Documents Checklist For Setting Up A Single Member Limited Liability Service Company

The checklist below sets out the documents required or necessary for applying to obtain an Investment Certificate (IC) to set up a one-member limited liability service company (the Company) wholly-owned by a foreign investor in Vietnam (the Investor). The list also provides some items and information that the Investor needs to consider or decide before applying for the Investment Certificate.

Notes:

  • Investment Certificates are issued by the provincial licensing authorities. There are 63 provinces in Vietnam. The licensing authorities in each province may have different interpretation of the law and procedures. Generally, the licensing authorities in Ho Chi Minh City and Hanoi are usually stricter and require more documents than the licensing authorities in other provinces. Therefore, for each specific application, the licensing authority may or may not require each of the documents listed below.

  • There is no foreign ownership limit applicable to the scope of activities of the Company. Among other things, one should double check the commitments of Vietnam to the WTO on service sectors.

  • The Company is not involved in import and distribution of goods. If this is not the case, then additional documents and information are required for a Trading Licence.

  • The Company only leases office from an office building for its head office. There is no need for acquiring land and constructing buildings.

  • The Company is not involved in any conditional business which requires a minimum paid up capital or a practicing licence issued by Vietnamese authorities. 

No.

Document Description

Notes

1.         

Application for establishment in prescribed form

Investor to decide:

·         Company’s name and address;

·         Exact description of the Company’s business;

·         Duration of the investment project;

·         Total investment capital (equity and loan);

·         Total equity capital;

·         Capital contribution schedule;

·         Identity of the proposed legal representative of the Company; and

·         Identity of the representatives of the Investor in the Company.

2.         

Charter of the Company

Investor to decide:

·         Whether the Company will be managed by (1) a members council and a General Director or (2) a Chairman and a General Director; and

·         Authorities of each management level in the Company.

3.         

Resolutions of the Board of Directors of the Investor approving:

(i)                  the establishment in the Company;

(ii)                the charter of the Company;

(iii)              the appointment of the legal representative of the Company;

(iv)               the appointment of members of the Company’s Members’ Council (the “Members”);

(v)                 the authorized authorities of the Members; and

(vi)               appointing the Authorized Representative of the Investor to sign all relevant documents and proceed with relevant procedures for the stated purposes (the “Authorised Representative”).

 

 

4.         

Legalised copy of the Certificate of Incorporation/Business Registration of the Investor (issued by competent authority of the country of its incorporation) and its amendments (if any)

·         The date of the legalization must be within 3 months before the date of the application for the Investment Certificate. So this should only be done when the preparation of the application is near final.

·         Vietnamese translation of the same will also be required.

5.         

Legalised copy of Charter/Articles of Incorporation of the Investor

·         The date of the legalisation must be within 3 months before the date of the application for the Investment Certificate. So this should only be done when the preparation of the application is near final.

·         Vietnamese translation of the same will also be required.

6.         

Office lease for the Company’s head office together with (1) business registration of the landlord and (2) land use right and ownership certificate (or equivalent document) evidencing the landlord’s title over the leased office.

If there is a mortgage over the land and the building of the landlord, the licensing authority may even require evidence that the lender of the landlord has agreed for the landlord to lease its building.

7.         

Letter of the Investor on financial capacity and commitment on capital contribution by the Investor

·         It is better for the Investor to be a company of substance which has audited financial statements.

8.         

Legalized and notarized audited financial report of the Investor for the latest financial year

If the Investor is a newly established company, a letter of confirmation of the bank where the Investor opens its bank account can be accepted.

9.         

Economic technical explanation for the investment and establishment of the Company and its proposed business.

To explain the legal basis on why the Company should be licensed.

10.      

List of the Members of the Members’ Council of the Company (if applicable)

·         Applicable if the Company is organized in form of a limited liability company with members’ council.

·         If the Company is organized in form of a limited liability company with, this list is not required.

11.      

Legalized copy of the ID/passport of the Members and of the Authorized Representative

 

12.      

Legalized copy of the ID/Passport of the person who is supposed to serve as the legal representative of the Company

 

13.      

Evidence that the legal representative of the Company resides in Vietnam.

This may be a certificate of temporary residence issued by the local police. For an Investor who has no presence in Vietnam at the time of application, it may be not practical to send a foreign staff to stay in Vietnam just for satisfying the residency requirement during the licensing period. In that case, the Investor may consider appointing trusted Vietnamese to be the legal representative during the licensing period only.

14.      

Power of Attorney permitting local lawyers to deal with the licensing authority on behalf of the Investor to obtain the IC (“POA”).

 

 

 


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Written by Nguyen Quang Vu On In ,

New measures to facilitate equitisation and divestments by Vietnamese State-owned enterprises

In order to equitise and/or divest from 432 State-owned enterprises by end of 2015, the Government has provided certain additional measures to facilitate equitisation and divestments by Vietnamese State-owned enterprises under Resolution 15/2014. In particular,

  •  Subject to approval by the relevant State owner, a State-owned enterprise is expressly allowed to sell its investment in non-core business at a price lower than par value or book value after taking into account any reserve for such investment. This provision is to clarify further Decree 71/2013 which also allows divestment of investment in non-core business at a price lower than book value. However, Decree 71/2013 seems to require the relevant State-owned enterprise to sell its non-core investment at market price first.
  • a State-owned enterprise which sells its shares in an unlisted company may organise a public auction on its own. Under Decree 71/2013, if the shares in an unlisted company have an aggregate par value of VND 10 billion or more, the relevant State-owned enterprise must organise a public auction through a Stock exchange.
  • a State-owned enterprise which is the major shareholder in a public company may make a public offer to sell its shares in the public company even the public company is running at loss. Under Decree 58/2012, a major shareholder in a public company can only make a public offer to sell its shares in the public company if the public company has not accumulated loss and is profitable in the year before the year of offering.
  • SCIC is authorised to acquire investments in banking and insurance sectors by other State-owned enterprises in case those State-owned enterprises fail to sell such investment to other investors.

Resolution 15/2014 is not a legal instrument under Vietnamese law. Therefore, a measure under Resolution 15/2014 which is contrary to other Decrees of the Government including Decree 71/2013 and Decree 58/2012 may be of questionable legality.

Vietnam Business Law Blog
Handling Civil Claims In Vietnamese Criminal Proceedings

In criminal proceedings in Vietnam, civil claims (e.g., claims for compensation, repair of damaged property) often arise alongside criminal charges against criminals. The Criminal Procedure Code 2015 introduces the position of “civil claimants” (nguyên đơn dân sự) and “civil defendants” (bị đơn dân sự) to facilitate the handling of civil claims in Vietnamese criminal proceedings. However, other than creating these positions, the Criminal Procedure Code 2015 lacks detailed provisions on how these civil matters should be addressed in criminal proceedings. This legal gap, coupled with inconsistent judicial practices, makes the resolution of civil claims within criminal cases particularly complex and problematic. This post will explore the key challenges in resolving civil claims during criminal proceedings.

  • No clear procedures - Article 30 of the Criminal Procedure Code 2015 provides that civil matters in criminal cases are to be resolved during the adjudication of the criminal case. However, the Criminal Procedure Code 2015 provides no further instructions on the procedure for resolving civil claims within criminal proceedings. It remains unclear what procedural rules apply—whether the criminal court should follow its own process or adopt the procedures set out in the Civil Procedure Code 2015 to settle a civil claim during criminal proceedings. This uncertainty can lead to inconsistent judicial practices and procedural confusion.

