During the course of working with many different and diverse clients, including foreign, we realized that foreign investors need legal advice and assistance when approaching the Vietnamese market. Therefore, PTVN’s investment project and business consulting focuses on providing key information and detailed analysis to help businesses and investors make informed and effective decisions. Our clients find that taking our advice means their investment is conducted smoothly, in due time and in cost effective manner. Our investment consulting experience covers the following areas:
1. Establishment of a foreign-invested enterprise
Vietnam has committed to join the WTO meaning foreign investors can form a company with up to 100% foreign capital, depending on the specific sub-sector, or set up a joint venture with a Vietnamese partner. PTVN with its accumulated investment advisory experience, is perfectly positioned to assist foreign investors choose the optimum type of business or business sub sector and to apply for the different types of licenses to establish and operate in Vietnam.
2. Establishment of Branch
According to Vietnam’s commitments to join the WTO, in some sub sectors, foreign businesses are allowed to establish a commercial presence via firming their own Vietnamese branch, this branch is a dependent unit of a foreign company that independently does accounting and carries out all or part of the businesses activities as authorized by the foreign business entity.
3. Establishment of Representative Office
Under Vietnamese Law, a representative office is not allowed to directly conduct profit generating activities in Vietnam, nor is its director, unless having obtained a valid authorization letter from the foreign company, allowed to enter into contracts or agreements on behalf of the foreign company. Therefore, this type of structure is only suitable for foreign investors in the early stage of market exploration and business development in Vietnam.
4. Business type transformation/restructure
Due to consolidation within industries, there is a trend for companies in Vietnam to need to restructure to improve management structures, gain efficiencies and take account of changing legal policies. Any company wishing to restructure must prove it meets the legal requirements for the change, in these cases PTVN provides advice and insight to ensure the following:
- The responsibility of each investor is limited to their shares/capital contribution as defined by the company’s charter capital, and that any such shares and stakes are easily transferable.
- To ensure it is easy to increase capital, diversify investors and minimize risks to contributed capital.
- Ensure the ease of expanding and diversifying production and of business activities with partners and customers.
- Lessen the reliance on parent companies, to allow more efficiency and flexibility in production and business operation and allow the business to take advantage of relationships, markets and technologies brought by other investors.
5. Total and Partial Division
Total or partial division of a company is a highly effective way to restructure, especially when the business operates in a number of fields, PTVN assists business to do this by:
- Advising the client on all legal aspects of the transformation.
- Advising and assisting in drafting and applying for the in principle approval by the respective State Agency.
- Advising the client on the appropriateness and feasibility of the plan under Vietnamese Law, ensuring any investment plans and ideas pass the regulations required by the relevant agencies.
- Support the negotiation between all parties in both amending any existing contract and negotiating a new one.
- Contact the relevant authorities and monitor the approval process to ensure any license approval is approved as quickly as possible.
6. Mergers and Acquisitions
Recently M&A activity has been an opportunity for both Vietnamese and Foreign Companies to access capital and expand investment with new capital whilst also creating the conditions for foreign investment to flourish. M&A is a competitive tool, as the activity is driven by an ambition to expand and develop often with limited resources meaning that business need co-operate with each other to find the right solution. The legal framework for M&A in Vietnam is complicated as there is no specific legislation and the success and transparency for these deals requires the participation of intermediaries, especially financial and legal advisors.