COVID-19 and eligibility to enter Vietnam

Border Control

As of the date of this post, the Government of Vietnam still maintains suspension of entry for expats, including people with a Vietnamese visa exemption certificate.  A potential date to allow foreigners to enter Vietnam again has not been formally announced by the Government yet, though further information is expected imminently.

The current entry restriction, which came into effect on 22 March 2020, has limited exemptions for diplomatic, official duty, as well as special circumstances, including experts, business managers, high-skilled technicians (pursuant to Government’s Decree 11/2016/ND-CP, it can be interpreted that experts, business managers, high-skilled technicians are those who have been issued with work permits to legally work in Vietnam), and other essential categories as determined by the Government of Vietnam.  That is to say, statutorily speaking, there exists a possibility where such subjects are entitled to enter Vietnam, subject to approval of provincial People’s Committee and Department of Immigration, after the  consultation with the Ministry of Public Security, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Health, and other relevant agencies.

Despite this, to the best of our knowledge, though feasible in theory, practice appears to be different and it seems no formal approval has been granted yet, partly due to absence of any guidance from the Government to each province in detail.

Should an enterprise wish to send an expat (with a valid work permit) to Vietnam to manage operations in Vietnam at the moment, they should seek approval for entry on a case-by-case basis from the provincial People’s Committee and Department of Immigration as first priority.

Quarantine Requirements in Vietnam

Since 8 March 2020, all people who have arrived from outside the country must (i) complete a medical declaration form, which can be done by completing a paper form on arrival or a digital form online before the trip via this link and (ii) undertake COVID-19 testing. On this basis, regardless of whether the COVID-19 testing result is positive or not, everyone entering Vietnam, including Vietnamese nationals, have been subjected to mandatory, centralized quarantine for 14 days. It is worth noting that this quarantine period, under some circumstances, might be prolonged to more than 14 days, at the broad discretion of the authorities.

Hệ thống thông tin quản lý Khai báo Y tế

Hệ thống thông tin quản lý khai báo y tế

So-called “centralized” quarantine sites in Vietnam may be basic facilities. Therefore, Ministry of Health released Decision No. 1246/QD-BYT on 20 March 2020 (“Decision 1246”) to grant more flexibilities for the mandatory quarantine. Specifically, a person subject to quarantine is entitled to request to be quarantined at a permitted hotel to enjoy better facilities and would need to bear all accommodation expenses during the quarantine period.

By law, this requires the individual to simply (i) fill in a Request Form under Annex 2 of Decision 1246; and (ii) submit same to immigration authority. However, we note that the procedure for this step is neither transparent nor well-organized and unlikely to be workable in practice on an ad-hoc basis.  It is thus necessary to ensure that arrangements are confirmed directly with the relevant provincial authorities of the port of entry.

For more information, please contact Giles at or Le Nhan at or any of the lawyers in our office listing. Giles is Chairman of Duane Morris Vietnam LLC and branch director of Duane Morris’ HCMC office.


Dr. Oliver Massmann’s speech:

The number of successfully implemented PPP projects in Vietnam is very limited, to be frank, too low.
Số lượng các dự án PPP được thực hiện thành công tại Việt Nam rất hạn chế, phải thẳng thắn, quá thấp.

Having worked on many legal PPP reform projects in the last 20 years in Vietnam, I conclude that there are three critical issues the Vietnamese Government has to confront and they are not legal issues at all.
Đã làm việc trong nhiều dự án cải cách PPP hợp pháp trong 20 năm qua tại Việt Nam, tôi kết luận rằng có ba vấn đề quan trọng mà Chính phủ Việt Nam phải đối mặt và chúng hoàn toàn không phải là vấn đề pháp lý.

Vietnam needs PPP laws. But these laws are only as good as the Political Will to enforce them.
Việt Nam cần luật PPP. Nhưng những luật này chỉ tốt như ý chí chính trị để thực thi chúng.

The Political Will to implement PPP projects in Vietnam is lacking!
Ý chí chính trị để thực hiện các dự án PPP tại Việt Nam còn thiếu!

The first issue is Political Will. So what is Political Will?
Vấn đề đầu tiên là ý chí chính trị, vậy ý chí chính trị là gì?

Political Will is Collective Will. Collective Will is essential for the supervision and successful implementation of PPP projects in Vietnam.
Ý chí chính trị là ý chí tập thể. Ý chí tập thể là điều cần thiết cho việc giám sát và thực hiện thành công các dự án PPP tại Việt Nam.

For example, clean water is an asset. It has to be paid for. Vietnam is lacking funds. Thus Vietnam needs successful foreign-financed BOT water projects, and the collective will of the Vietnamese people to pay for clean water.
Ví dụ, nước sạch là một tài sản. Nó phải được trả tiền cho. Việt Nam đang thiếu vốn. Do đó, Việt Nam cần các dự án tài trợ nước ngoài BOT thành công, và ý chí tập thể của người dân Việt Nam về việc phải trả tiền cho nguồn nước sạch.

Energy has to be paid for and Vietnam cannot pay for all the amount of energy it needs. Thus there have to be successful foreign-financed Energy PPP projects, and the collective will of the Vietnamese people to pay for energy.
Năng lượng phải được mua và Việt Nam không thể trả cho tất cả những gì chúng ta cần. Do đó, phải có các dự án năng lượng PPP tài trợ nước ngoài thành công, và ý chí tập thể của người dân Việt Nam về việc phải trả tiền để có năng lượng.

The second issue is Bankability of PPP contracts.
Vấn đề thứ hai là Khả năng thanh toán của các hợp đồng PPP.

What foreign investors care about most is financial closure.
Điều mà các nhà đầu tư nước ngoài quan tâm nhất là việc hoàn tất các thủ tục tài chính.

Lenders will carry out detailed due diligence on the project before handing out money, and investors must be able to show bankable PPP contracts.
Người cho vay sẽ thực hiện thẩm định chi tiết về dự án trước khi giao tiền cho nhà đầu tư, và nhà đầu tư phải xuất trình được hợp đồng PPP có thể giao dịch được.

A positive point of the Draft PPP Law is it includes boilerplate clauses on lender step-in right and international arbitration. However, the clause on Government Guarantee on Revenue Risk Sharing Mechanism must be further examined.
Một điểm tích cực của dự thảo luật PPP là nó bao gồm các điều khoản tiêu chuẩn về quyền của bên cho vay và việc giải quyết các tranh chấp trên trường quốc tế. Tuy nhiên, điều khoản về Bảo đảm của Chính phủ về Cơ chế chia sẻ rủi ro doanh thu phải được xem xét thêm.

The Government of Vietnam has very limited foreign exchange reserve compared to what’s needed for construction of infrastructure. If a project reports a loss of 5 billion USD, how will the government repay the investor?
Chính phủ Việt Nam có dự trữ ngoại hối rất hạn chế so với những gì mà chúng ta cần để xây dựng cơ sở hạ tầng. Nếu một dự án báo lỗ 5 tỷ USD, chính phủ sẽ trả nợ cho nhà đầu tư như thế nào?

In order to achieve the goal of sustainable PPP development, the private sector and government should create win-win solutions and share loss equally.
Để đạt được mục tiêu phát triển PPP bền vững, khu vực tư nhân và chính phủ nên tạo ra các giải pháp cùng có lợi khi chia sẻ thua lỗ và chia sẻ thua lỗ bằng nhau.

The third issue is Systemic issues.
Vấn đề thứ ba là Các vấn đề về hệ thống.

