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Getting The Deal Through

Country overview

1 Give an overview of the country’s economy, its structure and main characteristics, and prevailing government economic policy, particularly as regards foreign investment.

Vietnam’s shift from a centrally planned to a market economy has transformed the country from one of the poorest in the world into a lower middle-income country. Vietnam now is one of the most dynamic emerging countries in East Asia region.

Over the 30 years since the unification of the country, Vietnam has had a remarkable development record, from one of the world’s poorest nations to a lower middle-income in Southeast Asia. Its economy continues to show fundamental strength, supported by robust domestic demand and export-oriented manufacturing. The extreme poverty rate is estimated to have declined to below 3 per cent. Following 6.8 per cent growth in 2017, preliminary data indicate that GDP growth accelerated to 7.1 per cent in 2018, underpinned by a broad-based pickup in economic activity. Small and medium-sized enterprises play a major role in Vietnam, accounting for 98 per cent of all enterprises, 40 per cent of GDP, and 50 per cent of employment. The number of SMEs has grown by around 100,000 in 2016, driven mostly by government reforms. Vietnam’s growth is projected to moderate to 6.6 per cent in 2019, driven by credit tightening, slower private consumption and weaker external demand. Inflationary pressures are projected to remain moderate, due to subdued global demand conditions and moderate global energy and food prices. Over the medium term, growth is projected to stay around 6.5 per cent, as the impact of current cyclical uptick dissipates. Poverty is expected to decline further, as labour market conditions remain favourable. Over the past 30 years, the provision of basic services has significantly improved. Vietnam is today a significantly more educated and healthy society than 20 years ago, and these qualities are equitably distributed. Coverage and learning outcomes are high and equitably achieved in primary school – evidenced by remarkably high scores in the Programme for International Student Assessment, where the performance of Vietnamese students exceeds that of many OECD countries. Vietnam is ranked 48 out of 157 countries and territories in terms of human capital index, second in the Association of Southeast Asian Nations (ASEAN) behind Singapore. A Vietnamese child born today will be 67 per cent as productive when he or she grows up as he or she could be if he or she enjoyed complete education and full health. (*)

(*) Source: Worldbank

Vietnam’s total population reached 93.7 million in 2017 and is estimated to increase to 98 million by 2020. Vietnam enjoys what is known as the ‘golden population structure’, which means for every two people or more working , there is only one dependent person. Vietnam’s ‘golden population structure’ is predicted to last until 2035, with about 66 per cent of the population in working age and each year more than 1.5 million people joining the labour force (Source: Vietnam General Statistics Office).

Vietnam is a member of Asia-Pacific Economic Cooperation (APEC), ASEAN and the World Trade Organization (WTO).

Legal overview

2 Describe the legal framework and legal culture in your jurisdiction as regards business and commerce.

Vietnam legal system

Vietnamese legal system is influenced by eastern and western legal traditions, the French civil law system and Soviet communist legal ideology. In the late 1980s, Vietnam adopted its Doi Moi (Renovation) policy. This transformed Vietnam’s economy from a centrally planned economy to a market-oriented economy. Following the Renovation policy, many areas of law have been shifted from socialist-based models to those typically found in a western legal system.

Vietnam’s legal system is evolving fast and the legislation work has been significantly improved. In line with the increasing number of legal texts, the Official Gazette has increased its rate of publication from two issues per month in 1995 to daily in 2004. The number of laws and other legal texts increases rapidly. As of early 2003, legal texts must be published in the Official Gazette as a compulsory condition for becoming effective. This compulsory publication is a great improvement compared to the previous situation where most of legal texts became effective 15 days after the date of signature and not all legal texts were published. The dynamism and transparency of the legal system, as a result, were improved significantly.

Source of law

Three main sources of law in Vietnam are:

  • legislation (legal normative documents) is the most important source of law. The Constitution is the supreme law;
  • judicial decisions are not sources of law in Vietnam. However, guidelines on the interpretation of laws are issued in the form of Resolutions by the Judge Council of the People’s Supreme Court (article 21). This guidance is a source of law (article 4); and
  • treaties – ratified treaties are a source of law.

Legislative process

The legislative process and procedures of the National Assembly include the following steps:

  • develop legislative programme;
  • Ethnic Council and Committees of the National Assembly verify bills;
  • the National Assembly Standing Committee gives opinions on bills; and
  • the National Assembly examines and approves bills.

Main types of legal instrument

The main types of legal instrument in Vietnam are:

  • laws – drafted by the relevant Ministry and approved by the National Assembly at one of its twice-yearly sittings, after being first approved by the government;
  • decrees – a statement of significant legal importance issued by the government, without reference to the National Assembly, establishing detailed rules beneath a law; and
  • circulars and decisions – issued by the Ministry responsible for drafting the relevant Law and Decree, providing policy guidance for how the Law and Decree will be implemented.

Each of these legal instruments has the force of law and must be complied with.

  • Litigation and alternative dispute resolution
  • Litigation

There is a culture of litigation, with settlements being less common than in other jurisdictions. The highest court in the country is the Supreme People’s Court. Underneath the Supreme People’s Court are three levels of courts: the superior people’s courts, of which there are three; the provincial-level people’s courts, of which there are 63; and district-level people’s courts 3, which is the lowest level. The superior courts are appellate courts based in Hanoi, Danang, and Ho Chi Minh City, each responsible for the northern, central and southern region of the country, respectively. Provincial and municipal courts are both trial courts and appellate courts, while district courts are trial courts. There are military tribunals established at various levels in the Vietnam People’s Army, the highest one being the Central Military Tribunal, which is subordinate to the Supreme People’s Court. The Supreme People’s Court is headed by the Chief Justice of the Supreme People’s Court, who is appointed by the National Assembly of Vietnam.

Culturally, Vietnam is not a litigious society. A large number of disputes are resolved outside of court, by alternative dispute resolution.


Vietnamese laws highly emphasise the role of mediation. Mediation is a mandatory part of certain litigation procedures such as civil litigations, labour and marriage and family litigations. The state encourages the resolution of civil and family disputes and violations of the law that do not amount to criminal offences by means of mediation. At the local community, groups of non-professional mediators are set up to carry out this mediation mandate.

In 2019, the Supreme People’s Court is working a draft law on mediation and dialogue at court, emphasising the state policy of encouraging parties to settle civil cases and matters and administrative lawsuits through mediation and dialogue at court.

On 7 June 2019, first Vietnam International Commercial Mediation Centre was launched, promised to bring a time-saving and cost-effective approach to commercial disputes settlement to businesses.


Arbitration is a possible alternative for dispute resolution in Vietnam but restricted for commercial disputes only. Arbitration was not a popular dispute resolution means in Vietnam due to weak enforceability. Since the adoption of the new Ordinance on Commercial Arbitration in 2003, arbitration award given by a Vietnamese arbitration tribunal is automatically enforceable (ie, the parties do not have to bring the award to courts for a decision for its execution. With the recent reform, it is hoped that Vietnamese arbitration centres are referred to more often and grow more rapidly. The most well-known Vietnamese arbitration organisation is the Vietnam International Arbitration Centre at the Vietnam Chamber of Commerce and Industries.

Vietnam has been a member of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Foreign investors tend to refer to foreign arbitration whenever they can due to lack of confidence in the capability and transparency of Vietnamese courts. Until recently, the execution of foreign arbitral awards was troublesome due to the narrow definition of ‘commercial activities’ under Vietnamese law. The New York Convention only guarantees national recognition of foreign arbitral awards on issues considered of commercial nature under the national law. The recent expansion of the ‘commercial activities’ concept was a big step in Vietnamese legal reform.

Legal framework relating to business and commerce

The general legal environment in Vietnam is regarded by investors as complicated. Investors report that the Vietnamese legal framework is ‘severely deficient in transparency, consistency and dependability’. An unpredictable and unstable legal environment is the top concern for both local and foreign investors in Vietnam.

Willing to better business environment, the Vietnam government has undertaken a significant reform programme to attract more foreign investment to the country that might change the investment and business landscape.

Vietnam’s Decree Number Five whose purpose was to restructure the economy in order to transform Vietnam into a high-technology, highly productive and globally competitive industrial nation. In terms of practical policy, this includes reducing bureaucratic red tape, ‘by uncertainty’, and expanding the availability of publicly available business information.

Vietnam has reinforced its commitment to global economic integration through its enacting of Resolution No. 22. This clearly indicates the government’s commitment to the country’s integration into the world economy as well as efforts to both liberalise and industrialise the economy. At the same time, the government is carefully balancing increased economic growth with macroeconomic stability. This has resulted in the issuing of Resolution Number One as part of the government’s ongoing efforts to ensure macroeconomic stability and sustainability.

Prior to joining the WTO, Vietnam revamped much of its legal system, making revisions of major legal frameworks, specifically Labour Code, Land Law, Civil Code, Law on Securities, Law on Competition, Enterprise Law and Investment Law, to make the investment environment more transparent. 

