Foreign investors establish security service business company

Foreign investors establish security service business company

In fact, many foreign investors want to do security services business in Vietnam but are still concerned about procedures and legal regulations. Can foreign investors do security services business? Are there any conditions, requirements, or procedures for establishing a company to do this service? Let’s find out with Siglaw in this article!

Legal basis for foreign investors to establish security service business companies

Vietnam’s commitments in international treaties;

Law No. 61/2020/QH14, Investment Law;

Law No. 59/2020/QH14, Enterprise Law;

Decree 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Investment Law;

Decree 01/2021/ND-CP on business registration;

Decree 96/2016/ND-CP stipulating security and order conditions for a number of conditional investment and business sectors and occupations;

What conditions are required for foreign investors to establish a security service business company?

Security service business is a conditional business line as prescribed by the Investment Law. Therefore, a security service business establishment must satisfy the following conditions: (According to Article 11 of Decree 96/2016/ND-CP)

Be an enterprise legally established in accordance with the provisions of Vietnamese law.

The person responsible for security and order of the security service business establishment must have a college degree or higher and must not be the person responsible for security and order of the security service business establishment whose Certificate of eligibility for security and order has been revoked indefinitely within the previous 24 consecutive months (except for the provisions of Clause 2, Article 22 of this Decree).

For foreign enterprises providing security services in the form of joint ventures with Vietnamese security service businesses: joint ventures are only allowed when the Vietnamese security service business establishment needs to invest in machinery and technical equipment to serve the work protection and can only be carried out in the form of foreign business establishments contributing capital to purchase machinery and technical equipment to serve security work.

Foreign enterprises investing in contributing capital to a Vietnamese security service business establishment must meet the following conditions:

Being an enterprise that has been operating in the security service business continuously for at least 05 years;

The representative of the capital contribution of the foreign business establishment must not have been handled by a law enforcement agency of the foreign country where they operate for violations related to security service business activities from warning or higher;

The capital contribution of the foreign business establishment can only be used to purchase machinery and technical equipment for security work. The minimum investment capital of the foreign business establishment is 1,000,000 USD (one million US dollars). The valuation of machinery and technical equipment is carried out by a competent state price management agency at the provincial level or higher; the valuation cost is paid by the security service business establishment.

Form of investment in security service business for foreign investors

Direct investment: Establishing a foreign-invested economic organization in a joint venture with a Vietnamese investor; Indirect investment: Registering to contribute capital, buying shares, and capital contributions to a security service business company with 100% Vietnamese charter capital;

Procedures for establishing a security service business company by foreign investors

Step 1: Apply for an Investment Registration Certificate (IRC)

Application for an Investment Registration Certificate:

A written request to implement a security business investment project, including a commitment to bear all costs and risks if the project is not approved;

Documents on the legal status of the foreign investor: ID card, passport, or identification card for individual investors; a copy of the Certificate of Establishment or other equivalent document confirming the legal status of an institutional investor with consular confirmation

Documents proving the financial capacity of the foreign investor, including at least one of the following documents: financial statements of the last 2 years of the foreign investor; commitment to financial support from the parent company; commitment to financial support from a financial institution; guarantee of the financial capacity of the investor; other documents proving the financial capacity of the foreign investor;

The proposal for an investment project to provide security services includes the following main contents: investor or form of investor selection, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, implementation progress, information on current land use status at the project implementation location and proposed land use needs (if any), labor needs, proposed investment incentives, impacts, socio-economic efficiency of the project, preliminary assessment of environmental impacts (if any) according to regulations of law on environmental protection.

In case the law on construction stipulates the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of an investment project proposal;

In case the security service business investment project does not request the Government to allocate land, lease land, or permit the change of land use purpose, a copy of the land use right papers or other documents determining the right to use the location to implement the investment project shall be submitted;

Explanation of the technology used in the security service business investment project for projects subject to appraisal and consultation on technology according to the provisions of the law on technology transfer;

Other documents related to the investment project, requirements on conditions and capacity of the investor according to the provisions of law (if any).

Number of dossiers: 01 set

Processing time: The investment registration agency shall issue an Investment Registration Certificate to a foreign investor within 15 days from the date of receipt of a valid dossier.

Issuing authority: Department of Planning and Investment of the province where the company intends to establish its headquarters.

Step 2: Apply for an Enterprise Registration Certificate (ERC)

After being granted an Investment Registration Certificate, the investor shall carry out the procedure for applying for a certificate of registration of a security service business enterprise by one of the following three methods:

Register the enterprise directly at the Business Registration Office;

Register the enterprise via postal service;

Register the enterprise via the electronic information network.

The dossier includes the following documents:

Application for establishment of an FDI enterprise providing security services;

Company charter;

List of members or shareholders of the company (if it is a limited liability company with two or more members or a joint stock company);

Copies of legal documents of members, shareholders, and representatives (For individual investors: Copy of citizen identification card, identity card, passport or other legal personal identification of members or founding shareholders; For investors being economic organizations: Copy of the decision to establish the company, business registration certificate or other equivalent documents of the organization; copy of valid identity card or passport of the legal representative of the organization);

Investment registration certificate

Other necessary documents (if any);

Within 03 working days from the date of receipt of the dossier, the Business Registration Authority shall be responsible for reviewing the validity of the business registration dossier and granting the business registration; in case the dossier is invalid, the Business Registration Authority shall notify in writing the contents that need to be amended or supplemented to the business founder. In case of refusal to register the business, it shall notify in writing the business founder and state the reasons.

Issuing authority:

At the provincial level: Business Registration Office under the Department of Planning and Investment

The Business Registration Office can organize points to receive documents and return results under the Business Registration Office at different locations in the province;

At the district level: Finance – Planning Office under the District People’s Committee

Step 3: Apply for a Certificate of eligibility for security and order

According to the provisions of Decree 96/2016/ND-CP, security service business establishments must have a Certificate of eligibility for security and order.

Note: In case a business establishment has many legal representatives, the Personal History Declaration, Criminal Record or Personnel Declaration in the file applies to the person whose name is on the Certificate of eligibility for security and order.

Number of documents: 1 set

Place to submit documents: Department of Administrative Police for Social Order, Ministry of Public Security by one of the following three methods:

+) Submit directly to the competent police agency;

+) Send via postal service business establishments;

+) Submit via the Electronic Information Portal for management of investment and business sectors with conditions on security and order of the Ministry of Public Security.

Time limit for completing the issuance of Certificate of eligibility for security and order: No more than 05 days from the date of receiving a complete and valid dossier according to regulations.

In case of not issuing a Certificate of eligibility for security and order, within 04 working days from the date of receiving the dossier, the police agency must have a written reply to the business establishment and clearly state the reason.

Siglaw Law Firm

Phone: (+84) 961 366 238

Email:

• vphn@siglaw.com.vn
• vphcm@siglaw.com.vn

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