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Vietnam Law Firm with English Speaking Lawyers

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Vietnam Law Firm with English Speaking Lawyers

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Hiển thị các bài đăng có nhãn investment. Hiển thị tất cả bài đăng
Hiển thị các bài đăng có nhãn investment. Hiển thị tất cả bài đăng


Ministries want guidelines for conditional business regulations

HCMC – Several ministries and departments said they want guidance for implementing regulations on conditional businesses that are prescribed in the Law on Investment that has been approved by the National Assembly (NA)
Unlike other laws, the law amending and supplementing Article 6 and Annex 4 of the Investment Law on the list of conditional business and investment fields is said to be clear and therefore, the Government is not eassignd to issue guidelines for its implementation.

But many are of the opinion that such guidance is still needed, heard a meeting between the Ministry of Justice and other ministries and agencies on Wednesday.
Those agencies voice such concerns as the Government recently requested them to review and make suggestions for detailed regulations on new business fields and those which need to be adjusted, and report to the Government within this month.
According to the Ministry of Justice, most business conditions added into the investment law have already been regulated by current rules and therefore, the list of conditional business fields can be applied from January 1 next year.
The Ministry of Planning and Investment said the law amending and supplementing Article 6 and Annex 4 of the Investment Law has removed 20 sectors from the conditional business list while the list of conditional business fields has been included in the appendix of the investment law.
As such, ministries and departments should just follow those lists and regulations, said the ministry.
However, related ministries and departments said without specific guidance, enterprises operating in the four conditional sectors, including overseas study consultancy service, educational quality accreditation, and manufacturing, assembling and importing autos will face difficulties.
Source The Saigon Times
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With the increasing infrastructure demands, while the budget and ODA resources are limited, the call for private investment in infrastructure projects is seen as viable solution. Thus, the Government issued Decree 15/2015/ND-CP on February 14th 2015, provides for regulations on investment in the form of public-private partnerships (PPP) which will partially solve the real problems when implementing PPP projects in Vietnam.

