How to Close a Business in Vietnam? | ANT Lawyers

All corporations, companies, partnerships, branch offices, representative offices and other business entities are legal entities in Vietnam which can only be dissolved through formal procedures.

I. What are the major challenges with closing a business in Vietnam?

The main thing to remember throughout the process is that the dissolving company, a branch office or a representative office, one should pay close attention to the involvement of all key stakeholders, i.e. the employees, customers, creditors, business partners and relevant authorities.

The following are key information to gather for thorough analysis

1. Company size in terms of capital and number of employees?

2. Enterprise’s business sector?

3. Tax invoice usage declaration?

4. Annual profit?

5. Compliance with tax procedures?

6. Administrative violations in the field of taxation?

7. Any outstanding tax?

8. Tax document filing records?

9. Other tax matters?

II. What does the dissolution process involve?

Once an analysis has been through, the next procedures mostly deal with reporting and submitting the relevant documents to the various regulatories and tax authorities at each step of the process, terminating contracts, liquidating assets and settling liabilities, and general administrative work such as returning the corporate seal, registration certificates, and having the company’s name removed from the system of the license authorities.

III) How to prepare document to close a business in Vietnam?

1. Documents submitted to the licensing authority in Vietnam:

a. Liquidation notice of enterprise;

b. Minutes of the meeting of Management Board / Board of Directors decided on the dissolution of enterprises;

c. The company’s decision on liquidation;

d. Report on enterprise asset liquidation;

e. The list of creditors and the paid debt;

f. Documents evidencing that enterprise has fulfilled all of its tax;

g. Confirmation on social insurance for employees after the dissolution decision;

h. The seal and certificate of seal sample registration.

2. Documents submitted to the tax authority in Vietnam:

a. Liquidation notice of enterprise;

b. Minutes of the meeting of Management Board / Board of Directors decided on the dissolution of enterprises;

c. The company’s decision on dissolution;

d. Audit reports and tax settlements;

e. The financial statements for the year to date the decision on dissolution;

f. The company’s tax liabilities audited by tax authority;

g. Verification of tax obligations of the enterprise.

Closing a business in Vietnam might be a lengthy process and more complicated than setting up a company in Vietnam. Sometimes, it is important to make a decision to exit and start a new venture. As a law firm in Vietnam, we do assist clients to close the business, exit the investment and deal with pending issues with licensing authorities including department of planning and investment, department of labour, tax bureau and others.

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Some Modifications on Business Registration from October 10th, 2018

Decree no.108/2018/ND-CP amending and supplementing a number of articles of Decree No.78/2015/ND-CP effective from October 10th, 2018 has provided many new procedures of business registration.

The new decree stipulates clarification on some contents about the procedure on business registration, of which, the highlight are the procedures that do not to require the seal stamped on the dossier on business registration and that the power of attorney for a person whom establishes the company does not need notarization, authentication at Clause 1 and 2 of Article 1 Decree No. 108/2018/ND-CP. In the past, due to the lack of clarification on the above matters, some competent authorities require to affix the seal on the dossier of business registration and request the notarization of the power of attorney. These procedures created some troublesome in practice.

Another regulation that facilitate the business transaction is that previously enterprises can only set up business locations in the province or city under central authority where their head office or branch is located. It means that if an enterprise wishes to set up another business location where the office is located, it has to go through two procedures: setting up a branch first then setting up a business location. The procedure of setting up a branch is more complex more than the establishment of business locations. With the changes in the decree 108/2018/ND-CP, enterprises are allowed to set up business locations in other provinces or centrally-run cities where their head offices or branches are opened. The scope of work is simpler and more cost-effective, the transactions of the place of business are accounted for by the parent company, thereby reducing the workload for the accountant of the company.

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Foreign Investment | ANT Lawyers

Our foreign investment practice at ANT Lawyers helps clients with the following:

Transactional structuring: advising on the possibility for foreign investors to obtain an investment license in Vietnam and the selection of an appropriate investment vehicle in Vietnam such as a business co-operation contract, a joint venture company or to set up a company in Vietnam as a wholly foreign owned company.

Licensing requirements: drafting and negotiating all documents required for obtaining an investment license for a foreign invested project, following up Vietnamese authorities for obtaining the investment license and assisting to complete all post-licensing procedures.

Regulatory issues: advising on regulatory issues in relation to the operation of foreign invested projects in Vietnam including advertising and promotion of their products. Please contact us for inquiries through email ant@antlawyers.vn or call our partner directly at + 84 912 817 823.

Let ANT Lawyers help your business in Vietnam.

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Three Difficulties in Applying Temporary Residence Card in Da Nang | ANT Lawyers

In recent years, more and more foreigners are coming to live, work, study or to reside in Da Nang, therefore, many foreigners apply for Temporary residence card (TRC) for more convenience in Vietnam.

According to the regulation of Section 13, Article 3 of Law on Entry, Exit, Transit, and Residence of Foreigners in Vietnam, Temporary Residence Card (TRC)is a legal document issued by an immigration authority or a competent authority of the Ministry of Foreign Affairs to a foreigner who is permitted to reside in Vietnam for a certain period of time. This card has the same validity as a visa. Therefore, if the foreigners have TRC, they will reside and entry/exit Vietnam without applying for visa.

