Danang city Builds the Business Relationship with Tochigi Province of Japan

 On December 19th, 2019, the representative of Danang city met the president of Tochigi province, lead by Mr. Fukuda Tomikazu paying a working visit in Danang. At the moment, Japan is the top of country which invest in Danang.

Danang is receiving more than 130 investment projects and the total of investment capital is 800 million USD from Japan. The Japanese investors set up company, obtained investment registration certificate the area such as: hi-tech, supporting services, education, medical. Besides, Danang signed the official memorandum of understanding on business cooperation with some cities of Japan such as: Kawasaki, Kansai, Yokohama, Kirsarazu,… Danang show wishes to cooperate with Japan in many fields such as: economy, cultural, education,..

At the meeting, the representative of Danang city introduced the economy-social of the city and in the recent years, the cooperation relationship of Danang and Japan has been developing in many fields.

Besides, the representative of ANT Lawyers met the representative lawyers from Utsunomiya law firm of Tochigi province at ANT Lawyers Danang office. At the meeting, the parties discussed about the cooperation of helping Japanese investors to enter Vietnam market with legal services. ANT Lawyers is the law firm in Vietnam, which has the offices in Hanoi, Danang and Ho Chi Minh City.

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Regulations on Pay to Employees Working During Lunar New Year Holiday

Under the provisions of Article 106.1 of the Labor Code 2012, overtime is a period of work outside normal working hours prescribed by law or according to a labor agreement or regulation. Depending on the needs and agreement of the two parties, the enterprise may request employees to work overtime during lunar new year (Tet) holiday, but must not exceed 12 hours in a day and must pay overtime as prescribed by law.

According to Article 25 of Decree No. 05/2015 / ND-CP, the salary for overtime work on lunar new year holiday for employees is prescribed as follows:

An employee who works overtime in the daytime of the lunar new year holiday is entitled to at least 300% of the normal day salary, excluding the salary on that new year holiday if the employee receives wages.

Employees who work overtime at night during lunar new year holiday, apart from enjoying 300% of the normal daily salary, excluding the salary, if the employee receives a daily salary, the employee is also paid at least 30% extra of the average daily wage, and 20% extra of the of the lunar new year holiday pay rate.

In particular, night working hours are calculated from 10:00 p.m to 6:00 a.m of the following day.

For employees who work overtime on the same day as lunar new year holiday, they shall receive overtime pay according to lunar new year holiday; if the lunar new year holiday is the same as a weekly holiday, pay overtime is same as pay for work in weekend.

In addition, when making overtime workers, the enterprise must pay attention to the maximum number of overtime hours a day and must organize compensatory leave for employees as prescribed in Article 106 of the Labor Code and Article 4. Decree 45/2013/ND-CP.

Our lawyers with specialization in labour matters always monitor the changes in law to provide regular update to client. 

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Complete 1st Stage of the Information Technology Zone in Danang

On January 6th 2020, the Prime Minister issued Decision no.27/QD-TTg on establishing the information technology zone in Danang – Stage 1, effective from January 6th 2020. Specifically, the Danang information technology (IT) zone – Stage 1 has an area of 131 hectares, located in Hoa Lien commune, Hoa Vang district, Danang city.

The Ministry of Information and Communications shall assume the prime responsibility and coordinate with the ministries, branches, Danang People’s Committee and concerned units in guiding the implementation of the decision; The Ministry of Planning and Investment was assigned to assume the prime responsibility for, and coordinate with the Ministry of Finance and the Ministry of Information and Communications in, balancing the allocation of investment capital to support investment in and construction of infrastructure of Danang centralized IT Park according to law provisions.

Besides, the People’s Committee of Danang has 5 tasks including approving the organizational structure and operational regulations of the Danang central IT Management Group, then performing the state management function for the investment projects in the centralized IT zone, and prioritizing the allocation of development investment capital from the state budget for investment in infrastructure development connecting to Danang centralized IT Park – phase 1 and non-business social infrastructures in the area. Therefore, developing the plans and synchronously deploy solutions to attract foreign corporations and large domestic enterprises in the fields of IT, electronics and telecommunications to invest in Danang centralized IT Zone and set up company, apply for investment registration certificate. Finally, directing and organizing the levels of local governments and functional agencies of Danang city in cooperation with Danang IT Park development joint stock company to implement the construction, management to IT zone focus on Danang to develop in the fast and sustainable way.

Danang IT Park is entitled to preferential policies for centralized IT zone as stipulated in the Article 22 Decree no.154/2013/ND-CP to attract the investors to invest and set up business in Da Nang IP park, such as: Preferential corporate income tax for 15 years with tax exemption policy for the first 4 years, 5% for the next 9 years, 10% for the next 2 years and tax incentives after 15 years of operation is 20-22%. Moreover, exemption of import tax for imported goods to create fixed assets, raw materials, machinery and equipment that cannot be domestically produced to serve the production of IT products and IT services of enterprises; 50% reduction of payable personal income tax on income from salaries and wages of high-tech human resources working in IT. In addition, site clearance and infrastructure investment in Danang IT Park- stage 1 will be supported by government and local budgets in accordance with the law, master plan on development of centralized information technology zone approved by the Government. The Danang IT Park – stage 1 will also receive investment credit loans at Vietnam Development Bank for investment.

In the future, domestic and international investors need to update the progress when making investment in the IT sector as well as seizing the investment opportunity, to be able to enjoy the best incentives that Danang set for IT sector in the city with aim to develop a green city to attract the investment that need talents in IT. 

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Directive No.10/CT-TTg on Promoting Prevention and Control of Covid-19

 At the moment many countries in the world, the epidemic of severe acute respiratory syndrome coronavirus (Covid-19) continues to have many new complicated and unpredictable developments, especially in Korea, Japan, Italy, Iran and other countries. On February 25, 2020, the Prime Minister signed the Directive no.10/CT-TTg on promoting prevention and control of the Covid-19 epidemic (“Directive no.10/CT-TTg) to continue the effective implementation of Covid-19 anti-epidemic solutions.

