Attention in Drafting Registration Application for Invention

Inventions are created with purpose to people’s life convenience and consequently bring economic benefits to the inventor. As a result, protecting the intellectual property of inventions through patent registration in Vietnam is essential.

However, applicant of invention may find it difficult in declaring some of the information i.e. name of invention, field of use, technical status of field of use, technical nature and brief description while drafting an invention description that meets legal regulations in Vietnam.

To overcome this difficulty, applicant should take note the followings:

Name of the invention: name of inventions and name of inventor should be brief without promotion.

Filed of use: the invention registration application shall demonstrate the filed in which the invention is applied or related.

Technical status of field of use: the technical shall include information of prior known technical solutions until the priority date of the same application.

Technical nature of invention: the technical nature of the invention is the purpose that the invention need to get or technical problem that the invention shall solve to overcome disadvantage or shortage of the same technical solutions declared in “Technical status of field of use” part.

The description of constitutive signs of invention: The description shall declare new signs of the invention.

Brief description with enclosed images (if any): Applicant shall declare and submit clearly the scope of protection invention request in the description. The scope shall be presented briefly, clearly and fix with the description and images as stipulation of law on intellectual property.

With professional staff and vast experience in Intellectual Property aspect in Vietnam, ANT Lawyers could support inventor in advising and drafting dossier to request patent protection in Vietnam.

ANT Lawyers is a Law firm in HaNoi with English speaking lawyers whom understand the laws of Vietnam within the business and the local culture context.

For Vietnam legal matters or services, the clients could reach ANT Lawyers, the exclusive Vietnam law firm members via email at ant@antlawyers.vn or call the telephone at (+84) 24 32 23 27 71.

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HCMC chooses PPP as key fund-raising vehicle

The HCMC People’s Council on July 6 opted for public-private partnership (PPP) as a key fund-raising vehicle given the lack of capital for vital infrastructure development projects.

The council on July 6 allocated VND171.8 trillion (US$7.5 billion) for urgent infrastructure projects to be carried out in 2016-2020. Of the total amount, around VND22 trillion will come from the central State budget, and VND150 billion from the city’s budget.

The city will use around VND11.2 trillion as reciprocal capital for projects funded by official development assistance (ODA) loans, and another VND9.2 trillion for funding public-private partnership (PPP) projects.

According to a council resolution on the city’s socio-economic development tasks in the second half of this year, the local government will have to take measures to disburse State capital and prop up private investment.

PPP is a viable vehicle to lure private capital to meet the growing demand for infrastructure development. Private finances will be used for numerous projects, including traffic infrastructure, flood control, rehabilitation of major canals, and construction of new residential blocks.

According to the resolution, the city aims for gross domestic product (GDP) growth of 8.4-8.7% this year, with total factor productivity contributing 36% or higher to GDP and development investments 35%.

The city will have to make effort to realize the budget collection target. The central Government has assigned the city a budget collection target of VND 347.88 trillion this year, up 16% over last year.

However, the above targets are hard to obtain in the current circumstances. During the previous session of the city council, many voiced concerns that the city is facing a slew of difficulties.

In particular, the city has seen slow growth in supporting industries. Its tourism sector has yet to reach its full potential. The business environment and competitiveness of the city have improved at a slower pace than expected.

Source The Saigon Times

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What a Law Firm Could Assist in an M&A Deal?

M&A, abbreviated by Mergers and Acquisitions is expanding in both quantity and volume in Vietnam in many sectors. Successful M&A deals depend on various factors and legal due diligence, and drafting agreements are important processes in Vietnam.

For investors whom are interested in M&A deal in Vietnam as buyer or seller,it is important to hire a law firm that will assist in the process. The law firm in Vietnam could provide assessment of the target company through a legal due diligence, a legal background directly related to M&A deal, all of which are necessary to the completion of a successful deal. The attorney could then draft the letter of intent, and legal contracts, including the final purchase agreement, which will include a lot of stipulations that will need to be done correctly in order for the business transaction to be beneficial to both parties and in compliance with Vietnam regulations.

A law firm with expertise of Vietnam regulations, with the lawyers having experience and legal knowledge will be able to provide the clients with the right check-list of the documents to review.  In addition, the presence of lawyers contributes to strengthening the trust of the parties. In recent years, foreign businesses have often made acquisitions of all or part of a Vietnamese enterprise, and they often require the seller to engage law firms specializing in M&A. And now, not only the foreign businesses but also the Vietnamese parties are in need of conducting M&A deals with the participation of lawyers to ensure the success.