However, the process and procedures to apply for TRC would have many different practical applications in each province. Particularly in Da Nang, the issuance of temporary cards for foreigners is more challenging.

The first, for the issuance of a TRC, the foreigner must apply for suitable visa, the issuance of TRC is executed at the Immigration Department of the Da Nang City Public Security. The application for a visa in Da Nang is more complicated than in other provinces. It is necessary to have specific information relating to the operation and management of the enterprise which guarantee foreigner to enter Vietnam(if any). For the submission of dossiers to apply for the visa, the foreigner shave to submit by themselves or by the staff of their company. This makes it necessary for the foreigner or the sponsor have to spend the time to complete the procedure.

Secondly, after having a valid visa, the foreigners should apply the TRC at the Immigration Department of the Da Nang City Public Security. The dossiers for applying the TRC is regulated in the Article 37 of the Law on enter, exit, transit, and residence of foreigners in Vietnam. However, when applying for temporary residence cards in Da Nang, the Immigration Department could request more other relevant documents to the business, which is some time not found in the law, which poses challenges to applicant.

Thirdly, the granting of TRC to foreign investors, workers in Da Nang requires the confirmation of work permit exemption, work permits. The duration of the TRC issued will be valid for a period of two (2) years. As a result, for foreign investors, only have TRC with the validity term of 02 years are granted, instead of maximum 5 years, as provided for in Clause 2, Article 38 of the Immigration law. In order to be granted a TRC for a period of more than two years, the Immigration Department shall consider the business situation of the company, the tax payment status of the investor, etc. Therefore, if investors want to be granted TRC for more than 02 years, they need to work in Vietnam for a longer time and the business must be profitable.

With the above difficulties, many foreigners need to necessary attention, prepare all the documents as well as know about the term of TRC, in order to be able to prepare the best dossier. In case of difficulties, ANT Lawyers with offices in Hanoi, Ho Chi Minh City and Da Nang and experience in work permit, immigration, and temporary residence card could provide legal services for the client’s convenience.

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Foreign Investment in Education Sector in Vietnam | ANT Lawyers

Foreign cooperation and investment in education are not new to Vietnam. There has been a number of schools and education institutions such as BVIS, Hanoi Academy, International School in Hanoi, Japanese International School, Vietnam-Australia School. Since Aug 1st, 1018, the decree 86/2018/ND-CP on international cooperation and investment in education in Vietnam will be effective, replacing Decree 72/2012/ ND-CP.

According to Decree 86/2018/ND-CP, foreign organizations and individuals are allowed to cooperate in investment in the field of education in accordance with Vietnamese law and treaties to which Vietnam is a member. However, with the education sector in the security, defense, political and religious sectors, the law does not allow foreign organizations to cooperate, or invest.

The law open ways for enterprise to cooperate in education services in Vietnam including pre-school education establishments; primary and secondary education establishments, and educational establishments operating in foreign countries, which are accredited; and post graduate programs that offer master and doctoral training courses and examination centers with foreign language certificates.

Foreign organizations and individuals cooperating and investing in Vietnam in education services must meet the requirements of the Vietnam laws, including facilities in service of educational activities; the educational program and the quality of teachers. Accordingly, the integrated educational program must be a program that has been accredited, ensure meeting the objectives of the educational program of Vietnam; and meet the requirements of the foreign educational program and must be approved by the Vietnam competent authority. Teachers must be qualified and have diplomas and certificates as prescribed by law. Foreigner and foreign organizations which cooperate in the field of education for a joint term of no more than 5 years from the date of approval. Upon the expiry of the extended time limit, each extension time shall not exceed 5 years.

Forms of foreign-invested educational establishments permitted are include short-term training and vocational training; pre-school education establishment; General education establishments (primary schools, secondary schools, primary and secondary schools; higher education institutions. The duration of operation shall not exceed 50 years. For the establishment of foreign educational organizations, foreign organizations and individuals must meet conditions on capital, facilities and equipment, educational program; teachers must meet the requirements of the Vietnam Ministry of Education and Training.

For pre-school and primary and secondary education establishments, which accept Vietnamese pupils, and study the foreign educational programs, the number of Vietnamese pupils studying in the foreign educational program must be lower 50% of the total number of students enrolled in the foreign educational program at the institution. Vietnamese pupils studying in this group must study compulsory subjects according to regulations.

Foreign investors in education service have to apply for investment registration certificate in Vietnam. Depending on the nature of the educational business, other licenses will need to be applied at Department of Education and Training before operation.

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How To Conduct Legal Due Diligence for M&A in Vietnam? | ANT Lawyers

Mergers and Acquisitions (M&A) has become popular in Vietnam as the country develops and more investors are eager to invest and gain control of the business enough to engage in, decide important business matters through partial or full ownership of an enterprise. A successful M&A mean the parties achieve their financial and commercial goals (increasing capital, raising management capacity, branding, etc) and ensuring safety and restraint the risk at the lowest level, though legal due diligence undertaken by law firm in Vietnam.

The Importance of Legal Due Diligence of Enterprise in M&A activities

Legal due diligence of enterprises focuses on full and detailed assessment of legal issues relating to the legal entity, capital contribution status, shareholder status, legal rights and obligations. From the investigation information, the parties can anticipate legal risks, assess opportunities to come up with alternatives. In addition, legal assessments help parties evaluate the reliability of their counterparts as well as understand their advantages and constraints for the negotiation process.