  • Scope of civil claims - Article 64.1 of the Criminal Procedure Code 2015 defines a civil defendant as “an individual, agency, or organization that, as prescribed by law, is responsible for compensating for damages”. It appears from the definition of civil defendant that a civil claim during criminal proceedings only relates to the issue of compensation for damages. It is not clear whether other issues such as ownership of assets or return of illegal property could be covered in a civil claim during criminal proceedings. In addition, the court may also designate the person making or subjecting to a claim on civil issues which are not claim for damages to another position (e.g., person with related rights and obligations) during the proceedings.

Decree 125/2024: Licensing Uncertainty for Continuing Education Service Providers

Decree 125 of the Government dated 5 October 2024 (Decree 125/2024) introduces updated regulations for the education sector, including a requirement that a license must be obtained for establishing "other centres performing continuing education tasks" (trung tâm khác thực hiện nhiệm vụ giáo dục thường xuyên in Vietnamese and in the rest of this article, Other Continuing Education Centres). Crucially, the education law fails to clearly define these centres, creating significant ambiguity for education service providers, particularly those centres teaching K-12 subjects (e.g., math, literature).

First, the Education Law 2019 and Decree 125/2024 lack an explicit definition of Other Continuing Education Centres. Interpreting relevant provisions of the Education Law 2019, it appears that Other Continuing Education Centres are centres providing:

Vietnam Refines The Framework For Direct Power Purchase Agreement With Decree 57/2025

Following the issuance of the Law on Electricity 2024, Vietnam's Government has swiftly replaced its initial framework for Direct Power Purchase Agreements (DPPAs) under Decree 80/2024 by issuing Decree 57/2025 on 3 March 2025. Coming into effect immediately, Decree 57/2025 repeals Decree 80/2024, which had only been active since 3 July 2024. Decree 57/2025 largely maintains the two DPPA models introduced by Decree 80/2024  (1) via private line (Private DPPA) and (2) via the national grid (Grid-Connected DPPA), but introduces important changes impacting eligibility, pricing, and contractual details. Key changes include:

  • Flexible customer eligibility - Decree 57/2025 links customer eligibility (for initial participation and ongoing qualification) to a minimum consumption threshold (Minimum Take Amount) defined in the Wholesale Electricity Market Operation Regulations issued by the Ministry of Industry and Trade (MOIT). Decree 80/2024 instead used a fixed threshold (average ≥200,000 kWh/month). Accordingly, eligibility for participating in either DPPA model now depends on potentially dynamic wholesale market rules rather than a static figure, requiring ongoing monitoring of MOIT's regulations.

  • Stricter customer eligibility – A Large Customer in a DPPA arrangement which has been implemented for 12 months must ensure that in a calendar year, it has purchased from EVN the Minimum Take Amount for the 12 month periods ending on 31 October of the previous calendar year. Under Decree 80/2024, there is no requirement that the Minimum Take Amount must be purchased from EVN. It is not clear if this requirement will apply to a Private DPPA under which the customer purchases directly from the RE Generator.

Understanding Market Access Requirements For Uncommitted Businesses Under Investment Law 2020

Article 9 of the Investment Law 2020 provides for three kinds of business for foreign investors:

  • market-access-prohibited business lines (ngành, nghề chưa được tiếp cận thị trường in Vietnamese) (Prohibited Businesses);

  • business lines with conditional market access (ngành, nghề tiếp cận thị trường có điều kiện in Vietnamese) (Conditional Businesses); and

  • business lines which are not Conditional Businesses and Prohibited Businesses and are subject to the same market access treatment as domestic investors (Unrestricted Businesses).

However, Decree 31/2021 introduces another category of business lines being "business lines without market access commitment" (ngành, nghề Việt Nam chưa cam kết về tiếp cận thị trường in Vietnamese) (Uncommitted Business). It is unclear what the relationship between the Uncommitted Business and the Conditional Business under the Investment Law 2020 is.

Unclear Condition For Offshore Investors To Acquire Equity Originating From Land Use Right Contributions

Under Article 24.2 of the Investment Law 2020, offshore investors who intend to acquire equity in Vietnam-based companies must meet the land regulations on “conditions for receiving land use right” (LUR). However, the land law does not specify any conditions applicable to the offshore investors given that they are not a regulated land user.

Article 28.1(d) of the Land Law 2024 and its guiding provision, Article 9.1 of Decree 102/2024 only permit foreign-invested entities (FIEs), which can be established by offshore investors, to receive a transfer of equity being value of land use right originating from land allocation with land use fee payment or land lease with one-time rental payment to the State. Article 9.1 of Decree 102/2024 suggests that "equity being value of land use right " (vốn đầu tư là giá trị quyền sử dụng đất) (LUR Equity) is the equity in a company's charter capital created by contributing land use rights.

These provisions seem vague and can be interpreted differently, leading to varying conclusions.

Vietnamese Government’s Decree on Self-Consumption Rooftop Solar Power: A few comments (Part 2)

In light of our earlier analysis of Decree 135/2024, we have further observations regarding the Decree's lack of clarity. This post is written by Le Thanh Nhat.

Firstly, the Decree lacks a clear definition of “self-generation and self-consumption rooftop solar power” (Self-Consumption RSP). This is crucial as only surplus power from Self-Consumption RSP systems may be sold to EVN, Vietnam's national electricity provider. Unfortunately, Decree 135/2024 only offers the rather ambiguous definitions for “self-generation and self-consumption power” and “rooftop solar power” (which are arguably the two ‘components’ of Self-Consumption RSP) separately, without clarifying their integration.

Key Highlights Of Vietnam New Data Law

A new Data Law, passed in late November 2024 and set to take effect on 1 July 2025, focuses primarily on establishing a national general database and data centre for state use. However, it also introduces rules on digital data (data in the rest of this article) that concerns the private sector, such as, data products and services. The Government is also drafting three draft decrees detailing key issues under the Data Law, including Data-Related Products & Services Draft Decree, Core & Important Data Draft Decree and a Master Draft Decree.

This blog will discuss several key points under the Data Law and related draft decrees. This post is written by Ha Thanh Phuc and Trinh Phuong Thao.

1)          The police will review and supervise your data activities

The Ministry of Public Security (MPS) again is authorized to regulate all activities relating to data except for data under the Ministry of Defence. Accordingly, it seems that Vietnam considers data as security issue and violation of data activities could result in significant liabilities. This could raise significant compliance costs for businesses and companies in Vietnam if they want to be fully comply with unclear rules (see discussion below).

1)          Conditional Business Lines

Amendments to the Investment Law 2020 in late 2024 now require businesses involved in (i) data intermediary products and services, (ii) data analysis and synthesis, or (iii) data platform services to meet certain conditions. The Data Law suggests that:

a. data platform services may be restricted to state enterprises and public providers, potentially excluding private companies; and

b. only providers of data analysis and synthesis services that potentially harm national defence, national security, social order, safety, social ethics, or public health, which have been detailed under the Data-Related Products & Services Draft Decree, will be subject to these conditions.

Under the Data-Related Products & Services Draft Decree, businesses in these sectors are subject to strict requirements. Notably, all such businesses must maintain an escrow of at least 5 billion VND at a Vietnamese commercial bank to cover compensation and expenses in the event their licenses are revoked.

