New Competition Law: An Overview


On 01 July 2019, the Competition Law No. 23/2018/QH14 (the “New Competition Law” or “new Law”) came into effect, replacing its 14-year-old predecessor and related guiding instruments. The new Law is expected to have a significant impact on how enterprises conduct their day-to-day business. In an attempt to ease the transition, this article will highlight the notable changes introduced by the new Law of which enterprises should be aware.

Drastic Change of Approach

1. What are the key differences between the New Competition Law and the current one? What is the most significant change?

The New Competition Law will introduce changes in several areas such as scope of governance, anti-competitive conduct and economic concentration (e.g. M&A transaction) regulation, as well as introducing for the first time a leniency policy (all of which will be further addressed below).

The most drastic change is arguably the shift in the general regulatory approach towards an effect-based mindset. The key issue is no longer whether a given conduct falls within a statutorily prescribed list of prohibited conducts, but whether it has or may have a competition-restraining impact on the market, that is, whether it (potentially) has an impact which removes, reduces, distorts or otherwise hinders market competition.[1] The effect-based approach will require the competition authority to take into account a range of factors other than, as under the current law, the combined market share of the relevant parties when assessing whether an anti-competitive conduct or an M&A transaction should be prohibited. 

It is expected that given the new approach, enforcement of competition law will be more vigorous and all business individuals, organisations and any other relevant entities must adhere more strictly to the new Law.   

Widened Scope of Governance

2. What conducts and transactions are covered?

The New Competition Law regulates and governs anti-competitive practices (i.e. cartels and abuse of market power) and economic concentrations (e.g. M&A transactions) which have or may have a competition-restraining impact on the Vietnam market, and unfair competitive practices.[2]

3. Does the New Competition Law apply to conduct that takes place outside of Vietnam?

Yes. The New Competition Law adds to its list of applicable entities “[…] foreign agencies, organisations and individuals”.[3] This means that the new Law will apply to foreign enterprise participants in offshore anti-competitive practices or M&A transactions which have or may have a competition-restraining impact on the domestic market. This will be so regardless of whether the foreign enterprise has a presence in Vietnam.

Cartel Regime

4. What kinds of anti-competitive agreements are caught?

An anti-competitive agreement or cartel is defined as an act of agreement between parties in any form which causes or may cause a competition-restraining impact.[4] As the wording suggests, the law covers a broad range of agreements, from formal, written to informal, oral or implicit (gentlemen’s agreement) and even concerted practices.

Prohibited cartels under the new Law can be divided into two groups.

First, certain cartels are illegal per se with the assumption that they are inherently anti-competitive. Examples of these include price fixing, customer/market allocation, or quota fixing agreements between enterprises in the same relevant market.[5] It should be stressed here that unlike the current Competition Law 2004, these agreements are now prohibited per se under the new Law regardless of whether the combined market share of the cartel participants is above 30%.   

Second, certain cartels will be prohibited only if they cause or have the ability to cause a significant competition-restraining impact in the market. These include, for instance, R&D restriction, or refusal to trade agreements between any two or more enterprises, as well as price fixing, customer/market allocation agreements between enterprises operating at different stages of the supply chain i.e. vertical agreements. Here another notable change should be highlighted: vertical anti-competitive agreements will now be caught as well, albeit not illegal per se as their horizontal counterparts (i.e. agreements between enterprises in the same level of production or distribution).

These changes underscore the lawmakers’ attempt to align the New Competition Law with international practices.

Leniency Programme

5. Is there a way out for cartel participants? If yes, what conditions do they have to satisfy?

Yes. Under the new leniency programme which will be introduced for the first time under the New Competition Law,[6] co-conspirators participating in a cartel may self-report and assist the competition authority in exchange for either full immunity from, or a reduction of, fines for breach of competition law which the competition authority would have otherwise imposed on them.

In order to receive lenient treatment, the whistle-blower must satisfy the following conditions:[7]

  1. Having partaken or is currently partaking in a cartel;
  2. Coming forward before an investigation is launched;
  3. Declaring honestly and providing all evidence of the infringement which is significantly valuable for dismantling the cartel;
  4. Cooperating fully with the competition authority during the investigation; AND
  5. Not being ring-leader and/or coercer.

It is worth noting that only three whistle-blowers are eligible for leniency, with the first entitled to full immunity whilst the second and third shall receive a fine reduction of 60% and 40% respectively.[8] Furthermore, the leniency programme is only applicable to administrative sanctions and does not extend to criminal punishments.

While the effectiveness of the implementation of this new policy remains to be seen, there is little doubt that such policy will incentivise more co-conspirators to come forward, thus increasing the number of cartels discovered and sanctioned.

Abuse of Market Power

6. What kinds of abusive conducts are caught?

Abuse of market power means any conduct by an enterprise holding either a dominant market position or a monopoly position which causes or potentially causes a competition-restraining impact.[9]

An enterprise is regarded to be holding a dominant position if it has a market share of at least 30% in the relevant market or if it possesses significant market power,[10] which is determined on the basis of some of the followings, among other factors:[11]

  1. Financial capacity;
  2. Barriers to enter or expand the market; AND/OR
  3. Special factors in the industry or sector in which the undertaking is conducting business.

Abusive conducts are strictly prohibited without exemption. Examples of prohibited conducts include:[12]

  1. Predatory pricing or undercutting practices (i.e. exclusionary practices);
  2. Retail price maintenance (i.e. exploitative practices);
  3. Applying different commercial conditions to the same transactions (i.e. discriminatory practices).

Similarly to the cartel prohibition regime, the effect-based approach is also applied to prohibition of abusive conducts: in assessing an abuse of market power, the competition authority will focus on its competition-restraining impact or the ability to cause such an impact such as excluding competitors, hindering other enterprises from entering or expanding the market, causing loss to customers, and so on.

7. Is there any exemption?

The New Competition Law provides no exemption for abusive conducts (see Question 6).

Merger Control Regime

8. What forms of M&A transactions are caught? Are there any transactions prohibited?

Economic concentration (or M&A transaction) occurs when there is a merger, consolidation, acquisition, or joint venture.[13]

Merger means the transfer by one or more enterprise(s) of all of its lawful assets, rights, obligations and interests to another enterprise and, at the same time, the termination of the business activities or the existence of the merging enterprise(s).[14]

Consolidation is defined as the transfer by two or more enterprises of all of their lawful assets, rights, obligations and interests to form one new enterprise and, at the same time, the termination of the business activities or the existence of the consolidating enterprises.[15]

Acquisition means the purchase by one enterprise of all or part of the capital contribution or assets of another enterprise sufficient to control or govern the acquired enterprise or any of its trades or business lines.[16]

Joint venture occurs when two or more enterprises together contribute a portion of their lawful assets, rights, obligations and interests to form a new enterprise.[17]

An economic concentration is prohibited under the new Law if it causes or potentially causes significant competition-restraining impact on the Vietnamese market.[18] This is in stark contrast to the current law which prohibits economic concentrations where the combined market share of the participating parties exceeds 50%.[19]

9. How is “control” in an acquisition defined?

The Draft Decree guiding the New Competition Law (version dated 31 January 2019) (“Draft Decree”) sheds light on the definition of control. Accordingly, an enterprise (A) is deemed to control or govern another enterprise (B) if A owns more than 50% of B’s charter capital or voting rights; or any other percentage which in accordance with the law or B’s charter or any other agreement is sufficient to confer on A any of the followings:[20]

  1. The right to directly or indirectly appoint or dismiss all or the majority of the members of the Board of Management, Chairman of the Members’ Council, Director or General Director of B; OR
  2. The right to alter B’s charter; OR
  3. The right to make important decisions with regard to B’s business activities; OR
  4. Ownership of or the right to use all or the majority of B’s assets in all or one of B’s business lines.

10. What are the notifying thresholds?

Unlike the current law, combined market share is no longer the sole applicable notification threshold under the new Law. Instead, the notification threshold is determined based on any one of the following criteria:[21]

(*) Not applicable to offshore economic concentrations.

It is noteworthy that the thresholds are not fixed and subject to revision from time to time to reflect socio-economic conditions.[22]

11. Is merger filing compulsory or voluntary? If compulsory, what are the deadlines for filing?

Filing is compulsory for economic concentrations that reach the notifying thresholds.

While the law does not provide for a specific deadline for submitting a filing to the competition authority, the proposed concentration must be notified prior to its implementation.[23] Failure to notify constitutes a breach of the merger control regime[24] and the violators will be subject to a monetary fine of up to 5% of their total turnover.[25]

12. Will the new merger filing regime be applied retroactively to ongoing transactions? For instance, if a transaction has been signed prior to 01 July 2019 but not been closed by this date, must this transaction be reported to the competition authority if the new notifying threshold is met?

There is no transition provision that deals with this issue in the New Competition Law. In principle, any proposed concentration or transaction that reaches the notifying threshold must be filed and greenlit prior to its implementation (see Question 11).

13. How does the competition authority assess the impact of a transaction?

The significant competition-restraining impact or the ability to cause such impact is assessed on the basis of, inter alia, one or more of the following factors:[26]

  1. Combined market share of all economic concentration participants;
  2. Competitive advantages brought by the concentration; AND/OR
  3. Ability of an enterprise after concentration to determine prices and/or limit the competitiveness of other enterprises.

Therefore, when assessing the impact of a concentration under the new Law, the competition authority will take into account not only potential adverse effects of the concentration but also any possible benefits it may bring about.

Unfair Competitive Practices

14. What should be noted about unfair competitive practices?

Unfair competitive practices are defined as acts by an enterprise which contradict the principles of goodwill, honesty, commercial practice and other standards in business which cause or potentially cause loss and damage to the legitimate rights and interest of other enterprises.[27]

Under the New Competition Law, the scope of activities that constitute ‘unfair competitive practices’ remains broad and is not always apparent.

One notable prohibited practice is predatory pricing,[28] which is also listed as an abusive conduct. It is understood that this might be an oversight on the part of the lawmakers and, as a result, predatory pricing may be prosecuted under either regime. In practice, however, the competition authority may prefer prosecuting under the unfair competition provision given the relatively lighter burden of proof under this regime (e.g. the authority does not need to assess market power).


15. What are the legal consequences for breaching regulations on competition? Can the violators be criminally prosecuted?

