ANT Lawyers

Vietnam Law Firm with English Speaking Lawyers

ANT Lawyers

Vietnam Law Firm with English Speaking Lawyers

ANT Lawyers

Vietnam Law Firm with English Speaking Lawyers

ANT Lawyers

Vietnam Law Firm with English Speaking Lawyers

ANT Lawyers

Vietnam Law Firm with English Speaking Lawyers

Thứ Năm, 14 tháng 7, 2016

HOW FOREIGN ENTITY COULD SET-UP REPRESENTATIVE OFFICE IN VIETNAM

A foreign business entity or a foreign trader is allowed to establish Representative Office in Vietnam according to the Commercial Law No 36/2005 and Decree No. 72/2006/NĐ-CP dated July 25th, 2006 detailing the commercial law regarding Vietnam-based representative offices and branches of foreign traders.


Representative office of a foreign business entity in Vietnam (referred as “Representative Office”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to survey markets and to undertake a number of commercial enhancement activities permitted by the law of Vietnam.  Representative Office will need to apply and obtain the establishment license; and have a seal bearing the name of the representative office.
Setting up a Representative Office is less complicated from setting up a company in Vietnam.  The Vietnam Department of Trade will be approving the establishment of Representative Office in Vietnam while Vietnam Ministry of Planning and Investment will be the State agency that coordinate the setting up a company in Vietnam.  The time duration to establish a Representative Office is shorter than to establish a company.  There are fewer conditions to meet than conditions in setting up a company in Vietnam.  The main difference between a Representative Office and a company in Vietnam is that the Representative Office could not directly conduct profit making activities.
Rights of the Representative Office:
  • To operate strictly in accordance with the purposes, scope and duration stated in the license for establishment of such representative office;
  • To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the Representative Office;
  • To recruit Vietnamese and foreign employees to work for the Representative Office in accordance with the law of Vietnam;
  • To open accounts in foreign currency and in Vietnamese Dong sourced from foreign currency at banks which are licensed to operate in Vietnam, and to use such accounts solely for the operation of the Representative Office.
Obligation of the Representative Office:
  • Not to directly conduct profit making activities in Vietnam;
  • Not to enter into commercial contracts of the foreign business entity or to amend or supplement such contracts already signed except where the head of the Representative Office has a valid power of attorney from the foreign business entity;
  • To pay taxes, fees and charges and to discharge other financial obligations in accordance with the law of Vietnam;
  • To report on the operation of the Representative Office in accordance with the law of Vietnam
A foreign company which has effectiveness business activities will be allowed to open the Representative Office in Vietnam if this company has real demand to open the market in Vietnam and meet conditions as below:
  • Being a business entity or trader recognized by the law of the country or the territory (hereinafter referred to collectively as the country) where it has been lawfully established or made its business registration;
  • Having been operating for at least one year after its lawful establishment or business registration in its country.
The issuing period will be within 20 working-days after the date of submitting the full valid documents as requested.
At ANT Lawyers, a law firm in Vietnam with offices in Hanoi and Ho Chi Minh City, we are always able to assist clients in licensing and post-licensing matters to help clients with all questions and services toestablish a company in Vietnam or other form of business entities in Vietnam. We could be reached at email:ant@antlawyers.vn or office tel: +848 35202779.

WHICH AUTHORITY APPROVES BUSINESS SETTING UP IN VIETNAM?

Investment projects in Vietnam could be evaluated and approved for business setting-up at top level of the government, at ministerial levels or at the provincial levels.
The licensing authorities for business setting up in Vietnam has been divided to distribute workloads at different state agencies with aim to speed up the process and attract more quality investment projects in Vietnam.

