Vietnam Business Law is a website managed by lawyers of Venture North Law Limited (VNLaw). Venture North Law Limited (VNLaw) is a Vietnamese commercial law firm. We won the Rising Law Firm of the Year Award at the Southeast Asia Law Awards for the years 2020 and 2021 held by The Legal 500. Very few Vietnamese law firms have achieved a similar regional recognition.
Posted in: Legal Environment
Under the Bilateral Investment Treaty between Vietnam and Japan (VJ BIT) and the Agreement for an Economic Partnership between Vietnam and Japan (VJ Partnership), a subsidiary incorporated outside Japan by a Japanese investor has certain legal grounds to claim for enjoying the rights preserved for Japanese investors when investing into Vietnam under these treaties. This is because:
Under Decree 58/2012, if an international treaty has provisions regarding foreign ownership limit (FOL) in a public joint stock company then the provisions of the international treaty will apply. Under Decree 118/2015, if a foreign investor is subject to multiple international treaties on the same industry or business line then the foreign investor is entitled to select one of the applicable international treaty. And if the foreign investor has selected to follow one international treaty then the investor will need to comply the provisions of such international treaty as a whole.
To mitigate or avoid the risks of investor claims, the Government of Vietnam has introduced various measures under various new laws issued in 2014 and 2015. These measures certainly make it more difficult for foreign investors to use Vietnamese law against the Government of Vietnam in case of an investment dispute. Below are some of these measures:
From 1 January 2017, court precedents and “equity principles” (lẽ công bằng) will be the new sources of laws to govern civil relations in Vietnam. Under the new Civil Code 2015, court precedents and equity principles are now expressly allowed to be used to apply to a civil relation if there is no law or customs governing the same. Court precedents are judgements which are selected and announced by the Supreme Court so that lower courts can study and apply when hearing cases. Under the new Civil Procedure Code 2015, equity principles are determined based on rightful principles which are accepted by the society, and consistent with principle of humanity, principle of impartial and equality in terms of rights and obligations of the parties to a dispute.