Dealing With Civil Liability In A Criminal Case In Vietnam – A Review Of Certain Practical Cases

In a criminal case involving a business, from time to time, the courts will need to decide on the civil liability of the criminal and other persons including those who are not aware of the crime relating to the case. For example, if A commits a fraud against B and uses the monies obtained from B to repay a debt between A and C who is not aware of A’s crime. In addition to deciding on whether A is guilty or not, the court will need to decide whether (1) requesting A to compensate B for the loss that B suffers or (2) requesting C to return the monies C receives from A to B (assuming that A is convicted). However, it appears that the court does not have a consistent approach. In this post, we discuss the approaches that the courts took in some significant criminal cases for the last decade.

Huyen Nhu Case – 2014

Huynh Thu Huyen Nhu was the head of a transaction office of Vietinbank (a large State-owned bank). Huyen Nhu has offered high interest rate (exceeding the interest rate cap provided by law) to various companies to convince them to deposit their monies with a branch of Vietinbank. After those companies made the deposit under instructions of Huyen Nhu, Huyen Nhu used fake documents and payment instruction to cause Vietinbank to transfer the deposit to Huyen Nhu’s designated accounts. Huyen Nhu used most of the amount obtained through her fraud to repay her debts to several individuals. The damages caused by Huyen Nhu is reported to be around VND 4000 billion (about US$ 200 million at such time), being largest bank fraud at the time.

In addition to convicting Huyen Nhu of the crime of committing fraud to appropriate properties (lừa đảo chiếm đoạt tài sản), the court also requested Huyen Nhu to compensate all the relevant companies for the losses that such companies suffer. The relevant companies took the view that they are not victim of Huyen Nhu’s fraudulent acts but Vietinbank is. Therefore, the relevant companies requested Vietinbank to repay them the deposits they made with Vietinbank. However, the court rejected such view and considered those companies to be victims of Huyen Nhu’s fraudulent acts. The court confiscated the amount of interests that Huyen Nhu paid her lenders but did not require these lenders to return the entire amount they received from Huyen Nhu.

Vietnamese Government’s Decree On Self-Consumption Rooftop Solar Power: A Few Comments

On 22 October 2024, the Government of Vietnam issued Decree 135/2024 on mechanisms and policies incentivising the development of “self-generation and self-consumption rooftop solar power” (Self-Consumption RSP). Unfortunately, there is still a great deal of ambiguity in the provisions of Decree 135/2024 that might create unnecessary confusion in applying and administering the implementation of Decree 135/2024. Please see our discussion of a few ambiguous provisions of Decree 135/2024 below.

1)       Potential risk from Decree 135/2024’s scope of application – Decree 135/2024 is said to only govern Self-Consumption RSP [systems] that are installed on the roof of construction works that were invested and constructed in strict compliance with law, including regulations on investment, construction, land, environment, safety, firefighting and fire prevention. As such, any noncompliance of the underlying building may cause the rooftop solar system to not be recognised as a Self-Consumption RSP system and therefore cannot enjoy the incentives policies under Decree 135/2024. It is unclear (i) whether mitigated noncompliance in the past (before the Self-Consumption RSP system is installed) would cause the building to be considered not “invested and constructed in strict compliance with law” and therefore prevents the installation of Self-Consumption RSP system on said building, and (i) whether noncompliance that arises after the Self-Consumption RSP system is installed and operated would affect the applicability of Decree 135/2024 to such system and what the outcome would be.

New Amendments To The Investment Law 2020

The National Assembly of Vietnam adopted a new law (the Amended Investment Law) to amend and supplement several provisions in Investment Law 2020. Most provisions of the Amended Investment Law take effect from 1 January 2025, except certain cases will take effect from 1 July 2025. In this post, we discuss some notable points in this Amended Investment Law.

Special Investment Procedures

The key point in this Amended Investment Law is the introduction of a special investment procedure (Special Procedure) which allows the eligible investors in certain high-tech sectors to obtain the investment registration certificate (IRC) and implement its project in a shorter time and reduces procedures, including waiver of various approvals and procedures.

The project utilizing the Special Procedure are exempt from various standard approvals and procedures, including IPA, technology appraisal, environmental impact assessment report, detail planning, construction permit and other approvals and permits in construction, fire fighting and prevention. The issued IRC serves as document for land lease or conversion of land use purpose. However, before commencing construction, investors are obliged to submit a report on the project's economic-technical construction investment, along with the corresponding appraisal report, to the relevant Authority.

This Special Procedure prevails relevant regulations under other laws enacted before 15 January 2025 when there is any difference between the Special Procedure and such other laws. For projects having IPA or IRC before the effective date of Amended Investment Law and eligible for utilizing the Special Procedure, the investor of such project can choose to apply the Special Procedure. The Special Procedure is still subject to further guidance from the Government and Ministry of Planning and Investment.

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Written by Nguyen Quang Vu On In ,

Scope of real estate business by a foreign-invested developer in Vietnam

There has been an argument that under the Law on Real Estate, foreign investors may not engage in the activities of purchasing or leasing of buildings for further second sale or subleasing in Vietnam. This is because under Article 10.1 of the Law on Real Estate, a foreign investor is expressly allowed to:

  • invest in the creation of buildings, construction works for sale, lease and finance lease. Article 18 of Law on Real Estate defines "creation of a building" to include: (1) investment in construction of new houses and buildings or (2) investment in upgrading and repairing existing houses and buildings; and

  • invest in the renovation of land and infrastructure attached to land for lease of land with attached infrastructure.

The scope of real estate business of a foreign investor under Article 10 of the Law on Real Estate Business does not include any reference to purchase or lease of buildings for further secondary sale or sub-leasing.

However, by virtue of the definition of “creation of a building” under Article 18 of the Law Real Estate, one could also argue that if a foreign investor (1) purchases or leases existing buildings and then (2) invests in upgrading and repairing such buildings, the foreign investor should be allowed to conduct further secondary sale or subleasing. However, a recent official letter of the Ministry of Construction dated 12 February 2014, without giving a clear reason, the Ministry of Construction takes the view that a foreign investor leases a building or construction work and repairs or upgrades such building or construction work for subleasing is not within the permitted scope of real estate activities under the Law on Real Estate. According to the Ministry of Construction, a foreign investor should wait until the amended Law on Real Estate for subleasing of existing buildings.

Vietnam Business Law Blog
Handling Civil Claims In Vietnamese Criminal Proceedings

In criminal proceedings in Vietnam, civil claims (e.g., claims for compensation, repair of damaged property) often arise alongside criminal charges against criminals. The Criminal Procedure Code 2015 introduces the position of “civil claimants” (nguyên đơn dân sự) and “civil defendants” (bị đơn dân sự) to facilitate the handling of civil claims in Vietnamese criminal proceedings. However, other than creating these positions, the Criminal Procedure Code 2015 lacks detailed provisions on how these civil matters should be addressed in criminal proceedings. This legal gap, coupled with inconsistent judicial practices, makes the resolution of civil claims within criminal cases particularly complex and problematic. This post will explore the key challenges in resolving civil claims during criminal proceedings.

  • No clear procedures - Article 30 of the Criminal Procedure Code 2015 provides that civil matters in criminal cases are to be resolved during the adjudication of the criminal case. However, the Criminal Procedure Code 2015 provides no further instructions on the procedure for resolving civil claims within criminal proceedings. It remains unclear what procedural rules apply—whether the criminal court should follow its own process or adopt the procedures set out in the Civil Procedure Code 2015 to settle a civil claim during criminal proceedings. This uncertainty can lead to inconsistent judicial practices and procedural confusion.

