Foreign investors establish security service companies

Foreign investors establish security service companies

In fact, many foreign investors have the desire to provide security services in Vietnam but still have concerns about legal procedures and regulations. Can foreign investors provide security services? Does the establishment of this service business company have any conditions or requirements, order of procedures? Let’s find out with Siglaw in this tutorial!

Legal basis for foreign investors to establish security service companies

• Vietnam’s commitments in international treaties;
• Law No. 61/2020/QH14, Law on Investment;
• Law No. 59/2020/QH14, Law on enterprises;
• 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 stipulates security and order conditions for a number of conditional investment and business lines;

What conditions do foreign investors need to establish a security service company?

Security service business is a conditional business line in accordance with the Law on Investment. Therefore, a security service provider must meet the following conditions: (According to Article 11 of Decree 96/2016/ND-CP)

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

• The person responsible for the security and order of the security service business must have a college diploma or higher and not be the person responsible for the security and order of the security and order of the security service business that in the preceding 24 months has been revoked indefinitely the Certificate of eligibility for security, order (except for the provisions of Clause 2, Article 22 of this Decree).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 providers: joint ventures are allowed only when Vietnamese security service providers need to invest in machinery and technical means for protection work and only in the form of foreign business establishments contribute capital to purchase machinery and technical means for protection work.

For foreign enterprises investing in capital contribution with Vietnamese security service establishments, the following conditions must be met:

• Being an enterprise that has been operating in security services continuously for at least 05 years;
• The representative of the contributed capital of a foreign business establishment is a person who has not been handled by the law agency of the foreign country where they operate their business for violations related to the provision of protection services from a warning or higher;
• The capital contribution of foreign business establishments may only be used to purchase machineryand technical equipment for protection work. The investment capital contribution of the foreign business establishment is at least USD 1,000,000 (one million US dollars). The valuation of machinery and technical equipment shall be carried out by competent state management agencies in charge of prices at the provincial level or higher; Pricing costs are paid by the security service business.

Forms of investment, provision of protection services for foreign investors;

• Direct investment: Establishment of foreign-invested economic organizations in joint venture with Vietnamese investors;
• Indirect investment: registration of capital contribution, purchase of shares, capital contribution to a company providing protection services with 100% of Vietnamese charter capital;

Order and procedures for establishment of a company providing protection services of foreign investors

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

Dossier of application for an Investment Registration Certificate:

• A written request for implementation of a protective business investment project, including a commitment to bear all costs and risks if the project is not approved;

• Documents on the legal status of foreign investors: ID card, passport, identity card for individual investors; a copy of the Certificate of Incorporation or other equivalent document confirming the legal status of the investor being an organization certified by the consular

• Documents proving the foreign investor’s financial capacity include at least one of the following documents: financial statements of the last 02 years of the foreign investor; commitment to financial support of the parent company; commitment to financial support of the financial institution; guarantee on the financial capacity of the investor; other documents proving the financial capacity of the foreign investor;

• A proposal for an investment project providing security services includes the following principal contents: investor or investor selection form, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, implementation progress, information on the current status of land use at the project site and demand proposal land use (if any), labor demand, proposal for investment incentives, impacts, socio-economic efficiency of the project, preliminary environmental impact assessment (if any) in accordance with the law on environmental protection.

Where the law on construction provides for the preparation of a pre-feasibility study report, the investor may submit the pre-feasibility study report instead of the investment project proposal;

• In case an investment project providing security services does not request the State to allocate land, lease land, permit change of land use purpose, submit copies of land use right papers or other documents determining the right to use the location for the implementation of the investment project;

• Explanations on technologies used in investment projects on provision of security services for projects subject to appraisal and collection of opinions on technologies in accordance with the law on technology transfer;

• Other documents related to the investment project, requirements on conditions and capacity of the investor as prescribed by law (if any).

• Number of documents: 01 set
• Time limit for settlement: The investment registration agency shall issue the Investment Registration Certificate to the foreign investor within 15 days from the date of receipt of a valid dossier.
• Competence to grant: Department of Planning and Investment of the province where the company intends to establish its headquarters

Step 2: Apply for an ERP

After being granted an Investment Registration Certificate, investors shall carry out procedures for applying for a Certificate of registration of a security service provider by one of the following three methods:

• Business registration directly at the Business Registration Office;
• Business registration via postal service;
• Business registration via electronic information network.

The dossier includes the following documents:

• An application for establishment of an FDI enterprise providing security services;

• The company’s 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 papers of members, shareholders, representatives (For individual investors: Copies of citizen identity cards, identity cards, passports or other lawful personal identification of founding members or shareholders; For investors being economic organizations: A copy of the company’s establishment decision, business registration certificate or other equivalent document of the organization; copy of valid identity card or passport of the legal representative of the organization);

• Investment registration certificate

• Other required documents (if any);

Within 03 working days from the date of receipt of the dossier, the business registration agency is responsible for considering the validity of the enterprise registration dossier and granting business registration; in case the application is not valid, the business registration agency must notify in writing the contents that need to be amended and supplemented to the enterprise founder. In case of refusal to register an enterprise, it must notify in writing the enterprise founder clearly stating the reason.

Authority granted:

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

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

• At the district level: Finance and Planning Department 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, a security service provider must have a Certificate of satisfaction of security and order conditions.

A dossier of application for a license for provision of security services made in 01 set is the original, including:

• A written request for a Certificate of satisfaction of security and order conditions of a security service provider (Form No. 03 in the Appendix enclosed with this Decree);

• A valid copy of one of the following types of documents to prove the legal status of the Investor: Business registration certificate; Certificate of business registration; Investment registration certificate.

• Curriculum statement (Form No. 02 in the Appendix enclosed with this Decree) enclosed with a criminal record card or a personnel affidavit (Form No. 02b in the Appendix enclosed with this Decree) of the person responsible for security and order of the business establishment, As follows:

+) For Vietnamese people in the country who are responsible for security and order of business establishments named in the Certificate of eligibility for security and order, a curriculum statement must be made; Criminal record card (except for those who are on the payroll of state agencies, armed forces, political organizations, socio-political organizations);

+) Curriculum statements of persons specified at this point, if they are on the payroll of state agencies, armed forces, political organizations, socio-political organizations, they must be certified by competent agencies or organizations directly managing them (except for business establishments). For persons not falling into the above-mentioned subjects, it must be certified by the People’s Committee of the commune, ward or township where permanent residence is registered;

+) For overseas Vietnamese holding foreign passports and foreigners, they must have a personnel declaration together with a valid copy of their passport, permanent resident card or temporary residence card or visa with valid stay in Vietnam;

Note: In case a business establishment has more than one legal representative, the Background Statement, Criminal Record Card or Personnel Affidavit in the dossier shall apply to the person named in the Certificate of eligibility for security and order.

Number of records: 1 set

Place of application: The Police Department administratively manages the social order of the Ministry of Public Security by one of the following three methods:

+) Submit directly to the competent police agency;

+) Send through postal service establishments;

+) Submit via the portal managing investment and business lines subject to security and order conditions of the Ministry of Public Security.

Time limit for completing the issuance of the Certificate of satisfaction of security and order conditions: Not exceeding 05 days from the date of receipt of complete and valid dossiers as prescribed.

In case of failure to issue the Certificate of satisfaction of security and order conditions, within 04 working days from the date of receipt of the dossier, the Public Security agency must reply in writing to the business establishment clearly stating the reason.

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Siglaw Law Firm

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Email:

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

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