Why should you need to research the partner before signing the contract?

 Why should you need to research the partner before signing the contract?

It is important to find and work with a capable and long-term partner to build confidence doing business in a safely and effectively way for all parties, and avoid potential risks. In order to be guaranteed their legitimate rights and interests, individuals and organizations conducting business need to have a clear understanding of their partner before cooperating, in order to start their business cooperation most effectively.

 

In cooperation with a partner lawfully established in Vietnam, individuals and enterprises could find out information that has been registered at the competent state agencies. Accordingly, information about the owner, legal representative, business lines, head office address, tax code, charter capital, founding shareholder, business registration certificate, corporate history of the last three to five years, the latest business registration information, etc. could be checked on the National business registration information system. The registered information is the official information, valuable to determine the authority, position and responsibility of organizations and individuals if there is a mistake in the operation.

In addition, to find out if an individual is an owner, manager or capital contributor of one or more enterprises in Vietnam, organizations and individuals can also check the information registered in the National business registration information system. If an individual owns, manages, or contribute capital to any business lawfully established in Vietnam within 3 years, it will be recorded. This is the information which helps the organization and individual to verify the truth of information provided by their partner.

In addition, information related to the protection of trademarks of enterprises that have been protected in Vietnam, enterprises and individuals can also be found on the website of NOIP before cooperating.

The information that has been registered at the competent authority, these are basic and public information, so businesses and individuals can search. However, in the course of operation, a number of enterprises have been carrying out illegal activities that are not recorded on the registered information. Therefore, fact checking or finding out at other sources of information for an enterprise is essential to avoid cooperating with a party who is not capable of doing business.

Many businesses and individuals neglect their partner information before signing contracts. During the implementation of the contract, these partners were not able to continue to perform the contract, leading to many negative impacts on the business of the business. In addition, there are partners that commit fraud, provide inaccurate information, in order to appropriate assets of businesses and individuals through the signing of sales contracts. This makes businesses and individuals take a lot of time and effort to reclaim lost assets, affecting their business.

Searching the information of the partners before cooperating is very essential when doing business in any case so that businesses and individuals can cooperate in a long term. Cooperation with a good partner can help businesses and individuals achieve economic benefits, save time and costs in business, thereby bringing the best profit for themselves.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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Vietnam’s advantage of attracting FDI after Covid-19

In the period of many countries in the world and in the region competing for attracting FDI, especially when the wave of diversification of supply chains after the Covid-19 epidemic is growing sharply, Vietnam is considered to be one of the countries with the most FDI attraction in Southeast Asia for investors to set up company.

 

Vietnam is a Southeast Asian country with a fast-growing economy, stable politics, young population, abundant labor costs and competitive costs compared to other countries in the region. Besides other names such as Thailand, Singapore, Philippines, Indonesia, Malaysia, each country has a different advantage to attract FDI enterprises from Japan, Korea, EU, USA, etc. However, Vietnam is still the expected destination of many investors.

As a landlocked nation with an extensive international port system throughout the country, Vietnam has a superior position in trading and exchanging goods with other countries. With the investment in infrastructure, the development of international seaports and airports, Vietnam is gradually becoming a destination for international investors. In addition, Vietnam’s infrastructure develops relatively evenly across regions, not so different between regions, so investors can freely choose the right investment location for themselves.

Vietnam is a country with a young population in Southeast Asia, a country with the lowest labor costs in Southeast Asia, the labor force in Vietnam is fully trained in many different fields. Not only that, workers in Vietnam are gradually improving their foreign language skills, so that they can meet the needs of international investors, which will make it easier for investors to find the suitable human resources. The human resources in Vietnam not only help businesses invest in Vietnam but also qualified to implement projects of investors in many other countries.

In addition, Vietnam is a politically stable country in the region and investors can be assured of making investments in Vietnam. Along with that, Vietnamese culture has many similarities with Japan and Korea, many investors can make investments without worrying about the cultural differences that will affect the project implementation.

