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Vietnam’s New Civil Code and Contracts – GBA Presentation 11 Sep 2017

Vietnam’s new Civil Code and how it affects commercial contracts. Presentation slides from the German Business Association meeting in Ho Chi Minh City on 11 September 2017:

170911 GBA – New Civil Code and Contracts – Duane Morris – Otto


  1. Contract signatory (apparent authority)
  2. Damages (actual and liquidated; penalty)
  3. Foreign arbitration (“basics principles of Vietnam law”)

    Extra: UN Convention on Contracts for the International Sale of Goods (CISG)

If you have any question or comment, please contact Manfred Otto at MOtto@duanemorris.com or any other lawyer you are regularly communicating with at Duane Morris.

The firm’s full disclaimer applies to this post.

Vietnam Foreign Direct Investment

By Oliver Massmann and Manfred Otto – Duane Morris Vietnam LLC

Foreign Direct Investment

A Brief Overview
Vietnam is undergoing fundamental changes to form the basis for its attractiveness and competitiveness in preparation for the ASEAN Economic Community (AEC), the upcoming trade agreements including the EU-Vietnam FTA and the Transpacific Partnership Agreement (TPP).
Since July 2015, a number of new laws and regulations governing foreign investment, enterprises, real estate and foreign ownership limits have come into effect. For example, the new Law on Investment and the new Law on Enterprises:
(i) clarify definitions of foreign-invested enterprises;
(ii) facilitate M&A activities;
(iii) reduce the number of prohibited and conditional business sectors;
(iv) reduce statutory business licensing times;
(v) provide more flexibility with regard to corporate governance (such as multiple legal representatives and lower voting thresholds); and
(vi) create more favourable conditions for shareholder lawsuits.
In addition, new laws and regulations affecting foreign ownership of real estate have come into effect. Foreigners can now own apartments and for the first time buy houses. They are now also permitted to sublease and inherit real estate.
With the coming into effect of several international trade agreements and more particularly, the EVFTA, EuroCham members are looking forward to the positive changes that will be implemented and that will further business incentives as well as contribute to Vietnam’s growth.
Vietnam as an attractive FDI destination
In addition to the numerous legal changes, Vietnam has fundamental elements that participate to its continued growth. For instance, Vietnam is in a demographic golden age, with 25% of its 90 million people population between 10 and 24 years old. GDP per capital is increasing drastically as Vietnam has the fastest-growing middle class in South East Asia – (12.9% per annum over the period 2012-2020). Along with a high literacy rate and education levels, comparatively low wages, connectivity and central location within ASEAN, more and more foreign investors choose Vietnam as their hub to service the Mekong region and beyond.
Vietnam’s attractive profile is reflected in its generally welcoming of foreign direct investment (FDI) in manufacturing activities. The gradual opening of most service sectors under Vietnam’s WTO commitments schedule that began in 2007 has been completed in 2015. Domestic law has expanded market access in some sectors beyond those of Vietnam’s WTO commitments. For example, foreign shareholding in public companies that was previously capped at 49% is now generally open for to up 100% foreign ownership. Vietnam also grants investment incentives including tax breaks in areas, such as high-tech, environmental technology, and agriculture, where European businesses are global leaders.
Furthermore, in 2014, Vietnam recorded $21.92 billion in FDI with a total of 1843 investment licenses for foreign invested projects with a registered capital of $16.5 billion, representing a 14% increase from the previous year. Among the foreign investors, the EU is an increasingly important source of FDI for Vietnam as ‘according to the Foreign Investment Agency of the Vietnamese Ministry of Planning and investment, investors from 23 out of 28 Member States of the EU injected a total committed FDI worth US$19.1 billion into 1566 projects over the course of the past 25 years (by 15 December 2014)’. With this strong activity, in 2014, the EU positioned itself as fifth in the top FDI partners of Vietnam with a combined committed FDI of US$587.1 million.

