Category Archives: Vietnam – General


Number and types of gaming machines

A foreign enterprise that engages in the offline prize-winning electronic game business must obtain Investment Registration Certificate and Certificate of Satisfaction of Conditions for a Gaming Business (“SC Certificate”). The SC Certificate will reflect the type and number of gaming machines that an enterprise is permitted to have. Circular 11/2014/TT-BTC (“Circular 11”) lists the following seven types of gaming machines that an enterprise is allowed to operate:

1. Coin Slot Machines
2. Roulette
3. Automatic Baccarat
4. Electronic Blackjack
5. Sic Bo or Tai Siu Machines
6. Horse Racing and Mahjong; and
7. Poker Machines

Items 2-7 above are permitted only if they are automated and do not require participation by members of staff.

The total number of gaming machines of the enterprise must not exceed the permitted number stipulated in the SC Certificate. In addition, the number of gaming machines belonging to each of categories 2-7 above must not exceed 15% of the total number of gaming machines operated by the enterprise. No maximum percentage is applied to coin slot machines.

Circular 57/2017/TT-BTC (“Circular 57”) requires the enterprise to lodge a report to the Ministry of Finance, local Department of Finance, local Department of Culture, Sport and Tourism and local Department of Taxation, describing the total number and type of gaming machines, including the ratio of each type, within 5 business days from the date of commencement of operation. Any variation in the number and type of each machine must also be reported to each of these Department and Ministry.

Back-up equipment for gaming machines

Under Circular 57, enterprises licensed with an SC Certificate are permitted to purchase back-up equipment for gaming machines. Enterprises can purchase the following items for replacement where necessary:

1. Screens
2. Cash and token receipt systems
3. Prize payment systems
4. Archiving systems
5. Circuit boards

All back-up equipment must be 100% new and cannot exceed 10% of the number of gaming machines operated by the enterprise for which that item of back-up equipment would be used.

Where back-up equipment is used by an enterprise to replace items in gaming machines, that enterprise must keep detailed records specifying the type of gaming machine, the type of equipment and the reason for replacement.

Procedures to obtain a SC Certificate

An enterprise must satisfy the following conditions in order to apply for a SC Certificate:
– Have an Investment Registration Certificate that states the business line for prize-winning electronic game business operation
– Total investment capital of at least VND 200 billions
– If the enterprise also operates tourist accommodation service, the tourist accommodation establishment must be of five-star class as ranked by a state agency
– The facility for prize-winning electronic game business must be located separately from other business areas of the enterprise and must be equipped with 24/7 CCTV
– The business facility manager must have at least a Bachelor’s degree and at least 03 years of experience in managing prize-winning electronic game business
– The business facility must satisfy conditions on security and fire safety.

Application dossier for an SC Certificate includes: standard application form, copy of Investment Registration Certificate, site plan of the business facility, proof of the business facility manager’s competence, internal regulations on management, control, anti-money laundering and game rules.

Accounting system and reporting

Enterprises that operate electronic gaming equipment must conduct separate cost accounting for revenue, expenses and profit of its gaming business, and must separately monitor items related to the gaming business in its system of accounting books and financial statements.

Circular 11 requires an enterprise to submit to local authorities the following reports on a quarterly and annual basis:

1. Financial statements
2. Report on the number and type of gaming machines
3. Report on the purchase, use, re-export or destruction of equipment of gaming machines
4. Report on the status of operation of the gaming business

The issuance of Circular 11 and Circular 57, alongside the execution of legal instruments on casino business in Vietnam, indicates the Government’s increasing willingness in attracting foreign investors for the development of these gaming industries. Investors are strongly recommended to invest in Vietnam – one of the few global economies that manage to thrive flourishingly amid the Covid-19 pandemic and also the country with the fastest increase in the number of middle-class citizens in South East Asia.

For more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann via email under or via LinkedIn under Dr. Oliver Massmann. 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.


Guiding regulations:

Decree No. 72/2013/ND-CP on the management, provision and use of Internet services and online information;
Decree No.103/2009/ND-CP promulgating the regulation on cultural activities and commercial provision of public cultural services;
Vietnam’s Specific Commitments to WTO in Services

Enterprise Establishment:
Foreign investors who wish to engage in the online games distribution service must have either a Contract of Business Cooperation or a joint venture with a Vietnamese partner who is eligible to provide online gaming business. In case of a joint venture, the foreign investors’ capital must not exceed 49%.

The joint venture can be in the form of a Limited Liability Company or a Joint Stock Company. Generally, there are more options to mobilize capital in a Joint Stock Company.

Only Vietnamese enterprises can apply for G1, G2, G3 and G4 gaming license in Vietnam. A Vietnamese entity is defined under Law on Enterprise 2014 as an entity established or registered to establish under Vietnam laws and has headquarter in Vietnam.

Online Games Classification:
G1: Video games that have interaction among multiple players via the game server
G2: Video games that only have interaction between the players and the game server
G3: Video games that have interaction among multiple players without interaction between players and the game server
G4: Video games that are downloaded from the Internet without the interaction among players and between players and the game server

Licensing procedures for G1 Games:
G1 gaming license expires after 10 years and you can only extend it once for one extra year. The Ministry of Information and Technology is seeking to reduce the license’s validity to only 5 years.

Conditions to apply for G1 gaming license:
-Must have a headquarter and contact number
-Registered for a domain name to use to provide the service
-At least 1 personnel administers 2 servers
-The business manager must have at least a Bachelor’s degree
-Sufficient financial capacity, adequate gaming systems
-Have backup plan for equipment and connection as well as data backup plan
-Have professional measures to manage game forum content

Important documents of application dossier:
-Documents proving the ownership of domain name
-Business location rental/ownership contract
-Game service payment plan
-List of partners providing payment assistance service
-Detailed description of host devices

After attaining G1 gaming license, you would need to obtain Approval for script content for each G1 game in order to operate the G1 game

Conditions to apply for Approval of script content for each G1 game:
-Game content must be culturally appropriate
-The game’s age rating must be suitable with the content
-Have measures to manage players’ account

During operation phase, the game provider must ensure to manage under 18-year-old player’s time to not exceed 180 minutes in 24 hours each day

For more information on the above, 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 28 October 2020, the Ministry of Industry and Trade (MOIT) issued Official Letter No.8159/BCT-DL to collect comments from other Ministries and relevant agencies on solutions for difficulties in wind energy project development. The comments were combined into a Draft report for the Prime Minister’s review and approval.

A notable provision of the Draft report is for wind power projects that have been supplemented into the power development planning and do not meet the COD deadline for current wind FiT rate of November 2021, the new applicable FiT rate shall be:

No. Category FiT rate for onshore projects (Uscent/kWh) FiT rate for offshore projects (Uscent/kWh)

1 Projects reaching COD from November 2021 to December 2022 7,02 8,47

2 Projects reaching COD in 2023 6,81 8,21

In addition, the Draft report also proposes to extend the current FiT rate deadline to 31 December 2023, instead of November 2021.

As stated in our previous articles on FiT rate for wind power projects, 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:
• 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;
• 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 investors extra time, especially when there is unexpected delay of equipment delivery (e.g. due to Covid-19).


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 Information and Communications issued a Draft Decree amending and supplementing Decree No. 72/2013/ND-CP and Decree No. 27/2018/ND-CP regarding the management, provision and use of Internet services and online information (“the Draft”). The Draft will affect telecommunications businesses, publishers of video games and businesses that engage in producing and utilizing electronic newspapers, social networks, and sales websites.

Provisions in the Draft that may affect foreign investors

On Aggregate information:
1. Aggregate information is information retrieved from Vietnamese press sources and must relate to the following 08 sectors: science, technology, economy, culture, sports, entertainment, advertising and social security.

2. Organizations’ internal websites and specialized website providing aggregate information must obtain aggregate information website license. This measure aims to prevent internal websites from illegally posing as aggregate information websites in order to lure in viewers. Multinationals which usually have their own global websites for staff members across the world must take extra caution when handling information already published by the Vietnamese press.

On Re-releasing published contents:
1. Aggregate information websites, application distribution stores and social networks can only re-released content published by Vietnamese press sources at least 01 hour later than the time of publishing the source content. Re-released content must be removed immediately after the source content has been removed.

2. Agreggate information must state clearly the author’s name, the source’s name, the time of posting and place a link to the source content right below the re-released content. Aggregate information must not include readers’ comment of the re-released content (except for aggregate information websites constituted by press agencies).

