ANT Lawyers Meeting World Mediation Organization in Berlin

 On Sep 17th, 2014 ANT Lawyers Vietnam representative, Mr. Tuan Nguyen met up with Dr. Daniel Erdmann in Berlin, Germany to discuss mediation in general and the mediator network extention in Vietnam.

ANT Lawyers Meeting World Mediation Organization on Mediation in Berlin

Mediation is form of alternative dispute resolution (ADR), a way of resolving disputes between parties with the involvement of mediator to assist parties to negotiate settlement. While litigation is costly and time consuming, mediation helps save the cost and time in comparision with coulărt proceeding and in the meantime information remains confidential. In Vietnam, mediation is only mandatory in divorce cases. However, the law on mediation has been discussed and drafted to be applicable in a wider area of dispute in the near future to reduce the workloads for the court system in Vietnam. In many advanced economy, mediation is mandatory before court proceeding is carried out.

World Mediation Organization is a global networks of mediation center based in Berlin, Germany, which provide service in conflict management, and education with coverage in more than 40 countries.

It is expected ANT Lawyers, a law firms in Vietnam will develop mutual beneficial relationship with WMO to promote the networks and the industry practice.

Read More

Renew expired visas for foreigners during the Covid-19 period

 Visa is a certificate issued by a competent Vietnamese state agency, allowing foreigners to enter Vietnam for immigration for a certain period of time depending on specific case. To be granted a visa, a foreigner must meet the conditions specified in the Law on Entry, Exit, Transit and Residence of Foreigners in Vietnam 2014, such as: having a passport or valid international travel document, being invited or sponsored by agencies, organizations and individuals in Vietnam unless otherwise provided for by law and not in the cases where entry is not allowed. In some special cases, to be granted a visa, foreigners will have to present documents proving the purpose of entry. When the visa is about to expire, foreigners can apply for a new visa for immigration into Vietnam.

In order to be issued a new visa, the foreigners need to prepare the following documents: application form for visa issuance; papers on the foreigners need to fully guarantee (if any); valid passport, other necessary proofs related to the purpose of entry and residence. After fully preparing the above documents, the foreigner shall submit the application at working offices of the Immigration Department – the Ministry of Public Security. The immigration officer receiving the dossier will check the dossier. If it is complete and valid, then he or she will receive the application and hand over the receipt, schedule a date to return the results. If the dossier is not valid, the dossier-receiving officer shall guide the submitter to supplement the dossier for completeness.

The result would be available within 05 days from the date of receipt of complete dossiers. The person who comes to receive the result shall present the receipt, identity card or passport to the officer to check and compare, pay the fee and sign for receipt.

However, during the period of complicated developments of the Covid-19 epidemic, the Prime Minister and leaders of the Ministry of Public Security issued instructions on the implementation of “automatic extension of temporary residence” for foreigners affected by the Covid-19 epidemic. Accordingly, foreigners entering under the visa exemption category, entering with an electronic visa or a tourist visa from March 1, 2020 until now, will continue to have their temporary residence extended until the end of August 31, 2021 and can leave the country within the above time limit without having to carry out procedures for extension of temporary residence.

In case a foreigner who entered the country before March 1, 2020 if he/she can prove that he is trapped due to Covid-19, being certified by the diplomatic mission or has a written confirmation from the competent authority of Vietnam about the isolation and treatment of Covid-19 or other force majeure reasons, is also considered to apply “automatic extension of temporary residence” until the end of August 31, 2021.

Read More

Tax Obligations for Foreign Entity Doing Business in Vietnam

 The applicable taxes including value added tax (VAT), corporate income tax (CIT) and personal income tax (PIT).

On August 6th 2014, the Ministry of Finance issued Circular No. 103/2014/TT-BTC guiding the implementation of tax obligations that are applicable to foreign organizations and individuals doing business in Vietnam or having incomes generated in Vietnam.

Taxpayers: foreign contractors, foreign subcontractors; organizations established and operated under the law of Vietnam, organizations register to operate under the law of Vietnam, other organizations, individuals producing and trading.

The applicable taxes including value added tax (VAT), corporate income tax (CIT) and personal income tax (PIT).

Taxable income of foreign contractors and foreign subcontractors is income derived from the provision and distribution of goods; provision of service, service in association with goods in Vietnam on the basis of the contractor contract and subcontractor contract.

CIT Payable = Revenue subject to CIT x CIT rate calculated on taxable turnover

Subjects liable for VAT: services or services associated with goods provided by foreign contractors, foreign subcontractors on the basis of the contractor contract, subcontractor contract to use for manufacturing, trading and consumption in Vietnam.

Incomes arising in Vietnam of foreign contractors and foreign subcontractors are earnings received in any forms on the basis of the contractor contract, subcontractor contract (except for cases specified in Article 2, Chapter I of this Circular), regardless of the place conducting business operations of foreign contractors and foreign subcontractors.

Circular specifically instruct the following cases:

1. Pay VAT by deduction method; pay CIT on the basis of cost and revenue declaration to determine taxable income.

2. Pay VAT and CIT by percentage on turnover.

3. Pay VAT by deduction method; pay VAT by percentage on turnover.

Issued together with Circular 103 is the tax declaration form for foreign contractor.

This Circular takes effect from October 1st 2014, replaces Circular No. 60/2012/TT-BTC dated April 12th 2012 of Ministry of Finance guiding the implementation of tax obligation applicable to the foreign organizations and individuals doing business in Vietnam or having income in Vietnam.

Read More

What Foreign Investors Need to Know About Taxes in Vietnam

 Foreign investors whom set-up company in Vietnam always face challenges to understand the tax system in Vietnam. The below briefly explains type of taxes in Vietnam for regular enterprises. In special cases, foreign enterprises are suggested to consult with tax lawyers in Vietnam before establishment and during the operation to ensure compliance

Major taxes which enterprises including both local and foreigners are subject to are corporate income tax, import and export taxes, and value added tax, and their employees are subject to personal income tax. Other taxes might be applicable depending on nature of business, such as natural resource tax, special consumption tax, and foreign contractor tax.