At a time when the cost of doing business in other countries in the region is increasing, the demand for investment movement out of China of international investors is growing strongly, Vietnam needs to seize opportunities, improve infrastructure, create policy clearance, helping investors to attract maximum quality FDI investors to invest, set up company, obtain investment registration certificate and business certificate, transfer in investment capital, hire local people helping create the economic recovery process and business development in Vietnam.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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Market entery into Vietnam market through merger and acquisition

Over the past 10 years, Vietnam has always been one of the leading M&A destinations in Southeast Asia. Many international investors have chosen Vietnam as their place of business destination to set up company and apply for investment registration certificate under direct investment or acquiring shares or capital contributions through M&A.

M&A activities enable international businesses to take advantage of the existing business platforms of Vietnamese businesses to continue making investments. This helps international investors to timely grasp the changing trend of technology, legal policies, and facilities to do business, instead of rebuilding from scratch, it will take more time and effort.

Recently, the M&A market in Vietnam has been active and attractive to many investors around the world, especially in the retail and financial sectors. Many international investors have undertaken significant M&A deals in Vietnam over the years and achieved significant profits in their business.

There are many reasons for investors to choose Vietnam as a place to do business, but some of the main factors that make Vietnam attractive are political stability and its economic growth, despite the effects of the Covid-19 epidemic. In addition, with a population of 100 million people, this is considered a large consumption market, along with an abundant and high-quality labour source.

Currently, with the trend of moving production out of China, many investors have chosen Vietnam as the location of setting up company for manufacturing facilities. Rebuilding factories from scratch also makes investors time consuming and costly, therefore taking advantage of Vietnamese factories will help investors not to interrupt their production, and operate the business in a best way.

However, to be able to perform M&A activities in Vietnam, foreign businesses need to understand the Vietnamese market and partners before performing M&A. This will help investors understand the partners’ strengths and weaknesses, and outline a suitable business path after implementing M&A. In addition, to avoid unnecessary risks relating to the transaction and to the business itself, investors need to find a reputable and experienced professional consulting company that could help with market research, background check, management criminal record check, business certificate verification, corporate and individual reputation to build up confidence in doing M&A deal in Vietnam.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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UKVFTA- the cooperation between Vietnam and UK

On December 29th, 2020, representatives of Vietnam and the United Kingdom signed the free trade agreement negotiation between the Socialist Republic of Vietnam and the United Kingdom of Great Britain and Northern Ireland (UKVFTA) in London, United Kingdom. It would open up opportunities for flow of goods and that investors from UK to make investment in Vietnam through setting up company, and manufacturing facilities.

After December 31st, 2020, the Vietnam – EU free trade agreement (EVFTA) will no longer apply to the UK due to Brexit, so the implementation of the signing of a free trade agreement between the two countries is essential to sustaining and developing economic cooperation. The UKVFTA is expected to help reduce import duties on goods from the UK to Vietnam and vice versa. In addition, the commitments in the Agreement will help develop trade and investment between the two countries in the coming time.

In recent years, the UK is a major trading partner of Vietnam in Europe, the import-export turnover between the two countries has increased significantly, especially products of seafood, garments, wood products, agricultural products etc. Besides opportunities to promote exports, improve business investment environment, expand commodity supply, the UKVFTA also poses certain challenges in meeting the quality of goods to qualify for pressure tax incentives in the Agreement.

In order to make the most of the economic effects from the UKVFTA, there are UK investors to invest and produce products that meet the quality and demand conditions for the UK market is essential for Vietnam. Besides, in addition, the advantages of British investors such as finance, pharmaceuticals, chemicals…will benefit Vietnam. Investing in Vietnam in these industries will enable investors to take advantage of highly skilled labor, perfect facilities as well as investment attraction policies in Vietnam to bring the best benefits for investors. On that basis, Vietnam also learns the operations, management and experience from British investors, thereby helping to develop the domestic market. In addition, Vietnam also needs to import raw materials for UK manufacturing industries such as textile materials and leather to ensure compliance with the rules of origin in order to make the best use of incentives from the Agreement.

