It is common that large private companies in Vietnam are owned or controlled by certain key Vietnamese individual sponsors. From time to time, transactions between a foreign investor and a Vietnamese private company would involve transactions between the foreign investors and key sponsors of such companies including transfer of shares, shares mortgage, non-complete or sponsor guarantees. Below is a list of key legal issues that should be considered when entering into contracts with a Vietnamese individual:

• General legal capacity of an individual under the Civil Code: Under the Civil Code, an individual who is 18 years old or more will have full legal capacity except in case of mental illness or drug addicts. Accordingly, a representation on the general legal capacity of a Vietnamese individual should be obtained.
• Ability to manage and establish companies in Vietnam: Under the Enterprise Law, certain individuals are prohibited from managing or establishing companies including those are State officials, those whose legal capacity are restricted or those who are prohibited by the Bankruptcy Law.  Accordingly, a representation on ability to manage and establish companies in Vietnam of a Vietnamese individual under the Ente should be obtained.
• Spouse’s consents: Under the Marriage and Family Law and the Civil Code, assets created by either the husband or the wife during marriage are considered as commonly-owned by both. Any decision to deal with assets commonly-owned by husband and wife requires consents by both. Accordingly, when contracting with a Vietnamese individual such as transfer of shares, it is important to make sure that the consent of such Vietnamese individual’s spouse is obtained.