Business Registration Procedure In Vietnam

Formalities & Procedures of Enterprises Business Law Course

Group members • Vi Minh Hong – BA070075 • Nguyen Thanh Huyen – BA070080 • Nguyen Dang Khoa – BA070285 • Tran Minh Kien – BA070084 • Nguyen Thi My Linh – BA070093 • Nguyen Hai Thanh – BA060040 • Pham Thi Huyen Trang – BA070166 • Phan Nguyen Ngoc Van – BA070175

OUTLINE 1. General Requirements 2. Case: How to establish 3-member Limited Liability Company (LLC) 3. FDI Company

1-General Requirements Based on 88th Decree- 2006 a/ Scope regulation - Regulations on business registration offices - Procedures for business registration - Registration of changes in registered items by enterprises operating pursuant to the Law on Enterprises and by individual household businesses

1-General Requirements b/ Who can? 1. Domestic organizations and individuals;

and individuals undertaking business registration pursuant to the Law on Enterprises. 2. Other organizations and individuals related to business registration.

1-General Requirements

• • • • •

According to the Art No.13 LOEs Following Organizations and individuals shall NOT have the right to establish and mange enterprises in VN State Bodies and Vietnamese people’s armed forces using State asset to make the profit Career servicemen national defense worker Senior management in enterprise with 100% State owned capital Minors, persons whose capacity for civil acts is restricted or lost Person in process of serving prison sentences (prisoner)

1-General Requirements c. Rights & Responsibilities ( Art 3, Dec 88) • Right to setting up enterprises as regulated by the law • Obligation to register their business as stipulated by law • Registries strictly prohibited to make trouble when receiving and processing applications and registration of amendments • Be responsible before the law for the legality, correctness and preciseness of information in registration

1-General Requirements: d/Business Lines ( Art 5, Dec 88) • Be listed in business registration certificates in accordance with the system of national economic lines • Business Lines which require practicing certificates ( license : pharmacist, lawyer, real estate appraiser……….)any one individual shall be permitted to use his or her practicing certificate in one enterprise.

1-General Requirements Example of business lines • Agriculture, forestry and aquaculture • Mining • Manufacturing • Production and distribution of electricity, gas, hot water, water vapor, and air conditioning • Etc…

1-General Requirements Prohibited business lines • Weapons, ammunitions, military equipments… • Explosives, poisons, radioactive substances… • Drugs • Noxious chemicals • Firecrackers • Prostitution, women & children trafficking • Reactionary, superstitious products • Rare wild plants, animals… • Prohibited toys

1-General Requirements e/Capital • Contributing Capital Certificate • No stipulation for legal capital, except some particular lines of business, professions 1. Securities a. Medium: 3 billions VND b. Portfolio management: 3 billions VND c. Security Investment Advisor: 3 billions VND 2. Insurances a. Life Insurance: 140 billions VND b. Non-life Insurance: 70 billions VND c. Medium: 4 billions VND 3. Real Estates: 6 billions VND

1-General Requirements f/Others

• Names, addresses of head offices, branches, representative offices • Registration fees: 200.000 VND

2-Case: How to establish 3-member-LLC • • • • •

Com pan yLeg al Rep resent at i ve : N guy enVan A

•

3 members A, B, C want to establish a 3-member limited liability company with: Enterprises Name: ABC Timber Production Limited Liability Company Business Line: Timber Production Head Office Address:1A, Quarter 6, Linh Trung Ward, Thu Duc District, Ho Chi Minh City Charter Capital: 1,000,000,000 VND Charter contribution of each member: A

B

C

55%

25%

20%

2-How to establish a 3-member LLC Business registration procedures 1. Business registration dossier: A. Fill in the business registration application form B. Signed charters of the company C. List of members D. Certification of legal capital( if any) E. Practice certificate( if any)

2. Seal of enterprise registration 3. Tax code registration

2-1a. Fill in the BR application form

Department of Planning & Investment H

NGUYEN VAN A

General Director 01 01 1980 Kinh 024363989 05 10 1998

Vietnamese HCM Police

451 Nguyen Trai, Dist. 5, HCM

451 Nguyen Trai, Dist. 5, HCM 08.82752755 08.82752754 [email protected]

2-1a. Fill in the BR application form

CÔNG TY TNHH SẢN XUẤT ĐỒ GỖ XÂY DỰNG ABC

ABC Co., Ltd 1A, quarter 6, Linh Trung ward, Thu Duc district, HCMc (083) 2345678 (083) 234567.............. [email protected] www.ABCwood.com