  • Scope of civil claims - Article 64.1 of the Criminal Procedure Code 2015 defines a civil defendant as “an individual, agency, or organization that, as prescribed by law, is responsible for compensating for damages”. It appears from the definition of civil defendant that a civil claim during criminal proceedings only relates to the issue of compensation for damages. It is not clear whether other issues such as ownership of assets or return of illegal property could be covered in a civil claim during criminal proceedings. In addition, the court may also designate the person making or subjecting to a claim on civil issues which are not claim for damages to another position (e.g., person with related rights and obligations) during the proceedings.

Decree 125/2024: Licensing Uncertainty for Continuing Education Service Providers

Decree 125 of the Government dated 5 October 2024 (Decree 125/2024) introduces updated regulations for the education sector, including a requirement that a license must be obtained for establishing "other centres performing continuing education tasks" (trung tâm khác thực hiện nhiệm vụ giáo dục thường xuyên in Vietnamese and in the rest of this article, Other Continuing Education Centres). Crucially, the education law fails to clearly define these centres, creating significant ambiguity for education service providers, particularly those centres teaching K-12 subjects (e.g., math, literature).

First, the Education Law 2019 and Decree 125/2024 lack an explicit definition of Other Continuing Education Centres. Interpreting relevant provisions of the Education Law 2019, it appears that Other Continuing Education Centres are centres providing:

Vietnam Refines The Framework For Direct Power Purchase Agreement With Decree 57/2025

Following the issuance of the Law on Electricity 2024, Vietnam's Government has swiftly replaced its initial framework for Direct Power Purchase Agreements (DPPAs) under Decree 80/2024 by issuing Decree 57/2025 on 3 March 2025. Coming into effect immediately, Decree 57/2025 repeals Decree 80/2024, which had only been active since 3 July 2024. Decree 57/2025 largely maintains the two DPPA models introduced by Decree 80/2024  (1) via private line (Private DPPA) and (2) via the national grid (Grid-Connected DPPA), but introduces important changes impacting eligibility, pricing, and contractual details. Key changes include:

  • Flexible customer eligibility - Decree 57/2025 links customer eligibility (for initial participation and ongoing qualification) to a minimum consumption threshold (Minimum Take Amount) defined in the Wholesale Electricity Market Operation Regulations issued by the Ministry of Industry and Trade (MOIT). Decree 80/2024 instead used a fixed threshold (average ≥200,000 kWh/month). Accordingly, eligibility for participating in either DPPA model now depends on potentially dynamic wholesale market rules rather than a static figure, requiring ongoing monitoring of MOIT's regulations.

  • Stricter customer eligibility – A Large Customer in a DPPA arrangement which has been implemented for 12 months must ensure that in a calendar year, it has purchased from EVN the Minimum Take Amount for the 12 month periods ending on 31 October of the previous calendar year. Under Decree 80/2024, there is no requirement that the Minimum Take Amount must be purchased from EVN. It is not clear if this requirement will apply to a Private DPPA under which the customer purchases directly from the RE Generator.

Understanding Market Access Requirements For Uncommitted Businesses Under Investment Law 2020

Article 9 of the Investment Law 2020 provides for three kinds of business for foreign investors:

  • market-access-prohibited business lines (ngành, nghề chưa được tiếp cận thị trường in Vietnamese) (Prohibited Businesses);

  • business lines with conditional market access (ngành, nghề tiếp cận thị trường có điều kiện in Vietnamese) (Conditional Businesses); and

  • business lines which are not Conditional Businesses and Prohibited Businesses and are subject to the same market access treatment as domestic investors (Unrestricted Businesses).

However, Decree 31/2021 introduces another category of business lines being "business lines without market access commitment" (ngành, nghề Việt Nam chưa cam kết về tiếp cận thị trường in Vietnamese) (Uncommitted Business). It is unclear what the relationship between the Uncommitted Business and the Conditional Business under the Investment Law 2020 is.

Unclear Condition For Offshore Investors To Acquire Equity Originating From Land Use Right Contributions

Under Article 24.2 of the Investment Law 2020, offshore investors who intend to acquire equity in Vietnam-based companies must meet the land regulations on “conditions for receiving land use right” (LUR). However, the land law does not specify any conditions applicable to the offshore investors given that they are not a regulated land user.

Article 28.1(d) of the Land Law 2024 and its guiding provision, Article 9.1 of Decree 102/2024 only permit foreign-invested entities (FIEs), which can be established by offshore investors, to receive a transfer of equity being value of land use right originating from land allocation with land use fee payment or land lease with one-time rental payment to the State. Article 9.1 of Decree 102/2024 suggests that "equity being value of land use right " (vốn đầu tư là giá trị quyền sử dụng đất) (LUR Equity) is the equity in a company's charter capital created by contributing land use rights.

These provisions seem vague and can be interpreted differently, leading to varying conclusions.

Vietnamese Government’s Decree on Self-Consumption Rooftop Solar Power: A few comments (Part 2)

In light of our earlier analysis of Decree 135/2024, we have further observations regarding the Decree's lack of clarity. This post is written by Le Thanh Nhat.

Firstly, the Decree lacks a clear definition of “self-generation and self-consumption rooftop solar power” (Self-Consumption RSP). This is crucial as only surplus power from Self-Consumption RSP systems may be sold to EVN, Vietnam's national electricity provider. Unfortunately, Decree 135/2024 only offers the rather ambiguous definitions for “self-generation and self-consumption power” and “rooftop solar power” (which are arguably the two ‘components’ of Self-Consumption RSP) separately, without clarifying their integration.

Key Highlights Of Vietnam New Data Law

A new Data Law, passed in late November 2024 and set to take effect on 1 July 2025, focuses primarily on establishing a national general database and data centre for state use. However, it also introduces rules on digital data (data in the rest of this article) that concerns the private sector, such as, data products and services. The Government is also drafting three draft decrees detailing key issues under the Data Law, including Data-Related Products & Services Draft Decree, Core & Important Data Draft Decree and a Master Draft Decree.

This blog will discuss several key points under the Data Law and related draft decrees. This post is written by Ha Thanh Phuc and Trinh Phuong Thao.

1)          The police will review and supervise your data activities

The Ministry of Public Security (MPS) again is authorized to regulate all activities relating to data except for data under the Ministry of Defence. Accordingly, it seems that Vietnam considers data as security issue and violation of data activities could result in significant liabilities. This could raise significant compliance costs for businesses and companies in Vietnam if they want to be fully comply with unclear rules (see discussion below).

1)          Conditional Business Lines

Amendments to the Investment Law 2020 in late 2024 now require businesses involved in (i) data intermediary products and services, (ii) data analysis and synthesis, or (iii) data platform services to meet certain conditions. The Data Law suggests that:

a. data platform services may be restricted to state enterprises and public providers, potentially excluding private companies; and

b. only providers of data analysis and synthesis services that potentially harm national defence, national security, social order, safety, social ethics, or public health, which have been detailed under the Data-Related Products & Services Draft Decree, will be subject to these conditions.

Under the Data-Related Products & Services Draft Decree, businesses in these sectors are subject to strict requirements. Notably, all such businesses must maintain an escrow of at least 5 billion VND at a Vietnamese commercial bank to cover compensation and expenses in the event their licenses are revoked.

Dealing With Civil Liability In A Criminal Case In Vietnam – A Review Of Certain Practical Cases

In a criminal case involving a business, from time to time, the courts will need to decide on the civil liability of the criminal and other persons including those who are not aware of the crime relating to the case. For example, if A commits a fraud against B and uses the monies obtained from B to repay a debt between A and C who is not aware of A’s crime. In addition to deciding on whether A is guilty or not, the court will need to decide whether (1) requesting A to compensate B for the loss that B suffers or (2) requesting C to return the monies C receives from A to B (assuming that A is convicted). However, it appears that the court does not have a consistent approach. In this post, we discuss the approaches that the courts took in some significant criminal cases for the last decade.

