Construction Contract in Vietnam

COMPANIES SEEKING TO BUILD AN OFFICE BUILDING OR INDUSTRIAL FACILITY WORK WITH THE CONTRACTOR THROUGH A CONSTRUCTION CONTRACT.

construction lawyers in Vietnam

There are several types of construction contract used in the construction industry depending on the level of control from parties involved in terms of investment, responsibilities and duration.

Fixed price is a type of construction contract that offer a total fixed priced for all construction related activities. This contract type could include incentives or benefits for early termination, or can also have penalties, called liquidated damages, for a late termination. This contract type is preferred when a clear scope and a defined schedule has been reviewed and agreed upon.

Cost plus contract is a type of construction contract involves payment of the actual costs, purchases or other expenses generated directly from the construction activity. This type of contract must contain specific information about certain pre-negotiated amount (some percentage of the material and labor cost) covering contractor’s overhead and profit. Costs must be detailed and should be classified as direct or indirect costs.

Time and material contract is usually preferred if the project scope is not clear, or has not been defined. The owner and the contractor must establish an agreed hourly or daily rate, including additional expenses that could arise in the construction process. The costs must be classified as: direct, indirect, mark-up, and overhead. Sometimes the owner might want to establish a cap or specific project duration to the contractor that must be met, in order to have the owner’s risk minimized.

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Some Notable Changes in Vietnam Enterprise Law from Jul 2015

There have been a number of significant changes to the Vietnam law on enterprise to improve the business efficiency. Under this law, limited liability companies and joint stock companies may have one or more than one atlaw representative, of which at least one at-law representative resides in Vietnam. An enterprise shall ensure that at least one at-law representative resides in Vietnam. In case an enterprise has only one atlaw representative, such person must reside in Vietnam and shall, upon leaving Vietnam, authorize in writing another person to exercise the rights and perform the obligations of the at-law representative.

From July 01, 2015, enterprises may decide on the appearance, quantity and content of seal and before using a seal, an enterprise shall notify the seal specimen to the business registration agency for publicly posting on the national enterprise registration portal. These are significant contents as prescribed under the Law No. 68/2014/QH13 on Enterprises approved by the National Assembly on November 16, 2014. Another significant point is regulation on omission of business sectors in enterprise registration certificate. From July 01, 2015, enterprise name and identification number, head office address of the enterprise; charter capital and information of the at-law representative of the enterprise, information of the general partners for partnerships; of the enterprise owner for private enterprises… The at-law representative of an enterprise shall register the changes in the contents of the enterprise registration certificate within 10 working days after making the changes. After being granted an enterprise registration certificate, an enterprise shall publicly announce the enterprise registration on the National Enterprise Registration Portal within 30 days. This Law takes effect on July 1, 2015 and replaces the Law No. 60/2005/QH11 on Enterprises and June 20, 2013 Law No. 37/2013/QH13 amending and Supplementing Article 170 of the Law on Enterprises.

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Investment Incentives for IT area in Vietnam

VIETNAM IS ATTRACTING INVESTORS FROM AROUND THE WORLD TO MAKE INVESTMENT THROUGH SETTING UP IT SERVICE COMPANY IN VIETNAM

setting up IT company in Vietnam

Since 2010, Vietnam has initiated and invested more resources in the information technology which has been realized as an area that could create a competitive edge for Vietnam.  Recently, the Vietnam government has put a legal frameworks to attract more investment in this area, with the issuance of Decree No.154/2013/ND-CP, taking effect from Jan 1st, 2014 guiding particularly on management of the focused information technology areas.

Accordingly, the enterprises at focused information technology areas will enjoy tax benefits i.e. income tax rate of 10% within 15 years, in some specific cases, extended to 30 years; exempt 50% within 5 continuous years. They are exempted the import tax when importing goods to build fixed properties, manufacture such as machines, equipment, parts, assembles.

Besides, these enterprises may enjoy convenient conditions in customs procedure, incentives in export tax, investment credit, import credit and favorable policies for enterprises business in high technology area.

The focused information technology area must have at least 2,000 employees specialized in information technology; in case of emphasizing in software manufacture, digital content, information technology service, 1,000 specialized employees will be employed at least. 

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Why choose Vietnam and Japan to Invest?

When considering where to invest in Asia there are many options out there. We can suggest two countries in this vast continent which represent great setup opportunities for any global entrepreneur - Japan and Vietnam.

Why invest in Japan?