Ministries, Departments, People’s Committee of Provinces and cities under central continues to improve against epidemic, do not neglect, subjective, strictly implementation of prevention solutions, anti-epidemic in accordance with Directive no.05/CT-TTg dated January 28, 2020 and Directive no.06 / CT-TTg dated January 31, 2020 of the Prime Minister; continue to strictly control people crossing trails and openings in border provinces; strictly implement solutions on the management, control and prevention of epidemics in aviation activities, tourism and cross-border transportation of goods. The Ministry of Foreign Affairs continued to discuss with the Chinese about the Vietnamese citizens who come from epidemic cities and provinces of China could only enter Vietnam through international border gates.

For the people who enter from epidemic areas of South Korea and from epidemic areas of territories or other countries: The Ministry of Foreign Affairs immediately announced to the South Korea and countries and territories with Covid-19 epidemic of anti-epidemic measures which are applied in Vietnam, in which Vietnam will pause for entry Vietnam for persons who coming from or passing through the epidemic area, the people who entry for official purposes in special cases need to declare the medical situation and isolate for 14 days. The government notices Vietnamese citizens not to go to epidemic areas in other countries, except in case of necessity. If they do go to this area, when they enter Vietnam again, they will be isolated for 14 days. In addition, it is important to notice and pursuade the Vietnamese citizen living and working in South Korea (especially in Daegu and Gyeongsangbuk) to comply with guidance on local measures to prevent the spread of Covid-19, do not go to an infected area and has the ability to be affected by the epidemic recommended by the host country.

In addition, the Ministry of Health performs the isolation in the medical facility for the suspected person and other people as required by the health organizations. The Ministry of Defense prepare material facilities, equipment and places for reception and accommodation to conduct intensive isolation for people who are not in cases of concentrated isolation at health organizations; directing the application of measures to reduce the density of isolation in border provinces to ensure cross-contamination in isolated areas. The Ministry of Public Security shall notify the Ministry of Defense, the Ministry of Health and the People’s Committees of provinces and cities concerned about information on passengers from the epidemic area to enter Vietnam for the implementation of medical isolation. The Ministry of Transport direct the flights from the region of South Korea landing in Van Don Airports (Quang Ninh Province), Phu Cat (Binh Dinh province) and Can Tho (Can Tho city). The Ministry of Culture, Sports and Tourism recommends that people restrict travel to epidemic areas in the unnecessary case; If they still go this place, when they enter Vietnam, they will have to be isolated for 14 days as the regulation.

In addition, the Ministry of Health continues to implement mandatory medical declarations for cases of entry from epidemic countries and territories. People’s committees of provinces and cities under central authority performs medical monitoring and timely medical isolation when there are any symptoms of the disease against the persons coming from the epidemic area into Vietnam within 14 days; perform supervision, medical declaration, health monitoring for citizens from other parts of South Korea.

By the issuance and implementation of Directive no.10/CT-TTg, the Government of Vietnam hopes to quickly prevent and reverse the Covid-19 epidemic to stabilize the socio-economic situation for the country.

The legal direct impact to companies and business will be the delay in visa, work permit, temporary residence card application for foreigners entering Vietnam. Manufacturing companies and other companies in other sectors impacted by disrupted goods transportation, people traveling restriction will face financial loses, leading to being unable to pay salary, social insurance and other mandatory contributions. Further, they might unlawfully terminate the labour contracts with employee. Potential disputes in labour areas would rise in big scale. The disruption of goods and services would also lead to dispute in performance of contracts, which will need to be closely monitored.

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Da Nang organizes the 9th urban development forum in the city of Yokohama, Japan

 On September 9th, 2019, Danang organized the 9th urban development forum of the city in Yokohama, Japan.

The forum was organized in 03 days from 09-11 September 2019. In this forum, the two cities reassessed the cooperation results over the past time, namely the implementation of the Memorandum of Understanding was signed between the two cities (in April 2019). In the coming time, the cities will focus on developing public transport, building port government projects, environmental issues, high technology, information technology and city construction. clever.

In the forum, the two cities summarized the achievements of economic cooperation between the two cities in recent years. Especially with the financial support from Japan International Cooperation Agency (JICA) in recent years such as: waste separation project, water pump supply project, Lien Chieu port research project. At the same time, the representative from Da Nang highly appreciated the mode of cooperation between the public and private sectors of Yokohama City through the Center of establishment the knowledge- Y-PORT and the Yokohama Urban Solutions Alliance – YUSA; Danang hope that Yokohama city will continue to share experiences for Danang City to learn and apply to develop similar models in the city.

In addition, representative of Da Nang mentioned specific matters that need Yokohama to coordinate and support in the future such as: support to raise awareness of waste separation at source, technical observation of water environment and air environment, human resource training in the field of information technology, high technology, smart city, training and caring for the elderly …

At the forum, leaders of the two cities witnessed the departments and units of the two localities signing the cooperation minutes, marking, committing and confirming the sustainable cooperation relationship of the two cities, including: (1) Framework for implementing the Memorandum of Cooperation between the two cities for the period of 2019-2022 (2) Promotion of energy saving project towards people in Da Nang city by JICA funding (3) Danang Industrial Wastewater Management Project.

In the coming time, Danang wishes the two cities to work together to develop together, to attract Japanese investors to Danang to invest in here through setting up company under foreign direct investment scheme, thereby helping the city to learn a lot of experience in construction and development in the future.

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The Valid Transfer Date of Member or Shareholder Rights of Buyer Arising from M&A

 The specific time for transferring ownership right of asset is very important in all contracts. This time affects the lawful rights and obligations of not only seller, purchaser but also of the third party.

The most-important principal of civil law is the recognition and respect of agreement between the related parties. It means that the parties may freely decide the specific time for transferring ownership rights. Nonetheless, in some special case such as M&A contract, the specific time is not under the decision of parties.

In legal term of Vietnam, M&A is deemed as similar to split-off, split-up, merger, acquisition of an enterprise, contributing capital to existing enterprise, and purchasing contributed capital of member or shareholder of existing enterprise.

When is the transfer of member or shareholder rights of buyer come into effect in cases of split-off, split-up, merger and consolidations, acquisition?