Huyen Nhu Case – 2014

Huynh Thu Huyen Nhu was the head of a transaction office of Vietinbank (a large State-owned bank). Huyen Nhu has offered high interest rate (exceeding the interest rate cap provided by law) to various companies to convince them to deposit their monies with a branch of Vietinbank. After those companies made the deposit under instructions of Huyen Nhu, Huyen Nhu used fake documents and payment instruction to cause Vietinbank to transfer the deposit to Huyen Nhu’s designated accounts. Huyen Nhu used most of the amount obtained through her fraud to repay her debts to several individuals. The damages caused by Huyen Nhu is reported to be around VND 4000 billion (about US$ 200 million at such time), being largest bank fraud at the time.

In addition to convicting Huyen Nhu of the crime of committing fraud to appropriate properties (lừa đảo chiếm đoạt tài sản), the court also requested Huyen Nhu to compensate all the relevant companies for the losses that such companies suffer. The relevant companies took the view that they are not victim of Huyen Nhu’s fraudulent acts but Vietinbank is. Therefore, the relevant companies requested Vietinbank to repay them the deposits they made with Vietinbank. However, the court rejected such view and considered those companies to be victims of Huyen Nhu’s fraudulent acts. The court confiscated the amount of interests that Huyen Nhu paid her lenders but did not require these lenders to return the entire amount they received from Huyen Nhu.

Vietnamese Government’s Decree On Self-Consumption Rooftop Solar Power: A Few Comments

On 22 October 2024, the Government of Vietnam issued Decree 135/2024 on mechanisms and policies incentivising the development of “self-generation and self-consumption rooftop solar power” (Self-Consumption RSP). Unfortunately, there is still a great deal of ambiguity in the provisions of Decree 135/2024 that might create unnecessary confusion in applying and administering the implementation of Decree 135/2024. Please see our discussion of a few ambiguous provisions of Decree 135/2024 below.

1)       Potential risk from Decree 135/2024’s scope of application – Decree 135/2024 is said to only govern Self-Consumption RSP [systems] that are installed on the roof of construction works that were invested and constructed in strict compliance with law, including regulations on investment, construction, land, environment, safety, firefighting and fire prevention. As such, any noncompliance of the underlying building may cause the rooftop solar system to not be recognised as a Self-Consumption RSP system and therefore cannot enjoy the incentives policies under Decree 135/2024. It is unclear (i) whether mitigated noncompliance in the past (before the Self-Consumption RSP system is installed) would cause the building to be considered not “invested and constructed in strict compliance with law” and therefore prevents the installation of Self-Consumption RSP system on said building, and (i) whether noncompliance that arises after the Self-Consumption RSP system is installed and operated would affect the applicability of Decree 135/2024 to such system and what the outcome would be.

New Amendments To The Investment Law 2020

The National Assembly of Vietnam adopted a new law (the Amended Investment Law) to amend and supplement several provisions in Investment Law 2020. Most provisions of the Amended Investment Law take effect from 1 January 2025, except certain cases will take effect from 1 July 2025. In this post, we discuss some notable points in this Amended Investment Law.

Special Investment Procedures

The key point in this Amended Investment Law is the introduction of a special investment procedure (Special Procedure) which allows the eligible investors in certain high-tech sectors to obtain the investment registration certificate (IRC) and implement its project in a shorter time and reduces procedures, including waiver of various approvals and procedures.

The project utilizing the Special Procedure are exempt from various standard approvals and procedures, including IPA, technology appraisal, environmental impact assessment report, detail planning, construction permit and other approvals and permits in construction, fire fighting and prevention. The issued IRC serves as document for land lease or conversion of land use purpose. However, before commencing construction, investors are obliged to submit a report on the project's economic-technical construction investment, along with the corresponding appraisal report, to the relevant Authority.

This Special Procedure prevails relevant regulations under other laws enacted before 15 January 2025 when there is any difference between the Special Procedure and such other laws. For projects having IPA or IRC before the effective date of Amended Investment Law and eligible for utilizing the Special Procedure, the investor of such project can choose to apply the Special Procedure. The Special Procedure is still subject to further guidance from the Government and Ministry of Planning and Investment.

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New Decree on re-registration of Pre-2006 FIEs

Decree 194/2013 on re-registration of foreign-invested enterprises incorporated before 1 July 2006 (Pre-2006 FIEs) under the old Foreign Investment Law will take effect from 15 January 2014. Under the new rules,

  • A Pre-2006 FIE whose Investment Licence has expired and has not liquidated may apply to re-register and operate under the current Investment Law and Enterprise Law before 1 February 2014 subject to certain conditons. Beyond this time limit, such Pre-2006 FIE must liquidate.
  •  The licensing authority is required to reiterate in the new Investment Certificate of a re-registered Pre-2006 FIE the investment incentives and conditions recorded in the old Investment Licence of such Pre-2006 FIE. This express requirement seems to address the concern of many Pre-2006 FIEs that they may “loose” existing investment incentives through the re-registration process.
  • An un-re-registered Pre-2006 FIE will continue to operate according its current charter and Investment Licence. In case the current charter or the Investment Licence is silent, a wholly foreign invested enterprise with one owner will be subject to the provisions under the Enterprise Law applicable to a single member limited liability company and a joint venture or a wholly foreign invested enterprise with more than one owner will be subject to the provisions under the Enterprise Law applicable to a limited liability company with more than one member. This new clarification will likely help many Pre-2006 FIE to navigate through two incompatible legal frameworks.
  •  An un-re-registered Pre-2006 FIE is allowed to invest in new project and engage in new business line as long as there is no change to the duration of the Investment Licence. Again this provision is giving more certainty to an un-re-registered Pre-2006 FIE which wishes to expand its operation.
Vietnam Business Law Blog
Handling Civil Claims In Vietnamese Criminal Proceedings

In criminal proceedings in Vietnam, civil claims (e.g., claims for compensation, repair of damaged property) often arise alongside criminal charges against criminals. The Criminal Procedure Code 2015 introduces the position of “civil claimants” (nguyên đơn dân sự) and “civil defendants” (bị đơn dân sự) to facilitate the handling of civil claims in Vietnamese criminal proceedings. However, other than creating these positions, the Criminal Procedure Code 2015 lacks detailed provisions on how these civil matters should be addressed in criminal proceedings. This legal gap, coupled with inconsistent judicial practices, makes the resolution of civil claims within criminal cases particularly complex and problematic. This post will explore the key challenges in resolving civil claims during criminal proceedings.

  • No clear procedures - Article 30 of the Criminal Procedure Code 2015 provides that civil matters in criminal cases are to be resolved during the adjudication of the criminal case. However, the Criminal Procedure Code 2015 provides no further instructions on the procedure for resolving civil claims within criminal proceedings. It remains unclear what procedural rules apply—whether the criminal court should follow its own process or adopt the procedures set out in the Civil Procedure Code 2015 to settle a civil claim during criminal proceedings. This uncertainty can lead to inconsistent judicial practices and procedural confusion.

