Offshore indirect investment by Vietnamese companies

Under Decree 135/2015 effective from 15 February 2016, a local company can invest in shares, bonds and other securities issued offshore of Vietnam (Offshore Indirect Investment) via an entrustment agreement (hợp đồng ủy thác đầu tư) with a licensed fund management company, securities company or commercial bank (Local Managers) if:

the State Bank of Vietnam (SBV) designates investment in offshore securities investment funds includingOffshore Fund as a permitted type of offshore indirect investment;
the entrusted amount is within the annual limits for overall offshore indirect investment approved by the Prime Minister;
the local company satisfies certain conditions (see below); and
the Local Manager satisfies certain conditions (see below).

VALIDITY OF A CONTRACT DENOMINATED IN US$ AND SETTLED IN VND (Updated)

In June 2015, the first instance court decides that a contract in the territory of Vietnam that is denominated in US$ but settled in VND is not invalid. In December 2015, according to newspaper report, the appeal court has revoked a decision of the first instance court and held such a contract invalid in its entirety. This is a surprise development and may cause concern to many business transactions in Vietnam which have relied on a more relax view of the court earlier.

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WTO And TPP – A Comparison of Vietnam’s Commitments Regarding Investment In Financial Services

The table below tries to compare the existing commitments of Vietnam under WTO Agreement with the commitments under TPP for financial services. This post is contributed by Tran Thi Thu Thao, a VILAF associate. Pdf version of the table can be downloaded here.

Notes:

No limitation means no limits on national treatments in terms of foreign ownership, form of investment or other restriction.

Branch is generally not allowed unless otherwise indicated.

Share acquisition is generally allowed with no foreign ownership limitation for committed sectors and sub-sectors unless otherwise indicated.

Underlined words indicate new commitment under TPP.

Refund guarantees for house purchase contracts in Vietnam

Under the Law on Real Estate 2014, a real estate developer must provide a bank guarantee to secure for the developer’s obligations to refund to a house buyer the advance payment that the developer has received from the buyer if the developer fails to deliver the house to the buyer on time (a developer refund guarantee). In June 2015, the State Bank of Vietnam issued Circular 7/2015 on bank guarantees which provides further guidance on a developer refund guarantee as follows:

Vietnam Business Law