Category Archives: Vietnam – Market Access

Risk and reward in Vietnam’s real estate as investors ignore uncertainty over future of land rights

Vietnam has emerged as an attractive destination for foreign investors looking to enter the real estate market. Driven by a fast-growing economy, high rate of urbanisation and expanding middle-class, cities like Hanoi, Da Nang and Ho Chi Minh City have become dynamic and lucrative metropolises. For those willing to shoulder the risks, the market offers substantial rewards and great potential over the coming decades.


Much of the development can be attributed to the implementation of the Land Law (No. 45/2013/QH13), Law on Housing (No. 65/2014/QH13) and Law on Real Estate Business (No. 66/2014/QH13), which effectively opened the floodgates to foreign investment in real estate.  In principle, these laws allow foreigners most of the same rights as locals when it comes to purchasing and owning real estate.  Many foreign development companies are jumping at the chance to develop new residential and commercial properties in one of the world’s fastest growing economies.  Question marks remain however over the underlying rights foreign-invested developers enjoy in the land on which these buildings sit and it remains to be seen how this will play out.


Lack of Certainty 


For many developers the country’s political landscape remains a hurdle. In Vietnam, land is collectively owned by the people, and administered by the State on their behalf. Under this system, property owners are denied full and legal ownership over the land. Their rights to the land are limited to ‘land use rights’ within the scope permitted by law.  A land user is issued a land use right certificate (LURC) that recognises the land user’s rights over the property.  There are different types of land use rights possible and some come very close to being analogous to freehold ownership as many would know it in the West (use right in perpetuity, subject to reversion and compulsory public works acqusitions, right to sell, transfer, mortgage etc).

Continue reading Risk and reward in Vietnam’s real estate as investors ignore uncertainty over future of land rights

Plenty of life in Vietnam’s M&A market despite bumps

Globally, 2017 has been an unpredictable year for the mergers and acquisitions (M&A) market, with the hangover of political and economic instability from 2016 inspiring caution among investors.


Foreign investment has been put on the back foot due to rising protectionism and the failure of promising free trade deals like the TPP (Trans-Pacific Partnership). Vietnam in particular has suffered and will need some big breakthroughs to regain lost momentum.


Although the TPP would have brought some big benefits to Vietnam, it is expected that other trade deals on the horizon will make up most of the shortfall. The nation has joined six regional FTAs as an ASEAN member, including the ASEAN Free Trade Area (AFTA) and the five FTAs between ASEAN and China, Japan, South Korea, India, Australia and New Zealand, as well as four bilateral FTAs with Chile, Japan, South Korea and the Eurasia Economic Union (EAEU). Negotiations over an FTA with the European Union (EU) have also been concluded.

 Sluggish start


Whereas 2016 was an exciting year for M&A in Vietnam, 2017 has gotten off to a slower start. According to a report released in advance of the M&A Forum (August 10, HCMC), deals in Vietnam hit an all-time record of US$5.8 billion in 2016, a growth of 11.92 percent compared to 2015. However, the market has slumped since the latter half of last year with fewer headline signings. The total value of M&A activity reached just US$1.1 billion in the first quarter, a drop of 24.4 percent year-on-year.

Continue reading Plenty of life in Vietnam’s M&A market despite bumps


ベトナムでの外資系物流会社の設立と外国人によるベトナム人パートナーからの持分取得は、より明確なルールで進めることが可能となりました。ロジスティクス分門は、国際条約とベトナム国内法の施行の間に矛盾が生じて、多くの方々を悩ませていました。一方、ベトナム商工省(MOIT)は最近、より明確な施行規則(通達第 9911/BCT-KH号)、そしてホーチミン人民委員会やベトナム・ビジネス・フォーラム(VBF)に対する返答を含む、複数の公式文書を発行しています。同時に、日系物流会社はベトナムで100%外資で子会社を設立しました。