  • Scope of civil claims - Article 64.1 of the Criminal Procedure Code 2015 defines a civil defendant as “an individual, agency, or organization that, as prescribed by law, is responsible for compensating for damages”. It appears from the definition of civil defendant that a civil claim during criminal proceedings only relates to the issue of compensation for damages. It is not clear whether other issues such as ownership of assets or return of illegal property could be covered in a civil claim during criminal proceedings. In addition, the court may also designate the person making or subjecting to a claim on civil issues which are not claim for damages to another position (e.g., person with related rights and obligations) during the proceedings.

Decree 125/2024: Licensing Uncertainty for Continuing Education Service Providers

Decree 125 of the Government dated 5 October 2024 (Decree 125/2024) introduces updated regulations for the education sector, including a requirement that a license must be obtained for establishing "other centres performing continuing education tasks" (trung tâm khác thực hiện nhiệm vụ giáo dục thường xuyên in Vietnamese and in the rest of this article, Other Continuing Education Centres). Crucially, the education law fails to clearly define these centres, creating significant ambiguity for education service providers, particularly those centres teaching K-12 subjects (e.g., math, literature).

First, the Education Law 2019 and Decree 125/2024 lack an explicit definition of Other Continuing Education Centres. Interpreting relevant provisions of the Education Law 2019, it appears that Other Continuing Education Centres are centres providing:

Vietnam Refines The Framework For Direct Power Purchase Agreement With Decree 57/2025

Following the issuance of the Law on Electricity 2024, Vietnam's Government has swiftly replaced its initial framework for Direct Power Purchase Agreements (DPPAs) under Decree 80/2024 by issuing Decree 57/2025 on 3 March 2025. Coming into effect immediately, Decree 57/2025 repeals Decree 80/2024, which had only been active since 3 July 2024. Decree 57/2025 largely maintains the two DPPA models introduced by Decree 80/2024  (1) via private line (Private DPPA) and (2) via the national grid (Grid-Connected DPPA), but introduces important changes impacting eligibility, pricing, and contractual details. Key changes include:

  • Flexible customer eligibility - Decree 57/2025 links customer eligibility (for initial participation and ongoing qualification) to a minimum consumption threshold (Minimum Take Amount) defined in the Wholesale Electricity Market Operation Regulations issued by the Ministry of Industry and Trade (MOIT). Decree 80/2024 instead used a fixed threshold (average ≥200,000 kWh/month). Accordingly, eligibility for participating in either DPPA model now depends on potentially dynamic wholesale market rules rather than a static figure, requiring ongoing monitoring of MOIT's regulations.

  • Stricter customer eligibility – A Large Customer in a DPPA arrangement which has been implemented for 12 months must ensure that in a calendar year, it has purchased from EVN the Minimum Take Amount for the 12 month periods ending on 31 October of the previous calendar year. Under Decree 80/2024, there is no requirement that the Minimum Take Amount must be purchased from EVN. It is not clear if this requirement will apply to a Private DPPA under which the customer purchases directly from the RE Generator.

Understanding Market Access Requirements For Uncommitted Businesses Under Investment Law 2020

Article 9 of the Investment Law 2020 provides for three kinds of business for foreign investors:

  • market-access-prohibited business lines (ngành, nghề chưa được tiếp cận thị trường in Vietnamese) (Prohibited Businesses);

  • business lines with conditional market access (ngành, nghề tiếp cận thị trường có điều kiện in Vietnamese) (Conditional Businesses); and

  • business lines which are not Conditional Businesses and Prohibited Businesses and are subject to the same market access treatment as domestic investors (Unrestricted Businesses).

However, Decree 31/2021 introduces another category of business lines being "business lines without market access commitment" (ngành, nghề Việt Nam chưa cam kết về tiếp cận thị trường in Vietnamese) (Uncommitted Business). It is unclear what the relationship between the Uncommitted Business and the Conditional Business under the Investment Law 2020 is.

Unclear Condition For Offshore Investors To Acquire Equity Originating From Land Use Right Contributions

Under Article 24.2 of the Investment Law 2020, offshore investors who intend to acquire equity in Vietnam-based companies must meet the land regulations on “conditions for receiving land use right” (LUR). However, the land law does not specify any conditions applicable to the offshore investors given that they are not a regulated land user.

Article 28.1(d) of the Land Law 2024 and its guiding provision, Article 9.1 of Decree 102/2024 only permit foreign-invested entities (FIEs), which can be established by offshore investors, to receive a transfer of equity being value of land use right originating from land allocation with land use fee payment or land lease with one-time rental payment to the State. Article 9.1 of Decree 102/2024 suggests that "equity being value of land use right " (vốn đầu tư là giá trị quyền sử dụng đất) (LUR Equity) is the equity in a company's charter capital created by contributing land use rights.

These provisions seem vague and can be interpreted differently, leading to varying conclusions.

Vietnamese Government’s Decree on Self-Consumption Rooftop Solar Power: A few comments (Part 2)

In light of our earlier analysis of Decree 135/2024, we have further observations regarding the Decree's lack of clarity. This post is written by Le Thanh Nhat.

Firstly, the Decree lacks a clear definition of “self-generation and self-consumption rooftop solar power” (Self-Consumption RSP). This is crucial as only surplus power from Self-Consumption RSP systems may be sold to EVN, Vietnam's national electricity provider. Unfortunately, Decree 135/2024 only offers the rather ambiguous definitions for “self-generation and self-consumption power” and “rooftop solar power” (which are arguably the two ‘components’ of Self-Consumption RSP) separately, without clarifying their integration.

Key Highlights Of Vietnam New Data Law

A new Data Law, passed in late November 2024 and set to take effect on 1 July 2025, focuses primarily on establishing a national general database and data centre for state use. However, it also introduces rules on digital data (data in the rest of this article) that concerns the private sector, such as, data products and services. The Government is also drafting three draft decrees detailing key issues under the Data Law, including Data-Related Products & Services Draft Decree, Core & Important Data Draft Decree and a Master Draft Decree.

This blog will discuss several key points under the Data Law and related draft decrees. This post is written by Ha Thanh Phuc and Trinh Phuong Thao.

1)          The police will review and supervise your data activities

The Ministry of Public Security (MPS) again is authorized to regulate all activities relating to data except for data under the Ministry of Defence. Accordingly, it seems that Vietnam considers data as security issue and violation of data activities could result in significant liabilities. This could raise significant compliance costs for businesses and companies in Vietnam if they want to be fully comply with unclear rules (see discussion below).

1)          Conditional Business Lines

Amendments to the Investment Law 2020 in late 2024 now require businesses involved in (i) data intermediary products and services, (ii) data analysis and synthesis, or (iii) data platform services to meet certain conditions. The Data Law suggests that:

a. data platform services may be restricted to state enterprises and public providers, potentially excluding private companies; and

b. only providers of data analysis and synthesis services that potentially harm national defence, national security, social order, safety, social ethics, or public health, which have been detailed under the Data-Related Products & Services Draft Decree, will be subject to these conditions.

Under the Data-Related Products & Services Draft Decree, businesses in these sectors are subject to strict requirements. Notably, all such businesses must maintain an escrow of at least 5 billion VND at a Vietnamese commercial bank to cover compensation and expenses in the event their licenses are revoked.

Dealing With Civil Liability In A Criminal Case In Vietnam – A Review Of Certain Practical Cases

In a criminal case involving a business, from time to time, the courts will need to decide on the civil liability of the criminal and other persons including those who are not aware of the crime relating to the case. For example, if A commits a fraud against B and uses the monies obtained from B to repay a debt between A and C who is not aware of A’s crime. In addition to deciding on whether A is guilty or not, the court will need to decide whether (1) requesting A to compensate B for the loss that B suffers or (2) requesting C to return the monies C receives from A to B (assuming that A is convicted). However, it appears that the court does not have a consistent approach. In this post, we discuss the approaches that the courts took in some significant criminal cases for the last decade.