One of the most prominent systemic issues is lengthy government procedures. There are none one-stop-for-all laws or regulations on all the approvals that investors need to acquire in order to execute a project.
Một trong những vấn đề về hệ thống nổi bật nhất là thủ tục hành chính rườm rà. Không có luật pháp nào liệt kê một lúc tất cả các phê duyệt mà nhà đầu tư cần có để thực hiện dự án của mình.

Also, under the draft PPP law, the foreign currency balance scheme is only applicable to projects subject to decision on investment policy granted by the National Assembly and the Prime Minister, with a ceiling of 30%. Mostly very large-scale energy projects fall under this requirement. Government should extend the scope of projects eligible for foreign currency balance in order to attract more private investors.
Ngoài ra, theo dự thảo luật PPP, kế hoạch cân bằng ngoại tệ chỉ được áp dụng cho các dự án có quyết định về chính sách đầu tư do Quốc hội và Thủ tướng ban hành, với mức trần 30%. Như vậy chủ yếu các dự án năng lượng có quy mô rất lớn mới đủ điều kiện. Chính phủ nên mở rộng phạm vi các dự án đủ điều kiện cân bằng ngoại tệ để thu hút thêm các nhà đầu tư tư nhân.

In my opinion, these are the three most critical issues concerning the Draft PPP Law at the moment. Government must make effort to balance their interest with that of foreign investors in order to create a sustainable PPP development environment in Vietnam.
Theo tôi, đây là ba vấn đề quan trọng nhất liên quan đến luật dự thảo PPP tại thời điểm này. Chính phủ phải nỗ lực để cân bằng lợi ích của họ với các nhà đầu tư nước ngoài để tạo ra một môi trường phát triển PPP bền vững tại Việt Nam.


Please do not hesitate to contact the author Dr. Oliver Massmann under Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.


On 8 May 2020, the Ministry of Industry and Trade issued Official Letter No.3299/BCT-DL (“the Letter”) on supplementation of wind power projects into the Power Development Planning.

Notable provisions of the Letter:

1. EVN records a 8,6% increase in electricity demand each year, and suspect the possibility of power shortage, especially in 2023, if the Government doesn’t immediately implement measures such as increase development in the renewable energy sector, increase electricity import from countries in the area, etc.;

2. Most thermal power sources are 1-2 years behind schedule, even some projects are delayed by 4-5 years;

3. As solutions for the possible power shortage issue, EVN suggests that the Government promote the development of renewable energy sources and increase electricity import from China;

4. MOIT is reviewing the possibility of supplementing the Power Development Planning VII adjusted to the ability to release and balance supply and demand to report to the Prime Minister;

5. MOIT is expecting to develop renewable energy centers in areas with good wind potential and are capable of releasing capacity (when new transmission capacity is added);

6. The current FiT rate expires on November 2021; MOIT proposes to extend this deadline to 31 December 2023;

7. After 2023, MOIT proposes wind energy projects to apply auction, bidding methods;

8. MOIT to assume the responsibility of calculating new FiT rate for wind power projects, applicable from 1 November 2021 to 31 December 2023 in case the Prime Minister doesn’t agree to extend the current FiT rate.

It can be seen that the Government has continuously encouraged the development of wind and solar power projects – the most recent is the issuance of Decision No.13/2020/QD-TTg that published the new, attractive FiT rate for solar power plants. In other words, there are a lot of rooms for investors looking to participate in renewable energy development

To promote the development of renewable energy sources is a feasible and effective solutions to counter power shortage issue because renewable energy projects can be constructed quickly and promptly for operation in the period of 2021-2023, while taking advantage of the country’s natural potential without relying on imported fuels and is eco-friendly.

The need to extend the deadline for current FiT rate is essential because the projects waiting to be included in the Revised PDP VIII is unlikely to have commercial operation date before November 2021, because:

1. The supplement into PDP for new wind power sources was suspended for more than 1 year (from October 2018) because there were no guidelines to implement the Planning Law;

2. The construction of wind power projects takes more time than that of solar power projects. For feasibility study reports, investors must carry out wind measurement for at least 12 months. Moreover, wind turbines are mostly imported from abroad, which costs investor extra time, especially there is unexpected delay of equipment delivery.


Please do not hesitate to contact the author Dr. Oliver Massmann under Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.


The Ministry of Industry and Trade recently published a Draft Circular on Project Development and Standardized Power Purchase Agreement for both grid-connected and rooftop solar power projects (“the Draft”). After publishing new solar power purchase prices under Decision 13/2020/QD-TTg (“Decision 13”), the Draft is another move of MOIT to replace Circular 16 that failed to address necessary changes in PPA terms. The Draft is anticipated to takes effect in June 2020, but note that there’s not yet any official announcement on this. Also, with Decision 13’s price being effective until 31 December 2020 only, this raised questions on the effectiveness of laws and regulations in Vietnam on in the long run.

Notable provisions of the Draft Circular:

v Upon specific conditions and technical requirements of each individual rooftop solar power system, the Seller and the Buyer shall decide the chronology of items and tasks implementation sequence.

v Beside the contents stipulated in the standardized PPA, the Seller and the Buyer are only allowed to supplement contents for clarification of responsibilities and power of each party. Supplementary contents must be consistent with contents of the standardized PPA.

v If grid-connected solar power projects and rooftop solar power systems have commercial operation date between, and including, 1 July 2019 and the effective date of the Draft, the Seller and the Buyer are allowed to revise and sign the PPA based on the new standardized PPA in the Draft.

v Operational plan

a) Before or on the date of performance of the PPA for grid-connected projects, the Seller provides the Buyer with the chart of annual power generation capacity at the connection point by months in line with the appraised design;

b) Before every November 30th, the Seller provides the Buyer with the power generation plan of the following year, including:

_ Monthly operational plan in the year (power output and available capacity);
_The monthly plant repair and maintenance schedule in the year (if any).

Overall, the new standardized PPA for grid-connected solar power projects does not mitigate the problems already existed in the current template under Circular 16, namely:

v The PPA does not impose a clear “take or pay” obligation on Buyer and so does not assure Seller a guaranteed revenue stream and adequate return. Buyer has the right not to purchase power in certain circumstances (Seller is in breach of the Agreement, Buyer is instructed by the regulator not to purchase power, force majeure). We note that this is not realistic in practice and note that the main issue here is curtailment, which mostly occurred due to overload of grid. Thus to alleviate this problem, Buyer and Seller need to undertake thorough grid studies to ensure the effectiveness of the project in the future.

v Electricity purchase price is the one outlined in Article 5 of Decision 13/2020/QD-CP, which is applicable to projects that obtained Decision on Investment Policy before 23 November 2019 and have COD between 1 July 2019 and 31 December 2020. With the deadline approaching by the end of this year, investors have been hurry to finalize every steps of the project as per the approved schedule with EVN, and the attractive FiT rate also attracts foreign investors to invest in Vietnam fast. However, in the past few months, regions where there’s high level of concentration of solar power projects, have experienced problems of grid-overcapacity is anticipated to be solved by 2021. This issue leads to the question whether the signing of PPA with developers at this point is beneficial if due to grid-overload, power plants will not be able to operate at full capacity which will lead to machine erosion/breakdown and financial loss to investors?

v The PPA provides simple provisions relating to Force Majeure Event and does not distinguish natural force majeure event (Non-Governmental Force Majeure Event), and force majeure event due to political issues (Governmental Force Majeure Event). As EVN is a State-owned company, there may be possibility that EVN relies on Government Event to repudiate its obligation under the PPA, especially payment obligations. Accordingly, it is recommended to distinguish these two types of force majeure events with a view to ensuring that Governmental Force Majeure Event – including change in law or tax regimes – will not be used by EVN as an excuse to its obligations.

v Regarding compensation of damages, the violating party must demonstrate damages and consequential loss, which is quiet difficult as these will mostly based on estimation. As a result, it may be preferable not to terminate the PPA in case of breach by the Buyer and instead continue to insist upon performance without triggering this cap on compensation. In that case, the Buyer would be obliged pursuant to general Vietnam law principles to compensate Seller for damages directly caused by the breach (including loss of profits). In this case, there is no specific cap and the obligation would be to compensate for actual direct losses caused. However, this obligation is not expressed in the PPA as an “indemnity” obligation, but rather a general Vietnam law obligation to compensate following breach of contract. The party claiming the breach would be obliged to prove the losses and also to mitigate losses.

v There is currently no precedent of Buyer being sued for damages under the standard form PPA. The dispute resolution terms of the PPA expressly provide for local dispute resolution and, as a matter of practice, this makes it very challenging to claim against Buyer.