Decree 15 has some new and notably regulations as follows:
1. Decree 15 provides for forms of project contracts, including build – transfer contract (BT contract); build – transfer – lease contract (BTL contract) and build – lease – transfer contract (BLT contract). Thus, investors do not necessarily have to transfer the work to the State. They can choose different solutions depending on the requirements of the investors and fund lenders of the project.
2. Decree 15 clearly stipulates the form of investment and project classification that can apply the form of PPP. Besides the projects on physical infrastructure such as bridge, road, building…, the works on trade, science, technology, meteorological, economic zone, industrial park, tech park, information technology park; information technology application are also included in the list of projects that can apply the form of PPP.
3. Decree 15 also stipulates that the PPP projects will be classified according to national important projects, projects of groups A, B and C. Thanks to this, small projects will be approved more quickly. Accordingly, the project in group C will not have to carry out the procedures for investment registration issuance.
4. Decree 15 regulates that the state capital in the project implementation process will be used primarily to support the construction of auxiliary facilities, the organization of compensation, site clearance and resettlement. However, the decree does not specify the value of land use rights that have been included in the total cost of investment or not.
5. One of the conditions for the selection of projects is that projects must have a total investment of 20 billion VND or more (excluding O&M projects and a number of special projects). In addition, the project has the ability to recover capital from business activities will be prioritized.
6. In terms of the project proposal contents, beside the contents on project information, technical factors …, the contents on expected risk assessment in the course of project implementation and allocation of risk between the competent state agencies and investors should also be mentioned.
7. Decree 15 also provides for the time of project contracting. Accordingly, investors negotiate and sign off the contract project first, and then they will be granted the investment registration certificate. The final step is the signing of the project contract. Thus, the losses, changes or arising before contracting the project will arise legal consequences or not? This issue has not yet been answered.
8. In terms of the project contract contents, Decree 15 lists the necessary contents in a PPP contract and the necessary attached documents. In addition, the Decree also stipulates open so that ministries and provincial People’s Committees are allowed to propose a different form of contract with the form prescribed in Decree 15 to submit the Government for consideration and decision.
9. Decree 15 allows the transfer of rights and obligations under the project contract, or transfers a part or the whole project. This open opportunity to securitize the project, relieving nervous for donors or banks with the project finance issues, especially when investors are not qualified to continue to perform project.
10. Regarding the applicable law, Decree 15 allows the contracting parties may agree to the application of foreign laws to regulate the project contract in which one party is foreign investor or the contracts that are guaranteed by the Government for performance obligation. This is a major change and allowing the international financial consultants to involve deeply in the project.
11. Decree 15 provides for the obligation to guarantee the implementation of project contract, however, this matter will be resolved by the Law on Procurement. The issue of Government guarantee is not clearly defined and it was handed over to Ministry of Finance and Ministry of Justice to study.
12. For the project enterprise, after being granted the investment registration certificate, investors then establish the enterprises to implement projects that consistent with the objectives and scope of activities as agreed in the contract plan. The establishment of the project is implemented in accordance with the business law.
13. Decree 15 clearly stipulates the obligation to monitor the project contract implementation of investors, project business and competent state agencies. The specific allocation of responsibilities is necessary to ensure that the project is monitored to implement carefully. In terms of prices, cost of goods, services and revenue, Decree 15 respects the agreements of the parties in the project contracts and creates conditions for investors to recover capital and profit. This is an important basis for investors to negotiate the price with the supplier or the buyer of the state if there is any disadvantage binding to investors.
14. Decree 15 also specifies the time limit for project settlement. Accordingly, within 6 months from the completion day of the construction, the investor shall make final settlement of investment capital.
15. In terms of the mortgage of assets and the right to operate the project, Decree 15 specifies that investors and project business can mortgage the property, land use rights and the right to operate the project to the lenders under the provisions of the civil law and the law on land, provided that the mortgage term is not exceed the project contract period.
However, the mortgage term may exceed the project contract period if there is an agreement in the project contract. Regarding the form of mortgage agreement, the mortgage agreement of assets and the right to operate the project must be made in writing and signed by the lending party and the contracting parties of the project. Thus, the interests of the lending party to the project will somewhat be secured.
16. On the use of foreign currency in the project, Decree 15 stipulates the principle of ensuring the balance of foreign currency. Accordingly, investors and project enterprises can purchase foreign currency from credit institutions that are licensed to operate foreign exchange in order to meet the needs of current transactions, capital transactions and other transactions or transfer of capital, profits and proceeds from liquidation of foreign investments under the provisions of law on foreign exchange management.
17. On the issue of dispute resolution, Decree 15 classifies disputes into:
(i) Disputes between competent state agencies and investors or project enterprises and disputes between project enterprises and economic organizations participating in the project implementation;
(ii) Disputes between competent state agencies and foreign investors or project enterprises that established by foreign investors;
(iii) Disputes between the project enterprises and foreign organizations, individuals or economic organizations of Vietnam and disputes between investors.
Accordingly, the dispute settlement body corresponding to the above cases is the arbitration organization or the courts of Vietnam in accordance with the law of Vietnam; The arbitration or the Court of Vietnam or the arbitral tribunal are established upon agreement of the parties and are settled according to the provisions of the Investment Law. Disputes that are resolved by arbitration under the provisions of the project contract and related contracts are commercial disputes. The decision of foreign arbitration is recognized and enforced under the provisions of the law on recognition and enforcement of foreign arbitration decisions.
18. Decree 15 stipulates the responsibilities of the concerned ministries and agencies. In particular, the Ministry of Planning and Investment, in addition to other responsibilities, shall have to issue, modify and revoke the certificate of investment registration to projects under their jurisdiction; evaluate the State investment capital participating in the project within its jurisdiction; contribute opinion on issues within their functions and competence required by ministries, agencies and provincial People’s Committees. Ministry of Justice, in addition to other responsibilities, shall have to issue legal opinion to the project contract, guarantee document of the Government and the documents relating to the project signed by the state agencies.
19. As for the project contracts that are signed off before Decree 15 takes effect, they will not have to be renegotiated. Thus, the BT projects that are suspended previously can be redone.
To sum up, the changes in Decree 15 on PPP brought many positive signals to investors and sponsor banks. Many PPP projects are continuing to start, especially in the field of transport, showing that this will be the motivation to promote the development and proper management of infrastructure project.



The Ministry of Finance is drafting a report submitting to the Government on the implementation of Resolution 35/2016 of the Government on a number of solutions to remove difficulties and tax obstacles for small and medium enterprises.