As from the effective date of the Penal Code 2015 i.e. 01 January 2018, certain anti-competitive conducts are criminally prosecutable. In particular, entities which have combined market share of at least 30% and engage in an agreement either on, (i) price fixing, (ii) market allocation, or (iii) quota restriction, (iv) R&D restriction, or (v) imposing unrelated conditions, will be prosecuted. In addition, parties to an agreement on business restriction or excluding non-members from the market shall too be held criminally liable irrespective of their combined market share.[29]

In the worst-case scenario, corporates will be subject to a maximum fine of up to VND 5 billion (approx. USD 215,000), or a suspension of business up to 02 years, whilst individuals will be fined up to VND 3 billion (approx. USD 130,000) or imprisoned for up to 05 years.[30]

In respect of administrative sanctions, penalties applicable shall vary, depending on the type and the severity of the breach. In particular:[31]

[32]           The total turnover used herein refers to the total turnover of the respective violator in the fiscal year prior to the year of the cartel violation.
[33]           VND 200 million for individuals and VND 1 billion for commercial entities (approx. USD 8,600 and USD 46,000, respectively)

In addition to the aforementioned administrative sanctions, other supplementary penalties may apply depending on the nature and severity of the breach. They include, inter alia, confiscation of illegal gains and withdrawal of enterprise registration certificate.[34]

Transparency and Confidentiality

16. Does the competition authority publish its decisions? If so, which decision does it publish?

The National Competition Committee (“NCC”) does publicly announce most of its decisions, which include those on, inter alia, exemption for restrictive agreements, economic concentration, and dealing with competition cases, except for any content relating to State or trade secrets.[35]

Such decisions and the annual reports on operational results shall be published on NCC website.[36]

17. Is the NCC subject to any confidentiality obligation?

Yes. The NCC must keep confidential information relating to competition cases, trade secrets, identity of entities providing information and/or evidence during competition legal proceedings, as well as evaluation of economic concentrations.[37]

The new Law is notably silent on the confidentiality obligation in respect of leniency procedure. It is understood that the NCC shall nevertheless keep confidential the information, evidence and identity of whistle-blowers.

International Co-operation

18. Is there any international co-operation mechanism in place?

Yes. Given the widened scope of governance (see Questions 2 and 3), the NCC is expected to reinforce co-operation on, inter alia, consultation and information exchange with its overseas counterparts to crack down any potential cross-border infringements.[38]

[1] New Competition Law; Article 3.3
[2] New Competition Law; Article 1
[3] New Competition Law; Article 2
[4] New Competition Law; Article 3.4
[5] New Competition Law; Article 12.1
[6] New Competition Law; Article 112.1
[7] New Competition Law; Article 112.3 and Article 112.4
[8] New Competition Law; Article 112.5 and Article 112.7
[9] New Competition Law; Article 3.5
[10] New Competition Law; Article 24.1
[11] New Competition Law; Article 26.1
[12] New Competition Law; Article 27
[13] New Competition Law; Article 29.1
[14] New Competition Law; Article 29.2
[15] New Competition Law; Article 29.3
[16] New Competition Law; Article 29.4
[17] New Competition Law; Article 29.5
[18] New Competition Law; Article 30
[19] Competition Law 2004 No. 27/2004/QH11; Article 18
[20] Draft Decree; Article 2.1
[21] New Competition Law; Article 33.2
Draft Decree; Article 13.1
[22] New Competition Law; Article 33.3
[23] New Competition Law; Article 33.1
[24] New Competition Law; Article 44.1
[25] New Competition Law; Article 111.2
[26] New Competition Law; Article 31.1
[27] New Competition Law; Article 3.6
[28] New Competition Law; Article 45.6
[29] Penal Code 2015; Article 217.1
[30] Penal Code 2015; Article 217.2, Article 217.3, and Article 217.4(b)(c)
[31] New Competition Law; Article 111
[34] New Competition Law; Article 110.3
[35] New Competition Law; Article 104 and Article 105
[36] New Competition Law; Article 106 and Article 107
[37] New Competition Law; Article 40.2, Article 54.2, and Article 75.3
[38] New Competition Law; Article 108

By Dr Nguyen Anh Tuan – Partner and Mr Tran Hai Thinh – Associate

Disclaimer: This article is for informational purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For legal advice, please contact our Partners.

Promoting cross-border BOT partners

While build-operate-transfer transport projects are proving a moderate success, considerable controversies continue to revolve around them. Ngo Thanh Hai and Le Net, lawyers at LNT & Partners, give a thorough analysis on how attractive the investment model to foreign investors is and how Vietnam can learn experience from neighbouring countries in order to develop future successful projects.

Build-operate-transfer (BOT) investment in transport infrastructure started in Vietnam more than 20 years ago. As of 2016, 68 road traffic projects featured funding in the BOT form under the supervision of the Ministry of Transport (MoT), with total investment approximating VND208 trillion ($9.04 billion).

BOT investments, especially in transport infrastructure ventures, have contributed to the changing appearance of road traffic in Vietnam. While these projects are of only middling success, considerable problems abound. Excessive imposition of maintenance fees and unreasonable positioning of toll booths, amongst others, are major sources of conflict between users and investors.

The process destabilised the balance of the interests between the state, investors, and users. For example, the tolling policy of BOT projects has encountered fierce opposition from the public, as witnessed in BOT Ben Thuy 1 Bridge (Nghe An), Cau Rac BOT station (Ha Tinh), BOT Tan De (Thai Binh), Quan Hoa (Quang Binh) and the infamous BOT Cai Lay hotspot (Tien Giang). One thing these projects all have in common is that existing roads were renovated and some bypass routes erected, but there were relatively few new ones. Some experts maintained that BOT investment in traffic infrastructure should prioritise new road construction projects.

According to statistics issued by the Ministry of Planning and Investment, most of the current public-private partnership (PPP) projects in Vietnam selected investors via direct appointment. While public bidding is the preferred method in many countries, in Vietnam investors are often selected through direct appointment.  Investors participating in bidding when it does take place are further concerned about currency exchange, profitability, or a complicated bidding procedure.

Article 37 of Decree 63/2018/ND-CP states the selection of investor shall be carried out in accordance with the Law on Bidding. Accordingly, Article 22 of the Law on Bidding concerning direct appointments shall apply to certain cases such as urgent procurements with an aim to protecting national sovereignty, national borders, and islands. This condition is not specified in any other supporting legal documents and can thus be interpreted by the authority in different ways. The result is a reduction in competition and transparency in the selection of investors, an increase in potential wastage, and the risk of selecting substandard investors.

Another problem is that BOT projects in Vietnam, along with other PPP projects, are considered under the public procurement concept. Because of that, PPP projects involve countless bureaucracies. An example is BOT Vinh Tan 1, a $1.7 billion thermal power plant project. Its construction commenced in 2015 and was completed last year. But the project had been underway since 2007, and the negotiation process lasted from 2009 to 2012. The project also recently ran into the problem of generating excessive coal waste which has not been satisfactorily dealt with.

Another area in which the investor may face trouble is the interest of the loan, as interest rates between regulation and reality are different. According to Circular 75/2017/TT-BTC, the lending interest rate applied to the project is about 4 per cent lower than the actual lending rate of commercial banks. Specifically, the interest rate under Circular 75 is about 6.77 per cent, while the real interest rate is 10.83 per cent. This issue occurred due to the provision of Article 1 of Decree 75, in which interest rate calculated in the financial plan of PPP projects will not exceed 1.5 times the government bond interest rate.

In addition, to conduct transactions and transfer profits abroad, investors must resort to foreign currencies. However, since there is no clear commitment of the state guarantee on currency conversion, overseas investors would further refrain from BOT investment, according to Deputy Minister of Investment and Planning Vu Dai Thang.

A more effective BOT for Vietnam

The model of BOT transport projecst is crucial given the tight state budget, as numerous experts and management agencies have affirmed. The key to success lies in the ability of the state to select investors and appropriate management measures to ensure transparency and efficiency. If done well, not only will efficiency be improved and harmonisation of interests guaranteed, but much needed capital would also be attracted into different developing areas of the country.

Key success factors for PPP projects and BOT in particular are quality, time, and cost. Therefore, a PPP proposal will only be considered if there is a need for the project on the part of the government after taking into account the benefits as a whole in terms of several factors. These include socio-economic impacts; value for money and cost savings to the government; quick delivery of the project and service enhancement; and increased level of accountability, efficiency, and effectiveness.

The issues facing Vietnam were successfully dealt with in other countries many years ago. The success stories of BOT in other countries may be used as suitable benchmarks for Vietnam. For example, between 1999 and 2009 the government of South Korea offered guarantees to PPP toll road contractors under which government would, in various circumstances, make payments to the contractors if toll revenue fell below certain levels. On the other hand, the government would redeem the difference should the revenue exceed the upper limit.

This regulation may encourage private sector participation in PPPs, and BOT in particular.  However, this method may lead to higher fiscal risks for the government since it is difficult to estimate the costs and benefits.

A PPP structure applied in Malaysia (see chart).                    

The chart has shown that the PPP procedure is very simple: the competent authority is defined, the bidding procedure simple but effective.


Vietnam should emulate Malaysia’s simplified but effective PPP procedure. The bidding for BOT project should be transparent and must have a shortlist of three companies (for the first round) then the best among the finalists will be chosen to construct the BOT project. Lessons from the South Koreans could also be applied, so that investors could be encouraged by being guaranteed a guarantee on minimum revenue. On the other hand, the government may also retain the extras should the revenue exceed an upper limit.

To further attract international investors, the government needs to ensure that they are not prevented from exchanging their revenue into foreign currency. In addition, the government should not control the interest rate calculated in the financial plan of the PPP projects and share the interest risks with investors.

From the investors’ side, they should be contributing at least 30 per cent capital so as to secure their performance for the BOT venture. This guarantee must be sustained throughout the project. Besides, the investor must truthfully clarify the costs when bidding, with no double counting or bidding with false valuations (see graphic).

However, to make a transparent and simplified procedure it is of utmost importance to have a third independent auditor evaluate the budget of the project, so as to forecast the minimum revenue, or to cross-check with the budget proposed by the investor.

The audit should be conducted throughout the life-cycle of the BOT project – at the feasibility study stage, during construction, and at the time of completion, as well as regular audits during operation.

By Dr Le Net – Partner and Mr Ngo Thanh Hai – Associate

Disclaimer: This article is for informational purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For legal advice, please contact our Partners.

Readiness of Vietnamese labour force to CPTPP

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership is expected to have significant effects on the Vietnamese labour market in the months to come. Nguyen Thi Huong, lawyer at LNT & Partners – Leading Law Firm 2014 by Legal500 Asia Pacific – provide deep analysis into the issue, given a possible new investment inflow from member countries.

Vietnam is considered to be one of the attractive consumer markets in the region to investors from the agreement’s (CPTPP) member nations thanks to a population of about 100 million people, with 60 per cent of the young labour force, and increasing incomes.

Commitments in the CPTPP are at the core of reducing tariff barriers, implementing the principle of equality and freedom in trade, ensuring free movement of goods, services, capital and technology, facilitating trade and investment, and creating new opportunities for employees.

According to information from the World Trade Organisation, there are nearly 1,800 Japanese enterprises producing and doing business in Vietnam. This estimate continues to increase at a time when Vietnam has started to implement the CPTPP. Similarly, with trade promotion and also considering Canada as an important partner in the North American continent, Vietnam also expects a new wave of investment from Canada.

