Note on Setting up a Representative Office in Vietnam

Setting up a representative office is considered one of the simplest forms of investment in Vietnam.

The representative office will help the foreign trader to lease office, hire people, open bank account, and promote the business activities in Vietnam market.  The chief representative if being foreigner will then could apply for work permit and temporary residence card to stay in Vietnam.  There is no income tax as the representative office therefore the liability to maintain a representative office is less hassle.  When the purpose of setting up representative office in Vietnam has been achieved, the closing down of the business shall be not as challenging as closing down a company.

According to Vietnam laws, representative office is a dependent unit, representing the foreign entity’s interests in Vietnam. Representative office is established by foreign entities to help them liaise, implement research activities, provide information and support them in seeking new partners as well as having understanding of the new market.

The foreign entity has to meet certain conditions before setting up representative office in Vietnam. It has rights and duties in accordance with Vietnam laws.

When preparing the application for license of representative office in Vietnam, the foreign entities have to note the following.

Prepare the application forms

The application forms as issued by Ministry of Industry and Trade. The application must be signed by legal representative of the foreign entity;

Notarize, legalize and authenticate documents

The foreign entity has to prepare and provide business registration certificate, audited financial report, charter, and office lease memorandum of understanding, passport of the legal representatives of the Representative Office in Vietnam. The documents issued in foreign countries have to be notarized, legalized and authenticated (apostille procedures) in accordance with Vietnam laws to be used in Vietnam. If the business registration certificate or alternative documents have expiry date for business entity’s operation, the remaining time must be at least one year;

Who should be the chief representative?

The Chief Representative of the Representative Office in Vietnam must be different from the Director of the foreign entity.

How long does it take?

It would take around 20 business days since application until receiving the business operation registration of representative office.

Source: ANTLawyers.vn

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Vietnam Temporary Residence Card for Foreigner

Under the provision of the Law on entry, exit, transit and residence of foreigner in Vietnam, temporary residence card is paper issued by the immigration management agency or the competent authorities under the Ministry of Foreign Affairs for foreigner. Accordingly, foreigner is allowed to reside for a definite time in Vietnam and the temporary residence card can replace visa.

Temporary ResidenceCard in Vietnam

The cases that are eligible for temporary residence card granting:

_ Foreigners who are members of diplomatic representative missions, consular offices, representative missions of international organizations under the United Nations, intergovernmental organization in Vietnam and spouse, child under 18 years old and maid are granted the temporary residence card with symbol NG3.

_ Foreigners who are granted visa with the symbol LV1, LV2, ĐT, NN1, NN2, DH, PV1, LĐ, TT shall be granted temporary residence cards with similar symbols with the symbols in their visas

In which the meaning of the symbols in the visa is understood as follows:

_ LV1: Issued to person coming to Vietnam to work with departments, units and agencies directly under the central of the Communist Party of Vietnam; The National Assembly, the Government, the Central Committee of the Vietnam Fatherland, the Supreme People’s Court, the Supreme People’s Procuracy, State Audit, ministries, ministerial-level agencies, agencies attached to the Government; Provincial Committees, Party Committees, People’s Councils, People’s Committees of provinces and cities under the Central Government.

_ LV2: Issued to person coming to Vietnam to work with the political – social organizations, social organizations, Vietnam Chamber of Commerce and Industry.

_ ĐT: Issued to foreign investors in Vietnam and foreign lawyers practicing in Vietnam.

_ NN1: Issued to person who is the head of the representative office, project of international organizations and international non-governmental organizations in Vietnam.

_ NN2: Issued to the head of the representative office or branches of foreign business entity, representative offices of economic, culture and other professional organizations of foreign countries in Vietnam.

_ NN3: Issued to person coming to Vietnam to work with foreign non-governmental organizations, representative offices or branches of foreign business entities, representative offices of economic, culture and other specialized organizations of foreign country in Vietnam.

_ TT: Issued to foreigners who are spouses, children under 18 years of foreigners that are granted visa with symbols LV1, LV2, ĐT, NN1, NN2, DH, PV1, LĐ or foreigners who are parents, spouses and children of Vietam citizen.

