SB Law would like to provide legal frame on possibilities of formation of foreign invested company for software (Digital Content Product) manufacture and development; e-commerce portal in Vietnam as follows:
1. BRIEF SUMMARY OF BACKGROUND AND OUR COMMENTS
It is our understanding that foreign company duly established and operating under the law of foreign country intends to set up a wholly foreign invested company in Vietnam for software (Digital Content Product) manufacture and development; ecommerce portal.
Under Vietnam WTO’s Commitments, foreign investor is entitled to establish wholly foreign invested company to manufacture software (Digital Content Product) manufacture and development in Vietnam.
We would like to note that e-commerce portalis not mentioned in Vietnam-WTO Commitment. Thus, Vietnam Competent Authorities are not obligated to open market for Foreign Investor to carry out these activities in Vietnam.
According to the Decree No 52/2013/ND-CP dated May 16, 2013 of the Government on e-commerce, E-commerce activity is the conduction of a part or the whole process of commercial activities by electronic means connected to the Internet, mobile telecommunications network or other open networksand E-commerce website (hereinafter referred to as website) is the electronic information pages set to serve a portion or the whole process of buying and selling activities of goods or provision of services, from display and introduction of goods or services to contract commitment, service provision, payment and after-sales service.
According to our practical experience, several foreign investors were permitted to setup foreign invested company to provide e-commerce services in Vietnam. The foreign invested company was form under either of Joint Venture Company and Wholly Foreign Invested Company. In order to secure high possibility of success, we strongly recommend you to consider following factors:
Although Vietnam Law does not impose any minimum rate of charter capital for the above mentioned business activities. Accordingly, the foreign investor shall be self responsible for its estimate of sufficient charter capital to be injected into the Company in Vietnam for running its business project.
Investor who acts as owner or shareholder of the Company in Vietnam must provide sufficient evidence that it has good experience in the field, especially those relating to e-commerce services.
2. SETTING UP WHOLLY FOREIGN INVESTED COMPANY
The establishment of the new company 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 foreign invested company 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 20 - 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.
Under Vietnam Law on Investment, for incorporating a foreign invested company
(Hereinafter referred to as “FIC”), you are required to propose an Investment Project initially to obtain 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:
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.
Your financial ability, investment capital to put in the Investment Project, facilities and human resources serving the implementation of such investment project in Vietnam.
Head office of the FIC should be in line with master plan of the City.
The roadmap for the incorporation of the FIC for trading activities can be described in following steps as follows:
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 05-07 working days. The prepared documents shall then be sent to you for review, signing and seal.
Submission of application dossier:Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority. 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.
In some case the process can be longer as it takes time to consult relevant Ministries such as Ministry of Industry and Trade, Ministry of Planning and Investment, Ministry of Finance, Ministry of Information and Communication and State Bank of Vietnam.
Post licensing:Within 13 working days we shall complete the post licensing procedures such as publishing the FIC in News Paper, obtaining seal and tax code registration.
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Preparation of the application documents: Notifying application documents required in accordance with Vietnamese law; Drafting application documents required for submission purpose; |
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Liaising with S&B Law to discuss the draft application documents; Amending the application documents based on client’s 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. |
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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 your company updated on the developments and additional requirements, if any; and Assisting client in obtaining the investment certificate. |
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Post-licensing procedures: Upon the issuance of the investment certificate, the FIC shall be required to carry out immediate administrative procedures. Our services include: Obtaining the seal of the FIC; Obtaining the FIC’s tax code; and Placing an announcement on the establishment of the FIC in the newspaper.
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If you would like further information on Software Vietnam Company Formation , please either email to our Partners at: info@sblaw.vn or call to our Office:
Ha Noi Office: +84 (4) 62 62 0246
HCM Office: +84 (8) 35 208 101.
