Benefits of Representative Offices in Vietnam

Establish company inVietnam

Following the trend of international economic integration, foreigners have been attracted by the benefits of doing business in Vietnam through setting up representative office, setting up company, acquiring shares in Vietnam enterprise through M&A activity.

At the initial stage, foreign entity would try to research market, undertake due diligence on its clients, buyers, clients, or other business partners therefore many will be interested in establishing a representative office in Vietnam.

The foundation of representative office of foreign entity in Vietnam is governed under Vietnam Commercial Law 2005 and Decree 07/2016 / ND-CP dated 25 May, 2016.

Advantages of establishment of a representative office:

Establishing a representative office is a tool to research the market. For the first time, foreign enterprises entering the Vietnam market, the primary purpose is understanding the market, undertaking research on clients, or due diligence on their business partners, distributors, monitoring the performance of buyers and being familiar with the Vietnam market. The establishment of representative office in Vietnam turns out to be the most effective option both of cost and time.

The representative office in Vietnam is an effective tool to promote commercial activity, seeking partners, and increasing opportunities to expand business market in Vietnam.

Representative office form in Vietnam has allowed foreign entity to receive benefits such as recruiting Vietnamese employees, foreign employees working in offices whom could apply for work permit in Vietnam, then temporary residence card in Vietnam, opening bank accounts in foreign currencies or Vietnam dong at commercial banks, and to be allowed to use those accounts solely for their operations.

According to the laws of Vietnam, the establishment of representative offices does not require the investor’s capital. Instead, setting up a company in Vietnam, an economic organization requires capital contribution as per business plan, ranging from USD 50 k to million USD. Sometime, if the investment fall under conditional areas, setting up company seems more challenging. This relieves the foreign trader from advancing too much to achieve the purpose of expanding the market before the business plan has been proved to materialize.

Further, the establishment of representative office follows more simple procedures for licensing in Vietnam than establishing entity in Vietnam. Accordingly, the process has been taken less time which is more favorable for foreign traders.

Challenges of the establishment of representative office in Vietnam?

Vietnam law provides that, in order to establish a representative office in Vietnam, foreign traders have to prove the fulfillment of the financial responsibility in their country. In practice, the foreign entity is expected to provide audited financial statements. In some countries, the financial audited report is not available according to laws. The Vietnam Department of Trade and Commerce, which state authority would grand representative office operation certificate would require documents showing the fulfillment of tax liabilities or financial obligations of the last fiscal year, or equivalent documents as proof of existence and operation of the foreign trader issued or certified by competent authorities where such foreign trader is established. This provision may initially be difficult. However, if the foreign trader has been established and operated legally in their country, the implementation of this provision is not a major obstacle.

As a large potential market such a Vietnam, as well as the current rapid reform in administrative procedures, Vietnam Government has been more flexible to encourage foreign traders doing business in Vietnam, hence the establishment of representative offices is an optimal method to consider for market research, trade promotion and a stepping stone to penetrate the Vietnam market successfully.

The commercial law and other business laws in Vietnam are frequently changing toward attracting more quality investment projects into Vietnam. ANT Lawyers in Hanoi, Da Nang and Ho Chi Minh City continue to follow and provide update to its clients for their smooth operation in Vietnam.

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The Business Conditions for Sports Betting in Vietnam

Law firm 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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Benefits of Investors to Set-up Business in Ho Chi Minh City

Law firm in Ho Chi MinhCity

Ho Chi Minh City offers many benefits for foreign companies to do business and invest.

The population of Ho Chi Minh City is of more than 10 mil, earning a higher average income than other part of the country. Consumer retail has found Ho Chi Minh City as an attractive market for investment in retail shops, malls, introducing quality consumer goods to the local.

Ho Chi Minh City offers adequate infrastructure such as the Sai Gon port systems, deep seaport access from Vung Tau port systems, Tan Son Nhat international airport, and possible Long Thanh international airport project, Saigon railway station, the expressways, etc, connecting the city to neighbouring countries in the region and other part of the world. Through setting up factories in industrial zones, processing zones, local and international manufacturing companies could take advantage of high quality labor resources at reasonable cost and move the finished goods to final destinations in US, EU with reasonable lead-time and expenses. Consequently, the city has become leading industrial city of Vietnam, contributing more than 30% industrial production, 30% GPD and 30% national income to the country’s total.

Ho Chi Minh City is also a financial center, which the biggest stock exchange is located. Many corporations, and investment companies has chosen Ho Chi Minh City to set-up management and investment offices to search for opportunities, conduct Merger and Acquisitions and other business transactions, to leverage the annual growth of the country at more than 6%.

At the same time, the city government has been improving policies to support the removal of difficulties for foreign-invested enterprises investing in Vietnam through fixing administrative procedures to shorten the administrative process, saving time for investors, offering “one-stop” mechanism at the main state agencies.

Our professional consultants and lawyers have assisted a number of foreign companies and individuals to conduct transactions, set-up companies, make investment through M&A, and actively involve in the development of Ho Chi Minh City in particular and the whole country

How ANT Lawyers Could Help Your Business?