The Law on Enterprise 2014 provides the definition for each type as follows:

For splitting up enterprise:

“Article 192. Split-up

The splitted-up company shall cease to exist after the new companies are granted Enterprise Business Registration. The new companies are jointly responsible for the unpaid debts, labor contracts, and other liabilities of the splitted-up company, or reach an agreement with the creditors, customers, and employees to decide on one of the new companies to settle such obligations.”

For splitting off enterprise:

“Article 193. Split-off

After business registration, the splitted-off company and new companies are jointly responsible for the unpaid debts, labor contracts, and other liabilities of the splitted-off company, unless otherwise agreed among the splitted-off company, new companies, the splitted-off company’s creditors, customers, and employees.

For merger and consolidations of enterprise:

“Article 193. Consolidation

After business registration, the consolidated companies shall cease to exist; the new company shall take over the lawful rights and interests as well as unpaid debts, labor contract, and other liabilities of the consolidated companies.”

For acquisition of company:

“Article 195. Acquisition

Procedures for acquisition:

c) After business registration, the acquired companies shall cease to exist; the acquirer shall take over the lawful rights and interests as well as unpaid debts, employment contract, and other liabilities of the acquired companies.”

The above regulations of laws have determined the specific time for ceasing survival, transferring rights and obligations from old entity(ies) to new entity(ies) after split-off, split-up, merger and consolidations, acquisition. This time is specified after completing the legal procedures at competent state authorities.

After being granted an enterprise registration certificate or carrying out business adjustment and registration procedures, the new entity(ies) must (jointly) be responsible for: unpaid debts, labor contracts, and other liabilities, and the old entity(ies) will either cease to exist or still exist with smaller or bigger business. Accordingly, although the buyer and the seller (called collectively the parties participating M&A) have signed a M&A contract which has been agreed to take effect before the completion of legal procedures at state authorities, the buyer has not had any legitimate right yet to the seller. The M&A contract is one of the necessary documents submitted to state authorities to proceed the next legal procedures.

When is the transfer of member or shareholder rights of buyer come into effect in cases of contributing capital to existing enterprise, purchasing contributed capital of member or shareholder of existing enterprise?

The purpose of M&A is to gain control and dominance right of all or part of seller, not merely owning part of the capital or shares of the enterprise as a normal investment activity. With these cases, no new entity is established and no old entity is ceased to exist. The enterprise, after contributing capital or purchasing contributed capital, may have a change in the capital contribution ratio or keep it unchanged, but the information of members and shareholders of the enterprise shall be modified. The Law on Enterprise recognizes the rights of only members of limited liability companies and shareholder of joint stock companies but does not prescribe legal status before becoming a member or shareholder.

When is investor recognized as a legitimate member, shareholder to get the rights and obligations that the law stipulates?

The contribution of sufficient capital as committed is not a decisive factor in being entitled the right of member or shareholder. As well as notifying to the competent authorities is uncertain to generate member and shareholder right. Nevertheless, the Enterprise Law has uniform provisions on this issue as follows:

For joint stock company:

Contributing capital:

“Article 124. Offering of shares to existing shareholders

In case the amount of offered shares are not completely purchased by shareholders and recipients the preemptive right, the Board of Directors is entitled to sell the remaining authorized shares to shareholders of the company or other people in a reasonable manner and conditions that are not more convenient than the conditions offered to shareholders, unless otherwise accepted by the General Meeting of Shareholders or shares are sold via a Stock Exchange.

Shares are considered as sold when they are fully paid and information about the purchaser mentioned in Article 121.2 hereof are fully written in the shareholder registration book; from this time, the purchaser shall be come a shareholder of the company.”

Purchasing contributed capital:

“Article 126. Share transfer

Recipients of shares in the cases mentioned in this Article shall only become the company’s shareholders from the day on which their information mentioned in Article 121.2 hereof are fully recorded in the shareholder registration book.”

For limited liability company:

Purchasing contributed capital:

“Article 53. Transferring contributed capital

The transferring member still has the rights and obligations to the company in proportion to his/her capital until information about the buy mentioned in Article 49.1.(b), (c) and (d) hereof is written on the member registration book.”

Accordingly, when the information of buyer is recorded in member/shareholder registration book, the buyer will officially have the legal rights for members and shareholders. The next legal procedures are intended to notify the competent authority and amend the enterprise registration certificate. The most important content of the registration book is the total amount of contributed capital of each member or shareholder. This is evidence for the ownership in limited liability companies and joint stock companies. For a limited liability company, both registration book and enterprise registration certificate are two proofs of ownership right of the member. However, for joint stock company, only registration book is evidence on shareholder’s ownership right. This is the reason showing important role of registration book.

Depending on each M&A form, the buyer and the seller should attend to the time of termination and generation of legitimate rights and interests, obligations and responsibilities as members and shareholders. M&A aims to purchase and sell a special asset, which is property or capital of an enterprise. With the special assets, the regulation of laws may stipulate strictly depending on case by case which it is suggested the parties consult with law firm in M&A in Vietnam to receive advice.

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New provisions providing guidelines for labor dispute mediators

 ANT Lawyers employment practice offers counseling service in the Vietnam labour and employment compliance and dispute matters. Our Vietnam employment lawyers often keep track with changes in the Vietnam labour code, the Vietnam employment laws to provide the clients with the best advice. The recently issued Circular 08/2013/TT-BLDTBXH is guiding the selection, appointment, re-appointment for mediators for solving labour disputes and dismissal of labour conciliators as prescribed in Decree No. 46/2013/ND-CP of the Government which details the implementation of a number of articles of the Labor Code on labour disputes in Vietnam.

Each district, town and provincial city shall have labour mediators. Based on the number of firms and the level of labour disputes in the area, the Department of Labour, Invalids and Social Affairs shall determine the amount of the labour mediators;

Department of Labour, Invalids and Social Affairs is responsible for receiving requests for the mediation of labour disputes, disputes over contracts of labour. The party that is requesting mediation can suggest a labour mediator and the Department of Labour, Invalids and Social Affairs will appoint the mediator to involve in the labour dispute.

