To Start A Distribution Business With Foreign Capital Viet Nam

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TO START A DISTRIBUTION BUSINESS WITH FOREIGN CAPITAL

If the foreign investor would like to (i) start a Distribution Business (both wholesale and retail without opening wholesale or retail stores) (here in after referred to as “Business”), LHD Law Firm is able to provide consulting services for legal procedures as below:

1. LEGAL ADVICES

1.1. Exercising rights of importation and distribution

As per regulated at Provision 1, Article 4, Decree 23/2007/ND-CP dated February 12 2007 of the Government providing detailed guidance of Law of Commerce’s regulations on goods trading and directly related activities of FIEs in Vietnam (So called referred to as “Decree 23/2007/ND-CP”), an FIE is eligible to exercise its rights to import and distribute goods in Vietnam if it meets the following requirements:

- The Investor is from a country or territory which is a member of international treaties to which Vietnam is engaged and committed to open markets for goods trading activities and related;

- Form of investment must be consistent with the roadmap of commitments under international treaties to which Vietnam is a member and in accordance with the law of Vietnam;

- Goods and services must be in accordance with market opening commitments of Vietnam and with of the law of Vietnam;

- Scope of operation must be in accordance with the market access commitments of Vietnam and with the law of Vietnam;

- The business has the approval of the competent authorities in Vietnam.

According to Vietnam's commitments to the WTO, since 2009, foreign investors are entitled to import and distribute goods in the form of a company with 100% foreign capital.

To ensure the eligibility for licensing, in addition to the above conditions, you also have to ensure the following requirements:

- You must be a manufacturer of electric and electronic products expected to be distributed in Vietnam or be a trusted trader of electric and electronic products in the your country;

- The results of business operation in the your country must be positive, shown in the audited financial statements of the last two years;

- Registered office of the Company or wholesale, retail stores must be consistent with the planning of Vietnam. Normally, investors must have a rental office in an office building for the Company’s head office and/ or a place for wholesale and retail at a planned-in-advance trade center;

- Investment capital must be sufficient to ensure the feasibility to implement business projects in Vietnam.

1.2 Provide maintenance services

At the moment, Vietnam has no commitment on market access for appliance maintenance services. This means, the competent authorities of Vietnam has no obligation to open the door for foreign investors to participate in providing this kind of service in Vietnam.

However, according to our experience in previous similar cases, the competent authorities of Vietnam may consider allowing you to provide maintenance services for the electric and electronic products distributed by your company.

2. ORDER OF PROCEDURES

We would like to remind you that, process time of applying for establishment of foreign-invested capital company to import, distribute and maintain electronic and electrical appliances is 45 working days for investment evaluation and issue of certificate.

However, this process time in reality can be longer due to waiting for relevant Departments’ opinions on evaluating the application.

The procedures of applying for your investment certificate shall be done in these following steps:

a. Prepare the application for the Investment Certificate: We need to collect all of your essential information and papers. After that, we shall translate your papers from English into Vietnamese (if any) and prepare the application as per regulated by Laws as well as the authorities.

The application will be sent to you for your check-up and opinions if any adjustment or supplement is needed in the content of the application. After updating the application based on your opinions, we shall ask for the authorities’ initial opinions about the application. Finally, we shall send you the application for your signatures. It is supposed to take 10 days to complete this step.

b. Submit the application to the authorities: Within 02 working days since as to the date of receiving the application with full signatures and seals, we shall submit the application to the authorities. After 3 or 4 months from the date of submission of the valid application, you shall receive the Certificate of Investment.

c. Complete post-issue procedures: Within 13 working days since the date of receiving Investment Certificate, we shall complete all post-issue procedures such as announcement of business establishment printed in three consecutive issues of a newspaper, registration for tax code and seals.

Vietnam company formation

3. LAWYER’S WORK SCOPE

Our services include:

Scope of Services

1. Preparation of documents :

· Inform you of necessary papers during the procedures of business establishment;

· Prepare all the papers needed in the permit application including but not limited to application forms, authorization letters, Board of Directors’ resolution in English and Vietnamese as per Paragraph 2. Your needed papers such as documents or contracts related to a rented place, Investor’s company profile; or papers of any third party are not included here.

· Discuss with you during the preparation of any papers;

· Make adjustments based on your opinions;

· Receive the Authorities’ opinions;

· Complete the application based on opinions of the Authorities and the Client;

· Translate papers into Vietnamese for signatures (if needed).

2. Issue procedures:

· Submit the application to the authorities;

· Follow the application to receive the approval of the authorities;

· Update the progress as well as other requirements (if any) to the Client;

· Receive the result of application.

3. Post-issue procedures:

· Announce the establishment of Business on the media as requested;