What Legal Due Diligence in M&A Activities Entail?

Evaluate the factors related to the legal status and capacity of the target enterprise: Review the legitimacy of the establishment, operation, possession of enterprise; ensure that the enterprise is not subject to procedures for dissolution or bankruptcy and compliance with the law of the enterprise in the course of operation. The information to be checked includes: dossiers, certificate of enterprise establishment, operation licenses, practice certificates, professional liability insurance, company charter, agreement between the company owner on rights of shareholders, capital contributors, minutes of meetings, member/shareholder register, certificate of capital contribution.

Evaluate the factors related to the business and financial activities of the target enterprise: Review the system of customers and partners of the enterprise; the documents on economic contracts (with customers, suppliers, etc); dossier of investment, construction, land, project; information on guarantee, mortgage (if any), debt and credit agreement, M&A, financial leasing contract, exclusive contract, franchise, etc, in terms of value, legality, validity, progress to evaluate legal risks in the future. Review the financial statements on the accuracy of the financial status of the business.

Verify the factors related to labor: Review labor contracts, labor agreements, internal labor regulations to determine the enterprise’s financial obligations to employees, compliance Labor law and reception of labor after the purchase or sale.

Verify the factors related to intellectual property: Review intellectual property rights of enterprises including: trademarks, trade names, industrial designs, layout designs, business secrets, etc; the property has granted the patent/license. Review matters of infringement of intellectual property rights of other organizations, individuals or legal persons in order to anticipate the risks of being sued or claiming damages.

In addition, in an M&A deal, the acquirer should ensure that participation in capital contribution or acquisition of the target enterprise is permitted, the form of M&A implementation is in accordance with the law and the M&A deal was approved by the competent authority of each party. After that, the factors related to M&A transaction procedures and constraints and restrictions of law (if any) must be evaluated.

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How Foreign Entity Could Set-up Representative Office in Vietnam | ANT Consulting

A foreign business entity or a foreign trader is allowed to establish Representative Office in Vietnam according to the Commercial Law.

Representative office of a foreign business entity in Vietnam (referred as “Representative Office”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to survey markets and to undertake a number of commercial enhancement activities permitted by the law of Vietnam. Representative Office will need to apply and obtain the establishment license; and have a seal bearing the name of the representative office.

Setting up a Representative Office is less complicated than setting up a company in Vietnam. The Vietnam Department of Trade will be approving the establishment of Representative Office in Vietnam while Vietnam Ministry of Planning and Investment will be the State agency that coordinate the setting up a company in Vietnam. The time duration to establish a Representative Office is shorter than to establish a company. There are fewer conditions to meet than conditions in setting up company in Vietnam. The main difference between a Representative Office and a company in Vietnam is that the Representative Office could not directly conduct profit making activities.

Rights of the Representative Office:

To operate strictly in accordance with the purposes, scope and duration stated in the license for establishment of such representative office;

To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the Representative Office;

To recruit Vietnamese and foreign employees to work for the Representative Office in accordance with the law of Vietnam;

To open accounts in foreign currency and in Vietnamese Dong sourced from foreign currency at banks which are licensed to operate in Vietnam, and to use such accounts solely for the operation of the Representative Office.

Obligation of the Representative Office:

Not to directly conduct profit making activities in Vietnam;

Not to enter into commercial contracts of the foreign business entity or to amend or supplement such contracts already signed except where the head of the Representative Office has a valid power of attorney from the foreign business entity;

To pay taxes, fees and charges and to discharge other financial obligations in accordance with the law of Vietnam;

To report on the operation of the Representative Office in accordance with the law of Vietnam

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

Being a business entity or trader recognized by the law of the country or the territory (hereinafter referred to collectively as the country) where it has been lawfully established or made its business registration;

Having been operating for at least one year after its lawful establishment or business registration in its country.

The issuing period will be within 20 working-days after the date of submitting the full valid documents as requested.

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How Foreign Entity Could Set-up Representative Office in Vietnam | ANT Consulting

 A foreign business entity or a foreign trader is allowed to establish Representative Office in Vietnam according to the Commercial Law.

Representative office of a foreign business entity in Vietnam (referred as “Representative Office”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to survey markets and to undertake a number of commercial enhancement activities permitted by the law of Vietnam.  Representative Office will need to apply and obtain the establishment license; and have a seal bearing the name of the representative office.

Setting up a Representative Office is less complicated than setting up a company in Vietnam.  The Vietnam Department of Trade will be approving the establishment of Representative Office in Vietnam while Vietnam Ministry of Planning and Investment will be the State agency that coordinate the setting up a company in Vietnam.  The time duration to establish a Representative Office is shorter than to establish a company.  There are fewer conditions to meet than conditions in setting up company in Vietnam.  The main difference between a Representative Office and a company in Vietnam is that the Representative Office could not directly conduct profit making activities.

Rights of the Representative Office:

• To operate strictly in accordance with the purposes, scope and duration stated in the license for establishment of such representative office;
• To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the Representative Office;
• To recruit Vietnamese and foreign employees to work for the Representative Office in accordance with the law of Vietnam;
• To open accounts in foreign currency and in Vietnamese Dong sourced from foreign currency at banks which are licensed to operate in Vietnam, and to use such accounts solely for the operation of the Representative Office.