Lawyers shall conduct legal due diligence of enterprises, check reports and explanations with prudence, honesty and efficiency. They help the buyer and/or seller to understand their legal status, legal rights and obligations, legal regulations for assets, labor contracts, land records, construction and investment registration, certificates, and licenses and other matters. This is the basis for determining the status of enterprise and possible legal risks may cause. Lawyers will conduct and produce the most comprehensive, accurate, legal and objective information and legal documents by their professional, knowledgeable and ethical.

Lawyers shall advise the structure of an M&A to ensure the commercial intent that the parties are aiming and shorten the execution time and costs. In addition, it ensures the legality of procedures, safety and minimizes the legal and financial risks for the parties.

There is no common contract template for all M&A deals. Lawyers shall actualize the trade agreements, the will of the parties to the legally binding terms of the contract as well as clearly defines the rights and obligations of the parties to ensure the enforceability, minimize unlawful agreements or unclear terms that may cause the subsequent disputes.

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Benefits of Investors in Setting up a Business in Da Nang

Da Nang is one of the five major cities in Vietnam, having a geographical location that is particularly conducive to rapid and sustainable economic development. Da Nang has important transportation routes such as the China-ASEAN international railway crossings, seaports and international airports.

Da Nang is one of the tourist centers of the country, has rich tourism potential including natural tourism resources and humanities. Da Nang has many famous scenic spots such as Hai Van pass, Son Tra mountain, Ba Na hills, Ngu Hanh Son, Cham Museum or My Khe beach have been voted by Forbes magazine as one of the six most beautiful beaches in the world. These conditions are favorable for the development of diversified forms of tourism such as travel, research, cultural.

Da Nang have infrastructure development, four types of roads are popular: high way, rail way, International airport and International sea way. Da Nang have the sea lanes to most major ports in Vietnam and around the world. It helps investor more convenient to travel everywhere in Vietnam and other countries. Moreover, Da Nang’s water supply, electricity supply and communication system has developed rapidly and is increasingly modernized, ranking third in the whole country after Hanoi and Ho Chi Minh City. Da Nang have Da Nang Port, which help investor in import/export activities easily.

The first advantage of the policy mechanism is that Da Nang has also had great support the mechanism and policies for socio-economic development of Da Nang. Since Da Nang was recognized as a national grade I city in 2003, Da Nang has implemented guidelines, regulatory directions and the issuance of specific regulatory mechanisms. With the support from the Central Government, Da Nang authorities have also developed appropriate policies and mechanisms to facilitate the development of the economy, such as the one-stop-shopping mechanism, so Da Nang which is considered as a locality with attracting investment policies in Vietnam. Examples: Procedures related to investment, investment locations, clearance and handover plan, the granting of business registration certificates and investment preference certificates shall be carried out under the one-stop-shopping mechanism at the provincial municipal all of them are resolved at Da Nang Administration Center. Investors shall be exempt from all expenses related to the settlement of investment procedures apart from the payment of business registration fees according to the provisions of law. When investing in Da Nang, investors not only enjoy many preferential policy from city government but also have chance to find clients from many countries or compete with other companies in Vietnam and foreign countries.

Tradition of unity, consensus of people and the dynamism and creativity of the leadership, these advantages has aroused, mobilized the strength, the most important and decisive resource for the development of Da Nang. The determination of leaders, city authorities in building programs, projects with the support of the people, investors, enterprises, ect that help investors who will invest in Da Nang have highest benefits.

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How to distinguish a Limited Liability Company and a Joint Stock Company?

Vietnam Law allows the establishment of a company in Vietnam in various forms. It is an important step in investment process.

Investors could choose different forms depending on the needs and capacity on the ability to raise capital and sharing the risk in business as well as the management and operating costs. Each form will have its own organizational structure, operating mechanism, rights and obligations specified under Law on Enterprise 2014.

Currently, Limited Liability Company (“LTD”) and Joint Stock Company (“JSC”) are two popular enterprise forms operating in Vietnam.

What is the difference between these two forms of companies?

I. Organizational Structure

Number of members/shareholders:

LTD

• Single member LTD: Having only one member (member can be an organization or an individual);
• Multi members LTD: Having at least 2 members and not exceed 50 members (member can be an organization or an individual).