3. Aggregate information must not concern other localities. This measure is somewhat impractical given the fact that in this era global events closely interwove with and have direct effects on people’s everyday life, this is especially true for international organizations, and thus viewers are increasingly looking for information about other countries. For example, the war in Yemen can drive up oil price in Vietnam or the gold price fluctuates with the hourly results of the US presidential election. Putting such measure could hinder aggregate information website’s business growth.

On Cross-border provision of public information:
Foreign entities engaging in this service must comply to Vietnam laws. Failure by investors in handling violating information can lead to the Ministry of Information and Communications proactively implementing technical interventions.

On Social networks:
1. Social networks are classified into social networks with high levels of interaction and ones with low level of interaction based on the monthly number of interaction or registered users. Social networks with high levels of interaction (at least 1 million interactions and/or 10,000 registered users per month) have to obtain a Social Network License issued by the Ministry of Information and Communications. Social networks with low levels of interaction need only notify the Ministry of Information and Communication on its operation.

2. Only licensed social networks have the right to charge fees and perform livestreaming services. The Ministry of Information and Communications will also embed a tool to monitor interaction levels for licensing-related purpose.

These measures, if come into effect, would seriously hamper the development of new social networks that rely on service fees in order to further expand their business. The possibility that such new social networks have to go through lengthy administrative procedures before they can carry out any fees collection and the possibility that entities have to amend their information technology system to accommodate the Ministry’s monitoring tool, would not only cause them financial burdens but also interfere with their freedom of doing business.

On Online games:
1. The Draft removes the requirement for online game providers to obtain a master license/certificate. A Dissemination License is now only required for each G1 game, while a Certificate for Game Dissemination Registration is required for each G2-4 games.

2. Providers must also show that they have (i) A head office with clear address and contact; (ii) Capacity to register and store users’ personal information including national identification information; (iii) Capacity to control players’ playtime, including restriction on children’s playtime.

The application of an uniform policy for all online games creates an imbalance in management as new games that need to prioritize attracting players or new developers short on funds must adhere to the same standards for established games/developers, thus creating difficulties in online games distribution.

3. Payment system of online games (if any) must be located in Vietnam and connected with Vietnamese payment service providers.

Within this era of ever-changing technological advances and the society’s increasing dependence on technology, the Draft Decree would play a very important role in managing this under-regulated sector. Duane Morris calls for further amendment on the Draft Decree to address the aforementioned issues.

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 Government’s policies have created a driving force for wind energy development in Vietnam over the years. From 2018 to now, the Ministry of Industry and Trade (“MOIT”) has received requests for project inclusion into the National Power Development Plan (“NPDP”) of up to 50,000 MW.

At the moment, the total planned capacity of wind power in 2025 is 11,800 MW – of which competent authorities have approved 4,800 MW before January 1, 2019, and an additional 7000 MW was included by July 2020. MOIT has also sent a written report to the Prime Minister on the appraisal results of 74 wind power projects with a total capacity of about 6400 MW, which are proposed to be included in the NPDP.

MOIT is urgently completing the National Electricity Development Plan VIII (“VIII Master Plan”) for the period 2021-2030, with a vision to 2045 to submit for the Prime Minister’s approval in October 2020. To assist with this process, on 5 October 2020, MOIT issued Document No.7421/BCT-DL on the list of wind power projects proposed to be included in the VIII Master Plan, guiding the following:

1. The People’s Committees of provinces and cities to create a list of wind power projects requesting for survey, research, and supplementation into the NPDP.

2. Due to time constraint on the submission deadline of the VIII Master Plan, appraisal and approval for inclusion of wind energy projects shall be suspended until further notice.

3. The People’s Committees of provinces and cities are responsible for reviewing the site planning of wind power plants.

MOIT’s guidance to suspend the inclusion of more wind power projects into the NPDP is a recommendable move given the fact that the national power transmission system has been experiencing overload. Moreover, Electricity Vietnam (EVN) predicts that roughly 20-35% of total installed capacity will not be released in the South Central Region (including renewable energy hotspots Binh Thuan and Ninh Thuan) in 2025 if all projects that have been included in the NPDP go into operation in the next 4 years.

For more information on the above, 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.


Es war noch nie einfacher und profitabler in Vietnam in erneuerbare Energien zu investieren. Es ist eines der Länder mit den meisten Sonnenstunden im Jahr und kann sich mit einer 3000 km langen Küste rühmen, die sich für den Ausbau von Windkraft eignet.
Die Regierung hat ausländische Investitionen in diesem Sektor gefördert, in dem sie erneuerbare Energien als eines der fünf geeignetsten Sektoren für die Entwicklung öffentlich-privater Partnerschaften ernannt und die enormen Vorteile daraus gezogen hat, wie die Erteilung von Standard- Stromabnahmeverträgen unter Berücksichtigung der Meinungen ausländischer Investoren, sowie Tarifsätze (Fit) Steuern für Windkraft- und Sonnenenergie Projekte, Ratifizierung des EU-Vietnam- Freihandelsabkommens, des umfassenden und progressiven Abkommens für die trans-pazifische Partnerschaft (CTPP) und so weiter.

I) Analyse des Energiesektors in Vietnam:

Vietnam hat in seinem Energiesektor in den letzten 10 Jahren viele erfolgreiche Leistungen erzielt.
Der Ausbau der Öl- und Gasproduktion ist gestiegen und hat eine Reihe groß angelegter petrochemischer Raffinerieanlagen gebildet; Wind- und Solarenergie- Projekte entwickeln sich mit hoher Geschwindigkeit.
Da jedoch auch der Energieverbrauch steigt und sich die Verbraucherstruktur in Richtung Industrialisierung bewegt, sieht sich Vietnam einem steigenden Energieimport gegenüber. Einige Indikatoren der Energiesicherheit bewegen sich bereits in eine nachteihafte Richtung. Darüber hinaus hat der massive Verbrauch fossiler Energiequellen die Umwelt stark verschmutzt, trotz strenger Sanktionsmaßnahmen.

Als Reaktion hierauf hat die Regierung den Ausbau erneuerbaren Energiequellen gefördert um die fossilen vollständig zu ersetzen.
Es wird auch die Nutzung von Wind-, Solar- und Wasserkraftenergie zur Stromerzeugung unterstützt, insbesondere Solarprojekte auf Dächern und Wasseroberflächen, sowie Offshore- Windkraftprojekte.
Darüberhinaus werden Investoren dazu ermutigt, in den Bau von Kraftwerken unter Verwendung von Stadtabfällen, Biomasse und Festmüll zu investieren.
Die Förderung des Ausbaus erneuerbarer Energiequellen ist eine praktikable und effektive Lösung, um dem Problem der Stromknappheit entgegenzuwirken, da Projekte für erneuerbare Energien schnell gebaut und umgehend für die Periode 2021-2023 in Betrieb genommen werden können, während das natürliche Potential des Landes genutzt wird, ohne auf externe Faktoren, wie importierte Kraftstoffe, zurückgreifen zu müssen und sie ist umweltfreundlich.
Vietnam erwartet bis 2030 in der gesamten Primärenergieversorgung etwa 20 % aus erneuerbaren Energiequellen zu gewinnen.
Dies soll bis 2045 erwartungsgemäß auf ungefähr 30 % ansteigen.
Die Regierung beabsichtigt außerdem, 8 Milliarden Kubikmeter LNG bis 2030 und 15 Milliarden Kubikmeter bis 2045 zu importieren.
Vietnam verfolgt das Ziel, Gasstrom zu einer wichtigen Stromversorgungsquelle zu machen, insbesondere gasbefeuerte Wärmekraftprojekte unter Verwendung von LNG.
Das Land bemüht sich die Technologie für die Erforschung und Erschließung eigener Gasquellen zu verbessern.
Es ist empfehlenswert, Wärmekraftwerkeprojekte synchron aufzubauen, von der Brennstoffversorgung über die Speicherung bis hin zur Anlagenbauphase, wobei der Preis für den Stromverkauf durch das Einholen von Angeboten festgelegt wird.