Obligation of the Representative Office:

• Not to directly conduct profit making activities in Vietnam;
• Not to enter into commercial contracts of the foreign business entity or to amend or supplement such contracts already signed except where the head of the Representative Office has a valid power of attorney from the foreign business entity;
• To pay taxes, fees and charges and to discharge other financial obligations in accordance with the law of Vietnam;
• To report on the operation of the Representative Office in accordance with the law of Vietnam

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

• Being a business entity or trader recognized by the law of the country or the territory (hereinafter referred to collectively as the country) where it has been lawfully established or made its business registration;
• Having been operating for at least one year after its lawful establishment or business registration in its country.

The issuing period will be within 20 working-days after the date of submitting the full valid documents as requested.

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Foreign Direct Investment from CPTPP | ANT Consulting

Still familiar investors, but with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) expected to come into effect by the end of 2018 and approved by the National Assembly on November 12th, there will be a greater and more quality flow of capital poured into Vietnam.

Two of the large foreign direct investment (FDI) projects registered to invest in Vietnam since the beginning of the year are owned by investors from 11 CPTPP countries. It is the 4.138 billion USD Smart City project of the joint venture between Sumitomo (Japan) and BRG (Vietnam), or the Laguna project register to increase the investment capital by 1.12 billion USD from Banyan Tree (Singapore).

There are also several projects such as Hanbaram Wind Power Plant (150 million USD), Ramatex Nam Dinh Textile and Apparel Factory (80 million USD) of Singaporean investor, Ykk Ha Nam Ykk factory project (80 million USD) of Japanese investors…

In fact, without CPTPP, investment capital from Japan, Singapore, Malaysia… still poured into Vietnam. They are the leading investment partners of Vietnam in the last three decades of FDI attraction.

According to data from the Foreign Investment Agency (Ministry of Planning and Investment), accumulated up to now, Japanese investors have invested in Vietnam over 56.2 billion USD, this figure of Singaporean investors is 46.2 billion USD, Malaysia is 12.5 billion USD, Canada is 5 billion USD, Australia is nearly 1.86 billion USD, Brunei is more than 1 billion USD…

Currently, out of 11 CPTPP members, all members have invested in Vietnam, except Peru. In total, the CPTPP members have invested in Vietnam of about 123 billion USD, accounting for nearly 37% of total registered FDI in Vietnam over the last 3 decades. This is not a small figure, indicating that the investment of CPTPP members is very significant for Vietnam’s FDI attraction.

The CPTTP will create favorable conditions for Vietnam to attract investment capital from other member countries, especially those countries that do not have FTA agreements with Vietnam, such as Canada and Mexico. The reason is that, this agreement will promote trade cooperation, in which trade is associated with investment. On the other hand, this is also an opportunity for Vietnamese enterprises, especially large corporations, to seek investment markets in other member countries.

Moreover, once the plans to invite Thailand, Korea and the UK join the CPTPP successfully, the opportunities for trade and investment cooperation in the region will be even greater. That will bring more benefits to Vietnam.

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The US Increased Imports of Vietnamese Goods | ANT Consulting

Vietnam could become the seventh largest exporter to the US in 2019 if it can maintain the growth rate of 40.2% as in the first quarter.

According to the data announced by the US Bureau of Statistics, in the first three months of 2019, the export speed of goods from Vietnam to the US increased by 40.2% over the same period last year. This is the fastest growth rate among the 12 largest exporters to the US in 2018. Behind Vietnam is Korea with a growth rate of 18.4%. On the other hand, Chinese goods to the US fell 13.9% amid increasing trade tension between the two countries.

If maintaining the growth rate in the first quarter for the rest of 2019, Vietnam could surpass the big ones like France, England, Italy and India to become the 7th largest commodity exporter for the world’s largest economy, with an estimated value of nearly 69 billion USD. Last year, Vietnam ranked 12th with the value of goods exported to the US reached more than 49.2 billion USD.

According to the statistics of the General Department of Customs, in the first 4 months of this year, the US continued to be the largest importer of Vietnamese goods such as textiles and garments with value of 4.42 billion USD, increase by 9.1% compared to the same period last year; footwear (2 billion USD), increase by 13.5%; machinery, equipment, tools and spare parts increase by more than 54% (1.3 billion USD); wood and wood products (1.42 billion USD), increase by 34.7%.

In early May, US President Donald Trump also mentioned that producers could choose Vietnam as a destination after leaving China. According to the Fitch credit rating agency, there were signs that Vietnam could benefit from the impact of trade tension from the flow of trade out of China.

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FDI Is Expected to Flow into Vietnam After the Covid-19 Epidemic | ANT Consulting

The Covid-19 epidemic is also considered an opportunity for Vietnam to receive faster flows of foreign investment, especially capital flows away from China.

According to the Director of Foreign Investment Department (Ministry of Planning and Investment), a large US corporation is planning to invest a multi-billion-dollar project in Asia. The two locations they considered were China and Vietnam. Given the situation of the Covid-19 epidemic in China, it is likely that they will choose Vietnam. In March, they will make a final decision…

A group of Korean and US investors interested in LNG power projects in Vietnam is probably one of the rare foreign business delegations coming to Vietnam at the time of the outbreak of Covid-19. On February 11th, they went to the Government Office and the Ministry of Planning and Investment to work on this content.