Investors from Australia, Singapore, and Malaysia have had a tradition of investing in Vietnam before, and as the CPTPP takes effect, capital from these investors will continue to pour into the country. With investment commitments and opening up stronger service markets, the CPTPP will boost investment flows from countries with little investment in Vietnam currently, such as New Zealand, Mexico, and Chile.

The agreement will bring new employment opportunities for Vietnamese labours too. On the other hand, the labour faces tough challenges as the CPTPP regulations take hold.

On the state management side, on January 20 the government issued Decision 121/QD-TTg approving the plan for implementing the CPTPP.

Accordingly, for commitments in labour, ministries and committees are providing training to officials of the state management agency regarding specific commitments involved in the CPTPP, ensuring that they understand correctly and thereby helping to enforce the agreement fully and effectively.

The legal system will be improved to adjust labour relations and labour standards in accordance with international standards, commitments and conventions. Furthermore, the Labour Code 2012 will be modified in accordance with the roadmap stipulated in the CPTPP.

Opportunities and challenges ahead

Based on the latest data of the Ministry of Labour, Invalids and Social Affairs’ (MoLISA) on the Vietnamese labour market, half of the labour force takes up jobs in agriculture. The number of labourers with diplomas and certificates only account for roughly one-fifth among the labour force. This means that the majority of Vietnam’s workforce is made up of unskilled workers.

Labour standards will be required to be higher due to equality legislation being one of the factors in implementing equality in trade.

By participating in the CPTPP, Vietnam has agreed to follow the commitments covered in Chapter 19 regarding labour. The agreement includes two requirements for the labour market; one involves the labour standards referred to the ILO issued in 1998, and the other one is on acceptable conditions of work.

The CPTPP contains specific requirements on labour rights and work conditions to ensure that the free flow of trade will contribute to sustainable development, and enable workers and businesses to enjoy their fair share of economic gains, according to the International Labour Organization (ILO).

Vietnam, as a member of the ILO, is bound to respect ILO standards, stipulated in the three core conventions related to the freedom of association, the right to collective bargaining, and the elimination of forced labour, child labour, and labour discrimination. However, Vietnam has yet to ratify the three core conventions. Since Chapter 19 on labour in the CPTTP is mainly based on the 1998 ILO Declaration, Vietnam is obliged to review and reform its law to adapt the new labour rights of employees.

Also, for the secondary requirements regarding acceptable conditions of work, Vietnam shall have to raise its current working standards for labourers. While this improvement of standards will help better protect labourers, it also leads to a rise in costs.

Low labour cost has always been one of the key factors that attracts FDI flow coming into Vietnam, as overseas investors still target labour-intensive industries that use unskilled workers at cheap cost. However, having to abide the CPTPP’s labour commitments, Vietnam will have to consequently raise its minimum wage, thus resulting in a race to the bottom in wages to attract foreign businesses. In order to preserve Vietnam’s position as a manufacturing hub, a shift in demand from unskilled workers to more qualified ones is inevitable.

For low-qualified workers, jobs that require unskilled employees or other entry-level jobs might be cut off significantly. Low-qualified workers have no choice but to either improve their skills, or remain out of the workforce.

For workers with skills, their situation is likely to remain unchanged with or without the labour commitments of Vietnam in the new agreement. This is because skilled workers are paid based on their working performance, unlike their low-skilled counterparts who have to rely on minimum wage.

Recruiting trends

As analysed above, commitments on labour in the CPTPP are equivocal and not quite open for foreign labour. Therefore, there is not much difference in the recruiting trend of international enterprises in Vietnam. With white-collar workers, enterprise shall recruit based on proficiency and talent of employees as usual.           

On the other hand, it is a matter of fact that there may be a slight increase in demand of blue-collar workers. In particular, the CPTPP creates tax incentives in the form of exemptions or reductions among members, which encourages a huge amount of foreign products to be imported into Vietnam, encouraging more foreign investors to head to Vietnam for the purpose of production or branch establishment. For the long term, regardless of the development in technology and science, overseas enterprises may recruit more workers than ever before.

Table: Some main indicators of the economy and labour market

Source: GSO (2016, 2017), Quarterly Labor-Employment Survey and Statistical Data.

GSO (2017), Report on Socio-economic Status quarter 3, 2017.(*) all-year data; (**) data of the first 6 months; (***) data of the first 9 months.

[1] Including: primary level, secondary level, college level, university level and higher

By Ms Vu Thi Thinh, Associate and Ms Vo Phuong Thao, Trainee

Disclaimer: This article is for informational purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For legal advice, please contact our Partners.

Managing the Relationship with Special Managers

Successful cooperation between a special manager and an acquirer requires the involved parties to know, name and manage this relationship.

A “special manager”

A “special manager” in this article means a key manager who formerly founded/ owned a company and, after selling most or all of their shares in the company, is retained by the buyer to continue working there as a key manager for an agreed period of time.

Warren Buffet once said, “You can’t make a good deal with a bad person”. Yet ironically, it is also often difficult for “too good” persons to make a good deal with each other, and this precisely describes the relationship between the acquirer and the special manager(s) they retain for the acquired business. The manager cannot be a “bad” person, at least in terms of talent, since they have built up a company successful enough to attract the acquirer. Similarly, neither can the acquirer be considered a “bad person” in that they have chosen to not only acquire the manager’s company but also to retain the manager for cooperation.

A special manager is special not only because of their talents, but also because of their legal status. Before selling their shares in their own company, they are the owner – employer. Subsequently, after selling the said shares, they may be perceived as being employed by the very company which they no longer own. The nature of the legal status would be more difficult to define if the manager sold only part of their shares, and stayed at the company – which they now co-owned with the acquirer – as a minority shareholder and concurrently its manager. The circumstance is too special that it is almost impossible to decidedly label the manager as an employee or not of the company.

But successful cooperation between the special manager and the acquirer requires the involved parties to know, name and manage this relationship.

What legal shirt should the relationship between a special manager and an acquirer be dressed in?

Basically there are two designs that a special manager could wear: an employment relationship shirt which is manifested as an employment agreement, or a service supplier shirt manifested as a management service agreement. In the former, the special manager is an employee, while in the latter, a service supplier. The laws of Vietnam permit the parties to freely decide which legal shirt they would like to put on.

For the manager, the role “employee” is self-explanatorily contrary to “employer”, and thus it would seemingly be more desirable for them to wear the shirt of a service supplier. In reality, however, most would prefer to choose an employment agreement, not a service agreement, to be the legal instrument governing their relationship with the company. Why then?

What’s in it for the special manager to be positioned as an “employee”?

Wearing the “employee” shirt may not sound desirable by name, but it brings an abundance of benefits and protection if the special manager works in Vietnam. If defined as “employment” the relationship will be governed exclusively by the laws of Vietnam, particularly by Vietnamese labor regulations which are infamous for their employee-friendly reputation, and further protected by the exclusive jurisdiction of the Courts, not arbitration.

Being an employee means the special manager will have access to the full social welfare benefit package, which consists of, for instance, annual paid leave, maternity leave (of 6 months), payment of social insurance and so on.

On the other hand, sanctioning an employee for breach of the employment agreement is required to undergo a tightly regulated procedure, often with the participation of employee-protecting agencies such as the trade union and the conciliation organ. Provisions on confidentiality and non-competition are fairly difficult to enforce because, inter alia, these terms may be deemed a violation of the employee’s freedom to choose their job and workplace. Should termination be the employer’s final recourse, termination of an employment contract, especially those with employees of high seniority, is often difficult if not impossible. By contrast, from where the special manager stands, unilateral termination is just a matter of prior notice.

What’s in it for the acquirer if the special manager wears the “service supplier” shirt?

It would be easier for the acquirer to manage the relation if the parties can agree that the special manager would wear the “service supplier” shirt. The legal relationship would now be governed by commercial, not labor, law, and can even be made subject to a foreign jurisdiction; employee related benefits can be cut; confidentiality and non-competition provisions should be contractually binding and enforceable; and termination of the relationship is to be freely agreed by and subject to negotiation between the contracting parties without interference from pro-employee regulations.

Is a win-win possible?

In many cases, the acquirer needs the special manager so much that the former must agree for the latter to wear the “employee” legal shirt. In such a case, how should the conflicting needs be balanced so as to bring about a win-win for both parties?

First, agreement on termination of the relationship should be set out in a separate agreement, with effective conditions and timing to be controlled by the acquirer. In addition, the managerial title of the special manager should be forested out not in the labor contract but in a separate appointment which can be revoked by the company.

Second, agreements on confidentiality and non-competition should in similar veins be set out in a separate agreement to be governed like any other civil transactions. This would pave the way for the argument that these agreements are not part and parcel of any labor contract but should be treated as independent agreements subject to the same legal regime and having the same enforceability as any other civil agreement.

Last, but of course not least, is to build up a cooperative, win-win culture for the relationship. As discussed thus far, the relationship between an acquirer and a special manager is neither purely of an employment nor a service supplier-recipient nature. In such a special relationship, in addition to trust and respect, it is the clarity on how the parties are to exercise their agreed respective powers, how they are to cooperate for their mutual benefits and terminate their relationship as agreed, that will be the most enforceable and efficient tool for making a good deal between “too good” persons.

By Mr. Bui Ngoc Hong – Partner, LNT & Partners

This article is featured in Asian-mena Counsel M&A Special Report.

Disclaimer: This article is for informational purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For legal advice, please contact our Partners.


Circular 02/2019/TT-BCT is the latest and most comprehensive regulation on wind power project development in Vietnam. Dr. Le Net, Mr. Le Thanh Hieu and Ms. Vo Phuong Thao, lawyers at LNT & Partners provide their analysis of the changes, specifically whether the changes made by Circular 02 will be sufficient to tackle market criticisms of past regulations and attract further investments in Vietnam’s wind energy market.

Vietnam has a golden combination for developing wind power projects. The country has a booming economy which fuels increasingly higher energy demand. It also has vast geographic advantages, with over 3.000 Km2 of coastline, a high yearly average windspeed of 6m/s, with some region reaching 8-9m/s a year.

Yet by June 2018, Vietnam only had 7 functional wind energy projects with total capacity of 190 MW, falling far short of the Country’s maximum potential. It is submitted that the three barriers to wind power projects in Vietnam, especially larger-scale projects are (1) overcapacity of electricity lines in key regions such as Ninh Thuan and Binh Thuan, (2) low power buying price affecting the financial viability of the projects, especially in comparison with other countries in the region, and (3) international non-bankability of the mandatory Model Power Purchase Agreement (Model PPA).

The Ministry of Industry and Trade aims to rectify these issues and attracted further investments with Circular 02/2019/TT-BCT (“Circular 02”) which entered into effect from 28 February 2019. Circular 02 is the latest regulation on the implementation and development of wind power project in Vietnam, replacing both Circular 32/2012/TT-BCT and Circular 06/2013/TT-BTC, previously the key Vietnamese regulations in this industry.