Dismissal of labour conciliators in one of the following cases:a) There is an application for resignation under the labour mediator model No. 05/HGV attached to this Circular. b) Having 2 years of continuous assessment tasks that are not completed in accordance with Article 8 of this Circular. c) In case there are violations of law, an abuse of their credibility or authority. His responsibility is detrimental to the interests of the parties or the interests of the state during the reconciliation process in one of the following cases: i) One of the provisions of Article 3 of the Law on Anti-Corruption; ii) Perform reconciliation duties not impartial or not objective The Chairman of the District’s People’s Committee, representing the Department of Labour, Invalids and Social Affairs in the district level, shall preside over the meeting to consider the level of illegal labor mediation in the presence of the labour mediator and the parties relating to the violations of labour mediation. Minutes of the meeting must be signed by the labour mediator and the representatives of the involved parties. This Circular takes effect from July 1, 2013. If Circular 22/2007/TT-BLDTBXH of October 23rd 2007 of the Ministry of Labour, Invalids and Social Affairs is guiding on the organization and operation of this department and the mediators and labour regulations in a contrary way to this Circular, this Circular shall be effective as from the date when it is effective.

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Can Foreigner Authorize Other Person to Perform Transfer of Properties in Vietnam?

 In the complicated situation of the Covid-19 epidemic, the Government continued to implement policies to restrict entry to Vietnam, thus many transactions were canceled or delayed. That has caused many obstacles for foreign individuals and organizations wishing to perform transactions in Vietnam. We refer to the transfer of home ownership for foreign individuals who cannot enter Vietnam to participate in signing transfer contracts and other related transactions i.e. sell or buy an apartment or a house located in Vietnam.

Pursuant to the law on housing, foreign organizations and individuals have the right to own house in Vietnam, before the time limit of the homeownership, the homeowner is entitled to gift or sell their house(s) to entities eligible for the homeownership in Vietnam; if not, their house(s) shall be under ownership of the State. Regarding the house ownership term, if a foreign organization or individual sells or gifted to a domestic organization, household, individual, or a Vietnamese citizen residing overseas, the buyer or recipient will acquire a long-term ownership of the house. If the house is sold to a foreign organization or individual eligible to own housing in Vietnam, the buyer or recipient may own the house for the remaining period. When this period expires, if the owner wishes to have this period extended, the State shall consider granting an extension. The seller or giver must pay tax and other amounts to state budget as prescribed by Vietnam’s law.

In accordance with the law on housing transactions, the seller or transferor of the commercial house sale and purchase contract must meet the following conditions:

He/she is the homeowner, or the person permitted and authorized by the homeowner to enter into housing as prescribed in this Law and law on civil; if the agreement of commercial housing is transferred, he must be the buyer for housing of the investor or the transferee of the agreement on housing sale;

If the entity is a person, he must have full civil capacity to enter into transactions in housing as prescribed in law on civil; if the entity is an organization, it must have legal personality.

Article 195 of the 2015 Civil Code stipulates: “A person who is not an owner of property has the right to dispose of property only under the authorization of the owner or according to the provisions of law.”

Clause 2 Article 55 of the Law on Notarization 2014 stipulates: “In case both the authorizing party and authorized party cannot appear together at the same notarial practice organization, the authorizing party shall request the notarial practice organization of the place of residence of the authorizing party to notarize the authorization contract; the authorized party shall request the notarial practice organization of the place of residence of the authorized party to further notarize the original of this authorization contract and complete procedures for notarization of the authorization contract.”

In order to perform the house purchase and sale transaction or in other words to buy an apartment or sell a house in Vietnam, the parties to the house transaction need to agree to make a sale contract or a document on the transfer of a commercial house sale and purchase contract. In case a foreign house owner cannot enter directly to sign a contract, he/she may authorize another individual or organization in Vietnam to perform instead. However, the authorization document needs to be notarized at the competent authority. In case a power of attorney is notarized at a competent agency in a foreign country, it is required to be notarized, legalized, and authenticated in accordance with regulations of the foreigner country (apostille) before that document can be used in Vietnam.

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Conditions for foreign experts to work in Vietnam

 On December 30th, 2020, Decree 152/2020/ND-CP has been issued regulating on foreigners working in Vietnam and recruiting, managing Vietnamese employees working for foreign organizations and individuals in Vietnam. Decree 152 clearly defines the forms and conditions for foreign employees to be eligible to work in Vietnam, and provides conditions for exemption from work permits in Vietnam, recruitment of foreign employees, renew and re-issue work permits.

According to current regulations, foreign citizens come to work in Vietnam for the purposes of performing employment contracts; performing intra-company transfer program; performing contracts or agreements on business, trade, finance, banking, insurance, science and technology, culture, sports, education, vocational training and health; providing services under contracts; offering services; working for foreign non-governmental organizations or international organizations in Vietnam that have been granted with operating licenses in accordance with the Vietnam law; working as volunteers; taking charge of establishing the commercial presence; working as managers, executives, experts, technical workers; performing packages or projects in Vietnam; or accompanying members of foreign representative bodies in Vietnam who are authorized to work in Vietnam under an international treaty to which the Socialist Republic of Vietnam is a signatory as their relatives.

For the conditions for foreign employees to work in Vietnam, Decree 152 has some notable new points, which according to Clause 3, Article 3 of this Decree, an expert who wish to work in Vietnam requires a foreign worker who obtains at least a bachelor’s degree or equivalent and at least 03 years’ experience in his/her training field in corresponding with the job position/job assignment that he/she will be appointed in Vietnam or obtains at least 5 years’ experience and a practicing certificate in corresponding with the job position that he/she will be appointed in Vietnam. There are opinions that this regulation makes it difficult for many foreign experts to come to Vietnam to work because in fact there are many experienced people who do not have appropriate qualifications and certificates.

Foreign experts, managers, executives or foreign technicians working in Vietnam for up to 30 days and no more than 3 times a year may be exempted from work permits. Cases eligible for exemption from work permits (or a certificate of exemption from work permits) must be notified to the Ministry of Labor, War Invalids and Social Affairs or the Department of Labor, War Invalids and Social Affairs of the provinces and centrally-run cities regarding personal information of the foreign worker and the expected start /end date, at least three days prior to the first scheduled working date in Vietnam.