With the negotiation of the Agreement, this is a new beginning for the economic relationship between the two countries Vietnam and the UK during a period of many difficulties due to epidemics and economic crisis. In addition, this is a step towards further developing the diplomatic, cultural and educational relationship between the two countries in the future.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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Preferential import and export tariff according to EVFTA for the period 2020-2022

On September 18, 2020, the Government issued Decree No. 111/2020/ND-CP on Vietnam’s Preferential Export Tariffs and Special Preferential Import Tariffs to implement the Free Trade Agreement between The Socialist Republic of Vietnam and the European Union (EVFTA Agreement) for the period 2020-2022.

Accordingly, the Decree stipulates the Preferential Export Tariff, the Special Preferential Import Tariff of Vietnam to implement the EVFTA Agreement and the conditions for enjoying preferential export tax rates and special preferential import tax rates according to this Agreement.

The preferential export tariff specified in Appendix I to this Decree includes product code, description of goods, and preferential export tax rates for different stages when exporting to a territory under the EVFTA Agreement, including: European Union member territories; United Kingdom of Great Britain and Northern Ireland for each code.

Goods exported from Vietnam to which the preferential export tax rates are applied must satisfy the following conditions: to be imported into any territory specified in the EVFTA Agreement, including member territories of the European Union, United Kingdom of Great Britain and Northern Ireland; have transport documents (copy) showing the destination is the above territories; have the import customs declaration of the export consignment of Vietnamese origin imported into the aforesaid territories (the copy and translation in English or Vietnamese in case the language used on the declaration is not English).

Vietnam’s special preferential import tariff for the implementation of the EVFTA Agreement is specified in Appendix II to this Decree, including product code, description, and special preferential import tax rates according to stages are imported from the European Union member territory; United Kingdom of Great Britain and Northern Ireland; The Principality of Ando; The Republic of San Morocco and the Socialist Republic of Vietnam (Goods imported from non-tariff zones to the domestic market) for each product code.

Imported goods eligible for special preferential import tax rates under the EVFTA Agreement must satisfy the following conditions: in the Special Preferential Import Tariff specified in Appendix II to this Decree; be imported into Vietnam from the member territory of the European Union; United Kingdom of Great Britain and Northern Ireland; The Principality of Ando; Republic of San Mary; and the Socialist Republic of Vietnam (Goods imported from non-tariff zones to the domestic market); meeting the rules of origin of goods and having proof of origin in accordance with the provisions of the EVFTA Agreement.

The provisions of this Decree only apply to goods exported from Vietnam to the the United Kingdom of Great Britain and Northern Ireland and goods imported into Vietnam from the United Kingdom and Northern Ireland for the period from August 1, 2020, to the end of December 31, 2020.

This Decree takes effect from the date of signing.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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Regulations on opening individual payment account by electronic method

On December 4, 2020, the State Bank of Vietnam issued Circular No. 16/2020/TT-NHNN amending and supplementing a number of articles of Circular No. 23/2014/TT-NHNN dated August 19, 2014 of The Governor of the State Bank of Vietnam guides the opening and use of a payment account at a payment service supplier. Accordingly, the State Bank has supplemented instructions to open individual payment accounts by electronic method.

 

Banks and/or foreign bank branches that open payment accounts by electronic method must develop, promulgate and publicize the process and procedures for opening payment accounts by electronic method in accordance with regulations of the law, include at least the following steps: collect information about the application for opening a payment account as prescribed; check, compare and verify customer identification information; warn customers about actions not performed in the process of opening and using payment accounts opened electronically; provide the customer with the content of an agreement to open and use a payment account as prescribed and enter into an agreement to open and use a payment account with the customer; notify customers of the number, the name of the current account, the transaction limit through the current account and the date of commencement of operation of the checking account to the customer.

Banks and/or foreign bank branches shall evaluate on technological conditions to assess risks, determine the scope of use and decide to apply transaction limits via customers’ checking payment account by electronic method but must ensure that the total transaction value limit (debit) through that customer’s payment accounts does not exceed VND 100 million/month/customer.

Banks and/or foreign bank branches may decide to apply a transaction limit via an electronic payment account that is higher than the above limit in one of the following cases: banks, foreign bank branches apply video call to collect, check and verify customer identification information in the process of opening payment accounts to ensure efficiency such as identification and verification of customer information through face-to-face methods; banks and/or foreign bank branches apply the technology to check and compare customers’ biometric characteristics with citizen biometric data through the citizen identification database; after the bank, foreign bank branch has implemented the identification and verification of customer information through face-to-face meeting with the account holder; money transfer transactions for electronic savings and term deposits for the account holders at such banks, foreign bank branches; in cases where banks, foreign bank branches are allowed to actively debit the customers’ payment accounts as prescribed.