Please do not hesitate to contact the author Dr. Oliver Massmann under Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.


1. Positive:

– Eligible Sectors (Art. 5): business sectors, which are qualified for investment in PPP form, have been selectively considered and proposed, not as broad as the those under Decree 63/2018/ND-CP (“Decree 63”). This would help to concentrate the valuable resources and finance on efficient and necessary sectors. However, please refer to our notes on incompletion of this clause in the Negative Section as below.

– Language (Art. 34): language for selection of international investor may be in both Vietnamese and English.

– Step-in rights of lenders (Art. 55): Lenders have rights to take over the project and propose another investor to continue the project. This provision has addressed the constraints that inhibit cross-border financing will be essential for diversifying sources of funding for energy-sector investments. International financing can provide for both the electricity and midstream gas sectors in terms of longer tenors and fixed-interest rates, which domestic capital market cannot satisfy.

– Guarantee on Foreign Currency Conversion (Art. 82): it is positive that the PPP Draft still remains this guarantee regime, as the one under Decree 63. However, the scope and conditions to enjoy this are very limited and do not meet the expectation from the investors as discussed in the Negative Section as below.

– Revenue risk sharing (Art. 83): it is indeed a very bold proposal in the PPP Draft that enabling the State to share the revenue loss of investors, subject to certain conditions and qualifications. Though we have few comments on the scope of this mechanism as below. We highly appreciate that the drafter has tried to address one of current issues of PPP form, i.e., non bankability and high risk.

– Dispute Resolution (Art. 104): the relevant provision on dispute resolutions have been improved in comparison with those of Decree 63. In brief, it is crystal clear now disputes between investors involving at least a foreign investor and / or disputes between investors / PPP project company with foreign parties could be resolved by either local courts / arbitration and / or foreign or international arbitration. In terms of disputes between the state and investors / project company, the PPP Draft has in-principle required local courts / arbitration but enabled other agreement between the parties in the project contracts and / or otherwise provided by international treaties of Vietnam. This is a significant improvement as Vietnam has signed several major international treaties such as CPTPP and EVFTA. We give to your attention the advantage of some international treaties as below:

“The CPTPP and the EVFTA make it possible that foreign investors could sue Vietnam Government for its decisions according to the dispute settlement by arbitration rules. The violating party must take all necessary measures to promptly comply with the arbitral decision. In case of non-compliance, as in the WTO, the CPTPP and the EVFTA allow temporary remedies (compensation) at the request of the complaining party. The final arbitral award is binding and enforceable without any question from the local courts regarding its validity. This is an advantage for investors considering the fact that the percentage of annulled foreign arbitral awards in Vietnam remains relatively high for different reasons. It is crucial that foreign investors now could take advantage of the requirements under the CPTPP and the EVFTA (as also recognized by the PPP Draft) to enhance functionality of their PPP projects in Vietnam. In case these entities make wrongful decisions, foreign investors could take recourse to arbitration proceedings and have the arbitral awards fully enforced in Vietnam.”

2. Negative:

1. Art. 5 The scope of sectors eligible for PPP investment form is not crystal clear and need further guidance from the Government and Ministries. For example, in terms of power projects, in practice some major profile thermal power projects have been implemented in cooperation with the Government under the Build – Operate – Transfer (BOT) umbrella (a form of public private partnership (PPP), it appears that the Government would not offer this kind of treatment for renewable energy projects at large (except, perhaps in theory, for very large and prominent ones).

Foreign investors (most of them engaging small scale projects) do not prefer PPP structure for their power plant projects, due to complexity of this structure and the lack of clear guidance, especially feed-in-tariff and consequently bankability. However, on the contrary, BOT seems to be suitable for larger scale projects and often give investors a better position to negotiate with the Government on key project indicators at the outset, which may not be available in other investment platforms.

Recommendation: Consider clarification on the scope and scale of power projects eligible for PPP form. In addition, for large scale power projects, it is crucial to enable all sub-projects of a mega power project could be together invested in the PPP form. For example, a LNG-to-power project could only be efficiently invested with other sub-projects such as terminal, FSRU, pipelines, etc.

2. Art. 47 Lack of clear and bankable terms of PPP contract. It is critical that an international form of bankable PPP contract is provided in the PPP Draft. Other related transaction agreements could be further developed as agreed by the parties but bankable templates should be drafted and attached to the guideline for implementation of PPP Draft.

Recommendation Terms and conditions of PPP contract are too general and vague.

Considering to provide a bankable PPP contract template in the PPP Draft or in the guiding decree / circular for PPP Draft.

3. Art. 57 It is not reasonable for forcing governing law to be the Vietnamese law. Especially, Vietnam has signed several international treaties and in principle allowed rules of such international treaties to be applied in PPP projects.

It is an international norm and feasible for a foreign related transactions to be governed by foreign law of a third country (not Vietnam or investor’s country) to the extent certain specific areas / agreements must be in compliance with Vietnamese law such as land regime, taxes, etc.

Recommendation: Considering for the parties to agree on the governing law of a third country (not Vietnam or investor’s country, e.g., Singapore law) to the extent certain specific areas / agreements must be in compliance with Vietnamese law such as land regime, taxes, etc.

4. Art. 80 The investment incentives are underdeveloped and quite similar as those provided under Decree 63. This is a safe approach but it would confuse the investors on the incentives and how to enjoy them under the PPP Draft.

Recommendation: Considering not referring to other laws and regulations on determination of investment, land and tax incentives for PPP forms.

For example, at least the PPP Draft should determine whether the PPP project could enjoy incentives such as an encouraged investment project or special encouraged investment project, etc.

5. Art.82 The conditions for foreign currency balance is very limited. As discussed above, only large scale projects prefer and may satisfy conditions of PPP investment forms. Thus, the scope for application of this foreign currency balance would need to be extended to all PPP projects, or at least for power projects and grid projects.

Foreign currency balance ensuring scheme is only applicable to projects subject to investment policy decision of the Nation Assembly and Prime Minister. In addition, there is a ceiling of 30% to be imposed.

In practice, several projects could not reach financial closure as scheduled because they cannot agree with the government about the convertibility of profits earned in local currency into foreign exchange for repatriation and payment for input commodities (coal, gas).

The demand for foreign currency associated with BOT projects and associated tariff revenues to be covered in the energy sector could escalate dramatically through 2030, up to US$23 billion/annually by 2030.

Recommendation: Considering to extend the scope eligible for foreign currency balance.

Foreign exchange convertibility has been a concern among investors. In the absence of such government convertibility guarantees, there is limited availability of currency hedging instruments that would allow private investors to cover currency risks through the market. The assurance on the availability of foreign currency shall definitely facilitate investment procedures. The ceiling of 30% should be removed as well.