3 What are the main sources of civil and administrative law applicable to companies?

These are:

  • the Law on Enterprises (No. 68/2014/QH13, adopted on 26 November 2014);
  • the Law on Investment (No. 67/2014/QH13, adopted on 26 November 2014);
  • the Civil Code 2015;
  • the Labour Law 2013;
  • the Law on Tax Administration 2019 (come into effect on 2020), Law on Value-Added Tax 2008, Law on Enterprise Income Tax 2008, Decree 39/2016/ND-CP Regulation on licensing fees, etc;
  • the Intellectual Property Law 2005 (amended and supplemented in 2009); and
  • The Law on Land 2013.

Dispute resolution

4 How does the court system operate with regards to large commercial disputes?

The organisational court system of Vietnam in charge of commercial disputes consists of (i) the Supreme People’s Court; (ii) high-level people’s courts; (iii) people’s courts of provinces, municipalities (provincial people’s courts); and (iv) people’s courts of districts, towns, provincial cities and the equivalent (district people’s courts).

The two-level trial (first instance and appeal) is guaranteed. First instance judgments or decisions could be appealed or protested according to the appellate procedure. Appellate judgments or decisions become legally effective at the announcement date. First instance judgments or decisions that are not appealed or protested according to the appellate procedure shall take legal effect within the prescribed time limit.

There are special procedures to reconsider the effective judgements or decisions of courts, called a judicial review procedure if there are signals of conclusion in the judgment or decision is incompatible with the objective details of the cases, causing damage to legitimate rights and interests of the involved parties, or there are serious violations against procedures, or there are mistakes in the application of law leading to the issuance of wrong judgments or decisions;  or retrial procedure if there important details of the case were newly discovered, which the involved parties could not have known in the course of resolving the case, or there are grounds to prove that the conclusions of the expert witnesses and translations of interpreters were untruthful or evidence was falsified, etc.

The jurisdiction of Vietnamese courts is not based on value of the dispute. Under the Civil Procedure Code, the district People’s Court has competency to resolve at first instance level the disputes arising from commercial business activities between individuals, organisations having business registration and for profit purposes. Economic courts of provincial People’s Courts have competency to resolve at first instance level:

  • other disputes on commercial business activities between a company and its members;
  • disputes between a company and a managerial personnel in a limited liability company;
  • or a member of board of directors, a director or a general director of a joint stock company, between members of a company regarding the establishment, operation, dissolution, merger, consolidation, division, splitting, asset transfer of a company, transformation of organisational form of a company.

Economic courts of provincial People’s Courts are competent to settle according to the appellate procedure on cases where non-legally effective first instance judgments or decisions of district People’s Courts under territorial jurisdiction are appealed or protested. High-level People’s Courts are competent to resolve according to the appellate procedure cases where non-legally effective first instance judgments or decisions of provincial People’s Courts under territorial jurisdiction are appealed or protested.

In addition, Vietnamese law has regulations on territorial jurisdiction. Accordingly, if the parties involved do not have any agreement otherwise, the court where a defendant resides or works (in the case of individual defendant) or where a defendant is headquartered (in the case of organisational defendant) has competency to resolve the dispute at first instance level. If the object in dispute is real estate, only the court where such real estate located has competency to settle the dispute.

Currently, the Supreme People’s Court is implementing a trial program for the purpose of promoting mediation at the court with respect to civil and administrative disputes, including commercial disputes. Accordingly, before accepting a petition dossier, the case could be transferred to the Mediation Centre under such court to implement mediation procedure. This trial programme is currently implemented by provincial courts in 16 provinces or cities and some District People’s Courts in these provinces or cities, including but not limited to Hanoi, Ho Chi Minh and Hai Phong. However, upon a litigant’s request, this procedure maybe overlooked and the competent court shall apply normal procedure.

5 What legal recourse do consumers typically have against businesses?

Pursuant to the provisions of Law on Protection of Consumer Rights No. 59/2010/QH12 dated 17 November 2010, consumers are entitled to request directly or in writing that the state authorities resolve cases where organisations or individuals doing business of goods or services commit a violation of the legislation on the protection of consumer rights that causes damage to benefits of many consumers and the public. In addition, according to Decree 99/2011/ND-CP dated 27 October 2011, Vietnam Competition Authority – Ministry of Industry and Trade and Department of Industry and Trade – Provincial People’s Committee are also the competent authorities on protection of consumers’ rights.

In addition, consumers also enable to request the support, assistance and advices from the Consumer Associations in case their interests are violated because of the legislation violations of business organisations or individuals. The Consumer Association, which is a social organisation established in accordance with the law and operated under charter, is eligible for participating in activities on protection of consumer rights.

The enforcement of the Law on Protection of Consumer Rights is highly effective. According to the 2016 Consumer Survey Report of the Vietnam Competition Authority, up to 71 per cent of the survey respondents being aware of basic rights of consumers. Moreover, the role of state management authorities on protection of consumer rights is increasingly effective. Specifically, in 2017, the Vietnam Competition Authority received and handled about 412 consumer complaints and requests, of which, 405 cases were successfully handled or referred to the competent authorities to handle, accounting for about 98 per cent. In the first six months of 2018, the Competition Authority successfully handled or transferred to the competent authorities to handle 275 cases out of 282 received cases (accounting for over 95 per cent).

6 How significant is arbitration as a method of dispute resolution?

In recent years, method of dispute resolution by arbitration is increasingly appreciated and gradually popular in Vietnam.

The state of Vietnam also shows supports and encourages the parties to choose arbitration for commercial dispute resolution. This move partly alleviates the increasing overload of courts and on the other hand, ensures the integration of Vietnam in term of international law. Specifically, on 17 June 2010, the Law on Commercial Arbitration No. 54/2010/QH12 (Law No. 54) was promulgated to replace the Ordinance on Commercial Arbitration No. 08/2003/PL-UBTVQH11 (Ordinance No. 08). Accordingly, the scope of jurisdiction to resolve commercial arbitration disputes has been expanded and dictated more specifically.

Previously, the scope of the jurisdiction to resolve commercial arbitration disputes was limited in both the disputing parties (individuals, organisations doing business) and the legal relationship (arising from commercial activities) according to Ordinance No. 8. Law No. 54 expanded the scope of the jurisdiction by allowing parties to agree on resolving disputes by commercial arbitration when there is at least one party involved having commercial activities and it does not specify that dispute arises from commercial activities.

The statistics also show an increase in the number of disputes that were resolved by arbitration in recent years. Specifically, according to the statistics of the Vietnam International Arbitration Centre (VIAC), (one of the biggest arbitration centres in Vietnam), the total disputes resolved by VIAC in 2015 are 146; in 2016 are 155, in 2017 are 151 and 180 cases in 2018. However, compared to the number of commercial business cases settled by the court, the number of disputes resolved by arbitration accounting for a very small proportion, specifically in 2018, the court accepted 15,439 cases under the first instance procedure.

One of the reasons that the parties concern when choosing arbitration for dispute resolution in Vietnam is that there are many cases, after being resolved by commercial arbitration, having final arbitral awards but not enforceable due to the Vietnamese courts, by their jurisdiction, issued decisions to cancel awards of commercial arbitration. This situation has been gradually overcome, typically in the case of VIAC, there is no VIAC’s awards in 2015 cancelled by the Vietnamese courts.

7 What other methods of dispute resolution are commonly used?

Apart from dispute resolution by Court and Commercial Arbitration, the parties also enable to choose other dispute resolution method through mediation. Specifically, on 24 February 2017, the government promulgated Decree No. 22/2017/ND-CP on commercial mediation (Decree No. 22), accordingly, the scope of dispute resolution by commercial mediation includes: disputes between parties arising from commercial activities, disputes between parties of which at least one party has commercial activities and other disputes between parties as prescribed by law. This method offloads the burden on the court system and enhances an institution consistent with the context of Vietnam’s extensive international integration.

Prior to Decree No. 22, the mediation agreed by the parties (except for mediation in commercial arbitration and court proceedings) was not binding after the parties had reached successful mediation. The results are not prescribed in any legal documents. Therefore, Decree No. 22 created a legal basis for parties to have an additional option in dispute resolution with many advantages: maintaining the relationship between the parties and limiting the expense of time and money, moreover, being enforced in accordance with the law on enforcement of civil judgments after completing the recognition procedures at the court. Therefore, this method will be widely used in Vietnam in the coming time.

8 How easy is it to have foreign court judgments and foreign arbitral awards recognised and enforced in your jurisdiction?

