CLIENT’S INQUIRY: SETTING UP A FITNESS (GYM & YOGA) COMPANY IN VIETNAM

Thanks for your email. I am working alongside L and we plan to open a company that will be owned by the 2 of us – a Singaporean national and a British national. 

The business activities will be fitness activities. The fitness activities is a franchised gym format (group classes).  The franchise is present all over the world (including Asia) – but not yet franchised in Vietnam. We will be setting up our own gym in accordance with the franchise rights (License) granted to us by the Franchisor. 

We are planning to open the first gym in Hanoi, but are also considering Ho Chi Minh City. However, if it is easier to set the Company in Ho Chi Minh over Hanoi (as long as you have full rights to operate anywhere in Vietnam), we do not have a preference. 

Let us know your thoughts

ASL LAW’s ADVICE

Dear S__,

First of all, The Vietnam Law Firm – ASL Law Limited Liability Company (hereinafter referred to as “ASL Law/We”) would like to send our warm greetings to you. We understand that Client is seeking professional legal advice on opening a new company in Vietnam operating a GYM center in Hanoi and later on expanding to Ho Chi Minh City.

I. PRELIMINARY COMMENTS OF ASL LAW

1. Investment Registration

According to Vietnam Investment Law 2014, an investment in the form of the establishment of an economic organization will require a Foreign Investor to go through a two-step licensing process. Regarding trading services, applicable laws and regulations requires Foreign investor and their Foreign Invested Enterprise (FIE) to satisfy three-layer of conditions before officially providing trading services. The first one is investment conditions and the second being business conditions (also known as business condition or baby permit).

In summary, under applicable laws the following procedures need to be implemented:

+ Step 1: To apply and obtain an Investment Registration Certificate (IRC);

+ Step 2: To establish an enterprise by obtaining an Enterprise Registration Certificate (ERC) of the FIE; and

2. Obtaining Operation Business License for GYM/ FITNESS center.

After obtaining the IRC and ERC, the FIE has to apply Operation Business Licenses or Sub-licenses such as: Inspection minutes of Fire Fighting and Prevention, Licenses for gym/fitness center operations, etc.

II. REQUIREMENT FOR OPERATION OF GYM AND YOGA CENTER

• Pursuant to current law provisions, an enterprise operates Gym or Fitness center shall have to comply with the following conditions:

Professional staffs:

Professional staffs of GYM center are including:

1. The sport coach shall meet one of the following conditions:

1. Being a coach or athlete of a secondary or higher grade in accordance with the registered business sports;
2. Having a certificate in physical and sports training at intermediate level or higher in accordance with the registered sports activities;
3. Being trained in professional sports according to the regulations of the Minister of Culture, Sports and Tourism.
   2. Security staff
   3. Medical staff

Facilities, training equipment:

For gym and fitness activities:

1. The training floor has a size of 08m x 08m or more.
2. The floor surface is flat, non-slip and carpeted or cushioned soft.
3. Distance from floor to ceiling is at least 03 m.
4. The audio system must ensure at least 90dBA in intensity
5. Guaranteed light from 150 lux or more
6. Having a medical bag which is prescribed by the Ministry of Health.
7. Equipping auxiliary tools to serve the trainees: treadmill, barbell, platform, stick, ring, ball.
8. There are changing rooms and toilets.
9. Having regulation table which including the following main contents: Participants in training, training hours, training clothes and security policies.
10. The training density on the floor is at least 02m2 / 01 person practicing.
11. Each coach instructs no more than 30 people in a training session.

For yoga activities if any:

1. The training floor is flat and non-slip.
2. The distance from the training floor to the ceiling must not be less than 2.7m.
3. Cool workout space, light from 150 lux or more
4. There is a toilet, changing clothes area, a place for personal belongings for trainees, a medicine chest and first aid kit.
5. Having a regulation table which is specifying the following main contents: Training hours, subjects participating in the training, subjects not allowed to participate in the training, costumes for participating in the training, measures to ensure safety when practicing refining and other regulations
6. The organization of practicing and competing in outdoor yoga subjects must ensure items 1, 3, 4 and 5
7. Training equipment:
8. Make sure each practitioner has 01 personal mat or large carpet on the floor
9. For Yoga fly: Silk hammock (rope) withstands at least 300 kg of gravity, is installed on a suspension capable of ensuring the safety of the practitioner. The length of the cord can be adjusted to fit the practice position;
10. Yoga support equipment must be safe and not dangerous for the practitioner.
11. Training density on the floor is at least of 2.5m2 / 01 people.
12. Each coach instructs no more than 30 people in a training session.

– In addition, depending on the actual situation and scale of business establishments engaged in sports activities, enterprise shall also have to meet the conditions on fire prevention and protection applied to the establishment.

III. SCOPE OF WORKS

SCOPE OF SERVICES
Preparation of the dossier for setting up Company in Vietnam and then obtaining operation business license / sub licenses for GYM center. ·              Notifying to Client about application documents required in accordance with Vietnamese law; ·              Drafting required application documents for submission; ·              Finalizing the application documents following comments from the licensing authority; ·              Drafting the Application Dossier for Investment Registration (IRC). ·              Drafting the Application Dossier for Company Incorporation (ERC). ·              Drafting the Charter of the Company. ·              Drafting the Application Dossier for obtaining sub Licenses.
Licensing procedure ·              Reviewing and assembling all required documents to be included in the application ·              Submitting the application dossier to the licensing authority on behalf of Client; ·              Following with approval progress of the competent authority; ·              Keeping Client updated on the developments and additional requirements, if any; ·              Receiving and delivering results to Client. ·              Investment Registration (IRC): around 25-30 working days approximately from the submission of valid application dossier. ·              Company Incorporation (ERC): around 10 working days approximately from the submission of valid application dossier.
Post-licensing procedure ·      Obtaining company seal and seal sample registration;
Obtaining Operation business license/ Sub Licenses: around 45 working days approximately from the submission of valid application dossier.

Roadmap for carrying out above scope of work can be described in details as follows:

Preparing the application dossier: We anticipate that this phase shall be completed within 07 working days from full receipt of information and document provided by Client;

2/ Submission of application dossier: We shall submit application dossier within 02 working days from full receipt of duly signed and sealed application dossier.

Noted: All of the above works are appraisal procedures, therefore it can be prolonged for many reasons. ASL Law will take reasonable efforts and coordination to expedite the licensing process in case of necessity.

What services ASL LAW could do for clients/foreign investors doing business in Vietnam?

ASL LAW with very experienced business lawyers and consultants shall provide the clients a full legal service with affordable quotation to company formation in Vietnam from the initial step until full functional operation. Accordingly, the business of the clients shall do business in Vietnam legally, efficiently and costly.

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