New choice of foreign governing law in a contract with Vietnamese counterparty
From 1 January 2016, the Civil Code 2015 introduces a new set of rules regarding choice of governing law in a civil contract signed with a Vietnamese counterparty. In particular, parties to a contract in which there is at least one party is foreign individual or foreign “legal person” may agree to choose foreign governing law in the contract except in the following cases, among other things:
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.
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: