NOTABLE CHANGES OF VIETNAM LAW ON ENTERPRISES

On November 26th, 2014, the new version of Law on Enterprises has been adopted by Vietnam’s National Assembly. The act will come into effect on July 1st, 2015 and replace Law on Enterprises 2005. It comprises 10 chapters and 213 articles, which seek to improve Vietnamese business environment. Key points of the amendment include.

how to setting up business company in Vietnam

Company seals will be made optional

Pursuant to the prior Law on Enterprise, the Gorvernment shall stipulate the content of seals, conditions for making seals and regulations on seals usage. Now this regulation has changed under the new law. According to Article 44 of the new law, the company shall be entitled to decide the design, number and content of seals. The seals must supply the following information:

– Name of the company

– Tax number of the company Before using, the company must supply the seal sample to business registration office to post on National Portal of Business registration. The usage of seals must be in conformity with the company’s bylaw. Seals shall be used in case stipulated by law or agreed between transactional party.

 Limited company, joint-stock company may have more than one representatives

Article 13 of the law states that limited company or joint-stock company may have one or many representatives. The number of representatives, titles, rights and obligations of each representative are set out by the company’s bylaw. The company must ensure that at least one representative lives in Vietnam and that representative, if leaving Vietnam, must authorize another person in writing to perform on behalf of him.

The director or general director of joint-stock company will not be prohibited being concurrently the director or general director of another enterprise

Under the Law on Enterprises 2005, the director or general director of the company cannot be concurrently the director or general director of another enterprise. This regulation has been removed by the new amendment. The only exception is the one who is appointed by the state as owner representatives of state capital portions in state-invested enterprises.

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice. The firm provides a wide range of services, including M&A, corporate establishment, business advisory, tax advisory, dispute resolution for multinational and domestic clients.

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. For further details or to contact the firm, please email ant@antlawyers.vn or call us at +848 35202779.

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ADDING FOREIGN SUBJECTS TO OWN RESIDENT HOUSES IN VIETNAM

The Draft Law on House (amended) has currently taken lots of attentions of not only investors but residents. One of the significant amendments is provision on house ownership of foreign organizations, individuals.

According to Articles 161, 162, 163 of Draft Law, there are 3 cases that the foreigners may own resident houses in Vietnam as following:

1. Foreign organizations, individuals invest the construct resident houses according to projects for sale, lease, hire-purchase sale.
2. Foreign owned enterprises, branches, representative offices of the enterprises without business in real estate, foreign investment funds and branches of foreign banks permitted to operate in Vietnam are entitled to buy, donate, inherit the commercial houses in projects of resident housesdevelopment, new urban areas, tourism real estate.
3. Foreign individuals who are allowed to enter Vietnam, not belong to incentive rights, diplomatic or consular immunity.

However, subjects at section 2 and 3 are eligible to own houses in maximum term of 70 years, from the issuance date and can extend according to laws at that moment. They are not allowed to buy and own social houses, just buy and own commercial houses. They are also eligible to own unlimited number of commercial houses in commercial resident house development projects, new urban area or tourism real estate. These new provisions will become important points for real estate market in Vietnam. Especially, the foreign individuals are allowed to enter Vietnam, entitled to buy and own resident houses in Vietnam. It’s expected to make a big change in real estate in Vietnam when the new Law on House (amended) is adopted. ANT Lawyers,your lawyers in Vietnam.

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HOW TO PREPARE AND FILE A LAWSUIT IN VIETNAM?

If two parties have a dispute over a commercial matter in Vietnam, they should try to resolve disputes through negotiation, or mediation before considering to file a lawsuit against the other at a court in Vietnam.

To implement their right to sue, the plaintiff must prepare and submit the claim at the competent court in Vietnam.  The dispute lawyers in Vietnam with experience and understanding the litigation process should be invited at the early stage to advise, represent and prepare to defend the client.  The claim filing should include the petition and the supporting documents.  The petition is the most important legal document for the court to review and resolve the claim of the plaintiff, as such it should be carefully prepared to meet the requirements of the form, authority, and further contain information about the plaintiff, defendant, summary of the case and the request of the plaintiff.