In principle, a request for recognition and enforcement of foreign arbitral awards in Vietnam should be convenient and without difficulty because Civil Procedure Code No. 92/2015/QH13 and bilateral treaties on mutual legal assistance that Vietnam has signed with some countries have specific provisions on principles and procedures for the recognition and enforcement of both foreign arbitral awards and judgments, decisions of foreign courts. Moreover, Vietnam is also a member of the 1958 New York Convention on recognition and enforcement of foreign arbitral awards. 

However, there are not many cases where Vietnamese courts make decisions of recognition and enforcement of foreign arbitral awards in Vietnam. According to statistics of the Supreme People’s Court of Vietnam, from 1 January 2005 to 20 June 2014, only 28 out of 52 foreign arbitral awards were recognised in Vietnam (accounting for 53 per cent of the required awards). Cases of non-recognition and non-enforcement in Vietnam are mainly due to violations of dispute resolution procedures at foreign arbitration or the recognition and enforcement in Vietnam of foreign arbitral awards contrary to the basic principles of Vietnamese law.

Foreign investment and trade

9 Outline any relevant treaty organisations, economic or monetary unions, or free trade agreements.

Vietnam is an active member of international organisations, for instance: the United Nations, WTO, Association of Southeast Asian Nations (ASEAN), the Asia-Europe Meeting (ASEM), APEC, the World Bank and the International Monetary Fund.

In the economic integration process, Vietnam has signed various free trade agreements (FTAs). In 1995, the country joined the Association of Southeast Asian Nations (ASEAN) and the ASEAN Free Trade Agreement, followed by ASEAN agreements with China, Korea, Australia and New Zealand, India and Japan. In 2000, it signed an FTA with the US. In 2007, Vietnam joined the WTO. Since 2009, Vietnam has signed a number of bilateral trade agreements (BTAs) with Japan, South Korea, Chile. In the end of 2015, Vietnam and other nine ASEAN countries officially established ASEAN Economic Community (AEC). Especially, 2019 marked a significant milestone of Vietnam’s economic integration with the execution of the EU–Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

10 Are foreign exchange or currency controls in place?

In Vietnam, the State Bank of Vietnam (the SBV) functionates the foreign exchange and currency controls by the Law on State Bank, Ordinance on Foreign Exchange, Law on Credit Institutions and their guiding documents.

In principle, the SBV basically controls foreign exchange and currency through (i) appropriate exchange management mechanism, currency market intervention and regulation, (ii) gold trading management, (iii) foreign exchange management of current transactions and foreign currency use on Vietnamese territory, and (iv) foreign exchange management of capital transactions such as management of foreign loan and repayment, foreign lending and collecting foreign loans, foreign exchange management of foreign investment into Vietnam and outbound investment from Vietnam.

11 Are there restrictions on foreign investment?

Under the Law on Investment 2014, there are six prohibited business investment activities including: trade in certain narcotics; trade in certain hazardous chemicals and minerals; trade in certain endangered or rare wild flora and fauna; prostitution; human trafficking; trade in human tissue and body parts; business related to human cloning.

In addition, there is a number of industries in which foreign investment is conditional. These basically include transport service; real estate trade; distribution; business and production of specific goods such as cigarette, stamp, cannon; telecom service; construction; education. The limitations of foreign investment may be imposed in terms of foreign ownership, investment form, scope of operation and Vietnamese partnership.

12 Are there grants, incentives or tax reliefs for foreign investors or businesses?

Investment incentives are provided in the following forms:

  • a lower rate of, exemption from or reduction of corporate income tax;
  • exemption from import duty on goods imported to form-fixed assets, raw materials, supplies and components for implementation of the investment project; and/or
  • exemption from, or reduction of, land rent, land use fees and land use tax.

To be enjoyed these above incentives, an investment project must be a new or expanded project and satisfies one of the following conditions:

  • investment project in a ‘preferential investment industry and trade’, mainly including production of new materials, renewable resources, garment or textile products;
  • investment project located at ‘preferential investment geographical areas’ including industrial zones, export processing zones, high-tech zones, economic zones and areas with difficult socio-economic conditions and especially difficult socio-economic conditions;
  • investment capital must be 6,000 billion dong or more, of which at least 6,000 billion dong is disbursed for a period of three years from the date of issuance of the investment approval;
  • investment project located in a rural area and employ 500 employees or more; and
  • the project must be a high-tech company or a scientific or technological enterprises.

A lower rate of, exemption from or reduction of corporate income tax basically shall be applied as follows:

  • Tax exemption for four years, reduction of 50 per cent of tax payable for the next nine years, incentive tax rate of 10 per cent within 15 years applied to: income of enterprise from performing new investment projects in the area with extremely difficult socio-economic conditions, economic zones, high-technology zones; income of enterprise from performing new investment project in the fields of scientific research and technological development, application of high technology, hi-tech incubation, hi-tech enterprise incubation, venture capital for high-tech development, construction investment and business of high-tech incubator, high-tech enterprise incubator, investment and development of water plants, power plants, water drainage and supply system, bridges, roadway, railway, airports, seaports, river ports, railway stations and extremely significant infrastructure that shall be decided by the Prime Minister; production of software products, production of composite materials, light building materials, rare materials, production of renewable energy, clean energy, energy from waste destruction and biotechnology development, income of enterprises from performing new investment projects in the field of environmental protection, hi-tech enterprises and agricultural enterprises applying hi-tech; Income of enterprise from performing new investment projects in the field of socialisation.
  • Tax exemption for four years, reduction of 50 per cent of tax payable for the next five years for enterprise’s income from performing new investment projects in the field of socialisation
  • Tax exemption for two years, reduction of 50 per cent of tax payable for the next four years for incomes from performing new investment projects in the areas with difficult socio-economic conditions, Income of enterprise from performing new investment project: production of high-quality steel, energy saving products, machinery and equipment for agriculture, forestry, fishery and salt industry; production of irrigation and drainage equipment; production, refining of cattle, poultry and aquatic animal feed; development of traditional industries. and enterprise’s income from performing new investment projects in industrial parks (except for industrial parks located in the areas with advantageous socio-economic conditions); and
  • Tax rate of 17 per cent for 10 years applied to: the income of an enterprise from new investment projects in areas with difficult socio-economic conditions; income of an enterprise from a new investment project: production of high-quality steel, energy-saving products, machinery and equipment for agriculture, forestry, fishery and salt industry.

13 What are the main taxes that apply to cross-border or foreign-owned business and investors?

To run a business in Vietnam, foreign investor should be aware of the following major taxation:

  • Corporate income tax (CIT): imposed on the profits of entities implementing manufacture of or business in goods and services. The standard CIT rate is 20 per cent. For companies investing in oil, gas and mineral resources, the CIT rate may reach to 50 per cent.
  • VAT levied on goods and services used for manufacturing, business and consumptions in Vietnam (including goods, services purchased from foreign entities). Import goods is also subject to VAT. The standard VAT rate is 10 per cent. For exported or essential goods and services, the VAT rate may be applied at zero per cent or 10 per cent.
  • Business licence fee (BLF): Payable at the time of setting up business and subsequently on an annual basis. The tax amount is calculated based on the registered charter capital of the enterprise. For enterprises with a charter capital of 10 billion dong or lower, the BLF payable is 2 million dong per annum. For enterprise with charter capital of more than 10 billion dong, payable BLF is 3 million dong per annum.
  • Personal income tax (PIT): levied on individuals’ business income of more than 100 million dong per annum, capital investment income, capital transfer income, copyright or franchising income and other incomes regulated by laws. The PIT rates applied to resident individuals are progressive from 5 per cent to 35 per cent. The PIT rates applied to non-resident individuals are fixed, for instance the PIT rate for capital transfer income is 0.1 per cent of the transfer price.


14 Which industry sectors are regulated or controlled by the government?

Under the Vietnamese law, trader is granted to freely select business lines and conduct business in Vietnam, except for prohibited business lines and conditional ones under the Law on Investment 2014, which are strictly controlled by the government. Currently, there are 243 conditional business sectors under the Law on Investment and its amendment, generally including ‘sensitive’ sectors in relation to banking, issuance of securities, accounting, auditing, education, transport, real estate, etc. To invest in these areas, enterprises are required to satisfy all the regulatory conditions.

15 Who are the key industry regulators, and what are their powers?

In Vietnam, the National Assembly is the highest organ of state power of Vietnam, having main functions of making the Constitution and laws, deciding on the legislative programme and supreme supervision of all activities of the state.

Below the National Assembly is the government, the supreme state administrative organ of Vietnam. The government oversees the regulations of laws and performs the function of state management of all activities. The government has 18 ministries and four ministerial-level agencies that administer different sectors.

Under the government are the people’s committees, local administrative organs exercising state power at provincial, district and commune levels. Their function is to organise and ensure implementation of the Constitution and laws in their locality and decide on local issues. People’s committees are supported by specialised bodies (departments or offices) in specific areas.

People’s courts are the judicial organs of Vietnam, in charge of performing judicial work (eg, settlement of disputes and claims).

