65% or 51% simple majority voting?

Under the Enterprise Law, the quorum for a meeting of the Shareholders Meeting is met when the number of shareholders present in person and by proxy represents at least 65% of all voting shares. A decision of the Shareholders Meeting on matters which are not a super majority issue can only be passed if it is approved by a number of shareholders holding more than 65% of the number of shares entitled to vote.

Resolution 71 approving Vietnam’s accession to the WTO (Resolution 71)  provides that “[A] shareholding company is entitled to provide in its charter … the number of members [of the company] required for holding a shareholder meeting [and] … the majority vote necessary (including 51% majority) in order to pass decisions … of the shareholder meeting”.

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Written by Nguyen Quang Vu On In ,

Foreign investment in service sectors not included in the WTO Commitments

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oreign investors interested in service sectors in Vietnam will first need to look at the commitments of Vietnam to the WTO on various sectors (WTO Commitments). If the relevant service falls into one of the service sectors committed in the WTO Commitments then the investors will more or less have an answer. If the relevant service does not fall into one of the service sectors committed in the WTO Commitments (Non-committed Services) then one would need to look at the relevant domestic laws to see if the market is open to foreign investors. Usually, if there is no express restriction on a Non-committed Services under domestic laws then a foreign investor should be able to invest in such sector. This position is reflected in Decree 108/2006 implementing the Investment Law.

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Written by Nguyen Quang Vu On In

Role of Joint venture agreements

The documentation for a joint venture company in Vietnam must at least include a joint venture agreement and a joint venture charter. If there is difference between the joint venture charter and the joint venture agreement, then one needs to decide which document will take precedent. Usually, in such case, the joint venture parties tend to favour the joint venture agreement for two reasons. First, the joint venture agreement is usually regarded as a private agreement between the joint venture parties and therefore needs to be respected. Second, before 2005, under the old Foreign Investment Law, a joint venture agreement has a clear legal status and would take precedent over a joint venture charter
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Written by Nguyen Quang Vu On In

Actual implementation of the Vietnam Japan Bilateral Investment Treaty

The Agreement between Japan and Vietnam for the Liberalisation, Promotion and Protection of Investment (the Vietnam-Japan BIT) has been signed for almost nine years ago and will in fact be terminated by November 2013, if either Vietnam or Japan has decided to terminate the agreement earlier month. But for the first time since the signing of the Vietnam-Japan BIT, it appears that Vietnamese licensing authorities have actively implemented the provisions of the Vietnam Japan BIT.
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Written by Nguyen Quang Vu On In ,