Under Section 3 Article 4 of Circular 02, The Ministry of Industry and Trade (“MOIT”) will firstly review the application for supplementation of wind power projects to the power development planning scheme. This review will be conducted after consultation with relevant Ministries and Sectors. After reviewing, the MOIT will send an official dispatch to the Provincial People’s Committee to request the Provincial People’s C­­­­ommittee to make necessary revisions and submit a complete application. The complete application will be appraised by the Electricity and Renewable Energy Authority, who will then subsequently submit documentation to the Minister of Industry and Trade for a final review of the Project.

The new procedure for supplementing wind power projects can be summarized as follows:

Figure 1. Procedure for supplementing wind power projects pursuant to Decree 02/2019/TT-BCT
(Source: Self-synthesis)

Additionally, the mandatory contents of the feasibility study report on wind power project have also been clearly set out.

Besides from the more detailed procedure, some key changes regarding the requirements and conditions for the operation of wind power projects are also include in Circular 02. Notably, this Circular no longer requires signing of the connection agreement as a perquisite condition to the construction of the wind power project. Instead, the condition for construction of wind power projects under Circular 02 only includes (1) the approval of application for the construction design and environmental, (2) the PPA and (3) financing documents, as conditions to the construction of the wind power project. In addition, productivity of wind farm (which shall not be lower than 90% in the expired Circular) is no longer the compulsory requirement under Circular 02. 

In exchange, some conditions have been tightened, that is land area for used is now limited to 0.35 ha/MW, which is remarkably lower than the previous threshold allowed by the expired Circular (0.5 ha/MW).

The procedural framework under Circular 02 has the advantage of being highly detailed, is much more specific and is in line with other sets of law (i.e. Law on Planning and Law on Investment). This should appeal to Investors, who are likely to appreciate the increased procedural clarity. 

Additionally, one of the main reasons slowing the growth of wind power projects in Vietnam is the overcapacity of electricity lines in key regions such as Ninh Thuan and Binh Thuan. Thus, Circular 02 no longer requires the signing of the connection agreement as a perquisite condition to the construction of the wind power project. In addition, the Government has recently approved MOIT’s proposal to speed up development of electricity line and power stations projects in key areas such as Ninh Thuan and Binh Thuan to release capacity of replaceable energy projects by 2020. It is believed that these measures will increase the speed by which wind power projects are approved and implemented.

Regarding the buying price, the power purchase price from wind power project under Circular 02 is 8.5 Uscents/kWh for onshore wind power projects and 9.6 Uscents/kWh for offshore projects. Circular 02 therefore maintained the same price under the recently enacted Decision No. 39/2018/QD-TTg. This buying price is still relatively low when compared to countries in the region such as Thailand (up to 20 Uscents/kWh) or Philippines (up to 29 cents/kWh).

Nevertheless, evidence shows that the pricing under Decision No. 39 and now Circular 02 have positively affected the market. In late January, early February 2019, the MOIT reported receiving at least 3 Project Supplementation Requests with over 1.000 MW in total planned capacity, notably the USA- Bac Lieu wind farm project with proposed capacity of 608 MW. Also, on 27 March 2018, the Enterprise Energy Group EE announced a $11.9 billion Ke Ga offshore wind farm with a total capacity of 3,400 megawatts (MW). The detailed proposal was already submitted to the MOIT and the project is estimated to start launching by the end of 2022.     

Finally, Circular 02 stipulated a substantially revised model Power Purchase Agreement (Model PPA). The PPA is a crucial to the bankability any power Project. The terms of the PPA are amongst the most crucial concerns of international lenders, as the PPA is the key document for securing payment streams for projects. Under Circular 02, use of the Model PPA is still mandatory required, and parties are still forbidden from making revisions which are contrary to the provisions of the Model PPA.

Previously, the Model PPA under Circular 32/2012/TT-BTC was widely accepted to be non-bankable internationally. Specifically, the Model PPA under Circular 32/2012/TT-BTC was was heavily criticised as failing to adequately allocate dispatch risk by not imposing a take-or-pay provision on the Purchaser. This risk arises most crucially where the purchaser cannot receive power due to a breakdown in the electricity grid, in which case the purchaser would not be bound to make payment.

Other key issues affecting the international bankability of the Model PPA under Circular 32 include (1) lack of protection for projects in the event that EVN, who is the sole purchaser under the PPA, terminates the agreement; (2) lack of provisions allocating politics-related force majeure events; (3) no freedom to choose dispute resolution method; and (4) Vietnamese law being the mandatory applicable law.

Representative of Thuan Binh Wind Power JSC., which owns Phu Lac wind farm, shared that the company currently has four wind power projects in operation. However, deadlocks have put three of them on hold, as one project does not have access to the national power grid resulting in ineffective operation, one project is financially foreclosed by lenders, and one project is in dispute between investor and contractor. Only Phu Lac project is in operation.

Meanwhile, wind power companies also have problems with guarantee mechanism. “Foreign organizations are willing to lend us, but requires a domestic bank to guarantee the loan, which means we have to pay the cost. This is extremely difficult for the wind power project which has to save every single dollar”- said Thuan Binh JSC’s representative.

The Model PPA under Circular 02 has not made any attempts to rectify these criticisms. Specifically, the new Model PPA still fails to (1) adequately allocate dispatch risk, still (2) lack any outstanding debt settlement mechanisms in events of termination by EVN; (3) it is still impossible to choose arbitration as the dispute resolution method; (4) and Vietnamese law is still mandatory governing law. It is therefore predicted that Circular 02 of Model PPA will still unlikely to be internationally bankable, unless some kind of guarantee mechanisms are in place, which can be difficult and costly to acquire.

In conclusion, the changes brought about by Circular 02 were generally positive. We especially welcome the new procedural framework and lessening burden on implementation of wind energy power project. Nevertheless, it cannot be understated that Circular 02 did not adequately deal with non-bankability of Model PPA, which we believe is a critical issue. Circular 02 alone is therefore an inadequate measure for wind energy project development in Vietnam to truly take off. However, when adding the efforts of the Government and EVN to construct more electricity transmission lines and power stations, and the reaction of Investors to the increased pricing, we believe that it is possible to expect that 2019 will be a year of positive developments in the wind power project industry.

By Dr Net Le, Mr Le Thanh Hieu, Ms Vo Phuong Thao – LNT & Partners

This article is featured in the April issue of the Vietnam Investment Review.

Disclaimer: This article is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For legal advice, please contact our Partners.

Recent changes regarding trading rights of Foreign Invested Enterprises


During the past eleven years, Decree 23/2007/ND-CP dated 12 February 2007 (“Decree 23”) has been found to be a barrier to the trading activities of foreign investors in the Vietnam market, especially in the retail industry.

Recently, the Vietnamese government has decided to replace Decree 23 with Decree 09/2018/ND-CP dated 15 January 2018 (“Decree 09”) which has brought significant changes, specifically eliminating a number of restrictions previously contained in Decree 23. Nevertheless, Decree 09’s scope of application has been extended to some other business sectors.

Specifying and expanding entities affected

Unlike under Decree 23, where the scope of application was amorphous because the authorities had ample opportunity to use their own discretion in its application (any foreign invested enterprise (“FIE”) regardless of foreign owned capital ratio or investment structure would have to comply), Decree 09 has provided clear instructions on the subject of application, including: (i) legal entities with direct investment from foreign investors, regardless of capital ratio; (ii) entities having at least 51% of their charter capital owned by other FIEs in which  foreign investors directly holds 51% or more of its charter capital, or a partnership that has a majority of partners who are foreign individuals.

Once the scope of application is defined, entities that want to be involved in the following trading activities would have to obtain a Business License, also known as Trading License for: (i) retail sale of goods; (ii) import and wholesale of lubricant products (oils and greases); (iii) logistics services, excluding those for which Vietnam has committed to open the market in international treaties (of which Vietnam is a member); (iv) goods leasing activities, excluding finance leasing and leasing construction equipment with operator; (v) trade promotion activities, excluding advertising; (vi) commercial intermediary activities; (vii) e-commerce services; and (viii) services for arranging tenders/bids for goods and services.

It appears that Decree 09 has extended the scope of application to other business sectors which were not previously governed under Decree 23, such as: goods leasing activities, e-commerce services and services for arranging tenders/bids for goods and services. Providers of the mentioned services are now required to obtain a Trading License, which requires approval from the Ministry of Industry and Trade (MOIT). This new requirement may affect the operations of many e-commerce platform services which are currently operating in Vietnam.

Barrier on trading rights is lifted

Despite the fact that the scope of Decree 09’s application has been extended to additional sectors, Decree 09 is welcomed for the removal of the requirement for a Trading License for the export, import, and wholesale distribution of many types of goods. In particular, only FIEs involved in the trading of lubricant products (i.e., oils and greases) are required to obtain a Trading License for import and wholesale.

As a result, beginning on January 15, 2018, FIEs are only required to add “import, export and wholesale distribution” functions to their IRCs and ERCs in order to conduct such business. Trading Licenses will not be required for FIEs as they were before for the same trading activities. However, FIEs of the same but wish to carry out retail distribution will have to follow the same license requirements under Decree 23.

FIEs involved in wholesale distribution have taken the removal of such requirements as excellent news. There is no longer a waiting period for a Trading License before shipping different products[1] and no more HS Code on items to be imported, with many more opportunities in the future.

Retail Outlet License and Economic Needs Test (“ENT”)

Each and every FIE who wishes to open any retail outlet, even the first one, have to obtain a Trading License and Retail Outlet License.

The economic needs test (ENT) required under Decree 23 is still applied for the second outlets and those after (Additional Retail Outlet) which: (i) have areas from 500 square meters; or (ii) are established outside shopping malls; or (iii) are categorized as minimarts or convenience store. This means investors in those cases will need to pass the ENT and obtain a Trading License and appropriate Retail Outlet License for each outlet to be established inside Vietnam.

Important highlights for owners of franchises

Decree 09 provides clearly that any outlet established under the same name or same trademark with another retail outlet in Vietnam owned by any other FIEs shall be treated as an Additional Retail Outlet and need Retail Outlet License for operation. As a result, the franchising model which is currently used by some giant retail chains or chain stores might have to pass ENT to obtain relevant Retail Outlet License.

The People’s Committee at the province level would be the authority that would consider whether an outlet passes an ENT or not. This means that for such outlets, the establishment application must be approved by the People’s Committee at the province level and the MOIT.

HS Codes in the Trading License

Another interesting point under Decree 09, which is critical to all importers, is the new template for Trading Licenses and Retail Outlet Licenses. According to the new template and guidance provided under the Decree 09, HS Code might not be included in the Licenses while previously it was clearly required in the template of the same. It means that the names of the trading products will be listed in the Licenses while the HS Code of the products might be no longer referred to in the Licenses.

