Question: We would like to set up company of freight transport agency services in Ho Chi Minh City, Vietnam, please advise the legal procedure?
Answer: We refer with thanks to your email from which we were requested to advice on establishment of a wholly foreign invested enterprise (hereinafter referred to as the “NewCo”). The NewCo shall mainly operate freight transport agency services in Ho Chi Minh City, Vietnam. We therefore would like to present our proposal as follows:
I. INVESTMENT REGISTRATION
According to Vietnam Law on Investment 2014, an investment in the form of the establishment of an economic organization will require a Foreign Investor to go through a two-step licensing process as follows:
(i) Application for obtaining an Investment Registration Certificate (IRC) which is issued to the Foreign Investor itself rather than to the Foreign Invested Enterprise (FIE); and (ii) Registration for establishment of an enterprise by obtaining an Enterprise Registration Certificate (ERC) for the FIE.
(ii). REQUIREMENTS FOR INVESTMENT REGISTRATION
Operations of freight transport agency is classified to CPC 748: According to roadmap of opening market under Vietnam’s WTO Commitment on Services, from the year of entering into WTO, foreign investor shall be required to set-up joint venture with Vietnamese partner in which foreign ownership must not exceed 51%. 7 years after entering into WTO, foreign ownership restriction shall be removed. Thus, under applicable laws and regulations of Vietnam, now it is allowed to set-up a wholly foreign invested company provides freight transport agency services in Ho Chi Minh City, Vietnam.
In order to optimize the success when setting up NewCo, please kindly consider the following matters based on our actual practice:
– The foreign investor should be experienced in the relevant field of trading. The experiences are demonstrated through business lines/operation activities recorded in its Business Registration Certificate and/or Memorandum of Association or any other documents indicate these experiences;
– Vietnam law does not imply a required minimum amount of investment capital/charter capital for setting up NewCo providing freight transport agency services. We kindly suggest the investment capital/charter capital should feasible with scale of investment project, e.g. it could start from US$ 200,000.
– Business location and instruments necessary for the business must comply with requirements for technology safety and environment protection (if any).
II. PROFESSIONAL FEE
Our professional fee shall be US$ 6,000 (U.S. Dollars Six thousand), in particular:
– Preparation of the application documents: US$ 2,000 (U.S. Dollars Two thousand);
– Licensing procedure: US$ 4,000 (U.S. Dollars Four thousand); – 10% Value Added Tax: US$ 600 (U.S. Dollars Six hundred).
– Total estimated professional fee inclusive of VAT: US$ 6,600 (U.S. Dollars Six thousand and six hundred).
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