FacCo is a leading Hong Kong-based facility, asset and property management service provider with branch offices in Macau and China Mainland. FacCo wished to form a business operation in Vietnam to implement its various services such as interior and architectural management services, building consultancy and improvement works services, in addition to the aforementioned services. FacCo then cooperated with Viettonkin in a company incorporation project in which Viettonkin would serve as its strategic consultant throughout the entire process. FacCo wished to establish a rightful business enterprise at the earliest opportunity to immediately commence on doing business and asked Viettonkin to help in this regard.

Approach

Viettonkin’s approach to this project sought to highlight the client’s most urgent need, which is the ability to start the business process as soon as possible. The incorporation process for a 100% foreign-owned entity will typically take 80 working days to 3 months. Viettonkin would have to use its expertise to help shorten this delay duration.

Recommendation

With the client’s top priority pinpointed, Viettonkin recommended that instead of declaring and registering FacCo Vietnam as a 100% foreign-owned enterprise, the company should consider establishing a business entity under a Vietnamese nominee shareholder’s name. This would greatly accelerate the incorporation process because the nominee registration procedure is typically considerably faster.

Indeed, Viettonkin assisted FacCo in all of the components of this establishment process. First and foremost, the initial task of the nominee registration process involved finding and appointing the nominee himself. There would typically two nominees: Nominee Legal Representative and Nominee Shareholder. Since FacCo did not have any partners in Vietnam to authorize, Viettonkin assisted it in sourcing and recruiting trusted nominees for the establishment process, including support services in drafting and reviewing Trust Document, Authorization Agreement and Business Cooperation Contract (between FacCo Hong Kong and FacCo Vietnam).

After the statutory registration procedure, FacCo Vietnam was able to do business immediately but the capital flow was not formalized, meaning that the transfer of capital between FacCo Hong Kong and FacCo Vietnam had to be made through Viettonkin, which caused certain inconvenience and delay.

With this problem in sight, Viettonkin made one step further in proposing the Share transfer process from FacCo Vietnam to FacCo Hong Kong. Essentially, FacCo Hong Kong would then acquire the entirety of FacCo Vietnam’s assets the nominee’s shares. Viettonkin actively helped FacCo Hong Kong in all steps of this semi-acquisition, from drafting and reviewing necessary application dossier and obtaining the new notification approval of acquisition to obtaining new Business Registration Certificate and drafting share transfer agreements.

Results

After setting up the business operation under the Vietnamese nominees’ names, FacCo was able to start engaging its business activities immediately, avoiding wasting time for other administration procedure. This approach shortened the establishment process from supposedly 3 months to merely 10 days.

The Share Transfer Process validated not only the capital transfer between FacCo Hong Kong and FacCo Vietnam but also the declaration of the nature of FacCo Vietnam, which was then wholly foreign-owned enterprise.

FacCo Hong Kong’s next step after this successful incorporation and compliance is to incorporate into Cambodia and then Malaysia, with Viettonkin being its strategic consultant.

About FacCo

The Share Transfer Process validated not only the capital transfer between FacCo Hong Kong and FacCo Vietnam but also the declaration of the nature of FacCo Vietnam, which was then wholly foreign-owned enterprise.

FacCo Hong Kong’s next step after this successful incorporation and compliance is to incorporate into Cambodia and then Malaysia, with Viettonkin being its strategic consultant.