10 Questions to Ask Before Set-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 investment 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 or 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.

ANT Lawyers is a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

 

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How to register patent in Vietnam?

Invention means a technical solution in the form of a product or process which is intended to solve a problem by application of natural laws. Each invention is the result of a serious, painstaking work-study process by the inventor. However, right of industrial property shall only be established by the registration procedure, and the scope of protection is defined in the patent. Therefore, without prior registration at governmental competent authorities, right of industrial property could be violated.

 

Register invention in Vietnam

With highly professional staff and great experience in IP aspect, ANT Lawyers would like to support you in registering patent in Vietnam as follow:

Required information

Title of invention/ utility solution;

Name, address and nationality of the applicant (s);

Name, address and nationality of the investor (s);

Information of priority document: Nation, number of applications and dossiers for priority right;

International dossiers/ or publication (if any).

Document

For dossiers applied as national application

01 original Power of Attorney – POA (No need for notarization). The Copy of POA shall be accepted for filling but the original shall be submitted within 03 months since the date of filling.

02 copies of an invention description. An invention description must consist of the section of invention description and the invention protection coverage;

02 Drawings, photos or description (if any);

01 notarized copy of document to prove prior right (only for dossiers have prior right under the Paris Convention). The document shall be submitted within 03 months since the date of filling.

For dossiers applied as PCT application.

03 English declaration for registration originating in Vietnam

02 copies of an invention description (including images, if any);

02 written request of protection;

Related documents (if any);

Dossiers can be submitted at National Office of Intellectual property or International Office or sent via post office.

ANT Lawyers -  A Law firm in Vietnam is supported by a team of experienced patent, trademark, design attorneys with qualification and skills handling full range of legal services relating to intellectual property rights in Vietnam. We have specialized in the preparation and registration of patents, trademarks and designs for our clients.

 

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How to Terminate the Employment Contracts in Vietnam Due to Economic Reasons

Termination of a labor contract is an event that terminates the employment relationship between the employee and the employer. In particular, there are many cases of termination of labor contracts such as the labor contract expires, the work stated in the labor contract has been completed, both parties agree to terminate the labor contract, the employer lays off the employee due to structural or technological changes or because of economic reasons, merger, consolidation or division of the enterprise or cooperative,…

 

In case more than one employee face the risk of unemployment for economic reasons, the employer shall propose and implement a labor utilization plan in accordance with labour code. Specifically, the labor utilization plan must contain the following main contents: list and number of employees who continue to be employed, employees sent for re-training to continue using; list and number of retired employees; list and number of employees transferred to work part-time; employees must terminate labor contracts and measures and financial sources to ensure the implementation of the plan.

In case the employer cannot employ and have to dismiss employees, the employer shall pay job-loss allowances to the employees. Accordingly, the employer shall pay a job-loss allowance to an employee who loses his/her job and has worked regularly for the employer for 12 months or longer. The job-loss allowance is equal to 1 month’s wage for each working year, but must not be lower than 2 months’ wage.

The working period used for the calculation of job-loss allowance is the total time during which the employee actually works for the employer minus the time during which the employee benefits from unemployment insurance in accordance with the Law of Social Insurance and the working period for which the employer has paid a severance allowance to the employee. The wage used for the calculation of job-loss allowance is the average wage in accordance with the labor contract during 6 months preceding the time the employee loses his/her job.

The dismissal of more than one employee in accordance with this regulation may be implemented only after discussion with the representative organization of the grassroots-level employees’ collective and notification 30 days in advance to the provincial-level state management agency of labor.

It is important for the employer to consult with dispute lawyers specializing in labour matters for the avoidance of potential dispute with the employee, and cause negative social impact when deciding to terminate contract due to economic reasons.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn

 

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How to Resolve Disputes in Employment in Vietnam?

A labor dispute is a dispute over rights, obligations and interests arising between parties in employment relationship. Labor disputes include individual labor disputes between employees and employers, and collective labor disputes between labor collectives and employers. When a labor dispute occurs, the competent agency, organization or individual will settle it on the basis of the measures and principles of labor dispute settlement prescribed in Chapter XIV of the Labor Code 2012.

 

Employment Dispute Law Firm in Vietnam

Measures for resolving labor disputes include: negotiation, grassroots conciliation, settlement of individuals and organizations competent to settle labor disputes.