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How To Set-up Trading Company in Vietnam

Investment in setting up trading company in Vietnam is considered as investment in conditional investment areas

Once an underdeveloped country, in the last two decades Vietnam has shown an incredible growth in the world economic scene, especially in the criteria of investment attraction. For a foreign company that is interested in expanding the business in a new country or region, Vietnam is a promising destination. In order to start a company or specifically a trading company in Vietnam, foreign investor should comprehensively understand the formality and function of the legal entity to be formed according to Vietnam Law. The consultancy and guidance of skilled and qualified lawyers in Vietnam law firm throughout the process shall mostly be needed.

The legal basis for a foreign company to set up a company in Vietnam is stated in the Enterprise Law of Vietnam: foreign organizations and individuals will be entitled to establish and manage enterprises in Vietnam in accordance with this law, with some exceptions.  Foreign investors may invest in the form of 100% foreign- owned capital to establish limited liability companies, joint-stock companies, partnerships or private enterprises under the provisions of the Enterprise Law and relevant laws.

The foreign investor shall mostly needs to fulfill the investment registration procedures at provincial-level state agencies in charge of investment in order to be granted the investment certificates, in accordance with Vietnam law in investment. The dossier required for the investment registration shall comprise of an examination dossier, papers showing the capability to satisfy the conditions which the project is required by law to satisfy, for investment projects in conditional investment domains i.e. specific goods to be traded at HS code level, experience in trading area, how the trading procedures would be carried out, potential business in Vietnam.

In particular, for investment capital, it should be noted that, trading company needs to commit larger investment in terms of capital, since its function is to identify competitive suppliers, negotiate and purchase their products and sell them through a distribution network in Vietnam. In the meantime, the investor needs to have experience in trading to run the business smoothly and efficiently. The investor should explain why the company would contribute to the development in Vietnam when applying for investment license at Department of Planning and Investment, and Ministry of Trade and Commerce.

Our lawyers of foreign investment practice at ANT Lawyers are available to advise and provide client with service and representation in Vietnam.

Source: ANTLawyers.vn

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How to Set-up Travel Services Business in Vietnam

Foreign investor could only set-up joint venture with Vietnam travel agency to set-up travel services business in Vietnam because transport of passenger belongs to investment areas with conditions applied to foreign investor inVietnam.

No one could deny that information technology has tremendously changed the way travel services business operates.  The use of booking reservation system application on smartphone and internet are widespread that make travel has never been easier.   Foreign investor would be interested to explore the travel services market. However, 100% foreign owned company is not allowed to set-up in travel services business in Vietnam. As this investment area is conditional, it is advised that a law firm in Vietnam should be consulted to ensure compliance with local regulations.

The application process and documents requirements are briefly as following:

I. Required documents:

1.      Application for the International Travel Business License (form);

2.      Certificate of business registration (copy – certified)

3.      Business plan for the international travel agency;

4.      Tour schedule

5.      Proof of at least 4 years of experience in international travel business operations

6.      Certified copies of the tourist guides’ cards whereby at least 3 international tourist guides are required

7.      Confirmation of bank deposit (as per regulations);

8.      Proof of office premises or legally registered place of business

II. Business License Application Procedure

1.      Submission of the required documents to the correct authority (Department of Culture, Sports and Tourism of the province/city where the business is headquartered).

2.      The Department of Tourism of the province/city completes the records of appraisal and submits a written request with the agency’s records to the Minstry of Culture, Sports and Tourism in Vietnam within ten working days from the date of receipt of a valid application. When cases are not eligible for the proposed permit to the state agencies, the provincial tourism department shall cite the specific reasons for refusal.