Japan boasts easy and transparent company setup, with minimal red tape. While for example in many South-East Asian countries local partnership is required to setup a new company, in Japan foreign entrepreneurs may own 100% of a Japanese company with no minimum investment requirement.

The optimal business entity type is The Godo Kaisha . This vehicle is the most common corporate type used for Japanese subsidiaries, when the proposed business does not require a complex capital structure. Alternatively, trading businesses in Japanese free zones can enjoy multiple business setup incentives, including:

• No custom duties on imports and exports;
• Flexible labour laws and
• Faster business incorporation timeliness.

Japan business setup still requires appointing of a local resident director, but this can be easily negated via expert nominee director services.

Why invest in Vietnam?

While Japan is a safe bet for reaching large, profitable clientele, the operational costs of this mature market can be very high. Vietnam, these days, is more cost-efficient than most Asian countries. In 2014 multiple business setups moved their operations in Vietnam, rather than China due to lower business costs.

Vietnam has slower setup procedures which may take up to two months due to significant Government red tape. However, local regulations allow 100% foreign-owned business setups which is the preferred option for almost all foreign investors.

Conveniently, there are multiple advantages to setting up a Vietnamese business, including:

• Only one director of any nationality is required;
• Only one shareholder of any nationality is required;
• Only one US$1 is the required issued share capital;
• There is no travel to Vietnam required;
• Vietnam boasts the lowest labour costs in the region;
• Being part of ASEAN secure no import duties with multiple countries in the region.

Each city in Vietnam that have difference benifits to sett up business such as in Ho Chi Minh city, Ha Noi or Da Nang.

Conclusion

Both Japan and Vietnam offer significant advantages to setting up new business in their territories. From reputable, stable markets such as Japan to cost-efficient, growing solution as Vietnam, foreign entrepreneurs can choose their optimal business setup jurisdiction in Asia!

via Lowtax

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What you need to know when setting up a business?

Starting my company Gloss and Glam was the best thing I ever did. But before I opened my business, I spent countless hours speaking to lawyers, accountants, and other entrepreneurs trying to figure out next steps. Save yourself countless hours — and the possible headache of making a huge foundational mistake — by getting these five things straight before you start up your business:

1. Own your name. Make sure the company name you choose is one with an available trademark and Internet domain name. To see if a trademark is available, you can do a trademark search online through the United States Patent and Trademark Office’s website. Failure to properly obtain a trademark could put your fledgling business at risk — not to mention that the time and money you have invested in establishing your business name could go to waste if someone else owns the trademark. Don’t assume your new business name is not trademarked because you were unsuccessful finding such name on the Internet, either. Someone could have used the name for a business that closed, or filed a trademark and never used it.
2. Get in with the law. Understand what regulations, licenses and taxes you will need to follow, obtain and pay for your new business. After doing some initial research on your own, consult with a lawyer and accountant to confirm your understanding and to help structure your business to be in compliance with the law. Generally speaking, you will need to need to (i) ensure you are charging the correct amount of tax your service or product that your business is promoting, if applicable and (ii) obtain all of the proper licenses needed to run your new business, at a minimum. Establishing a successful business is hard enough. The last thing you need is some technical legality or administrative detail to stand in the way of your success.
3. How much do you need to live? When working on your business plan, do not forget about the most important factor: YOU. You need to take into account your living costs. Rent, mortgages, and health insurance — these are all things that don’t pay for themselves. You will most likely need to cut out all the unnecessary extras you can live without. Make sure you account for unforeseen or unexpected expenses by factoring a little flexibility into your budget for those “just-in-case” moments. You might even consider taking a part-time job until things pick up with your new venture and speak to a financial planner to help you budget yourself properly.
4. Where are you in your life? Starting a new business takes brains, bravery, and what will seem to be endless hours of hard work. When you own your own company, there is always something that has to get done. You will most likely find yourself working at least 60-80 hours a week for the first two years. With that said, I’ll ask you one very important question: Are you ready to give up your personal life for the next three years?
5. Don’t over — or under — spend. Starting a business can be incredibly financially taxing on you and your family. You will need to learn where and when to spend. It’s important not to waste those precious seed dollars but it’s equally important to spend where necessary. In any business, you often have to spend money to make money.  Don’t skimp out on things your company needs. For example, it may be worth it to put $1500 in an online vendor listing, but it may not be necessary to give every new customer a $15 mug. Be sure to keep up with technology too — there are many time-saving programs and apps (including free or inexpensive ones) that can help you keep track of it all, and as we all know, “time is money.

_Via Forbes_

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