For individual labor dispute resolution, labor conciliator, People’s Court is an individual or organization competent to resolve disputes. Labor conciliator; Chairman of the district People’s Committee; The People’s Court is competent to resolve collective labor disputes over labor rights and conciliators; The Labor Arbitration Council is competent to settle collective labor disputes about benefits.

Negotiation is a method of resolving a dispute in which the parties to a dispute deal directly with each other in order to reach an agreement on the settlement of the dispute. In fact, this is the most widely used solution. During the negotiation process, the parties will discuss issues related to the dispute, and propose solutions to resolve that dispute. The decision is made on the basis of agreement between the parties themselves and is not the result of any external pressure.

Unlike negotiation, conciliation is a method of resolving disputes involving third parties but not third parties make decisions but only support and guide the parties to negotiate. Under the provisions of Clause 1, Article 201 of the Labor Code 2012, individual labor disputes must go through the conciliation procedure of a labor conciliator before requesting a court to settle them, except for labor disputes on disciplinary measures in the form of dismissal or disputes over the unilateral termination of the labor contract; compensation for damages, benefits when terminating a labor contract; between domestic servants and employers; on social insurance in accordance with the law on social insurance, on health insurance in accordance with the law on health insurance; on compensation for damages between laborers and enterprises and non-business units that send laborers to work abroad under contracts. If the two parties reach an agreement, the labor conciliator shall make a record of successful conciliation. On the contrary, the two parties cannot reach an agreement, and the labor conciliator issues a conciliation plan for the two parties to consider and if the two parties accept the conciliation plan, the labor conciliator shall make a record of successful conciliation. In case the two parties do not accept the conciliation plan or a disputing party has been duly summoned for the second time but still absent without plausible reasons, the labor conciliator shall make a record of unsuccessful conciliation.

Dispute resolution by the Chairman of the district People’s Committee is the method to be applied when there is a request for resolving a collective labor dispute on rights. Chairpersons of district-level People’s Committees shall base themselves on labor laws, collective labor agreements, registered labor rules and legal regulations and agreements to consider and settle labor disputes dynamic.

The Labor Arbitration Council is the competent authority to settle collective labor disputes about benefits. At the meeting of the Labor Arbitration Council, there must be representatives of both parties to the dispute. The Labor Arbitration Council has the responsibility to assist the parties in self-negotiation. In case the two parties reach an agreement or accept the mediation plan, the Labor Arbitration Council shall make a record of successful mediation and issue a decision recognizing the agreement of the parties. In case the two parties fail to reach an agreement or one of the disputing parties has been duly summoned for the second time but still absent without plausible reasons, the Labor Arbitration Council shall make a record of unsuccessful mediation and after within 03 days, the labor collective has the right to carry out the procedures to go on strike.

Trial is a mode of resolving individual labor disputes and collective labor disputes over rights, in which the Court will issue a judgment or decision to resolve the case. The settlement of labor disputes in court is generally the final settlement activity after the dispute has been settled at other stages with no results. The settlement of labor disputes at the Court is done by a judicial body with special state power, proceeding according to the strict procedures and procedures prescribed in the Civil Procedure Code 2015. The greatest advantage of this method of dispute resolution is that the court’s decisions on labor disputes are guaranteed to be enforced by state coercive measures.

Employees as well as the labor collective and employers should pay attention to selecting the most appropriate and optimal resolution solution when labor disputes occur.  It is also suggested to consult with labour lawyers of law firm in Vietnam speacializing in employment matters for efficiency.

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What Are Penalty for Violations in the Field of Construction in Hanoi?

In any field, mistakes can occur but differ in actual consequences. Especially in construction activities, the consequences are difficult to predict, the violations in construction activities, to any extent, affect individuals and collective users. Therefore, the Hanoi City People’s Council issued Resolution No.07/2014/NQ-HDND prescribing the fine levels for a number of administrative violations in the field of construction.

 

This Resolution prescribes the fine levels for a number of administrative violations in construction activities in the Government’s Decree No. 121/2013/ND-CP of October 10, 2013 on sanctioning of violations. administration in construction activities; real estate business; exploitation, production and trading of construction materials; technical infrastructure management; housing and office development management (abbreviated to Decree No. 121/2013/ND-CP) in Hanoi city.

The Resolution provides a number of violations and penalties for corresponding acts of investors; of contractors and other organizations and individuals. In particular, the fine level prescribed for an administrative violation in the Resolution is equal to twice the fine level for the corresponding administrative violation in Decree No. 121/2013/ND-CP. The fines prescribed in Chapter II of this Resolution are those imposed on organizations. For the same administrative violation, the fine of an organization is 2 times that of an individual.

