The establishment of the NewCo requires an Investment Certificate from the licensing authority. Depending on 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 understand that upon establishment, the NewCo shall provide information marketing services in Vietnam.
PRELIMINARILY COMMENT OF SBLAW
1. Executive Summary
Under Vietnam Law on Investment, in order to obtain an Investment Certificate for establishment of a foreign invested company, Foreign Investor is required to propose an Investment Project.
Investment Project is understood as “a collection of proposals for the expenditure of medium and long-term capital in order to carry out an investment activity in a specific geographical area and for a specified duration”. Then, relevant competent authorities shall evaluate the legitimacy and the feasibility of such Investment Project to determine whether to grant Investment Certificate or not.
Assessment of the legitimacy of an Investment Project shall be based on legal framework of Vietnam, 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 NewCo shall register its head-office.
Meanwhile, a conclusion regarding to the feasibility of an Investment Project shall be based on assessment on the financial ability of the Foreign Investor, investment capital to put in the Investment Project, facilities and human resources serving the implementation of such investment project in Vietnam.
Thus, procedure for establishment of a foreign invested company 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 20 -45 days, the actual process may take a longer time due to that the competent authority must consult other relevant offices to valuate the investment project.
2. Specific comments
2.1. Form of business for registration
– Business line:
Under Vietnam’s WTO Commitments, there is no any specific commitment engaged by Vietnam from which Vietnam shall open its market to foreign investors to provide information marketing services in Vietnam. Thus, possibility of setting up the NewCo in Vietnam shall totally depended on master economy development plan of the province or cities where you intend to locate the NewCo. The provincial licensing authorities may also consult Ministry of Industry and Trade, Ministry of Planning and Investment and Ministry of Information and Communication before granting the final decision.
However, it should be noted that, Vietnam Law does not provide any limitation or inhibition measure applied to provision of information marketing services. Also, at present, Vietnam Government implement special policies to pay the way for development of the electronic trade in Vietnam. We therefore expect that response from competent authorities on application for establishment of the NewCo in Vietnam shall be positive.
– Form and charter capital of the company
The NewCo can be either of a wholly foreign invested company which is totally owned by the foreign investor or a joint venture company jointly owned by the foreign investor and local partner(s).
The capital to put in the NewCo: Kindly noted that the foreign investors must provide documents to prove that it has sufficient financial ability to make the capital contribution to the NewCo in Vietnam.
2.2.Procedures for setting up a foreign invested company in Vietnam to provide information marketing services.
As Provision of Marketing Information is not mentioned in Vietnam WTO’s Commitment. Thus, the application for establishment of the NewCo must undergo the investment evaluation process. Accordingly, before the Licensing Competent Authorities must consult Ministry of Planning and Investment, Ministry of Finance, Ministry of Industry and Trade an Ministry of Information and Communication to determine whether to grant the investment certificate to the companyto setup the NewCo or not.
For ease of reference, hereinafter is an overview roadmap of this procedure as follows:
| Step 1 | Step 2 | Step 3 | Step 4 | Step 5 |
| Preparation of application dossier | Submission of application dossier to Provincial Licensing Authority | Comments from relevant Ministries | Provincial Licensing Authority grants the amended Investment Certificate | Publication on News Paper |
| Comments from relevant Provincial Department |
Time frame
| Step 1 | 5-7 working days from receipt of necessary information and documents from your company |
| Step 2 | 02-03 working days from receipt of signed and sealed documents from your company |
| Step 3 | 1-2 months from submission of dossier to Provincial Licensing Authority |
| Step 4 | 5-15 working days from receipt of comments from relevant competent authorities |
| Step 5 | 05 working days from receipt of the Investment Certificate |
3. SBLaw’s qualificattion
We believe that SBLaw is well-positioned to assist foreign investorsin obtaining the Investment Certificate for the establishment of the NewCo in Vietnam for following basis:
- Highly skilled and experienced consultants and lawyers with high ability to assist client regarding to approach business goals in Vietnam.
- Experience of SBLaw in assisting client for obtaining license for trading right and export, import right in Vietnam.
- SBLaw has successfully assisted a large number of Foreign Investor to obtain License for Distribution and export, import right in Vietnam from the year of 2009.
Client Reference of SBLaw:
– Acting for a Japanese Investor (Individual Investor) to obtain license for trading and leasing construction equipment in Vietnam. This includes preparing application dossier, co-ordinating with competent authority to follow the case, responding to actions of competent authority;
– Acting for Malaysian and Singaporean Investors to obtain license for trading, importing and exporting wood floor and pharmaceutical and lab equipments. This includes preparing application dossier, liaising with competent authority to follow the case, updating status of application dossier for client;
– Acting for an Italian Investors to obtain license for importation, exportation and distribution of alcohol in Vietnam. This includes preparing application dossier, liaising with competent authority to follow the case, updating status of application dossier for client.
4. Our Scope of works
4.1. Obtaining official opinion of licensing authorities before the licensing works: (optional)
Our services in this regard will include:
– Drafting the official letters to Licensing Authorities for consultation;
1. Preparation of documents :
- Liaising with your company to discuss the drafted official letter;
- Amending the official letter based on your company’s comments;
- Finalizing and translating the final versions of the official letter into Vietnamese for execution.
2. Working with Licensing Authorities:
- Monitoring and following up with the relevant authorities on the process;
- Update on the developments of the process; and
- Obtaining the official response from the Licensing Authorities.
4.2. Establishment of the NewCo
Notifying your Company of the required documents;
1. Preparation of the application documents :
- Drafting application documents required for submission purposes including application, technical explanatory statement, financial capacity confirmation, board resolutions, power of attorney;
- Liaising with your company to discuss the draft application documents;
- Amending the application documents based on your company’s comments;
- Finalizing and translating the final versions of the application documents into Vietnamese for execution.
2. Assistance in arranging the translation and certification
We can assist your company in arranging translation and certification of translated documents after such documents have been duly notarized legalized in your country.
NewCo Charter
- Drafting a template NewCo Charter in accordance with Vietnamese laws;
- Finalizing the draft NewCo Charter following your company’s Comments;
- Translating the final version of the NewCo Charter into Vietnamese for execution purposes; and
- Submitting the application dossier to the licensing authorities.
3. Licensing procedures:
- onitoring and following up with the relevant authorities on the approval process;
- Update on the developments and additional requirements, if any;
- Prepare additional documents and submit to the licensing authority (if required); and
- Obtaining the investment certificate.
Upon issuance of the investment certificate, the NewCo is required to carry out immediate administrative procedures. Our services include:
- Application for the seal of the NewCo;
- Obtaining a tax code; and
- Public announcement arrangement.
