Surveying and Mapping Service in Viet Nam: How to Form a Company

1. Market Access

Market access, within the context of forming a surveying and mapping service company in Vietnam, refers to the ability of a foreign entity to enter and operate in the Vietnamese surveying and mapping market. This involves understanding two key aspects:

1. International Commitments and Vietnamese Regulations:

• WTO and FTAs: Vietnam is a member of the World Trade Organization (WTO) and has signed several Free Trade Agreements (FTAs) like the EVFTA and CPTPP. These agreements set out specific terms regarding market access for foreign service providers, including those in surveying and mapping.
• EVFTA and CPTPP: Both EVFTA and CPTPP contain provisions on market access for surveying and mapping services. However, it's crucial to review Annex 8-C (Vietnam's exception to national treatment) in EVFTA and Appendix NCM I-VN-26 in CPTPP, as they outline limitations and specific conditions for foreign players.
• Vietnamese Domestic Laws: Decree 45/2015/ND-CP details comprehensive regulations on licensing and operation of surveying and mapping businesses, including those with foreign investment. Understanding these regulations is crucial for ensuring compliance and smooth market entry.

2. Specific Conditions for Establishing a Company:

• Foreign Contractor vs. Foreign-Invested Company (FIC): You can choose to operate as a foreign contractor for specific projects or establish an FIC with a longer-term presence. Each option has its own set of requirements and limitations.
• Licensing Requirements: Certain surveying and mapping activities require a license. Decree 27 outlines the types of activities requiring licenses and the specific conditions for obtaining them. These conditions include having qualified technical staff, suitable equipment, and meeting minimum capital requirements.
• Joint Ventures: Partnering with a local Vietnamese company can simplify some aspects of market entry and compliance. However, this route involves navigating joint venture regulations and considerations related to decision-making, profit sharing, and control.

Additional Points to Remember:

• EVFTA and CPTPP: While these agreements create opportunities for foreign companies, accessing Vietnamese government projects still requires meeting specific conditions and bidding procedures.
• National Treatment: Despite commitments in international agreements, some limitations might still apply to foreign companies compared to domestic ones. Understanding these exceptions is crucial to avoid unexpected hurdles.
• Data and Information Access: Foreign companies should be aware of regulations governing access to and use of survey and mapping data, especially regarding state secrets and sensitive information.

By thoroughly understanding market access requirements and navigating them strategically, foreign investors can successfully establish and operate surveying and mapping service companies in Vietnam. Remember, seeking professional legal advice is crucial to ensure compliance, maximize opportunities, and navigate the nuances of the Vietnamese market.

2. Company Structure

Deciding your company structure is a crucial step when entering the Vietnamese surveying and mapping market. Two main options are available for foreign investors: operating as a foreign contractor or establishing a foreign-invested company (FIC). Each option has its own advantages and disadvantages, so carefully consider your specific needs and goals before making a decision.

Foreign Contractor:

• Pros:
  • Simpler initial setup, requiring only project-specific approvals and permits.
  • Potentially quicker entry into the market for specific projects.
  • No need for establishing a permanent legal entity in Vietnam.
• Cons:
  • Limited scope of operations, restricted to specific projects you secure contracts for.
  • No long-term presence or brand building in the Vietnamese market.
  • May face higher tax rates compared to FICs.
  • Potentially less control over project execution and personnel compared to an FIC.

Foreign-Invested Company (FIC):

• Pros:
  • Allows broader business operations and long-term establishment in Vietnam.
  • Greater flexibility to pursue various projects and opportunities.
  • More control over the business, brand, and operations.
  • Potential access to tax benefits and incentives depends on the chosen FIC structure.
• Cons:
  • The more complex initial setup process requires company registration and compliance with additional regulations.
  • Higher initial investment and ongoing administrative costs.
  • Need to navigate Vietnamese corporate governance and labor laws.

Additional Considerations:

• Joint Ventures: Partnering with a local Vietnamese company can offer benefits like navigating local regulations and market knowledge. However, it requires careful negotiation of terms, control dynamics, and profit-sharing agreements.
• Branch Office: This option allows an existing foreign company to establish a branch in Vietnam but has limitations on business scope and requires significant financial resources.
• Representative Office: Primarily for market research and liaison activities, but cannot directly engage in commercial activities.