Opening payment accounts by electronic method specified in this Article does not apply to joint payment accounts, individual customer who is foreigner; a person who is aged between exactly 15 and nearly 18 years and does not have his/her incapacity or restricted capacity for civil acts; a person who is under the age of 15, has restricted capacity for civil acts or is incapable of civil acts as defined by the Law of Vietnam is entitled to open a current account via his/her legal representative; a person who has limited cognition and behavioral control as defined by the Law of Vietnam may open a current account via his/her guardian.

This Circular takes effect on March 5, 2021.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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What Are Responsibilities of the Seller for Inadequate Delivery of Goods?

Delivering and receiving goods are basic obligations of the parties when performing the Contract for purchase and sale of goods. Specifically, in accordance with the law, when buying and selling goods, the seller must deliver goods and relevant documents, as agreed in contracts on quantity, quality, packing and preservation modes and other contractual terms.

 

In cases where there is no specific agreement, the seller is obliged to deliver goods and relevant documents according to the provisions of the Law on Commerce. At the same time, the Buyer is obliged to receive the goods as agreed and perform reasonable actions to help the seller deliver the goods.

If the Seller fails to deliver insufficient goods, they must deliver the goods in accordance with the contract. In case the Seller fails to deliver the goods as agreed, the Buyer has the right to purchase the goods from another person for replacement according to the goods specified in the contract and the Seller must pay the difference and relevant expenses, if any; reserves the right to repair the defect of the goods by itself and the Seller shall pay actual and reasonable expenses for the rectification.

The Buyer has the right to request to apply for penalty if agreed in the contract. The penalty for a breach of a contractual obligation or the aggregate fine level for more than one breach shall be agreed upon in the contract by the parties but must not exceed 8% of the value of the breached contractual obligation portion.

In the contract, where a contract-breaching party delays making payment for goods or payment of service charges and other reasonable fees, the aggrieved party may claim an interest on such delayed payment at the average interest rate applicable to overdue debts in the market at the time of payment for the delayed period, unless otherwise agreed or provided for by law.

Thus, when the Seller fails to comply with the commitments as in the contract, the Buyer has the right to initiate a lawsuit requesting a court to force the Seller to return the received amount of goods equivalent for the goods not yet delivered, interest due to late payment, contract fines, compensation for damage as required. In case the parties do not agree to penalty for violation, the Buyer only has the right to claim damages. In case the parties agree to fine for violation, the Buyer has the right to apply both the sanction of the violation and the forced compensation for damage, unless otherwise provided by law.

For the determination of civil liability when violating the sale and purchase contract, according to law, each juridical person must bear civil liability for the civil rights and obligations established and performed in the name of the juridical person by its representative. Each juridical person must bear civil liability by recourse to its property; shall not bear civil liability for its members with respect to civil obligations established and performed by such members not in the name of the juridical person, unless otherwise prescribed by law. A member of a juridical person shall not bear civil liability of the juridical person for the civil obligations established and performed by such juridical person, unless otherwise prescribed by law. Therefore, if the Seller breaches the contract, the legal entity being the Seller is responsible to pay the Buyer and the legal person is not responsible for that legal entity.

It is important to engage lawyers at an early stage of the dispute for consultation on effective dispute resolution. It is also advised, when entering into the Contract for purchase and sale of goods, the Seller needs to understand the basic legal provisions on its rights and obligations. The Buyer also needs to know clearly about the obligations of the Seller in order to be able to prevent the risk that arises when one of the parties breaches a fundamental contractual obligation.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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What is Statue of Limitation for Initiating Legal Action According to Arbitral Procedures?

Arbitration law always set the the limitation period for request of dispute resolution. This means that the law applies a specific period for parties to bring the dispute to the arbitration. According to law on arbitration 2010 (“LOA”), unless otherwise provided by specialized law, limitation period for initiating legal action according to arbitral procedures is two years from the time of infringement of lawful rights and interests.