Without hiding ambition, according to representative of Korean investors consortium including Korea Gas Corporation, Southern Korea Electric Company, Hanwha Group… – they want to invest into LNG port and gas power plant projects in Vietnam. Even in addition to the electricity sector, these investors also want to invest in other areas in Vietnam.

The fact that foreign investors still coming to Vietnam at this time proves the attraction of Vietnam. The postponement and cancellation of investment promotion trips of foreign investors is only momentary.

In addition, according to the National Center for Socio-Economic Information and Forecast, the Covid-19 epidemic showed that the world was too dependent on China.

Having similar views, the New York Times also forecast that the flow of foreign investment from China to Vietnam to avoid US taxes could be accelerated by the Covid-19 epidemic.

According to the representative of JETRO Hanoi Office, in order to disperse risks, 122 Japanese enterprises asked by JETRO said that they decided to relocate their production in China and the place to be moved to the top is Vietnam.

Vietnam is at the top of the list, with 42.3% of the 122 businesses mentioned above have chosen. Following Vietnam is Thailand (20.6%), Philippines (18.6%) and Indonesia (16.5%). Japanese enterprises moving away from China not only because of trade war, but also to evade the increasing input costs in this market.

In the international market, it is forecasted that the flow of international investment into China and investment from China to foreign countries will face difficulties in 2020, even possibly sharply decline in the first quarter of 2020. The Covid-19 epidemic, if combined with geopolitical risks, trade war risks… also makes the global political, economic and social environment even more uncertain, promoting defensive psychology, shrinking, thus weakening investment motivation.

This is an opportunity for Vietnam to have policies to attract investors who are intending to narrow production in neighboring countries and invest in Vietnam. Investment promotion units should proactively work with foreign investors who have plans to invest in Vietnam to discuss, orient and unify the preliminary investment procedures.

Besides, in the long term, it is necessary to continue improving the investment and business environment, amending policies and strategies to attract foreign investment.

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Series of Big Technology Companies Shifted Production to Vietnam | ANT Consulting

LG, Panasonic or Foxconn – Apple suppliers… are planning to set up factory in Vietnam to expand investment, production chains in Vietnam after Covid-19.

According to a 6-month industrial production report by the Ministry of Industry and Trade, some of the world’s big technology corporations are planning to shift production and investment chains to Vietnam. Vietnam is facing a great opportunity to welcome this wave of investment.

Among the big names mentioned by the Ministry include: LG, Panasonic, Foxconn – Apple component suppliers… Among that, LG had transferred the entire production line from Korea to Hai Phong.

In addition to LG, according to the Ministry of Industry and Trade, Panasonic Vietnam is also preparing to receive a production line of refrigerators and vertical door washing machines with high capacity from Thailand, in early September. Apple has also increased production of 3 – 4 million of AirPods in the second quarter, equivalent to nearly one third of its AirPods worldwide output through Foxconn.

Currently, Foxconn has a factory located in Bac Giang and proposed the Government to build 3 social housing projects in the Northern of Vietnam, next to its industrial parks with a total investment of over 7,400 billion VND.

Three Foxconn social housing projects are planned to be built in Bac Ninh, Bac Giang and Vinh Phuc. In particular, the project in Viet Yen district, Bac Giang province has the largest scale with 16.7 hectares, with an investment of 3,422 billion VND (about 150 million USD). The other two projects in Que Vo district, Bac Ninh province – scale 6.3 ha, invested 2,925 billion VND (more than 125 million USD) and in Vinh Phuc – scale 9.9 ha, invested more than 1,000 billion VND.

Vietnam’s disease control is highly regarded by the international community and is an important driving force to attract more foreign investment after Covid-19. The capital investment and expansion of production chains of multinational corporations in the electronics sector have helped the industry record a good growth in the first half of the year, though affected by the disease.

According to the Ministry of Industry and Trade, the index of industrial production of electronic products, computers and optical products in June increased by 29.3% over May and by 21.7% over the same period last year.

In the first half of the year, production of this industry increased by nearly 10% over the same period, 6% higher than the first 6 months of 2019.

In terms of export value, computers, electronic products and components reached nearly 19.3 billion USD, increase by over 24%; phones and accessories of about 21.5 billion USD. It is expected that in the last 6 months of the year, the electronics industry will still be greatly affected by the complicated disease situation which is likely to reduce the demand for electronic products in the US and European markets.

Samsung’s global sales and output are forecast to decline due to the overall impact of the epidemic on electronics in general. Samsung Vietnam is also expected to reduce its export target to about 45.5 billion USD in 2020, compared with 51.4 billion USD in 2019.

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Financial Times: Vietnamese Consumers Are Optimistic about The Economy | ANT Consulting

A recent study by the Financial Times issued statement on the positive psychology of Vietnamese consumers to the economy, thereby boosting consumer spending and encourage foreign investors to invest in Vietnam.

According to the study, Vietnamese consumers still spend heavily on shopping thanks to the dynamic economy, which increases household incomes.

This trend is expected to continue, in the context of Vietnam consumer psychology about the economy is in the highest optimism status in the past three years.