JSC

Joint Stock Company has at least 3 shareholders and not limit the maximum number.

Management structure

LTD

• Single member LTD

Single member LTD owner by an organization shall be organized under two models: Company president, Director/General director and Supervisor; (OR) Members Council, Director/General director and Supervisor.

Single member LTD owner by an individual shall be organized as follows:  Company president, Director/General director.

• Multi members LTD

Multi members shall be organized by: LTD Council members, Chairman of the Members Council and Director/General director;

Multi members LTD having 11 members or more shall establish the Board of Supervisors.

JSC

JSC can be organized under two models: General Meeting of Shareholders, Board of Directors, Board of Supervisors and Director/General director; (OR) General Meeting of Shareholders, Board of Directors (Board of Internal Supervisors under Board of Directors) and Director/General director.

II. Capital Contribution

Raising capital

LTD

• Single member LTD: Owner increases charter capital
• Multi members LTD: Members increase their charter capital, or increasing the number of capital contributors

JSC

Different from LTD, JSC can raise its capital by various methods as follows: Selling shares to existing shareholders; Selling shares individually to non-shareholders; Issuing shres on the stock market.

Transfer of contributed capital

LTD

• Single member LTD: Owner transfers a part of contributed capital to other persons and this could lead to changes of the type of business or other procedures if all capital is transferred (for instance in a M&A deal).
• Multi members LTD: Offer the stakes to other members in proportion to their stakes in the company under the same conditions;  The stakes could only be transferred to other persons if the members do not buy or do not buy completely within 30 days from the offering date.

JSC

The shareholders of JSC are free for transfer their contributed capital after 03 years from the establishment.

Having said that, LTD is a type of enterprise that the capital contribution is not the only link between the members of the company but they are also linked together by relationship. They may be acquaintances and trust each other to jointly contribute capital to establish an enterprise. Therefore, the management of the LTD is as complicated as JSC. With the larger the number of shareholders, the level of capital mobilization, voting power to decide on issues of the company based on the ratio of capital contribution of each shareholder, the management and operation of the JSC is more complex.

The ability to raise capital of a JSC is higher than a LTD. Because, JSC can issue shares to the public in the form of securities. When the stocks are listed on stock exchange, the information of company’s business operations must be public and more transparent.

The procedure to set up a company in form of an LTD or a JSC has not much differences.

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Foreign investor to join financial center project in HCMC

Jun 15,2017

HCMC will cooperate with a global financial group to build large financial centers in a move to attract foreign investment capital into key projects in the city, said city vice chairman Tran Vinh Tuyen.

The city will need up to US$40 billion for urban infrastructure, environment, health, education and manpower training projects as part of its seven breakthrough programs from now to 2020. Therefore, the city is calling for investments from various sources as its budget cannot afford this hefty capital demand.

The city government has held talks with the global financial group over construction of financial centers, Tuyen said at a meeting with department leaders on June 13.

Initially, this company would seek foreign capital for an extension metro line connecting HCMC and neighboring Binh Duong Province, Tuyen said but made no mention of the foreign group’s name.

Currently, the city relies on four financing sources to implement infrastructure development projects, namely the State budget, official development assistance (ODA) loans, bond issues and foreign investments.

According to the HCMC Department of Planning and Investment, the city’s total investments amounted to VND1,193 trillion in the 2011-2015 period, with an average annual growth rate of 9%. This amount accounted for around 30% of gross regional domestic product. In which, VND 250.8 trillion (21%) came from the State, VND 729.4 trillion (61%) from the non-State sector, mostly enterprises, and the remainder from other sources.

The city favors public-private partnership (PPP) when it comes to executing infrastructure projects. There are 20 build-transfer (BT), build-operate-transfer (BOT) and build-own-operate (BOO) projects already signed with a combined value of around VND 67.2 trillion.

In recent years, some foreign groups have expressed interest in developing a financial center in HCMC. Malaysia’s Berjaya once suggested building a financial center in District 10 before France’s Vinci Construction in October 2016 proposed cooperating with Berjaya to carry out the US$930-million project.

Three U.S. investors have recently suggested building a financial complex covering 11 hectares in Thu Thiem new urban area in District 2 with a total investment of US$4 billion.

According to financial experts, the city will contribute greatly to the nation’s gross domestic product, industrial production, export-import revenues and budget collections. The city is poised to become the financial center of Vietnam.