The contents of the petition must be presented in full, brief, clear, and in logic.  The plaintiff should provide all documents, and evidence to prove the merit of the claim including contract, purchase order, separate terms and conditions, appendixes (if any), minutes of meetings of negotiations, invoices, delivery proof, legal status of plaintiff and defendant, documents to determine the legal status of the representative of the plaintiff such as appointment decision, power of attorney.  In order for the document issued in foreign country to be valid in Vietnam, the documents presented have to be original or notarized, legalized and authenticated copy and translated into Vietnamese in accordance with Vietnam laws.

When the claim has been filed at the competent court in Vietnam provided all conditions of acceptance are met, the court will notify the plaintiff or its representative know the court fees. When the applicant advance the court fee, the case will be recorded and brought into the process for settlement.

At the trial preparation process, the case will be assigned to a judge whom after studying would request parties to present additional necessary papers and documents relating to the case.  Parties or their representative would then be requested to meet the judge to provide further information or testimony or attend reconciliation.  If the disputing parties resolve disputes with each other, the court will make a record to acknowledge the successful reconciliation and issue the decision to recognize the agreement of the parties. Where reconciliation fails, the court records that and shall issue the decision to bring the case to trial.

Disagreements or disputes arise when parties can not agree on issues related to contract provisions, expected outcome or performance starndards…There are cases when the dispute is over a debt obligations matters which a debt recovery law firm could assist at an early stage to manage the collection process pre litigations including negotitions and managing expectations of both sides.    

ANT Lawyers, a law firm in Vietnam will be available to assist the clients when required to handle dispute matters out of court, at court or through arbitration in Vietnam.  

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Vietnam debt collection services

We understand chasing late payment is costly and time consuming.  At ANT Lawyers, a law firm in Vietnam with offices in Ho Chi Minh City and Hanoi, we could act on client’s behalf in dealing with the debtor, and in the meantime do a thorough research on debtors’ assets for payment obligations for evaluation of options to reclaim the debts.  Debt recovery lawyers at ANT Lawyers Vietnam beside other legal profession skills are equipped with mediation, an alternative dispute resolution skill that helps handling disputes effectively and professionally.  If pre-litigation efforts fail, we will look at an alternative strategy and taking legal actions will be the last resort.

We have experience in dealing with debt recovery cases for clients being exporters, insurance companies from EU, US, Canada, Australia, Hong Kong.  ANT Lawyers is an exclusive Vietnam law firm member of Prae Legal, an international law firm network.  We do act as Vietnam agent for one of the largest debt recovery specialist firms of its kind from the UK.  ANT Lawyers is also an official member of World Mediation Organization, a global mediation organization in Berlin, Germany which foster and promote mediation practice throughout the world.  Lawyers at ANT Lawyers regularly undertake training and seminar in mediation to public free of charge to promote the mediation practice in Vietnam.

If you need help in addressing debt recovery and litigation issues, please either email us at ant@antlawyers.vn or call to our office at: +84 8 35202779.

Let ANT Lawyers help your business in Vietnam.

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HOW TO ESTABLISH A COMPANY IN VIETNAM

Foreign investors may invest in the form of 100% capital to establish a limited liability company, joint stock company, partnership company or other forms in investment in Vietnam.

Foreign investors that invest in Vietnam for the first time must have investment projects and fill in investment registration or examination procedures at state agencies in charge of investment in order to be granted investment registration certificates. Investment certificates shall concurrently be business registration certificates.  Company with 100% foreign capital has founded and operated from the date of issuance of the investment certificate.

A project dossier for establishing a company in Vietnam shall comprise:

• Registration/Request for issuance of Investment Certificate;
• A report on financial capability of the investor;
• Draft of the company’s charter;
• List of members of company: a) copy of the people’s identity card, passport or other lawful personal certification, for individual members; b) copy of the establishment decision, business registration certificate or other equivalent document, for member organizations; copies of the authorization document, the people’s identity card, passport or other lawful personal certification, for authorized representatives. Copies of the business registration certificates of the foreign member organizations must be authenticated within three months before the date of submission of the business registration dossier by agencies where such organizations are registered;
• Written authorization of the investor in case investor is organization and valid copy of the lawful personal certification of the authorized representative. Documents in foreign languages must be translated into Vietnamese, notarized and legalized;
• The joint-venture contract or Business Cooperation Contract (BCC);
• Other documents required by Vietnam law.