In practice, the process for establishing companies or executing investment projects in Vietnam would take from one month for simple project, three to six month for areas categorized under conditional investment areas, requiring sub-licenses, or additional time for more complicated projects.  At the provincial levels, there might be inconsistency between cities and provinces due to different interpretation of laws.  For investment project with difficulty to manage, the provincial levels would need to consult with technical department of central government agencies, as such the time taken to process the investment certificate would be lengthen.
Understanding the mechanism and the work division of Vietnam authorities that evaluate and approve business licensing at different government agencies would help foreign investors to smoothen the process and improve their experience in Vietnam.
It is notable that, the government level will be focusing on significant projects, in special area at large investment capital with impact on social economic situations.  Most of the investment licensing procedures will be carried out at the provincial levels where the investment projects exist.
The following will point out directions for foreigners to approach respective agencies based on the particular area of interests, scale, and nature of the investment.  However, to avoid delay and increase effectiveness, it is advisable that the foreign clients would consult with Vietnam law firms to help advise and represent them in preparing and executing the investment in Vietnam.
I. Projects evaluated and granted investment licensing at government level
Depending on the business nature, industry sector, investment scale, and investment policy, the Vietnam Prime Minister, on behalf of the government will evaluate and approve investment licensing for setting up business.
1. The investment project in Vietnam the government will evaluate and approve regardless of funding, the scale of investment are in the following areas:
a) Development and commercialization of airports and air transport;
b) Development and commercialization of national port;
c) Exploration, mining and processing of oil and gas; exploration and exploitation of minerals;
d) Radio, television;
e) Casino;
f) Production of cigarettes;
g) Establishment of university level educational institute;
h) Establishment of industrial zones, export processing zones, high-tech zones and economic zones.
2. Although investment projects which do not fall under the cases listed above, but the government of Vietnam also evaluates and approves investment project with investment capital of VND 1,500 billion (around USD 75 mil) upwards regardless of funding and in the following areas:
a) Sales of electricity, mineral processing, metallurgical;
b) Construction of railway infrastructure, roads, inland waterways;
c) Production, sales of wine and beer.
3. Further, the government of Vietnam also evaluates and approve investment projects with foreign investment in the following areas:
a) Maritime transport;
b) Establishment of networks and provision of postal services, courier, telecommunication and internet; network setup and signal transmission;
c) Printing and distribution of newspapers; publication;
d) Establishment of independent scientific research.
4. Where the investment projects specified in the above cases are in the plan which the Prime Minister has approved or authorized other agencies to approve, and that the investment projects meet the conditions prescribed by law and treaties to which Vietnam Nam is a member, the agency granted investment certificates perform the procedure for issuance of investment certificates is not required to submit to the Prime Minister to decide on the investment policy.
5. Where the investment projects specified in the above case is not in the plan which has been approved by the Vietnam Prime Minister or authorized other agency to approve, and that the projects do not meet the conditions for market access provisions in international treaties which Vietnam is a member, the agency granted investment certificates shall consult with other of relevant industries and submit to the Prime Minister for investment policy decision.
II. Projects evaluated and granted investment licensing at ministerial level
1. The Vietnam Ministry of Planning and Investment shall evaluate and approve licensing for investment projects in the form of BOT, BTO, BT.
2. Other ministries will be evaluating and granting license for investment in some sectors.
a.Vietnam Ministry of Commerce and Industry shall evaluate and approve licensing for investment project in oil and gas sector;
b. Vietnam State Bank shall grant licensing for financial institutions;
c. Vietnam Ministry of Finance shall be responsible for issuing license for investment project of insurance business.
III. Projects evaluated and granted investment licensing at provincial levels
1. Department of Planning and Investment shall be the single point of contact that receive the application and evaluate the investment plan of the foreign investors wishing to establish business in Vietnam for projects
a. Outside of Industrial Zone, Industrial Processing Zone;
b. Infrastructure development project for Industrial Zone, Industrial Processing Zone which management board of industrial zone and industrial processing zone are not yet established.
2. The management board of Industrial Zone, and Industrial Processing Zone:
a. For investment projects within the Industrial Zone, and Industrial Processing Zone which are not under the authority of the Prime Minister;
b. Infrastructure development project to for industrial zone and industrial processing zone.

