Can a foreign company retain a Vietnamese person as a service provider, not an employee?

Short answer: Yes, subject to some mitigants of risks as discussed below.

Vietnamese law has no clear-cut distinction between an employment relationship and a commercial relationship (e.g. service agreement). It is because the definitions of employment relationship and employment contract in the Labour Code 2019 are unclear and broad. For instance,

(1) The Labour Code 2019 defines “employment relationship” as social relations arising during the hiring and employment of workers and during wage payment as between employees, the employer, organizations representing the parties and the competent State agency. Under the Commercial Law 2005, “provision of services” is defined as a commercial activity whereby one party (hereinafter referred to as the service provider) is obliged to provide services to another party and receives payment; and whereby the party using the services (hereinafter referred to as the client) is obliged to pay the service provider and to use the services in accordance with an agreement. These definitions are broad and not specific enough to distinguish such relationships. In both cases, there will be an engagement and payment between the hiring party and the hired party.

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ACCOMMODATION SERVICE BUSINESS WITHIN AN INDUSTRIAL ZONE

To satisfy the actual demand of those working in industrial zones (IZs), recently, more and more investors are exploring possibility to do the accommodation service business (e.g. hotel, condotel, officetel, …) (Accommodation Business) within IZs.

There is however no clear legal basis under Vietnamese laws for the Accommodation Business to be conducted within an IZ. This is because:

a) Decree 82/2018 on IZs prohibits people from residing in the industrial zones, except for foreigners being managers, chief executive officers, and experts who can temporarily reside in an enterprise located within the IZs subject to the satisfaction of certain conditions. For instance:

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Are offshore wind turbines movable or immovable property under Vietnamese law?

1) Introduction

The wind turbines of an offshore wind power project (Offshore WPP) consist of two main types: fixed-bottom and floating. Both types are attached to the seabed either by a foundation or by mooring, respectively (see the image 1 below).. It is not entirely clear if the wind turbines of an Offshore WPP should be considered as an immovable property or movable property under Vietnamese law. This is because it is not clear if the seabed, to which an offshore wind turbine attached, can be considered as “land” under Vietnamese law.

The classification of whether an offshore wind turbine is movable or immovable property could have significant legal impact on an Offshore WPP. For example,

  • immovable property attached to land can only be mortgaged to licensed credit institutions in Vietnam (not to foreign lenders); and

  • certain contracts relating to immovable property attached to land (e.g., title transfer contracts, lease contracts, or mortgage contracts) must be governed by Vietnamese law being the law of the country where the immovable property is located.

In this post, we will discuss in detail as to whether an offshore wind turbine is movable or immovable property. This post is written by Tran Duc Long, Le Thanh Nhat, and Nguyen Quang Vu.

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New Amendments To Investment Law, Enterprise Law, Electricity Law, Residential Housing Law and Other Laws

On 11 January 2022, the National Assembly passed a new law amending 09 laws, including Public Investment Law, Public-Private Partnership Law, Investment Law, Residential Housing Law, Tendering Law, Electricity Law, Enterprise Law, Law On Special Consumption Tax, and Law On Civil Judgment Enforcement (Law 03/2022). Law 03/2022 will come into effect on 1 March 2022. In this post, we will discuss some new key points of Law 03/2022.

1) Enterprise Law 2020

Change of the term “members of the Members’ Council” into “members of the company”

As discussed before, the Enterprise Law 2020 (Articles 49 and 50) only provides for the rights of members of the Members’ Council, but not the rights of the members of the LLC. And many rights of the members of the Members’ Council should be the rights of the members of the LLC such as rights to subscribe for new capital increase or to receive dividends paid by the LLC. The change of the term “members of the Members’ Council” into “members of the company” in Articles 49 and 50 has successfully resolved this problem, although in other provisions, the Enterprise Law 2020 still does not distinguish between the positions of members of the LLC and members of the Members’ Council of the LLC.

Removal of requirement on signatures of dissenting members on meeting minutes; personal liability of the chairperson and the person writing the minutes

The requirement that meeting minutes of the Members’ Council must include signatures of members who disagree to pass such meeting minutes is now removed.

In addition, in the event that the chairperson of the meeting of the Members’ Council/Board Of Directors or the person writing the minutes refuses to sign the meeting minutes, for such minutes to be effective, the Enterprise Law 2020 no longer requires all attending members of the meetings to sign, and only the signatures of the attending members who agree to pass the minutes are necessary. Also, in such event, the chairperson or the person writing the minutes who refuses to sign such minutes must bear personal liability for any loss arising to the company due to their refusal.

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