Nach der Entscheidung 13/2020/QD-TTg, beträgt die FiT-Steuer 7,09 US cent pro kWh für netzgebundene Projekte, bei denen die Entscheidung über die Investitionspolitik vor dem 23. November 2019 und der Zeitpunkt des kommerziellen Betriebs (Commercial Operation Date, COD) zwischen dem 1. Juli 2019 und dem 31. Dezember 2020 genehmigt wurde. In Bezug auf die Provinz Ninh Thuan beträgt der Kaufpreis für Strom in netzgekoppelten Solarstromprojekten, die vor dem 1. Januar 2021 mit COD und einer Kapazität von nicht mehr als 2000 MW in die Stromentwicklungsplanung aufgenommen wurden, 9,35 US-Cent/kWh.
Der FiT-Satz für schwimmende PV-Projekte beträgt 7,09 US-Cent/kWh. Für Aufdachprojekte beträgt der Satz 8,38 US-Cent/kWh, aber dies ist verhandelbar, wenn der Käufer nicht Electricity Vietnam (EVN) ist.
Am 31. August gab das Industrie- und Handelsministerium Rundschreiben 18 heraus, das den neuen Standard-Stromabnahmevertrag (Power Purchase Agreement – PPA) für netzgekoppelte und Aufdach-Solarstromprojekte beinhaltet. Das neue PPA hat dazu beigetragen, den Mangel an Vorschriften für Solarstromprojekte seit Juli letzten Jahres zu beheben. Die Vorlage enthält jedoch Bestimmungen für Investoren, nämlich (i) das Fehlen der Zahlungsverpflichtung der EVN im Falle von Übertragungsproblemen, (ii) den Mangel an transparenten Möglichkeiten für internationale Schiedsverfahren und (iii) die fehlende Bankfähigkeit. Obwohl die Parteien Einzelheiten der Vereinbarung ergänzen können, dürfen solche Änderungen nicht wesentlich von den Bestimmungen der Standardvorlage abweichen.

Gemäß Rundschreiben 02/2019/TT-BCT beträgt der FiT-Satz 8,5 US-Cent/kWh für Onshore-Projekte und 9,8 US-Cent/kWh für Offshore-Projekte. Der Stichtag für diese Sätze ist der 1. November 2021. Von diesem Zeitpunkt an prüft die Regierung die Möglichkeit, den Auktionsmechanismus für den An- und Verkauf von Windenergie einzuführen, um die Wettbewerbsfähigkeit und Transparenz auf dem Strommarkt zu fördern.
Das Ministerium für Industrie und Handel hat vorgeschlagen, den FiT-Satz für Windkraftprojekte bis Ende 2023 zu verlängern, um den Investoren genügend Zeit zu geben, ihre Anlagen in Betrieb zu nehmen. Die Standardvorlage für den Kaufvertrag über Windenergie ist auch unter Rundschreiben 02 verfügbar.
Gegenwärtig sind die Stromnetze in Vietnam überlastet, was dazu führt, dass die Kraftwerke unter ihrer maximalen Kapazität betrieben werden müssen. Dies hat offensichtlich zum Ausfall von Anlagen und zu finanziellen Verlusten geführt. EVN ist das einzige Unternehmen in Vietnam, das berechtigt ist, die Aufrüstung der Netze durchzuführen, so dass es für Investoren sehr zeitaufwändig sein kann, warten zu müssen, während sie gleichzeitig über das Fachwissen und die finanziellen Mittel verfügen, um einzuspringen und die Netze zu verbessern. Der Erlass eines Preisrahmens führt zu mehr Investitionen in Off-Grid-Projekte und entlastet damit das Übertragungsnetz.

Bioenergie ist die Erzeugung von Energie aus Biomasse-Materialien wie den Nebenprodukten der Land-, Lebensmittel- und Forstwirtschaft sowie häuslichen und industriellen Abfallmanagement-Systemen.
In Vietnam haben Großstädte wie Hanoi und Ho-Chi-Minh-Stadt mit der rapide zunehmenden Abfallmenge und Luftverschmutzung zu kämpfen, die durch die beliebte Methode der Verbrennung verursacht wird. Statistiken der Regierung zeigen zum Beispiel, dass HCM City mehr als 9000 Tonnen Abfall pro Tag produziert. Infolgedessen hat Vietnam Investitionen in den Sektor Abfallverbrennung stark gefördert, um die Umwelt zu schützen und die Energieeffizienz zu steigern.
Im Jahr 2014 erließ der Premierminister den Beschluss 31/2014/QD-TTg zur Unterstützung von Mechanismen zur Entwicklung von Stromerzeugungsprojekten unter Verwendung fester Abfälle in Vietnam. Zu den bemerkenswerten Anreizen gehören: (i) Verpflichtung des Käufers, den gesamten von den von ihm verwalteten Anlagen erzeugten Strom zu kaufen, (ii) Befreiung von der Einfuhrsteuer für Waren, die zur Schaffung von Anlagevermögen für das Projekt importiert werden, und (iii) Ermäßigung/Freistellung von Landpachtzinsen (abhängig vom Standort des Projekts). Der FiT-Satz beträgt 10,05 US-Cent/kWh für Projekte, bei denen feste Abfälle direkt verbrannt werden, und 7,28 US-Cent/kWh für Projekte, bei denen aus Deponien gesammeltes Gas verbrannt wird. Die Standard-PPA für Stromerzeugungsprojekte, die mit festem Abfall betrieben werden und an das Netz angeschlossen sind, wird im Rundschreiben 32/2015/TT-BCT veröffentlicht.

Die einzigen Materialien, die für die Wasserstoffproduktion benötigt werden, sind die von der Natur gegebenen Elemente Wasser und Sonneneinstrahlung, was bedeutet, dass Wasserstoff eine unerschöpfliche Brennstoffquelle ist. Die Nutzung der Wasserstoffenergie wurde von der vietnamesischen Regierung aufgrund ihrer umweltfreundlichen Eigenschaften und der Tatsache, dass sie für den Bau unabhängiger Kraftwerke genutzt werden kann, die Städte selbst versorgen, ohne an das nationale Stromnetz angeschlossen zu sein – das zu Spitzenzeiten täglich fast überlastet ist -, stark gefördert.
Die Wasserkraft wird in einer Brennstoffzelle genutzt, die keine Arten von Umweltverschmutzung erzeugt, einen höheren Wirkungsgrad hat und im Vergleich zu Verbrennungsmotoren (die zur Verbrennung von Gas, Öl und anderen Brennstoffen mit Luft verwendet werden) mehr Energie einspart. Brennstoffzellen sind definitiv eine vielversprechende erneuerbare Energiequelle, und Investoren werden ermutigt, die Möglichkeit der Entwicklung von Wasserstoffprojekten in Vietnam zu prüfen.

II. Die Rolle der großen Handelsabkommen bei der Unterstützung ausländischer Investoren
Ausländische Investoren, die sich im Energiesektor engagieren, können die Vorteile verschiedener Unternehmensgarantien im Rahmen des Freihandelsabkommens zwischen der EU und Vietnam (EVFTA), des Investitionsschutzabkommens zwischen der EU und Vietnam (EVIPA), des umfassenden und progressiven Abkommens für eine transpazifische Partnerschaft (CPTPP), des Gesetzes über Investitionen in Form einer öffentlich-privaten Partnerschaft (PPP), des neuen Investitionsgesetzes 2021 usw. nutzen.
Das EVFTA ist am 1. August 2020 in Kraft getreten und gilt für Investoren aus der Europäischen Union. Das EVIPA ist ratifiziert worden und wartet auf die Zustimmung des EU-Parlaments, um durchsetzbar zu sein. Das CPTPP trat am 14. Januar 2019 in Kraft, zu seinen Unterzeichnern gehören strategische Verbündete Vietnams wie Japan, Kanada, Australien und Singapur. Viele Bestimmungen dieser beiden großen Handelsabkommen stehen in direktem Zusammenhang mit Investitionen in den Sektor der erneuerbaren Energien, nämlich dem öffentlichen Beschaffungswesen und der Beilegung von Streitigkeiten zwischen Investoren und Staaten.