16 What are the other main enforcement authorities relevant to businesses?

Enforcement authorities relevant to businesses are under Ministries, People’s Committees and specialised bodies in specific areas as mentioned before (eg, the Vietnam Competition Authority is under the Ministry of Trade and Industry of Vietnam, Authority of Information Security is under the Ministry of Information and Communications).

17 On which areas have regulators particularly focused their recent enforcement activities?

Recently, Vietnamese regulators have focused their enforcement activities on the following areas: corruption prevention, plant production and animal husbandry, national defence, competition, cybersecurity, securities, investment and business, labour and construction.


18 What are the principal bribery, corruption and money laundering concerns for businesses?

Bribery, corruption and money laundering are criminal crimes under the laws of Vietnam. As per the Criminal Code 2015 as amended 2017, giving bribes and brokering bribery with the value of at 500,000 dong and over could subject to a jail sentence and life sentence in case causing serious damages.

Under the Criminal Code and the Anti-Corruption Law 2018, corruption is defined as acts committed by persons in position of powers of abusing such positions of power for their own interests. Citizens have a right to denounce corruption and obligations in cooperation with the competent authorities.

The Law on Prevention of Money Laundering was adopted in 2012, the following acts are prohibited: organising and taking part or creating conditions to carry out the acts of money laundering; opening or maintaining anonymous accounts or accounts using false names; Establishing and maintaining business relationships with the banks established in a country or territory, but not being present tangibly in that country or territory and not subject to the management and supervision of the competent management agencies; illegally providing the services of cash, cheque and other currency instruments receiving or the valuable storage instrument and making payments to the beneficiaries at another location; abusing the positions and powers in the prevention of money laundering to infringe upon the legitimate rights and interests of organisations and individuals; hindering the provision of information for the prevention of money laundering; and threatening or taking revenge on the person detecting, providing information, reports or denunciations of any money laundering acts.

For instance, suspicious signs as stipulated in the Law on Prevention of Money Laundering are: the client provides incorrect, incomplete and inconsistent client identification information; clients persuade the reporting subjects not to report on the transactions to the competent state agencies; clients are unable to be identifed by the information provided by the client or the transaction related to a party whose identity cannot be identified. The financial organisation shall have to report the transactions to the State Bank of Vietnam and is entitled to impose necessary method to delay the implementation of the transaction.

19 What are the main data protection and privacy risks for businesses?

The risks stemming from data protection and privacy in businesses are diverse. They could be business or technology secrets; companies’ information or images used for journalism and publishing activities.

As per the Labour Code and Law on Intellectual Property, the employer has a right to reach a written agreement with the employee on the content and duration of protection of business or technology secrets, and benefits and compensation in the case of violation by the employee, called a non-disclosure agreement (NDA) or non-compete agreement (NCA), in which both parties could agree on a restriction of the right of employee to work after terminating labour contracts; the duration that employees have to protect business or technology secrets. However, due to the Vietnamese legal system, there are still no specific provisions in the NCA; in some cases, employees can claim against their employers for the violation of their freedom to work as per the Constitution, Labour Law or Law on Employment.

Moreover, according to the Law on Intellectual Property, enterprises should be aware of their rights on preventing others use or perform acts, especially, in several cases, the owners of trade secrets shall not have the right to prevent others from performing the following acts:

  • disclosing or using trade secrets acquired without knowing or having the obligation to know that they were unlawfully acquired by others;
  • disclosing secret data to protect the public;
  • using secret test data not for commercial purposes;
  • disclosing or using trade secrets obtained independently;
  • disclosing or using trade secrets obtained by analysing or evaluating lawfully distributed products, unless otherwise agreed upon by analysers or evaluators and owners of such trade secrets or sellers of such products.

It means that the owners of secrets have to demonstrate illegal acquisition or using from the others who are using or disclosing their trade secrets. In fact, it is really difficult for them to provide such evidences.

Besides business or technology secrets, enterprises’ information or images are also private to businesses. Companies should be aware of their data rights and if anyone tries to collect, process and use the information without obtaining consent of the enterprises or for illegal purposes, they shall be imposed a fine ranging from 10 million to 20 million dong as per the laws.

Furthermore, enterprises’ information that is submitted to business registration by the authorities during the establishment of the enterprise or amendment to business registration contents, including (i) business registration information; (ii) operation status; and (iii) financial statements, is purchasable from the national business registration portal. Therefore, there are certain risks or effects with respect to the exposure of such business information.

20 What are the main anti-fraud and financial statements duties?

Regarding financial statements duties, based on the Law on Enterprises, a business entity is liable to conduct some financial statements duties, such as: perform accounting, make and submit truthful financial statements in a timely manner according to regulations of law on accounting and statistics; retention of accounting books, accounting documents and annual financial statements at the headquarters or another location prescribed in the company’s charter; and submitting proper financial statements to the competent authorities, in good time. In terms of submission of financial statements to the competent authorities, according to the regulations, companies must comply with the terms and conditions for submitting financial reports (see table 1).

As regards anti-fraud obligations, as per the Law on Independent Audit, there are several organisations whose financial statements must be audited, include: enterprises with foreign investment; credit institutions established and operating under the Law on Credit Institutions; financial institutions, insurance enterprises, insurance brokerage firms; public companies, issuers and securities trading organisations.

Moreover, according to the Law on Enterprises, there are some types of business entities that must establish a control board in their organisational structure. The control board has a responsibility to supervise a company’s activities and truthfulness in accounting works, accounting books and financial statements. A joint stock company with upwards of 11 shareholders, or shareholders that are organisations holding 50 per cent of the total shares in the company, must have a control board. Similar provisions in this law apply to multi-member limited liability companies and single–member limited liability companies whose ownership is an organisation. Regarding multi-member limited liability companies, if the company has 11 members or more it must establish a control board, and for single–member limited liability companies that its ownership is an organisation, there must always be a controller or a control board in the company’s organisational structure.

21 What are the main competition rules companies must comply with?

As per the Vietnamese Laws, enterprises are entitled to freedom of competition in accordance with legal provisions. The state guarantees the lawful rights to competition in business; however, competition must be implemented on the principles of honesty, fairness, non-infringement upon the interests of the sate, public interests, legitimate rights and interests of enterprises and consumers. These are also the fundamental rules under the Law on Competition 2018.

This Law on Competition 2018 governs (i) acts in restraint of competition, economic concentrations that have or may have a competition-restraining impact on Vietnam’s market; (ii) unfair competitive acts; (iii) competition legal proceedings; (iv) dealing with breaches of the law on competition; and (v) state administration of competition. There is an attractive point in the new law of which businesses should be aware. It is the scope of the law’s applicable entities that consist of related domestic and foreign agencies, organisations and individuals, apart from organisations and individuals conducting business and industry and professional associations operating in Vietnam. These broader regulations are aimed at creating a mechanism to settle anticompetitive acts or cases that may be implemented overseas but have or may have a competition-restraining impact on Vietnam’s market, and to control acts relating to competition of state authorities. This content is to meet the requirements of economic integration and create a fair competition environment for both domestic and foreign organisations or individuals.

In additional, according to the Law on Competition 2018, there are several prohibited activities in competition, as follows:

  • prohibited unfair competition practices;
  • prohibited competition – restraining agreements based on the effects of the agreements on the market and the kind of enterprises that enter into competition-restraining agreements;
  • prohibited abuse of a dominant position or abuse of a monopoly position; and
  • prohibited economic concentration: economic concentration shall be prohibited if it causes or could cause substantial anticompetitive effects on the Vietnamese market.

Accordingly, the economic concentration includes the categories merger of enterprises, consolidation of enterprises, acquisition of enterprises, joint venture among enterprises and other categories of economic concentration as per the laws.

22 Outline the corporate governance regime.

There are two main types of enterprises in the Vietnamese market that are usually selected by investors. Pursuant to the Law on Enterprise, the organisational structure of the companies is set out in table 2.

23 Can business entities incur criminal liability? What are the sanctions for businesses, related companies and their directors and officers for wrongdoing and compliance breaches?

According to the Criminal Code 2015 as amended 2017, a corporate legal entity that commits a criminal offence regulated in article 76 of the Code has to incur criminal liability with the following conditions as stipulated in article 75 of this code: (i) the criminal offence is committed in the name of the corporate legal entity; (ii) the criminal offence is committed in the interests of the corporate legal entity; (iii) the criminal offence is under instructions or approval of the corporate legal entity; and (iv) the time limit for criminal prosecution has not expired.

The Criminal Code further provides the sanctions for business entities committing a criminal offence: (i) primary sentences: fine; suspension of operation; permanent shutdown (ii) additional sentences: ban from operating in certain fields; prohibition from raising capital; fine if not imposed as primary sentence. In additional, the criminal business entities may also be applied some judicial measures: (i) confiscation of money and items directly related to the crime; (ii) return, repair of property or provision of compensation; offering of public apology; (iii) restoration of original state; (iv) implementation of other measures for mitigation and prevention of consequences, as per the article 46.2 of this code.

