Question: We are foreigers (2 person) and we want to start on with trading company in Vietnam with very little capital in the beginning to test market it so someone suggested to start a company local in the name of Vietnamese whom we trust.
Point is that we can start on with that by making some trustworthy person a director and loan him some money. In such cases how we should proceed so that the real owners who are foreigner’s interest remain intact. What documentation we have to do so that later after couple of months it can be immediately change to foreign invested company. Please advice so that we can talk further.
Answer:
On behalf of SB Law thank you for your interest in our legal consultancy services. We understand that you want to set up a local company in which capital is invested by you and you will have a Vietnamese person make a director of company. Accordingly, I would like to provide an initial advice for your consideration.
In case you have a Vietnamese person use your capital in order to set up a company, you and Vietnamese person shall enter into agreement in order to protect your right and interest under Vietnam Law. We can assist you to prepare a set of agreement between you and your trustee. In addition, we can also support you to obtain EnterpriseRegistration Certificate for the formation of local company.
For the changing a local company into a invested foreign company: In order to become a contribution member of local company, at first, you have to register for contribution capital purchase. After receiving approval from competent authorities you shall carry out changing procedure of contribution member. Accordingly, your name shall recorded on the Enterprise Registration Certificate.
For avoidance of any doubt, you can only become Contribution Member or Shareholder of the Company only if goods to be traded by the Company do not fall into list of goods prohibited/inhibited from foreign involvement such as pharmaceutical products, rice, sugar, oil, magazine, book etc.
