Transportation Costs and Risk Exposure

Mergers and Acquisitions (M&A) has become popular in Vietnam as the country develops and more investors are eager to invest and gain control of the business enough to engage in, decide important business matters through partial or full ownership of an enterprise. A successful M&A mean the parties achieve their financial and commercial goals (increasing capital, raising management capacity, branding, etc) and ensuring safety and restraint the risk at the lowest level, though legal due diligence undertaken by law firm in Vietnam.

The Importance of Legal Due Diligence of Enterprise in M&A activities

Legal due diligence of enterprises focuses on full and detailed assessment of legal issues relating to the legal entity, capital contribution status, shareholder status, legal rights and obligations. From the investigation information, the parties can anticipate legal risks, assess opportunities to come up with alternatives. In addition, legal assessments help parties evaluate the reliability of their counterparts as well as understand their advantages and constraints for the negotiation process.

What Legal Due Diligence in M&A Activities Entail?

Evaluate the factors related to the legal status and capacity of the target enterprise: Review the legitimacy of the establishment, operation, possession of enterprise; ensure that the enterprise is not subject to procedures for dissolution or bankruptcy and compliance with the law of the enterprise in the course of operation. The information to be checked includes: dossiers, certificate of enterprise establishment, operation licenses, practice certificates, professional liability insurance, company charter, agreement between the company owner on rights of shareholders, capital contributors, minutes of meetings, member/shareholder register, certificate of capital contribution.

Evaluate the factors related to the business and financial activities of the target enterprise: Review the system of customers and partners of the enterprise; the documents on economic contracts (with customers, suppliers, etc); dossier of investment, construction, land, project; information on guarantee, mortgage (if any), debt and credit agreement, M&A, financial leasing contract, exclusive contract, franchise, etc, in terms of value, legality, validity, progress to evaluate legal risks in the future. Review the financial statements on the accuracy of the financial status of the business.

Verify the factors related to labor: Review labor contracts, labor agreements, internal labor regulations to determine the enterprise’s financial obligations to employees, compliance Labor law and reception of labor after the purchase or sale.

Verify the factors related to intellectual property: Review intellectual property rights of enterprises including: trademarks, trade names, industrial designs, layout designs, business secrets, etc; the property has granted the patent/license. Review matters of infringement of intellectual property rights of other organizations, individuals or legal persons in order to anticipate the risks of being sued or claiming damages.

In addition, in an M&A deal, the acquirer should ensure that participation in capital contribution or acquisition of the target enterprise is permitted, the form of M&A implementation is in accordance with the law and the M&A deal was approved by the competent authority of each party. After that, the factors related to M&A transaction procedures and constraints and restrictions of law (if any) must be evaluated.

Debt recovery is always a big problem for businesses and individuals. In order to promote the production process, the process of debt recovery is always one of the concerns with the business leaders.

One of the the appropriate method is the intervention of law. ANT Lawyers Co., Ltd is a leading legal consultancy in Vietnam, with a team of experienced lawyers and legal experts that have participated and solved many debt recovery cases for businesses and individuals.

We will:

– Study the case to find the legal basis and debt data that should be handled;

– Assess the payment capability of the debtor to creditor;

– Represent the client to exposure debtor to negotiate, persuade and require debt repayment;

– Advice and instruct customer the most beneficial solutions in accordance with the law;

– Implement civil proceedings, economic proceedings or criminal proceedings against law enforcement agencies, depending on the type of entity and the nature of the transactions arising overdue debts;

In case of debt recovery through litigation, we will help customer:

– Draft petition and other papers relating to the recovery of debt;

– Represent client (individuals and organizations) to submit the petition to the Court and the competent authorities to recover the debt as stipulated by law;

– Appoint attorney to participate in protecting the legitimate rights and interests of clients (individuals and organizations) at the Court at all levels;

– Represent client (individuals and organizations) to participate in judgment enforcement

The collection of bad debt and late payment after sales or services are difficult and sensitive jobs in Vietnam. Therefore, such job has always been handled by the law firms in Vietnam whom is aware of law and the process. The lawyers in Vietnam whom receive the case should be well informed about the legal nature of the debt profile and they must have skills on debt recovery.

Depending on the nature of each case and each specific dossier, the law firm can be able to make suitable plans to deal accordingly with the debtor.

There will be a number of methods and different solutions in the work of debt recovery. However, the recovery of debt will apply the following two basic methods:

– Mediation and agreement methods are ways that lawyers and legal professionals will come directly to negotiate and persuade debtor to make their debt payment schedule based on understanding of law and various drivers.

– Resolve through court proceeding, or arbitration. This method will be applied in the case that debtors are unwilling to cooperate, trying to evade responsibility, or the payment plan is delayed.

Time limit for settling the debt collection is influenced by different factors but the two most important factors are the legality of the documents and the payment capability of debtors.

There are debtors, after being explained the consequences and losses of non-payment, late payment by lawyers and legal experts, they were aware of and make plans to pay debts.

But there are debtors that the client requires the support and intervention of the state authorities. In such case, the duration of the case will be prolonged.

Cosmetics are areas of highly regulated in Vietnam as they apply on human and could create health concern. Hence, cosmetics imported into Vietnam have to be applied special procedures to ensure safety. Cosmetics regulations in Vietnam would lay out provisions that importers and manufacturers to follow.

To carry out the Combination Convention in the cosmetic management which has been signed by countries are member of the Association of Southeast Asian Nations on September 2nd, 2003 (commonly called ASEAN Cosmetic Convention), the Ministry of Health of Vietnam issued Circular 06/2011/TT-BYT on Cosmetic Management.