Seek Professional Guidance:

Choosing the right company structure is crucial for your success in Vietnam. Consulting experienced legal and business advisors familiar with the local market and regulations is highly recommended to ensure you select the most suitable option for your specific goals and circumstances.

Remember, the ideal structure depends on your long-term plans, risk tolerance, and resource availability. Carefully evaluate each option and seek professional guidance to optimize your market entry and maximize your success in the Vietnamese surveying and mapping landscape.

3. Licensing

Obtaining the necessary licenses is crucial for operating a surveying and mapping service company in Vietnam. Understanding the licensing requirements and procedures ensures smooth operations and avoids legal complications. Here's a breakdown of key points to consider:

Types of Licenses:

• Not all surveying and mapping activities require a license. Decree 27 outlines the specific activities subject to licensing, such as building coordinate networks, acquiring aerial photos, and creating topographic maps.
• Each type of licensed activity may have its own specific requirements and conditions for obtaining a license.

Eligibility:

• Both foreign contractors and foreign-invested companies (FICs) can apply for licenses.
• Regardless of the company structure, you must meet specific criteria, including having qualified technical staff, suitable equipment, and relevant permits.

Application Process:

• Applications for licenses are submitted to the Department of Survey, Mapping and Geographic Information (DSMG&GI) under the Ministry of Natural Resources and Environment (MONRE).
• The application must include various documents, such as the bid-winning decision, diplomas of technical staff, and proof of ownership of equipment.
• The DSMG&GI will inspect your company's capacity to conduct the licensed activities and verify the submitted documents.

Validity and Renewal:

• Licenses are typically valid for the duration of the specific project or contract you secured.
• You can apply for an extension if the project duration is extended.
• Licenses can be renewed upon meeting the eligibility criteria and following the application process again.

Additional Considerations:

• There are fees associated with applying for and obtaining licenses.
• Violating licensing regulations can result in penalties, including fines and license suspension.
• Seeking professional guidance from lawyers and consultants familiar with Vietnamese licensing procedures is highly recommended to ensure a smooth and compliant process.

Remember:

• Carefully review Decree 27 to determine the specific licenses required for your intended activities.
• Gather all necessary documentation and ensure they comply with the prescribed format and content.
• Partner with experienced professionals to navigate the application process and address any potential challenges.

4. Data and Information Access

The availability and usability of data and information are crucial components for any surveying and mapping company. However, in Vietnam, accessing and using such resources comes with specific regulations and limitations you need to understand. Here's a detailed breakdown:

Types of Data and Information:

• Public Survey and Mapping Data: Vietnam adheres to the principle of making certain survey and mapping data publicly accessible. This includes:
  • Lists of available data and products.
  • Notes on survey markers.
  • Standard national border maps.
  • Data on administrative boundaries, hydrology, traffic, etc.
  • Other non-classified information.
• Restricted Data: Certain data deemed sensitive or critical for national security is classified as state secrets. This includes:
  • Top-secret and secret information like specific infrastructure details or resource locations.
  • Data with economic or strategic importance.

Access Regulations:

• Public Data: Accessible upon request and payment of applicable fees. You may need to provide identification and follow specific application procedures.
• Restricted Data: Access is generally restricted to authorized Vietnamese agencies and organizations.
• Foreign Entities: Foreign companies can access non-classified data through established procedures. However, accessing state secrets requires specific permissions and agreements.

Important Points:

• Purpose and Use Restrictions: Data obtained must be used for the stated purpose in your application. Sharing with unauthorized parties is prohibited.
• Data Verification: Report any errors or discrepancies found in acquired data to the information providers.
• Intellectual Property Rights: Be mindful of and respect any intellectual property rights associated with the data you access.

Additional Considerations:

• Government Projects: Access to specific data might be restricted or require additional approvals for government projects.
• International Cooperation: Agreements between Vietnam and foreign countries can facilitate data exchange under specific conditions.
• Data Sharing Agreements: Collaborating with local partners might involve specific data sharing agreements outlining access and usage permissions.