The titles competent to impose fines for administrative violations specified in Decree No. 121/2013/ND-CP are competent to impose penalties corresponding to the fines for the prescribed violations. in chapter II of this Resolution. Specifically, the subjects competent to sanction administrative violations under this Regulation include: Construction inspectors; Head of a specialized inspection team; Chief Inspector of Department of Construction; Chief Inspector of Ministry of Construction; Police; Market management; Presidents of People’s Committees at all levels

Above are the main contents of Resolution No. 07/2014/NQ-HDND of the Hanoi City People’s Council stipulating the fine level for a number of administrative violations in the field of construction, individuals and organizations should grasp to ensure their legitimate rights and interests. For compliance in the area of construction, it is important to consult with construction lawyers in Vietnam for advice.

ANT Lawyers is a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients.

 

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How to Determine the child custody in a divorce in Vietnam?

Upon divorce, in addition to dispute over property division, child custody dispute is also popular. How to determine the child custody in a divorce depends on many factors and the parties are suggested to consult with dispute lawyers in Vietnam in civil matters.  The following does not try to give legal advice but a brief opinions on the matters of concern for reference.

 

According to Vietnamese law, after a divorce, parents still have rights and obligations of looking after, caring for, raising and educating minor children or adult children losing their legal capacity or having no working capacity and no property to support themselves. The law always prioritizes agreement right of both parties. Accordingly, husband and wife shall reach agreement on the person who directly raises their children and on his and her obligations and rights toward their children after divorce. If they fail to reach agreement, the Court shall appoint one party to directly raise the children, based on the children’s benefits in all aspects. If a child is full 7 years or older, his/ her desire shall be considered. In addition, a under-36-months child shall be directly raised by the mother, unless the mother can not afford to directly look after, care for, raise and educate the child or otherwise agreed by the parents in accordance with the interests of the child.

In reality, opinion of the children is only regarded as orientation and reference for the Court to consider making decision, not as completely decisive meaning. The Court shall base on interests of the children to appoint one party to directly raise him/her, according to: living, current education of the children, occupation of the direct caretaker, accommodation condition after divorce, income, child care time… and some other elements of each party. Accordingly, the person being entitled to directly raise the children must prove themselves to provide the most favorable environment for normal development requirements of the children and have enough conditions for ensuring both economy and mental health. The person being entitled to directly raise the children must prove themselves to have enough material conditions (stable income, property, and accommodation…), mental condition (having enough time to be with the children, care for, raise them, always put the children at the forefront…) to make the children have more stable life and more developed than living with the other party. In addition, one of the parties can provide additional evidence to prove that the other party does not have enough material conditions and mental condition to raise the children or often has behaviors of violence, unstable income…

In case of request of a parent or individual, organization being entitled to request (Next of kin; The state management agency in charge of families; The state management agency in charge of children; The women’s union), the Court may decide to change the person directly raising a child. The change of the person directly raising a child shall be settled if there is one of the following grounds: (i) The parents agrees on change of the person directly raising a child in the interests of this child; (ii) The direct caretaker no longer has sufficient conditions to directly look after, care for, raise and educate the child. Like divorce settlement, desire of full-7-years or older child shall be considered in case of changing the person directly raising a child. Seeing that both parents fail to have sufficient conditions to directly raise a child, the Court shall decide to assign this child to a guardian.

Obligations and rights of indirect caretaker after divorce: (i) Respect the child’s right to live with the direct caretaker; (ii) Support this child; (iii) Visit and care for this child without being obstructed by any person after divorce. Direct caretaker is entitled to require the Court to restrict the right of the indirect caretaker if the latter takes advantage of his/her visit to and care for the child to prevent or adversely affect the looking after, care for, raising and education of this child.

In accordance with obligations and rights of indirect caretaker, direct caretaker also has obligations and rights toward indirect caretaker after divorce: (i) require the indirect caretaker to fulfill the obligations; (ii) require this person and family members to respect his/her right of raising the child; (iii) The direct caretaker and family members shall not prevent indirect caretaker from visiting, caring for, raising and educating this child.

ANT Lawyers - Marriage and Family dispute lawyers in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients.