At least 30 days from the expected date of employment of the foreign employee, the employer (except contractors) is responsible for determining the demand to use foreign workers for each job position that the Vietnamese employee has not yet met requirements of the position and report to the Ministry of Labor, War Invalids and Social Affairs or the People’s Committee of the province where the foreign worker is expected to work. During the implementation process, if there is a change in the demand for foreign employees, the employer must also report at least 30 days in advance.

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Transfer of Trademark Application in Vietnam

 After filing of the application for a trademark registration, applicants might wish to transfer theirs application to others. There are lots of reasons for this but most of them derives from practical business activities and development needs of market, and society. For instance, two subjects transfer the application to each other for profit purpose; individuals want to set up an enterprise in the future and register a trademark as individuals and then transfer the application to the legal person to get early the priority date; at the moment, individuals are unqualified to be applying in applicants’ s name then individuals have others to do in application, in the appropriate time, and when the individuals are qualified according to statutory, they would implement the procedure of transfer the application.

Transfer of application for a mark registration is implemented on voluntary basis between the parties or decision of the competent authority and shall be presented in the form of a written contract. However, owner of application is only allowed to transfer application at the following times: before National Office of Intellectual Property of Vietnam makes a decision on refusing to accept the application, decision on issuing or refusing to issue protection titles. If one of the parties in contract transfers application for transfer registration after the time mentioned above, that application shall not be accepted.

Necessary documents when implementing the procedure of transfer of application for a trademark registration include:

Transfer contract: Contract must show name and address of transferor and transferee; the number of transfered applications or sufficient information to determine that application;

Declaration for registration of transfer;

Power of attorney (if authorized to industrial property agent i.e. ANT Lawyers).

According to regulations, duration of examining application for transfer registration is 2 months from the date of submission the application. However, this duration can be faster or slower, depending on the workload of National Office of Intellectual Property at the time the application is examined.

If the Client would like to know more about information and to be consulted about matters relating to transfer of application for a mark registration, please contact Intellectual Property department of ANT Lawyers, the trademark attorney in Vietnam.

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When a Contract is Invalid Due to Non-compliance With Form?

 Generally, contracts for sale and purchase of goods and service contract shall be expressed in verbal or written form or established with specific acts. For types of contract which must be made in writing provided by law, such contract must comply with such form regulation. Particularly, contract for international purchase and sale of goods shall be conducted on the basis of written contracts or other forms of equal legal validity.

There are two cases of non-compliance with form: (i) form of contract is not in accordance with the law and; (ii) contract violates against regulations on notarizing or authorization. It should be noted that the form of contract shall be the conditions for its effectiveness in cases where it is provided by law. The time limit of requiring the court to declare a contract of non-compliance with form invalid is 02 years, from the establishment date of contract. After such time limit, if there is still no request for declaring contract invalid, such contract still remains valid.

When the contract is invalid, the general rule is restoring everything to its original state and returning to each other what have received. The non-compliance with form contract could be valid de facto contract if recognized by the Court’s decision when one party or the parties has fulfill at least two third of the obligation contract. Obligations means work whereby one or more entities must transfer objects, rights, pay money or provide valuable papers, perform or not perform certain work for the interests of one or more other entities. However, one party or the parties fulfilling at least two third of the obligation contract will not naturally make such contract valid unless there is decision of the the Court to recognize such. Specifically, according to request of one party, after fully considering conditions mentioned above, the Court shall make a decision on recognizing the validity of such contract.

It is important for parties to have a proper contract with terms and conditions that provide sufficient details with consideration of the nature of the business transactions and the possible resolution when potential disputes arise. Further, the law governing the contract and the dispute resolution clause which refers to court or arbitration choice should be as clear as possible to avoid confusion and extended time resolving the arisen disputes.

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What is the Effective Date of the Contract and the Time of Ownership Transfer?

 One of the most common disputes in contract disputes is the dispute on the effective date of the contract. In order to avoid these disputes, parties should refer to the nature of the validity of the contract as well as distinguish the difference between effective date of the contract and the time of ownership transfer.

Regarding the effective date, contract shall take effect when contract meets all condition of participants in contract, condition of purpose and contents of contract and condition of form (in case there is regulation). Specifically, participants in contract shall have legal capacity in conformity with such contract and the participation shall base entirely on voluntariy will. For the second condition, the purpose and contents of the contract will not be contrary to the law and social ethics. When there are enough conditions met, a contract legally entered into shall take effect from the time when it is entered into, unless otherwise agreed or otherwise provided by law. From the effective date of the contract, parties shall mutually exercise rights and perform obligations as agreed. A contract may be amended or terminated as agreed by the parties or prescribed by law.

Through definition of the effective date of the contract, basic difference between dealing with breaches of contracts which have taken effect and dealing with breaches of invalid contracts can clearly be seen. In invalid contracts, the general remedy rule is restoring everything to its original state and returning to each other what have received. Dealing with breaches of contracts, which have taken effect, must be based on the terms of contract on how to handle such violations. If the contract does not stipulate, the provisions of law on such violation will be applied. It should be noted that there are many regulations from time to time, so the law must be properly applied.

Specially, a contract violating conditions of form validity shall be invalid, except that a party or the parties have fulfill at least two third of the obligations in the contract. A court, at their request, shall issue a decision on recognition of the validity of such contract. It is understood that the contract takes effect after the Court’s judgments or decisions take effect. After the contract takes effect, regulation of law will be applied to determine time of ownership transfer. Contract which can be recognized as valid does not mean that such contract will naturally take effect at the time of fulfilling two third of the obligations. Recognition of the Court is to force parties to continue to execise the obligations of the contract or resolve later disputes according to valid contract.

Time of ownership transfer normally belongs to stage of contract enforcement, which is after the effective date of the contract. Except for special contracts (such as contracts for gift), whose time of ownership transfer can be a condition of making contract be valid. With respect to other normal contract, time of ownership transfer is not related to validity condition of contract, which does not make the contract be valid or invalid. It should be noted that time of ownership transfer is stipulated differently with respect to different contract, different property and different specific time. According to Vietnam law of transfer of ownership rights by owner, when an owner transfers ownership rights to another person through a contract for sale and purchase, exchange, gift or loan, other contract of ownership transfer or through inheritance, the ownership rights of the owner shall terminate from the time when the ownership rights of the transferee arise.

