How to Set Up Company in Hanoi?

How to Set Up Company in Hanoi?

The Law on investment 2021 has a lot of investment incentive policies in economic sectors in Vietnam for foreign investors.

Foreign investors that invest in Vietnam in general and Hanoi in particular 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 (“IRC”) and Enterprise Registration Certificate (“ERC”). Company with 100% foreign capital has founded and operated from the date of issuance of the investment certificate.

The investor who wishes to apply for IRC in Hanoi, s/he need to have a possible project which is accepted by the Government (The Department of Planning and Investment of Hanoi City). The dossier on applying for IRC

For Investment Registration Certificate, the investor must prepare the dossier included:

i) An application form for execution of the investment project, including a commitment to incur all costs and risks if the project is not approved;

ii) A document about the investor’s legal status;

iii) Document(s) proving the financial capacity of the investor including at least one of the following documents: the investor’s financial statements for the last two years; commitment of a parent company to provide financial support; commitment of a financial institution to provide financial support; guarantee for the investor’s financial capacity; other document proving the investor’s financial capacity;

iv) Proposal for the investment project including the following main contents: investor or method of investor selection, investment objectives, investment scale, investment capital and plan for raising capital, location, duration and schedule of the investment project, information about the current use of land in the location of the project and proposed demand for land use (if any), demand for labor, proposal for investment incentives, impact and socio – economic efficiency of the project and preliminary assessment of environmental impact (if any) in accordance with regulations of law on environmental protection.

If the law on construction requires formulation of a pre-feasibility study report, the investor is entitled to submit the pre-feasibility study report instead of a proposal for the investment project.

v) If the project does not require the State to allocate or lease out land or to permit land repurposing, a copy of the document regarding the land use rights or other document identifying the right to use the location for execution of the investment project is required to be submitted;

vi) Contents of the explanation for the technology to be used in the investment project if the project requires appraisal and collection of opinions on the technology in accordance with the Law on Technology Transfer;

vii) The business cooperation contract if the investment project is executed under a business cooperation contract;

viii) Other documents relating to the investment project, and requirements on the eligibility and capacity of the investor in accordance with regulations of law (if any).

After having the project, the investor needs to apply for Business Registration Certificate, the dossier included:

i) An application for enterprise registration;

ii) The enterprise’s charter;

iii) A list of members of a limited liability company with two or more members or a list of general partners;

iv) A notarized copy of identity card or valid passport of individual member;

v) A notarized copy of the Business Registration Certificate of the organization’s member;

vi) A notarized copy of valid identity card or passport of the organization’s legal representative;

vii) The copy of Investment Registration Certificate.

The time for applying the investment project is 15 working days and the time for applying the company is 03 working days after the date of submitting the valid dossier.

ANT Lawyers, a law firm in Vietnam could offer service to set-up company in Vietnam. We assist clients needing legal service in obtaining investment certificate, business registration certificate, or other  licensing procedures.

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Network security services – Cybersecurity solutions in the new situation

Network security services – Cybersecurity solutions in the new situation

Information technology is existing in almost all areas of life, contributing to increasing work efficiency, saving time and costs. Besides these advantages, users also face many risks from loss, leakage of personal data, and organizational information and invasion of privacy when accessing the network. Therefore, network security service has becoming a necessary solution. Accordingly, Vietnam Ministry of Public Security proposed to consider cybersecurity protection services as business lines which are subject to conditions in the Vietnam Investment Law.

 Personal data security lawyers in Vietnam

According to statistics in 2021, the Ministry of Public Security has recorded and analyzed nearly eight million warnings related to cyberattack activities, thereby detecting and verifying 2,763 cyberattacks targeting portal sites in the country (up 26% compared to 2020). In addition, cyberattacks tend to increase, causing political influence and greater economic losses. In addition, the situation of illegally collecting and infiltrating information and data of organizations and individuals for illegal purpose are increasingly complicated. The participation of network security services will contribute to strengthening the protection of the network security environment, especially important economic organizations such as banks, securities, state agencies, which are organizations that have vital role of the country.

On the other hand, the development of network security services is in line with the development policy of the country. Specifically, in Resolution No. 30 of the Politburo on the National Cybersecurity Strategy, the ultimate goal has been determined to reduce the risk of national security and social order and safety being compromised. Moreover, the Government has also issued Resolution No. 22 on the action plan to ensure national cybersecurity. Accordingly, the Ministry of Public Security shall assume the prime responsibility for formulating a Decree stipulating conditions for trading in cybersecurity products and services. Therefore, making network security services a business line is consistent with the current context and development orientation.