Huyen Nhu Case – 2014

Huynh Thu Huyen Nhu was the head of a transaction office of Vietinbank (a large State-owned bank). Huyen Nhu has offered high interest rate (exceeding the interest rate cap provided by law) to various companies to convince them to deposit their monies with a branch of Vietinbank. After those companies made the deposit under instructions of Huyen Nhu, Huyen Nhu used fake documents and payment instruction to cause Vietinbank to transfer the deposit to Huyen Nhu’s designated accounts. Huyen Nhu used most of the amount obtained through her fraud to repay her debts to several individuals. The damages caused by Huyen Nhu is reported to be around VND 4000 billion (about US$ 200 million at such time), being largest bank fraud at the time.

In addition to convicting Huyen Nhu of the crime of committing fraud to appropriate properties (lừa đảo chiếm đoạt tài sản), the court also requested Huyen Nhu to compensate all the relevant companies for the losses that such companies suffer. The relevant companies took the view that they are not victim of Huyen Nhu’s fraudulent acts but Vietinbank is. Therefore, the relevant companies requested Vietinbank to repay them the deposits they made with Vietinbank. However, the court rejected such view and considered those companies to be victims of Huyen Nhu’s fraudulent acts. The court confiscated the amount of interests that Huyen Nhu paid her lenders but did not require these lenders to return the entire amount they received from Huyen Nhu.

Vietnamese Government’s Decree On Self-Consumption Rooftop Solar Power: A Few Comments

On 22 October 2024, the Government of Vietnam issued Decree 135/2024 on mechanisms and policies incentivising the development of “self-generation and self-consumption rooftop solar power” (Self-Consumption RSP). Unfortunately, there is still a great deal of ambiguity in the provisions of Decree 135/2024 that might create unnecessary confusion in applying and administering the implementation of Decree 135/2024. Please see our discussion of a few ambiguous provisions of Decree 135/2024 below.

1)       Potential risk from Decree 135/2024’s scope of application – Decree 135/2024 is said to only govern Self-Consumption RSP [systems] that are installed on the roof of construction works that were invested and constructed in strict compliance with law, including regulations on investment, construction, land, environment, safety, firefighting and fire prevention. As such, any noncompliance of the underlying building may cause the rooftop solar system to not be recognised as a Self-Consumption RSP system and therefore cannot enjoy the incentives policies under Decree 135/2024. It is unclear (i) whether mitigated noncompliance in the past (before the Self-Consumption RSP system is installed) would cause the building to be considered not “invested and constructed in strict compliance with law” and therefore prevents the installation of Self-Consumption RSP system on said building, and (i) whether noncompliance that arises after the Self-Consumption RSP system is installed and operated would affect the applicability of Decree 135/2024 to such system and what the outcome would be.

New Amendments To The Investment Law 2020

The National Assembly of Vietnam adopted a new law (the Amended Investment Law) to amend and supplement several provisions in Investment Law 2020. Most provisions of the Amended Investment Law take effect from 1 January 2025, except certain cases will take effect from 1 July 2025. In this post, we discuss some notable points in this Amended Investment Law.

Special Investment Procedures

The key point in this Amended Investment Law is the introduction of a special investment procedure (Special Procedure) which allows the eligible investors in certain high-tech sectors to obtain the investment registration certificate (IRC) and implement its project in a shorter time and reduces procedures, including waiver of various approvals and procedures.

The project utilizing the Special Procedure are exempt from various standard approvals and procedures, including IPA, technology appraisal, environmental impact assessment report, detail planning, construction permit and other approvals and permits in construction, fire fighting and prevention. The issued IRC serves as document for land lease or conversion of land use purpose. However, before commencing construction, investors are obliged to submit a report on the project's economic-technical construction investment, along with the corresponding appraisal report, to the relevant Authority.

This Special Procedure prevails relevant regulations under other laws enacted before 15 January 2025 when there is any difference between the Special Procedure and such other laws. For projects having IPA or IRC before the effective date of Amended Investment Law and eligible for utilizing the Special Procedure, the investor of such project can choose to apply the Special Procedure. The Special Procedure is still subject to further guidance from the Government and Ministry of Planning and Investment.

Resolution 171: Expanding Land Resources For Commercial Housing Development In Vietnam

Vietnam’s housing market has experienced rapid growth in recent years, driven by urbanization, economic development, and increasing demand. A shortage in housing supply in some big cities currently has prompted policymakers to enhance land policies to unlock resources for housing project development. As new Land Law 2024 seems to fall short in resolving the land supply constraints for residential development, on 30 November 2024, the National Assembly adopted Resolution 171 on piloting implementation of commercial housing projects through agreements on voluntary assignment of land use rights (LUR) or use of existing LUR (Resolution 171).

With its introduction of a more flexible mechanism for commercial housing development, Resolution 171 is anticipated to address the housing supply shortage. However, developers will need to wait for a detailed decree to ensure the feasibility and compliance of their proposed projects.

After The Storm - New Amendments to the Securities Law 2019

In the FLC and Van Thinh Phat cases, the authorities have accused the controlling shareholders of FLC and Van Thinh Phat of various crimes including crimes relating to public issuance of securities, stock manipulation or private issuance of bonds. In an apparent attempt to prevent these crimes to be recommitted, in December 2024, the National Assembly passes some important amendments to the Securities Law 2019 (2024 Amendment). The Amendment takes effect from 1 January 2025 and could impose significant risks to public companies and their shareholders in Vietnam.

Sweeping changes to the liability regime for public companies, their shareholders and advisors

Under the 2024 Amendment, organization or individuals participating in the process of preparing applicable files or reporting documents relating to securities activities and securities market (hoạt động chứng khoán và thị trường chứng khoán) will be responsible for ensuring that:

  • such application files and reporting documents are legal, accurate, true and complete; and

  • such application files and reporting documents have clear and not misleading information and contain all material content which affect decision of the authorities, organisations and investors.

Advisors, who provide advice on the application files and reporting documents relating to securities activities and securities market, must be honest and prudent and must ensure that all analysis is reasonable and prudent.

Before the 2024 Amendment, the Securities Law 2019 only imposes liabilities to issuers, underwriters, auditors and “certifying organisations” when they conduct a public offering of securities or register their securities for listing or trading. However, by referring to all securities activities and securities market, the 2024 Amendment appears to expand the liability regimes to apply to all activities in the market including those which are normally not subject to such liability such as (1) private offering of securities, (3) public disclosures by a public companies or their shareholders, (4) secondary trading of securities by investors, and (4) advisors who are involved in these activities.

In practice, it would be very difficult for public companies and their shareholders and advisors to ensure that all of the documents and information relating to their public disclosures and securities trading activities do not contain misleading information and contain all material information, which affect decision by not only investors but also the authorities and other organisations.

Notable points under the Draft Law on Personal Data Protection (Draft PDPL)

On 24 September 2024, the Ministry of Public Securities (MPS) published the draft law on personal data protection (Draft PDPL). Compared to Decree 13/2023, the Draft PDPL introduces several significant points related to personal data protection. This blog will explore the key highlights and implications of these new provisions.