The law stipulates that the time of establishing ownership rights and other property-related right shall be determined according to Civil Code 2015 and relevant laws. If there is no relevant regulations of law, the agreement of the parties shall be applied. If there is no either relevant regulations of law or agreement of the parties, the time of establishing ownership rights and other property-related rights shall be the time when the property is transferred. The time when the property is transferred is the time when the obligee or his or her legal representative possesses the property. In case where the property which has been not transferred and there are yield or income arise from that property, such yield or income shall belong to the transferor, unless otherwise agreed.

Legal significance of determining time of ownership transfer is to determine who is responsible for the risk and property. According to law, owner shall bear all risks of the property under his or her ownership, unless otherwise agreed or unless otherwise prescribed by laws. The holder of other property-related rights shall bear risks of the property within his or her right scope, unless otherwise agreed with the owner of the property or unless otherwise prescribed by laws.

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What Impact of Force Majeure and Basic Change of Circumstances for Contractual Relations During Covid 19 Pandemic?

 Whether purpose contract has been achieved or not does not only depend on compliance with contract but also is controlled by conditions, objective circumstances. In the current pandemic situation, which regulations do participants in contract need to pay attention to?

According to Vietnam laws, event shall be regarded as force majeure if it meets three conditions: (i) objective factors; (ii) not able to be foreseen; (iii) not able to be remedied by all possible necessary and admissible measures being taken. It should be noted that epidemic is regarded as event of force majeure if there is factor of “not able to be remedied”. Covid-19 pandemic, in legal aspect, initially was not a force majeure event. Only when it broke out and the Government issued Directive on nationwide social distancing, it appears that this pandemic become force majeure event. Specifically, according to request of Directive, all operation must stop, and this request seems to make Covid 19 epidemic meeting enough three mentioned conditions. Legal consequences of force majeure event is that if there is loss, and the obliger shall not take responsibility.

However, in the current pandemic situation, not all contractual relations will apply above principle. When force majeure event occurs, factor in performance of contract must be considered. This is fundamental difference between definition of “force majeure event” and “basic change of circumstances”. Specifically, the contract will not be performed in force majeure event and will be performed with many considerable changes compared to initial estimate in basic change of circumstances. According to the laws, the change of circumstances shall be deemed basic when it meets all following conditions: (i) The circumstances change due to objective reasons occurred after the conclusion of the contract; (ii) At the time of concluding the contract, the parties could not foresee a change in circumstances; (iii) The circumstances change such greatly that if the parties know in advance, the contract has not been concluded or are concluded, but with completely different content; (iv) The continuation of the contract without the change in the contract would cause serious damage to one party; (v) The party having interests adversely affected has adopted all the necessary measures in its ability, in accordance with the nature of the contract, cannot prevent or minimize the extent of effect.

In the case of basic circumstances change, the affected party may request the other party to the re-negotiate the contract in a reasonable period of time. If the parties cannot reach an agreement on amending the contract within a reasonable period of time, any of the parties may request a court or arbitration to terminate the contract at a specific time or amend the contract to balance the lawful rights and interests of the parties due to basic change of circumstances. The court may only decide to amend the contract in the event that the termination of the contract would cause greater damage than the cost to perform the contract if it is modified. In the process of negotiating on amendments and termination of the contract and the court or arbitration handling the case, the parties must continue to perform its obligations under the contract, unless otherwise agreed.

In the current pandemic situation, many places are still allowed to operate normally but there must be careful prevention measures. But these prevention measures are the cost that enterprise has to cover which is not small. Therefore, the contract can still be performed but one party has to suffer huge losses compared to initial estimate. In this case, the law allows parties to re-negotiate. If parties cannot reach any agreement, such case shall be brought to the court or arbitration to be solved. There are two possibilities: firstly amending the contract to balance the parties’ rights, secondly terminating the contract at a specific time if the contract cannot be amended. And it is important to consult with dispute lawyers for possible options before taking the matters further to protect best interests in the transaction.

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EuroCham Members Attending Hearings at European Parliament on EVFTA in Oct 2018

 

On 11th October, 2018, Mr Tuan Nguyen, the representative of ANT Lawyers law firm has participated in EuroCham Brussels Mission between 8th and 12th October, 2018 to attend hearings at European Parliament on the Free Trade Agreement (EVFTA), visited and discussed with the diplomats of European Union in head office of EEAS in Belgium, Mr. David O’Sullivan, the Chief Operating Officer of European External Action Service (EEAS) to seek understanding and support to promote the approval of EVFTA.

Along with other delegates of EuroCham at this meeting, Mr Tuan Nguyen, the representative of ANT Lawyers discussed with Mr. Sullivan on issues concerning EU relating to EVFTA. The issues included: the employee’s rights, the balance between investment incentives and environmental protection, the challenges that the Vietnamese Government could face as well as the handling measures. In addition, Mr Sullivan has showed concerns in Vietnam’s legal system and how to fit in with common standards of European counties, to ensure the balance of information control and privacy. Mr. Sullivan also emphasized the compliance with the international principles. The representative of EU has recognized that this is the appropriate time for Vietnam and to EU countries members to proceed with the agreement because it would help address the current shortcomings.

Free Trade Agreement between EU and Vietnam is expected to reduce more than 90% tariff and create the most favorable conditions for exporting Vietnam goods to EU market and vice versa. Relating to European businesses, this is an opportunity for extending investment and accessing to new markets. Vietnamese could enjoy the high quality goods with cheap price. Relating to Vietnam businesses, EU is a very potential market when tariff is removed.

The Vietnam EuroCham delegation has represented more than 1,000 European companies to promote the signing EVFTA at European Parliament. ANT Lawyers law firm is honored to participate to discuss, contribute for the promotion of approval of the agreement. ANT Lawyers law firm is committed to bridge European companies to investment more in Vietnam and that Vietnamese companies should to enter European market through its reliable global law form networks.

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ANT Lawyers Participating in Vietnam-Austria Business Forum in Vienna on October 15, 2018.