Regarding related companies and their directors and officers who are concerned in wrongdoing and compliance breaches, they also shall incur criminal liability as per the provisions of this code based on the nature of the act and danger to society.

Business operations

24 What types of business entity are most commonly used by foreign investors and why? What are the main requirements for their establishment and operation?

In accordance with the Law on Investment 2014, foreign investors may carry out the following forms of investment in Vietnam: (i) investment in establishment of an economic organisation; (ii) making investment by contributing capital, purchasing shares or capital contributions of economic organisations; (iii) investment under public private partnership contracts; and (iv) investment under business cooperation contracts. Of these forms, the most popular ones are (ii) and (iv).

By establishing a new legal entity, foreign investors shall prove its direct presence in Vietnam whether as a wholly owned enterprise or as a joint venture between foreign investors and Vietnamese partners. To do this, the investor is required to obtain approval of the investment project in the form of an investment registration certificate, then apply for an enterprise registration certificate to implement the approved investment project. The investor may choose from the following types of enterprise: (i) limited liability company including single member limited liability company and multiple-member limited liability company; (ii) joint stock company; (iii) partnership and (iv) private enterprise. Among these types of enterprises, the limited liability company and joint stock company are most commonly used by foreign investors, as enterprises established under these types have independent legal entity status and take self-responsibility for business operation of their own property.

Making investment by contributing capital, purchasing shares or capital contributions of economic organisations is normally chosen by the investors having interest in a specific ongoing business. If the foreign investor acquires upwards of 51 per cent charter capital of the target or the target is operating in business sectors conditional to foreign investors, the investment will be subject to the prior approval of the local authority.

25 Describe the M&A market and the merger control regime. How easy is it to complete deals in your jurisdiction?

The statistics show the rapid increase of the M&A market in Vietnam and prove that Vietnam is one of the most attractive destinations in Southeast Asia. According to the Report of M&A Vietnam Forum, the value of the M&A deals in Vietnam reached US$5.43 billion in the first seven months of this year. Foreign investors were seeking opportunities in the consumer goods manufacturing and real estate industries in Vietnam to capitalise on the huge market of more than 96 million people. The investors are mostly from Korea, Singapore, Thailand, Hong Kong and Japan, etc.

Merger control is governed by Law on Competition 2018. It prohibits activities of abuse of a dominant market position regardless of actual consequence. In addition, activities that may cause damage to customers, may eliminate a competitor or may hinder another enterprise in participating in or expanding the market are also prohibited. The competent authority shall assess substantial anticompetitive effects caused or that could be caused by an economic concentration based on a number of factors.

The completion of M&A deals in Vietnam is sometimes delayed due to the extension of time by competent authority in issuing approvals in a number of sectors controlled by the state. In case of acquiring a non-public company, it is required to obtain approval of the Department of Planning and Investment. In the event that the parties plan to carry out the economics concentration, a notification must be submitted to the National Competition Commission before initiating economic concentration if they reach the notification threshold. For target companies operating in specific sectors such as banking, insurance and securities, M&A transactions may require approval from ministry-level or above state agencies.

26 Outline the corporate insolvency regime. Is bankruptcy protection available for corporates?

The corporate insolvency is governed by the Law on Bankruptcy 2014 and Law on Enterprise 2014. The bankruptcy process is neither popular nor easy to carry out in Vietnam. The enterprises falling into bankruptcy status shall only be considered to settle by the court on the basis of request for initiation of bankruptcy process. The subjects eligible and liable for submission of such request when the enterprise is insolvent are as follows: (i) any creditor of unsecured debts or partly secured debts; (ii) any employee, internal trade union (or the superior trade union if the internal trade union is not established); (iii) the legal representative of the enterprise or cooperative; (iv) the owner of any private enterprise, the president of the board of directors of any joint stock company, president of the board of members of any multiple-member limited liability company, the owner of any single member limited liability company or any general partner of any partnership; (v) any shareholder of any group of shareholders owning at least 20 per cent of ordinary shares for at least six consecutive months; and (vi) any member of any cooperative or any legal representative of any cooperative that is a member of the cooperative union.

The bankruptcy process shall be settled by the court under the following steps: (i) submission of request for initiating bankruptcy process; (ii) consideration of the court towards such request; payment of bankruptcy fee, bankruptcy advance in case of valid request; (iii) acceptance of request for initiation of bankruptcy process by the court; (iv) the court organises the creditors’ meeting; (v) restoring business activities of the enterprise undergoing bankruptcy process if so decided by the creditors’ meeting, or the court issues the Decision declaring the enterprise’s bankruptcy if so proposed by the creditors’ meeting, (vi) issuance of a decision by the court on declaration of the enterprise’s bankruptcy in case of failure of restoring business activities of the enterprise undergoing bankruptcy process; and (vii) enforcement of the court’s decision on declaration of the enterprise’s bankruptcy.

To protect the enterprise under bankruptcy status, the Law on Bankruptcy 2014 provides for measures for preserving assets and procedures for restoring business operations. For the former one, the court may declare transactions invalid, suspend valid contracts and apply provisional measures for the enterprise to preserve its assets. The latter one clearly shows the purpose of protection of insolvent enterprise undergoing bankruptcy process by restoring its operations to discharge from bankruptcy.


27 How easy is it to enter into and terminate employment contracts?

Regarding the recruitment, the employer is required to publicly notify its demand for labour recruitment at least five days before the planned date to receive job applications by means of posting an employment advertisement at the employer’s main office, branches or representative offices where job vacancies are available or advertising job vacancies through the mass media. The international organisations are only allowed to recruit Vietnamese employees through licensed employment centres. After having recruitment result, the employer must make publication on the result within five working days of the date of such result.

After the recruitment, the employer and the employee may enter into a probation contract or include the probation contents in the labour contract. After successful probation, the employer and such employee must directly enter into a labour contract. It must be established in writing and made in two copies, each party to retain one copy. The parties may only enter into a verbal labour contract in case of temporary jobs with a duration of under three months. A labour contract must be entered into in one of the following types: (i) indefinite-term labour contract; (ii) definite-term labour contract; and (iii) a seasonal or work-specific labour contract that has a duration of under 12 months. The labour contract must consist of the principal contents stated by the laws.

During the performance of the labour contract, any party that requests to modify or supplement the contents of the labour contract shall notify the other party at least three working days in advance of the contents to be modified or supplemented. If the two parties can reach an agreement, the modification or supplement of the labour contract must be carried out by signing an annex to the labour contract or signing a new labour contract. Otherwise, the parties shall continue with the labour contract already entered into.

The labour contract shall be terminated under specific cases stated in the Labour Code, such as expiration of the labour contract, completion of work stated in the labour contract, agreement on termination of a labour contract between the employee and the employer, etc. Termination at will of the employer is not allowed, the employer is able to unilaterally terminate the labour contract in specified circumstances stated by the laws. Termination at will of employees working under an indefinite-term labour contract is allowed, as long as they fulfil the conditions for advance notice. Employees working under a definite-term labour contract, a seasonal labour contract or performing a certain job of under 12 months may only unilaterally terminate the labour contract in specified cases stipulated by the law.1 When unilaterally terminating the labour contract as permitted by the laws, the employer and employees are obliged to notify the other in advance. Breach of the time limit for advance notice could be regarded as unlawful termination.

In the case of unlawful unilateral termination of the labour contract by the employer, the employer is obliged to reinstate the employee, and pay the wage and social insurance and health insurance premiums for the period during which the employee was not allowed to work, plus at least two months’ wages in accordance with the labour contract.2 If the employee does not wish to return to work, in addition to the compensation mentioned above, the employer shall pay a severance allowance.3

28 What are the key rights of local employees?

There is no distinction between foreign employees and local employees, they have the following rights:

  • to work, to freely choose types of work and trades and professions, to learn a trade, to improve professional skills without any discriminations on ground of gender, race, skin color, social strata, marital status, belief, religion, HIV infection, disabilities or for the reason of establishing, joining trade unions and participating in trade union activities;
  • to be paid a wage commensurate with his or her professional skills on the basis of an agreement reached with the employer. An employee’s wage must not be lower than the minimum wage set by the government;
  • to be entitled to labour protection and to work in safe and hygienic working conditions such as obtaining assurance of equal, safe and hygienic working conditions; receiving benefits of personal protective equipment, healthcare, occupational disease check-ups, etc;
  • to be entitled to stipulated leave and paid annual leave and to receive collective welfare benefits;
  • to establish, join and participate in the activities of trade unions, professional and occupational associations and other organisations in accordance with law; to request and participate in discussions with the employer, to implement democratic regulations, and to receive advice at workplaces to protect the employee’s lawful rights and interests; and to participate in management in accordance with the internal rules of the employer; and
  • to strike. Nevertheless, a strike can only be carried out in respect of a collective labour dispute about benefits and on expiry of the time limit prescribed by laws.4

Moreover, there are separate provisions for female employees, elderly employees, minor employee, etc. to protect their rights to employment equality.5 For example, the employer may neither dismiss a female employee nor unilaterally terminate the labour contract with a female employee by reason of her marriage, pregnancy, maternity leave or if she is nursing a child under 12 months;6 the employer shall create opportunities for minor employees and employed persons aged under 15 years to receive general education,7 etc.

