Nowadays, Vietnam is one of the largest commercial franchise market in the region and the world. Expanding market through commercial franchise could save time and money as well as guarantee benefits for the franchisor; simultaneously, the franchisee gets the business secrets and can use the brand. This can create a win-win situation for the franchisor and the franchisee. Foreign investors can sign commercial franchising contracts with Vietnamese franchisee. In order to help foreign investors establish an overview about foreign commercial franchise in Vietnam, Viet An Law Firm collects and provides some basic information as follows:
Franchising from overseas to Vietnam (foreign commercial franchise in Vietnam):
Step 1: Registering for commercial franchise activities
In accordance with clause 1 Article 17 of Decree No. 35/2006/NĐ-CP, foreign franchisor need to register for commercial franchise activities.
An application for commercial franchise activities includes:
Submission place: The Ministry of Industry and Trade
The Ministry of Industry and Trade receive the application. If the application is full and valid, the Ministry shall issue the receipt to the applicant. If the application is not full and invalid, the Ministry shall inform the applicant with a written notice in order to supplement, adjust the application. The foreign franchisor is entitled to require the Ministry of Industry and Trade explain their requirements and they shall answer.
Within 05 days from the date of receipt of the valid application, the Ministry of Industry and Trade shall register the commercial franchise activities in the book of commercial franchise and inform the foreign franchisor. In case of refusal, the Ministry shall grant a written respond providing explanation.
Step 2: Signing commercial franchise contract
Formality: Written contract or other equivalent formalities.
Contents: Parties are able to negotiate and reach agreement on the commercial franchise contract. Article 11 Decree No.35/2006/NĐ-CP regulates that if parties apply the laws of Vietnam, the contract may contain some main articles as follows:
Governing law: As mentioned above, the governing law can be the laws of Vietnam or foreign laws depending on parties’ negotiation.
Foreign investment services in Viet An Law Firm:
Clients seeking for legal advice on regulations and procedures applied for foreign investors in Vietnam, please feel free to contact Viet An Law Firm for more information!
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