Öffentliches Beschaffungswesen
Das öffentliche Beschaffungswesen ist im Allgemeinen der Prozess, bei dem eine Regierungsbehörde (die beschaffende Stelle) für öffentliche Zwecke Waren einkauft oder Dienstleistungen erwirbt. Vietnam geht zum ersten Mal über das CPTPP und das EVFTA internationale Verpflichtungen im Bereich des öffentlichen Beschaffungswesens ein. In den Kapiteln über das öffentliche Beschaffungswesen (Kapitel 15 im CPTPP und Kapitel 09 im EVFTA) ist die Entschlossenheit Vietnams zur Öffnung des öffentlichen Beschaffungsmarktes festgehalten. Insbesondere verpflichtet sich Vietnam, die Transparenz bei der Auswahl von Auftragnehmern durch die Offenlegung von Informationen über Ausschreibungen und die Abschaffung unnötiger Qualifikationsverfahren zu erhöhen. Gleichzeitig erkennt Vietnam die faire, unparteiische und vertrauliche Behandlung von Angeboten an. Gegenwärtig hat Vietnam einen Online-Bietungsmechanismus eingeführt, der es Investoren ermöglicht, leicht Informationen über Menge und Preis eines Bieterpakets zu finden. Die für die Warenbeschaffung und die damit verbundene Beratung verwendeten Vorlagendossiers werden ebenfalls online veröffentlicht.
Es ist darauf hinzuweisen, dass es zwischen dem CPTPP und dem EVFTA in Bezug auf die staatliche Beschaffung einige wesentliche Unterschiede gibt. Erstens verpflichtet sich Vietnam im CPTPP nur zur Öffnung der Beschaffung durch 21 Ministerien und Zentralbehörden. Im EVFTA ist der Anwendungsbereich der Beschaffungsstellen jedoch weiter gefasst als im CPTPP. Neben den Zentralbehörden, den subzentralen Behörden und den staatlichen Unternehmen sind auch öffentliche Krankenhäuser, öffentliche Institute und Universitäten berechtigt, sich am staatlichen Beschaffungswesen zu beteiligen. Zweitens legt das EVFTA mehr Umstände fest, unter denen ein Lieferant von der Teilnahme an Beschaffungen ausgeschlossen wird, darunter (i) Insolvenz, (ii) falsche Erklärungen, (iii) erhebliche Mängel bei der Erfüllung wesentlicher Verpflichtungen in früheren Verträgen und (iv) Nichtzahlung von Steuern.
Es wird erwartet, dass der Mechanismus des staatlichen Beschaffungswesens ausländischen Investoren Möglichkeiten und Vorteile in einer Weise bietet, dass sie fair und transparent mit vietnamesischen Staatsunternehmen (SOEs) konkurrieren können.

Beilegung von Streitigkeiten
Ausländischen Investoren wird im Rahmen des EVIPA ein hohes Schutzniveau gewährt. Dieses Abkommen ist eine Kombination aus dem New Yorker Übereinkommen von 1958 und dem ICSID von 1965. Das EVIPA und das CPTPP ermöglichen es ausländischen Investoren, die vietnamesische Regierung wegen ihrer investitionsbezogenen Entscheidungen zu verklagen. Der endgültige Schiedsspruch ist bindend und vollstreckbar, unabhängig von Fragen der örtlichen Gerichte bezüglich seiner Gültigkeit.
Das EVIPA sieht insbesondere einen zweistufigen Schlichtungsmechanismus vor, bei dem die Parteien Berufung einlegen können, wenn sie mit dem ersten Schiedsspruch des Schiedspanels nicht zufrieden sind. Wenn jedoch keine der streitenden Parteien gegen den vorläufigen Schiedsspruch Berufung eingelegt hat, wird dieser rechtskräftig und “kann nicht angefochten, überprüft, aufgehoben, annulliert oder in sonstiger Weise angefochten werden” (Artikel 3 des EVIPA).
Es gibt immer mehr Energieprojekte, die von ausländischen Investoren in Vietnam betrieben werden. Dies führt unweigerlich zu einer wachsenden Zahl von Streitigkeiten zwischen dem Staat Vietnam und Investoren. Die Interessen der ausländischen Investoren müssen jedoch fair und vollständig sein

Für weitere Informationen zu den obigen Ausführungen wenden Sie sich bitte an den Autor Dr. Oliver Massmann unter Dr. Oliver Massmann ist der Generaldirektor von Duane Morris Vietnam LLC, Mitglied des Aufsichtsrats von PetroVietnam Insurance JSC und der einzige ausländische Anwalt, der den Mitgliedern der NATIONALEN VERSAMMLUNG VON VIETNAM in vietnamesischer Sprache Vortraege hält.


It has never been easier and more beneficial to invest in renewable energy in Vietnam. The country has one of the most sun hours during the year and boasts a 3000km coastline suited for wind power development. The Government has been encouraging foreign investment in this sector by naming renewable energy one of the 5 sectors eligible for Public-Private Partnership development and the vast benefits thereunder, issuing standard Power Purchase Agreements taking into account opinions of foreign investors as well as Feed-in-Tariff (FiT) rates for wind and solar power projects, ratifying the EU-Vietnam Free Trade Agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and so on.

I. Analysis of the energy sector in Vietnam

Vietnam has attained many successful achievements in the energy sector in the past 10 years. Oil and gas development output has increased, forming a number of large-scale petrochemical refining facilities; wind and solar power projects developing at high speed. However, as energy consumption increases and consumption structure shifts towards industrialization, Vietnam faces increasing energy import. Some indicators of energy security are already moving in an adverse direction. On top of this, the mass use of fossil energy sources has severely polluted the environment despite strict penalties measures.

In response to this, the Government has promoted the development of renewable energy sources to fully replace fossil ones. It is also encouraged to use wind, solar and hydrogen power for electricity generation, especially rooftop and water surface solar projects as well as offshore wind projects. Moreover, investors are encouraged to invest in the construction of power plants using urban waste, biomass and solid waste.

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

By 2030, Vietnam expects to see about 20% of renewable sources in the total primary energy supply. By 2045, this is anticipated to increase to approximately 30%. The Government is also looking to import about 8 billion cubic meters of LNG by 2030 and 15 billion cubic meters by 2045.

Vietnam aims to make gas electricity an important power supply source, especially gas-fired thermal power projects using LNG. The country is looking to improve technology for the exploration and development of domestic gas sources. It is commendable to develop thermal power projects synchronously from fuel supply, storage to plant construction phase with the electricity-selling price determined through bidding.

Solar power energy

Under Decision 13/2020/QD-TTg, the FiT rate is 7,09 US cents/kWh for grid-connected projects that have Decision on Investment Policy approved before 23 November 2019 and Commercial Operation Date (COD) between 1 July 2019 and 31 December 2020. With respect to Ninh Thuan province, purchase price of electricity in grid-connected solar power projects included in electricity development planning with COD before 1 January 2021 and capacity of no more than 2000MW is 9.35 US cents/kWh.

The FiT rate for floating PV project is 7,09 US cents/kWh. For rooftop projects, the rate is 8,38US cents/kWh but this is negotiable if the purchaser is not Electricity Vietnam (EVN).

On 31 August, the Ministry of Industry and Trade issued Circular 18, which entails the new standard Power Purchase Agreement (PPA) for grid-connected and rooftop solar power projects. The new PPA has helped to solve the lack of regulations on solar power projects since July last year. However, the template contains concerning provisions for investors, namely (i) the lack of EVN’s payment obligation in case of transmission problem, (ii) the lack of transparent possibility for international arbitration and (iii) the lack of bankability. Though parties can supplement details to the Agreement, such changes must not derogate substantially from the provision of the standard template.

Wind power energy

Under Circular 02/2019/TT-BCT, the FiT rate is 8,5 US cents/kWh for onshore projects and 9,8 US cents/kWh for offshore projects. The deadline for these rates is 1 November 2021. From then onwards, the Government is looking into the option of implementing the auction mechanism for the sale and purchase of wind energy with a view to promote competitiveness and transparency within the power market. The Ministry of Industry and Trade has been proposing to extend the FiT rate for wind power projects until the end of 2023 in order to give investors ample time to put their plants into operation. The standard template for wind power purchase agreement is also available under Circular 02.

Currently, the electricity grids in Vietnam is experiencing overload, leading to power plants have to operate below their maximum capacity. This has evidently resulted in breakdown of equipment and financial loss. EVN is the only company in Vietnam authorized to carry out upgrade for grids, so it can be very time-consuming for investors having to wait while they also have the expertise and funding to step in and ameliorate the grids. The issuance of a pricing framework leads to more investment in off-grid projects, thus relieving pressure on the transmission system.


Bioenergy is the production of energy from biomass materials such as the byproducts of agricultural, food and forestry industries, as well as domestic and industrial waste management systems.

In Vietnam, metropolitans like Hanoi and Ho Chi Minh City have been dealing with rapidly increasing amount of waste and air pollution caused by the popular method of burning them. For instance, statistics produced by the Government show that HCM City produces more than 9000 tons of waste per day. As a result, Vietnam has strongly encouraged investment in the waste-to-electricity sector in order to protect the environment and boost energy efficiency.