The study also expects that Vietnam’s economy will maintain the highest growth rate among key regional economies.

In 2017, Vietnam’s economy grew by 6.8% and is expected to grow higher this year.

Through a survey with 5,000 consumers in Thailand, Indonesia, Malaysia, Philippines and Vietnam, the study evaluated Vietnamese young people are the most optimistic in this group about their economic prospects.

Vietnam is also becoming a destination for foreign investment.

Since 2009, Samsung from Korea has invested in Vietnam 17 billion USD. Last year, nearly half of smartphones sold to the world came from factories in Vietnam.

Nevertheless, the Financial Times study also identified the challenges faced by the Vietnamese government to maintain economic growth, in the context of rising public debt and tight budgets.

2018 is also the year Vietnam will gradually fulfill the commitments of 16 free trade agreements, in which a series of tariff will fall to 0%, affecting the budget revenue.

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Licensing for Foreign Contractor

Under the provisions of the Vietnam law for operations of foreign contractors in Vietnam in the fields: investment and construction consulting, supply of materials and technology equipment together with technical services related to the construction works, construction of work, foreign contractors must apply for a contractor license.

Conditions for obtaining permits for foreign contractor in Vietnam:

Case for bidding packages that are subject to compulsory application in accordance with the bidding law of Vietnam: Win the bid or select the bid.

– Had won the bid or can select the bid.

– Had a forwarding bid contract.

Case for bidding packages that are not subject to compulsory application in accordance with the bidding law of Vietnam:

– Had won the bid or can select the bid.

– Had a forwarding bid contract.

Meeting all the conditions and capability that are consistent with contracted works prescribed by the law of Vietnam.

In all cases that foreign contractors are assigned the bid (due to win the bid through bidding or select the bid), foreign contractors have to codeshare with Vietnam contractors or have to use Vietnam sub-contractors (except the cases that are allowed by the Prime Minister or prescribed by the law of Vietnam).

Foreign contractors have to commit to fully implement the provisions of the law of Vietnam relating to contracting activities in Vietnam.

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Temporarily Stop Granting Work Permits to Foreigners Originating from Infected Area Because of Covid-19

An outbreak of acute respiratory infections caused by a new strain of Coronavirus (nCoV) was first detected in Wuhan City, Hubei Province, China in December 2019. Up to now, the disease has spread to many cities in China and more than 20 countries in the world including Vietnam. Facing new complicated movements of the acute respiratory disease epidemic caused by a new strain of Coronavirus (Covid-19), on February 2nd, 2020, the Vietnam Minister of Labor, War Invalids and Social Affairs issued Official Dispatch No. 01/CD-LDTBXH on strengthening measures to prevent and control Covid-19 epidemics through the tighter control of immigration process, including the grant of visa, work permit, temporary residence card for foreigners originating from infected area.

Set up company in Vinh Long 

Set up company in Binh Duong

Accordingly, the Ministry of Labor, War Invalids and Social Affairs shall propose the Employment Department and the Department of Labor, War Invalids and Social Affairs, the Management Boards of industrial parks, export processing zones and economic zones of localities to temporarily stop granting work permit for foreign workers from epidemic areas during the time when Vietnam declared the disease. This affects the entry into Vietnam of foreign workers who have not yet been granted a work permit under the law. According to Article 10 of the Law on Entry, Exit, Transit, and Residence of Foreigners in Vietnam 2014; Point c Clause 4 Article 1 of the Law on Entry, exit, transit and residence of foreigners in Vietnam amended in 2019; Clause 16, Article 1 of the Law on Entry, Exit, Transit, and Residence of Foreigners in Vietnam amended in 2019 foreign workers to be granted LD1, LD2 visas and temporary residence cards of the same type, should be issued with a work permit in Vietnam. In addition, foreign investors in Vietnam are also affected, because the temporary stoppage of granting of work permits will also affect the application for certification of foreign workers’ eligibility for exemption from work permit for investors, it also affects the foreign investor’s temporary residence card application.

In addition, it is required that enterprises and organizations employing foreign workers to temporarily stop accepting workers from China returning Vietnam after Tet holiday to work and foreign workers moving to endemic areas during the Covid-19 epidemic announcement. In case of having received such, the enterprise must report the list of employees who have just returned to Vietnam from China with the necessary information as required, carry out isolation measures at places of residence and workplaces under the guidance of the health authorities, and at the same time monitor and examine health within 14 days from the date of entry into Vietnam.

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Temporary residence card for foreigner in Vietnam

If the foreign investor, the employee needs to reside in Vietnam to be able to facilitate the implementation of investment, labor contract, the investor and the employee needs to have the company sponsored and proceed to apply Temporary residence card in accordance with the purpose of residence in Vietnam.

Temporary residence card is a document issued by an immigration authority or a competent authority of the Ministry of Foreign Affairs to a foreigner who is permitted to reside for a limited period of time in Vietnam and is valid for visa replacement. When a temporary residence card is available, the foreign investor or worker will present a temporary residence card instead of a visa when entering, leaving Vietnam and is legally residing in Vietnam.

To avoid administrative fines or deportation for violations of the law on residence in Vietnam, foreign investors and employees need to follow procedures for applying for a temporary residence card suitable for the purpose of entry (symbol visa). Investors, employees who have appropriate entry visas (DT or LD visa) will be considered by the Immigration Authority to grant a temporary residence card.