CPC サービス分類 外国人保有比率
742 倉庫 100%
748 貨物運送代理 100%
749の一部 運送証券検査、貨物運送仲介、貨物鑑定、サンプル採取、重量判定、貨物の受取、受入、運送証明準備 99%
7211 海運(国内運送を除く顧客運送) 49%
7212 海運(国内運送を除く貨物運送) 51%
7221 内陸水路運送(顧客運送) 49%
7222 内陸水路運送(貨物運送) 49%
7111 鉄道運送(顧客運送) 未公約
7112 鉄道運送(貨物運送) 49%
7121 + 7122 道路運送(顧客運送) 49%
7123 道路運送(貨物運送) 51%
No CPC 通関 99%
No CPC コンテナヤード 100%
7411 コンテナ積降(空港でのサービスを除く) 50%
7512 配達(速配サービス) 100%
621, 61111, 6113, 6121, 622, 631 + 632 流通(輸出入、販売代理店、卸売、小売) 100%



詳細につきましては、ジャイルズ・クーパー(、オットー マンフレッド 倉雄( 、又はドウェイン・モリス法律事務所で通常連絡を取っている弁護士へご連絡ください。

More Clarity on Foreign Investment and M&A in Logistics Companies in Vietnam

Foreign investors can now proceed with more certainty when setting up logistic companies or acquiring stakes from Vietnamese partners. Logistics is an area where discrepancies between international treaties and domestic law implementation have caused many headaches. However, Vietnam’s Ministry of Industry and Trade (MOIT) has recently provided more clarity through a guiding regulation (Circular No. 9911/BCT-KH) and a number of official letters, including responses to the Ho Chi Minh City People’s Committee and the Vietnam Business Forum. At the same time, a few Japanese logistics companies have established 100% foreign-invested subsidiaries in Vietnam.

International treaties should supersede national law, and official comments from MOIT have restated that view. So, we initially refer to Vietnam’s WTO service sector commitments (WTOSSC) in most cases. Accordingly, some sectors are open to 100% foreign investment (e.g., warehousing and freight forwarding), while some still require Vietnamese equity participation (e.g., container handling).

Foreign Ownership Limitations in the Logistics Sector (WTOSSC)
CPC Service Description Max. Foreign Ownership
742 Storage and Warehouse 100%
748 Freight transport agency (incl. freight forwarding services) 100%
749 (partially) Bill auditing; freight brokerage; freight inspection, weighing and sampling; freight receiving and acceptance; transportation document preparation on behalf of cargo owners 99%
7211 Maritime transport (Passengers; less cabotage) 49%
7212 Maritime transport (Freight; less cabotage) 51%
7221 Internal waterways transport (Passengers) 49%
7222 Internal waterways transport (Freight) 49%
7111 Rail transport (Passengers) Unbound
7112 Rail transport (Freight) 49%
7121 + 7122 Road transport (Passengers) 49%
7123 Road transport (Freight) 51%
No CPC Custom clearance 99%
No CPC Container station and depot 100%
7411 Container handling (except at airports) 50%
7512 Courier (express delivery) 100%
621, 61111, 6113, 6121, 622, 631 + 632 Distribution (import/export, commission agents, wholesale, retail) 100%

As a foreign buyer in an M&A case, besides the purchases price and other conditions, we recommend to consider and differentiate between absolutely essential and optional business lines as well as the best case and acceptable levels of ownership in the target.

Yamato Logistics and Sagawa Express have established 100% foreign-invested subsidiaries in Vietnam. This is possible through strategically limiting business lines to those that are open to 100% foreign investment.

For further information, please  contact Giles Cooper (, Manfred Otto ( or any other lawyer you are regularly communicating with at Duane Morris.