Source: ‘Vietnam’s logistics market: Exploring the opportunities, Hong Kong Trade Development Council (HKTDC)

In addition to FDI, the EU-Vietnam’s strong trade relationship can be seen through programmes like the Multilateral Trade Assistance Project (MUTRAP) which accounts for over €35.12 billion. MUTRAP has been instrumental in supporting Vietnam’s negotiating efforts during the WTO accession process and now continues to assist Vietnam in the implementation of trade commitments. In terms of trade, both the EU and Vietnamese businesses are expected to benefit under the EVFTA. The FTA will gradually eliminate tariffs for over 99% of goods and services besides other mechanisms to support bilateral trade. On 4 August 2015, the EU and Vietnam reached an agreement in principle for the free trade deal, an agreement that will also attract further FDI into the country.
Vietnam’s top trading partners 2013
Finally, the EU’s strong commitment to support Vietnam in its modernisation and integration in the world economy is mirrored by the aid programmes. In line with Vietnam’s 2020 socio-economic plan, the EU has increased its aid by 30 % reaching 400 million euros via its multi-annual indicative programme for the period of 2014-2020 focusing on the development of clean energy in Vietnam.

Further improvements necessary
It is clear that Vietnam’s development and its attractiveness to foreign investors are undeniable as Vietnam is constantly improving its business environment.
However, as of this writing, guiding regulations for many new laws have still not been published, and investors are experiencing delays in the processing of applications. We expect processing times to improve once the new implementing regulations come into effect and officials get accustomed to the changes.
Another issue that has been highlighted by our members is that many foreign investors still face significant challenges when dealing with Vietnam’s bureaucracy. Tax filing, customs clearance, business registration and licensing, and other administrative procedures are often delayed, outcomes can be unpredictable, and businesses find themselves spending resources on administration that they would prefer to invest in expanding their core activities.
Despite remaining hurdles, the national government of Vietnam has expressed an understanding of the issues surrounding foreign investment. Providing foreign investors increased access to its market, the stream of FDI is expected to continue. For many foreign investors the positive economic development of the country and its fundamentals substantially outweigh potential risks.
In this light, EuroCham wishes to present the key issues that our members face in their activity in Vietnam along with some key recommendations. EuroCham hopes to engage in a constructive dialogue and increasing cooperation with the relevant authorities on all the issues presented in this edition in order to improve the business environment for all enterprises in Vietnam and contribute to the country’s fast modernisation.


1‘Vietnam; from golden age to golden oldies’, UK FOC, 07/01/15. Available at
2‘Report revises 2014 FDI figures’ Viet Nam News, 18/03/15. Available at
3‘Investment -EU-Vietnam economic and trade relations’, Delegation to the European Union to Vietnam, 2015. Available at
4‘Vietnam’s logistics market: Exploring the opportunities, Hong Kong Trade Development Council (HKTDC), 20/01/15. Available at
5‘Trade – EU-Vietnam economic and trade relations’, Delegation to the European Union to Vietnam, 2015. Available at
6‘European Union, Trade in goods with Vietnam’, European Commission DG Trade, 10/04/15, p.9. Available at
7‘Development Cooperation’, Delegation to the European Union to Vietnam, 2015. Available at

Continue reading Vietnam Foreign Direct Investment

Breaking News: Vietnam’s New PPP Decree Is Out!

The new PPP Decree (No. 15/2015/ND-CP) was issued on 14 February 2015 and will be effective from 10 April 2015. Major changes are in line with the draft decree described in our previous article.

History of Vietnam's PPP Regulations from 1997 to 2015

In a nutshell, the new PPP Decree 15 provides a number of changes, including:

  • More PPP projects forms (e.g., BOO, BTL, BLT, O&M)
  • Removal of the cap on State equity participation
  • Forms of viability gap funding
  • Incentives in the tendering process to investors with approved feasibility studies or project proposals
  • Choice of foreign law and dispute settlement
  • Government guarantees and other incentives
  • Online publication of PPP project status

We’ll keep you posted on further details and developments.

Duane Morris lawyers have been involved in PPP project planning from the beginning in Vietnam. For further information, please contact Giles T. Cooper or Manfred Otto. For inquiries in Japanese, please contact japanese@duanemorris.com.

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

Vietnam’s New Investment Law Paves the Way for More M&A – No More Investment Certificates!


