Implementing Decree of the new Vietnam Law on Laws

The new Decree 37/2016 implementing the Law on Laws 2015 provides some notable clarifications of the Law on Laws 2015 as follows:

Various types of decisions of the Prime Minister are excluded from being a law such as decision approving development strategy or a master plan or decision not satisfying the conditions of a law under the Law on Laws 2015;
Decree 37/2016 provides detailed drafting and formatting rules on a legal document including various sample Decrees and Circulars; and
Decree 37/2016 requires Vietnamese language to be used in a legal document. The Vietnamese language used in a legal document must be consistent and must not be local dialect or old-fashioned words. Vietnamese words in a legal document must be clear and should not have multiple meaning. If a word can have multiple meaning then the meaning used in the legal document must be used.

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Offshore subsidiaries of Japanese investors investing in Vietnam

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:

Application of investment treaties for a Japanese investor in Vietnam

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.

New “Government protection measures” against investor claims in Vietnam

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:

Vietnam Business Law