日本政府によるTPP詳細の発表 ~ ベトナム、関税撤廃及び外資小売規制を緩和 ~








  • 迅速通関(通常通関は48時間以内にそして急送貨物用の「6時間以内」のルール)
  • 知的財産(偽造品)に対する厳格な規律とロイヤリティ率規制の禁止
  • 技術移転、ローカルコンテンツ、投資家のソースコードへのアクセスの要求禁止
  • 短期出張者やその家族へのビザ免除(アメリカとシンガポールを除く)
  • 加盟国入札者へ国内一般調達の公開
  • デジタルコンテンツへの輸入課税禁止と電子商取引に関する一般的な規則
  • TPPにより利益を得る為の中小企業の支援
  • 環境及び乱獲保護措置


(a) ベトナムはENTを廃止



(b) ベトナムの電気通信業、地場銀行や娯楽サービスへの外資出資比率規制の緩和


(c) 輸出税の禁止及び通関手続きの透明性






  • 仲裁廷は事例の判断を下す前に、まず訴えが仲裁廷の管轄内であるか決定し、また被申立国による異議等に返答しなければならない。
  • 非公開手続が好まれる民間仲裁とは異なり、原則として全てのISDS仲裁判断内容は公開されなければならない。
  • ISDS申立て期間を一定の期間に制限する。



詳細につきましては、オットー マンフレッド 倉雄またはjapanese@duanemorris.comまでお願い致します。


Japan Releases TPP Details – Vietnam to Abolish Tariffs and Economic Needs Test

Besides abolishing tariffs and providing for investor-state dispute settlement (ISDS), some of Vietnam’s highlights under the Trans-Pacific Partnership (TPP) free trade pact include removing the dreaded economic needs test (ENT), raising foreign ownership caps in restricted sectors such as telecoms, and improving custom procedures.

Although the actual text of the TPP has not been published (because the final version is not available yet), the Japanese government has recently disclosed key elements of the pact. Interestingly, the government refers to the agreement that was reached on 5 October 2015 in Atlanta as a “broad agreement,” implying that it may not be the final version including all the details yet. The following information that may not have been as broadly reported in other international news is based on Japanese government sources, including the following presentation (in Japanese):

1. Abolishing tariffs for 95% of all traded items

The TPP has a very high liberalization rate. Tariffs for many agricultural products and 99.9% of industrial products (e.g., cars, auto parts, electronics, chemicals) will be abolished. Tariffs for many items will be lifted immediately once the TPP comes into effect (e.g., agricultural products such as grapes, kiwifruits, herring, prawns, crab, yellowfin tuna, suckling pig, red beans, eggs.). On the other hand, tariffs for some items will remain and will end in the 3rd to 16th year of the pact (e.g., orange juice, cigarettes, wine, plywood).

For specific items member countries can set import quotas (e.g., rice in Japan), and countries can implement temporary emergency measures (so-called “safeguards”) to protect domestic production.

2. General trade and investment facilitation

The TPP provides common rules to facilitate doing business, competition and investing in other member countries. Some general rules include:

  • 6-hour rule for express custom clearance (standard clearance within 48 hours).
  • Stricter rules on intellectual property (counterfeits) and prohibition on royalty rate restrictions.
  • General prohibition on demanding technology transfer, local contents, or access to source code from an investor.
  • Visa waivers for short-term business travelers and their families (except for United States and Singapore).
  • Opening domestic public procurement to member state bidders.
  • Prohibition on levying import duties on digital contents and general rules on e-commerce.
  • Support for small and medium-sized enterprises to benefit from TPP.
  • Environmental and over-fishing protection measures.

3. Examples of rules specifically applicable to Vietnam

(a) Vietnam to scrap the economic needs test

Vietnam commits to abolish the ENT after a period of 5 years from the issuing date of the TPP agreement. (At least 6 member countries respresenting at least 85% of the GDP of all initial members must ratify the pact within 2 years before it can be issued.) Foreign retailers are very interested in this market with an emerging middle class and surging disposable income.

The ENT currently requires foreign investors in the retail sector (including supermarkets, malls, and convenience stores) to undergo licensing procedures for each new outlet they intend to open beyond the first one. This has long been seen as a barrier to market access.