In 2014, the Prime Minister issued Decision 31/2014/QD-TTg on supporting mechanisms for development of power generation projects using solid waste in Vietnam. Notable incentives include: (i) An obligation on purchaser to buy all power produced by the plants under its management, (ii) Exemption from import tax for goods imported to create fixed assets for the project and (iii) Land rent reduction/exemption (subject to the project’s location). The FiT rate is 10.05 US cents/kWh for projects that burn solid waste directly and 7.28 US cents/kWh for projects that combust gas collected from landfill. The standard PPA for solid waste-generated power projects that are connected to the grid is issued in Circular 32/2015/TT-BCT.

Hydrogen power

The only materials required for hydrogen production are nature-granted elements water and sunlight radiation, meaning hydrogen is an inexhaustible source of fuel. The use of hydrogen power has been strongly encouraged by the Vietnamese government given its eco-friendly characteristics and the fact that it can be used to build independent power stations that self-supply to cities without being connected to the national grid – which is almost overstressed daily during peak hours.

Hydropower is used in a fuel cell, which does not generate any types of pollution and has higher efficiency rate as well as save more energy compared to internal combustion engines (used for the burning of gas, oil and other fuels with air). Fuel cells are definitely a promising renewable energy source and investors are encouraged to explore the option of developing hydrogen projects in Vietnam.

II. The role of major trade agreements in supporting foreign investors

Foreign investors engaging in the energy sector can reap the benefits of various business guarantees under the EU-Vietnam Free Trade Agreement (EVFTA), the EU-Vietnam Investment Protection Agreement (EVIPA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Law on Investment in the form of Public-Private Partnership (PPP), the new Law on Investment 2021 and so on.

The EVFTA came into force on 1 August 2020 and is applicable to investors from the European Union. The EVIPA has been ratified and is pending the EU’s Parliament consent to be enforceable. The CPTPP took effect since 14 January 2019, its signatories including strategic allies to Vietnam such as Japan, Canada, Australia and Singapore. Many provisions under these two major trade agreements are directly related to investment in renewable energy sector, namely Government Procurement and Investor-State Dispute Resolution.

Government Procurement

Government procurement, in general, is the process in which a governmental authority (the procuring entity) purchases goods or acquires services for public purposes. Vietnam, for the first time, engages in international government procurement commitments through the CPTPP and EVFTA. The Government Procurement Chapters (Chapter 15 in CPTPP, and Chapter 09 in EVFTA) feature the determination of Vietnam to open the public procurement market. Specifically, Vietnam commits to enhancing transparency in the selection of contractors by disclosing bidding information and removing unnecessary qualification procedures. Concurrently, Vietnam recognizes the fair, impartial and confidential treatment of tenders. At the moment, Vietnam has implemented online bidding mechanism that allows investors to easily find information on quantity and price of a bidding package. Template dossier used for goods procurement and related consultancy are also published online.

It should be noted that there are some substantial differences between CPTPP and EVFTA with regard to government procurement. First, in CPTPP, Vietnam only commits to opening procurement by 21 ministries and central authorities. In the EVFTA, however, the scope of procuring entities is broader. In addition to central authorities, sub-central authorities and state-owned enterprises, public hospital, public institutes and universities are also entitled to partake in government procurement process. Second, the EVFTA sets out more circumstances in which a supplier shall be excluded from participating in procurement, including (i) insolvency; (ii) false declarations; (iii) significant deficiencies in the performance of substantive obligations in prior contracts and (iv) failure to pay taxes.

The Government Procurement mechanism is expected to provide opportunities and benefits for foreign investors in a way that they can compete fairly and transparently with Vietnamese state-owned enterprises (SOEs).

Dispute Resolution

Foreign investors are given high level of protection under the EVIPA. This Agreement is the combination of the New York Convention 1958 and the ICSID 1965. The EVIPA and CPTPP make it possible for foreign investors to sue the Vietnamese Government for its investment related decisions. The final arbitral award is binding and enforceable regardless of questions from the local courts regarding its validity.

In particular, EVIPA stipulates a two-tier arbitration mechanism, in which parties can appeal if they are not satisfied with the first award issued by the arbitration panel. However, if neither disputing parties has appealed against the provisional award, it shall become final and “shall not be subject to appeal, review, set aside, annulment or any other remedy” (Article 3 of the EVIPA).

There have been more and more energy projects operated by foreign investors in Vietnam. This inevitably leads to growing number of disputes between the State of Vietnam and investors. The interests of foreign investors, however, shall be fairly and completely protected by the dispute settlement mechanism under the EVIPA.
At the moment, Vietnam has reserved the right to fulfill this commitment for 5 years from the effective date of the EVIPA. Nevertheless, Duane Morris Vietnam has the legal and technical tools to make such provisions work in favor of investors from now.

For more information on the above, 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.

Legal Update – Vietnam’s New Law on Enterprises 2020

The National Assembly of Vietnam recently approved a new Law on Enterprises 2020 (59/2020/QH14), superseding the Law on Enterprises 2014 (68/2014/QH13). As with previous versions, the Enterprise Law continues to regulate the establishment, operation, and governance of corporate entities, and exists as the primary legislative instrument in the area of Vietnamese corporate law. The new law will come into effect on 1 January 2021. Directors, shareholders, and prospective investors are encouraged to consider the key amendments discussed below.  Critically, companies should also ensure that their charters and internal processes are amended and adapted as necessary to ensure consistency and compliance with the terms of the new law as of 1 January 2021.  If not, they run the risk of taking unlawful corporate actions which could jeopardise validity of transactions and/or give rise to potential disputes and liabilities.

One Member Limited Liability Company – Corporate Owner

Where a one-member limited liability company is owned by a corporate member, there is now no longer a requirement to appoint official controllers (sometimes called inspectors). Rather, the incoming law provides for the following possible two organisational structures: i) Chairman and Director/General Director; or ii) Council of Members and Director/General Director.[1] Importantly, the company must appoint at least one legal representative who must also simultaneously hold the position of Company Chairman, Chairman of the Members’ Council, or Director/General Director.[2]

 Capital Transfers by Foreign Investors

The Enterprise Law 2014 provided an express blanket obligation that all foreign capital contributions (as well as dividend repatriations, and the purchase, sale, and transfer of shares) must be routed via an authorised capital account with a Vietnamese bank, except where such transfers were made in the form of assets.[3]

The phrasing under the 2020 law remains unchanged, merely re-stating that all foreign capital transfers must be routed via a capital account, except for transfers in the form of non-cash assets.[4]

In potential conflict with the above position, State Bank of Vietnam regulations under Circular 06/2019/TT-NHNN provides that transfers between two non-resident investors need not be routed via a capital account, irrespective of whether or not the transfer was in the form of cash or non-cash assets. [5]

Issues around Vietnamese foreign exchange control laws and the use capital accounts remain highly complex and uncertain, and we intend to produce further publications on such matters in due course. Whilst the 2020 law does touch on the issue, it is still silent as to when foreign investments are categorically deemed to be direct or indirect for the purposes of routing contributions via a formal capital account. It is strongly recommended to seek further legal advice prior to the making of any foreign capital contributions, as non-compliance may result in material transaction delays and prohibitions on the repatriation of future profits.

Bond Offerings

It has been widely reported that the Vietnamese domestic bond market has recently experienced significant overheating, largely as an indirect consequence of the State Bank of Vietnam imposing credit restrictions, particularly on real estate ventures.

The new law plays a part to address such concerns via the introduction of additional statutory obligations on corporate bond issuers and investors. The new law continues to allow for the issuance of bonds by private joint stock companies, however placement requires satisfaction of numerous complex transparency obligations, including in relation to audit procedures, shareholder approval, stock exchange notification, prudential and debt ratios, amongst others.[6] Such requirements on issuance also overlap with existing stipulations under the Securities Law 2019 and various guiding decrees, and it is therefore strongly advised to seek legal counsel on such matters prior to considering a private placement. Under the 2014 regime, the placement of private bonds only required the board of management to report on the issuance to shareholders in the next general meeting, including details of bond value, timing, class, and an explanation of the board’s resolution.[7]

The new law also allows for multiple member limited liability companies to issue bonds, [8] which was previously restricted to that of only joint stock companies under the 2014 law.

Additional Protections for Minority Shareholders

The new law allows a group of shareholders (5% or more) of a joint stock company to access important corporate information, including financial statements, resolutions, minutes, and inspection committee reports, amongst others. [9] This is a lowering of the threshold from 10% under the 2014 law.[10]

The group may also seek to convene a shareholders’ meeting in specific circumstances (i.e. serious breach of shareholder rights by the board of management). [11] Ordinary shareholders are now no longer required to hold their shares for a minimum ownership period (i.e. 6 months as under the 2014 law [12]) before being able to exercise general shareholder rights.[13]

Additionally, a group of shareholders (10% or more) now need not wait for 6 months post-investment before being able to exercise their right to nominate a specific director to the board of management. [14] This amendment is crucial, as in practice it had been commonplace for such delay to restrain incoming investors from nominating a preferred director at the time of investment completion.