During the past eleven years since the enactment of Decree 23, the HS Code has been an important factor slowing down the investment process due to the complexity caused by these codes (e.g., discrepancy in HS codes referred to for imported items between IRC, Trading License and documents prepared for customs clearance, lengthy codes in the IRCs of FIEs, different import duties to be applied, and many other issues). However, its removal at the beginning stage of the new Decree may also cause difficulties for FIEs because Customs and other authorities might challenge FIEs on their trading rights.

Listing the names of the goods might not be as convenient and accurate as using the HS Code. Even the DOIT has not reached consensus as to how to name the goods in the Trading License. The interpretation of it, unfortunately, is subject to the sole discretion of the DOIT, especially the officer in charge. As a consequence, this can cause inaccuracies. Take the example of a FIE that trades facial brushes. These brushes belong to HS Code 9603, which is described as “Brooms, brushes (including brushes constituting parts of machines, appliances or vehicles), hand-operated mechanical floor sweepers, not motorised, mops and feather dusters; prepared knots and tufts for broom or brush making; paint pads and rollers; squeegees (other than roller squeegees)”. If the officer in charge does not understand the business of the FIE, he/she might put the name of the goods as “brooms” instead of “brushes”. However, because the FIE sells brushes, not brooms, another relevant authority may challenge the FIE for not having the proper Trading License. The FIE might then have to apply to amend its Trading License to be in line with its actual business.

Therefore, at present, FIEs should be careful and clearly describe their goods when applying for Trading Licenses. More detailed guidance from the relevant authorities is essential to avoid problems regarding this advanced and evolving regulation.


In conclusion, Decree 09 does provide a better legal framework to resolve the ambiguous procedures for foreign investors and FIEs pertaining to trading and trade-related activities under Decree 23. However, as this Decree has just been issued, there might be challenges for both FIEs and licensing authorities to fully understand and implement in practice.

[1] Under Decree 23, Trading Licenses provide a list of products under their HS Code which are allowed to be imported into Vietnam for wholesale or retail distribution. If the entities wish to add new products to the list, the Trading License needs to be updated and the MoIT’s approval is required.

By Ms. Hoang Nguyen Ha Quyen – Partner, LNT & Partners

Disclaimer: This article is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For legal advice, please contact our Partners.

Understanding “Business Transfer”

Business transfer as a structuring tool — when, how and what to note.

When investing in a business in Vietnam, an investor may prefer to cherry-pick a specific part of the business rather than buying the entire company. In such cases, an asset acquisition may be the best choice — however, in special situations where a share transaction is more appropriate, the transaction needs to be structured as a share acquisition and accordingly a “business transfer” needs to be used.

A business transfer usually covers the transfer of the targeted business to a newly incorporated company (NewCo), so that NewCo will be transferred to the buyer. The transfer generally includes assets, employees, licences and on-going contracts.

Typically, a business transfer can be conducted via two steps.

  • Step 1: the seller establishes NewCo and transfers the targeted business to NewCo
  • Step 2: the buyer acquires share capital to own Newco, thus owning the targeted business

Although there can be some variations, the whole transaction can generally be illustrated as seen in the chart.



Business transfer — an efficient tool for investment
Why and when should investors use business transfer for their investment? By purpose, business transfer helps the buyer to cherry-pick only the asset they wish to acquire. Meanwhile, by nature, business transfer is a means to conduct the contemplated transaction by way of a share acquisition. The hybrid nature of business transfer brings all the pros and cons of an asset deal and a share deal, which makes it a useful structuring tool when a deal needs to take advantage of both asset deal and share deal structures.

Usually, business transfer should be a preferred tool to structure a deal when one or more of the following come into play:

  1. the targeted business is only part of a larger business that the buyer wouldn’t want to acquire entirely;
  2. the company originally owning the targeted business may raise concerns for the buyer about accumulated liabilities that may remain hidden or unacceptable to the buyer;
  3. the licences for engaging in the targeted business are under the name of a company, and accordingly the acquisition transaction must be in the form of a share acquisition deal, not an asset deal; or
  4. it isn’t justifiable for the purchase price to structure the deal purely as an asset acquisition deal, meanwhile a share acquisition deal can help make the purchase price justifiable.

Generally, a transaction by way of business transfer is often more complicated than a purely asset deal or purely share deal. However, when the above listed items become relevant concerns, business transfer may be a preferred solution. Knowing how to use business transfer is therefore necessary.

Some key points to note when consider whether or not to use business transfer
The first point to consider is the transferability of each asset comprising the targeted business. Under Vietnamese law, the transferability of some assets can be conditional or subject to permission or consent by the government or by a third party. For example, land use rights may be restricted from transferring; some licences are granted to a legal entity on the ground of some conditions which may not be met by Newco; some contracts are transferable only upon consent by third party. Transferability, depending on the particular asset, could be decisive when considering whether to use business transfer.

The second point to consider is whether or not the operation of the business to be transferred can be maintained uninterrupted. Transferring an on-going business can be like trying to dismantle and re-assemble the parts of a running engine. In this regard, transfer of existing contracts should be handled carefully.

The third point to consider is the time to be spent for conducting a business transfer. Depending on the specific business component to be transferred, the business transfer process could take a long time to complete. Typically, business transfer of the targeted licences or the like can be very time-consuming and may mean that the business transfer structure is undesirable.


The fourth point to consider is the possibility and arrangements for the potential buyer to control the business being transferred, so that any liabilities newly incurred are monitored and subject to being approved or otherwise controlled by the potential buyer. This control is very important in many aspects, especially to ensure that the objects being transferred comprise only those that are targeted, and any liabilities incurred during the time when the business transfer is conducted are accepted by the potential buyer.

The last key point to consider is the tax perspective. For example, if the company with the targeted business is incurring substantial losses that could be deducted by the buyer, or it currently enjoys a special tax incentive that is no longer obtainable by a company newly incorporated like NewCo, it could become undesirable to use business transfer. Further, tax arising from the acquisition transaction could be a concern as well. That is, in case the company owned by the seller’s sole business is the one to be transferred; accordingly, after the business is transferred, the transferring company will be liquidated. In this case, the seller may be subject to both corporate gains tax (on the purchase price) and individual gains tax (to the shareholder, if the shareholder is an individual), and may find business transfer undesirable.

Some technicalities to help investors conduct a business transfer
Conducting due diligence (DD)
When it turns out that a business transfer is to be used, the DD should focus on only the targeted business, which is to be reflected in a checklist. Accordingly, the existing company’s liabilities which shall not be the subject of the business transferred can be excluded from the DD scope.

In conducting the DD, the transferability — legal and practical — of each item of the targeted business should be verified. When transferability of an item in the targeted business is conditional, eg subject to another party’s consent, obtainment of such consent should be raised for possible solution. When re-issuance of some licences for continuing the targeted business require NewCo to meet some conditions, it should be confirmed that NewCo can meet the respective conditions.

Conducting the business transfer
The parties need to agree on how to implement the business transfer. The buyer needs to have the business transfer conducted so that all the targeted business is transferred properly. In case any desired assets are not transferred, that has to be taken into account, eg for possible price adjustment. Any liabilities incurred to NewCo should be monitored and controlled by the buyer.

Preparing transactional documents

With the investigation results from the DD, transactional documents will be prepared. These may include memoranda of understanding (MOU), master agreement, shareholders’ agreements and other agreements to implement the business transfer and to realise the contemplated transaction.

In an acquisition transaction that involves the use of business transfer, a master agreement should be deployed. The master agreement sets out the terms to conduct the deal, and especially the business transfer — by using many affiliate agreements. Examples of these affiliate agreements include real estate transfer agreement, intellectual property transfer agreement, assignment agreements for each on-going commercial contract and employment contracts such as termination minutes, and new employment agreements.

Special transaction terms: In addition to the standard terms, a transaction involving the use of business transfer may require the transactional documents to take into account the following:

  • The status and performance of the business to be acquired should be detailed. A list of assets, detailing tangible and intangible ones, commercial contracts, liabilities, employees, etc, with detailed status should be annexed to the purchase agreement.
  • Agreement on how the business transfer should be conducted should be set out. As mentioned, a deal using business transfer involves establishment of NewCo, transferring the targeted business from the selling company to NewCo. Accordingly, the method of transfer, the transfer procedures, the record of acquired assets to the NewCo’s accounting system need to be anticipated and agreed beforehand by the parties.
  • The buyer’s right to manage, monitor and check the status of business transfer should be set out. Frequently, the business keeps running during the transfer process and the acquisition. New inventories may be acquired, and new sale contracts and purchase contracts may be concluded. These events may affect receivables and payables of the targeted business. Transactional documents should provide appropriate mechanism to deal with those scenarios. The agreement may set certain rules applicable to the seller in operating NewCo, for example, (i) list of action requiring the buyer’s consent (eg change of NewCo’s charter capital, business lines, loan obtainment, change of management structure, etc); (ii) list of transactions to which NewCo being a contracting parties require the buyer’s consent (which can base on criteria of value or nature of transactions); (iii) agreement between the seller and the buyer so that persons appointed by the buyer will hold some managerial position in NewCo even before the closing.
  • As to purchase price, the transactional document should include a mechanism to evaluate the targeted business at the closing, with the applicable accounting standard rules to apply.
  • And, similar to any M&A deal, the transactional documents should record detailed arrangements on how the buyer can take over the business, including conducting necessary registration procedure, appointment of key managerial positions, decision-making rules, etc.


Some points to note in conducting the transfer of the targeted business

  • Asset transfer: In Vietnam, some types of assets require ownership registration, such as real estate, ships, vehicles, etc. When dealing with transferring these types of assets, it should be clear who is responsible for the registration.
  • Commercial contracts: Transfer of existing contracts to NewCo requires the consent of the contract counterparty. Negotiating a new agreement may result in the loss of attractive terms.
  • For supply contracts and customer contracts: there can be two options, signing new ones or having contracts assigned. In any case, the parties should agree on which obligation to be transferred, how to deal with payables and receivables, and whether NewCo or the buyer shall absorb such rights and obligations.
  • For lease agreement, deposit should be a concern. In practice, the lessor normally does not want to return the deposit. Therefore, the transferor and the transferee to the lease must agree on how to deal with such amount, eg whether this amount should be added to the purchase price.
  • Employment transfer: Basically, for conducting employment transfer, the selling company shall reach agreement with the employees to terminate the employment relationship, and at the same time, NewCo shall enter into new employment contracts with the employees. A note from practice is the termination agreement should include all severance payment amounts payable to the employees. Also, the selling company should have a good filing system to keep all relevant documents recording the fulfilment of its relevant obligations, including confirmation of employees on receiving the payment, no claims declaration.
  • Sublicences: Except for certain sublicences attached to assets and being confirmed transferable, NewCo/the seller needs to reobtain all required sublicences before starting running the business. In Vietnam practice, obtaining sublicences can be very time-consuming. This should be taken into account to avoid the situation where the company has to open without the required licences.