Government guarantees for other obligations such as off-taker obligations and obligations towards infrastructure, payment obligations (including deemed commissioning and termination payments), etc. depending on projects.

6. Art. 83 Revenue risk sharing mechanism: (i) the investors, PPP project enterprises shall share with the State 50% of the increase between actual revenue and committed revenue in the contract; and (ii) the State shall share with the investors, the PPP project enterprises 50% of the decrease between actual revenue and committed revenue in the contract if, inter alia, the project does not use state’s budget and the cause of the loss is the change of policies, laws.

Recommendation: The risk sharing mechanism should be further developed to cover all other risks that may arise during the implementation of the PPP project (e.g., force majeure, change in law, price fluctuation, low selling price, etc.)

7. N/A Long negotiation process: it is due to several issues: (i) no clear list of approvals for the Project to be ready-to-build and / or operation, (ii) land site clearance and compensation process is still very challenging, (iii) not all decisions / procedures having a clear time-limit.

Recommendation: Recommending to provide all time-limits for all decisions / procedures and it is deemed to be provided if the state authority fails to issue such decisions. In addition, it is recommended to have a basic ready-to-build approval list for the investors to pursue and operate the PPP projects.

Please do not hesitate to contact the author Dr. Oliver Massmann under Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.



Am 2. Dezember 2015, nach fast drei Jahren und 14 Verhandlungsrunden, gaben Präsident DonaldTusk, Präsident Jean-Claude Juncker und der vietnamesische Premierminister Nguyen Tan Dung denAbschluss der Verhandlungen über das Freihandelsabkommen EU-Vietnam (EVFTA) bekannt.EVFTA ist ein Freihandelsabkommen der neuen Generation zwischen Vietnam und der EU. Am 26.Juni 2018 wurde EVFTA in zwei separate Abkommen aufgeteilt: das Freihandelsabkommen(EVFTA) und das Investitionsschutzabkommen (EVIPA). Im August 2018 schlossen die EU undVietnam die rechtliche Überprüfung EVFTA ab, wobei diese noch die Ratifizierung durch denEuropäischen Rat sowie die Zustimmung des Europäischen Parlaments benötigt, während die EVIPAnoch die zusätzliche Ratifizierung durch die Parlamente der einzelnen EU-Mitgliedstaaten erfordert.Am 30. Juni 2019 wurde in Hanoi EVFTA und EVIPA von der EU-Handelskommissarin CeciliaMalmstrom, dem rumänischen Wirtschaftsminister Stefan-Radu Oprea als Vertreter der EU,zusammen mit H.E. Premierminister Nguyen Xuan Phuc und vietnamesischen Regierungschefs,unterzeichnet. Der Premierminister brachte dabei seine Überzeugung zum Ausdruck, dass dasEuropäische Parlament, die Parlamente der EU-Mitgliedstaaten und die vietnamesischeNationalversammlung EVFTA und EVIPA bald ratifizieren werden. Beide Handels- undInvestitionsabkommen wurden am 12. Februar vom Europäischen Parlament gebilligt. Am 30. März2020 wurde EVFTA dann vom EU-Rat genehmigt, so dass die Umsetzung der EVFTA unmittelbarbevorsteht, sofern die vietnamesische Nationalversammlung auf ihrer Sitzung im Mai ihreZustimmung erteilt. Ein Inkrafttreten der EVFTA im Frühsommer diesen Jahres ist daherwahrscheinlich. Anders jedoch bei der EVIPA, welche für das Inkrafttreten von den Parlamenten derMitgliedstaaten gebilligt werden muss und daher länger dauern wird. Beide Abkommen werden voraussichtlich erhebliche Vorteile für Unternehmen, Arbeitnehmer undVerbraucher, sowohl in der EU als auch in Vietnam, mit sich bringen. Das vietnamesische BIP wirddabei voraussichtlich um 10 bis 15 Prozent steigen, während für die Exporte in den nächsten zehnJahren ein Wachstum von 30 bis 40 Prozent zu erwarten ist. In der Zwischenzeit könnten dieReallöhne von Facharbeitern um bis zu 12 Prozent steigen, während sich die Gehälter der einfachenArbeiter um 13 Prozent erhöhen würden. Sobald EVFTA in Kraft getreten ist und dieRegierungspolitik und die institutionellen Reformen diese umgesetzt haben, werden VietnamsGeschäftsaktivitäten einen Boom erleben. Dennoch bleiben einige Herausforderungen weiterhinbestehen. In dem folgenden Kapitel wird der Rechtsausschuss von EuroCham die für ihre jeweiligenBranchen relevanten Themen aufzeigen und spezifische Empfehlungen aussprechen, um bestehendenBedenken Rechnung zu tragen.


