Venture Capital's investment business must be managed by a firm with a comprehensive understanding of legal, accounting and industrial practices. Lawyer, Mr. Yongwook Jeong has a Korean lawyer license and an United States certified public accountant license at the same time. Also Arbitrator, Mr. Jay Casee has many years of venture capital work experiences and foreign-invested corporation dispute settlements.
Investment Term Sheet Legal Validation · Foreign-restricted Business Category Check · Foreign-restricted Business Category Bypass · Foreign-invested Capital Increase Permission · Foreign-invested Share Deal Permission · Opening Indirect Investment Capital Account (IICA) · Capitalization Transaction Support · Shareholder Agreement (SHA) · Share Subscription Agreement (SSA) · Share Purchase Agreement (SPA) · Convertible Note for Seed Round · Short Term Loan · Long & Mid Term Loan · Debt to Equity Conversion · Business Category Revision · Joint-stock Company Conversion · Capital Surplus · Related Corporation Establishment · Business License Revision · Common Share · Preferred Stock · Redeemable Preferred Share (RPS) · Convertible Preferred Share (CPS) · Redeemable Convertible Preferred Share (RCPS) · Stock Option · Employee Stock Ownership Plan (ESOP) · Cross Border Corporate Flip
Investment Term Sheet Legal Validation
We review whether there is any item in the term sheet which is contrary to current Vietnamese laws. We can also consult about provisions that are not actually effective depending on the legal environment in Vietnam.
- Can you be a legal agent on an investment term sheet negotiation stage?
- What is usually included in an investment term sheet?
Foreign-restricted Business Category Check · Foreign-restricted Business Category Bypass
If the investee is a domestic-capital company, some business categories must be excluded in order to receive foreign investment capital. If the investee's main business category is restricted to foreign investment,, the relevant bypass structure is required.
- If even a small percentage of foreign-invested share exists in a corporation, the corporation must follow the obligations as a foreign-invested corporation.
- It is difficult for even Vietnamese persons to grasp Vietnamese law and administration procedure accurately.
- Do not respond to suggestions regarding investment remittance before the relevant foreign investment permission and registration procedures.
Foreign-invested Capital Increase Permission · Foreign-invested Share Deal Permission
All foreign capital transactions require prior approval from the Department of Planning and Investment.
- What is Foreign-invested Capital Increase Permission & Foreign-invested Share Deal Permission?
- Procedures & Required Time for Foreign-invested Capital Increase Permission & Foreign-invested Share Deal Permission
Opening Indirect Investment Capital Account (IICA) · Capitalization Transaction Support
Most startup investments are indirect investments, and foreign investors are not allowed to transfer the capital from their overseas accounts directly to the investee's account, but the transactions are restricted to transfer only through Indirect Investment Capital Accounts in Vietnam.
- Procedure & Required Time for Indirect Investment Capital Account Opening
- Can I open an Indirect Investment Capital Account without visiting Vietnam?
Shareholder Agreement (SHA) · Share Subscription Agreement (SSA) · Share Purchase Agreement (SPA)
We make the actual contracts according to your investment term sheet conditions. Share Subscription Agreements and Share Purchase Agreements are legally essential documents to submit to Department of Planning and Investment (DPI) and banks.
- Why do you make legally non-compulsory shareholder contracts?
- Does a newly incorporated corporation need a shareholder agreement?
Convertible Note for Seed Round
In the case of initial startup investment, if the investment size is small and you want to shorten the time to negotiate, you can invest in internationally well-known convertible note agreements such as Simple Agreement for Future Equity (SAFE) and Keep It Simple Securities (KISS).
Short Term Loan · Long & Mid Term Loan · Debt to Equity Conversion
If the investment is divided and paid several times, it is a wasteful administrative task repeatedly to obtain relevant permits from DPI to reflect the investments in the investment registration certificate (IRC) and business registration certificate (ERC) for every single time. In this case, the investee can receive the investment as a loan first, and when a certain amount is collected, the investment can be converted into the capitalization of the investor.
Business Category Revision · Joint-stock Company Conversion · Capital Surplus
An investee's business category revision can be done at the same time with the foreign capital increase. In addition, if the face value of the investment and the secured equity are different, the investee must transform to a joint stock company to keep the difference as a capital surplus.
- What is Capital Surplus?
- What types of business categories are allowed for foreign-invested corporations?
Related Corporation Establishment · Business License Revision
In some cases, after all investment transactions have been completed, it may be necessary to establish an affiliated entity to conduct a business in a specific industry, or to transfer the relevant business license to an appropriate entity.
Common Share · Preferred Stock · Redeemable Preferred Share (RPS) · Convertible Preferred Share (CPS) · Redeemable Convertible Preferred Share (RCPS)
Vietnamese Enterprise Law (68/2014/QH13) does not define the characteristics of preferred shares in detail. Therefore, the details related to several types of preferred shares need to be described in SHA or SSA.
Stock Option · Employee Stock Ownership Plan (ESOP)
In Vietnam, the usage of ESOP (Employee Stock Ownership Plan) and Stock Option are a little bit unclear. People may consider them similar, so please do not focus on the literate terminologies, but please try to figure out the actual meaning on each contract.
- What is the Share Allocation Registration in DPI?
- Process and Required Time for Share Allocation Registration in DPI
Cross Border Corporate Flip
Cross-border Corporate Flip is an action to move a corporation's registration to another country which is not the main business area of the corporation for some financial or administrative benefits. In cases of Vietnamese startups, there are some cases which have flipped to Singapore, and we can consult for the issue.