29 What are the main restrictions on engaging foreign employees?

A foreigner must satisfy the following conditions to work in Vietnam: (i) possessing full civil act capacity; (ii) possessing technical and professional qualifications and skills and health appropriate to the work requirement; (iii) not being a criminal or subject to penal liability examination according to Vietnamese and foreign laws. Moreover, foreign employees are only issued with a work permit or work permit exemption certificate if Vietnamese employees are unable to fill the production and business requirements of the positions, as such, the employer must apply for written approval for the utility of the foreign employees from provincial competent state agencies at least 30 days before the expected date of recruitment.8

The maximum validity duration of a work permit or work permit exemption certificate is two years from the date of issuance. Between five and 45 days before the expiry of work permit or work permit exemption certificate, the employer must submit an application for reissuance of these certificates to extend the duration of the working period in Vietnam.9

30 What are the other key employment law factors that foreign counsel, investors and businesses should be aware of?

Foreign entities should be aware of the following notable regulations.

  • Wage scale, wage table and determination of labour norms: Based on the principles of formulation of wage scales, wage tables and labour norms stipulated by the government, the employer shall formulate the wage scale, wage table and labour norms for use as the basis to employ and use labour, to negotiate wage levels in labour contracts and to pay wages to employees with consulting the representative organisation of grassroots-level employees collective and publishing this information at the workplace before implementation and sending them to the district-level state management agency of labour in which the employer’s production and business establishments are located.10
  • Contribution of mandatory insurances: contribution to social insurance, health insurance and unemployment insurance is applicable for both employee and employer. The amount of the insurance contribution is calculated on the basis of monthly salary of employee. For social insurance, the respective contribution rates of employee and employer are 8 per cent11 and 17.5 per cent.12 For health insurance, the respective contribution rates of employee and employer is 1.5 per cent and 3 per cent.13 The unemployment insurance fee is 2 per cent of an employee’s salary, of which the employer pays 1 per cent and employee pays 1 per cent.14
  • Internal labour rules: employer using 10 employees or more is mandatory to make internal labour rules (ILR) in writing.15 This document is to set out the enterprise’s internal rules and basically contains regulations on working time, rest time, order at the workplace, occupational safety and hygiene, protection of assets and technological and business secrets and intellectual property of the employer or labour disciplinary action.16 It is required to consult with the trade union about the contents of draft ILR prior to issuance and then register ILR with a provincial labour management authority within 10 days of the issuance date.17
  • Submission of labour reports: Within 30 days of an employer commencing operation, the employer must declare its labour employment and periodically provide a report on the status of labour changes during operation to the local labour authority.18 The employer must report every six months or extraordinarily upon request to the local labour authority on the use of its employees.19 In particular, the employer must annually report any change in the labour utilisation before 25 May and November 25.20 The employer shall send the general report on the reality of occupational accident to Department of Labour, Invalids and Social Affairs where the employer’s head office is situated; the report must be sent before the 5 July annually for the first six months and before 10 January of the subsequent year of the annual report.21
  • Trade union: Employees may set up grassroot-level trade union within enterprise’s organisation to represent for employees and protect their legitimate rights and interests. Once the trade union is set up, the employer is obliged to recognise and facilitate trade union’s operation. Immediate higher-level trade unions shall assist grassroot-level trade unions in performing their functions and tasks.22 At non-unionised workplaces, immediate higher-level trade unions shall perform the duties of the grassroot-level trade unions.23
  • Regulation on workplace democracy: The employer is obliged to promulgate the Regulation on workplace democracy with consulting the labour collective’s representative at workplace and to disseminate to the employees before application.24

Intellectual property

31 Describe the intellectual property environment. How effective is enforcement and what are the key current issues?

Overview of IP legislation

Vietnam is member of the World Intellectual Property Organization and a signatory to various international treaties and agreements relating to protection of intellectual property rights. Its legal system on intellectual property is deemed meeting with TRIPS regulations, providing legal framework for registration, establishment, protection and enforcement of intellectual property rights (IPRs). However, it is recognised that the legal system of Vietnam on intellectual property is rather complicated. Matters relating to IPRs in Vietnam are not concentrated in one or two laws. They are governed by different laws and regulations depending on different aspects of IPRs. The 2015 Civil Code (Code No. 91/2015/QH13) and the 2005 Intellectual Property Law (Law No. 50/2005/QH11) as amended by the 2009 Law (Law No. 36/2009/QH12) and the 2019 Law (Law No. 42/2019/QH14) are deemed the most important laws, providing general, basic but important regulations on registration, protection and IPRs-related transactions. Other issues related to IPRs would be also governed by other laws and regulations, such as the Law on Enforcement, Law on Customs, Law on Telecommunications, Law on Internet Management, Law on Medical Service Practice, Code of Civil Procedures, Code of Criminal Procedures and the Law on Quality of Goods.

Under the Intellectual Property Law and the aforesaid laws, a series of decrees, decisions, circulars are promulgated by the government, the prime minister, Supreme Court, General Customs Department, National Office of Intellectual Property (NOIP), Ministry of Science and Technology and various other central ministries and provincial authorities, for guiding the implementation. Below are some of the main decrees and circulars on the registration and protection of IPRs:

  • Decree 22/2018/ND-CP dated 23 February 2018 on guidelines of the Intellectual Property Law and 2009 Law on copyright and related rights;
  • Decree 131/2013/ND-CP dated 16 October 2013 on sanctions to administrative violations in copyright and related rights as amended by Decree 28/2017/ND-CP dated 20 March 2017;
  • Decree 103/2006/ND-CP dated 22 September 2006 on registration and protection of industrial property rights as amended by Decree 122/2010/ND-CP dated 31 December 2010;
  • Decree 88/2010/ND-CP dated 16 August 2010 on registration and protection of plant varieties as amended by Decree 98/2011/ND-CP dated 26 October 2011;
  • Decree No. 31/216/ND-CP of 6 May 2016 on Penalties for Administrative Violations in the field of Plant Varieties, Plant Protection and Quarantine;
  • Decree 105/2006/ND-CP dated 22 September 2006 on protection and enforcement of intellectual property rights as amended by Decree 119/2010/ND-CP dated 30 December 2010;
  • Decree 99/2013/ND-CP dated 29 August 2013 on sanctions on administrative violations in industrial property;
  • Decree 08/2015/ND-CP dated 21 January 2015 guiding the implementation of the Law on Customs on customs control on intellectual property to importing goods and exporting goods as amended by Decree 59/2018/ND-CP dated 20 April 2018; and
  • Circular 02/2008/TTLT-TANDTC-VKSNDTC-BVHTT&DL-BKH&CN-BTP jointly issued by the Supreme Court, Supreme Procuracy, Ministry of Culture, Sports and Tourism, Ministry of Technology and Science and Ministry of Justice on 3 April 2008 guiding the procedures for settlement of disputes on intellectual property rights at the courts.

Multilateral agreements

Vietnam is member of the following international agreements on intellectual property:

  • Paris Convention for the Protection of Industrial Property (Paris Convention);
  • Patent Cooperation Treaty;
  • Madrid Agreement on International Registration of Marks (Madrid Agreement);
  • Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol);
  • Berne Convention on Copyright Protection of Literary and Artistic Works (Bern Convention);
  • Geneva Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of their Phonograms;
  • Brussels Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite;
  • International Convention for the Protection of New Varieties of Plants;
  • Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations;
  • member of the World Trade Organization, acceded to WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement);
  • CPTPP;
  • ASEAN Framework Agreement on Intellectual Property Cooperation;
  • Blueprint for an AEC by 2015;
  • Agreement on Comprehensive Economic Partnership among Japan and Member States of the Association of SouthEast Asian Nations;
  • Agreement Establishing the ASEAN–Australia-New Zealand Free Trade Area;
  • EVFTA; and
  • Agreement on Promotion and Protection of Investment in ASEAN.