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

Good news for M&A in Vietnam! Effective 1 July 2015, foreign investors won’t need to undergo lengthy investment certificate procedures when buying stakes in Vietnamese target companies.  The change, introduced by the new Investment Law, will hopefully end years of uncertainty and frustration faced by foreign investors eyeing Vietnam market entry or expansion via M&A.

M&A activity in Vietnam saw a 15% uptick in 2014 and is expected to increase in 2015. We’ve seen a strong increase of interest from international investors, especially in the last months of 2014 continuing into 2015. The TPP (which includes the U.S. and Japan), the EU-Vietnam FTA as well as tariff reductions under the AFTA are all scheduled for this year.  These will increase market access for foreign investors in Vietnam and lower barriers to trade in goods and services.

Mergers & Acquisitions in Vietnam 1999-2014

 Source: Institute of Mergers, Acquisitions and Alliances

Why is the investment certificate question so important?

Put simply, it can take forever to get an investment certificate (IC) and without one investments are at high risk.  Under current law, Vietnam has different licensing procedures for foreign and domestic investors. The IC serves as business registration for foreign investors. In practice, despite a 45 day maximum statutory time limit, the lC process can take 4 to 6 months or longer, while domestic business can be registered within a day.

Under the new Investment Law, the IC is replaced by an “investment registration certificate” (IRC) and an enterprise registration certificate (ERC). Obtaining ERCs should be straightforward, as they only contain basic business info and also apply to domestic investors. We have high hopes that IRCs will be processed faster than current ICs, but wouldn’t it be nice to invest without an IRC? Continue reading Vietnam’s New Investment Law Paves the Way for More M&A – No More Investment Certificates!

New PPP Decree – Coming Soon: Enhanced Legal Framework for Infrastructure Projects in Vietnam

By Manfred Otto, Duane Morris Vietnam LLC

Update: The new PPP Decree (No. 15/2015/ND-CP) was issued on 14 February 2015 and will be effective from 10 April 2015.  Major changes are in line with the draft decree described in this article.

Vietnam is finalizing a much improved legal framework for public-private partnerships (PPP) with the goal to revitalize investment in infrastructure projects. The latest Ministry of Planning and Investment (MPI) drafts of the PPP Decree and the Investor Selection Decree provide more clarity compared to previous regulations. Opinions from international advisors, multilaterals, donors and  business associations appear to have had a positive impact on the drafts. The drafts are in the government’s hands now and hopes are high that they will become law soon. Of course, the new regulations will mean nothing without proper implementation. The MPI is holding seminars to educate local government officials, who are expected to administer PPP projects.
Continue reading New PPP Decree – Coming Soon: Enhanced Legal Framework for Infrastructure Projects in Vietnam

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!

Ground-breaking Feed-In Tariff for Waste-To-Energy Projects in Vietnam

By Manfred Otto and Giles Cooper, Duane Morris Vietnam LLC


Vietnam’s Prime Minister Decision 31/2014/QÐ-TTg on solid waste-to-energy projects becomes effective as of today (20 June 2014). Article 14 of the Decision provides a ground-breaking feed-in tariff for power suppliers of up to “VND 2,114/kWh (equivalent to 10.05 US cents/kWh)”. This is more than 25 percent higher than the 7.8 cent applicable to wind power projects in Article 14 of Decision 37/2011/QÐ-TTg from 2011. 10 cent per kWh was long considered the minimum threshold for investments into renewable energy projects.

Continue reading Ground-breaking Feed-In Tariff for Waste-To-Energy Projects in Vietnam



オットー マンフレッド 倉雄(著)
ジャイルズ クーパー、小林 裕(編)

ベトナムの固形廃棄物発電プロジェクトに関する首相決定Decision 31/2014/QÐ-TTgは、本日(2014年6月20日)より実施されます。当決定の14条は、電力供給者からの買い取り価格を「1キロワット当たり2,114ベトナムドン(10.05米セント/kWh)に当たる)」と定めています。この買取価格は、過去の風力発電決定Decision 37/2011/QÐ-TTgの7.8米セントを25%以上上回っています。10米セント/kWhが従前の再生可能エネルギープロジェクトに対する投資に関して最小値とされていました。

Continue reading ベトナムのごみ焼却発電に革新的な固定価格買取制度(フィードインタリフ)を