 

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There is no regulation in arbitration law regarding consequence of expiration of limitation period, but Civil Code 2015 (“CC”) stipulates that: “if such time limits expire, the right to initiate such legal action shall be lost”. Arbitration council shall not resolve expired requests, which means council shall not judge which parties is right or wrong. Therefore, enterprise needs to request within the statutory time limits in order to be resolved. If not, the request shall not be considered although there was request and related fees. In addition, it should be noted that the Court only applies time limits regulation at the request of a party or the parties provided that such request is filed before the first trial court of first instance makes a judgment, a decision on settlement.

However, there has been cases of non-applicability of limitation periods. Specifically, a limitation period for initiating legal action for a civil case shall not apply in any of the following cases: (i) Request for the protection of personal rights not associated with property; (ii) Request for the protection of ownership rights, unless otherwise provided by Civil Code or relevant laws; (iii) Dispute over land use right as prescribed in the Law on land; (iv) Other cases as provided by law. For instance, dispute over reclaiming deposited property is under case of non-applicability of limitation periods. Specifically, deposited property still belongs to ownership of depositor although the property had been transferred to depositary and reclaiming property is a measure protecting the right of property ownership, while dispute over the protection of ownership rights is under case of non-applicability of limitation periods.

In practice, the time between the time period of filing a lawsuit and the time period of infringement of lawful rights and interests can be longer than two years if there is time periods excluded from limitation periods for initiating legal action or there is re-commencement of limitation period for initiating legal action.

The time period during which one of the following events occurs shall be excluded from limitation periods for initiating legal action: (i) An event of force majeure or other objective hindrance which renders the person with the right to initiate legal action for a civil case or make the request not able to do so within the limitation period; (ii) The person with the right to initiate legal action for a civil case or to make the request is a minor or a legally incapacitated person, a person with limited cognition and behavior control or a person with limited legal capacity, and does not yet have a representative; (iii) The representative of a minor or a legally incapacitated person, a person with limited cognition and behavior control or a person with limited legal capacity has not yet been replaced in case that the representative being natural person dies or the representative being juridical person ceases to exist or in case that the representative, for good reasons, cannot continue his/her representation.

The limitation period for initiating legal action shall re-commence in any of the following cases: (i) The obligor has acknowledged part or all of its obligations to the plaintiff; (ii) The obligor has acknowledged or fulfilled part of its obligations to the plaintiff; (iii) The parties have become reconciled. The limitation period for initiating legal action for a civil case shall re-commence from the date following the date on which the above event occurs. Having said that, it is important to consult with dispute lawyers for the effective dispute resolutions should dispute arise.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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RCEP Helps Vietnam Accelerate Investment Attraction

Together with ASEAN countries, Vietnam absolutely has the opportunity to become a hub to attract foreign investment in Vietnam, especially from countries participating in the Regional Comprehensive Economic Partnership (RCEP).

 

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Finally, the RCEP was signed after 8 years of negotiations. Although it still has to wait a while for the 15 member countries, including 10 ASEAN member countries and 5 partners (including China, Japan, Korea, Australia and New Zealand) to approve, the assessment of the impact of the RCEP on the Vietnamese economy has been repeatedly confirmed.

The rules of origin procedures in RCEP bring significant advantages to Vietnam, whose economy is heavily dependent on imported materials. Vietnam is having a large trade deficit from Korea, China on raw materials for export production and it is always difficult for the origin of goods when exporting to many major markets around the world.

With RCEP, it is reported that Vietnamese enterprises can more easily access raw materials from member countries to produce export goods. For example, it is possible to import electronic chips from Japan and Korea; imported raw materials for textile and leather from China, then produced domestically and exported to other countries, at the same time satisfying the rules of origin within the bloc to take advantage of tariff preferences.

Not only with Vietnam, experts also agreed that RCEP is a favorable opportunity for all countries to participate in restructuring, repositioning supply chains and participating in global value chains. With RCEP, ASEAN is hoping to become the center of the global production chain. If we can do that, the chances for Vietnam are not small.