1. Allgemeiner Marktzugang für Waren- und Dienstleistungen

EVFTA ist das umfassendste und ehrgeizigste Handels- und Investitionsabkommen, welches die EUjemals mit einem asiatischen Entwicklungsland geschlossen hat. Es ist nach dem mit Singapurgeschlossenen Abkommen, das Zweite in der ASEAN-Region und wird die bilateralen Beziehungenzwischen Vietnam und der EU intensivieren. Vietnam wird dadurch Zugang zu einem potenziellenMarkt von rund 446 Millionen Menschen und einem Gesamt-BIP von 13.918 Milliarden US-Dollarhaben.Weiterhin werden Exporteure und Investoren aus der EU weitere Möglichkeiten haben, Zugang zueinem der größten und schnellsten wachsenden Länder der Region zu erhalten. Einem Anfang desJahres 2017 veröffentlichten Bericht zufolge, der 134 Städte weltweit umfasst, gehören Hanoi undHo-Chi-Minh-Stadt zu den zehn dynamischsten Städten. Nicht zuletzt aufgrund ihrer niedrigenKosten, der raschen Expansion des Verbrauchermarktes, des starken Bevölkerungswachstums und desÜbergangs zu Aktivitäten, welche eine beträchtliche Anzahl von Direktinvestoren anziehen. NachAngaben der Weltbank hat Vietnam mit einem BIP-Wachstum von 7,1% im Jahr 2018 und 6,7% zurJahresmitte 2019, eine der am schnellsten wachsenden Volkswirtschaften der Welt. Vergleichsweisezum Wachstum des BIP der USA, steigt das BIP Vietnams dabei fast doppelt so schnell.Darüber hinaus hat Vietnam die am schnellsten wachsende Mittelschicht der Region. Es wirderwartet, dass sich ihre Größe zwischen 2014 und 2020 fast verdoppeln wird (von 12 Millionen auf 33Millionen Menschen). Auch die superreiche Bevölkerung Vietnams wächst weltweit so rasant wiekeine andere und es besteht kein Zweifel daran, dass diese in den nächsten zehn Jahren zunehmendgrößer werden wird.2. Marktzugang für WarenBezüglich der Zölle ist zu beachten, dass nahezu alle, nämlich über 99 Prozent, entfallen werden.Diewenigen verbleibenden werden durch zollfreie Kontingente teilweise liberalisiert. Bei Inkrafttretendes Abkommens wird Vietnam als Entwicklungsland 65 Prozent des Wertes der EU-Exporte nachVietnam liberalisieren, welches etwa der Hälfte der Zolltarifpositionen entspricht. Die verbleibendenZölle werden im Laufe der nächsten zehn Jahre abgebaut. Dies stellt eine beispiellose, weitreichendeZollabschaffung für ein Land wie Vietnam dar, welches damit sein Streben nach einer tiefgreifendenIntegration und Handelsbeziehungen mit der EU unter Beweis stellt.In der Zwischenzeit stimmte die EU zu, die Zölle für 84 Prozent der Zolltarifpositionen und 71Prozent ihres Handelswerts für aus Vietnam eingeführte Waren unmittelbar nach Inkrafttreten vonEVFTA zu beseitigen. Innerhalb von 7 Jahren nach Inkrafttreten von EVFTA werden mehr als 99Prozent der Zolllinien für Vietnam abgeschafft worden sein. Im Vergleich zu der Reduzierung derZolllinien in Höhe von 95 Prozent, welche die ehemaligen TPP-Länder für vietnamesische Importeangeboten haben, ist diese Senkung weitaus umfassender. In der ASEAN-Region ist Vietnam derHauptexporteur von Waren in die EU. Allerdings ist der Marktanteil der vietnamesischen Produkte inder EU ist immer noch gering. Die am meisten von der EVFTA profitierenden Sektoren, werden dieseExportsektoren sein, für die früher hohe Zölle aus der EU erhoben wurden, wie beispielsweise solchefür Textilien, Schuhe und landwirtschaftliche Erzeugnisse. Die EU ist dabei auch ein guter Start fürVietnam, um andere Märkte zu erreichen.
Vietnam wird im Vergleich zu anderen derartigen Abkommen stärker von EVFTA profitieren, daVietnam und die EU als zwei sich unterstützende und ergänzende Märkte angesehen werden. Vietnamexportiert nämlich Waren, die die EU nicht selbst herstellt bzw. herstellen kann (z. B.Fischereierzeugnisse, tropische Früchte usw.), während die aus der EU importierten Produkte auchsolche sind, die Vietnam nicht im Inland produziert, darunter Maschinen, Flugzeuge und hochwertigepharmazeutische Produkte.Mit einem besseren Marktzugang für Waren aus der EU könnten vietnamesische Unternehmeneuropäische Materialien, Technologien und Ausrüstungen zu einer besseren Qualität und einembesseren Preis beziehen. Dies wiederum wird die eigene Produktqualität verbessern und eineübermäßige Abhängigkeit Vietnams von seinen anderen Haupthandelspartnern verringern.EVFTA wird als Grundlage für die EU angesehen, um weitere Freihandelsabkommen mit anderenLändern in der ASEAN-Region abzuschließen, um darauf folgend, ein Freihandelsabkommen vonRegion zu Region abzuschließen, sobald genügend Freihandelsabkommen mit einzelnen ASEAN-Ländern abgeschlossen wurden. Dieser Prozess könnte etwa 10-15 Jahre dauern. Vietnam sollte daherdieses Zeitfenster als Chance nutzen sich zu einem regionalen Drehkreuz zu entwickeln, bevorFreihandelsabkommen mit anderen Ländern in der Region geschlossen werden und in Kraft treten. 3. Marktzugang für EU-DienstleisterObwohl die WTO-Verpflichtungen Vietnams als Grundlage für die Dienstleistungsverpflichtungenvon EVFTA dienen, hat Vietnam nicht nur zusätzliche Teilsektoren für EU-Dienstleistungsanbietergeöffnet, sondern ist auch Verpflichtungen eingegangen, die über die in der WTO festgelegtenhinausgehen, um der EU den bestmöglichen Zugang zum vietnamesischen Markt zu bieten. Zu denTeilsektoren, die nicht Bestandteil der WTO sind, in denen Vietnam jedoch Verpflichtungen imRahmen der EVFTA eingegangen ist, gehören interdisziplinäre Forschungs- und Entwicklungsdienste(F & E); Pflegedienste, Physiotherapeuten und paramedizinisches Personal;Verpackungsdienstleistungen; Messen und Ausstellungen sowie Gebäudereinigungsdienste.Wenn diese Dienstleistungen internationale Standards erreichen, hat Vietnam die Möglichkeit,qualitativ hochwertige Dienstleistungen zu exportieren, welches nicht nur zu einer Steigerung desExportwertes, sondern auch der Exporteffizienz führt und somit zur Verbesserung der Handelsbilanzbeiträgt.III. ÖFFENTLICHES BESCHAFFUNGSWESENVietnam hat weltweit eine der höchsten Quoten der öffentlichen Investitionen im Verhältnis zum BIP(39 Prozent jährlich ab 1995). Bis jetzt hat Vietnam jedoch noch nicht zugestimmt, dass seinöffentliches Beschaffungswesen unter das Übereinkommen über das öffentliche Beschaffungswesen(GPA) der WTO fällt. Nun hat sich Vietnam erstmalig im EVFTA dazu verpflichtet.Die EVFTA-Verpflichtungen im Bereich des öffentlichen Beschaffungswesens betreffen in ersterLinie die Verpflichtung, Bieter aus der EU oder inländische Bieter mit EU-Investitionskapital gleichzu behandeln wie vietnamesische Bieter, wenn die Regierung Waren erwirbt oder eine Dienstleistunganfordert, deren Wert über dem festgelegten Schwellenwert liegt. Vietnam verpflichtet sich, die
allgemeinen Grundsätze der Inländerbehandlung und Nichtdiskriminierung zu befolgen. Es wirdInformationen über geplante Beschaffungen und Informationen zu der Auftragsvergabe in Bao DauThau – Zeitung für öffentliche Aufträge – sowie Informationen über das Beschaffungssystem und im Amtsblatt rechtzeitig veröffentlichen. Außerdem wird denLieferanten ausreichend Zeit eingeräumt, um Anträge auf deren Teilnahme und reagierende Angebotevorzubereiten und einzureichen und die Vertraulichkeit der Angebote zu wahren. EVFTA verlangtvon seinen Parteien auch, dass sie Angebote auf der Grundlage fairer und objektiver Prinzipienbewerten, diese nur auf der Grundlage von Kriterien bewerten und vergeben, die inBekanntmachungen und Ausschreibungsunterlagen festgelegt sind, und ein wirksames System fürBeschwerden und die Beilegung von Streitigkeiten schaffen. Diese Regeln verpflichten die Parteien,sicherzustellen, dass ihre Ausschreibungsverfahren den Verpflichtungen entsprechen und ihre eigenenInteressen schützen. Auf diese Weise kann Vietnam das Problem lösen, dass Angebote von billigen,aber qualitativ minderwertigen Dienstleistern gewonnen werden.Die öffentliche Beschaffung von Gütern oder Dienstleistungen oder einer Kombination davon, die diefolgenden Kriterien erfüllen, fällt in den Geltungsbereich der EVFTA-Regeln für die öffentlicheBeschaffung:KriterienEVFTAGeldwerte, die bestimmen, ob dieBeschaffung durch dieZentralregierung unter einAbkommen fälltAnfängliche Übergangsschwelle: 1,5 Millionen SZR (2,23Millionen US-Dollar)Nach 15 Jahren 130.000 Sonderziehungsrechte (SDRs)(191.000 US-Dollar)Beschaffung von Bauleistungendurch zentrale RegierungsstellenAnfänglicher Schwellenwert: 40 Millionen SZR (58,77Millionen US-Dollar)Nach 15 Jahren 5 Millionen SDRs (7,35 Millionen US-Dollar)Erfasste Einrichtungen22 zentrale Regierungsstellen42 weitere Einrichtungen (darunter 2 staatlicheVersorgungsunternehmen, 2 Universitäten, 2Forschungsinstitute und 34 öffentliche Krankenhäuser unterder Kontrolle des Gesundheitsministeriums)Berichterstattung über die subzentrale Regierung:einschließlich Hanoi and Ho Chi Minh CityAusschluss von Präferenzen fürKMUBreiter Ausschluss
Schaffung von AusgleichenBasierend auf dem Wert eines AuftragsIV. BEILEGUNG VON INVESTITIONSSTREITIGKEITENInvestitionsstreitigkeiten könnten nun im Rahmen von EVIPA beigelegt werden. Bei solchenStreitigkeiten (z.B. entschädigungslose Enteignung oder Diskriminierung von Investitionen) kann einInvestor den Streitfall dem Investment Tribunal zur Beilegung vorlegen. Um die Fairness undUnabhängigkeit der Streitbeilegung zu gewährleisten, wird ein ständiges Tribunal aus 9 Mitgliedernbestehen: jeweils 3 Staatsangehörige, die aus der EU und Vietnam ernannt werden, sowie 3Staatsangehörige, die aus Drittländern ernannt werden. Die Fälle werden von einem dreiköpfigenTribunal verhandelt, das vom Vorsitzenden des Tribunals nach dem Zufallsprinzip ausgewählt wird.Damit soll auch eine kohärente Rechtsprechung in ähnlichen Fällen gewährleistet und dieStreitbeilegung vorhersehbarer gemacht werden. EVIPA lässt in einzelnen Fällen auch zu, dass eineinzelnes Mitglied des Tribunals die Streitigkeit verhandelt, wenn der Kläger ein kleines odermittleres Unternehmen ist oder die Entschädigung für geschädigte Forderungen relativ gering ist. Diesist ein flexibler Ansatz, wenn man bedenkt, dass Vietnam immer noch ein Entwicklungsland ist.Falls eine der Streitparteien mit der Entscheidung des Gerichts nicht einverstanden ist, kann sie beimBerufungsgericht Berufung einlegen. Dies unterscheidet sich zwar vom üblichen Schiedsverfahren, istjedoch dem zweistufigen Streitbeilegungsmechanismus in der WTO (Panel and Appellate Body) rechtähnlich. Dieser Mechanismus könnte, unserer Meinung nach, Zeit und Kosten für das gesamteVerfahren sparen könnte.Der endgültige Vergleich ist bindend und von den örtlichen Gerichten hinsichtlich seiner Gültigkeitdurchsetzbar, mit Ausnahme eines Zeitraums von fünf Jahren nach Inkrafttreten von EVIPA (sieheweitere Anmerkungen im Kapitel über den Rechtsweg des Rechtssektorkomitees).V.FAZITSobald EVFTA und EVIPA von Vietnam ratifiziert sind, werden sie ein nachhaltiges Wachstum undgegenseitige Vorteile in mehreren Sektoren schaffen und ein wirksames Instrument zum Ausgleichder Handelsbeziehungen zwischen der EU und Vietnam sein. Vietnam unternimmt kontinuierlicheAnstrengungen und Fortschritte, um die hohen Standards der beiden Freihandelsabkommen zuerfüllen, und bietet ausländischen Unternehmen in Vorbereitung auf den Abschluss derFreihandelsabkommen derzeit größere Möglichkeiten. Es ist jetzt an der Zeit, dass ausländischeInvestoren ihre Geschäftspläne in Angriff nehmen und die sich bietenden klaren Chancen nutzen.


