Establish foreign-owned cinematographic company in Vietnam
Currently, cinematographic business in Vietnam is considered as a business sector which brings the best benefits to investors. Cinematographic business includes three main activities: film production, film distribution, film projection. Among them, film projection is highly appreciated although revenues belong to foreign investors because they control most film projection organizations in Vietnam. Cinematographic business, generally, and film projection service are relating to the national culture; then, foreign investors are bound by certain legal limitations. Despite that, this business is still the target one of those investors because they can also gain profits from relating services such as food and beverage, film accessories… Limitations on foreign investors in cinematographic industry are regulated in the Schedule of Specific Commitments in Services of Vietnam in WTO and the Law on Cinematographic 2006 (amended, supplemented in 2009).
In accordance with the Schedule of Specific Commitments in Services of Vietnam in WTO, specific cinematographic activities are:
Motion picture production: CPC 96112, excluding video tape;
Motion picture distribution: CPC 96113, excluding video tape;
Motion picture projection: CPC 96121.
As this Schedule and clause 2 Article 13 of the Law on Cinematographic 2006 (amended, supplemented in 2009) regulate, foreign investors can invest in cinematographic business in Vietnam under the two following forms:
Business corporate contracts;
Establish joint-venture with Vietnamese partners.
Notices: Vietnamese partners must be Vietnamese companies operating cinematographic business and the foreign capital in the joint-venture does not exceed 51% of the legal capital.
In reality, foreign investors pay much attention to the second form. To establish a joint-venture with Vietnamese partners, foreign investors can choose one of two options below:
Establish a foreign-owned cinematographic company in Vietnam;
Contribute capital, purchase shares, purchase capital contributions to Vietnamese cinematographic company.
Option 1: Establish foreign-owned cinematographic company in Vietnam
Step 1: Apply for the Investment Registration Certificate
A written request for permission for project execution;
Individual investors: copies of ID or passport of each individual;
Organization investors: copies of Establishment Certificate or equivalent paper confirming the legal status;
Project proposal specifying: the investors, project’s objectives and scale; capital and capital rising method; location, duration and schedule of the project; labor demand;
Copies of financial statements in the current 02 years or financial support commitment of the parent company or financial institutions; guarantee for investors’ financial capacity, description of investors’ financial capacity; request for investment incentives; assessment of socio-economic effects of the project;
Land use demand. If the project does not use land allocated or leased by the State or does not require the State to change land use purpose, the copies of the lease agreement or equivalent papers proving that investors have rights to use the location shall be submitted;
If the project use any technology in the List of technologies restricted from transfer, investors have to submit the explanation on technology transfer.
Submit the application at: The Department of Planning and Investment.
The process: Within 15 days from the receipt date of the valid application, the Department of Planning and Investment will grant the Investment Registration Certificate to foreign investors. If the Department of Planning and Investment refuse to grant, they will respond in notices and explain the reasons.
Step 2: Establish foreign-owned cinematographic company in Vietnam
Apply for the Business Registration Certificate:
An application includes:
A written request for business registration;
The Articles of Associates;
The list of members of the multi-member limited liability company or the list of partners of partnership;
Notarized copies of ID or valid passport of each individual member; notarized copies of the Business Registration Certificate/Establishment Certificate of each organization member; notarized copies of ID or valid passport of each legal representative of each organization;
Power of attorney (Clients grant to Viet An);
Certificate of Investment Registration of foreign investors.
Submission place: The Department of Planning and Investment.
Duration: 03 – 06 working days.
Announce the business registration contents:
Business registration information must be announced publicly on the National Portal of Business Registration within 30 days from the date of issuance of the Business Registration Certificate. The contents of the announcement are all the information stated in the Business Registration Certificate.
Notice: In accordance with Clause 1 Article 26 of the Decree 50/2016/NĐ-CP, if the company does not announce or lately announce the business registration information on National Portal of Business Registration, they are fined an amount of money from 1.000.000 VND to 2.000.000 VND.
Engrave the seal and publish the seal sample:
The company can authorized Viet An Law Firm or can engrave the seal by itself then announce the seal sample to the Department of Planning and Investment. The company is allowed to decide about the appearance, quantity and the contents of the deal but it must contain the name and the code of the company;
After receiving the announcement on the seal sample, the Business Registry Office shall grant the receipt to the company, post the announcement on the National Portal of Business Registration and issue the Announcement on Publication of the seal sample to the company.
Step 3: Apply for the Certificate on Satisfaction of Conditions on Film Production (if the company produces films)
Conditions for Certificate on Satisfaction of Conditions on Film Production:
Legal capital: 1.000.000.000 VND, confirmed by capital contribution agreement of founding shareholders/founding members of joint-stock companies/multi-member limited liability company, capital contribution registration of the owner of sole proprietorship/partnerships/single-member limited liability company;
Director, General Director: has legal capacity as regulated in the Law on Enterprises; has professional capacity and practical experience in cinematographic activities.
Submission place: the Ministry of Culture, Sports and Tourism
The process: Within 30 days, the Ministry of Culture, Sports and Tourism shall issue the Certificate on Satisfaction of Conditions on Film Production. In case of refusal, the Ministry shall grant a written respond providing explanation.
Option 2: Contribute capital, purchase shares, purchase capital contributions to Vietnamese cinematographic company
If foreign investors choose this option, they can save time and money as they do not need to apply for the Investment Registration Certificate. Foreign investors just have to register to contribute capital, purchase shares, purchase capital contributions at the Department of Planning and Investment. Besides that, any Vietnamese cinematographic company being operated has already satisfied conditions required by the laws. In order to get approval from the Department of Planning and Investment, foreign investors just need to comply with the maximum rate of foreign capital: 51% of the legal capital of the company.
Step 1: Foreign investors register to contribute capital, purchase shares/capital contributions to the company
Application for capital contribution, shares/capital contributions purchase indicating: the information of the target company, the foreign capital contribution after completing the procedures;
Copies of the ID or passport of each individual investor; copies of Establishment Certificate or equivalent papers confirming the legal status of each investor who is an organization.
Submission place: The Department of Planning and Investment.
The process: If the capital contribution, shares purchase, capital contribution purchase of foreign investors comply with the regulations on investment forms and foreign capital contribution, within 15 days from the date of receipt of the valid application, the Department of Planning and Investment will grant a written announcement. If the application does not satisfies conditions, the Department of Planning and Investment will grant a written announcement providing reasons and explanation.
Step 2: Transfer the shares, capital contributions and change the shareholders or members of the company
Foreign investment services in Viet An Law Firm:
Consult about conditions of each business sectors applied to foreign investors in Vietnam;
Consult about procedures, process relating to foreign investment in Vietnam;
Draft, prepare and perform the procedures at the state-authorized agencies when being authorized by Clients;
Consult about after-establishing issues: contracts, labor, tax, social insurance…
Foreign investors seeking for legal advice on the laws and procedures relating to foreign investment and enterprises in Vietnam, please feel free to contact Viet An Law Firm for more information!