Vietnam Business Law

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Potential restriction on pre-WTO service companies

Vietnam accessed to the World Trade Organisation (WTO) in January 2007. Under the commitments to the WTO (WTO Commitments), for certain services, Vietnam only allows foreign investors to hold up to certain amount of equity interest (see here). However, before January 2007, Vietnam has allowed many foreign investors to set up service companies in Vietnam (Pre-WTO Service Companies) which exceed the foreign ownership limits provided in the WTO Commitments. In a recent correspondence in July 2013, the Ministry of Planning and Investment (MPI) has taken the view that a Pre-WTO Service Company which exceeds the foreign ownership limit may continue to do business but may not invest in a new investment project if it does not comply with the foreign ownership limit applicable to the relevant sector. If the view of the MPI is a general view rather than being specific to the Pre-WTO Service Company in question then this could adversely affect all Pre-WTO Services Companies which exceed the foreign ownership limits provided in the WTO Commitments.

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