In addition, approving network security services will guide specific regulations and conditions for businesses. Businesses and organizations and individuals providing cybersecurity products and services will need to actively comply with regulations. The business conditions for network security services will ensure that network security products and services to be provided by reputable and capable service providers. Accordingly, improving policies and laws and improving the effectiveness and efficiency of state management of information, communication and network security will be a solid basis for cybersecurity services to demonstrate their functions and roles its important role in the overall development of the country.

Moreover, developing quality and effective cybersecurity services will create more opportunities and attract more foreign investors to participate in the Vietnam market. Most business activities now have involved the Internet connection, and therefore the risks such as information security and data security will be an issue of concern to investors making investment, setting up company in Vietnam. If network security services that support risk reduction and data recovery to help run business well, it will create confidence and motivation for investors.

The Ministry of Public Security expects network security products and services to include: (i) Confidential products to collect information (devices where hardware and software have the function of collecting information, documents, and data) via cyber – spyware; (ii) Security control products for network traffic (in which specialized hardware and software equipment for competent state agencies are designed with specific features to protect targets, systems, etc.) information system to warn, detect and prevent cyber security violations; (iii) Network security monitoring services, network security testing, knowledge training, network consulting, standards assessment. These are services and products that have practical applications and are capable of meeting the needs of individuals and organizations using cyberspace.

Therefore, although cybersecurity services have not yet been officially approved, in the current context, network security services will be an effective solution to work with the Government to build a digital environment and develop digital technology secure and sustainable information technology in line with the speed of global development. It is expected that when cyber security services are specified, it will promote a healthy, safe and effective cyber environment and hence promote the business and investment in Vietnam.

ANT Lawyers is a network security law firm in Vietnam located in the business centers of Hanoi, Danang, Ho Chi Minh city. We provide convenient access to our clients. Please contact our lawyers in Vietnam for advice via email ant@antlawyers.vn or call our office at +84 28 730 86 529.

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Vietnam attends APEC Ministers Responsible for Trade Conference

Vietnam attends APEC Ministers Responsible for Trade Conference

The 27th APEC Ministers Responsible for Trade (MRT) took place online on June 5, 2021 with the participation of 21 APEC member economies and observers including the Association of Southeast Asian Nations (ASEAN), the Asia-Pacific Economic Cooperation Council (PECC) and the Pacific Islands Forum (PIF). Measures to open market will be discussed to facilitate trade and investment, including the smooth policy from Vietnam to support to establish company in Vietnam.

In 2020, due to the impact of the Covid-19 pandemic, the global economy shrank 3.3%. However, because of strong efforts in the introduction of vaccine production and vaccination, financial support programs in some countries, as well as more effective disease containment measures in many countries, this year’s global economy is forecasted to achieve marked improvements compared to 2020. According to a report by the International Monetary Fund (IMF) published in April 2021, the global economy is forecast to reach 6% in 2021 and 4.4% in 2022.

At this meeting, APEC Ministers focused on discussing trade policies to respond to the COVID-19 pandemic. Measures taken include ensuring open markets, promoting the smooth flow of trade in essential goods and services, and facilitating safe and effective vaccine supply chains.

Another important content of the 27th MRT Conference is to support the multilateral trading system, including the progress of implementing reforms of the World Trade Organization (WTO) and updating the progress of negotiations in many fields, such as fisheries subsidies, special and differential treatment, industrial subsidies, market access, agriculture, etc. The APEC Ministers expressed their hope that reform and progress in WTO negotiations will bring positive results, contributing to strengthening the role of the multilateral trading system as well as global and regional economic integration.

At the Conference, the Vietnamese representative also affirmed that Vietnam would actively participate in negotiations and discussions to resolve current issues in the WTO to contribute to the success of the 12th WTO Ministerial Conference. In addition, Vietnam also supports initiatives to promote the movement of goods and services in the region, both to help prevent the epidemic and to develop the economy.

Through the meeting, the participants hoped that in the coming time, in parallel with fighting the epidemic, the parties would also take measures to promote trade and investment to achieve the goal of economic development in the world. Vietnam commits to support the global trade and policy to smooth investment into Vietnam through setting up company in Vietnam.

ANT Lawyers, a law firm in Vietnam could offer service to set up company in Vietnam. We assist clients needing legal service in obtaining investment certificate, business registration certificate, or other  licensing procedures. 

