Investor: We are a Hongkong holding company in retail Food & Beverage sector currently with 5 outlets in Hongkong. We are seeking to expand to Ho Chi Minh and plan to start with 3 retail food outlets soonest possible.
After doing some reading online on company setup in Vietnam, we plan to setup a 100% foreign owned LLC probably under individual names rather than our holding company incorporated in Hongkong to simplify & speed up the process.
Appreciate if you can advise type of documents required, time frame and total cost of the application to obtain the Investment Certificate/Business Registration Certificate.
Lawyer: Regarding to setting up FIC for food or beverage retails in Vietnam, from the year of 2015, Vietnam shall totally open market for foreign investors. However, at the beginning, every thing is totally new and it took us a little bit time to get the preliminary consult from the competent authority. We are sorry if our delay in response causes any inconvenience to you.
We would like us to advise on establishment of 100% Foreign Invested Company (hereinafter referred to as “FIC’) for food retail in Ho Chi Minh City. We are therefore grateful to present you hereinafter our Legal Services Proposal for your review and consideration.
1. SUMMARY OF BACKGROUND AND PRELIMINARY COMMENTS
1.1. SUMMARY OF BACKGROUND
According to information as provided by you, we understand that Client would like to setup a wholly FIC in Ho Chi Minh City for food retail. The owner of the FIC shall be an individualother than holding company incorporated in Hongkong.
1.2. PRELIMINARY COMMENTS
1.2.1. REGULATION ON SETTING UP FOREIGN INVESTED COMPANY IN VIETNAM
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.
Generally, 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:
a. 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.
b. Your financial ability, investment capital to put in the Investment Project, facilities and human resources serving the implementation of such investment project in Vietnam.
1.2.2. SPECIFIC COMMENTS
Food and beverage retail is classified to CPC 642 and CPC 643. According to Vietnam-WTO commitments, from the year of 2015, it is possible for foreign investor to setup FIC for food or beverage retails without any specific restriction1licensing authorities in Ho Chi Minh City, it was confirmed that application of FIC for food or beverage retail shall be considered from the year of 2015. Thus, in general, you shall not face with difficulty to obtain the approval from competent authority.
However, according to our practical experience in previous cases, we highly recommend you carefully consider following factors:
– Location for food retail must be compliant with master plan of the City. Under Vietnam Law, upon submission of application dossier for setting up the FIC, you must show relevant documents regarding to the location for food retail. It shall be considered as one of important factors during the licensing process.
– Investment Capital: Vietnam Law does not apply any minimum capital requirement for this sector. However, Client shall be required to provide explanation on financial capacity and investment capital for the Company. It must make sure that the investment capital is sufficient for running the company in long term.
– Experience of the Investor who shall register the company shall be carefully checked.
Generally, Vietnam Government favours experienced investor. Then, company incorporated in Vietnam having same business sector shall be much more convenient.
1.2.3. Licensing Process
The roadmap for the incorporation of the FIC can be described in following steps 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 07 working days.
b. Licensing Procedure: 02 working days from obtaining signed and sealed documents from you, we shall submit the application dossier for starting the licensing procedure. It shall take about 3-4 months from submission of application dossier to the competent authority for the provincial licensing authority to grant the Investment Certificate.
c. 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.