Source The Saigon Times

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How to Transfer Investment Capital into Bank Account Vietnam?

Foreign investors must transfer money in and out through the Direct Investment Capital Account (DICA) for investment capital contribution.

FDI enterprises, foreign investors participating in business cooperation contracts, foreign investors implementing investment activities in Vietnam in the direct foreign investment forms in accordance with current provisions of law on investment should comply with the provisions of the investment law when making investment and transfer the capital into Vietnam implementing FDI activities in Vietnam, through setting up company.

The capital contribution in cash of foreign investors and Vietnamese partners in FDI enterprises must be made through transferring to the DICA, either in foreign currencies or Vietnam dong, which are opened by FDI enterprises and foreign investors participating in a business cooperation contract at an authorized credit institution in order to perform the relevant transaction to the FDI activities in Vietnam.  From DICA account, the investor could then transfer into transaction bank accounts opened in a commercial banks in Vietnam.

The transfer of investment capital before being granted investment certificate into Vietnam and the transfer of capital abroad in case of not being granted investment certificate of foreign investors shall be complying with the provisions of the relevant regulations.

After being granted the investment certificate, the accounting of pre-establishment costs of FDI enterprises into equity or foreign loans is made on the basis of agreement between the involving parties, ensured to comply with current provisions of Vietnamese law and regulations on accounting, borrowing, repayment of foreign debts of enterprises and other relevant provisions of Vietnamese law and regulations. In case the foreign investors do not use all the investment capital transferred into Vietnam to satisfy the legal costs for the preparatory phase of investment, foreign investors can buy foreign currency and transfer the remaining investment capital abroad in foreign currency on the basis of the issuing records and documents evidencing investment capital transferred into Vietnam and the expenses incurred for investment projects in Vietnam.

In case foreign investors had moved investment capital into Vietnam to satisfy the legal costs for the preparatory phase of investment in Vietnam but were not granted the investment certificate by Vietnamese competent agencies, foreign investors are allowed to transfer the investment capital transferred abroad after deducting the expenses incurred in relation to the preparation of direct investment projects in Vietnam. The investment capital transferred abroad by foreign investors shall not exceed the maximum investment capital transferred into Vietnam and the amount of interest of non-term loans incurred (if any). Foreign investors are allowed to buy foreign currency and transfer abroad the investment capital transferred into Vietnam in accordance with valid documents proving the amount of investment capital transfer red into Vietnam and legitimate expenses incurred in relation to the preparation of investment projects in Vietnam.

Along with that, foreign investors are allowed to transfer abroad the charter capital, direct investment capital upon termination of operations (due to ending, the liquidation or the dissolution of the enterprise before maturity), interest and foreign loans, profits and other lawful income relating to operations of FDI activities in Vietnam through the DICA. In case FDI enterprises and foreign investors participating in business cooperation contracts have to close the DICA due to ending, liquidation, dissolution which lead to the termination of FDI activities in Vietnam or conduct investment capital transfer resulting in alteration of the initial legal person of FDI enterprises, foreign investors are allowed to use their DICA, either in foreign currency or in Vietnam dong, opened at authorized credit institutions in order to transfer direct investment capital and legitimate income abroad legally.

Moreover, FDI enterprises and foreign investors can use legitimate income sources in Vietnam dong or foreign currency gained from operations of FDI activities in Vietnam to perform re-investment activities in Vietnam. Simultaneously, they also have the right to use such income sources to purchase foreign currency at an authorized credit institution and transfer abroad within 30 days since the date of buying foreign currency.

The credit institutions have the right to require FDI enterprises and foreign investors to provide legal records and proofs relating to the FDI activities in Vietnam. They are also responsible for regulating, inspecting and storing the documents appropriate with the revenue and expenditure transactions of the DICA of foreign investors to ensure the revenue and expenditure transactions are made complying with the stipulations of this Circular and in accordance with the relevant provisions of the Vietnamese law and regulations; and selling foreign currency to foreign investors to transfer abroad on the basis of foreign currency balances of credit institutions.

The  laws on  investment in Vietnam will continue be adjusted to encourage investment into various sectors of the economy.  The changes of laws will be monitored by ANT Lawyers Foreign Investment Practice  in Hanoi, Da Nang and Ho Chi Minh City to provide clients with updates.

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