Recommendations:

• Consult with local legal counsel and regulatory experts to understand specific data access regulations relevant to your activities.
• Clearly define your data needs and obtain necessary permissions before embarking on projects.
• Partner with trusted local collaborators who can navigate data access procedures and ensure compliance.
• Remain updated on evolving regulations and policies regarding data accessibility and data privacy in Vietnam.

By navigating the data and information landscape responsibly and strategically, you can ensure your surveying and mapping services adhere to Vietnamese regulations and contribute to successful project completion while protecting sensitive information. Remember, seeking professional guidance is crucial to avoid legal complications and maximize your access to the data you need for your business operations.

5. Other Considerations

While understanding the core aspects like market access, company structure, licensing, and data access is crucial, additional factors require careful attention for a smooth and successful operation in Vietnam's surveying and mapping landscape:

Financial Resources:

• Budgeting: Consider initial setup costs, ongoing operational expenses, potential license fees, and legal/administrative charges. Factor in employee salaries, equipment maintenance, and insurance costs.
• Taxation: Research applicable tax regulations for foreign companies and FICs. Seek professional advice to optimize your tax strategy and minimize liabilities.
• Financing Options: Explore available financing options like loans or joint ventures with local investors to manage costs and secure capital.

Local Expertise:

• Partnerships: Consider partnering with experienced Vietnamese companies for their market knowledge, network connections, and navigating local regulations.
• Cultural Nuances: Be mindful of Vietnamese business culture and communication styles. Building rapport and fostering positive relationships with stakeholders is key.
• Language Barriers: Hiring bilingual staff or partnering with translation services can bridge communication gaps and ensure clear understanding.

Operational Requirements:

• Office Space: Secure appropriate office space that meets operational needs and complies with local regulations.
• Equipment and Technology: Ensure your equipment and technology meet licensing requirements and industry standards. Consider local availability and support services.
• Logistics and Infrastructure: Understand logistical challenges and infrastructure limitations that might impact your operations in certain regions. Plan accordingly.

Sustainability and Compliance:

• Environmental Regulations: Adhere to environmental regulations concerning surveying and mapping activities, especially in sensitive areas.
• Labor Laws: Comply with Vietnamese labor laws regarding employee contracts, work permits, and social security contributions.
• Ethical Practices: Uphold ethical business practices and transparency throughout your operations to maintain a positive reputation and trust.

Marketing and Networking:

• Understand Target Audience: Identify your target clients and tailor your marketing strategy accordingly.
• Networking: Build relationships with relevant industry players, government agencies, and potential clients to expand your network and visibility.
• Marketing Channels: Utilize appropriate marketing channels like industry publications, conferences, and online platforms to reach your target audience.

Remember:

• Conducting thorough due diligence and seeking professional guidance from legal, financial, and industry experts is highly recommended.
• Adapting to the local business environment and cultural norms is crucial for establishing trust and fostering long-term success.
• Staying updated on regulatory changes and market trends ensures you operate compliantly and adapt to evolving conditions.

6. Conclusion

The Vietnamese surveying and mapping industry presents exciting opportunities for foreign investors. While navigating the legal and regulatory landscape can be complex, understanding the key aspects outlined in this guide can equip you to embark on this endeavor with knowledge and confidence. Remember, carefully consider your long-term goals, resources, and risk tolerance when choosing your company structure and licensing strategy. Seek professional guidance to ensure compliance and maximize your access to data and information crucial to your operations.

Building strong local partnerships, adapting to cultural nuances, and adhering to ethical and sustainable practices are essential for establishing a well-regarded and successful surveying and mapping service company in Vietnam. With careful planning, strategic execution, and a commitment to contributing to the industry's progress, you can turn your business ambitions into reality and become a valuable player in Vietnam's dynamic surveying and mapping landscape.

If you need further explanation on this subject, please don't hesitate to contact us through email at lienhe@luatminhkhue.vn or phone at: +84986 386 648. Lawyer To Thi Phuong Dzung