SBLAW would like to provide you some information on setting up wholly foreign invested company (Hereinafter referred to as “FIC”) for conducting import and export agricultural products in Ho Chi Minh City as follows:
1. General Comments
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 2014 is only 15 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.
With respect to several cases that involves with relocation of 10,000 people or more in highlands; 20,000 people or more in other areas or requirement for changes of land purposes or project in several special field such as Construction and operation of airports; air transport; Construction and operation of national seaports; Petroleum exploration, extraction, and refinery etc, it shall require for approval from the National Assembly, Prime Minister or Provincial People Committee before starting the licensing process. In this case, we assume that your case is not subject to such requirement for approval. However, we reserve our right to re-quote our professional fee and amend the work schedule if your case is subject to approval of the National Assembly, Prime Minister or the Provincial People Committee. In order to setup a FIC, it shall require you to undergo two following steps:
Step 1: Obtainment of Investment Certificate. The Law requires that within 15 working days from submission of the application dossier the competent authority shall have to issue the Investment Certificate for Foreign Investor. However, having preliminarily discussed with the Licensing Authority, we do not much expect that the licensing authority can comply with this requirement in practice, especially, those relating to conditional investment sectors. For granting the 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:
- 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.
- Your financial ability, investment capital to put in the Investment Project, facilities and human resources serving the implementation of such investment project in Vietnam.
Step 2: After obtainment of Investment Certificate, Client shall be required to obtain the Certificate of Business Registration. The Law requires that within 05 working days from submission of application dossier, the competent authority shall have to issue the Certificate of Business Registration for forming the Foreign Invested Company.
2. Specific comments
Vietnam Law grant right for Foreign Investor to import and export goods not fall to the list of products inhibited or prohibited from import and export. However, export and import right of FIC shall adhere with specific goods with 4 first digit number of HS Code. Then, upon submission of application dossier for setting up such FIC, we shall require you to furnish us a specific list of agricultural products with HS Code.
We also would like to note that, regarding to the export right of FIC, under Vietnam Law, FIC is not permitted to directly collect and buy agricultural products from farmers. Instead of this, FIC is only entitled to buy agricultural products through Vietnamese traders granted Business Registration Certificate (pursuant to Art.3 of Circular No. 08/2013/TT-BCT on detailing the goods trading and directly related activities of foreign-invested enterprises in Vietnam dated April 22th, 2013 issued by the Ministry of Industry and Trade). Regarding to the import right of FIC, under Vietnam Law, FIC is not allowed to sell imported products to end users. It must sell imported products to licensed trading companies in Vietnam.
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