business registration procedure in vietnam

Formalities & Procedures of EnterprisesBusiness 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- 2006a/ 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

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, professions1. Securities

a. Medium: 3 billions VNDb. Portfolio management: 3 billions VNDc. Security Investment Advisor: 3 billions VND

2. Insurancesa. Life Insurance: 140 billions VNDb. Non-life Insurance: 70 billions VNDc. 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

1-General Requirements

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

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%

• Company Legal Representative: Nguyen Van A

2-How to establish a 3-member LLC

Business registration procedures1. Business registration dossier:

A.Fill in the business registration application formB. Signed charters of the companyC. List of membersD. Certification of legal capital( if any)E. Practice certificate( if any)

2. Seal of enterprise registration3. Tax code registration

2-1a. Fill in the BR application form

Department of Planning & Investment HCM

01 01 1980General Director

024363989Kinh

NGUYEN VAN A

Vietnamese

05 10 1998 HCM Police

451 Nguyen Trai, Dist. 5, HCM 451 Nguyen Trai, Dist. 5, HCM

anguyen@gmail.com08.82752755 08.82752754

CÔNG TY TNHH SẢN XUẤT ĐỒ GỖ XÂY DỰNG ABC

ABC Co., Ltd 1A, quarter 6, Linh Trung ward, Thu Duc district, HCMc

(083) 234567.............. (083) 2345678 ABCCo@yahoo.com www.ABCwood.com

1 16220 Timber Production

2-1a. Fill in the BR application form

1,000,000,000 VND

2-1a. Fill in the BR application form

1,000,000,000 VND10,000 shares

100,000 VND

4000 common shares, 2000 preferred shares 4000 common shares

1,000,000,000 VND

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

2-1a. Fill in the BR application form

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 companyI. 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 companyIII. 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 companyV. 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 companyVII. 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 companyVIII. 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

• 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

2-1d&e. Legal Capital & Practice Certificate

Seal of enterprises

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

2-2. Seal of enterprise registration

Tax code registration - Register at Tax departments of provinces

and centrally-run cities where your headquarter locates

- Import-Export  tax registration

2-3. Tax code 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

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

3. FDI Company

CONCLUSION

Business registration procedure:1. Business registration dossier:

A. Fill in the business registration application form

B. Signed charter of the companyC. List of membersD. Certification of legal capital( if any)E. Practice certificate( if any)

2. Seal of enterprise registration3. 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