Vietnam has the opportunity to reshape and better exploit new positions, thereby building up a position in the global supply chain map. Of course, there will be an opportunity to attract investment. RCEP can help Vietnamese companies expand their markets, join regional supply chains and attract foreign investment.

Among the remaining 14 RCEP member countries, most are major investment partners of Vietnam. Even in the list of 10 countries and territories with large investment in Vietnam, there are 6 partners from RCEP. In which, the largest is Korea (70.38 billion USD), followed by Japan (59.89 billion USD), Singapore (55.7 billion USD), China (18 billion USD), Malaysia (12.8 billion USD), Thailand (12.5 billion USD).

Even without RCEP, foreign investment capital from these countries is still pouring into Vietnam, especially when Vietnam is the focus of attention of international investors, when investment flows are changing during Covid-19 period.

Currently, China, Japan, Korea and even Singapore, Thailand, Malaysia are speeding up investment abroad to expand production and supply chains. Vietnam is a safe and attractive destination. The opportunity to speed up investment attraction from RCEP member countries will be greater for Vietnam, especially when Vietnam is building many outstanding mechanisms and policies to catch the shifting investment inflows.

But with RCEP, the story is not just the investments between RCEP members. The prosperity, large market size of the RCEP bloc will also make it become the focus of global investors.

When proposing to negotiate RCEP, ASEAN countries also want to create a favorable environment to connect economies, creating opportunities for enhancing production capacity towards the goal of building ASEAN into a dynamic and unique economic region in terms of production and market.

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The cooperation between Da Nang and EU strengthen

On November 26th, 2020, representatives of Da Nang city meet and work with the delegation of EU countries to work in the city. The year 2020 marks the 30th anniversary of the establishment of Vietnam-EU diplomatic relations, which is also an opportunity for Da Nang to promote cooperation with EU partners in the coming time.

 

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In recent years, Da Nang has established relationships with many countries in the EU. Many cooperation programs and projects on socio-economic development of the city are coordinated with localities of many countries in the fields of environment, education, information technology, and tourism. Besides, the implementation of the EVFTA has helped the countries have more opportunities to cooperate, especially in the fields of investment and trade.

In addition, Da Nang city also commits to create the most favorable conditions for European investors to invest in Da Nang to set up company in the fields of environment, tourism, high technology, and building smart city.

The head of the delegation of the European Union said that economic activities towards green approaches and areas that focus on attracting investment in Da Nang such as high technology, digital transformation, responding to climate change etc. are also the areas that the European investors are interested in and prioritize towards. This is a great potential and opportunity for cooperation between the countries. With the advantage of European investors is the use of modern technology, digital transformation into production and business, this is completely suitable for Da Nang’s goal of attracting investment in this time.

At the meeting, the representatives of European countries highly appreciated Da Nang’s development efforts in recent years. The implementation of the Memorandum of Understanding with European countries, as well as many policies to attract European investment as well as administrative reform, helps create an open investment environment and create the best conditions for investors to do business, establish company, obtain investment certificate in Da Nang.

In the coming time, with many policies on investment and economic development cooperation between Europe and Da Nang, Da Nang city hopes that have many European investors will choose the city as their investment destination when expanding their investments in Vietnam.

 

 

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How Amendment to Contracts Can be Made?

Once a contract is made legally, contracting parties shall implement and such contract is respected by third parties. As stated in Civil Code 2015 (“CC”): “Each commitment or agreement that does not violate regulations of law and is not contrary to social ethics shall be bound by contracting parties and must be respected by other entities”. However, in the implementation process, the contract can be amended, which means, rights and obligation of parties can be amended accordingly.

