starting a company or franchise
DESCRIPTION
Starting a Company or FranchiseTRANSCRIPT
Starting a Company or Franchise / Retail Business in the Mekong Region
17 June 2015
“We are pioneers in emerging markets”
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What makes us unique?
20111994 201020061995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
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Part 1
Doing Business in the Mekong Region
Mekong Region Key Indicators: GDP Growth
CountryPopulation
2014(M)
2014 GDP per capita
(USD)
2012 GDP Growth
(%)
2013e GDP Growth
(%)
2014e GDP Growth
(%)
2015 GDP Growth forecast
(%)
Vietnam91.5 2,052 5.2 5.4 5.6 5.8
Laos 7.0 1,692 7.9 8.2 7.5 7.8
Cambodia 15.5 1,080 7.3 7.0 7.2 7.2
Source: IMF World Economic Outlook Database, April 2015
2014 Ease of Doing Business Ranking
148
78
135
Source: Doing Business 2015 Fact Sheet: East Asia and the Pacific
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Part 2
Setting up a Retail Business
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Key Legal Framework
– Law on Investment - Law on Enterprises– Law on Commercial– Decree 35/2006/ND-CP on commercial franchise– Circular 08/2013/TT- BCT of Ministry of Industry and Trade on
trading activities
– Investment Promotion Law - Enterprise Law– Decision 0977/MOIC regarding Business on Retail and Whole Trade– Notification No. 1489 regarding Categories of Goods and – Investment ratio open to foreign investors for investment in the
establishment of import business units for wholesales
– The Civil Code– The Law on implementation of certain provisions of Civil Code– Law on Investment– Law on Commercial Enterprises
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Setting Up a Retail Business
100% foreign owned or joint venture or
local
Investment or Joint Venture for
construction or model sales establishment or
local
100% foreign owned or joint venture or
local
Lao nationality
and residing in Lao PDR
Foreign or local companies
Setting
Companies
FranchisingForeign or local
companies
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Part 3
Vietnam – Setting up a Subsidiary or Franchising –
What you need to know
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Establishing a subsidiary
Country LLC1 LLC2+ RO Branch
Vietnam YesLLC (2-50)JSC (3+)
Yes Yes (banks, insurers, securities firms, law firms)
Lao PDR Yes Yes (2-30) Yes Yes (banks, insurers, airlines)
Cambodia Yes Yes (2-30) Yes Yes
Enterprise Structures
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Establishing a foreign invested company
Time frame by law* – In practice, it is longer
Application for Investment RegistrationSubmission
Local Department of Planning and Investment
Investment Registration
Enterprise Registration
Rejection or Supplementation
15 working
days
* Law on Investment 2014
3working
days
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Establishing a local company
Time frame by law* – In practice, it is longer
Application for Enterprise
Registrationsubmission
Local Department of Planning and Investment
Enterprise Registration
Publication
Rejection or Supplementation
3 working
days
* Law on Enterprises 2014
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Franchising
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Franchising in Vietnam
Legal Definition* of Franchising
The sale of goods or provision of services conducted under the business method or format of the franchisor;
Law on Commercial Decree 35/2006/ND-CP on commercial franchise as amended by Decree 120/2011/ND-CP Circular 08/2013/TT- BCT of Ministry of Industry and Trade on trading activities
The business carried out by the franchisee itself;
The business carried out under the trademark and commercial symbol of the franchisor; and
Franchisors entitled to supervise and assist franchisees in conducting their business activities.
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Franchising in Vietnam
Vietnam WTO Commitments:
100% foreign owned permitted;
Necessity to verify Vietnam Commitments under WTO;
Involvement of the Ministry of Industry and Trade
“Economic Needs Test”: permission considered on a case by case basis, depending on number of retail outlets, market stability, population density in the province/city of proposed additional retail outlet, and consistency with the master plan of such province/city.
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Master Franchise vs Sub-Franchise
Global Franchisor
National Franchisee (in Country or Area)“Master Franchise”
Sub-Franchisee Sub-FranchiseeSub-Franchisee
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Registration of Franchising Activities
Time frame by law* – In practice, it is longer
Application for franchise activities
submission
Ministry of Industry and
Trade
Registration Publication
Rejection
5 working
days
Law on Commercial Decree 35/2006/ND-CP on commercial franchise as amended by Decree 120/2011/ND-CP Circular 08/2013/TT- BCT of Ministry of Industry and Trade on trading activities
Franchise Description Document
Including the following information
– Information of franchisor and franchisee: organizational chart, financial status
– Trademark of the goods and services;
– The franchise system, initial and ongoing franchising fees, the number of franchisee currently in operation and the agreement forms; and
– Other mandatory information
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Registration Of Franchising Activities
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Registration Of Franchising Activities
One-year Rule
The franchisee system has been in operation for at least one year.
The Vietnamese master-franchisee of a foreign franchisor must also have conducted a franchise business for at least one year in Vietnam before granting sub-franchise to others
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Mandatory Provisions of The Franchise Agreement
1 Content of franchising
2 Rights and obligations of the franchisor
3 Rights and obligations of the franchisee
4 Price and periodic franchise fees and payment method
5 Term of contract
6 Extension and termination of contract
7 Dispute solution
Franchisor must Franchisee must
– Disclosure the information – Pay franchise fee
– Provide initial training and regular technical assistance
– Invest in facilities, finance, human resources…
– Design and arrange business at franchisee’s expense
– Keep confidentiality
– Comply with the requirements of franchisor regarding design and layout
– Warrant intellectual properties – Stop using intellectual properties of the franchisor at expiry of the franchise contract
– Treat all franchisees equally – Comply with operation system
– NOT to sub-franchise WITHOUT franchisor’s approval
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Legal Rights and Responsibilities
Thank you
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Hanh TranPartner, Vietnam
Deputy Managing Director, Ho Chi Minh City Office
Excellence . Creativity . TrustSince 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO P.D.R | MYANMAR | SINGAPORE | THAILAND | VIETNAM www.dfdl.com
Excellence · Creativity · TrustSince 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM www.dfdl.com
Excellence · Creativity · TrustSince 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM www.dfdl.com