Question: We are foreign company and would like to do franchise in Vietnam, please provide us the franchise quotation?

Answer: In connection with your email regarding the franchise legal work in Vietnam, we would like to propose to you our advice as well as the quotation as follows:

1.                  LEGAL OPINION

Franchise activities in Vietnam are generally required to comply with the following conditions:

1.1.            Regarding the conditions for the franchisor in Vietnam

As stipulated in article 5.1[1] of Decree No. 35/2006/NĐ-CPdetailing implementation of Commercial Law 2005 regarding franchising, a franchisor could only be qualified to conduct franchise in Vietnam if their business system intended to franchise has been in operated for at least 01 year.

Therefore, if your system has operated for at least 01 year, it is possible for you to conduct franchise in Vietnam.

1.2.            Regarding the procedure of and estimated time for franchise registration in Vietnam.

In accordance with article 17a.1.a[2] of Decree 120/2011/NĐ-CP, the franchising registration should only be applied to the franchise from foreigner trader into Vietnam. The registration therefore must be registered for the franchise to be conducted.

The report procedure, therefore, would be applied for franchise activities in the territory of Vietnam or from Vietnam to the foreign country instead of registration procedure according to Article 17.a.2 of Decree 120/2011/NĐ-CP.

Please be noted that, in case franchise activities are proceeded from Vietnam to foreign countries, the domestic regulations are strictly applied.

2.                  Works and estimated fees

In connection with the above mentioned matter, we could assist you in implementing the following works:

–          Registering the franchise operation at MOIT in case the franchise activity is from the foreign country into Vietnam;

–          Recording license agreement at Vietnam Intellectual Property Office.

For your consideration, our fees for implementing possible works are listed as following table.

No

Work

Official Fees (VND)

Agency Fees (VND)

1

Drafting the sample franchise agreement and its Annexes

Not required

2

Registering the franchise operation at MOIT

16.500.000

40.000.000

3

Translation fee

100.000/100 words

4

Recording license agreement

3.500.000

Note: The aforementioned fees are exclusive 10% VAT.

We do hope that the above advice will be useful for you. Should you have any enquiry, please do not hesitate to contact us.


[1]Article 5. Conditions for the franchisor

A trader shall be permitted to grant commercial rights when fully satisfying the following conditions:

1. The business system intended for franchise has been in operation for at least one year.

Where a Vietnamese trader is the primary franchisee of a foreign franchisor, such Vietnamese trader must conduct business by mode of franchising for at least one year in Vietnam before sub-franchising.

[2]Article 17a. Cases where franchise registrations are not mandatory

1. The cases in which the franchise registrations are not applied:

a) Franchise in the territory of Vietnam;

b) Franchise from Vietnam to the foreign country

If you would like further information on Vietnam – Franchise Legal Work, please either email to our Partners at: info@sblaw.vn or call to our Office:

Ha Noi Office: +84 (4) 62 62 0246

HCM Office: +84 (8) 35 208 101.

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