Corporate income tax (CIT) is governed under Vietnam Law on Corporate Income Tax. CIT is calculated by multiplying assessable income with the CIT rate. Assessable income is the difference between sales revenue and deductable expenses. In general, CIT tax rate in Vietnam is currently 22% and will be reduced to 20% starting Jan 1st, 2016.

Export and Import tax are governed under Vietnam Law on Export tax and Import tax. Export of finished goods is encouraged and export tax is 0%. Import tax will be as import tax tariff published by the government unless exempted for reasons of import to process for export, import to create fixed assets other other cases as the laws regulated.

Value added tax (VAT) is governed under Vietnam Law on Value added tax, applicable to goods and services sold in Vietnam. VAT is calculated by multiplying taxable price and VAT rate. The most common VAT rate is 10%. The rate level of 5% and 0% are applicable in certain cases.

Personal income tax (PIT) is governed under Vietnam Law on Personal income tax. Tax payers are resident, which taxable income includes income generated both inside and outside of Vietnam; and non non-resident, which taxable income includes income generated from Vietnam, regardless of the place where it is paid or received.

Read More

Cosmetics Workshop, Event Organizing Registration Services

 In addition to the cosmetics advertising on mass media such as television, radio, electronic portals (Internet, Website), books, newspapers, magazines, flyers, posters, underwater objects or other means of advertising, the cosmetics business can make or sponsor, authorize other entities to carry out workshop activities to introduce cosmetic products.

The cosmetic businesses are only allowed to advertise, organize seminars and events to introduce the cosmetic products when having the Receipt of advertising, seminar, cosmetic introduction events registration dossiers as prescribed by law.

Cosmetic advertising content must be consistent with the documents proving the safety and efficacy of the cosmetics and must comply with published guidelines of ASEAN cosmetic product features.

1. Services that ANT Lawyers provide for customers:

+ Consultation on the announcement of cosmetics, import cosmetics, cosmetics advertising.

+ Consulting on the registration and documentation of organizing conferences, workshops to introduce and advertise cosmetics as requested by customers.

+ On behalf of customer to fill in the cosmetics advertising registration where business operates or where enterprise organizes conference, workshop to advertise cosmetics.

+ On behalf of customer to contact, work and receive information from the competent State agencies related to the implementation process.

+ Amend and supplement the dossier as prescribed by the competent State agencies upon requested.

+ Inform customers about the validity result from the competent State agencies.

2. Registration dossier includes:

+ Trader registrated to advertise cosmetics, orgasnize seminar, event to introduce cosmetic products.

+ A copy of the business registration.

+ A copy of the cosmetic product announcement card that has been granted.

+ POA of organizations and individuals that announce the cosmetic products for the one who organizing cosmetic seminar, introduction event (in case of the event organization or individual register for advertising, organizing the seminar, cosmetic introduction event which are the one who held, published cosmetic products).

+ Document disclosures for the features, the use of the product in the case of the advertising contents, the contents presented at the seminar, cosmetic introduction event mentioned features, the use of the product beyond the content stated in the cosmetic product announcement card.

+ 02 advertising scripts (script must clearly describe the pictures, lyrics, music intends to advertise) or 02 advertising forms intend to release (applicable to the advertising registration dosssier) or documents intend to display, release at the seminar, cosmetic introduction event (applicable to workshop registration dossier).

3. Ways to file registration of cosmetic advertising, organizing seminar, event introduced cosmetic products:

a) Cosmetic registration dossier may be compiled for one or more products, can advertised on one or more means of mass media.

Cosmetics advertisement, advertising script can be made ​​for one or more different products.

b) The event, workshop organizing registration dossier may be compiled for one or more products to be held in one or more locations in the province, city

The procedure time: 10 working days from the time when the customer provides valid records and documents as required.

Read More

Cosmetics Product Proclamation in Vietnam

 Under Vietnam law, a cosmetic product made in Vietnam or imported into Vietnam must go through procedure of proclamation before being sold on the market.

Organizations or individuals distributing the cosmetic product on the market are only permitted when being granted the number of cosmetic product proclamation from the authority agencies. Such organizations or individuals are also responsible for safety, effectiveness, and quality of product.

Organizations, individuals who are responsible for putting products on market are organizations, individuals have name written in the cosmetic product announcement dossier and be responsible for cosmetics product in the market and must have the license of cosmetic business in Vietnam.

The cosmetic product manufacturers or importer may themselves conduct procedure in cosmetic product announcement or authorize for other organizations, individuals satisfying conditions as regulated to do this.

The cosmetic proclamation dossier includes the following documents:Cosmetic product proclamation report (02 versions) with the proclamation data (soft version of proclamation report);

Copy of business registration certificate of organizations, individuals who are responsible for circulation products into the market (with the enterprise’s signature and seal). In case the cosmetic domestic produced, but organizations, individuals who be responsible for putting products on the market are not the manufacturer must have a copy of business registration certificate of the producer (have legal notarized);

Original or notarized copy of letter of attorney from the producers or the owners of products authorized for organizations, individuals are responsible of putting products on the market in Vietnam (applied to the import or domestic cosmetic of which organizations or individuals are responsible of putting products on the market, be not the manufacturer). For the import product, the letter of attorney must be a copy notarized sign and consul legalized as provisions of law, except for being exempted of the consul legalization in regard to international treaties in which Vietnam is a member. The letter of attorney must satisfy requirements regulated at the Article 6 of this Circular.

Certificate of free sale (CFS) is only applied for import cosmetic product proclamation which satisfies the following requirements: (i) CFS which is issued by the current territory must have been original or legally notarized and still in the day of validity. In case CFS is not provided of the expiry day, it must be a certificate which has just been issued within 24 months; (ii) CFS must be consul legalized according to provisions of the law, except consul legalization immunity case according to the international treaties in which Vietnam is a member.