Of note, the amendment comes on the back of a 2018 controversy, whereby incoming majority shareholder, ThaiBev, was denied the ability to nominate members to the board of management of Sabeco, Vietnam’s largest domestic brewer. This occurred due to the fact that ThaiBev had not held their shares for at least 6 months prior to the holding of Sabeco’s extraordinary general meeting, which was principally held for the purposes of nominating board of management members post-investment completion.

Rights of Preference Shareholders

Preference shares are a form of non-voting shares under current Vietnamese law. Significantly, the new law allows for shareholders holding preferred dividends and redeemable preferred shares to have limited participation rights. Such shareholders will be allowed to attend and vote in shareholder meetings where proposed resolutions adversely impact their rights and obligations.[15]  In such cases, a resolution will only pass where it is approved by at least 75% of shareholders who hold that specific class of shares.[16] It is important to note that the incoming provision does not provide an express definition of “adverse” should a shareholder dispute scenario arise.

This is a crucial amendment, providing much needed statutory protection to the rights of preference shareholders. In principle, Vietnamese law currently allows ordinary shareholders to alter the substantive terms of a class of preference shares via the passing of a general shareholders’ resolution. The above incoming 75% threshold seemingly serves to restrain such adverse action. Of course, the minority 25% shareholding group will nevertheless still be potentially subject to adverse alteration, and it is strongly recommended that appropriate consent rights are negotiated and drafted into the shareholders’ agreement at the time of investment.

 Pre-emptive Rights

Where a private joint stock company seeks to issue new shares by way of private placement, the amended law provides that existing shareholders are to be given pre-emptive rights over the subscription of such shares, except in a situation of merger or consolidation. [17]

Accordingly, in practice, a private joint stock company should obtain a formal waiver of pre-emptive rights from existing shareholders prior to undertaking a private placement of new shares. It may also be necessary for a general resolution to pass where such shares are offered on more favourable terms than those currently in existence. [18]

While this amendment will be welcome to some, it will serve as a potential constraint and unwelcome development for others. This sort of change in the 2020 law also highlights a significant point that has not been addressed: the role and scope of shareholder agreements in which shareholders may reach agreement on points that run contrary to otherwise mandatory terms of the Enterprise Law (e.g. – agreement to be issued new shares in priority to other shareholders). Despite the common use of shareholder agreements in Vietnam, there remains significant question marks over their validity and enforcement in practice. Nothing in the 2020 law suggests a change to this status quo.

Legal Representative Liability

A joint stock company or limited liability company may now appoint multiple official legal representatives. The specific rights and duties of each appointed representative must be recorded in the charter of the company. [19]

Should the charter be silent as to such allocation of duties, each individual legal representative stands to represent the company before third parties.[20] Under the new law, legal representatives are also now jointly liable for any loss or damage related to the company.[21] There continues to be no express indication that companies can agree to insure or indemnify legal representatives against such liabilities.

 Shareholder Confidentiality Obligations

Shareholders of joint stock companies are now under an obligation to keep corporate information confidential and refrain from distribution to third parties (presumably most relevant to substantive financial reports, strategic planning etc). [22]

The provision does not precisely identify the forms of relevant information nor circumstances where distribution would otherwise be permitted. It is also unclear whether such obligations would materially prevent a shareholder from providing corporate information to a prospective purchaser of shares.

 State Owned Enterprises – Lower Threshold

The new law amends the 2014 position, providing that State-owned enterprises (SOEs) are now to be defined as enterprises comprising of a State shareholding of more than 50% charter capital or voting rights. [23] The 2014 law previously defined SOEs as those enterprises with 100% State owned charter capital. [24]

This will have the effect of increasing the number of SOEs significantly. While this may serve a policy position of enhancing State control over use of State capital, it may have an adverse impact, especially when considering the drive to speed up the equitization process in general. SOEs are, in general, subject to stringent rules on audit, fund raising, and procurement, and such rules may serve to dampen the interest of potential strategic minority investors.

Digital Signatures

Enterprises are now free to utilise both physical seals and digital signatures when executing company documentation. Consistent with the current Law on Electronic Transactions,[25] digital signatures will be given the same legal weight with that of traditional physical seals. This is particularly relevant due to the current Covid-19 situation, introducing timely flexibility and practicality into corporate administrative practice. [26]

Board of Management – Rights and Obligations

The rights, duties, and liabilities of members of the board of management of joint stock companies remain largely unchanged under the new law, albeit with the following technical amendments.

Firstly, a shareholder holding as little as 1% has standing to commence legal proceedings against a director or member of a board of management who is in breach of their duties, regardless of how long the shareholder has held their shares (previously minimum 6 month holding requirement under the 2014 law).[27]

Secondly, where the board of management passes a resolution contrary to law or the charter of the company, a single shareholder now has the right to commence legal proceedings and request that the resolution be suspended or rescinded,[28] again with no minimum holding requirement (previously 1 year under the 2014 law). [29] This will importantly empower incoming shareholders who would otherwise have limited formal legal recourse against unlawful board action.

Thirdly, a board appointed independent director can now only serve for two consecutive terms. [30] There was previously no limit under the 2014 law. [31] This amendment will ensure that appointed independent directors are better able to meet their corporate governance objectives, bringing greater transparency and impartial oversight to the management of joint stock companies in Vietnam.

Finally, a board member of a joint stock company which is also a State-owned enterprise (i.e. State shareholding / charter capital of more than 50%), must not have a family relationship with a manger of the company, or with a manager of the parent company.[32] Again, such amendment brings greater transparency and governance standards, better protecting shareholders against improper corporate conduct.

Transitional Requirements

It is highly recommended that all enterprises undertake a thorough review of their existing company charters and proactively identify and amend any clauses which are inconsistent with the incoming law prior to 1 January 2021.

Where a company charter is inconsistent with the new law, board actions based on such outdated clauses (e.g. prohibiting a new shareholder from nominating a specific director until at least 6 months of shareholding has passed) may be legally challenged and potentially deemed invalid at law.


In conclusion, Vietnamese corporate law continues to positively evolve with the approval of the amended Enterprise Law 2020.

Significantly, the new law enhances protections for minority and preference shareholders, whilst consolidating pre-emptive rights. Importantly, the law also simplifies organisational structures for one-member limited liability companies, and allows for the use of digital signatures in the execution of corporate documentation.

Finally, the new law seeks to address recent concerns around overheating and transparency in the Vietnamese domestic bond market, introducing greater statutory obligations on private issuers and investors alike.


For more information, please contact Giles at or Daniel Haberfield 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. Daniel is an associate in Duane Morris’ HCMC office.

[1] Art 79(1), LoE 2020.

[2] Art 79(3), LoE 2020.

[3] Art 36(3), LoE 2014.

[4] Art 35(5), LoE 2020.

[5] Art 10(1), Circular 06/2019/TT-NHNN.

[6] Art 128(3), LoE 2020.

[7] Art 127(4), LoE 2014.

[8] Art 46(4), LoE 2020.

[9] Art 115(2)(a), LoE 2020.

[10] Art 114(2), LoE 2014.

[11] Art 115(3), LoE 2020.

[12] Art 114(2), LoE 2014.

[13] Art 115(2)(a), LoE 2020.

[14] Art 115(5), LoE 2020.

[15] Art 148(6), LoE 2020.

[16] Art 148(6), LoE 2020.

[17] Art 125(2)(b), LoE 2020.

[18] Art 125(2)(c), LoE 2020.

[19] Art 12(2), LoE 2020.

[20] Art 12(2), LoE 2020.

[21] Art 12(2), LoE 2020.

[22] Art 119(5), LoE 2020.

[23] Art 88(1), LoE 2020.

[24] Art 4(8), LoE 2014.

[25] Law on Electronic Transactions 51/2005/QH11.

[26] Art 43(1), LoE 2020.

[27] Art 166(1), LoE 2020; Art 161(1), LoE 2014.

[28] Art 153(4), LoE 2020.

[29] Art 149(4), LoE 2014.

[30] Art 154(2), LoE 2020.

[31] Art 150(2), LoE 2014.

[32] Art 155(1)(d), LoE 2020.

