Establishment of 100% Foreign Invested Company for providing management consultant services

0
97
Establishment of 100% Foreign Invested Company for providing management consultant services

This is reference to your email from which, we understand that you would like us to advise on establishment of 100% Foreign Invested Company (hereinafter referred to as “FIC’) in Binh Duong Province for providing management consultant services.

Weare therefore grateful to present you hereinafter our Legal Services Proposal for your review and consideration.

  1.       SUMMARY OF BACKGROUND AND PRELIMINARY COMMENTS

1.1.    General introduction to establishment of FIC

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:

  1. 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.
  2. Your financial ability, investment capital to put in the Investment Project, facilities and human resources serving the implementation of such investment project in Vietnam.
  3. Head office of the FIC should be in line with master plan of the City.

1.2.    Setting up FIC for providing management consultant services

Management consultant service is classified to CPC 865. Under Vietnam WTO commitment, Vietnam Government license for foreign investor to setup 100% foreign owned company to provide management consultant service. Thus, your plan is positive. According to our practical experience, in order to secure success possibility in this project, you should carefully consider following factors:

–        Investment Capital: In this field, Vietnam Law does not impose any minimum rate of investment capital. However, you should consider an amount of 60,000USD upward.

–        Experience of Investor: Experience of foreign investor in the same field is one of important condition to be examined during the licensing process. If you intend to register the FIC under your individual name, a document briefing your experience in the same field shall be required. Otherwise, if you register the FIC under the name of a company in foreign country, registered business activities of such company should include management consultant service.

1.3.    Licensing Process

The roadmap for the incorporation of the FIC in this case can be described in following steps as follows:

  1. 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 05 working days.
  2. Pre-licensing procedure: In case you intend to locate the FIC outside of Industrial Zone in Binh Duong Province, an in-principal approval for location of the FIC shall be required before submission of application dossier to the competent authority. In such case, within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to People Committee of Binh Duong Province for obtaining In-principal Approval. It shall take about 20-25 working days from submission of application dossier to People Committee of Binh Duong Province for obtaining the in-principle approval. However, if you locate the FIC inside Industrial Zone of Binh Duong Province, the lesser shall be responsible to obtain such in-principal approval.
  3. Licensing Procedure:02 working days from obtaining In-principle Approval from People Committee of Binh Duong Province, we shall submit the application dossier for starting the licensing procedure.  It shall take about 30-45 working days from submission of application dossier to the competent authority for the provincial licensing authority to grant the Investment Certificate.
  4. Post licensing: Within 15 working days we shall complete the post licensing procedures such as publishing the FIC in News Paper, obtaining seal and tax code registration.
  5. 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, S&B Law shall try its best to accelerate the progress in order to obtain the approval at the soonest.

2.       SCOPE OF WORK

We propose our scope of work in this case as follows:

Description of work
Preparation of the application documents:

  • Notifying application documents required in accordance with Vietnamese law;
  • Drafting application documents required for submission purpose;
  • Liaising with S&B Law to discuss the draft application documents;
  • Amending the application documents based on Client’s 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.
Pre-Licensing procedures:

  • Submitting the application dossier to the licensing authority on Client’s behalf;
  • Monitoring and following up with the relevant authorities on the approval process;
  • Keeping your company updated on the developments and additional requirements, if any; and
  • Assisting Client in obtaining the In-principle Approval from Binh Duong People Committee (if so required).
Licensing procedures:

  • Submitting the application dossier to the licensing authority on Client’s behalf;
  • Monitoring and following up with the relevant authorities on the approval process;
  • Keeping your company updated on the developments and additional requirements, if any; and
  • Assisting Client in obtaining the investment certificate for the Investment Project.
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;
  • Placing an announcement on the establishment of the FIC in the newspaper;

3.       PROFESSIONAL FEE

3.1. Professional Fee for performing the S&B Law services as mentioned in item 4 above will be from 4,400USD (Four thousand and four hundred US Dollar), inclusive of 10% VAT. Particular as follows:

–         Preparation of application dossier: 1,650USD (One thousand and six hundred and fifty US Dollar)

–         Licensing Process: 2,530 USD (Two thousand five hundred and thirty US Dollar);

–         Post licensing Process: 220 USD (Two hundred and twenty US Dollar).

–         The above service fee is exclusive bank charge and cost for translation of documents from English into Vietnamese (10USD/300 words).

3.2. Services fee shall be paid to S&B Law as follows:

–               Within 03 working days from signing date of legal service contract, Client will pay for S&B Law an advance payment which equivalent to 40% of the total estimated services fee.

–               Within 03 working days from commencing Licensing Process, Client will pay for S&B Law an amount equivalent to 20% of the total estimated services fee;

–               Within 05 working days from obtaining Investment Certificate, Client shall pay for S&B Law remained 40% of estimated fee and other expense on behalf of Client.

–               Client shall immediately notify S&B Law of when actual payment(s) will be made on the amount specified in the invoice(s). S&B Law will start working only upon receipt of payment of the respective invoice(s). Alternatively, S&B Law reserves the right to withdraw the service if payment is not received 10 days after the date of the invoice. Further, in the event payments are not received by the payable date, S&B Law reserves the right to suspend services and/or levy and collect a late payment fee of 0.5% per month up to the date of receipt of payment by S&B Law.

–               Paid professional fee shall not be reimbursed.