the soonest3.
2. PROFESSIONAL FEE
Professional fee for performing services as mentioned in above:
– Preparation of application dossier: 2,000 USD (Two thousand US Dollars);
– Licensing procedure: 5,000 USD (Five thousand US Dollars);
– Total estimated professional fee: 7,000 USD (Seven thousand US Dollars), included the governmental fee
