This is reference to our discussion from which we were requested to advice for a Singapore Investor (hereinafter referred to as “Client”) to set up a 100% foreign invested company manufacturing wood pallet.
We are grateful to set our legal services proposal for your review and consideration as follows:
1. BRIEF SUMMARY OF BACKGROUND AND OUR COMMENTS
Under Vietnam Law, in order to setup a foreign invested company (hereinafter referred to as “FIC”), Foreign Investor is required to obtain an Investment Certificate from the licensing authority.
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 FIC 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 evaluate the investment project.
Under Vietnam Law on Investment, for incorporating a FIC, you are required to propose an Investment Project initially to obtain Investment certificate. The relevant licensing authority shall evaluate the legitimacy and the feasibility of such Investment Project to determine on granting of the Investment Certificate on the following factors:
a. The Investment Project must be in conformity with the socio-economic development and the location of business facilities of the FIC must be compliant with master plan of the competent authority. According to our practical experience, with respect to manufacturing wood pallet, Client should consider locating the Head Office of the FIC in Industrial Zones in Ho Chi Minh City. The Industrial Zone near by material zone shall be favored;
b. Proposed capital for the FIC. For manufacturing wood pallet, Vietnam Law does not require for minimum capital. However, the Investor must provide explanation regarding to possibility for the proposed capital to satisfy requirements for business scope of the FIC;
c. Technology used for manufacturing wood pallets must be compliant with requirement for environment protection under Vietnam Law.
The roadmap for the incorporation of the FIC for trading activities 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 10-15 working days.
2. 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 workings 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, Ministry of Finance and Ministry of Agricultural and Rural Area Development.
3. Post licensing: Within 13 working days we shall complete the post licensing procedures such as publishing the New Company in News Paper, obtaining seal and tax code registration.
2.SCOPE OF WORKS
SCOPE OF SERVICES
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 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 your company 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.