The Circular dated January 25th, 2011 regulating the management of cosmetic products manufactured in the country, as well as cosmetics imported for circular in Vietnam. Besides, the cosmetic regulations is also provided in related provisions.

According to the Vietnam cosmetic regulations, cosmetic product must be construed as a substance or a preparation which is used for touch with outside parts of human body (skin, hair system, finger nails, toenails, lip, and outside reproduction organ) or teeth and mouth mucous membrane with main purpose in order to cleanse, aromatize, change the outward characteristics, form, adjust body’s smell, safeguard body, or maintain the human body in good condition. In addition to the products being grouped as cosmetic products such as: creams, emulsion, lotions, gels and oils for skin (group 1); tinted bases (group 2); toilet soaps, deodorant soaps (group 3); … some products are not classified as cosmetic.

Under Vietnam law, a cosmetic product made in Vietnam or imported into Vietnam must go through procedure of proclamation before being is sold on the market. In particular, organizations or individuals circulating the cosmetic products on the market have to be responsible for obtaining permissions through cosmetic product proclamation from authority agencies as well as responsible for safety, effectiveness, and quality of product.

For exporting cosmetic, the exporter needs to obtain the Certificate of Free Sale (CFS) as regulated. CFS is issued when such domestic cosmetic is issued the cosmetic product proclamation receipt number by competent state management agency. For importing cosmetic, enterprises are only allowed to import the cosmetic into Vietnam when presenting to the Customs agency the valid receipt number of cosmetic product proclamation report which has been issued by the Medicine Management Department – the Health Ministry. However, Vietnam law also provide import of cosmetic in some special situations which are not obligated to implement the cosmetic product proclamation as the following:

– Organization or individual who imports cosmetic in order to study and experiment;

– The organizations, individuals who receive cosmetic as gifts;

– The organizations, individuals who import cosmetic for displaying at fair, gallery and other temporary import for re-export situations.

For manufacturing cosmetic, the cosmetic regulations require the organizations which manufacture the cosmetic must deploy to apply and satisfy principles, the “cosmetic good manufacturing practice” standard of the Asian Southeast Association Nations (CGMP-ASEAN).

Besides, compliance with the other requirements such as labeling, safety of ingredients, cosmetic advertising is also required.

The Ministry of Industry and Trade has recently issued Circular 16/2017/TT-BCT on project development and the model purchase contract for solar power projects.

Accordingly, the grid connected solar power investment projects are regulated as follows:

– The investor can only set up a solar power investment project included in the provincial and national level solar-power development plan; or provincial and national power development plan that are approved.

– The contents of the solar power investment project must comply with the regulations on management of investment in construction and the following requirements:

+ Evaluate the impact of solar power project connection plan on the power system in the area.

+ Having equipment connected to the SCADA system or moderation information so that the forecast information on electricity output can be transmitted per hour to the regulated agency.

– The equity ratio of grid connected solar power projects should not less than 20% of the total investment.

– The area of long-term land use shall not exceed 1.2 ha/01 MWp.

Circular 16/2017/TT-BCT takes effect on October 26th 2017.

Da Nang is one of the five major cities in Vietnam, having a geographical location that is particularly conducive to rapid and sustainable economic development. Da Nang has important transportation routes such as the China-ASEAN international railway crossings, seaports and international airports.

Da Nang is one of the tourist centers of the country, has rich tourism potential including natural tourism resources and humanities. Da Nang has many famous scenic spots such as Hai Van pass, Son Tra mountain, Ba Na hills, Ngu Hanh Son, Cham Museum or My Khe beach have been voted by Forbes magazine as one of the six most beautiful beaches in the world. These conditions are favorable for the development of diversified forms of tourism such as travel, research, cultural.

Da Nang have infrastructure development, four types of roads are popular: high way, rail way, International airport and International sea way. Da Nang have the sea lanes to most major ports in Vietnam and around the world. It helps investor more convenient to travel everywhere in Vietnam and other countries. Moreover, Da Nang’s water supply, electricity supply and communication system has developed rapidly and is increasingly modernized, ranking third in the whole country after Hanoi and Ho Chi Minh City. Da Nang have Da Nang Port, which help investor in import/export activities easily.

The first advantage of the policy mechanism is that Da Nang has also had great support the mechanism and policies for socio-economic development of Da Nang. Since Da Nang was recognized as a national grade I city in 2003, Da Nang has implemented guidelines, regulatory directions and the issuance of specific regulatory mechanisms. With the support from the Central Government, Da Nang authorities have also developed appropriate policies and mechanisms to facilitate the development of the economy, such as the one-stop-shopping mechanism, so Da Nang which is considered as a locality with attracting investment policies in Vietnam. Examples: Procedures related to investment, investment locations, clearance and handover plan, the granting of business registration certificates and investment preference certificates shall be carried out under the one-stop-shopping mechanism at the provincial municipal all of them are resolved at Da Nang Administration Center. Investors shall be exempt from all expenses related to the settlement of investment procedures apart from the payment of business registration fees according to the provisions of law. When investing in Da Nang, investors not only enjoy many preferential policy from city government but also have chance to find clients from many countries or compete with other companies in Vietnam and foreign countries.

Tradition of unity, consensus of people and the dynamism and creativity of the leadership, these advantages have aroused, mobilized the strength, the most important and decisive resource for the development of Da Nang. The determination of leaders, city authorities in building programs, projects with the support of the people, investors, enterprises, ect that help investors who will invest in Da Nang have highest benefits.