3.      The state management agency of tourism (VNAT – Ministry of Culture, Sports and Tourism) is responsible for reviewing and licensing the international travel business within ten working days from the date of both receipt of the file and written request of the state agency of tourism in the province. In case of refusal, the ministry shall state the specific reasons to the state and provincial tourism authorities

III. Number of records

– Submission to the Department of Culture, Sports and Tourism: 01

– Tourism Authority Filed in: 01

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How Foreign Entity Could Set-up a Branch Office in Vietnam

A foreign business entity or a foreign trader is allowed to set-up a branch in Vietnam to conduct business activities.

Having the right to conduct business activities and make profit are how a branch differs from a representative office in Vietnam.  A branch depends on the foreign business entity that set-up the branch while a foreign owned company set-up in Vietnam exists by itself.  The Vietnam Department of Industry and Trade will be approving the establishment of a branch in Vietnam while Vietnam Ministry of Planning and Investment will be the State agency that coordinate the setting up a company in Vietnam.

In particular, the branch of a foreign business entity in Vietnam (referred to as the “Branch”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to enter into contracts in Vietnam and conduct activities being the purchase and sale of goods and other commercial activities consistent with its licence for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

The Branch will need to apply and obtain the establishment license; and have a seal bearing the name of the Branch.

1. Rights of the Branch

• To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the branch.
• To recruit Vietnamese and foreign employees to work for the branch in accordance with the law of Vietnam.
• To enter into contracts in Vietnam in accordance with the activities stated in the license for establishment of such branch and in accordance with the Vietnam Law.
• To open Vietnamese dong and foreign currency accounts at banks which are licensed to operate in Vietnam.
• To remit profits abroad in accordance with the law of Vietnam.
• To have a seal bearing the name of the branch in accordance with the law of Vietnam.
• To conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

2. Requested conditions for establishment the Branch in Vietnam

A foreign company which has effectiveness business activities will be allowed to open the Branch in Vietnam if this company has real demand to open the market in Vietnam and meet some conditions as below:

• Being a trader recognized by the law of the country where it has been lawfully established or made its business registration;
• Having been operating for at least five years after its lawful establishment or business registration.

3. Issuance the Certificate of Branch:

The issuance of the Certificate of Branch will be implemented by the Department of Industry and Trade Department  after the foreign company meets all of conditions as Vietnam legal requirements.

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 law office Hanoiand Ho Chi Minh City, we are available to assist clients in licensing and post-licensing matters to help clients with all questions and services in setting up and maintaining the company or other form of business entities in Vietnam. We could be reached at email: ant@antlawyers.vnor office tel: +848 35202779.

Source: ANTLawyers.vn

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Industrial Design Registration in Vietnam

Industrial design is the appearance of the product which is expressed through shapes, lines, colors or combinations of these factors. 

A product as being commercially marketed will have a certain style with a combination of certain shapes, lines, colors, etc which is the design of the product. When a new design to be launched, if it attracts customers, there is a big chance there will be fake or imitated products.  Therefore, before a new design is launched, business owners need to conduct registration procedures for protection of industrial designs.  That is the action for the protection of its product design and the prestige of the enterprise in the market.  This protection will prevent the infringement of the design, therefore the registration of industrial design protection is essential.

ANT Lawyers’ services in the field of industrial design registration advice covers:  

• Look-up, assess and consult possibilities to register industrial design in Vietnam and abroad;

• Represent clients in applying for certificates of industrial design, record modification, extend degree of industrial protection in Vietnam and abroad;

• Evaluate the effectiveness of the certificate of industrial design registration and the possibility of industrial design rights violation;

• Implement of the protected industrial design rights: investigate, monitor, negotiate, seek arbitration or initiate a lawsuit or request other competent agencies for handling of infringement in Vietnam and abroad;

• Negotiate, draft, evaluate and register the of changing industrial design ownership in Vietnam and abroad;

• Advise on building strategies, brand development; For advice and specific details in each case, please contact us directly for advice.

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10 Questions to Ask Before Setting-up Company in Vietnam

Foreigners are encouraged to make investment in Vietnam through direct investment by Setting up company in Vietnam.

However there are restrictions in some cases in regard to investment capital, investment area, special licenses required. The investor is suggested to consult with a law firm in Vietnam for advice and service offering.

