How to Close a Business in Vietnam?

How to Close a Business in Vietnam?

All corporations, companies, partnerships, branch offices, representative offices and other business entities are legal entities in Vietnam which can only be dissolved through formal procedures.

I. What are the major challenges with closing a business in Vietnam?

The main thing to remember throughout the process is that the dissolving company, a branch office or a representative office, one  should pay close attention to the involvement of all key stakeholders, i.e. the employees, customers, creditors, business partners and relevant authorities.

The following are key information to gather for thorough analysis

-Company size in terms of capital and number of employees?

-Enterprise’s business sector?

-Tax invoice usage declaration?

-Annual profit?

-Compliance with tax procedures?

-Administrative violations in the field of taxation?

-Any outstanding tax?

-Tax document filing records?

-Other tax matters?

II. What does the dissolution process involve?

Once an analysis has been through, the next procedures mostly deal with reporting and submitting the relevant documents to the various regulatories and tax authorities at each step of the process, terminating contracts, liquidating assets and settling liabilities, and general administrative work such as returning the corporate seal, registration certificates, and having the company’s name removed from the system of the license authorities.

III) How to prepare document to close a business in Vietnam?

1. Documents submitted to the licensing authority in Vietnam

-Liquidation notice of enterprise;

-Minutes of the meeting of Management Board/ Board of Directors decided on the dissolution of enterprises;

-The company’s decision on liquidation;

-Report on enterprise asset liquidation;

-The list of creditors and the paid debt;

-Documents evidencing that enterprise has fulfilled all of its tax;

-Confirmation on social insurance for employees after the dissolution decision;

-The seal and certificate of seal sample registration.

2. Documents submitted to the tax authority in Vietnam

-Liquidation notice of enterprise;

-Minutes of the meeting of Management Board/ Board of Directors decided on the dissolution of enterprises;

-The company’s decision on dissolution;

-Audit reports and tax settlements;

-The financial statements for the year to date the decision on dissolution;

-The company’s tax liabilities audited by tax authority;

-Verification of tax obligations of the enterprise. 

Closing a business in Vietnam might be a lengthy process and more complicated than setting up a company in Vietnam.  Sometimes, it is important to make a decision to exit and start a new venture.  As a law firm in Vietnam, we do assist clients to close the business, exit the investment and deal with pending issues with licensing authorities including department of planning and investment, department of labour, tax bureau and others.

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ANT Lawyers Participating in ASEAN Rail Infrastructure & Expansion 2019

In the year 2017, ANT Lawyers, a law firm in Vietnam has been participating in the event of GRS Rail Extension Summit and Thomas Giglione presented about Alternative Dispute Resolution in executing contracts. In the year of­ 2019, ASEAN Rail Infrastructure & Expansion 2019 will bring to Hanoi the most exclusive and influential railway gathering in ASEAN region on May 30th -31st, 2019.

Asia is seeing rapid growth and urbanization, and there is an increasing need to develop transport services to match. And rail is an increasingly viable option to meet the demand for both urban commuting as well as long distance travel. Throughout Southeast Asia, countries are making upgrades to increase freight and passenger rail capacity, extending and rehabilitating existing rail infrastructure, developing urban rail, and pursuing cross border rail and transport linkages.

Vietnam is a country with a relatively complete and early railway system in the Southeast Asia region. On 16 June 2017, the National Assembly of the Socialist Republic of Vietnam officially approved the Revised Railway Laws which supplements many preferential and breakthrough mechanisms and policies. This is the opportunity for Vietnam Railways to open a new page, the period of construction and development so that the railway sector can play its rightful role as the backbone of transport sector, contributing to the reduction of logistics expenses and enhancement of national competitiveness. At the same time, the Vietnamese Government is also planning to allocate a medium-term capital package of USD 350-450 million to Vietnam Railways in order to improve and upgrade the existing infrastructure network to increase railway interval capacity.