Depending on type of cosmetic, Vietnam law requires different competent state management agencies responsible for receiving dossier of cosmetic announcement. For the export of cosmetic, the medicine Management Bureau – the Ministry of Health is responsible for receiving proclamation dossier. For the cosmetic produced by domestic organizations, individuals, organizations or individuals who are responsible for bringing cosmetic into market shall apply the cosmetic product proclamation dossier at the Department of Health in which production factory is located. The product which is produced, packed from the import semi finished products shall be considered domestic produced products.

The results of handling the cosmetic product proclamation dossier: the competent state agencies shall issue or refuse to grant the number of receiving the cosmetic product proclamation report.

The receipt number of cosmetic product proclamation report shall be valid for 05 years since issuing date. After 05-year-expiry, if organizations or individuals wish to continue selling product in the market, they must make a proclamation again before the expiry of the receipt number of cosmetic product proclamation report and pay a regulated cost fee.

This publication is designed to provide updated information of legal matters, and does not constitute professional advice.

Read More

How to Determine Penalty and Compensation for Damages from Breach of Commercial Contract?

 When drafting a contract, especially a commercial business contract, in addition to basic provisions such as the object, scope of the contract, value and payment method, rights and obligations of the parties, dispute settlement, information confidentiality, and the regulations on the penalty for a breach of the contract and damage compensation are also very important.

Penalty for a breach of the contract

Under the provisions of the Commercial Law 2005, penalty for a breach means that the breaching party must pay a sum of money to the aggrieved party due to the breach of the violating party if the parties agree in the contract on the fine for a breach. Thus, the penalty for a breach only arises when there is a breach of the contract by the violating party and the parties have agreed on the penalty.

The law gives the right to agree on sanctions for violations to contractual parties, but this freedom to negotiate is limited. Specifically, the parties are only allowed to agree to a maximum penalty of 8% of the breached contractual obligation value, except traders providing assessment services issue assessment certificates showing incorrect results caused by their unintentional faults, they must pay penalty therefor to customers. The penalty level shall be agreed upon by the parties but must not exceed ten times the assessment service charge. In fact, the dispute settlement agency also bases on the prescribed limit of the law to handle; therefore, even if the parties agree to a higher penalty for a breach, it is not applicable in practice.

Compensation for damage

Compensation for damage means a remedy whereby the breaching party pays compensation for the loss caused by a contract-breaching act to the aggrieved party. The basis for arising damages is a breach of the contract; there is material loss and act of breaching the contract is the direct cause of the loss. Difference from penalty for a breach, liability to compensate for damages caused by breaches of contract performance obligations arises even in cases where the parties do not have an agreement on this matter. Besides, the law does not provide any regulation to limit the amount of compensation; it is based on the actual damages that the aggrieved party can prove.

When participating in the transaction, if both types of sanctions are specified in the contract, they should clearly specify the basis for the amount of compensation for the damages and the penalty for violation.

In fact, there are many cases where the parties do not agree clearly or agree on the penalty but the amount of the penalty exceeds the prescribed level, the excess could be considered invalid. The parties should also note that there will be no agreement on late payment interest on the infringement penalty and the amount of compensation damages.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang, will help customers conveniently drafting contracts and assist in resolving contract disputes

Read More

Investigation Questionnaire for Foreign Manufacturers and Exporters in Case of the Final Review

 On October 13th, 2021, the Ministry of Industry and Trade issued the Decision No.2301/QD-BCT on the final review of the application of anti-dumping measures to a number of H-shaped steel products originating from People’s Republic of China (China) imported into Vietnam (Code of case ER01.AD03).

On October 29th, 2021, Department of Trade Remedies issued Official Letter No.839 /PVTM-P1 on the issuance of the Investigation Questionnaire for foreign manufacturers and exporters in the case ER01.AD03.

The Investigating Authority requires all relevant foreign manufacturers/exporters to cooperate and participate sufficiently during the investigation. The content of the response will be the basis for the Investigating Authority to review and draw a conclusion of the investigation of this case. In the event that the Investigating Authority doOn October 13th, 2021, the Ministry of Industry and Trade issued the Decision No.2301/QD-BCT on the final review of the application of anti-dumping measures to a number of H-shaped steel products originating from People’s Republic of China (China) imported into Vietnam (Code of case ER01.AD03).

On October 29th, 2021, Department of Trade Remedies issued Official Letter No.839 /PVTM-P1 on the issuance of the Investigation Questionnaire for foreign manufacturers and exporters in the case ER01.AD03.

The Investigating Authority requires all relevant foreign manufacturers/exporters to cooperate and participate sufficiently during the investigation. The content of the response will be the basis for the Investigating Authority to review and draw a conclusion of the investigation of this case. In the event that the Investigating Authority does not receive timely responses from foreign manufacturers/exporters or the information provided is incorrect or incomplete, the Investigating Authority will use information and documents provided by related parties, the information and documents collected by the Investigating Authority, including conducting on-site investigations abroad according to the regulation of Law on Foreign trade management.

The relevant parties must respond to the Investigation Authority directly to Investigation Authority before 17:00 December 05th, 2021 (Hanoi time).

The information, data provided in the Questionnaire of the Investigation Authority and the right to access the information of the case during the investigating term will be implemented in the regulations of the laws.

If Client needs any more information or request for legal advice or potential dispute regarding trade remedies measures including, anti-dumping, countervailing duty and safeguard measures or international trade dispute matters, our competition, anti-dumping, and countervailing duty lawyers of International trade and tax practice at ANT Lawyers, a law firm in Vietnam always follow up anti-dumping cases and its development to update clients on regular basis.

es not receive timely responses from foreign manufacturers/exporters or the information provided is incorrect or incomplete, the Investigating Authority will use information and documents provided by related parties, the information and documents collected by the Investigating Authority, including conducting on-site investigations abroad according to the regulation of Law on Foreign trade management.

The relevant parties must respond to the Investigation Authority directly to Investigation Authority before 17:00 December 05th, 2021 (Hanoi time).

The information, data provided in the Questionnaire of the Investigation Authority and the right to access the information of the case during the investigating term will be implemented in the regulations of the laws.