 

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Due to the fact that the contract is result of before agreement, amendment shall follow certain conditions. According to laws, parties may agree to amend a contract. Enterprises need to pay attention to some following issues when amending the contract in the implementation process:

Firstly, entities participating in contract amendment is the matter which enterprises need to notice. Both contract and supplemental agreement are made on behalf of the parties, which means between two juridical persons. In reality, juridical persons only carry out transactions through representatives, it may be legal representative or authorized representative. Therefore, entities participating in contract amendment shall be representative of juridical persons. A civil transaction entered into and performed with a third person by a representative in accordance with his/her scope of authorization shall give rise to rights and obligations of the principal. Regarding consequence of civil transactions made by unauthorized persons or by representatives beyond scope of representation, such civil transactions shall not give rise to rights and obligations of the principal or not give rise to rights and obligations of the principal with respect to that part of the transaction which exceeded the scope of representation, except for any of the following cases: (i) The principal recognizes the transaction or gives consent; (ii) The principal knows it without any objection within an appropriate time limit; (iii) It is the principal’s fault that the other party does not know or is not able to know that the person entering into and performing the civil transaction therewith was unauthorized or beyond his/her scope of representation. In above circumstances, the unauthorized person must fulfill the obligations to the person with which he/she transacted or the obligations owning to the person with which he/she transacted in respect of the part of transaction which is beyond the scope of representation, unless such person knew or should have known that the representative was unauthorized or the scope of representation was exceeded but still transacted. A person having transacted with above representative has the right to terminate unilaterally the performance or to terminate the made civil transaction or to terminate the civil transaction with respect to that part which is beyond the scope of representation or with respect to the entire transaction and to demand compensation for any damage, except that such person knew or should have known that that the representative was unauthorized or the scope of representation was exceeded or the case of which the principal recognizes the transaction or gives consent. If above representatives and the other party in a civil transaction deliberately enter into and perform such transaction and thereby cause damage to the principal, they must jointly compensate for the damage.

Form of agreement on amending contract is the second matter which needs to be taken into consideration. Amendment shall comply with the form of the initial contract. For instance, if the initial contract is made in written, notarized, certified, registered, the amendment shall follow such forms. The form of contract shall be the conditions for its effectiveness in cases where it is provided by law. Therefore, the form of amended contract shall be the conditions for its effectiveness in cases where it is provided by law. In invalid contracts, the general rule is restoring everything to its original state and returning to each other what have received. The condition for the contract of non-compliance with form recognized by the Court’s decision is that one party or the parties has fulfill at least two third of the obligation contract. However, not one party or the parties fulfilling at least two third of the obligation contract will naturally make such contract invalid but there must go through the Court. 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. This principle also applies to contracts amendment. It is important that parties to consult with lawyers at early stage to anticipate matters of dispute and clearly have clauses drafted to avoid potential future disputes.

 

 

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The Wave of New Technology Companies Wants to Choose Vietnam as the Destination

After the wave of technology companies pouring capital into Vietnam 10 years ago, there seems to be a wave of new technology companies wanting to choose Vietnam as their destination.

Last weekend, LG (Korea) went to Dong Nai to seek investment opportunities in items related to digital transformation and building smart cities in this province. According to representatives of LG, the Group is cooperating with a number of major corporations in the world to produce and supply 4.0 technology to deploy large smart city projects for some countries around the world.

Dong Nai is implementing smart city project, so LG Group wants to participate in some categories, such as smart industrial parks, smart transportation, smart health care, smart factories, smart logistics… Funding to implement a smart city is about 15,000 – 20,000 billion VND.

Even as LG, after making its mark with the production complex of electronics, home electronics in Hai Phong (including 3 factories LG Electronics, LG Display, LG Innotek), at the end of last year, also set the ambition to make Da Nang become the Group’s information technology research and development (R&D) center in Vietnam. And now, although the information is not very specific, there is also a new investment direction.

The fact that Vietnam is promoting digital transformation has also attracted special attention from Taiwanese businesses. According to PwC’s research has just been published, the importance of Vietnam for Taiwanese businesses has increased from 18% in 2018 to 24% by the end of 2020 and ranked 4th, after the US, Japan and China.

According to Taiwanese PwC, the fact that the Vietnamese Government is actively focusing on promoting digital transformation will almost be a free ‘preferential’ policy for all foreign businesses to invest in Vietnam. Because, the impact of digital transformation not only helps reduce production costs, but also promotes efficiency and business performance here.

About 2 weeks ago, the leaders of Bac Giang province had a meeting to discuss with departments and branches to push up the clearance progress of Quang Chau Industrial Park (Viet Yen, Bac Giang). This industrial park has a total area of 426 hectares, but currently only 336 hectares have been cleared ground, the remaining 90 hectares have not.