Event Highlight

➢ Forecast the Future Plans of the ASEAN Government in Rail Expansion

➢ Provide New Partnership Opportunities with Governments and Project Developers

➢ Feasibility of Rail Project Financing and Investment Opportunities

➢ Focus on Highly Technical Sessions on Track& Infrastructure Upgrades, Rolling Stock, Signals and Communications from Key Solution Providers

➢ Discuss Design and Construction Challenges for ASEAN Rail Projects from Leading Consultants and Engineers

At the event, among other speakers, Mr. Giglione, a Mediator and Mediation Trainer of ANT Lawyers shall be presenting about APEC’s New (O.D.R) Online Dispute Resolution Framework for Resolving Cross Border Construction Disputes. It is obvious that, any contracts would involve potential disputes. Court or arbitration litigation is always the last resort while resolving dispute through mediation could be utilized to encourage parties to maintain relationship and continue the business. Since 2012, ANT Lawyers has been promoting mediation to resolve.

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What is cybersecurity?

We depend on technology heavily, which also translates to a rise in online hackers. The bigger the corporation is, the higher the risk of cyber attacks. This is when cybersecurity comes into the picture.

Cybersecurity law in Vietnam

What is cybersecurity: Cybersecurity is the condition of being guarded against criminal and illegal activities that comprise of activities related to computer, information technology, and virtual reality. It also means the measures taken to acquire this condition. One must know the risks, threats, and consequences of cyber attacks.

- Who are the attackers: The attacker could be an external source like a hacker who gets into the system and steals files. The imposter could even be someone from the company itself, like an employee who has an access to confidential information.

- How are the attacks carried out: The attackers through viruses or botnets invade systems. It is even done by using a USB drive or clicking on an unknown link.

- When is the attack carried out: Cyber attacks mostly occur when your systems or the internal staff are vulnerable. There is no specific vulnerability and the attack can occur at any time.

- Which area is hit: Cyberspace is a limitless stretch so the attack can occur in any area.

- Why do these attacks occur: The external agents strike to leak or held captive crucial company data for earning ransom. And the internal sources like the employees do it for competitors in exchange for money. Some even do it as a revenge due to past unpleasant experiences.

- How to tackle cyber attacks: There are three ways of securing your website:

1) SSL Certificate: This certificate validates your website's identity and encrypts the information visitors send or receive from your site.

2) CodeGuard: It is a service that does an automatic backup of your website.

3) SiteLock: It scans your website for any threat and when it is detected, it works effectively to repair it. Also, you would be instantly notified about any attack.

Source : Quora - Jenny Webber, Web hosting expert

ANT Lawyers, a Law Firm Vietnam with International Standard

As a single, fully integrated, global partnership, we pride ourselves on our approachable, collegiate and team-based way of working.  ANT Lawyers is a member of Vietnam Bar Federation, Hanoi Bar Association, an exclusive Vietnam law firm member of Prae Legal, a global law firm network spanning 5 continents and 150 countries.  

Send us request via email at ant@antlawyers.vn or call us at +84 28 730 86 529 

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Handing Trademark Infringement in Vietnam

Counterfeit destroys businesses, business environments, markets as well as the image of the country. Handling trademark infringement in Vietnam has been practically challenging.

Vietnam government has been trying to curb the counterfeits however the results are limited.  The counterfeit business generates huge profits due to the gap price anywhere in the world.   Almost goods which is either popular or luxury, high or low-value of either domestic or foreign brands are being counterfeited, imitated in Vietnam.  Falsification of household goods, food, cosmetics, shoes and items of higher value such as bags, watches, glasses, etc may be found all over Vietnam. For effective anti-counterfeit, we need a close cooperation among the authority agencies in inspection, control of production, import and circulation in the market.  The Southern Department of Goods Quality Control in Vietnam in one of its regular inspections when cooperating with competent agencies in Ho Chi Minh City found after checking 79 stores with 416 items including: oil, helmets, toys, electronic devices that 33.89% of goods of unsatisfactorily labeled, 14.5% unsatisfactory quality. Where the consumers buy counterfeit goods, they could and should report to State authorities, Anti-Counterfeit and Brand Protection Association as an effort to contribute to curbing counterfeit in Vietnam.  The international brands being infringed could request assistance from local law firms in Vietnam.

