Would transactions between parties outside Vietnam (offshore transactions) be caught by merger control legislation?

Under the Competition Law 2018, any transaction “causing the effect or being capable of causing the effect of significantly restricting competition in the market of Vietnam” is prohibited. As such, an offshore transaction will be caught by merger control requirement if it has actual or potential anti-competitive impact on a relevant market of Vietnam. In particular, an offshore transaction may be subject to notification requirement under Vietnamese laws where a party to the transaction or its affiliates have assets, sale revenue or purchase costs in Vietnam and the transaction triggers any of the applicable notifying thresholds discussed here (except for size of transaction test). ‎

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Written by Nguyen Quang Vu On

Re-execution of a Government Land Lease Agreement in case of assigning of land use rights in Vietnam

In Vietnam, leasing land directly from the State is a common option to acquire land use right (LUR). That means one, as master “land user” (người sử dụng đất), needs to sign a land lease agreement (LLA) with State, by which it is obligated to pay land rental. Depending on the choice of the land user, the land rental could be paid in lump sum for the whole term or annual basis. Regarding the former case, the land law allows the land user (Assignor) to assign its LUR to another entity (Assignee) via, among others, sale of or capital contribution in form of LUR (generally, assignment). Meanwhile, the law does not make it clear on whether the Assignee should sign a new LLA with State as a result of the LUR assignment. In particular,

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Written by Nguyen Quang Vu On In

Can Foreigner Engage In An Indefinite Term Employment In Vietnam Under Labour Code 2012?

The current Labor Code 2012 does not make it clear on whether a foreigner could be entitled to an indefinite term employment contract (ITEC) although the foreigner only has a work permit with limited term (two years at the maximum). In theory, the foreigner can demand for an ITEC with the employer based on the following legal basis and arguments:

  • Article 22.2 of the Labor Code 2012 generally suggests that any employees will be entitled to an ITEC after two consecutive definite term employment contracts. Technically, a foreign employee can also enjoy this treatment;

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Written by Nguyen Quang Vu On In

Points To Consider In An Arbitration Clause For A Vietnamese Party In A Contract With A Foreign Party

When a Vietnamese company enters into a contract with a foreign party, the foreign party usually requires the contract to have an arbitration clause so that disputes arising from the contract will be settled by commercial arbitration instead of Vietnamese courts. When negotiating and drafting the arbitration clause of such contract, a Vietnamese company may need to consider the following points:

Governing law of the contract

If the governing law of the contract is Vietnamese law, then selecting arbitration centers in Vietnam may be appropriate since the arbitrators in Vietnam will likely be more familiar with Vietnamese law than arbitrators in other countries. If the governing law is a foreign law, then the Vietnamese party may consider selecting the jurisdictions whose law is more accessible from Vietnam. Based on this criteria, English law would be more favourable for Vietnamese companies since many English law textbooks are available in Vietnam or can be bought from online stores. There are more free internet sources about English law than other laws. In addition, it may easier to find UK qualified lawyers in Vietnam than lawyers from other jurisdictions.

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Written by Nguyen Quang Vu On In ,