1)         Expanded scope of application

As compared to Decree 13/2023, the Draft PDPL broadens its scope to cover additional entities, being “agencies, organizations, and individuals collecting and processing personal data of foreigners within Vietnamese territories.” (Article 1.2(dd). This provision appears to enhance the protection of personal data belonging to foreign nationals. However, it remains unclear whether the provision applies solely to foreigners present in Vietnam or also to those residing abroad. The ambiguity lies in the interpretation of the phrase “within Vietnamese territories”. If it extends to foreigners outside Vietnam, it could impose significant compliance burdens on Vietnamese enterprises processing personal data of foreign nationals.

Furthermore, it is confusing that the Draft PDPL does not address the existing ambiguity in the scope of application under Decree 13/2023. Instead, it introduces another type of applicable entity that could potentially create even greater uncertainty.

2)         Definition of personal data associated to “citizen”

Unlike Decree 13/2023, the Draft PDPL defines both basic personal data and, seemingly, sensitive personal data as being specifically associated to “citizens”. It is unclear why Draft PDPL limits its personal data protection to citizens rather than to all individuals, regardless of nationality or status. This approach is not in line with the term “personal data” in GDPR (which refers to that of a natural person). Furthermore, limiting protections to citizens could also infringe on the rights of non-citizens and stateless people, potentially conflicting with Article 21 of the 2013 Constitution, which guarantees privacy rights to "everyone," not just citizens.

Additionally, the term “citizen” is ambiguous, as it is unclear whether it refers to Vietnamese citizens only or also encompasses foreign citizens. If the former interpretation is adopted, this would be inconsistent with the broader scope outlined in Article 1.2(dd) of the Draft PDPL, which governs the personal data of foreigners. If the latter interpretation is adopted, it would not be reasonable for the Draft PDPL and Vietnamese authorities to govern personal data of foreign citizens (especially those who are not in Vietnam).

New Law on Credit Institutions 2024 (Part 3)

This post continues discussing some additional changes of the Law on Credit Institution 2024 (LCI 2024). For changes discussed in our Part 1, please see here, in Part 2, please see here.

1.         More comment on security agent

As discussed in Part 2, LCI 2024 allows security agent operation. However, the relevant provision of LCI 2024 has the following limitations:

1.1.      such provision does not clarify the nature of security agent and whether it is the relation of representative (đại diện) or authorization (ủy quyền) as stipulated under the Civil Code. Under LCI 2024, the activity of security agent is implemented under the provisions of relevant laws, without further clarifying which relevant laws are; and

1.2.      LCI 2024 does not provide any details on what a security agent can do (such as definition of security agent or the role of the security agent).

2.         New classification for letter of credit

LCI 2024 no longer classifies letter of credit operation as a payment service provided via account (dịch vụ thanh toán qua tài khoản). LCI 2024 now defines letter of credit as a form of credit extension through the issuance, confirmation, negotiation, payment and return of letter of credit.

Where in the law foreign investors get better treatment over Vietnamese investors?

One can assume that where possible (i.e., not prohibited by international treaties) Vietnamese law will likely provide better treatment to Vietnamese investors over foreign investor. However, in the examples discussed below, foreign investors do get better treatment over Vietnamese investors:

  • Investor protection - The biggest advantage that many foreign investors have over Vietnamese investors is the ability of the foreign investor to make a claim against Vietnamese Government before international arbitration under various investment treaties that Vietnam has signed with several countries. Vietnamese investors have no ability to do so. The Government of Vietnam has indeed been subject to several investor-State disputes and is well aware of the risk that it can be sued if it mistreats foreign investors.

Understanding the Legal Status of "Other Legal Documents" Published on the Official Gazette

The Official Gazette (Công Báo) publishes legal instruments (văn bản quy phạm pháp luật) issued in accordance with the Law on Law. However, the Official Gazette also has a section which publishes “other legal documents” (Văn bản pháp luật khác). It is not clear if these “other legal documents”, which are not legal instruments, will have the force of law.

The Law on Legal Instruments (or Law on Laws) defines a legal provision (quy phạm pháp luật) to mean a general rule of conduct, with universal binding force, applied repeatedly to agencies, organizations, and individuals within the entire country or a specific administrative unit, as prescribed by a competent state agency in this Law and ensured by the State. A legal instrument (văn bản quy phạm pháp luật) is a document containing legal provisions issued in accordance with the Law on Legal Instruments and must be published on the Official Gazette. The Law on Legal Instrument prohibits the issuance of documents which are not a legal instrument but which contain legal provisions. Since the “other legal documents” published on Official Gazette are not issued in accordance with the Law on Legal Instruments, they should not contain a legal provision and should not have the force of law.

The concept of indirect subsidiaries of a parent company under the Enterprise Law 2020

It is unclear whether indirect ownership or control is taken into account when determining a company is the parent company of another company. Under Article 195.1 of the Enterprise Law 2020, a company will be deemed to be a parent company of another company in one of the following circumstances:

  • the former owns more than 50% of the charter capital or the total number of ordinary shares of the latter;

  • the former has the right to directly or indirectly appoint “the majority or all directors of the Board, Director or the General Director” of the latter; or

  • the former has the right to amend the charter of the latter.

The above definition makes it unclear because indirect control is only clearly mentioned in the case of appointing Board directors and Director (General Director) (i.e. the second limb).

Use Of Houses And Buildings To Secure For Performance Of Obligations Under Vietnamese Law

The most common form of security which is created over houses and buildings is mortgage (thế chấp). However, the Civil Code 2015 also provides for other forms of securities. In this blog, we will discuss whether other forms of securities could be created over houses and buildings.

Pledge (Cầm cố) – Unlikely

Pledge of property means the delivery by one party of “property” under its ownership to another party as security for the performance of an obligation. Since the term “property” includes both moveable properties and immovable properties, it is arguable that a pledge could be created over houses and buildings being immovable properties. However, Article 310.2 of the Civil Code 2015 provides that “Where an immoveable property is the subject matter of a pledge in accordance with law, the pledge of the immoveable property shall be enforceable against a third person as from the time of registration.”

Reference to “in accordance with law” suggests that pledge could only be created over an immovable property if a law specifically allows it. However, currently the Land Law 2024 and the Residentially Housing Law 2023 only specifically allow mortgages to be created over residential houses or assets attached to land.

Unusual obstacles for leasing of future properties under the Law on Real Estate Business 2023

Article 23.1 of Vietnam's 2023 Law on Real Estate Business explicitly allows real estate developers to sell future properties, such as houses, buildings, or floor areas within a building. However, the law is silent on the leasing of future properties (except for hire purchase transactions). This omission has led to uncertainty regarding the legality of such transactions.

On the one hand, leasing of future properties was clearly permitted in a similar Article of the Law on Real Estate Business 2014. Accordingly, one could argue that the omission of leasing from Article 23.1 of the Law on Real Estate Business 2023 indicates that a real estate developer cannot lease future properties.

Unclear Legal Capacity of Vietnamese Company’s Branches

Under Article 84.2 of the Civil Code 2015, a branch (chi nhánh) of a legal entity has the duties to perform all or parts of the legal entity’s functions. However, a branch is not allowed under the Civil Code 2015 to act as an authorized representative of a legal entity. Accordingly, it is not clear in what capacity a branch would perform the functions of a legal entity.

Logically, in order for a branch to perform all or parts of the legal entity’s functions, either

  • Option 1: a branch could be allowed to act as an authorized representative of a legal entity under another law; or

  • Option 2: a branch could perform the functions of a legal entity in its own name and capacity. In other words, a branch can perform the functions of a legal entity without needing an authorization from the parent entity and the action (or inaction) of a branch will be deemed an action or inaction of the parent entity.

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Written by Nguyen Quang Vu On In