Bitte kontaktieren Sie den Autor Dr. Oliver Massmann, Generaldirektor von Duane Morris Vietnam LLC unter wenn Sie Fragen zu dem Inhalt haben. Dr. Oliver Massmann ist Mitglied des Aufsichrates der PetroVietnam JSC Holding und der einzige auslaendische Anwalt, der Vortraege in vietnamesischer Sprache vor den Mitgliedern der vietnamesischen Nationalversammlung haelt.


The COVID-19 pandemic has given rise to many questions regarding force majeure and e-signatures. In particular, parties to commercial contracts are keen to know (i) whether they can be released from liabilities by relying on a force majeure clause and (ii) whether they can execute contracts by electronic signatures instead of the traditional “wet ink” signatures which have become almost impossible in the context of the COVID-19 pandemic.

  1. Force majeure

 A force majeure event under Vietnamese law

Vietnamese law defines force majeure in Article 156.1 of the Civil Code as “an event which occurs in an objective manner which is not foreseeable and which is not able to be remedied by all possible necessary and admissible measures being taken”.

For contracts that have been entered into prior to the COVID-19 pandemic, affected parties will have to prove that the pandemic satisfies all three components of a force majeure event in order to rely on this statutory right. The first two can be easily met – the corona virus is an objective event that cannot be foreseen. However, the trickiest part for parties would be the last component – whether the party has taken all reasonable measures to prevent the effect of the pandemic on their performance of the contract. This is a subjective test, and will need to be analyzed on a case-by-case basis taking actual facts into account.

  1. The effect of a force majeure event

The effect of a force majeure event is that the affected party who fails to perform its obligation under a contract will be released from liabilities. The relevant provisions are Article 351.2 of the Civil Code 2015 and Article 294.1 of the Commercial Law 2005 as quoted below:

Article 351.2 of the Civil Code 2015:

Where an obligor fails to perform correctly an obligation due to a force majeure event, it shall not have civil liability unless otherwise agreed or otherwise provided by law.

Article 294.1 of the Commercial Law 2005:

A defaulting party will be exempt from liability upon occurrence of a force majeure event.

The wording of Article 294.1 of the Commercial Law 2005 does not explicitly require a causal link between a force majeure event and the default of the affected party. However, logically speaking, to be released from liabilities, the fault should be caused by a force majeure event. It is also worth noting that according to the Commercial Law 2005, in order to be released from liabilities, the affected party is required to (i) immediately notify the other party in writing of the force majeure event and the potential consequences of such event; and (ii) promptly notify the other party when the force majeure event ceases to exist.

Regarding the possibility to terminate a contract, neither the Civil Code 2015 nor the Commercial Law 2005 allows parties to terminate a contract due to a force majeure event. However, the Commercial Law 2005 allows an extension of the deadline for the performance of a contract, and a refusal to perform a contract in the event of a prolonged event. The affected party who refuses to perform the contract due to a prolonged force majeure event must notify the other party of its refusal to perform the contract within ten days from the expiry date of the extended deadline for performance of the affected party’s obligations and before the other party commences to perform its contractual obligations.

  1. Alternative approaches for affected party due to COVID-19

Besides a force majeure event, an alternative approach for parties to consider in the context of the COVID-19 pandemic is fundamental changes clauses provided by Article 420 of the Civil Code 2015. Article 420 the performance of a contract under a fundamental change of conditions, which is quite similar to hardship clauses in other civil jurisdictions. Specifically, a circumstance is deemed fundamentally changed when the following elements are met:

  • The change occurs due to objective reasons after the execution of the contract. The COVID-19 pandemic would seem, prima facie, to satisfy this element;
  • At the time of contract execution, the parties could not foresee any change in circumstances. Contracts executed prior to the COVID-19 pandemic would also seem to satisfy this element;
  • There is such a fundamental change in circumstances that if the parties had known in advance, they would not have executed the contract, or might have executed it but with completely different content. This element is likely to be satisfied as well;
  • The continued performance of the contract without an amendment would cause serious damage to one party. The satisfaction of this element would depend on specific facts of each case; and
  • The affected party has taken all necessary measures in its capability in accordance with the nature of the contract but it still cannot prevent, mitigate the impact on its interest. The satisfaction of this element would also depend on specific facts of each case.

A key difference between a force majeure event and a fundamental change, which is also what might make proving the COVID-19 pandemic to be a fundamental change easier than a force majeure event, is that, with respect to the former, affected parties need to prove that the contractual performance is impossible while, for the latter, affected parties only need to prove that the performance of the contract is possible but with substantial disadvantages to the affected party.