In summary, business transfer can help buyers to cherry-pick desirable assets, avoid liabilities and, when needed, make the purchase price justifiable. Offering all the advantages of both asset deal and share deal structures, a transaction by way of business transfer is often more complicated than a purely asset deal or purely share deal. When business transfer has to be deployed to get a deal through, nevertheless, the deal should be conducted with care, including utilisation of the dos and don’ts for a hybrid of share deal and asset deal, in an on-going business.

By Mr. Bui Ngoc Hong – Partner, LNT & Partners

Disclaimer: This article is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us at or visit the website: Http://

FIEs will have greater rights to import drugs into Vietnam

According to Decree No. 54/2017/ND-CP (the “New Decree”) guiding Pharmaceutical Law 2016 which took effect 1 July 2017, foreign pharmaceutical investors are allowed to import and sell drugs to local partners in Vietnam. This new regulation creates an excellent opportunity for foreign investors interested in Vietnam’s pharmaceutical market. 

Article 24 of Decree 79/2006/ND-CP guiding Pharmaceutical Law 2005 limited the right to import drugs to manufacturers and local partners (“LPs”):

“1. Drug-producing or wholesaling enterprises which have certificates of full satisfaction of drug business conditions and have drug warehouses up to good practice standards on drug preservation shall be permitted to import drugs according to the provisions of law on pharmacy, regulations of the Health Ministry, and relevant legal provisions.”

However, this restriction was removed when Pharmaceutical Law 2016 was issued and took effect on 1 January 2017 because the New Decree guiding this law specifies the importation right is now expanded to foreign invested enterprises (“FIEs”).

Article 33.1(b) of Pharmaceutical Law 2016 states a drug business establishment can import drugs if it has the following: a physical premises; a GSP warehouse for drug storage; storage equipment; vehicles to transport drugs; quality control systems; technical documents; and personnel that fulfill Good Storage Practice requirements.

Article 44.1(d) of Pharmaceutical Law 2016 and Article 91.10 of the New Decree provide that FIEs will have the right to import and sell drugs to local partners for distribution. Article 91.12 also states that FIEs that want to import and sell drugs to LPs must register their LPs with the Ministry of Health (“MOH”) before they begin selling, as well as when they terminate their contracts with the LPs. The MOH will publish the list of LPs eligible to purchase imported products from FIEs on the MOH’s website within three working days.

The New Decree’s regulations were promulgated pursuant to Vietnam’s WTO commitments and other treaties, such as the EU – Vietnam Free Trade Agreement (“EVFTA”). Specifically, Paragraph 1 of Article 14 EVFTA (Trading Rights) states that:

“1. Vietnam shall adopt and maintain in force appropriate legal instruments allowing foreign pharmaceutical companies to establish foreign-invested enterprises in order to perform importation of pharmaceuticals [emphasis added], which duly got the marketing authorization from Vietnam’s authority.”

All of this bodes well for Vietnam’s pharmaceutical sector. Vietnam’s pharmaceutical sector has shown high growth rates over the last few years. For instance, the value of imported pharmaceutical products in the first nine months of 2016 reached USD 1.9 billion, up 16.44% from the same period in 2015. FIEs are responsible for an estimated 15% of domestic pharmacy production[1]. These figures prove that Vietnam’s pharmaceutical business has potential market space for FIEs to take advantage of.

With the passing of new laws in a dynamic country of nearly 90 million citizens, Vietnam promises to be a fertile pharmaceutical market for FIEs’ investment.

By Net Le & Hai Ngo, LNT & Partners

Disclaimer: This article is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us at or visit the website: Http://

[1] Source:

A bold move by the Vietnamese Government in the field of solar power projects

The development of the power sector, while prioritizing the production of renewable energy sources, forms a crucial part of Vietnam’s National Power Development Plan. On the 11th of April 2017, the Vietnamese Prime Minister, by issuing Decision 11/2017/QD-TTg on the mechanism for encouraging the development of solar energy in Vietnam (“Decision 11”), formalized some of these objectives.

Solar power as a primary focus of the Vietnamese Government

Unlike other alternatives to fossil fuels, solar power is a type of renewable energy that is encouraged by the Government.

The development of alternative sources of energy first began with the National Master Plan for Power Development in 2011 when the Prime Minister issued Decision 1208/QD-TTg. With the implementation of Decision 11, solar energy has gradually become a priority among power sources.

Decision 11 provides regulations for solar power projects, including rooftop projects and grid-connected projects. Rooftop projects are solar power projects that have their solar panels mounted on the rooftop or integrated into the construction of a building. Rooftop projects are connected directly to the buyer’s power grid. Grid-connected projects are those solar power projects, other than rooftop projects, connected to either the national power grid or the buyer’s power grid.  Under Decision 11, only grid-connected projects must conform to the National Development Plan for Solar Power or to the Provincial Development Plan for Solar Power. The Ministry of Industry and Trade (the “MOIT”) develops the National Development Plan, and the Prime Minister approves it. On the other hand, the provincial-level People’s Committee establishes the Provincial Solar Power Development Plan, and the MOIT approves it. This is one of the first steps to prepare and implement a Solar Power project. The detailed procedure is described in a flowchart presented at the end of this article.

Decision 11 provides an important incentive to encourage the development of solar power projects. Decision 11 mandates that Vietnam Electricity (EVN) and its authorized subsidiaries must buy all the electricity produced by every Vietnamese solar power project. Furthermore, Decision 11 also puts forth some important provisions regarding the price of electricity. Decision 11 fixes the purchasing price at US$ 00.0935/kWh, equivalent to VND 2.086/kWh for grid-connected projects. This price was set according to the exchange rate between VND and USD announced by the State Bank of Vietnam on the 10th of April 2017. The MOIT will determine the price to sell electricity for each power purchase agreement based on the present exchange rate. With respect to rooftop projects, projects must be implemented using net-metering with two-way electricity meters. In a trading cycle, if the amount of electricity generated from rooftop projects is greater than the consumed amount, the surplus will be carried forward to the next trading cycle. Every year, the MOIT will announce prices for electricity produced by rooftop solar power for the following year based on the exchange rate on the last day of the year.

According to Decision 2256/QD-BCT (dated 12 March 2015) of the MOIT, EVN’s average electricity selling price was US$ 00.0714/kWh, equivalent to VND 1.622/kWh. Therefore, the price provided by Decision 11 is significantly higher.

In addition, Decision 11 also states that the MOIT will provide a template for power purchasing agreements. Those agreements will be limited to twenty years, but could be extended.

Other incentives to be clarified

Decision 11 also encourages the development of solar power projects by providing attractive incentives. Those incentives are related to: capital mobilization; import duties; the corporate income tax (“CIT”); and land acquisition and rent. However, most of these incentives are too general and should be clarified. This lack of clarity can be seen when examining each incentive individually.

First, regarding capital mobilization, Decision 11 merely states that organizations and individuals involved in the development of solar power projects may raise domestic and foreign capital to carry out solar power projects in accordance with effective law.

Second, regarding import duties, Decision 11 provides that with respect to goods imported as fixed assets, solar power projects are exempted from import duties. Besides that, with respect to other materials, components, and semi-finished products that cannot be manufactured domestically, the import duty incentives for solar power projects must be determined in accordance with the present provisions in the Law on Import and Export Duties.

Third, regarding CIT, Decision 11 provides that the CIT exemptions and reductions granted to solar power projects shall be the same as those granted to projects eligible for investment incentives in accordance with effective regulations.

Fourth, regarding land incentives, grid-connected solar power projects, transmission lines, and substations shall be eligible for exemptions from, or reductions on, land levies, land rents, and water surface rents. Those exemptions or reductions shall be in accordance with current regulations on investment incentives. Depending on plans approved by the competent authorities, the People’s Committees of the provinces shall facilitate land arrangements for investors to execute solar power projects. Provision of compensation and site clearance shall be carried out in accordance with effective land regulations.

Therefore, because most of Decision 11’s incentives refer to other laws and specific incentives are not mentioned, the above-mentioned solar power project incentives remain unclear.

In addition, Decision 11 produces a conflict in the use of terms used by previous laws and regulations dealing with investment incentives.  In fact, while Decision 2068/QD-TTg approving the development strategy of renewable energy stated that renewable energy includes solar energy, and Decree 118/2015/ND-CP on Guidelines for some articles of the Law on Investment (“Decree 118”) classifies solar power projects as a business line eligible for special investment incentives (rather than a business line eligible for investment incentives), Decision 11 considers solar energy projects as a business line eligible only for investment incentives. Thus, Decision 11 may limit the chances for solar energy projects to benefit from the incentives applied to business lines eligible for special investment incentives. For example, under Decree 118, if the solar power project is treated as a business line eligible for investment incentives, the investor is entitled to only a 25% reduction of the security deposit required for project implementation. However, if the solar power project is treated as a business line eligible for special investment incentives, the investor may be entitled to a 50% reduction of the security deposit required for project implementation.

The MOIT has drafted a circular related to the development of solar power projects. However, the draft circular does not clarify the incentives, including investment incentives.


Decision 11 is an innovative move by the Vietnamese Government to help it meet its international obligations under the 2015 United Nations Climate Change Conference. Vietnam’s issuance of this decision demonstrates Vietnam’s intention to develop its economy without compromising environmental protection. However, while Decision 11 is a big step in the right direction, some of its important provisions, especially regarding investment incentives, need to be further clarified (or even modified) in order to remove any sources of confusion or disincentives. Otherwise, Decision 11 might only be a symbolic gesture without real effect.

Process flowchart for the implementation of a solar power project

By Net Le, Thu Nguyen and Cuong Le, LNT & Partners

Disclaimer: This article is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us at or visit the website: Http://

New NPL resolutions will facilitate distressed assets transactions in Vietnam – opportunities to foreign investors?

Following the issuance of Civil Code 2015, banking regulations have been amended substantially in early 2017. Among these amendments, two are crucially important for bringing about improved conditions for credit institutions and their clients: 1) Circular No. 39/2016/TT-NHNN, which provides new regulations for lending transactions of credit institutions and/or foreign bank branches with clients (“Circular 39”); and 2) Resolution No. 42/2017/QH14 on Pilot treatment of bad debts of credit institutions (“Resolution 42”). These new regulations, together with the Civil Code 2015, will affect the practice of credit activities and can hopefully address existing issues.

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Regulation of credit activities under Circular 39

Circular 39’s enactment was a response to the criticism that Decision No. 1627/2001/QD-NHNN on the Regulations on lending by credit institutions to clients (“Decision 1627”) was outdated (it had been in effect for fifteen years). Circular 39’s amendments are discussed below.

Non-juridical borrowers

Prior to Circular 39, Decision 1627 recognized numerous individuals and groups as customers that had the legal capacity to borrow capital from credit institutions. Those individuals and groups included: both Vietnamese and foreign organizations and individuals; households; private enterprises; cooperative groups; partnerships; as well as other organizations. However, on the basis of the Civil Code 2015, Circular 39 now only recognizes borrowers as legal entities established and/or operated within the territory of Vietnam, Vietnamese individuals, and foreign nationals1. Accordingly, households, cooperative groups, and other non-juridical subjects are no longer eligible to borrow from banks. Instead, individuals, who are the owners of private enterprise and households, have the right to borrow money from the bank for their businesses’ capital needs.