Bilateral agreements

  • The US–Vietnam FTA (Chapter II);
  • Vietnam–US Copyright Agreement;
  • Swiss–Vietnam Agreement on Protection of Intellectual Property Rights;
  • Agreement between Japan and Vietnam for an Economic Partnership (Chapter 9);
  • Agreement on Comprehensive Economic Partnership among Japan and member states of the Association of Southeast Asian Nations;
  • Agreement between Japan and the Socialist Republic of Viet Nam for Liberalisation, Promotion and Protection of Investment;
  • Agreement between the government of Argentina and the government of the Socialist Republic of Vietnam on the Promotion and Reciprocal Protection of Investments; and
  • Agreement between the government of Argentina and the government of the Socialist Republic of Vietnam on the Promotion and Reciprocal Protection of Investments.

Application of international and bilateral agreements

Article 5 of the Intellectual Property Law stipulates that if provisions set forth in international treaties to which Vietnam is a signatory contravene the provisions set forth in the Intellectual Property Law on the same issue, or the Intellectual Property Law does not regulate issues that are regulated in such international treaties, the relevant provisions set forth in such international treaties shall apply.

Objects to be protected

Under the Intellectual Property Law, the following objects are protected:

  • invention, utility solution is a technical solution, in form of a product or a process, to resolve a specific issue by utilising laws of nature;
  • industrial design is appearance of a product expressed in shapes, lines, dimensions, colours or any combination thereof;
  • trademark includes trademark, service marks, is sign(s) used to distinguish goods or services of different organisations and individuals. A collective mark is a mark used to distinguish goods or services of members from those of non-members of an organisation that owns the mark. A certification mark is a mark licensed by its owner to other organisations or individuals to use for their goods or services in order to certify characteristics in respect of origin, materials, raw materials and methods of goods production or methods of services supply, quality, accuracy, safety or other characteristics of such goods or services. Associated marks are marks registered by the same owner, identical or similar to each other and are used for identical or similar or inter-related goods and services. A well-known mark is a mark widely known throughout territory of Vietnam;
  • the layout of semiconductor integrated circuits is a three-dimensional disposition of circuitry elements and interconnections of such elements in a semiconductor integrated circuit;
  • geographical indication is a sign used to indicate a product originating from a specific area, locality, region or country;
  • plant varieties is a plant grouping within a single botanical taxon of the lowest known rank, uniform of morphological, stability in the propagation circle, which can be distinguished by the phenotype expressed by a genotype or the combination of genotypes and distinguished from other plant grouping in at least one genetic phenotype. Rights to plant varieties are the rights of organisations, individuals to the new plant varieties that are created or discovered and developed by and fall under the ownership right of such organisation or individuals;
  • copyright (literary, artistic and scientific works) and related rights (performances; sound recordings; video recordings; broadcasting programmes; satellite signals carrying encrypted programs);
  • a business secret is information obtained from financial, intellectual investment that is undisclosed and susceptible to application in business; and
  • a trade name is a designation of an organisation or individual used in business to distinguish the business entity bearing such designation from other business entities acting in the same field and area of business. The area of business stipulated in this paragraph shall be the geographical area where a business entity has business partners, clients or reputation.

Protection of the following objects are subject to title of protection granted by the NOIP: inventions, utility solutions, trademarks, layouts of semiconductor integrated circuits, geographic indications, plant varieties. However, protection of those objects is not subject to title of protection granted by NOIP. The protection is subject to their satisfaction with conditions set out by law: copyright and related rights, business secret, trade names.

How do foreign applicants file applications for protection of their intellectual property rights in Vietnam?

For registration of protection of IPRs in Vietnam, foreign applicants shall file IPRs-related applications through licensed Vietnamese IP law firm under written power of attorney given to it.

Under the Intellectual Property Law, Vietnamese IP law firms that represent foreign applicants in taking IPR-related procedures and actions must be granted an IP practice licence by the NOIP. General law firms and foreign law firms practising law in Vietnam that do not have an IP practice licence are not permitted to represent foreign applicants in respect of IPR-related application filing works in Vietnam.

First come-first served principle

Vietnam applies the first come-first served doctrine in determination of priority filing date of the applications in Vietnam. In the case of more than one application filed by different applicants for title of protection for the same IP object, title of protection will only be granted to an application that is legitimate and that has the earliest priority date or filing date among the applications that satisfy the statutory conditions for title of protection.

If all such applications satisfy the statutory conditions for being granted a title of protection and have the same earliest priority date or filing date, title of protection will only be granted to one application among the applications with the mutual agreement of all applicants. If no mutual agreement is reached by the applicants, all applications are refused.

Claiming priority right to applications

Applicant of an invention, an industrial design or a trademark is entitled to claim priority right based on his or her first application for registration of the same IP object filed in the first country, subject to his or her satisfaction of the following statutory conditions:

  • the first application has been filed in Vietnam or a country that is a party to an international treaty having provisions on such priority right to which Vietnam is a party, or that is a country signed bilateral agreement with Vietnam to apply such priority right provisions;
  • applicant is a national of Vietnam or a country as mentioned in the preceding subparagraph, who permanently resides or has a production or business establishment in Vietnam or in a country as mentioned in the preceding subparagraph;
  • priority right claim is clearly stated in the application and copy of the first application, which is certified by patent and trademark office receiving such first application; and
  • the application has been filed in Vietnam within the time limit prescribed in the international treaty to which Vietnam is party.

In a single application for a patent of invention or industrial design or certificate of registration of trademark, the applicant may claim a priority right based on different earlier applications, provided that the claim indicates the corresponding contents of the earlier applications and the application itself.

An application enjoying priority right shall have a priority date, being the filing date of the first application.

Vietnam applies the system of substantive examination of intellectual property objects for title of protection. Applications shall be examined formality first, then substantially.

Formality examination

All applications for registration shall be checked in terms of their formality to ensure their compliance with statutory requirements on the applications and attached documents. The duration of a formal examination is one month from the legitimate filing date (ie, the filing date accepted by the NOIP). If the application satisfies the requirements, it will be passed and entered into the publication and substantive examination. Publication is for obtaining any public opposition.

Substantive examination

The statutory durations of the substantive examination of application for registration are as follows:

  • for the application for a patent of invention, 18 months from its publication date of the application if request for substantive examination is filed prior to the publication date, or from the date of NOIP’s receipt of the request for substantive examination if the request is filed after the publication date of the application;
  • for an application for a trademark, not exceeding nine months from the publication date of the application;
  • for an application for industrial design, not exceeding seven months from the publication date of the application; and
  • for an application for geographical indication, not exceeding six months from the publication date of the application.

The time limit for re-examination of application shall be equal to two-thirds of the duration of the first time, and as for complicated cases, the duration may be extended but the extended time shall not exceed the duration of the first time.

The time for amendment of or supplement to the application shall not include the time limits of formality, substantive examination and re-examination.

Bases of establishment and protection of industrial property rights

Industrial property rights to inventions, layout of semiconductor integrated circuits, industrial designs and trademarks are established and protected in accordance with a written decision issued by NOIP to accept registering and protecting such industrial property objects in the form of a title of protection (or written decision on acceptance of protection, applicable to trademarks internationally registered in Vietnam under the Madrid Agreement and Madrid Protocol) granted to the applicants.

Industrial property right to a well-known trademark is established on the basis of the bona fide use of such trademark, which makes the trademark famous, and is protected without registration with NOIP.

Industrial property right to a trade name is established on the basis of the legitimate use of the trade name without registration with NOIP.

Industrial property right to a business secret is established on the basis of financial, investment and intellectual activities or results of other legitimate activities, to find, create or acquire information that creates a business secret and protect the confidentiality of such information without registration with NOIP.

Titles of protection

An invention is protected in form of a patent of invention. An industrial design is protected in the form of a patent of industrial design. A trademark is protected in the form of a certificate of trademark registration. The layout of a semiconductor integrated circuit is protected in the form of a certificate of registration of layout of semiconductor integrated circuit. An appellation of origin is protected in the form of a certificate of registration of appellation of origin.

Industrial property right to geographic indication is established and protected in accordance with the certificate of registration of such geographic indication, granted to organisations that managing it.

Patents and certificates are collectively referred to as titles of protection in accordance with the Intellectual Property Law.

Duration of protection

A patent for an invention becomes effective as of the granting date thereof and continues its effect for 20 years from the application filing date.

A patent for a utility solution becomes effective as of the granting date thereof and is valid for 10 years from the application filing date.

A patent for an industrial design becomes effective as of the granting date thereof and continues its effect for five years from the application filing date. A patent can be renewed two consecutive times each five years.

A certificate of registration of a trademark becomes effective as of the granting date thereof and is valid for 10 years from the application filing date. A trademark registration certificate can be renewed unlimited times, every 10 years.

A certificate of registration for a layout of semiconductor integrated circuit becomes effective as of the granting date thereof and terminates its effect on the earlier of the following dates:

  • expiration date of 10-year period, counted from the application filing date;
  • expiration date of 10-year period, counted from date of registration or first use in commerce at anywhere in the world; and
  • expiration date of 15-year period, counted from the date of creation of the layout of semiconductor integrated circuit.

A certificate of registration of a geographical indication is valid indefinitely from the granting date.