Under the direction of the Vice Chairman of Bac Giang Provincial People’s Committee, the People’s Committee of Viet Yen district must focus highly on the work of site clearance for the remaining area, ensure early handover to the investor, even consider this is the top priority task.

It is easy to understand why Bac Giang province is so impatient. Provincial leaders want to soon hand over the entire premises of this project so that they can “welcome strategic investors”. The details have not been disclosed, but it is most likely related to the Foxconn Group’s investment expansion project that is about to be deployed in this industrial park. And most likely, this is the project that has been mentioned for a long time – 270 million USD, producing smart TV for a famous brand.

Meanwhile, Luxshare Group, after investing in building a factory in Van Trung Industrial Park, is also implementing another project in this industrial park, with an investment of 190 million USD. According to Luxshare-ICT Van Trung General Director, this new factory specializes in manufacturing all kinds of wireless headsets (bluetooth), smartwatches and bluetooth speakers.

In addition to the factories in Bac Giang, Luxshare is also in the process of expanding its investment in a factory in Nghe An. Meanwhile, Wistron Group has invested 273 million USD project in Ha Nam, while Pegatron Group has invested 2 projects 500 million USD in Hai Phong.

Looking at this angle, it seems that there is a next wave of investment in the high-tech sector pouring into Vietnam. In a report titled “Rising Star: The Role of Vietnam in Transforming Supply Chains in Asia”, according to Economist Intelligence Unit (EIU), Vietnam is still an interesting option for manufacturing operations and those looking to diversify supply chains in Asia.

According to the EIU, high-tech manufacturers will continue to receive incentives for many years to come and that is an advantage, so that along with other advantages, for example joining many trade agreements, Vietnam will become “a very convenient alternative name for a part of Chinese production”.

We are a law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

 

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Benefits of retaining a Real Estate Lawyer in Vietnam

Benefits of retaining a Real Estate Lawyer in Vietnam

Due to changes in law attracting foreigners to come to live, and invest in Vietnam, foreigners have growing interest in investment and acquiring real estate.  However, as real estate is valuable assets, the law on real estate ownership and real estate transactions are complicated, especially for foreigners.

Under the land ownership regime in Vietnam, land belongs to the entire people with the State acting as the owner’s representative and uniformly managing land. Hence, in Vietnam, the land users will have the land use right without the private ownership of the land.  Land law 2013 does not allow foreigner to have land use rights in Vietnam. It only allows foreign invested enterprises to be permitted to use land through the form of land allocation or lease.

Although foreigners do not have land use rights in Vietnam, they are allowed to own houses in Vietnam under the Law on Housing. In addition, the Law on Real Estate Business has certain limitations for foreign investors to conduct real estate business in Vietnam and must meet the legal requirements.

Foreign investors investing in Vietnam wish to use the land to conduct business activities, or intend to conduct real estate business in Vietnam, or simply a foreigner wishing to purchase and own real estate in Vietnam should be aware of the legal provisions on conditions of implementation, orders and procedures to of the transactions to minimize risks.  The assistance of the lawyers on real estate in Vietnam shall be worthwhile.

Real estate lawyers in Vietnam would have in-depth knowledge of the Land Law, Law on Housing, Law on Real Estate Business and related regulations. In addition, they would have practical experience in implementing legal procedures, handling disputes, and supporting real estate transactions in Vietnam. The real estate lawyers could explain the restrictions on land use rights of foreign organizations and individuals in Vietnam and the conditions for conducting business in real estate in Vietnam.  The lawyers at request could assist the foreigners with the process and procedures to work with state agencies to obtain land use rights for enterprise and home ownership rights for individual more effectively.

When conducting transactions related to real estate such as buying, selling, transferring, renting, leasing, real estate lawyers could also provide assistance in in legal due diligence of the real estate to minimize legal risk to clients. It is important to evaluate the legal status of the property, the owner of property, whether property is in dispute, or subject to additional requirements of government before being sold by the developer and the people eligible for entering into the transaction. In addition, the lawyers in Vietnam can advise clients to draft or review the agreements, sales contract as well as the process to legalize the process to comply with the law in Vietnam.

We are a law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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