Hierarchy of legal applications in credit activities

Before the enactment of Circular 39, there were eight different legal instruments that simultaneously governed credit activities, creating difficulties for credit applications. Circular 39 has corrected this problem by prescribing the hierarchy of legal applications in credit activities2. Specifically, credit activities must comply with the Law on Credit Institutions, Circular 39, and other relevant legislation. If particular documents of the Vietnamese Government, the Prime Minister, and the State Bank of Vietnam prescribe the application of Circular 39 or contents relating to lending operations that are not prescribed in particular documents, Circular 39 still applies. However, if the Government, Prime Minister, and the State Bank of Vietnam issue documents for specific lending operations, those documents will prevail. This provision clears up the issue of ambiguity in previous instruments.

Interest rate

Taking into account Articles 466 and 468 of the Civil Code 2015, as well as the Law on Credit institutions 2010, Circular 39 provides that credit institutions and their clients shall agree on loan interest rates based on several factors. One factor is supply and demand in the capital market. Another factor is the demand for loans. The third factor is the creditworthiness of clients.

One exception to this rule for interest rates is the application of a maximum interest rate for short-term loans for five priority sectors, which the State Banks’s Governor will decide from time to time3. However, the ceiling interest rate regulation is only applied to short-term VND loans for priority fields.

Regarding the interest rate charged on overdue paid interest, customers will pay late payment interest over the outstanding balance of late payment interest at the interest rate agreed to by the credit institution and customer (which cannot exceed 10% per annum). Where a debt has become delinquent, the client must pay interest on the outstanding amount of principal which is overdue. In that case, the interest rate cannot exceed 150% of the interest rate originally charged before the debt became delinquent.

New practical lending rules

Circular 39 makes efforts to include three additional types of loans that credit institutions recommended. These three loans are for crop season intervals, revolving loans, and rollover loans4. Circular 39 is the second legal document after Decree No. 55/2015/ND-CP to recognize loans for crop season intervals, thereby demonstrating the Government’s determination to encourage investment in rural and agricultural development. Revolving loans and rollover loans are common in other markets, and have been utilized frequently by foreign bank branches in Vietnam to satisfy the demand of enterprises with relatively low capital turnover for working capital. Since Circular 39’s enactment, the inclusions have been welcomed as they not only reflect actual credit practices, but also provide legal certainty for credit institutions and their clients.

With respect to the security of the loan, the Civil Code introduced two new measures of security for performance of civil obligations: title retention and a lien on property5. The 2005 Civil Code already recognized these measures, but not as means of security.

A lien on property is a security measure established by the law, under which the obligee in possession of assets, which are the subject of a bilateral contract, is entitled to retain the assets if the obligor fails to perform its obligations6.

Title retention is a security measure established through written agreements. In a sales contract, it allows the seller to retain ownership of property until the buyer pays the purchase price in full7. More importantly, title retention is not only effective between the contracting parties, but also against third parties. The new approach of the 2015 Civil Code better reflects the nature of these measures in accordance with international practice, and offers greater flexibility when choosing measures of security.

Circular 39 also imposes other rules for credit activities. For example, the calculation of the loan term has been modified. Previously, it started on the date on which the client began to receive the loan funds. It ended on the date on which the principal and interest were repaid in full as agreed in the credit contract between the credit institution and the client. Now, under Circular 39, the term begins on the day following the day when a credit institution begins to disburse the borrowed funds to a client. It ends on the day when the client has to repay the principal and interest amounts in full as agreed. If a loan term is not a full day, the provision enshrined in the Civil Code on the date of commencement of a term is applied8. With regard to fees, Circular 39 maintains most of the fee regulations related to lending activities. However, it adds a fee paid for a commitment to withdraw the borrowed funds9. This fee is in line with international practice, and allows credit institutions to avoid situations where the client refuses to withdraw the funds provided by the credit institutions under the loan agreement.

Settlement of bad debts under Resolution 42

Resolution 42 is expected to create legal certainty and resolve the inadequacies of the former regulations regarding the process of handling bad debts. Some notable components of Resolution 42 are the inclusion of a new method for handling bad debts and new approaches for dealing with collateral composed of land use rights, as well as assets attached to land, land formed in the future, and real estate projects.

Seizing collateral

The fact that Civil Code 2015 does not mention the seizing of collateral raised concerns for credit institutions, before Resolution 42 was released, that the drafters intentionally abandoned this method for handling collateral. However, Resolution 42 clarified Article 7, and creates the right to seize the borrowers’ collateral with detailed provisions10.

Resolution 42 lists several conditions for seizing collateral, specifically: (i) a case occurs that brings it under the scope of handling collateral under Article 299 of the Civil Code; (ii) the security agreement clearly indicates the right to seize the collateral; (iii) the transaction has been registered; (iv) the collateral is not in dispute; and (v) information regarding seizing assets has been published for at least 15 days (for real estate assets)11.

There are problems, however. First, the mortgagor can prevent the mortgagee’s seizure of collateral. The mortgagor can accomplish that simply by engaging in actions which put the collateral in dispute within fifteen days of the publication of information regarding the seizure. Another problem under this rule is that only credit institutions, organizations, and companies that trade and handle bad debts are allowed to seize the collateral, while others (such as debt collection services) receive no such authorization, and only to the extent that the seizure does not violate legal prohibitions12.

Collateral composed of land use rights, assets attached to land, assets attached to land formed in the future, and real estate projects

Resolution 42 gives certain rights regarding mortgages to buyers of debts that originated from credit institutions’ bad debts. For those bad debts with the secured assets of land use rights, assets attached to land, or assets attached to land formed in the future, the buyers now have the right to register and receive the mortgages on those assets as the security property of the debt purchased13.

Additionally, Resolution 42 allows credit institutions, foreign bank branches, and organizations that trade and handle bad debts, to transfer the bad debts’ collateral if they are comprised of real estate projects. The following conditions, however, must be met: (i) the project must have been approved by the competent authority; (ii) there is a decision on land allocation and land leasing from the competent authority; (iii) the project must not be in a dispute; and (iv) the project is not being seized to ensure the enforcement of judgments or to execute administrative decisions14.

These amendments have been long-awaited by credit institutions and debt dealers alike. Creating the right to seize collateral will help enhance the handling process for collateral. In addition, Resolution 42 will bring promising changes in regulating and finalizing the legal framework for handling bad debts in general.

Circular 39 took effect on the 15th of March 2017, while Resolution 42 goes into effect on the 15th of August 2017 and lasts for five years. While both go into effect this year, it may take some time to see the impact of these improvements in practice.

1Article 2.3 Circular 39.
2Article 5 Circular 39.
3Article 13.1, 13.2 Circular 39.
4Article 27 Circular 39.
5Article 292 Civil Code 2015.
6Article 346 Civil Code 2015.
7Article 331 Civil Code 2015.
8Article 2.8 Circular 39.
9Article 14.4 Circular 39.
10Article 7.1 Resolution 42.
11Article 7.2, 7.3, 7.4 Resolution 42.
12Article 7.6 Resolution 42.
13Article 9 Resolution 42.
14Article 10 Resolution 42.

By An Dao, LNT & Partners

Disclaimer: This article is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us at or visit the website: Http://

New banking and loan security regulations in Vietnam

Real estate projects generally demand a large amount of capital from investors, especially for housing projects. The majority of housing projects are implemented in urban areas, where land use taxes and site clearance expenses are extremely high. Thus, financing is considered the most important factor in the development and operation of real estate projects.

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In Vietnam, there are two mechanisms to finance real estate projects: mortgages and the sale of off-the-plan houses to customers. However, both options pose risks that investors, banks, and buyers are rightfully concerned about, especially in a country where the regulating legal system is not well-developed. Those risks became very real during the financial crisis earlier this decade, followed by the freezing of the real estate market. That freezing could be attributed to the dysfunction in the legal system for financing real estate projects. The laws and regulations have since been upgraded to eliminate that Achilles’s heel, but the implementation of such provisions is still proving challenging.

Mortgage of housing construction projects

A housing construction project can be wholly or partly mortgaged if the following documents are provided: the approved project’s documents and technical designs, and the certificates or decisions on land assignment and land leases from authorities. An investor can also mortgage off-the-plan residences in his/her project if the foundations of the residences have been completed and have not been previously mortgaged by the investor. Depending on their capital requirements, investors can choose the most appropriate option to finance their projects.

Investors do not necessarily need a Certificate of land use rights and ownership of houses and other land-attached assets (the “Certificate”) to mortgage their investment projects. Nevertheless, this is where potential risks appear. The laws and regulations do not provide any mechanism for banks to protect their rights in case the State recovers the land from the investors.  Pursuant to the Land Law 2014, the competent authority may seize the land if the land user fails to fulfill its financial obligations with the State. If that occurs, even if the banks take the secured assets to make up for the loan, there is not much to take because the land, which is the most crucial asset to a housing project, was already seized by the Government.

Mortgage of future acquired assets on land

The investor can also mortgage off-the-plan residences in his or her project. Circular 26 requires the mortgagor of the future acquired properties to register the mortgage at the competent authority (land registration offices and their branches). However, in order to register the mortgage, the dossier must include a Certificate. Therefore, the investor must complete all the financial obligations regarding the land. That includes paying site clearance expenses, as well as making rent payments and paying registration fees. After meeting those obligations, the investor is able to mortgage the off-the-plan residences for a loan.

Recently, some provincial Departments of Natural Resources and Environment have published lists of mortgaged real estate projects registered in their localities. These actions are motivated by The Harmony residence’s incident, where nearly 600 people are at risk of losing their apartments, because the investor has mortgaged all the land and the future acquired assets on land since 2012. In 2016, only after the bank announced its intention to seize the residence for recovery of the investor’s loan, was the truth revealed to the residents.

Currently, in order to protect the consumers, lists of mortgaged projects are being announced by the authorities. Only projects which have been granted Certificates may register their mortgages, which led to the announcement of mortgaged projects. However, from the perspective of the investors affected, the announcement of their mortgaged projects could adversely impact potential sales because the projects have to be free of the mortgages (or parts of the mortgage) before selling any off-the-plan residences.

There are two disadvantages for investors if they choose to mortgage off-the-plan residences. The first one is that they need to obtain a Certificate, which means they have already spent a large amount of money for site clearance and land rental. The second disadvantage is the public announcement of mortgaged projects, which could make customers hesitant to purchase units. Based on these factors, investors tend to choose the first mechanism (mortgaging the housing project or a part of the project for a loan). In fact, only 10% of projects in large cities such as Hanoi or Ho Chi Minh City are registered for mortgages at the authority. For example, in Ho Chi Minh City in 2016, only seventy-seven of 600 projects had their mortgages registered. The majority of housing projects must be de facto financed from banks’ loans with secured properties. Therefore, the remaining projects are likely to have mortgages over their construction projects, but not over land use rights, or future acquired assets on land. Accordingly, the investors were not required to register the secured transactions.