 

On the afternoon of October 14th, 2018, the Vietnam Prime Minister Nguyen Xuan Phuc and his wife led Vietnamese delegation to Vienna for official visit to Republic of Austria under the invitation of Austrian Chancellor Sebastian Kurz. On October 15th, 2018, the Prime Minister Nguyen Xuan Phuc had an official meeting with the Chancellor Sebastian Kurz and participated in the Vietnam – Austria Business Forum.

In Vienna, the representative of ANT Lawyers law firm, Mr. Tuan Nguyen participated the Vietnam – Austria Business Forum organized by the Vietnam Chamber of Commerce and Industry (VCCI) and the Austrian Federal Economic Chamber (WKO). This forum has been joined by the representatives from 60 Vietnamese businesses and over 100 Austrian companies. The lawyer of ANT Lawyers law firm met the representative of Austrian companies including Asteas Technologies GmbH & Co KG, AGES – Austrian Agency for Health and Food Safety, FRONIUS International GmbH, Europlast Kunststoffbehälterindustrie GmbH, Bitmedia e-solutions GmbH, D2 Consult International GmbH,… to discuss the Vietnam market entrance possibilities.

The meeting has occurred in the context that Vietnam Prime Minister and the Austrian Chancellor emphasized the importance of promoting the bilateral cooperate on economic, investment and trade; the opportunities post signing the Free Trade Agreement between Vietnam – EU (EVFTA) and Investment Protection Agreement (IPA) looking into the future.

The Vietnam economy has been achieving high growth for the last 30 years. Vietnam is a large market with a population of almost 100 million, 65% of the country’s workforce is young, and the increasing number of internet and smart phone users in Vietnam has also opened up a great opportunities for e-commerce development. Vietnamese Government has committed to vigorously reform and created optimal conditions for Austrian investors. The Prime Minister suggested Austrian companies invest in high-tech agriculture, processing and manufacturing industry, especially agricultural product processing, high-tech zones,…

Along with the advantages facilitated by Vietnamese Government, Austrian companies will seek for investment opportunities in Vietnam to set up company, joint invest, or cooperate to transfer technology. It is expected that both countries will further cooperate and receive benefits from competitive advantage of each other, contribute to economic development and promote the relationship between Vietnam and Austria.

Mr Tuan Nguyen, the representative of ANT Lawyers law firm is honored to participate in the Vietnam – Austria Business Forum, and together with its law firm partner in Austria, Leitner HirthRechtsanwälte GmbH, under the leadership of Markus Leitner, to promote the development of trade relation between Vietnam – Austria in particular and Vietnam – EU in general. With legal and business expertise and experience, we will continue to support the Austrian and other European companies to invest in Vietnam and that Vietnamese company to enter Austrian and European market.

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Decree 15/2015/ND-CP on Investment in the Form of Public - Private Partnerships

 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.

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Incorporation of CPTPP Agreement Relating to Origin Rules into Vietnam Laws

 The CPTPP Agreement took effect in Vietnam as of January 14th, 2019 including 11 founding countries including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Singapore, New Zealand, Peru and Vietnam. On January 22nd, 2019, the Vietnam Ministry of Industry and Trade issued Circular No. 03/2019/TT-BCT (Circular 03) regulating rules of origin of goods in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to incorporate and implement the commitments of CPTPP. These rules are important for investors whom are transitioning their factories and manufacturing sites from neighboring counties to Vietnam and set up company to obtain the certificate of origin from Vietnam. However, the understanding of regulations of the circular and relating laws requires the consultation of international trade lawyers in Vietnam for application in particular cases.

Goods are treated as an originating goods if meeting the following requirements:

-Wholly obtained or produced entirely in the territory of one or more of the Member States;

-Produced entirely from materials originating in the territory of one or more of the Member States; or

-Produced entirely in the territory of one or more of the Member States using non-originating materials provided that the goods satisfy all applicable requirements of Annex I attached to the Circular 03.

Moreover, CPTPP Agreement stipulates the origin rule for the Remanufactured Good and Sets of Goods, regulated in Article 7 and Article 20 of Circular 03 respectively.

-Regarding the Sets of Goods, the set is treated as originating if the value of all the non-originating goods in the set does not exceed 10% of the value of the set.

-Regarding the Remanufactured Good, Remanufactured Good are committed to treat as new goods at the same type. CPTPP also has very flexible rules regarding rules of origin for these Good: a recovered material derived in the territory of one or more of the Member States is treated as originating when it is used in the production of, and incorporated into, a Remanufactured Good.

Both CPTPP Agreement and Circular 03 (Article 14) also provide De Minimis regulations, which means that a goods that contains non-originating materials that do not satisfy the applicable change in tariff classification requirement for the good is nonetheless an originating good if the value of all those materials does not exceed 10% of the value of the goods.

In addition to Build-up Method and Build-down Method for calculating Regional Value Content (RVC) based on the value of originating and non-originating materials respectively, CPTPP also stipules Focused Value Method based on the value of specified non- originating materials and Net Cost Method for automotive goods only.

Relating to C/O granting, Vietnam shall use the mechanism of certification by competent authority for goods exported to other Member States. The time for implement the mechanism of self-certification of goods origin by exporters is carried out from 5 to 10 years under the guidance of the Ministry of Industry and Trade. The mechanism of Vietnamese importers self-certifying their origin is implemented after 5 years from the effective date of CPTPP. The procedures of certification and inspection of goods origin shall comply with the provisions of Decree No. 31/2018/ND-CP dated on March 8th, 2018 of the Government detailing the Law on Foreign Trade Management on goods origin and other related documents.

Lawyers at International Trade and Taxes practice of ANT Lawyers always follow the changes in law to update client for decision making process in investing and optimizing operations in Vietnam.

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Whom is Exempted from Work Permit Since 2021?

 On December 30, 2020, the Government issued Decree No. 152/2020/ND-CP regulating foreign workers working in Vietnam and recruiting and managing Vietnamese employees to work for the foreign employers in Vietnam.