In the event of a fundamental change regulated by Article 420, affected parties may request the other party to re-negotiate the contract within a reasonable period of time. Where the parties to the contract cannot agree on amendment to the contract as such, either party may request a court to:

  • terminate the contract at a specified time; or
  • amend the contract to balance the rights and benefits of the parties;

Of note, the court is only permitted to decide on the amendment to the contract where the termination of such contract would cause loss and damages greater than the costs for the performance of the contract when amended.

  1. Rewriting force majeure clauses

Proving any pandemic, the COVID-19 as analyzed above for an example, is onerous and requires a lot of efforts from affected parties while the outcome is unpredictable as ever. That is why we have seen plenty of new drafting around force majeure terms expressly referencing to pandemic in general and the COVID-19 in particular, as below for an example, which is highly recommended to be incorporated into contracts to be entered into.

Force Majeure Event means an event that wholly or partly prevents or delays the performance of obligations and/or the adherence to deadlines or time periods arising under this Agreement and shall include, without limitation, an act of God, explosion, accident, fire, lighting, earthquake, storms, flood or similar cataclysmic occurrence; an act of war , blockade, insurrection, lockouts, or other labor difficulties; restrictions or restraints imposed by law or by rule, regulations or order of any deferral, state or local government, governmental agency or quasi-governmental agency; a pandemic; COVID-19 (Coronavirus)-related events, including, by way of example but not limitation, quarantines, third party vendor shut downs, business shut downs, and travel restrictions; action or failure to act of any federal, state or local government, governmental agency or quasi-governmental agency; and interruption or other loss of utilities due to causes beyond the reasonable control of the Purchaser.”

  1. E-signatures

Under the Law on Electronic Transactions 2005, an e-signature is defined as being created in the form of words, script, numerals, symbols, sounds or in other forms by electronic means, logically attached or associated with a data massage, and being capable of identifying the person who has signed the data message, and being capable of identifying the consent of that signatory to the contents of the signed data message.

The law also provides that parties to a transaction have the right to agree to use or not to use an e-signature to execute data messages (e.g. a soft copy of a contract exchanged via emails) unless otherwise regulated by the law. In the context of the COVID-19 pandemic, it is advisable that parties explicitly agree on the e-signatures having the same validity of “wet ink” signatures. Internationally we have seen new drafting around e-signatures as below, for an example:

The words “execution,” “signed,” “signature,” and words of like import in this Agreement shall be deemed to include electronic signatures which shall be of the same legal effect, validity or enforceability as a manually executed signature, to the extent and as provided for in all applicable law.”

Notwithstanding the agreement of the parties on the validity of e-signatures, according to Article 24.1 of the Law on Electronic Transactions, e-signatures must satisfy the following conditions in order to have same legal effect with a “wet ink” signatures:

  • The method of creating the e-signatures permit the identification of the signatory and to verify his/her approval of the contents of the data message; and
  • Such method is sufficiently reliable and appropriate for the purposes for which the data message was originated and exchanged.

In addition, Article 21.2 of Law on Electronic Transactions also generally requires e-signatures to satisfy the following “safety” conditions:

  • The data used to create an e-signature is owned only by the signatory;
  • The data used to create an e-signature is under the control of only the signatory at the time of signing;
  • All changes to an e-signature after the time of signing is detectable; and
  • All changes to the contents of the data message after the time of signing is detectable

As all these conditions are vague and may give rise to uncertainty, a practical solution is to resort to third-party certification service providers. Enterprises/individuals can register their e-signatures with such service providers and will receive a certificate of validity of the respective e-signatures.

All analysis aside however, Vietnam remains an ‘old school’ jurisdiction for the time being and, where possible to obtain wet signatures on contracts and contract related documents such as formal notices it remains advisable to do so.

For more information, please contact Giles at or Dang Ngoc Huyen at or any of the lawyers in our office listing. Giles is Chairman of Duane Morris Vietnam LLC and branch director of Duane Morris’ HCMC office.


On 23rd April 2020, The Ministry of Planning and Investment issued Document No. 2640/BKHDT-TH to consult related government agencies on Draft resolution of the Government on solutions to remove difficulties for production and business, promote disbursement of public investment capital and ensure social order and safety in the context of COVID-19 (“the Draft”).

This is an effort of the Government in aiming to restore the power of Vietnam’s economy that has been negatively affected since the pandemic broke out in February.

The Draft focuses on 5 main topics, with key provisions as follow:

1. Reduce/Exempt tax:
– Exemption of guarantee fee arising in 2020 for government-guaranteed loans for aviation businesses;
– Reduction of lending interest rates for small and medium-sized enterprises which are prioritized by small and medium-sized enterprise development funds: reduce lending entrusted interest rates by around 3%; reducing direct and indirect lending interest rates by approximately 2%;
– Reduce 50% of corporate income tax for small and medium enterprises and cooperatives in 2020.
– Reduce/Exempt fees: 100% exemption of license fees in 2020 for affected business households. For those that paid, the amount paid is deducted from the obligation to pay license fees in the following year;
– 50% reduction in registration fee when registering for a car manufactured or assembled domestically by the end of 2020 to stimulate domestic consumption;
– 30% reduction in land rent for a period of 6 months for production and business establishments that have been stopped due to COVID-19.

2. Delay of tax payment time:
– Allow the postponement of special consumption tax payment for domestically manufactured cars until the end of September 2020 for amounts payable from March 2020;
– Allow deferred payment of VAT to the end of September 2020 for affected enterprises;
– Extension of the time for payment of export tax to the end of September 2020 for payables arising from March 2020;
– Extension of personal income tax payment to the end of September 2020 of individuals working in the affected businesses arising from March 2020;
– Extend the term of preferential interest rate loans to 1 year.

3. Apply special entry procedures for foreign experts working for businesses in Vietnam: extend their work permit; issue new work permits to experts, business managers, technical workers who are foreigners to replace those who cannot return to Vietnam.

4. Accelerate disbursement of public investment capital;

5. Accelerate investment procedures for projects; Attract new investment resources;

6. Forbid to apply the regulation of saving 10% of total investment for new projects starting in medium-term public investment plan 2016-2020 and allocating capital from public investment plans in 2020;

7. Temporarily suspend the application term of Decree 68/2019/ ND-CP on management of construction investment costs until the end of 2020;

8. Promulgate a resolution on conversion of investment forms for 8 projects on the North-South Expressway on the east side from public-private partnership to public investment.

Some Clarifications Required

o While the Draft proposes straightforward and welcoming measures for supporting business in this pandemic, there are a number of issues that will require additional guidance, among others, such as:
o The list of enterprises affected by COVID-19 is unclear and limited, as it does not cover the petroleum, entertainment, etc. industries that are also heavily affected.
o Besides, it is unreasonable to propose VAT reduction for some affected industries such as aviation and tourism because the current laws have specific provisions for VAT reimbursement, and it creates inequality with other affected industries;
o Extension of time limit for corporate tax payment year 2019, VAT, personal income tax and land rent are only 5 months. Given that the pandemic has occurred for approximately 3 months now and has left devastating consequences, coupled with extreme natural disasters in many regions of Vietnam in the past months, the time limit should be extended to 1 year;
o Most of the wordings in the draft are quiet general; the reduction or exemption of tax and fees should be associated with specific household/individual (poor household of specific income levels, children…)
o Proposing a 50% reduction of registration fee when registering domestically manufactured or assembled cars until the end of 2020, applying special consumption tax incentives to the domestic automobile industry is a violation of the commitment to zero discrimination between domestically produced goods and imported goods upon accession to the WTO.


