Vietnam joins the United Nations Convention on Contracts for the International Sale of Goods

In December 2015, Vietnam decided to join the United Nations Convention on Contracts for the International Sale of Goods (CISG) with effect from 1 January 2017. Vietnam reserves provisions regarding formality of contracts under Articles 11, 29 and Section II of CISG. Vietnam is an active trading country. Therefore, from a legal perspective, CISG will have major impact on all international sale of goods involving Vietnam and other countries, which are also CISG members (e.g. Japan, China, and US).

Under Commercial Law 2005, where provisions of CISG are inconsistent with the provisions of the Commercial Law 2005, the provisions of CISG will apply. Therefore, if a sale of goods contract involving a Vietnamese party does not exclude CISG expressly then CISG will presumably apply to such contract. In view of this, one more thing that lawyers practicing in Vietnam have to consider now is whether to exclude or include the provisions of CISG in cross-border sale of goods contracts. In case of inclusion, one should decide which language version of CISG should be used since CISG has many different official texts.

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List of investment conditions applicable to foreign investors in Vietnam

The Ministry of Planning and Investment (MPI) published a consolidated list of investment conditions applicable to foreign investors in Vietnam (FDI Condition List) as of 27 December 2015 in its website. For easy reference, is a consolidated list based on the information published on MPI’s website can be downloaded from here. The FDI Condition List represents a major effort of the MPI to help foreign investors to navigate a mirage of domestic laws and investment treaties which may apply to a foreign investor in Vietnam. That said, when relying on the FDI Condition List, one should take note of the following:

Changes to regulations relating to the legal representative of a Vietnamese company

The legal representative plays an important role in the operation of a company. New changes introduced by the Enterprise Law 2014 and Civil Code 2015 regarding legal representative of a company are both positive and negative.

Trading Licence for investment by way of acquisition in Vietnamese companies

In December 2015, the Ministry of Industry and Trade (MOIT) confirmed in a Letter No.12933 that a Vietnamese company in which foreign investors invest will need to comply with the regulations under Decree 23/2007 regarding import and distribution activities of foreign invested enterprises regardless of the level of foreign ownership in the Vietnamese company. This means that most local companies which register for import and distribution businesses and have foreign investors will need to obtain a Trading Licence (Giấy phép kinh doanh) under Decree 23/2007 even if there is no investment certificate for the investment by the foreign investor. The MOIT requires compliance with Decree 23/2007 even when it is contemplating further changes to Decree 23/2007. The MOIT’s confirmation has certain important implication:

Vietnam Business Law