If Client needs any more information or request for legal advice or potential dispute regarding trade remedies measures including, anti-dumping, countervailing duty and safeguard measures or international trade dispute matters, our competition, anti-dumping, and countervailing duty lawyers of International trade and tax practice at ANT Lawyers, a law firm in Vietnam always follow up anti-dumping cases and its development to update clients on regular basis.

Read More

Handling of Violations in Cosmetics Sales in Vietnam

 The mechanisms of handling violations of cosmetics advertising and sales in Vietnam.

The cosmetic quality checking central agency is the Vietnam Medicine Management Department – the Ministry of Health. The Medicine Management Department coordinates with the inspector of the Health Ministry, the Medicine Analyzing Central Institute, Medicine departments of centrally – affiliated cities and provinces in order to carry out and supervise the post – sale promotion activities in regard to the cosmetic product. On the cosmetic analyzing result of the analyzing state agencies, the Medicine Management Department – the Ministry of Health is the agency who controls cosmetic quality in Vietnam.

The local cosmetic quality – checking agency is the Health Department of centrally – affiliated cities and provinces. The Health Departments of centrally – affiliated cities and provinces organize to carry out the post – sale promotion activities on the domestic cosmetic, the import cosmetic which is delivered in their area, and handle problems in relation to the cosmetic quality according to the law regulations; report on statistic of the cosmetic quality management situation in their localities

For the checking and inspecting form, Vietnam law provides two forms: the scheduled check and inspection and the ad-hoc check and inspection. The ad-hoc check and inspection shall be made when discovering the products which are unqualified, don’t obey provisions for being sold on the market, or because of the customer’s complaints. In urgent cases, the competent agency has right of check and inspect without warning.

The check and inspection include contents as the following:

Check and inspection the obedience of laws on the cosmetic production and the trading, including: (i) the obedience of principle and standards of “cosmetic good manufacturing practice” of the Asian Southeast Association Nations (CGMP-ASEAN) or equivalence which are admitted by the ASEAN Cosmetic Association; (ii) the label writing; (iii) the Product Information File (PIF) regulated by the ASEAN; (iv) the cosmetic advertising;

The check and inspection of solving the dispute, the complaint, the denouncement on the quality and other contents related to the cosmetic (if any);

The check and inspection of implementing announcement of confiscation the cosmetic in regard to the regulation (if any).

The priority order in checking and supervising the post – sale promotion is based on the product’s kind, origin source, label, company’s brand name, formula ingredients.

This publication is designed to provide updated information of legal matters, and does not constitute professional advice.

Read More

Forms of Company to be Set-up in Vietnam

 According the Vietnam Law on Enterprises, there are four common types of companies:

Private enterprise is an enterprise owned by an individual who is liable for all of its operations with his/her entire property;

Partnership is an enterprise in which (i) there are at least two partners who are co-owners of the company, jointly conduct business under one common name; in addition to general partners, there may also be limited partners; (ii) general partners to a partnership must be individuals who are liable for all obligations of the partnership with his/her own entire property; (iii) Limited partners shall be liable for debts of the partnership only to the extent of their capital contribution to the partnership;

Joint stock company is an enterprise where (i) Its charter capital is divided into equal portions known as shares; (ii) Shareholders may be organizations and/or individuals; the minimum number of shareholders shall be three and shall not be restricted to any particular maximum number; (iii) Its shareholders shall be liable for debts and other property liabilities of such enterprise within the limit of the value of their capital contribution to the enterprise; (iv) Shareholders shall be entitled to freely transfer their shares according to the provisions of law;

Limited liability company (multi-member limited liability company and single-member limited liability company). A one-member limited liability company is an enterprise which is owned by one organization or individual (hereinafter referred to as the company owner); the company owner is liable for debts and other property liabilities of the company within the charter capital of the company. A limited liability company is an enterprise of which: (i) Members may be organizations and/or individuals; the total number of members shall not exceed fifty; (ii) Members are responsible for debts and other property liabilities of the enterprise within the amount of capital that they have committed to contribute to the enterprise; (iii) Capital shares of the members may only be transferred in accordance with the provisions of law.

Read More

Five types of real estate contracts abolished mandatory notarization procedure

 According to the regulation of Civil Code 2015, some of the transactions which are required to implement the process of notarization and registration according to the regulation of the laws. As real estate transactions are normally at high value, the process of notarization and registration would help parties involved to be protected from falsified transactions.

As the stipulated in the Real estate trading 2014, the real estate trading agreement must be made in writing. The agreement notarizing or authenticating shall be discussed by contracting parties. However, the real estate trading agreement in which on building sale or lease purchase agreements or land transfer agreements concluded by households and individuals who conduct small-scale or irregular transactions of real estate sale, transfer, lease-out, and lease purchase shall not be required to set up enterprises, but they shall make tax declaration as prescribed need to be implemented the mandatory notarization procedure.

The procedure and dossier for notarization the real estate agreement will be implement according to the regulations of Law on notarization 2014.

Our real estate lawyers in Vietnam recommend client to have house leasing contracts voluntarily notarized to better protect their interests in disputes or any future issues.

For more information or legal advice in real estate transactions, we are glad to assist. ANT Lawyers, your lawyers in Vietnam

Read More

What Foreign Investors Need to Know About Taxes in Vietnam

 Foreign investors whom set-up company in Vietnam always face challenges to understand the tax system in Vietnam. The below briefly explains type of taxes in Vietnam for regular enterprises. In special cases, foreign enterprises are suggested to consult with tax lawyers in Vietnam before establishment and during the operation to ensure compliance

Major taxes which enterprises including both local and foreigners are subject to are corporate income tax, import and export taxes, and value added tax, and their employees are subject to personal income tax. Other taxes might be applicable depending on nature of business, such as natural resource tax, special consumption tax, and foreign contractor tax.

Corporate income tax (CIT) is governed under Vietnam Law on Corporate Income Tax. CIT is calculated by multiplying assessable income with the CIT rate. Assessable income is the difference between sales revenue and deductable expenses. In general, CIT tax rate in Vietnam is currently 22% and will be reduced to 20% starting Jan 1st, 2016.

