Dossier of licensing of insurance LLC establishment in Vietnam

by Quang Minh

The insurance business services with a promising future to become a profitable business, now gaining the interest of the market. However, the law stipulates the conditions for the insurance business services very complicated. In which, the dossiers needed to prepare to establish this kind of company differ from other types of services in some points. So, LSX legal firm would like to inform you of this article: “Dossier of licensing of insurance LLC establishment in Vietnam”

Limited Liability Company (LLC)

Limited Liability Company (LLC), often abbreviated as Limited Company. This type is among the popular business types in Vietnam.
According to Clause 7, Article 4 of the Law on Enterprise 2020, Limited liability companies include two types: “A “limited liability company” can be a single-member limited liability company or multiple-member limited liability company”.
Capital contributors can be individuals or organizations. contributors who own part or all of the charter capital of the Company are called capital contributing members.
On the other hand, capital contributing members are only liable for debts, and other property obligations of the enterprise within the amount of capital contributed to the enterprise.

Insurance Business Services

Under the law, insurance business services are operations of insurance enterprises to make a profit. Accordingly, the insurer (business) takes the risk of the insured (client) on the basis that the insurance buyers pay the insurance premium for the enterprises to pay the insurance money to the policyholders; or indemnify the insurance buyers when insured events occur.
Thus, the insurance enterprise has to pay the insurance money to the beneficiary when the insured event occurs. In addition, policyholders must pay monthly or annual premiums, this is the profit that the business receives.
Besides, not every insured event ensures the insured to receives the insurance money. For example, a person applying for insurance for his motorbike; If that person destroys the motorbike on his own, he will certainly not receive insurance money.
The insurance business will have to take its own money to pay the insurance money to the beneficiaries. Therefore, the law strictly stipulates the establishment and operation conditions of insurance enterprises. Because such a regulation is to ensure that businesses will have enough insurance money to pay their customers.

Dossiers to prepare

  • Firstly, an application (made according to the standard form).
  • Secondly, draft of Company’s charter.
  • Suitable operation plan for the first 5 years for the business line to which the business register. The plan states the target market; distribution channels; backup method; reinsurance program; capital investments; business efficiency; solvency of the insurance company.
  • Copy of citizen identification; ID card; passport or other legal personal identification. Criminal record, background; copies of licenses and certificates of the person expected to be appointed as the President of the Company; or the Chairman of the Board of Members; General Director; the actuary; solvency, chief accounting.
  • Records of state agencies that the capital contribution of a Vietnamese organization satisfied financial safety conditions; allowance to contribute capital to establish insurance enterprises under the law.
  • Rules, terms, premium table of insurance products expected to deploy.
  • The bank’s confirmation of the allowance to operate in Vietnam on the charter capital deposited in an escrow account opened at the bank.

List of founding members or contributing 10% or more of charter capital and the following attached documents:

  1. Copy of establishment decision, business registration certificate, or other equivalent documents.
  2. Company charter.
  3. Document of the competent authority of the capital contributing organization deciding on the participation in capital contribution to establish the insurance enterprise.
  4. Authorization documents; a copy of ID card; passport; or other legal personal identification of the authorized representative of the capital contributing organization.
  5. Audited financial statements for 03 consecutive years before the year of application. In case a foreign insurance enterprise authorizes a subsidiary to contribute capital to establish an insurance enterprise in Vietnam, the financial statements of such subsidiary must also be provided.
  6. Authorization letter of foreign insurance enterprise for a subsidiary company specialized in performing overseas investment; and commitment to take responsibility with the subsidiary for capital contribution and obligations of the subsidiary in the establishment of a foreign insurance company in Vietnam

Minutes of the meeting of capital contributors (for the application of a multi-member LLC) on:

  1. Agreement to contribute capital to establish an insurance LLC; together with a list of founding members or contributing 10% or more of the charter capital.
  2. Approval of the draft on the company’s charter.

Confirmation by the competent authority of the country where the foreign organization contributing capital has its head office located:

  1. Foreign organizations are allowed to establish insurance enterprises in Vietnam. In case the regulations of that country do not require written approval; then there must be proof.
  2. The foreign enterprise is in good financial health, and fully meets the management requirements in the country where the enterprise is headquartered.
  3. Not grievously violating the regulations on insurance business activities of the country where the foreign organization is headquartered within 03 consecutive years before the application.

When establishing a company, people must carry out the procedure following the law at the competent business registration authority (under the Law on Enterprise 2020). The process of establishing a business includes many different steps and phases. If you are not familiar with the law, this process may take a lot of time.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Using our service, you do not need to do the paperwork yourself. We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application; submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.

Conditions for establishing an insurance business in Vietnam

Insurance regime of foreigners when participating in labor in Vietnam

Regulations on paying unemployment insurance for foreigners in Vietnam

What is the charter capital of an insurance LLC?

Charter capital of an insurance LLC is the total amount of money that members have contributed or committed to contribute when establishing a limited liability company.

Do I need to submit proof that the organization meets the prescribed conditions?

The answer is no. You only need to submit the written commitment of the capital contributors for meeting the conditions to be granted the License as prescribed.

Contact LSX

Finally, hope this article is useful for you to answer the question about “Dossier of licensing of insurance LLC establishment in Vietnam”. If you need any further information, please contact  LSX Law firm+84846175333 or Email: hoangson@lsx.vn

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