Please do not hesitate to contact the author Dr. Oliver Massmann under Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.


(“FIT”) scheme for wind power may be extended until the end of 2023 if it is approved by the Prime Minister. On April 09th, 2020, MoIT sent the Government Office the Official Letter no. 2491/BCT-DL to propose to extend FIT scheme for wind power. The proposed content is as follows:

1. Extending FIT scheme for wind power until 31/12/2023.

2. Assigning MoIT to calculate and propose a new FIT price for the projects COD after 01 November 2021 until 31 December 2023.

3. Competitive tender and auction scheme shall be applied after 2023.

The reason for this proposal is the predicted shortage of power for Southern Vietnam from 2021 to 2025 because many thermal projects are behind schedule, thus the need for wind power from 2021 to 2025 is predicted from 6,030 MW to 11,630 MW.

This extended FIT scheme, if approved by the Prime Minister, shall be a lucrative opportunity for investors in the following years.

Please do not hesitate to contact Dr. Oliver Massmann under or any other lawyer in our office listing if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
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Vietnam’s renewable energy industry amid COVID-19: facts, force majeure and (patchy) Government support

Vietnam’s renewable energy development over the past three or so years can variously be described as frenetic, chaotic and heartening. Look past all the noise about non-bankable agreements, insufficient transmission infrastructure and bureaucratic black holes, and it’s clear the market has spoken. Vietnam currently has the largest installed solar capacity in Southeast Asia and is taking strides on wind too. Between May and July 2019, an incredible 82 ground mounted solar plants were connected to the national grid (total of 4,464 MW), more than 400% the target that had been set for 2020. The Ministry of Industry and Trade recently announced that the country is aiming to boost power output produced by renewable energy to about 23% by 2030.

The sector as a whole is also poised on the brink of a new phase. Feed in tariffs are coming to an end, low hanging fruit projects have been developed and local banks’ capacity to continue to finance development is stressed. Meanwhile, energy demand rises steadily and right-minded global citizens are clamoring for an end to coal and a rapid transition to renewable energy sources.

Into this heady mix arrived a novel corona virus and the disease known as COVID-19.

For all the momentum, the clean-energy sectors – solar, wind, energy storage, and companies transforming the power grid – will not escape the COVID-19 impact. They face serious questions across the board: from supply chain issues to workforce shortages, to more macro questions about the economy, energy demand and availability of finance.

New FiT announcement for solar does little to calm waters

Which is why the Prime Minister’s Decision 13 on 6 April 2020 announcing the new solar power feed in tariffs was both a blessing and a curse. On the one hand, the market finally has long-awaited certainty over revenue stream. On the other hand, the COD deadline to qualify for the new tariffs – 31 December 2020 – is like a bad joke. See more about this here:

In fairness, the 31 December 2020 deadline had been flagged for some time, but the long delay in making it formal, only to finally issue the Decision in a period of unprecedented global chaos and lockdown, with a deadline just 8 months away, almost seems cruel.

Module production facilities in Vietnam usually carry one or two months of supplementary materials inventory on-site. If production interruptions lasts longer than one month, factories in Vietnam will start to see supply shortages that will reduce their production output. Developers waiting for module delivery from mainland China in the second quarter of 2020 will very likely not see the orders delivered on time. Late module delivery will affect project construction schedules around the world, and projects with Q3 and Q4 2020 targets are likely to be hit particularly hard.

In other words, if you are a ground-mounted solar developer in Vietnam today and had been waiting for certainty of revenue stream before pulling the trigger on procurement (let alone land clearance costs), good luck.

Wind makes out better

Similar to the solar industry, COVID-19 has already interrupted the supply chain for wind power plants, which will lead to commissioning delays. Leading turbines suppliers have already announced delays in delivery dates for turbines and other essential equipment citing force majeure clauses in supply contracts.

Looking past supply, the longer strict public health measures stay in place, the more likely it is that equipment prices will be impacted as well.

At least for wind power projects, Vietnam’s Government seems to be listening. As a result of the COVID-19 situation and pleas from investors, on 9 April 2020, the Ministry of Industry and Trade proposed to the Prime Minister a FiT extension for wind projects until 31 December 2023 (a substantial 2+ years extension on the current deadline of 1 November 2021). The MOIT proposes in Official Letter 2491 that a new FiT should apply from1 November 2021 to 31 December 2023 and thereafter wind power tariffs should be subject to auction.

It remains to be seen if the MOIT proposal will be accepted and if prompt action is not taken, foreign clean energy development companies may withdraw from the wind and solar power market because of the possible negative impacts of COVID-19 on their global operations. Vietnam may lose investment disproportionately because it is considered a high-risk market. The virus could also make it harder to keep wind and solar farms up and running, due to travel bans and maintenance delays.

COVID-19 re-writes force majeure clauses

Where coronavirus causes business disruption, from fulfillment of deliveries to cancellation of events, a common question is whether commercial parties can rely on force majeure clauses in their contracts.

Vietnamese law defines force majeure in Article 56 of the Civil Code: “An event of force majeure is an event which occurs in an objective manner which is not able to be foreseen and which is not able to be remedied by all possible necessary and admissible measures being taken”.

For contracts that have been entered into prior to the COVID-19 pandemic, project developers will have to prove that the pandemic satisfies all three components of a force majeure event in order to rely on this statutory right. The first two can be easily met – the corona virus is an objective event that cannot be foreseen. However the trickiest part for developers would be the last component – whether the developer has taken all reasonable measures to prevent the effect of the pandemic on their project. This is a subjective test, and will need to be analyzed on a case-to-case basis taking actual facts into account.

Internationally, we see plenty of new drafting around force majeure terms expressly referencing COVID-19. An example is:

“Force Majeure Event means an event that wholly or partly prevents or delays the performance of obligations and/or the adherence to deadlines or time periods arising under this Agreement and shall include, without limitation, an act of God, explosion, accident, fire, lighting, earthquake, storms, flood or similar cataclysmic occurrence; an act of war, blockade, insurrection, riot, civil disturbance, sabotage, strikes, lockouts, or other labor difficulties; restrictions or restraints imposed by law or by rule, regulation or order of any federal, state or local government, governmental agency or quasi-governmental agency; a pandemic; COVID-19 (Coronavirus)-related events, including, by way of example but not limitation, quarantines, third party vendor shut downs, business shut downs, and travel restrictions; action or failure to act of any federal, state or local government, governmental agency or quasi-governmental agency; and interruption or other loss of utilities due to causes beyond the reasonable control of the Purchaser.”

Even though the force majeure clauses in standard wind and solar PPA do cover epidemic, they do not refer to epidemic-related events caused by third parties or those within the control of the government (government FM events). Since the power purchaser in Vietnam (EVN) is a State-owned enterprise, this raises the concern of EVN relying on government FM events to exempt itself from obligation. The lack of distinction emphasized between natural FM events and government FM events in the standard clauses, and the lack of expansion on the general reference to “epidemic”, puts power developers in a fragile spot amid this novel virus situation. As a result, it is advised that developers should always try to negotiate their PPAs to reflect international standards. This is of course easier said than done, but doesn’t mean efforts should be ignored.

On the developer’s side, it remains to be seen whether the standard PPA terms on force majeure might operate to allow extensions to COD deadlines, especially considering the deadlines are mandated in legislation. This is a topic that would bear much more scrutiny on a case-to-case basis.

For more information about Vietnam’s energy sector, please contact Giles at or any of the lawyers in our office listing. Giles is Chairman of Duane Morris Vietnam LLC, branch director of Duane Morris’ HCMC office and Asia lead for Duane Morris’ Energy Industry Group.