Export and Import tax are governed under Vietnam Law on Export tax and Import tax. Export of finished goods is encouraged and export tax is 0%. Import tax will be as import tax tariff published by the government unless exempted for reasons of import to process for export, import to create fixed assets other other cases as the laws regulated.

Value added tax (VAT) is governed under Vietnam Law on Value added tax, applicable to goods and services sold in Vietnam. VAT is calculated by multiplying taxable price and VAT rate. The most common VAT rate is 10%. The rate level of 5% and 0% are applicable in certain cases.

Personal income tax (PIT) is governed under Vietnam Law on Personal income tax. Tax payers are resident, which taxable income includes income generated both inside and outside of Vietnam; and non non-resident, which taxable income includes income generated from Vietnam, regardless of the place where it is paid or received.

Read More

What Are Regulations on Debt Trading Contracts in Vietnam?

 Along with the development of socio-economic activities, right to collect debt has become an asset right, hence its transferability is also recognized. Vietnam law recognizes debt as a commodity that can be traded through a debt trading contract. However, in order for the debt trading contract to be legally valid and ensure the rights and obligations are enforced, the parties need to pay attention to the provisions on the debt trading contract.

Firstly, in terms of the right to enter into a debt trading contract, according to the provisions of the Civil Code on the sale and purchase of property rights, the property right is the right to claim debt in Vietnam. Accordingly, the right to recover debt becomes the subject of a contract that the parties can transfer as if it were a special type of property. In addition, the debt trading contract aims to transfer ownership of the right of debt recovery and at the same time transfer the debt seller’s obligations to the debt purchaser. This is a transaction that does not affect the interests of the debtor totally. Therefore, the transfer of the right to demand does not require the consent of the obligor, whereby the parties can enter into a debt trading contract without the consent of the debtor.

Secondly, in terms of the form of the debt trading contract, based on the provisions of law prescribing debt trading contract by credit institutions and foreign bank branches, debt trading contract is a written agreement on the transfer of the right to collect debt for a debt arising from a lending operation, payment on behalf of the guarantee, whereby the debt seller transfers ownership of the debt to the debt purchaser and receives payment from the debt purchaser. Therefore, the debt trading contract must be made as a written document.

Furthermore, the debt trading contract must be signed by the legal representative or the authorized representative of the debt purchase and sale parties. Therefore, according to this provision, the debt trading contract does not require the parties to be notarized or authenticated. If necessary, the parties can agree on the notarization or authentication of the debt trading contract. In addition, the parties can make an agreement that the contract can be made in a foreign language and the parties need to consent on which language of the contract will be used in case of a dispute arisen. In addition, in case the debt purchaser and debt seller are organizations with legal status, in addition to the legal representative to sign, the contract needs to be stamped. These are strict regulations on the established form to ensure the legality of the contract’s form.

Thirdly, when drafting a debt trading contract, it must contains the following principal contents: (i) Time for signing the debt trading contract; (ii) Names and addresses of the parties to the debt trading contract; (iii) Name and title of the representative of the parties to the debt trading contract; (iv) Name and address of the debtor and related parties (if any) to the purchased or sold debt; (v) Details of debt purchased and sold: Loan amount, loan period, purpose, book value of the debt up to the time of debt purchase and sale; (vi) Security measures for the debtor’s payment obligation for the purchased or sold debt (if any); (vii) Debt selling price, payment method, payment term; (viii) Time, method and procedures for transferring debt documents and records, including dossiers and documents on debt security (if any); The time the debt purchaser becomes the subrogator, the debt seller has obligations; (ix) Rights and obligations of debt sellers and debt buyers; (x) Liability of the parties for breach of contract; (xi) Settlement of arising disputes. These are the basic and mandatory contents of a debt trading contract. In addition, the parties can make agree on other contents in the debt trading contract that are not contrary to the provisions of the laws.

In addition, during the implementation of the debt trading contract, the law allows the parties to agree to amend, supplement or cancel the content of the debt trading contract. However, the decision to amend, supplement or cancel must be based on ensuring compliance with the provisions of law.

Therefore, the establishment of a debt trading contract in Vietnam is basically the same as other property rights transfer transactions. However, debt is a special object of property rights, therefore the parties need to strictly comply with the provisions of law on the content and form of the contract to ensure the legality of the contract as well as the rights and obligations of the parties. It is suggested to engage lawyers with specialization in debt recovery and dispute resolution to assist drafting or reviewing debt trading contract for its effective usage.

Read More

Cosmetics Safety Requirement in Vietnam

 Cosmetics safety has always been concern when such are on sale in an open market.

Compatible with the Combination Convention in the cosmetic management which has been signed by countries are member of the Association of Southeast Asian Nations on September 2nd, 2003 (ASEAN Cosmetic Convention), Vietnam law not only requires the organization or the individual which delivers the product to the market must guarantee that its product shall be harmless for people’s health when exerted in normal or appropriate conditions supplied by the producer or the owner, but also requires the producer or the owner to have obligation in evaluating the safety of every cosmetic product in accordance with the ASEAN safety norm. Besides, the heavy metal limit and the microorganisms in the cosmetic must satisfy the ASEAN’s requirements. The cosmetic Ingredients must satisfy the Appendix requirements (Annexes) – new version of the ASEAN Cosmetic Convention.

This publication is designed to provide updated information of legal matters, and does not constitute professional advice.

Read More

Decree 118/2015/ND-CP Guiding the Investment Law 2014

Decree 118/2015/ND-CP was issued on November 12th 2015 by the Government. It takes effect from December 27th 2015 clearly regulates some regulations of the Law on Investment on the application, control, publish investment business condition; measures to ensuring investment, investment incentives, investment procedures, operational implementation of investment projects and state management of investment projects.

Regarding investment conditions in Vietnam:

– In terms of the business investment sectors, investors may invest in conditional business lines when they meet the conditions of license, practicing certificate, certified professional liability insurance or other forms of required documents under the provisions of the covered agreements that Vietnam has signed or specific regulations of the law of Vietnam.

