Amend Investment Certificate to include the business line of leasing services

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We understand that your company (hereinafter referred to as “Client”) wishes to amend its Investment Certificate to include the business line of real estate leasing services, namely, warehouse lease.

 Therefore, we are grateful to set our legal services proposal for your review and consideration as follows:

According to information as provided by you, we understand that Client would like to amend its Investment Certificate to include warehouse leasing services. In which, the leasing warehouse shall be the warehouse area built or leased by Client to sub-lease.

1. Warehousing Service:

Warehouse leasing service is classified to real estate business activities regulated in the Law on real estate business No. 63/2006/QH11 and its amending Law No. 66/2014/QH13.

Accordingly, foreign investors shall have right to lease house, construction to sublease on 1st July, 2015 towards.

Thus, with respect to this service, the Client shall not face with many difficulties in amendment of its Investment Certificate to include warehouse leasing service from 1st July 2015.

However, if foreign investors apply for issuance of this service including the activity of sublease, foreign investors may meet more difficulties and the result may be:

(i) The Licensing Authority shall issue the Amended Investment Certificate, and grant the permit for doing sublease of warehouse from the issuance time of the Amended Investment Certificate;

(ii) The Licensing Authority shall issue the Amended Investment Certificate, however, the sublease of warehouse shall only be implemented from 1st July 2015.

2. Special notes to amendment of Investment Certificate

Supplementation of business activities and investment objective is considered as expansion of  investment project. According to our practical experience, in case the Foreign Owned Company would like to expand scope of business activities, particularly, the approval shall very much depend on following factors:

– Audited Income Statement of the Client in the most recent year (2013) must be positive. In some cases, in order to assess feasibility of expansion of investment project, the Licensing Authority requests the Client to explain more about business result within early six months of 2014.

– Client finalized all tax obligations within recent 02 fiscal years;

– Client should provide detailed explanation on demand on land use for current business activities (prior expansion of investment project), space area as used in practice, proposal for space to be used for warehouse leasing service, proposal for space that shall be leased to do sublease. In our opinion, the warehouse leasing contract/Memorandum of Understanding for sub-leasing warehouse from other lessors since the time of applying for the Application Dossier should be provided for issuance of sublease.