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How to Close a Business in Vietnam

How to Close a Business in Vietnam?

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

-Company size in terms of capital and number of employees?

-Enterprise’s business sector?

-Tax invoice usage declaration?

-Annual profit?

-Compliance with tax procedures?

-Administrative violations in the field of taxation?

-Any outstanding tax?

-Tax document filing records?

-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

-Liquidation notice of enterprise;

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

-The company’s decision on liquidation;

-Report on enterprise asset liquidation;

-The list of creditors and the paid debt;

-Documents evidencing that enterprise has fulfilled all of its tax;

-Confirmation on social insurance for employees after the dissolution decision;

-The seal and certificate of seal sample registration.

2. Documents submitted to the tax authority in Vietnam

-Liquidation notice of enterprise;

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

-The company’s decision on dissolution;

-Audit reports and tax settlements;

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

-The company’s tax liabilities audited by tax authority;

-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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Vietnam attracts FDI in 10 months of 2021

Vietnam attracts FDI in 10 months of 2021

In 2021, due to the spread of the Covid-19 epidemic in the world, the economic situation has been seriously affected. This greatly affects the investment performance of investors making investment in Vietnam. However, Vietnam government still implements many policies to attract forein investors to set up company, make investment, in order to realize the “dual goal” of fighting the epidemic and developing socio-economic and achieving economic growth to get the high results.

According to statistics of the Ministry of Planning and Investment, as of October 20th, 2021, the total newly registered capital, adjusted and contributed capital to buy shares, and buy capital contributions from foreign investors reached USD 23.74 billion, which is accounted for 1.1% more than the same period in 2020. Realized capital of foreign investment projects is estimated at USD 15.15 billion, accounted for 4.1% over the same period in 2020.

Accumulated to October 20th, 2021, the Vietnam has attracted 34,266 projects with a total registered capital of over USD 404 billion. The accumulated realized capital of foreign investment projects is estimated at over USD 247 billion, equal to 61.1% of the total valid registered investment capital.

Foreign investors have invested in 18 industries out of a total of 21 national economic sectors. In which, the processing and manufacturing industry leads the way with total investment capital of USD 12.74 billion, accounting for 53.7% of total registered investment capital. Next is the electricity production and distribution industry ranked second with a total investment of USD 5.54 billion, accounting for 23.3% of the total registered investment capital. Followed by real estate, wholesale and retail businesses with a total registered capital of USD 2.12 billion and over USD 803 million respectively.

In terms of the number of new projects, the processing and manufacturing industry, the wholesale and retail trade, and professional and scientific and technological activities are the industries that attract the most projects, accounting for 33.1% and 27.8% respectively, and 16% of total projects.

There are 97 countries and territories have the investors invested in Vietnam in the 10 months of 2021. In which, Singapore leads with a total investment of USD 6.77 billion, accounting for 28.5% of total investment capital in Vietnam. Korea ranks second with USD 4.15 billion, accounting for 17.5% of total investment capital. Japan comes third with a total registered investment capital of nearly USD 3.4 billion, accounting for 14.3% of total investment capital.  Investment amount is followed by China, Hong Kong, Taiwan,…

Foreign investors have invested in 58 provinces and cities in Vietnam in 10 months of 2021. Long An province leads the way with a total registered investment capital of USD 3.68 billion, accounting for 15.5% of total registered investment capital, including a large power project of up to USD 3.1 billion (accounting for 84.2% of total registered investment capital of Long An province). Ho Chi Minh City comes to second place with over USD 2.73 billion, accounting for 11.5% of total investment capital. Hai Phong city ranks third with a total registered capital of USD 2.72 billion, accounting for nearly 11.5% of total investment capital. Next are Binh Duong, Can Tho, Quang Ninh,…

In terms of the number of projects, foreign investors still focus a lot on investing in big cities with convenient infrastructure such as Ho Chi Minh City, Hanoi, Bac Ninh. In which, Ho Chi Minh City leads in number of new projects (34.1%), number of adjusted projects (17.7%) and capital contribution and purchase of contributed capital (59.4%).

In addition, Vietnam has implemented the selective investment attraction policies (reducing quantity, increasing quality) to eliminate small-scale projects with little added value. This also partly affects the number of projects of small investors planning to invest in Vietnam.

To ensure safety in the prevention and control of the Covid-19 epidemic, Vietnam has applied a policy of restricting entry and implementing long-term isolation, which affects the progress of surveys and implement the procedures of experts and project development groups.

