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Question: Our company is an US-based company operating in home appliances trading. We and a Vietnamese partner are intending to enter into a franchise contract, in which we will be the franchisor. Shall the franchise contract be required to get the approval from or be registered with the competent authority of Vietnam? What kinds of conditions that we have to satisfy?

Answer:

Under the current regulations, the franchise contract shall not be required to get the approval from or be registered with the competent State authority of Vietnam.

According to Decree 35/2006/ND-CP of the Government dated March 31, 2006 detailing the provisions of the Commercial Law on commercial franchising, before conducting commercial franchising activities, foreign traders that intend to franchise must register commercial franchising with the Ministry of Industry and Trade. That can be understood that before entering into the franchise contract, your company shall have to register the franchising with the Ministry of Industry and Trade.

Apart from the registration of franchising, the following conditions must be satisfied:

- The business system intended for franchising has been in operation for at least one year

- Goods and services intended for franchising are those not on the list of goods and services banned from business. It is required to have the business license or equivalent document in case where goods, services are on the list of goods and services restricted from business or those on the list of goods and services subject to conditional business.

For application for registration of commercial franchising, a dossier of following documents shall be prepared:

1. An application for registration of commercial franchising, made according to the form guided by the Ministry of Industry and Trade.

2. A written introduction of commercial franchise, made according to the form set by the Ministry of Industry and Trade.

3. Following written certifications that are consularly legalized and translated into Vietnamese and notarized by domestic notaries public or Vietnam's foreign-based diplomatic missions in accordance with the provisions of Vietnamese law.

a) The legal status of the intended franchisor, such as certificate of incorporation, certificate of business registration

b) Industrial property right protection titles in Vietnam or a foreign country in case of licensing industrial property subject matters for which protection titles have been granted.

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