– In addition, investors also have to meet other conditions such as charter capital (for a certain number of business lines); forms of investment; scope of investment activities; Vietnam partners to join the investment execution.

– The form of investment for foreign investor:

+ Establish economic organization.

+ Capital contribution or share purchase.

+ Business cooperation contract.

+ Receive transfer of investment project.

– Foreign investors when investing in Vietnam in addition to meeting conditions like investor Vietnam, they will have to meet other specific conditions. Particularly for investors that have both Vietnam and foreign citizenships, they will be able to choose to apply the conditions for foreign investor or Vietnam investor.

On the issue of investment incentives, investors will receive incentives from the State in the following cases:

– Projects under the business lines of investment incentives.

– Investing in areas with difficult economic conditions.

– Project with capital from 6000 billion VND and will be disbursed within a period of 3 years.

– Investing in projects in rural areas and use more than 500 employees.

– Investment project in the fields of science and technology.

– For investment projects in Section 3 and 4 above will be entitled to preferential investment projects in areas with difficult economic conditions. The cases that projects simultaneously under both Section 1 and 2 above shall also enjoy incentives according to investment project in areas with difficult economic conditions.

Distinguishes 3 types of projects:

– The investment project that is not subject to the investment policy decision.

– The investment project under the jurisdiction on investment policy decision of the provincial People’s Committee.

– The project that is not subject to the granting of investment certificate.

In particular, for the project’s land that is granted, lease or allow the transfer of land use purposes by the State, it is necessary to deposit to ensure the investment. The deposit rate will be 3%, 2% or 1% depending on the scale of capital is 300 billion VND or above. Depends on the enjoyed incentives that the amount of deposit will be reduced according to different rate (the typical reduction rate is 25% or 50%).

Regarding the transfer of investment project:

Investor is allowed to transfer part or the whole of their investment project to other investor under the provisions of the law on investment (paragraph 1, article 45). In case when the transfer of projects generates income, investors must comply with the relevant tax obligations.

In addition, the Decree 118/2015 also provides details about:

– The procedures for the adjustment of investment projects in the case of division, separation, merger and transformation of economic organization (Article 38);

– The procedures for the termination of investment projects (Articles 41, 42);

– The investment procedures in the form of capital contribution, share purchase and capital contribution of foreign investors.

Decree 118/2015/ND-CP takes effect from December 27th 2015.

Read More

Forms of Company to be Set-up in Vietnam

 According the Vietnam Law on Enterprises, there are four common types of companies:

Private enterprise is an enterprise owned by an individual who is liable for all of its operations with his/her entire property;

Partnership is an enterprise in which (i) there are at least two partners who are co-owners of the company, jointly conduct business under one common name; in addition to general partners, there may also be limited partners; (ii) general partners to a partnership must be individuals who are liable for all obligations of the partnership with his/her own entire property; (iii) Limited partners shall be liable for debts of the partnership only to the extent of their capital contribution to the partnership;

Joint stock company is an enterprise where (i) Its charter capital is divided into equal portions known as shares; (ii) Shareholders may be organizations and/or individuals; the minimum number of shareholders shall be three and shall not be restricted to any particular maximum number; (iii) Its shareholders shall be liable for debts and other property liabilities of such enterprise within the limit of the value of their capital contribution to the enterprise; (iv) Shareholders shall be entitled to freely transfer their shares according to the provisions of law;

Limited liability company (multi-member limited liability company and single-member limited liability company). A one-member limited liability company is an enterprise which is owned by one organization or individual (hereinafter referred to as the company owner); the company owner is liable for debts and other property liabilities of the company within the charter capital of the company. A limited liability company is an enterprise of which: (i) Members may be organizations and/or individuals; the total number of members shall not exceed fifty; (ii) Members are responsible for debts and other property liabilities of the enterprise within the amount of capital that they have committed to contribute to the enterprise; (iii) Capital shares of the members may only be transferred in accordance with the provisions of law.

Read More

How Regulation on Telecommunications Changes in Vietnam?

 Proportional to Vietnam’s rapid development in various areas of its economy, the telecommunication industry has undergone through rapid development and has become a key economic sector for the country. Legal regulations on telecommunications have also been evolving to support the business practice in Vietnam.

Various regulations on the telecommunication business, for instance the Ordinance of Post and Telecommunication promulgated in 2002 created a legal framework for the telecommunication business in Vietnam and thereby promoting competition, encouraging and supporting the new market entrants. After sometime, the Vietnamese provisions on telecommunications turned out not always be compatible with the international regulations – especially when Vietnam became an official member of the World Trade Organization (WTO) and thereby had to be in line with the WTO’s international provisions. On November 23rd, 2009 the National Assembly of Vietnam passed the Law on Telecommunications that came into effect on July 1st, 2010 (“Law on Telecommunications”). The Law on Telecommunications describes and specifies general terms and provisions on the telecommunication activities in Vietnam. According to this Law on Telecommunications, Telecommunications service means the service of sending, transmitting, receiving or processing of information between two users or within a group of users of telecommunications services, including basic service and value-added service.

The government authorities perform three main tasks of state management on telecommunications in Vietnam:

i) to cater for an open competition that allows all businesses that are established under Vietnamese law and are engaged in providing telecommunication services or infrastructure therefore, to enter the market;

ii) secondly, to create a legal framework to ensure that enterprises and market participants could enter the market and handle acts of unfair competition;

iii) to create good conditions for building and modernizing telecommunication networks and for enhancing the security and defense operations of the state to improve the standards for international cooperation in telecommunication.

According to Article 5 of The Law on Telecommunications, the safety of the telecommunication infrastructure and information security are responsibilities of all organizations and individuals. The Ministry of Information and Communications shall hold the main responsibility and in cooperation with the Ministry of National Defense; the Ministry of Public Security and concerned agencies, it also shall coordinate the safety of the telecommunication infrastructure and informa­tion security in telecommunication activities.