(b) Vietnam to ease foreign investment caps on telecoms, local banks, and entertainment services

Currently limited to a maximum of 65% foreign ownership, under the TPP foreign investors will be allowed to own up to 75% stakes in telecommunication businesses in Vietnam. Foreign ownership caps are also slated to be raised for local banks and entertainment services, such as theaters and music clubs.

(c) Prohibition of export duties and custom procedure transparency

Vietnam will generally not be allowed to impose new export tariffs or maintain the same on items such as on mineral resources. Vietnam will also be obliged to use best efforts to announce new custom regulations at least 60 days before they come into effect and to respond to reasonable questions from member states within 60 days as well.

In addition, the TPP generally provides for product-specific rules of origin applicable to all TPP member countries. Producers, exporters and importers will be allowed to issue certificates of origin themselves. E-custom filing is encouraged.

4. Investor-state dispute settlement mechanism

Investors from member states will be able to bring legal action against the Vietnamese government using international arbitration tribunals outside of Vietnam.

The ICSID, UNCITRAL, ICC or other arbitration rules can be applied, but the TPP’s ISDS provisions set forth a few basic rules:

  • Before the arbitration tribunal can rule on the merits of a case, it must first decide on whether it has jurisdiction and respond to the responding party’s objections.
  • Unlike in private arbitration where secrecy is considered a plus, all ISDS arbitral decisions must generally be published.
  • Statutes of limitations for bringing ISDS actions.

However, apparently, the TPP cannot prohibit countries from implementing restrictive measures based on justifiable public policy grounds. In the past, Vietnamese courts have often declined the recognition and enforcement of foreign arbitral awards on the ground of contradicting ‘fundamental principles of Vietnamese law’ which is similar to the public policy argument. Accordingly, how frequently TPP ISDS awards against Vietnam will be enforced in Vietnam in the future is still uncertain.


Again, the above information is not based on the actual text of the TPP but secondary governmental sources. A review of the actual legal text may reveal discrepancies. We will keep you updated on interesting developments and look forward to receiving your comments.

Please contact  Manfred Otto for more information or inquiries in Japanese.

Disclaimer: This post has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. Each case should be analyzed individually with the support of competent legal counsel. For more information, please see the firm’s full disclaimer.




オットー マンフレッド 倉雄

Continue reading ベトナムの外食事業、100%外資系企業の参入が可能に

Get ready, Vietnam’s Restaurants Open To 100% Foreign Ownership!

How International Dining and Food Chains Can Control Their Businesses In Vietnam

By Manfred Otto, Duane Morris Vietnam LLC

Now is the time for international chains to position themselves. Beginning in January 2015, Vietnam’s restaurant business is open to 100 percent foreign ownership. Foreign-invested enterprises (“FIE”) may run their own production and internal logistics network free from limitations. The dreaded Economic Needs Test (“ENT”), still required for large retail stores, may not affect restaurant outlets. Like them or not, the legal conditions required for mass-produced fast food will soon be in place. A shakeup may also occur among already-established restaurants with apparently foreign management. Expect to see international chains, which have been waiting for “100 percent ownership” and full control, to flock to Vietnam.

Continue reading Get ready, Vietnam’s Restaurants Open To 100% Foreign Ownership!

New Laws on Gaming Business in Vietnam

By Hau Le, Giles T. Cooper, Manfred Otto of Duane Morris Vietnam LLC

We witnessed last October the long-expected Decree 86 dated 29 July 2013 on electronic gaming business for foreigners (“Decree 86”) coming into effect. Although Decree 86 replaces an obsolete Decision 32 dated 27 February 2003 of the Prime Minister (“Decision 32”), it is unfortunate that Decree 86 appears to be even more tightening for the electronic gaming business in Vietnam.  Continue reading New Laws on Gaming Business in Vietnam