#Vietnam #Hanoi #Licensing #ONE-VALUE

Enhancing Business Growth in Vietnam

ONE-VALUE, a consulting firm based in Koto, Tokyo, led by CEO Phi Hoa, is committed to supporting Japanese companies aiming to enter and expand in the Vietnamese market by enhancing its local license application services.

In Vietnam, establishing a business involves obtaining an Investment Registration Certificate (IRC), an Enterprise Registration Certificate (ERC), and, depending on the industry, various specific licenses and sub-licenses in sectors such as retail, food service, construction, education, healthcare, real estate, logistics, e-commerce, and labor dispatching.

Navigating the licensing process in Vietnam is complex; merely understanding legal codes is insufficient. Companies must consider a variety of practical factors, including precise definitions of business activities, selection of business lines for application, the presence of foreign investment regulations, capital adequacy, site requirements, and local authority operations. Each of these factors can significantly affect the licensing process and approval times.

ONE-VALUE leverages its extensive experience in market research, entry support, M&A assistance, and deep connections with local businesses and government entities to streamline the licensing process for Japanese firms. This enhancement comes in response to Vietnam’s growing appeal in sectors like manufacturing, consumer products, food service, and education. However, many companies face challenges stemming from the opaque nature of administrative procedures when attempting to enter this market.

When setting up a local entity in Vietnam, companies typically first decide on their business structure and activities, followed by the acquisition of the IRC and subsequently the ERC. After these steps, additional tasks arise, such as opening a bank account, registering for taxes and social insurance, and obtaining industry-specific permits as necessary. It is crucial to recognize that the IRC and ERC alone do not finalize the establishment process; multiple operational procedures must follow before actual business activities commence.

For instance, sectors such as retail require a Trading License, while food services need to comply with food safety regulations. Furthermore, foreign employees working long-term in Vietnam typically need to acquire a Work Permit or an exemption certificate followed by an application for a Temporary Residence Card.

In each of these processes, companies must not only prepare application documents but also conduct initial groundwork, which includes understanding which licenses are necessary, the appropriate business codes for applications, compliance with foreign business regulations, ensuring the capital amounts are deemed acceptable by authorities, and verifying if the premises suited for business activities meet stipulated requirements.

Common Challenges for Japanese Companies in Vietnam

One major issue faced by companies is attempting to apply with vague definitions of their business activities, which can extend review periods. It becomes indispensable to verify prior to application precisely which business line applies, whether foreign investment regulations permit the activity, and what additional conditions might be in play, especially in cases involving multiple business types or groundbreaking services like digital platforms, online sales, educational services, and healthcare.

Companies often discover post-IRC/ ERC acquisition that further licenses are required before business operations can commence. Depending on the industry, these may include operational permits, specialty licenses, and compliance with safety and environmental regulations. Failing to account for these requirements can lead to time delays, increased costs, administrative fines, and risks of operational suspension.

Furthermore, the adequacy of registered capital may be assessed against overall business plans; local authorities scrutinize cost expectations associated with business scale, operational costs, equipment investments, and employee remuneration when determining if the proposed capital is adequate.

Choosing the right site for offices, factories, and rental spaces also impacts the licensing outcome. It’s crucial that the chosen property's usage aligns with business operations. Any mismatch risks hindering the acquisition processes of both the IRC and necessary sub-licenses, especially for business types such as retail and food service where site conditions and compliance with local regulations are paramount.

Changes in administrative districts and local authority regulations can also affect the licensing process. Vietnam’s administrative landscape is subject to continuous reforms, which may result in shifts in procedures or requirements. Such changes often lead to a lack of clarity at the operational level, delaying processing times.

In this complex milieu, simply submitting documents isn’t enough; appropriate engagement with local authorities and meaningful consultations are essential for clarifying application points, addressing queries, and aligning business activities with administrative practices.

ONE-VALUE's Enhanced License Application Support Services

To assist Japanese enterprises planning or expanding in Vietnam, ONE-VALUE provides several significant support operations:
1. Pre-establishment License Requirement Analysis: Understanding necessary licenses, regulatory constraints, application possibilities, required documentation, timelines, and associated risks for the business activity intended in Vietnam.
2. Assistance with IRC and ERC Acquisition: Helping with the whole process of acquiring an IRC and ERC, including documentation support and liaison with local authorities for application submission.
3. Industry-specific Sub-license Support: Support in securing additional licenses required across various sectors.
4. Work Permit and Temporary Residence Card Assistance: Helping foreign employees navigate labor requirements and obtain necessary permits.
5. Initial Tax, Social Insurance, and Labor Procedure Support: Facilitating compliance-related procedures right after establishment to ensure smooth operations.
6. Practical Engagement with Administrative Bodies: Offering further clarifications, confirmations, and assistance when additional information is requested by authorities.

Why Choose ONE-VALUE?

1. In-depth Local Knowledge: Specializing in Vietnamese administrative practices, ONE-VALUE understands how these regulations impact business strategies and operational execution across different industries.
2. Tailored Application Design: By comprehensively understanding Japanese business models, ONE-VALUE can effectively design applications that adhere to Vietnamese regulatory frameworks.
3. Local Contacts and Operational Capacity: With extensive networks in Vietnam, ONE-VALUE is well equipped to manage all aspects of the application process efficiently.
4. Comprehensive Support Beyond Licensing: ONE-VALUE offers a broad suite of services that extend beyond licensing, ensuring that firms are not just set up but also positioned for sustainable growth.

Ideal Clients for Our Services

• - Companies considering establishing entities in Vietnam.
• - Businesses looking to launch in sectors like retail, food, education, or healthcare.
• - Firms unsure of additional licensing requirements after securing an IRC/ERC.
• - Existing firms in Vietnam looking to expand their operations.
• - Organizations facing elevated complexities regarding work permits for expatriates.

Conclusion: Effective Initial Design is Key to Success

The accuracy of initial design in licensing applications in Vietnam cannot be overstated. Decisions concerning company structure, business definitions, capital amounts, address usage, and sequence of obtaining licenses profoundly influence application speed and ultimate approval.

Being well-informed about legalities isn’t sufficient; understanding the actual implementation in Vietnam is vital for a smooth business launch. ONE-VALUE is positioned to offer comprehensive insight and the necessary support to facilitate the successful entry and expansion of Japanese firms in Vietnam, ensuring excellent results in their business endeavors.