Due to the impact of the epidemic, Vietnam has implemented a factory blockade and restricted the movement of workers in industrial zones, slowing production, reducing capacity and output, and disrupting the supply chain. This affects the psychology of new investors who are planning to invest in Vietnam.

In 2021, many factors affect the investment performance of international investors to Vietnam. However, with many policies to support and attract investment, Vietnam still becomes an investment destination for many big investors in the world. In late 2021 and early 2022, with many policies to attract FDI to revive the economy after the epidemic, Vietnam hopes that international investors can seize the opportunity to make investment, establish company in Vietnam, in order to bring the best economic benefits for their business.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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What Are Legal Framework for Fintech in Vietnam

The 4.0 industrial revolution along with the explosion of the Internet has created the basis for the forward leap in all fields of life. The financial sector is not an exception and is directly affected by science and technology.  In addition to traditional finance, a new type of finance has been formed with superior characteristics which are appropriate for the current situation and actual needs, which is Fintech – Financial Technology. Despite the advantages of Fintech, the process of operating it faces certain difficulties including the legal challenges.

Fintech Lawyers in Vietnam

Fintech may utilize technologies being big data, cloud computing, artificial intelligence, biometrics and blockchain… There is no comprehensive legal framework for such at the present in Vietnam. Hence, regulations on science, technology, information technology and intellectual property can be applied depending on the nature of the matters including Law on Intellectual Property, Law on Information Technology, Law on High Technology, Law on Science and Technology, Law on Cyberinformation Security and Cybersecurity Law. These regulations partly facilitate the research, development and application of technological innovation together with ensuring the protection of databases and related intellectual property.

In particular, digital payment is a big part of Fintech. This sector is governed by Law on Credit Institutions, and regulations on non-cash payments, intermediary payment services. The Prime Minister also issued Decision 316 since March 9, 2021, allowing the use of mobile money to pay for goods and services of small value. This is the legal basis for the establishment of Fintech companies providing digital payment services and for the use of this method by customers. Fintech application also extend to Peer to Peer lending, asset management, and crypto currencies which are not yet clearly regulated in Vietnam.

Because of the importance of making legal regulations governing Fintech, Official Dispatch No. 2433/VPCP-KTTH dated August 31, 2021 of the Government Office directed: “The State Bank of Vietnam chairs and coordinates with relevant agencies to continue studying and concretizing regulations on the pilot mechanism of P2P lending in the process of developing and finalizing the draft Decree on a controlled trial mechanism. Control (Regulatory Sandbox) financial technology activities in the banking sector, report to competent authorities for consideration and decision in accordance with the provisions of the Law on Promulgation of Legal Documents”. On September 6^th, 2021, the Government issued Resolution No. 100/NQ-CP approving the proposal to formulate a Decree on a mechanism for controlled testing of Fintech activities in the field of the banking sector. In April 2022, after the research process, the State Bank of Vietnam published the Draft Decree on the controlled trial mechanism for Fintech activities in the banking sector. This draft is still at the stage of seeking public comment and has not been approved. The formation of the draft marks a new step in Vietnam’s legal framework for Fintech, laying a solid foundation for the later birth of the Decree.

In case the Draft is approved, the Government will officially issue the Decree on Controlled Trial Mechanism for Fintech in the banking sector. This Decree will serve as a basis for credit institutions and financial technology companies to test Fintech technology in their operations to a controlled extent. They can assess the effectiveness and possible risks when using Fintech solutions. Based on the results of the experiment, the legislature can identify issues that need to be corrected by legislation to promulgate legal documents regulating Fintech in the banking sector. If so, banking will be a pioneering field, leading to the formation of Fintech regulations in other fields.

In the face of the strong and rapid development of internet and its application, it is natural to have a separate legal framework for Fintech in Vietnam in the future. Fintech lawyers in Vietnam whom are interested in Fintech could also take part in the process of making the contribution through the comments on draft law drawing from the practical cases advising the clients. It is obvious that, some of the biggest companies in the word are in the technology industry. Among them, Fintech is the fastest growing start-up. The sooner legal framework on Fintech can be issued, the better for Vietnam to snap up opportunities to attract investment and catch up with the world.

Our Fintech, banking lawyers at ANT Lawyers - a Law firm in Vietnam will always follow up with development of legal framework in Fintech in Vietnam to provide update to clients.

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