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Acquire 49% equity of a pure local company

This is with regards to our conservation from which you requested us to advise for you (hereinafter referred to as “Client”) to acquire 49% equity of a pure local company (hereinafter referred to as “Vietnam company”).
Thus, we are pleased to present herewith our Legal Service Proposal for your kind reference.

1.OUR PRELIMINARY COMMENTS
According to information provided by Client, we understand that, main business activities of Vietnam company are (i) wholesale of bitumen and additives formulation; (ii) wholesale of rice; (iii) wholesale of food.
Under Vietnam Law, whole sale of goods is classified to trading activities and is considered as conditional investment sector.
Under Vietnam-WTO Commitment, the Government does not have obligation to open Vietnam Market for foreign investor to trade rice product.
Also, we would like further note that, according to our practical experience in previous similar case, Vietnam Government trends to restrict granting license for Foreign Individual Investor to trade goods (including wholesale and retailed sale) in Vietnam.
Thus, possibility of success of Client to acquire 49% equity of Vietnam company shall very much depend on Client’s approval for change of main business activities of this company in order to comply with Vietnam Law on Investment.
Particularly, the amended business line of Vietnam company should be as follows:
  • Implementation of import and export right against wholesale of bitumen and additives formulation. HS Code of such products shall be also required to be recorded in Business License of this company.  
We also would like to note that, procedure for acquiring 49% equity from Vietam company by Client shall be subjected to two following steps:
  1. Step 1: Register for amendment of Certificate of Business Registration for recording Client as Member of this company;
  2. Step 2: Client is to obtain the Investment Certificate for investment into this company.
2.   scope of works
With regards to acquisition of 49% equity of Vietnam company, our scope of work shall be as follows:
Preparation of the application documents:
  • Notifying application documents required in accordance with Vietnamese law;
  • Drafting application documents required for submission purpose including board resolution, joint venture contract, corporate charter, application etc;
  • Liaising with Client to discuss the draft application documents;
  • Amending the application documents based on your comments;
  • Obtaining preliminary comments from the licensing authority on the draft application documents;
  • Finalizing the application documents following comments from the licensing authority; and
  • Translating the final version of the application documents into Vietnamese for execution.
Licensing procedures:
  • Submitting the application dossier to the licensing authority on your behalf;
  • Monitoring and following up with the relevant authorities on the approval process;
  • Keeping you updated on the developments and additional requirements, if any; and
  • Assisting you in obtaining the amended Certificate of Business Registration and Investment certificate.
The roadmap for the acquisition of 49% equity of Vietnam company can be described in following steps as follows:
  • Preparing the application dossier: We shall collect necessary information and documents from you. A list of required documents is detailed described in the Annex A of this Proposal. Upon receipt of necessary information and documents from you, we shall translate documents from English into Vietnamese and prepare the application dossier under the standard forms. The initial drafted application dossier shall be sent to you for your comments. Then, after updating the application dossier based on your comments, we shall obtain the preliminary comments from the competent authority and send the finalized application dossiers for you to sign and seal. We anticipate that this phase shall be completed within 10 working days.
  • Submission of application dossier: Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority.
  • Procedure for amendment of Certificate of Business Registration: It shall take about 45 working days from submission of application dossier to the competent authority for the provincial licensing authority to grant the amended Certificate of Business Registration. In some case the process can be longer as it takes time to consult relevant government agencies.
Procedure for Obtainment of Investment Certificate: It shall take about 90 working days from submission of application dossier to the competent authority for the provincial licensing authority to grant the amended Certificate of Business Registration. In some case the process can be longer as it takes time to consult relevant government agencies.

» Acquisition of enterprise in Vietnam
Contact: Law Firm - SB Law in Vietnam
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Or Tel: 0983367068 / Send request email: dongtaylaw@gmail.com
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