The Good, The Bad, and The Ugly – Vietnam’s New Public-Private Partnership Law 2020

Vietnam’s first Public-Private Partnership Law 2020 (the “PPP Law”) was passed by the National Assembly of Vietnam on 18 June 2020 and will come into effect from 1 January 2021. It is anticipated that further guiding decrees and circulars will soon be introduced to assist in the implementation of the PPP Law.  Here we take a look at the good, the bad, and the ugly.

The Good

The current Vietnamese PPP legal framework consists of numerous outdated circulars, decrees, and decisions. The incoming PPP Law serves to unify the current patchwork of laws into a stand-alone legislative instrument, thereby attempting to govern the full life cycle of inbound PPP activity, providing greater legal clarity and comfort to prospective foreign investors. The availability for the first time of codified minimum revenue guarantee and viability gap mechanisms will pique the interest of international investors and financiers. Likewise, the ability to select third country international arbitration provides increased comfort should a dispute scenario arise. Finally, the inclusion of competitive bidding processes enhances transparency and is welcomed.

The Bad

Concerns exist with respect to rigid project development timelines, restrictions on the assignment of rights, limitations in the scope of eligible investment sectors, and high minimum investment thresholds. Mandatory contract performance security and potentially mandatory use of template project documents are also areas of potential concern for investors and financiers alike.

The Ugly

From a project finance perspective, broad rights in favor of the procuring entity to terminate “in the interests of the nation”, rigidity with regards to the timing of financial close, and limitations in the choice of contractual governing law are all notable concerns, resulting in unfavorable risk allocation for investors. Further, the lack of express change in law provisions, step-in rights for lenders, and the inability of international financiers to take direct security over land in Vietnam will likely further negatively impact forthcoming project bankability assessments.

The table below provides an analysis of the key features of the new law, with comparative commentary from the perspective of primary PPP participants – namely, the government, developers, and lenders:

Key Legislative Features The PPP Law 2020 Government  View Investor View – Developers / Lenders
Permitted PPP Investment Sectors –  Reduces the list of eligible PPP investment sectors to the following only: Transport; Power Grids and Plants; Irrigation, Water, and Waste; Healthcare and Education; IT Infrastructure.


– Current Vietnamese law under Decree 63 recognizes a broader list of PPP investment sectors, which in addition to the above, also includes public lighting systems, agricultural developments, social housing, commercial infrastructure for economic and industrial zones, water drainage systems, waste treatment systems, amongst others.


– The reduced list clearly articulates and reinforces Hanoi’s current policy priorities regarding target PPP investment sectors.



– Limited scope, seemingly excludes important sectors (agriculture, public housing, public lighting systems etc).


– Potentially excludes sub-projects connected to the primary project (i.e. terminals, pipelines, transmission lines, storage facilities etc).


– Ambiguities surround the statutory scope of “power plant.” Potentially excludes some forms of renewables (i.e. rooftop solar systems).


Competitive Bidding – All proposed PPP projects must undergo competitive bidding, except for projects related to security, defence, high technology, and “other special cases as decided by the Prime Minister”.






– Global best practice.


– Attracts top international expertise.


– Demonstrates policy commitment to ensure development of quality and transparent public infrastructure works.


– Transparent process that encourages the participation of tier-one international expertise. However, implementation in practice must be transparent and efficient to be valuable.


– Some investors may however prefer to self-propose projects with the option of direct appointment.

Bid Security / Contract Performance Security – Investors must provide bid security of between 0.5%-1.5% of the total investment value of the project (to be later released).


– PPP project companies must provide contract performance security of between 1%-3% of the total investment value of the project (to be later released).



– Ensures only investors who are genuinely committed to completing the tender process are selected.


– Provides the government with some form of compensation should a non-completion scenario arise.


– Such requirements are problematic as financing may not yet be complete at this early stage of the PPP investment cycle.


– A lower security threshold or more flexible timing may be more appropriate.


Minimum Total Investment Threshold


– Minimum investment threshold of USD 8.7 million (for projects in the specific permitted investment sectors) reinforces current government policy focus on large-scale PPP ventures.


– NB: Minimum investment threshold lowered to USD 4.3 million for projects located in geographical areas with difficult or extremely difficult socio-economic conditions.


– Minimum investment threshold does not apply to O&M contracts.


– Reinforces Hanoi’s policy preference for large-scale high-impact PPP investments.



– Small-scale projects of significant social value may still require private sector investment and expertise, and thereby be unnecessarily excluded.


– Particularly relevant for smaller projects in health, education, science and technology, and environmental protection.


Statutory Definition of “Project Enterprise”



– The new law narrowly defines “project enterprise” to that of an entity executing and implementing a single PPP project contract. – Unclear policy objective but may be linked with desire to clearly ring fence projects for ease of administration (e.g. – assessing revenues and applying tax incentives). – This would seemingly prevent the enterprise from executing ancillary sub-projects connected to the primary project (e.g. construction of regasification assets connected to proposed gas turbine power plant development).


Assignment of Rights



– Restricts equity investors from assigning their shares/capital contribution/rights in a PPP project company until after the completion of the construction phase.


– Ensures only qualified investors are selected and thus genuinely capable of implementing the proposed project agreement.




– Rigidly prohibits assignment. Share ownership group structures should be flexible and allow for supplemental participation, including new and affiliate membership.


– The participation of new members can potentially add significant value and expertise to a project.


Contractual Governing Law



– The PPP project agreement must be governed by Vietnamese law.


In contrast to the incoming provision, the Vietnamese Civil Code permits parties to a PPP contract to select foreign law where the contract includes a “foreign element.”

– Projects are located in Vietnam and it is standard global PPP practice for the agreement’s governing law to be the same with that of the host government or procuring entity. – Important concepts of commonly used contract laws (e.g. English law) are not recognized under Vietnamese law.  For example, Vietnamese law does not recognize agreement on liquidated damages.


– The unpredictability of Vietnamese law will likely discourage foreign lending syndicates from providing debt funding and therefore significantly impact the project’s bankability assessment.


Dispute Resolution


– Where contractually agreed, parties to a project agreement may opt for international arbitration as a dispute resolution mechanism.


– The new law also references international treaties as a means to resolve disputes where applicable, leading to a possible application of formal Investor State Dispute Resolution.


– The potential to resolve disputes via international arbitration in a third country (i.e. Singapore International Arbitration Centre) is attractive and provides additional comfort to prospective foreign investors should a dispute scenario arise.



– Potential application of Investor State Dispute Resolution under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership / EU-Vietnam Free Trade Agreement is welcomed.



Viability Gap Funding



– Allocation of public funding designated for the construction phase, site clearance and compensation, and resettlement capped at 50% of the total investment amount. – Provides a tangible incentive for private investors to participate in projects which may otherwise not be economically viable or financially attractive.


–  Use of viability gap funding mechanism to attract investment is consistent with other comparative regional PPP markets (e.g. Indonesia, the Philippines, and India) and is welcomed.


Minimum Revenue Guarantee – Subject to satisfaction of certain conditions, where revenue reaches less than 75% of the revenue in the project’s financial plan, the government shall share with the investor and the PPP project company 50% of the difference between 75% of the revenue in the financial plan and the actual revenue realized. – Important financial risk allocation mechanism, providing additional encouragement to international financiers to join PPP infrastructure developments. – Availability subject to satisfaction of complex terms and conditions, heavily weighted against the private investor.


– Restricts revenue risk sharing to that of a change in plan, policy, or law scenario.


– Fixed threshold creates financial feasibility concerns.


– Threshold should be flexible and adjusted on a case-by-case basis, dependent upon the specific investment sector.


Financial Closing Timeline – Equity and debt financing into the project vehicle must be completed within 12 months (or 18 months for projects whose decisions on investment policy fall within the approval of the National Assembly or the Prime Minister) from the execution of the project contract.


– Deadlines ensure funding is provided in a timely manner, injecting the requisite equity and debt amounts into the project vehicle. – Too restrictive and unnecessarily prescriptive and threatens financial feasibility.


– Financial closing should be more flexible and account for the different forms of potential funding (i.e. bond solutions may take more time to prepare than bank solutions).


Step-in Rights: Lenders – Where a project contract is terminated early, the procuring entity, lender, investor, and project company have the ability to agree to coordinate with the government entity in the selection of an alternative investor.


–  This is more restrictive compared to the current position under Decree 63, whereby lenders have the right to step in on their own or to appoint another competent organization to take over all or part of the rights and obligations of investors and project companies if investors or project companies fail to discharge the obligations prescribed in the relevant project contracts or loan agreements.