For the application for a temporary residence card that requires the investor, the employee needs to have all business documents, proving that it is eligible to sponsor a foreigner and enter the country for the right purpose. Request a Certification of exemption from a work permit, work permit, entry visa for the right purpose, legal residence address in Vietnam.

When all of the above conditions are met, investors and employees shall carry out the procedures for applying for temporary residence cards in Vietnam so that they can reside, leave and enter in accordance with law. The duration of the temporary residence card is issued pursuant to the purpose of entry and the proposal of agencies, organizations and individuals. The temporary residence card is from 1 to 5 years but shorter than the passport duration by at least 30 days, specifically:

– Temporary residence cards with symbols NG3, LV1, LV2, ĐT and DH are valid for no more than 05 years.

– Temporary residence cards with symbols NN1, NN2, TT are valid for not more than 03 years.

– Temporary residence cards with the symbol LD and PV1 are valid for no more than 02 years.

When the temporary residence card expires, the foreign individual will be considered to request the sponsored company to apply for a new temporary rresidence card.

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The Business Conditions for Sports Betting in Vietnam

Law on amendments to Physical Training and Sports No. 26/2018/QH14 is in valid as of February 1st, 2019. The highlight that must be noted is sports betting as provided in Article 67a. This activity is officially governed by laws. Sports betting is a form of entertainment with rewards in which bettors predict the results of sporting events used for betting purpose.

The sports betting has a long history, but it had not been recognized by the State for a long time. Therefore, the betting was considered a violation of laws and was liable to administrative and criminal remedies. Before sports betting is restricted and just allowed to bet on horse racing, greyhound racing and pilot international soccer as specified in the Decree 06/2017/ND-CP effective from March 31st, 2017 on business of betting on horse racing, greyhound racing and international soccer. After the amendment law takes effect, the sports are allowed to bet will be extended according to the List of sports activities allowed to trade in betting issued by the Government.

What Conditions Required for Sports Betting?

Relating to condition of sports betting business in Vietnam, the enterprises need to be granted a certificate of eligibility for betting business. This is one of the conditional business lines under the strict management.

Regarding horse racing and greyhound racing, the enterprises need to obtain the Certificate of investment registration for the project for construction of horse and/or greyhound racecourses and the Certificate of eligibility for betting business. For horseracing, the charter capital requirement is VND 1 trillion ($44.2 million), while for greyhound racing it is VND 300 billion ($13.2 million). Locations of horse and/or greyhound racecourses are conformable to the socio-economic development planning of the area where such racecourses are located. Therefore, if the project attracts more than one investor, the investor for the project for the construction of horse racecourses and/or greyhound racecourses which covers the business of betting on horse racing and/or greyhound racing shall be selected through bidding process according to law.

Regarding international soccer, the procedures is similar to horse racing and greyhound racing. However, The Government allows one enterprise to pilot the business of betting on international soccer. The duration of pilot international soccer betting business shall be 05 years since the date on which the Certificate of eligibility for international soccer betting business is issued. After such period, the Government shall consider whether or not to continue the pilot international soccer betting business upon the assessment of the collected results. The list of international football matches and tournaments which are selected to provide the basis for the business of betting on international football is stipulated in the Decision No. 1064/QĐ-BVHTTDL issued by the Ministry of Culture, Sports and Tourism.

Which Authorities Will Approve the Sports Betting Activities?

The Ministry of Finance will publicize the conditions, dossiers, procedures for organizing bidding to select enterprises to pilot international football betting business according to the provisions of law. To be able to participate in bidding, the enterprises need to meet the following conditions:

(1) The minimum charter capital shall be VND 1 trillion ($44.2 million)or an equivalent amount;

(2) Having a plan on investment in the technological system, technical equipment and business software to ensure their accurate, safe and stable operation;

(3) There shall be a feasible plan on the business of betting on international soccer and ticket selling methods and locations;

(4) Committing to community assistance.

There are 135 countries in the world officially legalizing sports betting activities. Betting is increasingly on the rise, along with the development of information technology and entertainment. In Vietnam, sports betting is put under the strict management.

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The Politburo First Issued Resolution on FDI Attraction

For the first time after 30 years of attracting foreign investment in Vietnam, the Politburo issued a thematic resolution to guide in the coming years.

On August 21st, General Secretary and State President Nguyen Phu Trong signed Resolution No. 50 on the orientation of perfecting institutions and policies, improving the quality and efficiency of foreign investment cooperation by 2030.

In the period from now until 2030, the guiding point emphasized by the Politburo is to attract FDI selectively, taking quality, efficiency, technology and environmental protection as the main evaluation criteria. At the same time, priority is given to projects with advanced technology, new technology, high technology, clean technology, modern management, high added value, spreading and connecting global production and supply chains.

In addition, the overall objective is to improve institutions and policies of foreign investment cooperation with high competitiveness and international integration. At the same time, basically overcome the limitations in building, completing and organizing the implementation of institutions and policies on foreign investment cooperation.

The Resolution of the Politburo also supplements the provision on the conditions for national defense and security in the process of considering and issuing investment registration certificates with new investment projects and investment activities through the form of capital contribution and purchase of shares.