In which, foreign workers in Vietnam are not required to be granted work permits include:

The employee is the owner or capital contributor of a limited liability company with a capital contribution of at least 3 billion VND; Chairman of the Board of Directors or a member of the Board of Directors of a joint stock company with a capital contribution of at least 3 billion VND;

Intra-corporate transferees within 11 service sectors in Vietnam’s service commitment schedule with the World Trade Organization, including: business services, communication services, construction services, distribution services, educational services, environmental services, financial services, health services, tourism services, recreational and cultural services, and transport services;

The person responsible for establishing a commercial presence;

The employee enters Vietnam to work as manager, executive, expert or technical worker for a working time of less than 30 days and not more than 3 times a year;

The employee who enters Vietnam for a period of less than 03 months to offer services;

The employee enters Vietnam for a period of less than 03 months to handle complicated incidents, technical or technological situations that affect or risk affecting production and business that Vietnamese experts and the foreign experts currently in Vietnam cannot handle it;

Foreign lawyer who has been granted a law practice license in Vietnam in accordance with the Law on Lawyers; The employee is licensed by the Ministry of Foreign Affairs to operate information and press in Vietnam in accordance with the law; The person certified by the Ministry of Education and Training to enter Vietnam for teaching and researching;

The employee enters Vietnam to provide professional and engineering consulting services or perform other tasks intended for research, formulation, appraisal, supervision, evaluation, management and execution of programs and projects using official development assistance (ODA) in accordance with regulations or agreement in international treaties on ODA signed between the competent authorities of Vietnam and foreign countries;

The employee is sent to Vietnam by competent foreign agency or organization to teach and research at international schools under the management of foreign diplomatic missions or the United Nations; establishment and organization established under the agreement which Vietnam has signed and acceded to;

The employee enters Vietnam to implement an international agreement to which a central or provincial authority is a signatory as per the law;

Person obtains an official passport to work for a regulatory agency, political organization, or socio-political organization;

Relatives of members of foreign representative missions in Vietnam;

In cases where the provisions of an international treaty to which the Socialist Republic of Vietnam is a signatory;

Head of representative office, project or is responsible for the activities of international organizations, foreign non-governmental organizations in Vietnam;

The employee is a volunteer;

The student studies at a foreign school or training institution which has a probation agreement with an agency, organization or enterprise in Vietnam; or a probationer or apprentice on a Vietnam sea-going ship;

The employee is a foreigner who marries a Vietnamese and lives in the territory of Vietnam.

This Decree takes effect from February 15, 2021.

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Construction Contract in Vietnam

 In Vietnam, like other countries companies seeking to build an office building or industrial facility work with the contractor through a construction contract.

There are several types of construction contract used in the construction industry depending on the level of control from parties involved in terms of investment, responsibilities and duration.

Fixed price is a type of construction contract that offer a total fixed priced for all construction related activities. This contract type could include incentives or benefits for early termination, or can also have penalties, called liquidated damages, for a late termination. This contract type is preferred when a clear scope and a defined schedule has been reviewed and agreed upon.

Cost plus contract is a type of construction contract involves payment of the actual costs, purchases or other expenses generated directly from the construction activity. This type of contract must contain specific information about certain pre-negotiated amount (some percentage of the material and labor cost) covering contractor’s overhead and profit. Costs must be detailed and should be classified as direct or indirect costs.

Time and material contract is usually preferred if the project scope is not clear, or has not been defined. The owner and the contractor must establish an agreed hourly or daily rate, including additional expenses that could arise in the construction process. The costs must be classified as: direct, indirect, mark-up, and overhead. Sometimes the owner might want to establish a cap or specific project duration to the contractor that must be met, in order to have the owner’s risk minimized.

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How To Conduct Legal Due Diligence for M&A in Vietnam?

 Mergers and Acquisitions (M&A) has become popular in Vietnam as the country develops and more investors are eager to invest and gain control of the business enough to engage in, decide important business matters through partial or full ownership of an enterprise. A successful M&A mean the parties achieve their financial and commercial goals (increasing capital, raising management capacity, branding, etc) and ensuring safety and restraint the risk at the lowest level, though legal due diligence undertaken by law firm in Vietnam.

The Importance of Legal Due Diligence of Enterprise in M&A activities

Legal due diligence of enterprises focuses on full and detailed assessment of legal issues relating to the legal entity, capital contribution status, shareholder status, legal rights and obligations. From the investigation information, the parties can anticipate legal risks, assess opportunities to come up with alternatives. In addition, legal assessments help parties evaluate the reliability of their counterparts as well as understand their advantages and constraints for the negotiation process.

What Legal Due Diligence in M&A Activities Entail?

Evaluate the factors related to the legal status and capacity of the target enterprise: Review the legitimacy of the establishment, operation, possession of enterprise; ensure that the enterprise is not subject to procedures for dissolution or bankruptcy and compliance with the law of the enterprise in the course of operation. The information to be checked includes: dossiers, certificate of enterprise establishment, operation licenses, practice certificates, professional liability insurance, company charter, agreement between the company owner on rights of shareholders, capital contributors, minutes of meetings, member/shareholder register, certificate of capital contribution.

Evaluate the factors related to the business and financial activities of the target enterprise: Review the system of customers and partners of the enterprise; the documents on economic contracts (with customers, suppliers, etc); dossier of investment, construction, land, project; information on guarantee, mortgage (if any), debt and credit agreement, M&A, financial leasing contract, exclusive contract, franchise, etc, in terms of value, legality, validity, progress to evaluate legal risks in the future. Review the financial statements on the accuracy of the financial status of the business.

Verify the factors related to labor: Review labor contracts, labor agreements, internal labor regulations to determine the enterprise’s financial obligations to employees, compliance Labor law and reception of labor after the purchase or sale.

Verify the factors related to intellectual property: Review intellectual property rights of enterprises including: trademarks, trade names, industrial designs, layout designs, business secrets, etc; the property has granted the patent/license. Review matters of infringement of intellectual property rights of other organizations, individuals or legal persons in order to anticipate the risks of being sued or claiming damages.

In addition, in an M&A deal, the acquirer should ensure that participation in capital contribution or acquisition of the target enterprise is permitted, the form of M&A implementation is in accordance with the law and the M&A deal was approved by the competent authority of each party. After that, the factors related to M&A transaction procedures and constraints and restrictions of law (if any) must be evaluated.

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