This is further our discussion held at our Hanoi Office from which you requested us to assist in setting up foreign invested company, (hereinafter referred to as “FIC”) in Phu Tho Province.
Upon establishment, the FIC shall engage with manufacture of knives for machines or for machine appliances. Thus, we are pleased to present herewith our Legal Service Proposal for your kind reference.
1. CASE BRIEF AND OUR COMMENTS
Case brief
It is our understanding that you would like to establish a FIC in Vinh Phuc Province for manufacturing knives for machines or for machine appliances.
Capital structure of the FIC shall be as follows:
– Thailand Investor: 75%
– Vietnamese Citizen: 25%
We also further note that you would like to complete the licensing process as soon as possible so that you can quickly conduct renovation in the leased factory and start the official operation soon.
We further acknowledge that you already set up a foreign invested company in Binh Duong Province with the same capital structure and registered business activities.
However, the foreign invested company in Binh Duong has not yet established factory. In your long term business plan, you shall register Hanoi Office as Head Quarter of the Company and Ho Chi Minh City as Branch Office which shall mainly carry out distribution of manufactured products.
Our comments
In light of above, we are of opinion that you shall have three following options to carry out your business plan:
– Option 1: You shall setup an independent FIC in Vinh Phuc for manufacturing knives. After that you shall liquidate the company in Binh Duong and setup new branch office in replacement;
– Option 2: You shall move the FIC from Binh Duong to Vinh Phuc and then setup new branch office in Vinh Phuc;
– Option 3: You shall setup a branch office in Vinh Phuc. After that, you shall consider converting Branch Office in Vinh Phuc to Head Office and Head Office in Binh Duong to Brach Office.
Having carefully studied and consulted relevant parties, including licensing authorities in both of Binh Duong and Vinh Phuc on no name basis, we are of opinion that:
Option 1: This option is not recommended due to that it shall take you both time and cost.
– Option 2: This option shall save you much cost and it is highly recommended by the competent authorities both in Vinh Phuc and Binh Duong. However, please note that before moving the FIC from Binh Duong to Vinh Phuc, you shall have to carefully work with the tax agency in Binh Duong so that they can confirm that your company in Binh Duong has no outstanding tax debt. Then, the dossier shall be sent to Hanoi for final approval. You should select this option if you can have good support from an experienced and qualified tax advisor in Binh Duong. Then, you can have best plan for time required for settling tax matter with Tax Department of Binh Duong. After that, it shall take you about 2,5 weeks to complete the licensing process in Vinh Phuc for operation of the Company.
– Option 3: Establishment of branch office in Vinh Phuc shall not take you much time. According to our practical experience in similar previous case, we can complete the establishment of the branch office in Hanoi within 2,5 weeks after submission of the application dossier to the competent authority. However, please note that, Vietnam does not have official legal framework for converting Head Office to Branch Office and from Branch Office to Head Office. It does mean that we shall move the Head Office fromBinh Duong to Vinh Phuc and Branch Office to Binh Duong in a same time. Then, you shall have closely work with Tax Authorities in both Vinh Phuc and Binh Duong before coverting.
2. SCOPE OF WORKS
Following works are proposed based on the request of Client. However, depending on the specific position/situation of Client, several work items may not be necessary.
Meanwhile, other works may be required. SB Law shall immediately advise Client the same upon review documents of the case. However, any additional works shall not fall under the scope of this Legal Service Proposal Letter, but could be provided upon request. Preparation of the application documents:
Notifying application documents required in accordance with Vietnamese law;
Drafting application documents required for submission purpose in English language;
Liaising with you 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 Client’s 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 Certificate of Business Registration Post-licensing procedures:
Placing an announcement in data base of company registration;
Obtaining Seal Sample. Our estimated timeline shall be as follows:
a. 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 working days.
b. Licensing Procedure: – 02 working days from receipt of documents duly signed and sealed from Client, we shall submit the application dossier for starting the licensing procedure. It shall take about 15 working days from submission of application dossier to the competent authority for the provincial licensing authority to grant the Certificate of Enterprise Registration for Option 2/ Certificate of Branch Office Operation Registration for Option 3.
c. Post licensing: – Within 05 working days we shall complete the post licensing procedures such as publishing the FIC in National Database of Enterprise Registration, obtaining seal;