The Politburo requires clearly defining the responsibilities of investors on environmental protection during the investment period, project implementation and operation of enterprises during the project implementation period. Along with these tasks, policies on investment management and supervision; innovation and efficiency improvement of investment promotion must be paid attention to.

The Politburo noted that the emphasis on inspection, supervision and inspection is associated with improving the responsibilities of local authorities and heads; definitely deal with projects that cause environmental pollution, inefficient land use and business losses for many years, the project does not comply with its commitments.

Statistics show that after nearly 30 years of receiving FDI capital, Vietnam has more than 23,000 FDI projects with a total registered capital of over 300 billion USD. In which, the total implemented capital is about 161 billion USD. Resolution 50 sets targets, registered capital in the period 2021 – 2025 is about 150 – 200 billion USD (30 – 40 billion USD a year); implemented capital of 100 – 150 billion USD. The period of 2026 – 2030, registered capital of 200 – 300 billion USD, implemented capital of 150 – 200 billion USD.

Percentage of enterprises using advanced technology, modern management, environmental protection, towards high technology increased by 50% in 2025 and doubled (100%) in 2030. Proportion of labor through training in the labor use structure from 56% in 2017 to 70% in 2025 and 80% in 2030.

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The procedure for issuing and extending investment visa

Investment visa which is symbolized as DT, is granted to foreign investors who establish or contribute capital to companies operating in Vietnam with the maximum time limit for each grant is no more than 01 year. The issuance of investment visas for foreigners must comply with the provisions of the Law on entry, exit, transit, and residence of foreigners in Vietnam 2014 and Circular 14/2015 / TT-BCA.

According to the current law, in order to be granted a investment visa, the foreign investor need to prepare 01 set of documents including: Certified copy of Business License / Investment License; certificate of seal sample registration or the Notice of posting information about the seal sample of the enterprise on the national portal of enterprise registration; registration of seal sample and signature of the legal representative of the enterprise operating in Vietnam (form NA16); visa application form, visa extension, temporary residence extension for foreigners in Vietnam (form NA5); The original passport is valid as prescribed and the temporary residence registration is required. The dossier is fully prepared and submitted at the Immigration Department of the province where the enterprise is located. The time limit for settlement is 05 days from the date of receipt of complete and valid dossiers.

If foreign investors want to extend the visa, they must apply for the extension within 06 months before the expiration date. Dossiers include: Original passport (valid for at least 06 months); NA5 visa application form; investment certificate, business registration certificate; power of attorney (if any). Dossiers of application for extension of temporary residence visas for foreigners shall be submitted at the Immigration Department or the Immigration Department of the Public Security of the city/province where the enterprise or organization is headquartered. Time for returning results is no more than 5 working days. The investment visa is extended once for no more than 01 year.

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Transfer of Investment Projects in Vietnam

Under the current Law on Investment, investors are entitled to transfer part or all of the project to another investor when satisfied the specific conditions and conducting to procedure of project adjustment under the regulation of law.

The conditions of project transfer

- The project is not terminated in the cases as prescribed in Clause 1 Article 48 of Law on investment;

- Investment conditions applied to foreign investors are satisfied in case the foreign investor receives a project of investment in conditional business lines;

- Regulations of law on law, real estate trading is complied with if the project transfer is associated with transfer of land;

- Conditions in the Certificate of investment registration or relevant regulations of law are complied with.

Preparation of dossier

- A written request for permission for project adjustments;

- A report on the project’s progress up to the time of transfer;

- The project transfer contractor an other document with equivalent legal value;

- Copies of the ID card or passport (if the investor is an individual) or Certificate of Enterprise Registration or another document with equivalent legal value (if the investor is an organization);

- Copies of the Investment Registration Certificate or decision on investment guidelines (if any);

- Copies of the BCC contract (for BCC projects);

- Copies of one of the following documents of the transferee: financial statements of the last 02 years; commitment to provide financial support by the parent company, commitment to provide financial support by a financial institution, the guarantee of transferee’s financial capacity, documents describing the transferee’s financial capacity;

Order and procedure

- Investors submit the dossier at Department of Planning and Investment (or Management of Economic Zone or High-tech Zone);

- Within a period of 10 working days from the date of receipt the complete and valid dossier for an investment project operating under an investment license and not subject to decision of investment policy (or 28 working days from the date of receipt the complete and valid dossier for an investment project which is subject to investment decision of the provincial People’s Committee; 47 working days from the date of receipt the complete and valid dossier for the investment project subject to the decision of the Prime Minister), the competent authorities consider and decide to adjust the investment registration certificate to the investor transferring the project.

Before transferring an investment project, investors need to evaluate the legal situation, apart from the financial, personnel, and other key issues of the project, which are subject of the transfer. Therefore, to ensure effective transfer, investors often engage law firms with highly qualified lawyers in Vietnam to conduct M&A legal due diligence related to the legal documentation of the owner, capital contribution of the shareholder or member, tangible assets (land use rights, plant and machinery, equipment, etc.) and invisible assets (including industrial property rights), licenses, contracts or transactions of great value, taxes and other legal risks such as litigation or disputes which could significantly impact the project..

The transfer of an investment project is an administrative procedure with a state agencies that is only smooth when the parties reached agreements. In fact, the transfer of the investment project’s timeline depends on the appraisal and evaluation process of the parties involved in the project.

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