Establish a company in Vietnam providing management consulting services

According to the provisions of the Law on Investment 2020, Vietnam’s WTO commitments and bilateral free trade agreements between Vietnam and countries in the region and the world, foreign investors can invest foreign-invested companies in the field of management consulting services. This is an unconditional field. Viet An Law would like to give some legal opinions on the procedures for establishing a foreign-invested company providing management consulting services as follows:

Legal basis

• Schedule of specific commitments on services of Vietnam at WTO;
• Law on Investment 2020;
• Law on Enterprise 2020;

The scope of operation

Arcording to the schedule of commitment WTO, management consulting services include the following activities:

• CPC 86501: General management consulting services include: consulting support services, guidance related to business policy, planning, overall strategy, structure and control of an organization’s operations. More specifically, the assignment of a general management consultant can be handled with a combination of the following: Formulate policy, identify the organizational structure that will be most effective in satisfying the organization’s goals, the strategic business plan of the organization, identifying an information management system, developing management reports, planning business turnaround, developing programs to improve profitability and other issues related to the higher management of an organization.

• CPC 86502: Financial management consulting services (except tax) including consulting support services, guidance related to the area of ​​decision-making, which is of a financial nature such as working capital and liquidity management, analysis of the resource of proposed investment capital, development of accounting systems and budget control,… but does not include consulting services in the field of short-term portfolio management because this service is usually provided by financial intermediaries.

• CPC 86503: Marketing management consulting services include consulting support services, guidance related to the strategy and marketing activities of an organization. Analyze and construct a marketing strategy, construct pricing policies for customer objects, manage sales and train employees, organize distribution channels (to wholesale or directly to retailers, direct mail, franchising, etc.), organize the distribution process, packaging design and other issues related to an organization’s strategy and marketing activities.

• CPC 86504: Human resource management consulting services include consulting support services, guidance related to the management of human resources of an organization. Human resource consulting can be performed with the following combination: human resource function audit, human resource policy development, human resource planning, recruitment process, motivation and remuneration strategy, human resource development, labor relations – administration, absence control, performance evaluation and other issues related to the organization’s human resource management function.

• CPC 86505: Production management consulting services include consulting support services, guidance related to improving productivity, reducing production costs and improving production quality. Manufacturing consulting can be done with the following combination: Efficient use of materials in the production process, inventory management and control of quality standards, work and working methods, safety standards, office manager, design and planning other issues related to production manager but does not include consulting services and plant layout design because this service is normally provided with architectural consulting organizations.
• CPC 86506: Public relations services include consulting support services, guidance related to improving the image and relationship between organizations, individuals with the public.
• CPC 86509: Other management consulting services: These services include industrial development consulting services, tourism development services, electronics, etc.

To establish a company in Vietnam providing management consulting services, foreign investors have two options:

• Establishment of a foreign-invested company providing management consulting services;
• Contributing capital, purchasing shares, capital contributions to economic organizations providing management consulting services.

Option 1: Establishing a foreign-invested company providing management consulting services:

Step 1: The investor applies for an Investment Registration Certificate

Dossier include:

• A written request for implementation of an investment project;
• Documents on investor’s legal status: copy of ID card or citizen ID card or passport (if an individual); a copy of the certificate of incorporation or equivalent document and the passport of the capital manager (if an organization);
• The investment project proposal includes the following contents: investor who implements the project, target, scale and investment capital, capital mobilization plan, location, duration, investment schedule, labor demand, proposals for investment incentives, assessment of the project’s socio-economic impacts and efficiency;
• Documents proving the financial capacity of the investor include at least one of the following documents: financial statements of the last 2 years of the investor; commitment to financial support of the parent company; financial institution’s commitment to financial support; guarantee on the financial capacity of the investor; other documents proving the investor’s financial capacity;
• The investment project proposal includes the following main contents: investor or the investor selection form, investment target, investment scale, investment capital and capital mobilization plan, location, duration, implementation progress, information on the current status of land use at the project site and proposed the land use demand (if any), labor demand, proposal for investment incentives, impact, socio-economic efficiency of the project, preliminary assessment of environmental impacts (if any) in accordance with the law on environmental protection.

If the law on construction stipulates for the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of the investment project proposal;

• In case the investment project does not request the State to allocate or lease land, permit the change of land use purpose, a copy of the paper on land use rights or other documents determining the right to use the site shall be submitted for implementation the investment project;
• The explanation content of the technology is used in the investment project for the project subject to appraise and get opinions on technology in accordance with the law on technology transfer;
• Other documents related to the investment project, requirements on conditions and capacity of the investor as prescribed by law (if any);
• Power of Attorney for Viet An Law.

Place of application:  Department of Planning and Investment where the head office is expected to be located.

Processing sequence: Within 15 days from the date of receiving the complete and valid dossier, the Department of Planning and Investment will issue the Investment Registration Certificate to the foreign investor. In case of refusal, the Department of Planning and Investment will reply in writing and clearly state the reason.