– Allows participants to agree on the selection of an alternate investor should a termination scenario arise.  – Too restrictive and inconsistent with global PPP best practice. In practice, lenders will not lend without pre-agreed step-in rights recorded in Direct Agreements and we do not expect this to change.



Termination – Government may terminate in the “interests of the nation.” – Provides protection and contractual flexibility should proposed investments become unviable or inconsistent with the public interest. – Reference to national interests creates a very broad termination basis in favor of the government entity and is inconsistent with international best practice.


– Parties should be free to directly negotiate and define specific termination events in the project agreement.


Foreign Lender Security – The requirement to mortgage in accordance with the Law on Land remains, meaning that security over land use rights and real property is only available to domestic lenders. – The incoming law remains consistent with key Vietnamese concepts in relation to foreign legal interests over real property. – Foreign lenders’ inability to directly take security over land and assets attached to land is a serious impediment to attracting international project finance funding.

– The use of local security agents to hold land-related security remains fraught with uncertainty and practical constraints.


Change in Law – No specific stand-alone change in law provision. Government will however allow for amendment of project contract terms where changes in law result in actual project revenue to be 75% less than the anticipated revenue projected in the initial financial plan.


– Apparent policy decision to allocate change in law risk to investors though, more likely, in knowledge that terms will be subject to case-to-case negotiation and agreement.



– The PPP Law or government-issued contractual template should provide specific clauses protecting investors regarding change in law scenarios, as consistent with global PPP best practice.


– Particularly important given Vietnam’s evolving legislative landscape.



For more information, please contact Giles at or Daniel Haberfield 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. Daniel is an associate in Duane Morris’ HCMC office.

Anwalt in Vietnam Dr. Oliver Massmann – Die Nationalversammlung nahm die Empfehlungen von Duane Morris in das erste vietnamesische Gesetz über Investitionen in Form von öffentlich-privaten Partnerschaften (PPP) auf

Am 13. Mai dieses Jahres diskutierte Dr. Oliver Massmann mit Schlüsselpersonen der Nationalversammlung über den Entwurf des PPP-Gesetzes.

Am 8. Juli 2020 wurde das erste vietnamesische Gesetz über Investitionen in Form von öffentlich-privaten Partnerschaften veröffentlicht, das die folgenden von Duane Morris vorgeschlagenen Empfehlungen enthält:

Klärung des Umfangs und der Größenordnung von Energieprojekten, die für PPP-Investitionen in Frage kommen

Artikel 4 des PPP-Gesetzes sieht fünf Sektoren vor, die für PPP-Investitionen in Frage kommen:

a/ Transport;

b/ Stromnetze, Kraftwerke, mit Ausnahme von Wasserkraftwerken und Fälle von Staatsmonopol nach dem Elektrizitätsgesetz;

c/ Bewässerung; Wasserversorgung; Entwässerung und Abwasserbehandlung; Abfallbehandlung;

d/ Gesundheitsversorgung, Bildung, Ausbildungdd/ Infrastruktur für die Anwendung von Informationstechnologie

Das PPP-Gesetz legt auch den Gesamtinvestitionskapitalbedarf für ein PPP-Projekt fest. So müssen beispielsweise Energieprojekte, ausgenommen sind Betriebs-und Wartungsverträge, ein Gesamtinvestitionskapital von mindestens 200 MilliardenVND aufweisen. Bei Projekten in Gebieten mit schwierigen sozioökonomischen Bedingungen ist dieser Wert niedriger (100 Milliarden VND).

2. Die Bedeutung bankfähiger PPP-Verträge

Duane Morris schlug vor, dass die Nationalversammlung erwägen sollte, eine bankfähige Vorlage für PPP-Verträge im Gesetz selbst oder in diesem Leitdekret bzw. Rundschreiben vorzusehen. In Artikel 47 des PPP-Gesetzes wurde ergänzt, dass die Regierung die Ausstellung von Standartverträgen für Projekte mit BOT-,BTO-, BOO-, O&M-, BTL-, BLT-, BT-oder gemischten Verträgen regeln soll.

In Bezug auf das Einstiegsrecht der Kreditgeber legt das PPP-Gesetz fest, dass im Falle einer vorzeitigen Beendigung des PPP-Projektvertrags und der Notwendigkeit, einen Ersatzunternehmer auszuwählen, um den Fortschritt des Projekts sicherzustellen, der Kreditgeber sich mit dem Staat abstimmen muss, um den alternativen Investor auszuwählen.

3. Bestimmen Sie im Detail Investitionsanreize, die Investoren genießen können

Artikel 80 legt fest, dass Investoren Sicherheit in Bezug auf das Landzugangsrecht, das Recht auf Nutzung von Land und anderen öffentlichen Gütern, das Hypothekenrecht, das Recht auf Handel mit dem Projekt und seinem Infrastruktursystem erhalten.

PPP-Projektunternehmen haben auch Vorrang bei der Inanspruchnahme öffentlicher Dienstleistungen für die Durchführung des Projekts, und die zuständigen Behörden müssen die Investoren bei der Durchführung der erforderlichen Verfahren unterstützen, um diese Prioritätzu optimieren.

Weitere nennenswerteBestimmungen im neuen PPP-Gesetz:

1/ Das System zur Sicherung des Fremdwährungsausgleichgewichtsist auf Projekte anwendbar, die der Entscheidung der Nationalversammlung oder des Premierministers über die Investitionspolitik unterliegen. Letzterer beantragte Projekte mit einemGesamtinvestitionskapital von mindesten 5000 Milliarden VND, was darauf hindeutet, dass alle Energieprojekte, die für PPP-Investitionen in Frage kommen, automatisch für dieses Fremdwährungsschema in Frage kommen. Darüber hinaus soll für alle PPP-Projekte eine Obergrenze von 30 % festgelegt werden.

2/ Mechanismus zur Aufteilung des Einnahmerisikos. wenn die tatsächlichen Einnahmen mehr als 125 % der Einnahmen im Finanzplan des PPP-Projektvertrags erreichen, teilt sich der Investor mit dem Staat 50 % der Erhöhung zwischen den tatsächlichen Einnahmen und den vertraglich festgelegten Einnahmen.

Wenn die tatsächlichen Einnahmen weniger als 75 % der Einnahmen im Finanzplan des PPP-Projektvertrags erreichen, muss der Staat mit dem Investor 50 % des Rückgangs zwischen den tatsächlichen Einnahmen und den vertraglich zugesagten Einnahmen teilen.

Dieser Mechanismus zur Teilung der Mindereinnahmen wird angewandt, wenn die folgenden Bedingungen erfüllt sind:

1. Art des Vertrags: BOT, BTO oder BOO;

2. Die Ursache des Verlustes ist die Änderung von Gesetzen und Richtlinien;

3. Maßnahmen zur Anpassung der Preise und Vertragsbedingungen für Produkte und öffentliche Dienstleistungen sind umgesetzt worden, aber die Gesamteinnahmen liegen immer noch unter 75 %; und

4. Die Staatliche Rechnungsprüfung hat die Einnahmeverringerung geprüft.

3/ Auswahl von Auftragnehmern zur Durchführung von PPP-Projekten

PPP-Verträge müssen verbindliche Inhalte enthalten, für die der Auftragnehmer verantwortlich ist, wenn die Qualität des Projekts nicht den vereinbarten Anforderungen entspricht. Für Arbeiten, die von inländischen Auftragnehmern ausgeführt werden können, wird die Inanspruchnahme inländischer Auftragnehmer gefördert.

4/ Geltende Gesetze: Der PPP-Vertrag, seine Anhänge und damit zusammenhängende Dokumente sind in Übereinstimmung mit den vietnamesischen Gesetzen auszulegen und zu interpretieren.

Es ist uns eine Freude, dass die Nationalversammlung die Ratschläge und Empfehlungen von Duane Morris berücksichtigt hat. Diese Handlungen sind ein Schritt in die richtige Richtung. Es bleibt abzuwarten, ob der politische Wille vorhanden sein wird, PPP-Projekte regelmäßig und in großem Maßstab vollständig umzusetzen.

Bitte zögern Sie nicht, den Autor Dr. Oliver Massmann unter zu kontaktieren. Dr. Oliver Massmann ist der Generaldirektor von Duane Morris Vietnam LLC, Mitglied des Aufsichtsrats von PetroVietnam Insurance JSC und der einzige ausländische Anwalt, der vor den Mitgliedern der Nationalversammlung von Vietnam Vortraege in vietnamesischer Sprache haelt.