New Company Setup

0
45
Land Tax for Foreign Contractor in Vietnam

Client:  We want to open company in Vietnam, Ho Chi Minh City.

Need some information:-

1. Import/Export Heavy machinery Company

2. 100% ownership.

3. Owner is Singapore & Hongkong National

4. How long take time to all procedure.

5. How much expenses for all license procedure including visa.

6. How much your professional charges.

Thanks for enquiry.

We want to export all type of construction equipment from Vietnam to Middle East.

We have already 4 company. 2 In UAE ,1 in Taiwan & 1 in Iraq (Head Office)

Lawyer: This is reference to your email below. I am Lawyer of SBLaw. I was entrusted to provide you legal advice regarding to your inquiry below.

In order to provide you accurate legal advice, please describe us what kind of heavy machine that you would like to import and export.

We shall need HS Code of them. Then, we shall check if there is any item fall into list of goods prohibited or inhibited from import and export or not.

We refer with thanks to your email dated 21advice on possibilities of setting up a wholly foreign invested company (hereinafter referred to as “FIC”) for implementation of export right of construction equipment in Ho Chi Minh City, Vietnam.

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

1. BRIEF SUMMARY OF BACKGROUND AND OUR COMMENTS

1.1. SETTING UP WHOLLY FOREIGN INVESTED COMPANY

The establishment of a FIC in Vietnam requires an Investment Certificate from the licensing authority. Depending upon 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 would like to clarify that the procedure for establishment of a FIC 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 45 days, the actual process may take a longer time due to that the competent authority must consult other relevant offices to evaluate the investment project.

Under Vietnam Law on Investment, for incorporating a foreign invested company (Hereinafter referred to as “FIC”), you are required to propose an Investment Project initially to obtain Investment certificate. The relevant licensing authorities shall evaluate the legitimacy and the feasibility of such Investment Project to determine on granting of the Investment Certificate 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 or province that the FIC shall register its head-office.

b. Your financial ability, investment capital to put in the Investment Project, facilities and human resources serving the implementation of such investment project in Vietnam.

c. Head office of the FIC should be in line with master plan of the City. The roadmap for the incorporation of the FIC for trading activities can be described in following steps as follows:

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 07 working days.

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 45 days from submission of application dossier to the competent authority for the provincial licensing authority to grant the Investment Certificate. In some case the process can be longer as it takes time to consult relevant Ministries such as Ministry of Industry and Trade, Ministry of Planning and Investment, and the Ministry of Finance.

Post licensing: Within 13 working days we shall complete the post licensing procedures such as publishing the FIC in News Paper, obtaining seal and tax code registration.

1.2. INTRODUCTION TO EXPORT COMPANY IN VIETNAM

It is our understanding that you are now considering possibilities of setting up a foreign invested company for exporting constructional equipments from Vietnam to other markets.Vietnam Government is now creating best supports for foreign investor setting up company for exporting goods from Vietnam. Accordingly, FIC exporting goods from Vietnam can claim reimbursement of input Value Added Tax from Tax Agency.

With the respect to capital required for FIC for exporting construction equipments, Vietnam Law does not stipulate any minimum capital rate. Generally, based on number of goods to be covered by the FIC (we shall need details of goods with HS Code), competent authority shall consider whether the proposed capital is reasonable or not. Low Investment Capital Rate can lead to the risk that competent authority shall shorten validity term of Investment Certificate granted for FIC. However, according to our experience, you should consider an amount of 100,000USD (One hundred thousand US Dollar). This rate is considered as normal rate in Ho Chi Minh City. The foreign investor can complete capital contribution within 36 months from the establishment of FIC in case FIC is structured under the form of Limited LiabilityCompany. Despite of that, competent authority may suggest Foreign Investor to complete its capital contribution within 12 months from the establishment of FIC.

2. SCOPE OF WORKS

With regards to the establishment of FIC in Vietnam, our scope of work shall be as follows:

Preparation of the application documents:

Notifying application documents required in accordance with Vietnamese law;

Drafting application documents required for submission purpose;

Liaising with Client to discuss the draft application documents;

Amending the application documents based on your comments;

Obtaining preliminary comments from the licensing authority on the draft application documents;

Finalizing the application documents following comments from the licensing authority; and

Translating the final version of the application documents into Vietnamese for execution.

Licensing procedures:

Submitting the application dossier to the licensing authority on your behalf;

Monitoring and following up with the relevant authorities on the approval process;

Keeping you updated on the developments and additional requirements, if any; and

Assisting you in obtaining the investment certificate.

Post-licensing procedures:

Upon the issuance of the investment certificate, the FIC shall be required to carry out immediate administrative procedures.

Our services include:

Obtaining the seal of the FIC ;

Obtaining the FIC’s tax code; and Placing an announcement on the establishment of the FIC in the newspaper.