NEW GUIDANCE ON VIETNAM CORPORATE LAW FOR LISTED COMPANY

ANT Lawyers – A new law provides guidance on Vietnam corporate laws for consolidated or merged companies listed on Vietnam Stock exchange has been issued by Vietnam Ministry of Finance.  The recently issued Circular 73/2013/TT-BTC specifically provides guidance on the conditions and procedures for listing shares of a company after consolidation or merger. The circular references a number of articles of the Securities Act by the Vietnam Ministry of Finance and provides guidelines for listed securities already stated in Decree 58/2012/ND-CP on Law on Securities. According to the new guidelines, listed companies that consolidate with companies that are not listed on the HCM City Stock Exchange and want to list shares after the merger, must arrange it so the unlisted company meets the following conditions before the merger takes place: 

  • At least 2 years of operation in the form of a joint stock company by the time the company was formed after the consolidation; the after-tax rate of ROE (return on equity) for the last year must be at least 5% and the businesses and operations of two years immediately preceding the year of the merger must be profitable;
  • No debt overdue for more than 1 year;
  • No accumulated losses until the consolidation;
  • Finally, the company must meet the general conditions for listing securities of the Securities Decree 58/2012/ND-CP.
 This Circular is effective from the date of July 15th 2013.
ANT Lawyers
Your lawyers in Vietnam

CASES THAT FOREIGNERS DO NOT HAVE TO APPLY FOR WORK PERMITS

Pursuant to Decree No. 11/2016/ND-CP of the Government that will take effect April 1st 2016, the below cases of foreigner will not have to apply for work permit in Vietnam:




  • As capital contributing members or the owner of limited liability company.
  • As member of the Managing Board of the joint stock company.
  • As Head of the representative office, project of international organizations, non-governmental organizations in Vietnam.
  • Entry into Vietnam for less than 03 months to carry out the service offering.
  • Entry into Vietnam for less than 03 months to handle the incidents, technical situations and complicated technology arising that influence or threaten to production and business that Vietnam expert and foreign experts that currently in Vietnam cannot handle.
  • As foreign lawyers that are licensed to practice law in Vietnam under the provisions of the Law on Lawyers.
  • Under the provisions of the international treaties in which the Socialist Republic of Vietnam is a member.
  • As pupils and students studying in Vietnam and working in Vietnam but the employer must notify 07 days with state authorities on the provincial labor.
  • Moving within the enterprises in the range of 11 service sectors in the service commitments of Vietnam to the World Trade Organization, including: business, communication, construction, distribution, education, environment, finance, health, tourism, culture and transport;
  • Entry into Vietnam to provide advisory services and technical expertise or perform other tasks to serve the research, construction, appraisal, monitoring, evaluation, management and implementation of programs and projects funded with official development assistance (ODA) as prescribed or agreed in international treaties on ODA signed between the competent authorities of Vietnam and foreign countries;
  • Granted the work permit on information and press in Vietnam by the Vietnam Ministry of Foreign Affairs in accordance with law;
  • Sent to Vietnam by agencies and foreign organizations to teach and research in the international school under the jurisdiction of the foreign diplomatic representative agencies or international organizations in Vietnam or the Ministry of Education and Training certificated for teaching and researching in the educational and training institutions in Vietnam;
  • Volunteers certified by the foreign diplomatic representative agencies or international organizations in Vietnam
  • Entry into Vietnam working in the positions of professional, manager, executive or technical employees with working duration of less than 30 days and no more than 90 cumulative days in 01 years;
  • Entry into Vietnam to implement international agreements that agencies and organizations at the central and province have signed as in accordance with law;
  • Pupils and students studying in abroad schools and training institutions that have internship agreements in the agencies, organizations and enterprises in Vietnam;
  • Relatives of members of foreign representatives in Vietnam working after licensed by the Ministry of Foreign Affairs, except the case where international treaties that the Socialist Republic of Vietnam is a member that have other regulations;
  • Have official passport to work for state agencies, political organizations and political – social organizations;
  • Other cases decided by the Prime Minister on the proposal of the Ministry of Labour – Invalids and Social Affairs.