ANT Lawyers’ Intellectual Property lawyers in Vietnam have assisted a number of clients being foreign brands in its effort to protect their intellectual property and industrial property rights in Vietnam under Intellectual Property Law through advisory, and implementation service.

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Handling Labour Matters in Post M&A Transaction

While undertaking M&A transaction, the buyer may face legal risks regarding license, assets, compliance, including labor matters. One of the challenges of the buyer post M&A is the integration of the labour force into the new structure while ensuring rights and interests of their existing employee complying with the laws.

When negotiating a deal, the buyer and target company may try to retain the advantage combining the strengths of both side. However, it’s challenging to just merely add personnel of the existing of departments with same functions together and group them under i.e. administration departments, sales department, accounting department…Further, one of the benefits of M&A is to improve the effectiveness of the operation through managing the similar scale of the combined business with less resources. Therefore, the re-arrangement of personnel is required and therefore conflicts will have to be managed between employees and employer.

Pursuant to Article 45 of Labor Code: in case of merging, consolidating, splitting or separating an enterprise, the successive employer shall continue employing the existing workforce and modify and supplement their labor contracts; if the existing workforce cannot be fully employed, the successive employer shall prepare a suitable labour plan and implement a labor utilization plan. In case of transferring asset ownership or use rights of an enterprise, the preceding employer shall have to prepare a labor utilization plan.

The labor utilization plan shall have the following contents: the lists and numbers of workforce to be continued employment and workforce to be re-trained for continued employment; the list and number of employees to be retired; the lists and numbers of employees to be assigned part-time jobs and those to terminate their labor contracts; measures and financial sources for implementing the plan. This is responsibility of the employer when the business arise change which greatly affects employee.

Regarding dismissed employee, the employer shall pay a job-loss allowance to the employee who has worked regularly for the employer for 12 months or longer. The job-loss allowance is equal to 1 month of salary for each working year, but must not be lower than 2 months of salary. The working period used for the calculation of job-loss allowance is the total time during which the employee actually works for the employer minus the time during which the employee benefits from unemployment insurance in accordance with the Law of Social Insurance and the working period for which the employer has paid a severance allowance to the employee.

It is important that the seller to retain M&A law firm to assist with the post M&A process to ensure the labour compliance is followed during the integration of labour resources.

If you need some help finding a Law firm in Vietnam, check out our website at ANT Lawyers.vn. As a single, fully integrated, global partnership, we pride ourselves on our approachable, collegiate and team-based way of working.  ANT Lawyers is a member of Vietnam Bar Federation, Hanoi Bar Association, an exclusive Vietnam law firm member of Prae Legal, a global law firm network spanning 5 continents and 150 countries. 

Let ANT Lawyers help your business in Vietnam.

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New laws on labor dispute mediators

ANT Lawyers employment practice offers counseling service in the Vietnam labour and employment compliance and dispute matters. Our Vietnam employment lawyers often keep track with changes in the Vietnam labour code, the Vietnam employment laws to provide the clients with the best advice. The recently issued Circular 08/2013/TT-BLDTBXH is guiding the selection, appointment, re-appointment for mediators for solving labour disputes and dismissal of labour conciliators as prescribed in Decree No. 46/2013/ND-CP of the Government which details the implementation of a number of articles of the Labor Code on labour disputes in Vietnam.

1.Each district, town and provincial city shall have labour mediators. Based on the number of firms and the level of labour disputes in the area, the Department of Labour, Invalids and Social Affairs shall determine the amount of the labour mediators;

2.Department of Labour, Invalids and Social Affairs is responsible for receiving requests for the mediation of labour disputes, disputes over contracts of labour. The party that is requesting mediation can suggest a labour mediator and the Department of Labour, Invalids and Social Affairs will appoint the mediator to involve in the labour dispute.

