CONSULTATION, IMPLEMENTATION OF REQUESTING INVESTMENT LICENSE

Matter in Brief:

Company B, a foreign investor, intends to invest in Vietnam to engage in the wholesale and retail of cosmetics, functional foods, and household goods. Company B seeks to understand the appropriate investment methods and procedures required to conduct such business activities.

Client’s Request:

Company B, recognizing TAPHALAW’s extensive experience in providing investment advisory services and handling investment procedures in Vietnam, has entered into a legal services agreement with TAPHALAW. Company B requests TAPHALAW to advise on the specific conditions foreign investors must meet and the procedures prescribed under Vietnamese law for the company to conduct the aforementioned business activities.

Attorney’s Work Performed:

The attorney has conducted a legal and financial due diligence of Company B based on the documents provided by Company B.

Accordingly, Company B is an organization incorporated in Singapore. Singapore is an official member of the World Trade Organization (WTO), and as of now, both Vietnam and Singapore are official members of the WTO. Therefore, Vietnam’s commitments to the WTO shall be applied to all enterprises of the nationalities of the members of this organization in general and to Singaporean investors in particular.

Under the WTO schedule of commitments, the sectors with CPC codes 632 (retail distribution) and 622 (wholesale trade) belong to the group with unrestricted market access. Therefore, for these services, Company B meets the market access requirements under the international treaties to which Vietnam is a party.

However, the business line that the investor wishes to carry out in Vietnam falls under the category of conditional business lines as prescribed in the Investment Law 2020, so after its establishment, the economic organization must register for a business license to carry out the purchase and sale activities as prescribed in Decree No. 09/2018/ND-CP on the purchase and sale of goods and activities directly related to the purchase and sale of goods by foreign investors, foreign-invested economic organizations in Vietnam.   

TAPHALAW has advised Company B on the forms of investment as prescribed in the Investment Law, along with the necessary procedures and documents for each form of investment that the Investor may choose, including documents proving financial capacity, how to explain the fulfillment of project implementation conditions, procedures for registration of investment registration certificate, business registration certificate, and business license to carry out the purchase and sale of goods. TAPHALAW also advises on the procedures for opening a direct investment account to carry out transactions related to foreign direct investment in Vietnam, including contributing capital to implement the investment project.

Advisory Outcome: Upon the advice and assistance of TAPHALAW, Company B successfully completed the registration procedures for obtaining an Investment Registration Certificate for a 100% foreign-owned economic organization with the purpose of importing, wholesaling, and retailing cosmetics, food, and household goods in accordance with applicable regulations.

Subsequent to the issuance of the necessary licenses for conducting business in Vietnam, Company B continued to entrust TAPHALAW and entered into a further service agreement, requesting TAPHALAW to provide advisory services and complete the procedures for obtaining Cosmetic Product Notifications and Food Supplements Notifications for Company B to distribute the products in the Vietnamese market. TAPHALAW successfully completed both procedures for Company B.