 

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Contract Dispute in Vietnam

Disputes occur during contract performance are beyond the control of the entity entering contractual relations. In developed countries, lawyers always invited to advise customers to identify potential disputes, and provide solutions, support and provide legal advice and to accompany the enterprises solve disputes in accordance with the provisions of the law, which help businesses to focus on its business activities. The contract should be carefully reviewed by lawyers. Foreign companies when entering Vietnam mostly follow suit to engage dispute or litigation dispute lawyers in Vietnam at early stage of the transactions.

 

Contract Dispute

Contractual disputes in Vietnam shall be construed as conflicts, disagreements, conflicts between the parties regarding the implementation or non-implementation of rights and obligations in the contract. Disputes could arise in failure to collect the payment from debtor in sales agreement, construction contract disputes between investor and contractor, labour dispute between employer and employee, insurance disputes between ship owner and insurance company.

Contract disputes must satisfy the following factors:

First, there is a contract between the parties. The contract would be in different for ms therefore, there is a need to clearly define if the contractual relationship has been formed or not.

Second, there is a breach of obligations or duties that are in violation of a party in the contractual relationship.

Third, there is disagreement between the parties about the handling of infringement or the consequences of such violations.

It should be noted, the contract disputes arise from the breach. However, not all breaches of contract also lead to disputes.

How to settle the contract disputes in Vietnam?

Contractual disputes can be resolved by the following methods:

Negotiation is the process or behavior in which the two sides conduct exchanges, agreement on common interests and characteristics of disagreement and come to a unified agreement. The negotiation is without the presence of third parties. However, if the contract dispute lawyers in Vietnam would be involved during the negotiation process, at the role of representing or advising, counseling, then the negotiations tend to be more effective and parties would reach agreement.

Mediation is one of the options for disputing parties to end the conflict. Mediation is different from negotiating with the intervention of a third party. Mediator will help parties to achieve agreement and resolve conflict.

Court or arbitration: The settlement of the dispute in court would take time. The court’s ruling can be appealed. It should be noted that, per Vietnam laws, only Vietnam litigation or dispute law firms could represent the client at court. Commercial arbitration is available only in commercial-business sector. The advantage of this method is fast and efficient. However, compare with disputing at court, this method of handling dispute would take higher costs.

Disputes and dispute resolution matters are natural and inevitable in any countries including Vietnam. It is important that parties involved need to identify, anticipate disputes can occur. Contract or agreement should be reviewed by lawyers. When there is a dispute, the dispute lawyers in Vietnam will be able to help parties to with advice to reasonable solution to address the disputes effectively.

ANT Lawyers is a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients.

 

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Draft Decree on E-transactions in the Government Management of Land

In the era of technology 4.0, the application of science and technology in all activities of social life in general is increasingly focused. Vietnam government has introduced a number of policies on the application of electronic technology in administrative procedures, particularly the Draft Decree on Electronic Transactions in the management of land.

 

Electronic transactions in the government management of land are the implementation of administrative procedures in the field of land; share and provide land information and data; share and provide documents among state agencies.

On the implementation of administrative procedures on land, according to the Draft, the Government stipulates 17 administrative procedures on land to be carried out by electronic methods, such as: land acquisition; land allocation, land lease, change of land use purpose; first registration of land and properties attached to land, first-time certificate of land use rights, ownership of houses and other land-attached assets and additional registration of assets attached to land;… However, in order to carry out electronic procedures, agencies and organizations providing/using electronic transaction services in the field of land must meet certain conditions in accordance with the provisions of this draft.

Regarding sharing and providing information and land data, in the draft, the Government clarified the cases; responsibilities of agencies that share and provide land information and data and responsibilities of land users and users of electronic data. However, the draft did not specify what information allowed to be shared.

The draft also specifies the assurance of security and safety in e-transactions on land and the settlement of arising problems. Accordingly, disputes related to e-transactions in Land areas are settled based on the provisions of the Law on Electronic Transactions, this Decree and other relevant laws. In addition, the draft also provides regulations on the right to appeal, denunciations and regulations on sanctions.

Electronic signatures in the field of land include digital signatures and other types of electronic signatures as prescribed by law. Agencies, organizations and individuals have the right to discuss and select the type of appropriate electronic signature.

The implementation of electronic transaction in the land management will improve the efficiency of land, and real estate transaction from management, development, sales and purchase, and could help reduce the inaccuracy and avoid potential disputes.

ANT Lawyers is a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients

 

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