3.Dismissal of labour conciliators in one of the following cases:a) There is an application for resignation under the labour mediator model No. 05/HGV attached to this Circular. b) Having 2 years of continuous assessment tasks that are not completed in accordance with Article 8 of this Circular. c) In case there are violations of law, an abuse of their credibility or authority. His responsibility is detrimental to the interests of the parties or the interests of the state during the reconciliation process in one of the following cases: i) One of the provisions of Article 3 of the Law on Anti-Corruption; ii) Perform reconciliation duties not impartial or not objective The Chairman of the District’s People’s Committee, representing the Department of Labour, Invalids and Social Affairs in the district level, shall preside over the meeting to consider the level of illegal labor mediation in the presence of the labour mediator and the parties relating to the violations of labour mediation. Minutes of the meeting must be signed by the labour mediator and the representatives of the involved parties. This Circular takes effect from July 1, 2013.  If Circular 22/2007/TT-BLDTBXH of October 23^rd 2007 of the Ministry of Labour, Invalids and Social Affairs is guiding on the organization and operation of this department and the mediators and labour regulations in a contrary way to this Circular, this Circular shall be effective as from the date when it is effective.

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The Business Conditions for Sports Betting in Vietnam

Law on amendments to Physical Training and Sports No. 26/2018/QH14 is in valid as of February 1^st, 2019. The highlight that must be noted is sports betting as provided in Article 67a. This activity is officially governed by laws. Sports betting is a form of entertainment with rewards in which bettors predict the results of sporting events used for betting purpose.

The sports betting has a long history, but it had not been recognized by the State for a long time. Therefore, the betting was considered a violation of laws and was liable to administrative and criminal remedies. Before sports betting is restricted and just allowed to bet on horse racing, greyhound racing and pilot international soccer as specified in the Decree 06/2017/ND-CP effective from March 31^st, 2017 on business of betting on horse racing, greyhound racing and international soccer. After the amendment law takes effect, the sports are allowed to bet will be extended according to the List of sports activities allowed to trade in betting issued by the Government.

What Conditions Required for Sports Betting?

Relating to condition of sports betting business in Vietnam, the enterprises need to be granted a certificate of eligibility for betting business. This is one of the conditional business lines under the strict management.

Regarding horse racing and greyhound racing, the enterprises need to obtain the Certificate of investment registration for the project for construction of horse and/or greyhound racecourses and the Certificate of eligibility for betting business. For horseracing, the charter capital requirement is VND 1 trillion ($44.2 million), while for greyhound racing it is VND 300 billion ($13.2 million). Locations of horse and/or greyhound racecourses are conformable to the socio-economic development planning of the area where such racecourses are located. Therefore, if the project attracts more than one investor, the investor for the project for the construction of horse racecourses and/or greyhound racecourses which covers the business of betting on horse racing and/or greyhound racing shall be selected through bidding process according to law.

Regarding international soccer, the procedures is similar to horse racing and greyhound racing. However, The Government allows one enterprise to pilot the business of betting on international soccer. The duration of pilot international soccer betting business shall be 05 years since the date on which the Certificate of eligibility for international soccer betting business is issued. After such period, the Government shall consider whether or not to continue the pilot international soccer betting business upon the assessment of the collected results. The list of international football matches and tournaments which are selected to provide the basis for the business of betting on international football is stipulated in the Decision No. 1064/QĐ-BVHTTDL issued by the Ministry of Culture, Sports and Tourism.

Which Authorities Will Approve the Sports Betting Activities?

The Ministry of Finance will publicize the conditions, dossiers, procedures for organizing bidding to select enterprises to pilot international football betting business according to the provisions of law. To be able to participate in bidding, the enterprises need to meet the following conditions:

(1) The minimum charter capital shall be VND 1 trillion ($44.2 million)or an equivalent amount;

(2) Having a plan on investment in the technological system, technical equipment and business software to ensure their accurate, safe and stable operation;

(3) There shall be a feasible plan on the business of betting on international soccer and ticket selling methods and locations;

(4) Committing to community assistance.