Accordingly, the Ministry is expected to submit two plans to prepare for comments of the Parliament at the 2ndSession (October 2016). In which, there are two options. Option 1 is applying the general tax rate of 17% from January 1st 2016 until the end of 2020 for small and medium enterprises. Option 2 is applying the general tax rate of 15% from January 1st 2016 to 2020. The general tax rate which is currently applied is 20%.
In addition, the Ministry of Finance also proposed the plan to reduce the corporate income tax for newly established start-up businesses with investment projects in the fields of preference or in underdeveloped areas, rural areas: applying tax rate of 10% in 15 years; tax exemption for 4 years and reduce 50% of the tax payable in the next 9 years for new projects.
Concerning the handling of the tax debt, deferred payment and fines, the Ministry of Finance proposed debt relief but must ensure equality among economic sectors, non-discrimination; remove the deferred payment for cases caused by force majeure that does not have the money to pay tax; remove tax debt, deferred payment and fines for companies that were dissolved, bankruptcy, business individuals are dead or missing.



Foreign entities can set-up company or branch offices in Vietnam to carry out business activities.

There are several main different aspects between opening a branch office or establishing a foreign owned company in Vietnam.
  1. Conditions
  • Permits for establishment of Vietnam-based branches of foreign enterprise shall each have a valid term of five years.
  • Foreign enterprise must choose between establishing a 100% foreign capital enterprise or forming a joint-venture with domestic investor or company.
  1. Certificate
  • The Branch office needs to apply and obtain the operation license of a Branch;
  • A foreign owned company will need to apply and obtain the investment certificate (“IC”) to operate in Vietnam.
  1. Capital
  • Optional, foreign entity will decide how much money to invest in branch. The allocation capital for branch is capital for the subordinate units.
  • Mandatory, foreign entity will need to provide minimum capital as required by Vietnam Law in conditional investment area.
  1. Obligation of owner
  • For branch office in Vietnam, owner takes full responsibility;
  • For company, owner takes responsibility within the capital contributed into the company in Vietnam;
  1. Other matters
  • For branch office setting up in Vietnam, the procedure is less complicated compared to those for the establishment of a 100% foreign owned company;  the branch office is able to carry out trading and some other activities as stipulated by Vietnam laws and the WTO commitments which Vietnam enters.  The business lines of a branch have to be aligned with the business lines of the headquarter of the foreign entity.
  • Setting up foreign owned company would be more complicated than the setting up of the branch office, however this form of investment has more flexibility and freedom as it is a stand alone Vietnam entity recognized under Vietnam laws.



Dispute in Vietnam could be between parties in business transaction, foreign investors and Vietnam government, or between countries in implementing international treaties.

The formation of market economy in Vietnam took place in the context of the development in the width and depth of the economic ties at a significant fast pace that make Vietnam an important part of the world supply chain.  Vietnam suppliers could sell the goods and services to the world and the foreign supplier could also export their goods and services to Vietnam market.  Further, as the Vietnam market opens up, foreign investors could invest through various establish business in Vietnam i.e. acquire equities in Vietnam companies, establish business in Vietnam.  During this process, disputes are an inevitable result which has been growing in scale and complexity.
Most should agree that disputes shall be construed as the dissent, inconsistencies or conflicts of interests, rights and obligations between the parties in the economic relations at different levels. Accordingly, economic disputes can have the following basic forms:

  1. Disputes in business are between the participants in a business transaction including investments, production to consumption of products or performance of services on the market for profit purposes i.e. professional and product liability, debt disputes over a business transaction, franchise disputes,intellectual property disputes, and disputes over contract for supply of goods or services…
  1. Disputes between foreign investors with Vietnam government agencies, arising in the implementation of the BTO, BT, BOT, and the implementation of international agreements on promotion and protection bilateral and multilateral investment i.e. government policy and policy measures, concession to water and sewerage, power or energy supply, project or contract payment…
  1. Disputes between countries in the implementation of the international bilateral and multilateral agreements.

In Vietnam, as the disputes arise, parties involved could consider resolving the matters through negotiation, mediation, arbitration, or taking court actions after taking consideration of various factors including cost, time, and the complexity of the disputes.  Litigation law firm in Vietnam with skillful dispute lawyers should be consulted to provide the suitable advice for dispute resolution.