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Why Da Nang is a Place for Setting up Business

Lawyers in Da Nang

Da Nang has been creating flexible policies, good environments attracting foreign investors setting up company, building factory, and developing service business.

Da Nang is a social and economic center of central area of Vietnam with the role as the center of industry, trade and tourism and service. It is a seaport city, an important transport hub for the transit of domestic and international transportation. Presently, Da Nang has been rising as a comprehensive and sustainability developing city.

With the advantages of geographical location, people and nature, the leader of Da Nang is planning to build the city becoming a major tourist center of the country, developing tourism industry with entertainment centers and luxury resorts in Vietnam.

In practice, Da Nang has been reducing administrative procedures, creating favorable conditions for investors in obtaining certificate for investment. In the meantime, the city also supports investors understanding the information and maintaining direct dialogue mode with businesses leaders and managers in order to promptly assist any difficulties encountered by investors in the process of project implementation. Da Nang’s leaders are famous in being proactive in providing the latest information about the law in investment, especially information on the process of changing investment certificate… to facilitate the investment plan of the investors whom are investing in Da Nang. For investment projects in infrastructure construction using ODA capital, the city has been quickly implemented the clearance and compensation in time to hand over the project site to the investors as planned.

To ensure the tourism environment and sustainable development, the city focuses on attracting projects in high technology industry, supporting industry and services with high added value i.e. information technology, education, healthcare and logistics…, especially favouring clean and quality projects rather than large projects but are likely to cause environmental issues.

Along with economic development, Da Nang also has activities and measures for environmental protection by investing in building projects to protect and improve the environment such as: modernization the sewer and wastewater treatment system (JICA), building east-west economic corridor (ADB)… to ensure sustainable and long term development of the economy.

An important element for economic development is the local security. Da Nang has done a great job in maintaining public security in order to guarantee investors a stable and safe political, social environment for investors.

It can be seen that Da Nang converges suitable elements and really is a promising land for investors both domestic and international, to invest in entertainment, real estate, tourism, IT, healthcare, education services.

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Hanoi looks to boost cooperation with Germany’s Thuringia State

Establish company inVietnam

Hanoi is willing to cooperate with and create favourable conditions for German enterprises as a whole and those from Thuringia State in particular to do business in the city, Chairman of the municipal People’s Committee Nguyen Duc Chung affirmed.

Addressing a working session with a high-level delegation of Germany’s Thuringia State, led by its Minister President Bodo Ramelow, in Hanoi on April 8, Chung suggested that the two sides strengthen the sharing of experience and continue to carry out specific cooperation projects, especially in the areas of Hanoi’s demand, such as labour, vocational training, the provision of highly technical medical equipment, digitalisation of databases, and smart city building.

He informed the guests of Hanoi’s socio-economic development over the past few years and also touched on the major challenges currently faced by the city concerning the training of high-quality human resources, traffic congestion and environmental pollution.

One of Hanoi’s efforts to deal with the aforementioned challenges is to accelerate cooperation with European countries, including Germany, Chung said, stating that modern the technological equipment of Germany and Thuringia State are quite suitable for Hanoi.

For his part, Minister President of Thuringia Bodo Ramelow affirmed that relations between Thuringia and Hanoi have been growing finely over recent times, with Thuringia’s businesses highly appreciating the learners from Vietnam.

He voiced his wish that Hanoi and Vietnam would continue to be a trusted partner of Thuringia, agreeing with the Hanoi mayor on the enhancement of experience sharing between the two sides and further bilateral cooperation in the handling of environmental pollution issues and vocational training.

The high-ranking delegation of Germany’s Thuringia State, led by its Minister President Bodo Ramelow, is paying a working visit to Vietnam (Hanoi and Ho Chi Minh City) from April 6 to 13, at the invitation of Deputy Prime Minister and Foreign Minister Pham Binh Minh

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How Lawyers Could Assist to Collect Debt

Debt Recovery Lawyers inVietnam

The collection of bad debt and late payment after sales or services are difficult and sensitive jobs in Vietnam. Therefore, such job has always been handled by the law firm in Vietnam whom is aware of law and the process. The lawyers in Vietnam whom receive the case should be well informed about the legal nature of the debt profile and they must have skills on debt recovery.

Depending on the nature of each case and each specific dossier, the law firm can be able to make suitable plans to deal accordingly with the debtor.

There will be a number of methods and different solutions in the work of debt recovery. However, the recovery of debt will apply the following two basic methods:

– Mediation and agreement methods are ways that lawyers and legal professionals will come directly to negotiate and persuade debtor to make their debt payment schedule based on understanding of law and various drivers.

– Resolve through court proceeding, or arbitration. This method will be applied in the case that debtors are unwilling to cooperate, trying to evade responsibility, or the payment plan is delayed.

Time limit for settling the debt collection is influenced by different factors but the two most important factors are the legality of the documents and the payment capability of debtors.

There are debtors, after being explained the consequences and losses of non-payment, late payment by lawyers and legal experts, they were aware of and make plans to pay debts.

But there are debtors that the client requires the support and intervention of the state authorities. In such case, the duration of the case will be prolonged.

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The changes of laws will be monitored by ANT Lawyers. For advice or service request, please contact us via email ant@antlawyers.vn or call +84 28 730 86 529

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