The Law on Telecommunications also provides general principles regarding telecommunication services connected to foreign investors. According to Article 18 of The Law on Telecommunications, forms and conditions of foreign investment and capital contribution of foreign investors in telecommunication services must comply with Vietnamese laws and international treaties to which the Socialist Republic of Vietnam has signed to.

The Government shall specify forms and conditions for foreign investment and determine the maximum capital contribution of foreign investors in telecommunication services. Foreign investors who invest in telecommunication services for the first time in Vietnam must also complete formalities to obtain an Investment Certificate and the Telecommunications Business Service License. Besides guiding on the specific matters such as foreign investment in telecommunication services, the Law on Telecommunications established a legal framework that covers all matters connected with telecommunication services in an all-embracing way for the first time in Vietnam.

Professionals at ANT Lawyers work on many a variety of telecommunications, media and technology transactions and cases. Our attorney’s industry knowledge and expertise allow us to effectively support the information technology sector. We could deliver the experience and expertise needed to handle issues in both private practice and in corporate and regulatory bodies.

Read More

List of Investment Sectors Banned in Vietnam

 Although investment is encouraged in Vietnam, there are sectors banned to invest in Vietnam which foreign investors need to be advised and considered when setting up business in Vietnam.

The list of investment sectors banned in Vietnam has been issued with Decree 108/2006/ND-CP dated September 22nd 2006 of the Government on guiding the implementation of some Articles in the Law on Investment.

I. The projects which are detrimental to national defense, national security and public interest

1. Production and processing of drugs

2. Investment in services that secretly investigating infringe upon the interests of the State, the legitimate rights and interests of organizations and individuals.

3. Investment in the fields of private detective and investigation.

II. The projects which are detrimental to the historical places, cultural, ethical, habits and customs of Vietnam

4. The projects built on the campus of the national historical and cultural places, projects that negatively affect the architecture and landscapes of national historical and cultural places.

5. Production of depraved and superstition cultural products.

6. Production of dangerous toys, educational harmful toys that affect to the character and health of children or to the security, social order and safety.

7. Prostitution business, trafficking in women and children.

8. Experimental reproductive cloning in humans.

III. The projects harmful to people’s health, destroying natural resources and destruction of the environment

9. Manufacturing of prohibited chemicals (contact ANT Lawyers for details) (according to the Convention).

10. Production of veterinary drugs, plant protection drugs that are banned or not permitted to use in Vietnam.

11. Production of medicines for human use, vaccines, biologicals, cosmetics, chemicals and pesticides, bacteria which are not permitted to use in Vietnam.

IV. The hazardous waste treatment projects brought from overseas into Vietnam, production of toxic chemicals or the use of toxic agents that are prohibited by the provisions of international treaties

12. The hazardous waste treatment projects brought from overseas into Vietnam, production of toxic chemicals or the use of toxic agents that are prohibited by the provisions of international treaties to which Vietnam is a member.

V. Other investment projects that are prohibited under the provisions of law.

Read More

How Foreigners Could Work in Vietnam Legally

 Foreigners working in business set-up in Vietnam are expatriates which are normally required work permit in Vietnam.

As the Vietnam law’s restrictions to encourage employment of local employee over foreign employee, normally, the employment of an expatriate is limited to a managerial position or to a position which Vietnamese employee are not yet qualified.

There are exemption of work permit in Vietnam as following cases:

A capital contributing member or owner of a limited liability company which is registered to operate in Vietnam;

A member of the Board of Management of a shareholding company which is registered to operate in Vietnam;

A chief of a representative office or of a project of an international organization or a non-governmental organization in Vietnam;

The foreigner enters Vietnam for less than three months to offer services;

The foreigner enters Vietnam to work for less than three months or to handle an emergency case and that cannot adequately be addressed within Vietnam;

A lawyer who has received a Certificate for the practice of law in Vietnam granted by the Ministry of Justice;

The foreigner is a student studying and working in Vietnam;

An intra-corporate transferee working in Vietnam;

The foreigner provides expert and technical consultancy services or undertakes other tasks with respect to research, formulation, evaluation, monitoring and assessment, management and implementation of a program or project using official development aid (“ODA”);

The foreigner has a media license issued by the MOFA;

The foreigner is appointed by a competent authority of a foreign country to teach at an international school which is managed by a foreign diplomatic office or an international organization in Vietnam;

The foreigner a volunteer;

The foreigner has a master’s degree or higher or similar qualifications and provides consultancy, teaching, or conducts scientific research at a university or vocational college for a period not exceeding thirty (30) days; or

The foreigner implements an international agreement signed by a Vietnamese government authority, a provincial body or a central socio-political organization.

In order for an expatriate to be exempted from a work permit, the employer must file an application with the provincial labor authority. Chairman of the provincial People’s Committee will be consulted and if approval, he/she will issue a written consent to each employer regarding the employment of expatriate.

Read More

Export and Import of Cosmetic Procedures in Vietnam

 Export and import of cosmetics have to follow procedures provided by Vietnam regulations on cosmetics.

For exporting cosmetic

Export of cosmetic must be implemented at the Customs agency in accordance with the current law regulation and the import country’s requirements.

The exporter needs to obtain the Certificate of Free Sale (CFS) as regulated. CFS is issued when such domestic cosmetic is issued the cosmetic product proclamation receipt number by competent state management agency. Moreover, the export trader must register the trader file at the Health department where having cosmetic manufacturing plant and make CFS issuing procedure for export cosmetic goods. The Health department in central-affiliated cities and provinces are competent agencies in issuing and managing CFS of export cosmetics which are manufactured in that area (where the manufacturing plant is located).The CFS issuing request file includes:

The CFS issuing request must be fully regularly enumerated;

The copy of the cosmetic product proclamation report has been issued the receipt No (the copy sealed by trader who suggest for the CFS granting).

For importing cosmetic

Enterprises are only allowed to import the cosmetic into Vietnam when presenting to the Customs agency the valid receipt number of cosmetic product proclamation report which has been issued by the Medicine Management Department – the Health Ministry. However, Vietnam law also provides import of cosmetic in some special situations which are not obligated to implement the cosmetic product proclamation as the following:

Organization or individual who imports cosmetic in order to study and experiment;

The organizations, individuals who receive cosmetic as gifts;

The organizations, individuals who imports cosmetic for displaying at fair, gallery and other temporary import for re-export situations.