There are 135 countries in the world officially legalizing sports betting activities. Betting is increasingly on the rise, along with the development of information technology and entertainment. In Vietnam, sports betting is put under the strict management.

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Investment Capital Account of Foreign Investors in Vietnam

According to Vietnam laws, any transaction relating to direct or indirect investment operation of foreigner must be implemented by an investment capital account opened in a licensed bank which is commercial bank or branch of foreign bank permitted to trade and supply foreign exchange service according to legal provisions. It is imperative that, the foreign exchange control in Vietnam is strictly regulated, it is suggested the investors whom invest in Vietnam to consult with banking lawyers in Vietnam to receive legal advice on transaction in the activities of investment through direct investment or M&A transactions.

Banking Law Firm in Vietnam

In particular, the regulations on investment capital account of foreign investor are set forth in Circular No. 05/2014/TT-NHNN dated on March 12^th, 2014 of the State Bank of Vietnam guiding the opening and use of indirectly- invested capital accounts for implementation of foreign indirect investment activities in Vietnam and Circular No. 19/2014/TT-NHNN dated on August 11^th, 2014 of the State Bank of Vietnam guiding the foreign exchange management for the foreign direct investment in Vietnam.

What is Foreign Direct Investment?

Foreign direct investment in Vietnam means the transfer of capital for investment and participation in the management of investment activities in Vietnam by foreign investors.

The subject matters governed by Circular No. 19/2014/TT-NHNN include residents which are enterprises receiving the direct foreign investment; non-residents involved in the business cooperation agreement in Vietnam; non-residents who are foreign investors of FDI enterprises; organizations, individuals regarding the foreign direct investment in Vietnam.

The invested capital contribution of foreign and Vietnamese investors into an FDI enterprise must be performed in the form of money transfer into the direct investment accounts. In order to perform the foreign direct investment activities in Vietnam, FDI enterprise and foreigner participating in business cooperation contract are entitled to open their foreign currency and Vietnamese dong account of direct investment at a licensed bank.

What is Foreign Indirect Investment?

Foreign indirect investment in Vietnam means the investment into Vietnam by foreign investors through purchase and sale of securities, other valuable papers, contribution of capital and purchase of shares, and through securities investment funds, other intermediary financial institutions in accordance with the law of Vietnam but without direct participation in management of investment activities.

The subject matters governed by Circular 05/2014/TT-NHNN include foreign investors who are nonresidents conducting indirect investment activities in Vietnam; and organizations and individuals who are related to indirect investment activities in Vietnam. It means that this Circular does not govern foreign investors being residents who are foreign organizations and individuals. These subject mattes conduct indirect investment activities in Vietnam according to prevailing legal provisions on securities and other relevant normative legal documents.

All indirect investment activities of foreign investors in Vietnam must be conducted in Vietnam Dong. Transactions relating to foreign indirect investment activities must be conducted through an indirectly-invested capital account opened at a licensed bank.

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How do you legally trademark your name?

You’ll need to follow the process of obtaining a trademark. It all starts with the application. You could do a preliminary search on your own to make sure that the name isn’t already in use, but like others have said here—you really need an attorney.

Why?

-Trademark lawyers are experienced in thorough searches.

-A lawyer will make sure your application is properly completed.

-They will be sure you won’t miss any important deadlines

-And of course, you’ll need to be using the trademark to conduct business in some way—you don’t just get to trademark your name and sit on it so nobody else can use it!

If you need some help finding a trademark attorney in Vietnam, check out our website at ANT Lawyers.vn. ANT Lawyers is supported by a team of experienced patent, trademark, design attorneys with qualification and skills handling full range of legal services relating to intellectual property in Vietnam.  We have specialized in the preparation and registration of patents, trademarks and designs for our clients.

We are representing and advising clients being multinationals, inventors, global partner law firms serving their clients in IP works in Vietnam.

Let ANT Lawyers help your business in Vietnam.