1

16220

Timber Production

2-1a. Fill in the BR application form 1,000,000,000 VND 1,000,000,000 VND 1,000,000,000 VND 10,000 shares 100,000 VND 4000 common shares, 2000 preferred shares

4000 common shares

2-1a. Fill in the BR application form Gỗ xây dựng ABC, 9, Nguyễn Thị Minh Khai street, district 1, HCM city Gỗ xây dựng ABC, 191, Quang Trung street, district 9, HCM city

2-1b. Signed charters of the company • What is Charter? A document, usually under seal, granting specific rights and setting forth the goals and principles of an incorporated body. (http://www.hsn.org/default.asnx?id=885)

CHARTERS of the company I.

NAME, FORM, HEADQUARTERS, LEGAL REPRESENTATIVE, BRANCHES, REPRESENTATIVE OFFICES OF THE COMPANY

• The legal name of the Company in Vietnamese is: CÔNG TY TNHH SẢN XUẤT ĐỒ GỖ XÂY DỰNG ABC • The Company is headquartered at : 1A, quarter 6, Linh Trung ward, Thu Duc district, HCMc II. BUSINESS LINE: Timber Production

CHARTERS of the company III. CHARTER CAPITAL &CAPITAL CONTRIBUTION

Capital charter: 1,000,000,000 VND IV. LIST OF MEMBERS, RIGHT & RESPONSIBLILITY OF MEMBERS: (art 41&42, LOEs 2005)

• Right to request the meeting of the Members’ council: capital contribution >= 20%. • Have responsibility to announce any changes in member’s information

CHARTERS of the company V. OBJECTIVES, BUSINESS SCOPE AND OPERATIONS OF THE COMPANY

Objectives of the Company: – Provide timber for construction in HCMC – Direct Import-Export VI. ORGANIZATION, MANAGEMENT AND CONTROL

Company’s management organizational structure comprises: – Members’ Council – Board of directors – Departments

CHARTERS of the company VII. SETTLEMENT OF INTERNAL DISPUTES

When the conflict happens: - Members will try to solve the conflict through negotiation and reconciliation - Ask for the assignment of an independent expert to act as an arbitrator for the settlement of the conflict - Bring the case to the Economic Arbitration or to the Economic Court.

CHARTERS of the company VIII. PROFIT SHARING

After paying for all the debt and company fund (compulsory reserved fund, welfare fund…), the profit will be distributed according to the proportion of capital contribution.

2-1c. List of members

2-1d&e. Legal Capital & Practice Certificate • Certification of legal capital (if any) Ex: Aviation Port Services - Legal capital in international airport: 100 billion VND domestic airport: 30 billion VND • Valid copy of the practice certificate Ex: Legal services Medical examination and treatment services Auditing services

2-2. Seal of enterprise registration Seal of enterprises

Register at police offices of the provinces and centrally-run cities where your headquarter locates

2-3. Tax code registration Tax code registration - Register at Tax departments of provinces and centrally-run cities where your headquarter locates - Import-Export tax registration

3. FDI Company Procedure to establish foreign owned company Investment certificate = business registration certificate

3. FDI Company Documents required: 1. Written request for issuance of an Investment Certificate 2. Report on financial capability of the investor 3. Signed charter of the company 4. Legal documents concerning housing and land of the main office and place of implementing the projects 5. List of members

3. FDI Company Time and venue • Department of Planning and Investment Division of Management of Foreign Invested Enterprise • Time for receiving and returning results: from Monday till Friday (30 working days) • Free of charge

CONCLUSION Business registration procedure: 1. Business registration dossier: A. Fill in the business registration application form B. Signed charter of the company C. List of members D. Certification of legal capital( if any) E. Practice certificate( if any) 2. Seal of enterprise registration 3. Tax code registration

REFERENCES • 88th Decree- 2006 , Circular 03/2006TT-BKH, Law on Enterprise 2005 • http://www.vietlaw.gov.vn/LAWNET/index.html • http://www.dpi.hochiminhcity.gov.vn/vie/news_ detail.asp?period_id=1&cat_id=42&news_id=364 • http://www.camnangphapluat.com/viVN/Home/ dichvu/2007/08/663.aspx • http://www.business.gov.vn/advice.aspx? id=74&LangType=1033