The establishment of a company in Vietnam would take from 30 days.  The extra time might be needed in case theinvestment area is conditional or the State government needs to examine the investment project.  Minimum capital, special licenses or other conditions might be required in certain investment projects.

At ANT Lawyers, a law firm in Vietnam with law offices in Hanoi and Ho Chi Minh City, we are available to assist clients in establishing foreign owned company in Vietnam.  We could be reached at email: ant@antlawyers.vn or office tel: +84 912 817 823.

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FOREIGN INVESTORS MAY BE ALLOWED TO HOLD 60% SHARES

A new decision has been proposed to the Prime Minister with a number of changes that encourage foreign investors to make investment in Vietnam and in the meantime improve the financial market to catch up with international standard.

Foreign investors may be allowed to hold 60% shares

ANT Lawyers’ foreign investment practice always follow the change in legal environment to assist our client with the best service. First, foreign investors could own up to 60% of total voting right shares of a listed company.   The previous provisions only allow this ratio for strategic partners.  Secondly, the foreign investors may hold maximum 49% total voting right shares. The previous provision is 49% of charter capital.  Thirdly, for non-voting right shares, the foreign investors are not restricted to hold.  Fourthly, for fund certificate, the foreign investors may hold 100% for both close and open funds while the previous provision only allows 49% and restricts the foreign –owned in open funds.  Fifthly, foreign organizations business in securities may hold securities companies in Vietnam up to 100% Charter capital while in recent provision, maximum of 49% and 100% for the specific cases.

When the new Decision will have been officially issued, the securities market of Vietnam will be more open and attractive to foreign investors. As expected, impact will be increasing liquidation, opening the conditions to establish investment funds, changing the enterprise’s structure, developing the fund management companies, and as such developing the financial market with more options to invest and control the investment in Vietnam.

For further information or intensive advice, please contact ANT Lawyers, your securities lawyers in Vietnam via email ant@antlawyers.vn or tel (848) 3520 2779.

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice. We are an exclusive Vietnam member of Prae Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services as following to multinational and domestic clients.

Commercial

Dispute Resolution

Debt Recovery

Employment

Foreign Investment

Intellectual Property

International Trade and Taxes

Infrastructure and Project

Civil Matter

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EMPLOYER’S OBLIGATIONS ON RECRUITMENT, LABOR MANAGEMENT AND LABOR DECLARATION UNDER CIRCULAR 23

Labour and employment compliance are continuous process which has no ending and there is no reason to stop.  In order for the companies in Vietnam to improve the effectiveness of its compliance in labour and employment in Vietnam, it is always important to pay attention to the details and fix the pending matters one by one.  Labour and employment lawyers in Vietnam would help the clients with a thorough reviewing process if required.

The employer is required to comply with current labor regulations on recruitment procedure, labor management and declaration as mentioned under Circular No. 23/2014/TT-BLDTBXH dated August 29, 2014 of the Ministry of Labor – Invalids and Social Affairs providing a number of articles of the Government’s Decree No. 03/2014/ND-CP dated January 16, 2014 detailing a number of articles of the Labor Code on employment (“Circular 23”), as following:

– Recruitment procedure:

The employer may recruit employee by either way of announcement at its head office or mass media.  Employment application form must comply with the standard form provided in Circular 23 which is attached in application dossier submitted by candidate.  The application dossier must be returned to the candidate (if required) within 03 months from the date of announcement of recruitment results.

– Labor management:

The employer is required to create employment log book where is recorded information on the employees and their employment. The employment log book must be reserved at head office and make it available if required by Department of Labour, Invalid and Social Affairs (DOLISA).

– Labor declaration

Employers must semi-annually report any changes in their labor utilization as prescribed form under Circular 23 to the DOLISA before May 25 or November 25 of each year.

Visa, Work Permit and PIT – What should enterprise know?

Law that impact work permit of foreigners in Vietnam

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice.  We are an exclusive Vietnam member of Prae Legal, the global law firm network covering more than 150 jurisdictions.  The firm provides a range of legal services as following to multinational and domestic clients.

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