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How To Protect Your Invention When Pitching It

If you've developed a potentially marketable invention, you are faced with a dilemma. To make money from the invention, you must generally license the rights to it to another business, often a manufacturer or distributor. But in pitching the invention to potential licensees, you run the risk of disclosing so much information that the invention might be stolen or no longer protected by law.

File PCT Patent Application in Vietnam

Horror stories abound of unscrupulous businesses who feign disinterest in the hard work of an inventor, only to turn around and use the inventor's description of her work to steal the invention for themselves--and reap huge profits. Some inventors have fought back in court and won millions--money that rightfully should have been theirs in the first place. One study determined that trade secret owners prevailed in 75% of the cases--poor odds for parties planning to steal. But winning these cases isn't easy or cheap.

Filing A Provisional Patent Application

So how can you shop your invention around without jeopardizing your rights? If your invention potentially qualifies for a patent, it may be worth your while to file a provisional patent application ($80 for small companies) and obtain "patent pending" status. Most often, this will deter rip-offs.

Using Nondisclosure Agreements

However, if you determine that the invention is probably not patentable, the best way to protect yourself is to have prospective licensees sign a nondisclosure agreement (sometimes called a disclosure agreement or confidentiality agreement) before you disclose any secrets. If someone signs a nondisclosure agreement and later uses your secret without authorization, you can sue for damages.

Nondisclosure agreements vary in format. Generally, they contain these important elements:

--What's Confidential. Every nondisclosure agreement provides a definition of confidential information or trade secrets. It also specifically excludes some information from protection, meaning that the receiving party has no obligation to protect that information. Information is not protected if it was created or discovered before or independent of any involvement with you.

--Obligations Of The Receiving Party. The person or company you're sharing confidential information with generally must hold the information in confidence and limit its use. Under most state laws, the receiving party cannot breach the confidential relationship, induce others to breach it or induce others to acquire the confidential information by improper means. Most companies accept these obligations without discussion. If you enter into a mutual nondisclosure agreement (where you also agree to keep information confidential), you should also feel comfortable with these requirements.

--Time Periods. How long must the information be kept confidential? This issue is often a subject of negotiation. Disclosing parties want a long period; receiving parties want a short one. Five years is a common length in the United States, although many companies insist on no more than two or three years. In Europe, it is not unusual for the period to be as long as ten years. Ultimately, the result depends on the relative bargaining power of the parties.

One factor in negotiations may be the shelf life of your idea. Ask yourself:

--How long will it be before others stumble upon the same innovation?

--If the product were licensed in the next year or two, how long would it be before the secret would be figured out?

If the answer to these questions is only a few years, then you are unlikely to be damaged by a shorter (two- to three-year) period.

Disclosing Without An Agreement

It's always safest to get a prospective licensee to sign a nondisclosure agreement, but you may not always be able to convince them to do so. When that happens, you are left in a vulnerable position. If you disclose crucial information without the agreement, you risk losing your rights to the invention. If you don't disclose it, you risk losing a business opportunity.

Probably the most important factor to consider is the reputation of the person or company you're dealing with. If the company has a poor reputation, the dangers of losing your secrets outweigh the business opportunity.

If you decide to go ahead and disclose, proceed cautiously. Here are some tips.

--Disclose "Around" The Secret. A licensee is primarily concerned with two questions about your invention: "What does it do?" and "Is it profitable?" Try to determine if there is a way to present your invention and an estimate of its costs without disclosing trade secrets. If you can give a company this information, it may enter into a nondisclosure agreement.

--Establish A Confidential Relationship. A confidential relationship can, in some cases, be established without a signed agreement. An "implied" confidential relationship occurs when the conduct of the parties indicates that they intended to create one. An implied confidential relationship gives you legal rights similar to those created by a written agreement, but it is always more difficult to prove that an implied relationship existed.

A confidential relationship can be implied if certain factors are present:

--The person you gave confidential information to solicited the idea from you--you did not send it without prompting;

--You indicated that the invention was a business proposition and you hoped for payment;

--At the time of disclosure, you requested that the information be kept secret; and

--The information is a trade secret--it has commercial value and is not known by competitors.

Source: Forbes

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