The moral right (personal right) of author(s) is protected indefinitely, except moral right to publish or permit others to publish the works.

The duration of protection of the material rights (property rights) and the moral right (to publish or permit others to publish the works) is as follows:

  • As to cinematographic work, photographic work, applied fine artwork, anonymous work, the duration of protection is 70 years from the first publication date thereof. As to cinematographic work, photographic work, applied fine artwork that has not yet been published within the time line of 25 years from the fixation of the work, the duration of protection of such work is 100 years from the fixation date thereof; as to the anonymous work, if information on the author is available, the duration of protection of the work is the lifetime of the author plus 50 years after the death of the author. With respect to a work of co-authors, the duration of protection will end on the 50th year after the death of the last surviving author.
  • Works other than the above-mentioned works shall be protected for the lifetime of the author and for another 50 years after the death of the author. With respect to a co-authored work, the duration of protection will end on the 50th year after the death of the last surviving author.
  • The duration of protection as mentioned in the preceding sub-paragraphs ends on 31 December of the year of termination of the copyright.

Termination of validity of title of protection

The validity of a title of protection may be terminated in either of the following cases:

  • the owner of a title of protection fails to pay annuities or fails in applying for renewal of such title of protection in accordance with the Intellectual Property Law;
  • the owner of a title of protection has declared to relinquish the rights conferred by the title of protection;
  • the owner of a title of protection no longer exists or the owner of a trademark registration certificate no longer engages in business without a lawful successor;
  • a registered trademark has not been used by the owner of that trademark or by the owner’s authorised users without justifiable reasons for five consecutive years prior to a request for termination, except in the case where the use is commenced or resumed at least three months prior to date of request for termination;
  • the owner of registration certificate of a collective mark fails to supervise or ineffectively supervises the implementation of the rules on the use of a collective mark;
  • the owner of registration certificate of a certification mark violates the rules on use of certification mark or fails to supervise or ineffectively supervises the implementation of such rules;
  • specific geographical conditions attributable to the reputation, quality or characteristics of the products bearing a geographical indication have been changed or modified, which results in a loss of the reputation, quality or characteristics of such products.

Invalidation of title of protection

A title of protection would be entirely invalidated in the following cases:

  • the applicant neither has right to register nor has been assigned such right to register inventions, industrial designs, layout of semiconductor integrated circuits and trademarks; or
  • the industrial property object fails to satisfy conditions for protection at the granting date of title of protection.

A title of protection would be partly invalidated if that part of an industrial property fails to satisfy the conditions for protection.

Any organisation or individuals shall be entitled to request the NOIP to invalidate a title of protection. The time limit for filing of such request is the whole duration of protection. With respect to trademarks, the time limit shall be five years as from the granting date of title of protection, except if the title of protection was granted due to the applicant’s dishonesty and bad faith.

Legal reform and policy

32 What are the key issues in legal reform, government policy and the economy?

During the enforcement of the newly signed FTAs such as EVFTA, the CPTPP, etc, Vietnam is reviewing legal documents to make timely amendments and supplements to comply with commitments in the FTAs.

Besides, the reform in administrative procedures is accelerated in recent years. In particular, the draft of the Law on amendment and supplement of a number of articles of the Law on Investment and Law on Enterprise, which shall be submitted to the National Assembly next year, proposes to eliminate 17 conditional business lines. Therefore, the sublicence in some sectors shall accordingly be removed and the administrative procedures shall be simplified for foreign investors. Moreover, together with the development of the fourth Industrial Revolution, the Vietnamese government has identified that building an e-government for a digital government, society and economy is one of the top priorities in this period to perform state administration in a smarter, faster and more transparent, effective and efficient manner. Recently, the government office has operated an e-cabinet system, which marked a turning point in building an e-government in Vietnam.

33 Are there any significant legal developments ongoing or pending? What are their effects on the business environment?

In the event of Vietnam becoming a member of some new generation FTAs, the legal framework has been reviewed as a move in preparation for the implementation of Vietnam’s commitment under the newly signed FTAs. It is worth noting that one of significant legal development this year is the ratification of Law No. 42/2019/QH14 on amendments to some articles of the Law on Insurance Business and the Law on Intellectual Property. In addition, there are about 15 laws to be submitted to the National Assembly to ratify next year, including the Law on Public-Private Partnerships, Law on the amendment and supplement of a number of articles of the Law on Investment and Law on Enterprise, etc.

The law reform demonstrates Vietnam’s effort in integrating with countries in the region and in the world. Besides, it has contributed to the enhancement of the quality and effectiveness of laws and regulations, accordingly, it will definitely create a more favourable and clearer legal environment for attracting foreign investors to do business in Vietnam.

Table 1



Recipients of financial statements

Types of enterprises

Period of reports

Financial agencies

Tax agencies

Statistics agencies

Superior enterprises

Business registration agencies

1. State-owned enterprises

Quarterly, yearly







2. Foreign-invested enterprises







3. Other types of enterprises







Table 2


Limited liability company

Joint stock company

Multi-member limited liability company

Single – member limited liability company

Organisational structure

The type of company can apply the structure of: a board of members; chairperson of the board of members; director/general director.

If the company has 11 members or more it must establish a control board.

The company that its ownership is an organisation can choose one of the following structures:

The company’s president; director/general director and controller.

The board of members; director/general director and controller.

The company that its ownership is an individual shall apply the structure of: company’s president and a director/general director.

A joint stock company could choose the following structures:

The general meeting of shareholders; the board of directors; the control board; and the director/general director.

If the company has fewer than 11 shareholders and the shareholders being organisations hold less than 50% of total shares of the company, the control board is not necessary.

The general meeting of shareholders; the board of directors; and the director/general director.

In this case, at least 20% of members of the board of directors must be independent members and there must be an internal audit board affiliated to the board of directors.

Legal basis

Article 55 – Law on Enterprises

Article 78 – Law on Enterprises

Article 85 – Law on Enterprises

Article 134 – Law on Enterprises



1 Plan No. 301/KH-TANDTC dated 1 October 2018.





6 Law on prevention of Money Laundering 2012, article 22.

7 Labour Law 2012 article 23.2 and Law on Intellectual Property 2005, as amended 2009 article 84.3.

8 Law on Intellectual Property 2005, as amended 2009 article 125.3.

8 Decree No. 174/2013/ND-CP, article 66.3 (e).

10 Law on Enterprise 2014, article 8.2.

11 Law on Enterprise 2014, article 11.

12 Law on Enterprise 2014 article 8.3.

13 Circular 200/2014/TT-BTC, article 110.

14 Law on Independent Audit 2011, article 37.1

15 Law on Enterprise 2014 article 55, 78, 134.

16 Law on Competition 2018, article 5.

17 Law on Competition 2018 article 1, 2.

18 Law on Competition 2018 article 45.

19 Law on Competition 2018 article 11, 12.

20 Law on Competition 2018 article 27.

21 Law on Competition 2018 article 29, 30.

22 Article 5.1, Circular No. 23/2014/TT-BLDTBXH.

23 Article 4.1, Decree No. 75/2014/ND-CP.

24 Article 7.4, Decree No. 03/2014/ND-CP

25 Article 18.1, Labour Code.

26 Article 16.1, Labour Code.

27 Article 16.2, Labour Code.

28 Article 22.1, Labour Code.

29 Article 35.1, Labour Code.

30 Article 35.2, Labour Code.

31 Article 35.3, Labour Code.

32 Article 36, Labour Code.

33 Article 38, Labour Code.

34 Article 37.3, Labour Code.

35 Article 37.1, Labour Code.

36 Article 42.1, Labour Code.

37 Article 42.2, Labour Code.

38 Article 209, Labour Code.

39 Chapter X, XI, Labour Code.

40 Article 155.3, Labour Code.

41 Article 163.5, Labour Code.

42 Article 9.5, Circular No. 18/2018/TT-BLDTBXH.

43 Article 15.1, 16.2, Labour Code.

44 Article 93, Labour Code.

45 Point 1.1, article 5, Decision No. 595/QD-BHXH.

46 Article 86.1, Law on Social Insurance; article 3.1, Decree No. 44/2017/ND-CP.

47 Article 13.1, Law on Health Insurance; article 7, Decree No. 146/2018/ND-CP.

48 Article 57.1, Law on Employment.

49 Article 119.1, Labour Code.

50 Article 119.2, Labour Code.

51 Article 119.3, Labour Code.

52 Article 6.2, Labour Code.

53 Article 8.2, Decree No. 03/2014/ND-CP.

54 Article 6.2, Circular No. 23/2014/TT-BLDTBXH.

55 Article 24.1, Decree No. 39/2016/ND-CP.

56 Article 188.2, Labour Code.

57 Article 188.3, Labour Code.

58 Article 11, Decree 149/2018/ND-CP.

Published November 2019

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