Before setting up business in Vietnam, ask yourself the following questions:

1. Which business should I invest in Vietnam?

There are non-conditional investment areas and conditional investment areas.  Establishing company in the non-conditional investement areas are more simple than in conditional investment areas.  Investment in IT services, manufacturing, management consulting, business promotion are a few samples of non-conditional investment areas.  Example of conditional investment areas are real estate, trading, travel agencies, freight forwarding…which are more complicated with investment conditions.  Investment conditions might also be changed over the time depending on the WTO commitments which Vietnam enters.

2. What should I name the business in Vietnam?
The company in Vietnam has to have Vietnamese name, and English name. The company could also have abbreviated name.  The name of the company in Vietnam indicates the structure of the company, the business lines, and the name that differentiate against other businesses.  For instance, the company could be named Alpha consulting limited liability company.

3. Where should I register the address of the business in Vietnam?
Not every address could be used to register a company.  The address has to be an address of a house with leasing agreement or office building which owner has license to operate as office building.

4. What is the legal structure of the company?
Depending on the number of investor contributing capital, company could be set-up as one member limited liability company or two ore more member limited liability company or joint stocks company.

5. How much capital is required to set-up a company in Vietnam?
The investment amount depends on the business plan and is subject to the approval of the provincial Department of Planning and Investment evaluating application dossier. In some business areas like real estate, banking and finance, minimum capital is required. In general for non-conditional investment area, the law does not specify the minimum capital to establish a company in Vietnam however the State agencies that evaluate investment plan could reject the investment project which are not feasible. Bank statement in foreign banks could be used to prove sufficient fund of investment capital.

6. Whom will be legal representative and work permit in Vietnam?
The investor will need to appoint the legal representative in Vietnam to oversee the business performance and take legal responsibility in Vietnam. If the legal representative is an expatriate, whom is a capital contributing member or owner of a limited liability company or a member of the Board of Management of a shareholding company which is registered to operate in Vietnam, he or she will be exempted from work permit in Vietnam. Otherwise, he or she will need to have a work permit to work in Vietnam legally.  The work permit holder would then apply for temporary residence card to live in Vietnam as long as the work permit allows.

7. How long does it take to set-up a company in Vietnam?
It depends on what type, scale, and whether or not conditions are required. For a simple minimum capital without conditions to set-up, it would take 30 working days. For setting up company in conditional investment areas i.e.  trading company in Vietnam, time would be lengthen due to the involvement of a number of State agencies approving the investment project and it would take 60 working days. For setting up company in other investments in areas requiring conditions to meet, time might be taken depending on the type of conditions and the government agencies evaluating the conditions of investment.

8. Whom will be granting the investment license in Vietnam?
For most of the investment projects, the provincial state agencies with the approval of the Department of Planning and Investment (DPI) will be granting the Investment Certificate in Vietnam. However, depending on the type, scale, and whether or not conditions are required, other Vietnam State agencies might be involved. For the case of trading company, ministry of trade and commerce, ministry of finance, provincial people’s committee will be reviewing the investment application dossier as well.

9. What are the tax liability in Vietnam?
Major taxes in Vietnam are corporate income tax, import and export tax, value added tax, and personal income tax in Vietnam. In some special areas, there are other taxes. The corporate income tax is currently at 22% and will reduce to 20% beginning 2016. Export is mostly encouraged as such the export tax is 0 however there are special cases when export tax is larger than 0. Import tax varies according to tariff. Value added tax is mostly at 10% however in some cases, VAT could be 5% or 0%. Personal Income tax varies according to income level and is applicable from VND 9,000,000 above.

10. What are mandatory reports submissions requirement in Vietnam?
Companies are required to keep accounting books, prepare and submit tax reports on monthly, quarterly and annually. Foreign companies are also required to have financial audit taken before the financial year end. The financial year in Vietnam is from January to December and the deadline to submit financial report is March 30th for the previous year. Other reports are required to be submitted at other State agencies.

Source: ANTLawyers.vn

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