This publication is designed to provide updated information of legal matters, and does not constitute professional advice.

Read More

How to Transfer Shares in a Joint Stock Company?

 According to Vietnam law, joint stock company is one form of typical company types in Vietnam. For a joint stock company to be set-up, there should be at least three shareholders. In the joint stock company, the charter capital is divided into equal parts called shares. Shareholders have the right to freely transfer their shares to others, but there will be some certain restrictions.

Within three years from the establishment of the company and the issuance date of the Certificate of Enterprise Registration, the ordinary shares of founding shareholders may be transferred to other founding shareholders and may only be transferred to a person that is not a founding shareholder if the transfer is accepted by the General Meeting of Shareholders. In this case, the transferor does not have the right to vote on this transfer. In addition, if the company’s charter has provisions restricting the transfer of shares, the transfer of shareholders must also comply with the provisions of the Charter and these regulations will only applicable if they are written in the certificates of the shares subject to restriction.

The transfer of shares is usually made by the parties by contract or transaction on the securities market. In case of transfer under a contract, the documents shall bear the signatures of the transferor and the transferee or their authorized representatives. In case shares are transferred on the securities market, the transfer procedures prescribed by securities laws shall apply.

Shareholders of a joint-stock company have the right to donate part or all of their shares in the company to other individuals or organizations; use shares to pay off debt. At that time, individuals and organizations that are given or received the donation or debt payment will become a shareholder of the company. However, they will only become shareholders of the company from the time their information is fully recorded in the register of shareholders.

In case of the death of a shareholder that is an individual, his/her heir at law or designated by a will shall become a shareholder of the company. If such shareholder dies without an heir or the heir refuses the inheritance or is disinherited, his/her shares shall be settled in accordance with civil laws.

The last point to pay attention is when there is a share transfer event, the company shall register the changes of shareholders in the shareholder register as requested by relevant shareholders within 24 hours after the request is received.

Read More

Decree 46/2015/ND-CP on the Quality Management and Maintenance of Construction Works

 On May 12th 2015, the Government issued Decree 46/2015/ND-CP on the quality management and maintenance of construction works, which entered into force on July 1st 2015. The Decree stipulates that construction contractors and equipment supply contractors must be responsible to investors on warranty for the part of jobs they have done.

For construction items, new construction work or renovation, upgrading, the minimum warranty period is 24 months from the date of acceptance (for the construction works, construction items belong to special level and level I); not less than 12 months for the construction works and construction items belong to the remaining levels. As for housing, the warranty period shall comply with the provisions of the law on housing, namely, not less than 60 months for condominiums from 9 floors or more and other types of housing that are built by the State budget; not less than 36 months for apartment from 4 – 8 floors and minimum of 24 months with the remaining houses.

In addition, the Decree also stipulates about the minimum amount of guarantee for works using State capital. Accordingly, for the construction works belong to special level and level I, the minimum guarantee amount will equal to 3% of the contract value; with construction works belong to the remaining levels, the minimum guarantee amount will at least equal to 5% of the contract value. For construction works that use other sources of capital, we can refer to the above minimum amount of guarantee to apply.

Also under this Decree, the owner or manager using construction works must check frequently, regularly and irregularly to timely detect signs of deterioration and damage of the works, equipment installed in works as basis for the maintenance of works; the maintenance must be carried out under an annual maintenance plan and the maintenance procedure should be approved…

Read More

Work Permit Regulations in Vietnam under Decree No. 102/2013/ND-CP

 The Government has issued Decree No. 102/2013/ND-CP dated September 5, 2013 providing for the granting of work permits for foreign laborers to work in Vietnam.

According to this Decree, foreign workers who want to be granted a work permit are required to meet the five following conditions. First, the worker is capable of civil acts as prescribed by law. Second, the worker’s health is suitable for his or her job. Third, the worker is a manager, executive officer, expert, or technician. The foreign workers that provide medical examination and medical treatment in Vietnam, or work in education and vocational training must meet the conditions for provision of medical examination, medical treatment, education and vocational training of Vietnam’s law. Fourth, the worker is not a criminal or liable to criminal prosecution according to Vietnam’s law and the foreign country’s law. Fifth, the employment of the foreign worker is approved in writing by a competent. The employer will be responsible for apply application for work permit at least 15 working days before the day on which the foreign worker intends to start working, the employer shall submit the application for the work permit to the Service of Labor, War Invalids and Social Affairs of the province where the foreign worker works for the employer the whole time. Where the foreign worker does not work for the employer in the same province the whole time, the application for the work permit shall be submitted at the Service of Labor, War Invalids and Social Affairs of the province where the employer’s head office is situated. The duration of a work permit shall not exceed 2 years, and follow the duration of Decree 102/2013/ND-CD also provides about the cases in which the work permit shall be reissued. Namely, these cases include when the work permit is lost, damaged, or the contents of the work permit such as name, date of birth, nationality, passport number, or workplace is changed and when the work permit. The employers shall be responsible for apply application for reissuance of the work permit to Service of Labor, War Invalids and Social Affairs that issued it so as to obtain new work permit. For the cases of expiring, the duration of the work permit reissued does not exceed 02 years and follows the duration of particular situations. Where the work permit reissued in remaining cases, this duration is equal to the duration of the issued work permit minus the period of time the foreign worker has worked up to the day the application for the reissuance of the work permit is submitted. Besides, this Decree also provides the cases in which the foreign worker is exempt from applying for the work permit such as foreign workers working as contributing member, or owners of limited liability company, coming to Vietnam with a period of less than 03 months to offer services. The cases of revocation of the work permit and expelling the foreign workers also provided in this Decree.

In order to seek further advice, please contact us at ant@antlawyers.vn or call +84 28 730 86 529.

ANT Lawyers, your lawyers in Vietnam.

Read More