Step 2: Establish a company in Vietnam providing management consulting services

Apply for a Business Registration Certificate:

Dossier for the enterprise establishment includes:

• Application for enterprise registration;
• Company charter;
• List of founding shareholders and shareholders being foreign investors (if it is a joint stock company); List of members (if it is a two-member limited liability company);
• A certified copy of ID card or citizen ID card or passport (if an individual); establishment decision, the certificate of business registration or equivalent document and citizen ID card or ID card or passport with the authorization written for capital manager in Vietnam (if an organization) ;
• A certified copy of the issued Investment Registration Certificate;
• Power of attorney for Viet An Law Firm ;

Place of application:  Department of Planning and Investment where the enterprise’s head office is located.

Duration:  03 – 06 working days.

Disclosure content of enterprise registration information:

• After being granted an enterprise registration certificate, an enterprise must make a public announcement on the National Business Registration Portal and submit fees as prescribed by law. The content to be announced includes the contents of the Business Registration Certificate and the following information:
• Business lines;
• List of founding shareholders; list of shareholders being foreign investors in the case of a joint-stock company (if any).
• Publication fee: The request for announcement contents of enterprise registration and payment fee for announcement contents of enterprise registration shall be performed at the time the enterprise submits the enterprise registration dossier. In case the enterprise is not granted business registration, the enterprise will be refunded the fee for announcing contents the enterprise registration.

The publication fee is 100,000 VND according to the provisions of Circular 47/2019/TT-BCT.

A seal of enterprise:

• A seal includes a seal is made at a seal engraving institution or a seal in the form of a digital signature in accordance with the law on electronic transactions.
• The enterprise shall decide on the type, quantity, form and content of the seal of the enterprise, its branches, representative offices and other units of the enterprise.
• The management and keeping of the seal shall perform the provisions of the company’s charter or regulations issued by the enterprise, branch, representative office or other unit of the enterprise with the seal. Enterprises use seals in transactions as prescribed by law.

Option 2: Contribute capital, purchase shares, capital contributions to economic organizations providing management consulting services

This option will help investors save more time and costs because they do not have to apply for an Investment Registration Certificate. However, investors must ensure the rate of capital contribution of foreign investors in accordance with regulations. If choosing this option, investors only need to carry out the procedures for registration of contribute capital, purchase shares, capital contributions at the Department of Planning and Investment. In addition, for activities that foreign investors are not allowed to carry out, it is necessary to consider and implement procedures to reduce industries.

Step 1: Foreign investors register to contribute capital, purchase shares, stakes to economic organizations

Dossier include:

• A written registration for contribute capital, purchase shares, capital contributions includes the following contents: information on business registration of the economic organization to which the foreign investor intends to contribute capital, purchase shares, capital contributions; business industries; list of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any); the rate of ownership of charter capital of foreign investors before and after contribute capital, purchase shares, capital contributions to economic organizations; expected transaction value of the contract of contribute capital, purchase shares, capital contributions; information on investment projects of economic organizations (if any);
• Copies of legal papers of individuals, organizations contributing capital, purchasing shares, capital contributions and economic organizations with foreign investors contributing capital, purchasing shares, capital contributions: Passport (if an individual); Business license or equivalent document and Passport of the authorized person to manage the capital portion in Vietnam (if an organization);
• A written agreement in principle on contribute capital, purchase shares, capital contributions between foreign investors and economic organizations in which foreign investors contribute capital, purchase shares, purchase capital contributions or between foreign investors and shareholders or members of that economic organization;
• A copy of the Certificate of land use rights of an economic organization in which foreign investors contribute capital, purchase shares, capital contributions, if such economic organization has a Certificate of land use rights in the island, border commune, wards and towns and coastal communes, wards and towns; Other areas affecting to national defense and security, except for economic organizations implementing investment projects in industrial parks, export processing zones, hi-tech parks and economic zones established under the Government’s regulations.
• Power of Attorney for Viet An Law.

Place of application:  Department of Planning and Investment where the head office of economic organizations is expected to be located.

Processing sequence: If contributing capital, purchase shares, capital contributions of foreign investors satisfying the conditions on the rate of ownership and the form of investment suitable for the schedule of commitments and the law of Vietnam, within 15 days from the date of receiving the complete and valid dossier, the Department of Planning and Investment will issue the Investment Registration Certificate to the foreign investor. In case of refusal, the Department of Planning and Investment will reply in writing and clearly state the reason.

Step 2: Carry out procedures for transferring shares, capital contributions and changing shareholders, members, and owners.

Service to establish a company in Vietnam providing management consulting services of Viet An law firm

• Consulting on the conditions for establishing a foreign-invested company: capital contribution ratio of foreign investors in Vietnam; conditions for business industries; project implementation location; pay attention to the procedures before and after the establishment of a foreign-invested company;
• Consulting to choose the right type of company for investors: a limited liability company or a joint stock company;
• Consulting on opening a capital transfer account, capital contribution term;
• Consulting and guiding investors to prepare necessary documents to establish a foreign-invested company;
• Consulting, drafting dossier for company establishment for investors;
• Representing investors to work with competent Vietnamese state agencies in the process of carrying out the procedures for establishing a company for investors (Apply for Investment Registration Certificate, Enterprise Registration Certificate, Business License, Licenses according to specialized requirements, making seals of legal entities, procedures after company establishment,…;
• Comprehensive, regular consult, accounting services, tax law package of activities arising in the process of implementing business in Vietnam for investors.