Bank guarantee

Article 55 of the Law on Real Property Trading stipulates that investors, in order to sell off- the-plan houses to buyers, must obtain guarantees by commercial banks in case the investors fail to transfer the buildings on schedule as committed. Article 55 creates two issues:

  • For residential megaprojects, there is a question as to which bank will make the guarantee. For example, Royal City, a VinGroup real estate project in Hanoi, has a total investment capital of 18,000 billion VND, equivalent to 700 million US dollars. That amount surpasses the charter capital of thirty of thirty-three banks listed by the State Bank of Vietnam which are eligible to provide bank guarantees for housing construction projects;
  • The banks will only issue guarantees if the investors have assets with sufficient value to secure their obligations. The investors that already spent millions of dollars on construction may not be able to meet those requirements.

Due to the above obstacles, there are those who would rather violate the laws and run away with the consumers’ money when the project is not feasible anymore. In the end, the consumers are the ones who suffer.


Real estate project finance is a complex legal field that needs to be more fully developed, even though Vietnamese legislators and executive bodies have already made great efforts to do so. Sometimes, the law benefits investors, but creates great risks for banks and customers. And sometimes the exact opposite is true. Finally, some legal requirements appear impossible to meet, creating pressure to meet them through inappropriate responses, such as violating the law.

By Quang Le and Kim-Cuong Le, LNT & Partners

Disclaimer: This article is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us at or visit the website: Http://

Legal Update on Real Estate Law in Quarter 1 of 2017

Change in Land Rental in Economic Zones

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The Government has recently issued Decree No. 35/2017/NĐ-CP dated 3 April 2017 providing regulations on collection of land use fee, rental of land surface and water surface in economic zones and hi-tech parks (Decree 35).

As from 20 June 2017, the collection of land use fee and land rental in economic zones shall be no longer governed by Decree No.45/2014/ND-CP providing regulations on collection of land use fee (Decree 45) and Decree No. 46/2014/ND-CP providing regulations on collection of rental of land surface and water surface (Decree 46) but in accordance with Decree 35 with the highlighted points for the investors as follows:

  • The percentage for calculating land rent unit price in case of annual payment shall be from 0.5% to 3% subject to specific area or route corresponding to the investment and publicly announced annually.
  • The land rental is determined with land price adjustment coefficients. Subject to the specific area, route and location of the land corresponding to the land use purpose, the Provincial People’s Committee shall issue the land price adjustment coefficients annually with the minimum rate at 1.0 applicable from 1 January each year.
  • The land use for development of social housing for employees in accordance with approved projects shall be subject to land use fee exemption. The developer must conduct the administrative procedure for the exemption in this regard.

Land price adjustment coefficients applicable from 1st January 2017 in Ho Chi Minh City

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On 23 March 2017, the People’s Committee of Ho Chi Minh City has just issued Decision No. 19/2017/QD-UBND providing the land price correction coefficient applied in 2017 in Ho Chi Minh City (Decision 19). The outstanding application for determining the land use fee or land rental in Ho Chi Minh City from 1 January 2017 shall be subject to the regulations of Decision 19.

The coefficients are applied for determining (i) the annual land rental for the first period; (ii) the adjustment to unit price of annual land rental for the following period and (iii) the unit price for annual land rental in case of acquiring the assets attached to land shall be from 1.0 to 2.0. In which, the land used for development of residential housing for leasing shall be subject to the maximum coefficient of 2.0 corresponding to the location of the project.

The coefficients applied for determining (i) the land use fee without land use right auction or in case of conversion of land use purpose, (ii) the one-off payment of land rental without land use right auction and (iii) the unit price of land rental in case of changing from leasing with annual rental to leasing with one-off payment for land rental shall be from 1.2 to 2.0 subject to the location of the project.

The land price adjustment coefficients mentioned above can be higher subject to the location with more than two (02) road fronts and the land use ratio.

The Ministry of Construction requesting the issuance of regulations on the condotel and officetel

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“Condotel” and “Officetel” have been new types of real estate development in Ho Chi Minh City since 2008.  In recent years, these kinds of real estate developments become more popular in the real estate market, particularly condotel type is more applied in coastal and tourist cities like Nha Trang, Da Nang, or Vung Tau. However, despite its popularity and more transactions on the properties, regulations or guidance from the competent authorities on the investment and management of the condotel and officetel are still unclear and confusing, and therefore potentially risky to the buyers as well.

For example, the concept of “officetel” describes apartments in residential buildings which may be used for both residential and office purpose. However, the Law on Residential Housing as well as guidance from the Ministry of Construction prohibits using residential apartments for office use. Furthermore, the guidance from the Ministry of Planning and Investment does not allow using residential apartments for business registration either.  Another legal issue to these kinds of properties is how to properly recognize the ownership to the properties because, in the Land Law, land use right duration for commercial purpose is 50 years and indefinite term for residential purpose.

Recently, the Ministry of Construction has given instructions and responses that (i) the regulations on condominiums are applied for the condotel/officetel with function as residential housing and (ii) the regulations on hotel are applied for the condotel/officetel without function as residential housing. This is actually confusing to the owners as well.

Therefore, the Ministry of Construction (MoC) recently had Dispatch No.381/BXD-QLN dated 28 April 2017 for report and proposal of the issues in relation to the management of condotel, officetel, or  resort projects to the competent Deputy Prime Minister for decision.

In which, MoC proposed (i) the amendment to law on land with respect to the classification and the usage of mixed use land (for both residential and commercial purposes) and issuance of the certificate of land use right, ownership of residential housing and other assets attached to land in this regard and (ii) clarification of the financial obligation for such mixed use land and (iii) the regulations on the management of the condotel and officetel.

The issuance of regulations in respect of condotel and officetel mentioned above will provide detailed legal framework for the development and management of condotel and officetel projects. Accordingly, (i) the investors will have firm legal basis for development and management of condotel and offictel and (ii) the buyers will have basis for considering their investment in the business model of condotel and officetel.

New model real estate business – Hometel

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Besides the officetel and office which become popular in real estate market, “hometel” is a new concept of tourism real estate just launched in the beginning of 2017. Hometel is the combination of “home” and “hotel” function.  Similar to condotel, hometel is fitted out and operated with the luxury standards as hotel under the management of a hotel operator.

However, hometel has some features different from condotel, typically (i) the homebuyers shall have an indefinite-term ownership of hometel with the certificate of land use right, ownership of residential housing and other assets attached to land and (ii) the homebuyers can decide the leasing program of the hometel without sharing profit with the developer, it means that the homebuyers will directly deal with the hotel operator for the operation and maintenance of standard of the hometel as hotel.

From legal perspective, (i) hometel must be constructed on residential land for the indefinite-term ownership; (ii) the development of hometel project must be in accordance with Law on Residential Housing because hometel is classified as residential housing and (iii) the construction of hometel must be in accordance with regulations on construction of residential housing under Law on Construction.

The management and operation of hometel is not clear to be treated as a condominium or not. As a residential housing, the hometel should be managed as a condominium with the organization of the Management Committee as required by laws.

However, the hometel must be operated and maintained with hotel standard which must be managed by a hotel operator. In case the management of hometel must be in accordance with regulations on management of condominium, the Management Committee must deal with the hotel operator for ensuring the standards applied to the hometel buiding as a hotel.

In addition, there should be amendments to Law on Land in relation to the classification of the land on which the hometel project located. Similar to the land used for developing condotel project, the land in this regard should be residential land without establishment of residential area.

As such, due to lack of legal grounds for such properties, the owners’ use right and ownership rights over these properties may be potentially restricted (for example, in terms of use duration or use functions).  This cannot be resolved in near future since amendments to several laws are required as well.

Disclaimer: This legal update does not constitute and should not be taken as a legal advice for a matter. For more information and clarification, please contact Mr. Tran Thai Binh, Partner of LNT & Partners, Head of Real Estate Practice Group via email: or his cell phone: 84-913629191.

Thoái vốn nhà nước: cần chọn “bà đỡ” tốt để thành công

Trong năm 2016, không ít đợt thoái vốn nhà nước tại các doanh nghiệp bị “ế”, phải bán nhiều lần. Tình trạng “ế” cổ phần tiếp tục diễn ra trong một số phiên bán đấu giá kể từ đầu năm năm 2017 đến nay. Để cải thiện tình trạng này, Báo Đầu tư Chứng khoán giới thiệu góc nhìn của ông Ngô Thanh Hải, Công ty Luật LNT và Thành viên.

Thoái vốn nhà nước: cần chọn “bà đỡ” tốt để thành công

Ngày 12/12/2016, Tổng công ty Đầu tư và Kinh doanh vốn nhà nước (SCIC) đã chào bán 130,6 triệu cổ phiếu VNM, tương đương 9% vốn điều lệ của Vinamilk. Kết thúc phiên bán đấu giá, SCIC bán được 78,4 triệu cổ phiếu cho Tập đoàn F&N, tương ứng khoảng 60% số lượng cổ phiếu chào bán. Về việc thoái vốn nhà nước, người viết cho rằng, cần phải được thực hiện một cách cấp bách và hiệu quả hơn vì trên thực tế, sự vững mạnh của nền kinh tế thường dựa vào khu vực kinh tế tư nhân.

Ngày 12/12/2016, Tổng công ty Đầu tư và Kinh doanh vốn nhà nước (SCIC) đã chào bán 130,6 triệu cổ phiếu VNM, tương đương 9% vốn điều lệ của Vinamilk. Kết thúc phiên bán đấu giá, SCIC bán được 78,4 triệu cổ phiếu cho Tập đoàn F&N của Singapore, tương ứng khoảng 60% số lượng cổ phiếu chào bán.

Về việc thoái vốn nhà nước, người viết cho rằng, cần phải được thực hiện một cách cấp bách và hiệu quả hơn vì trên thực tế, sự vững mạnh của nền kinh tế thường dựa vào khu vực kinh tế tư nhân. Có thể xem xét quá trình thoái vốn của Casino Group tại Big C Việt Nam, dù đây là thương vụ thoái vốn không liên quan đến bất kỳ vốn nhà nước nào nhưng cách thức và hiệu quả của nó rất đáng được quan tâm.

Casino Group đã mở ra ba đợt đấu thầu thu hút được nhiều “gã khổng lồ” của ngành bán lẻ, đợt đầu tiên có sự tham gia của Lotte (Hàn Quốc), Aeon (Nhật Bản), Central Group, BJC (Thái Lan) và cả những tên tuổi lớn trong nước như Masan Group, Saigon Co.op… Tuy nhiên, chỉ có số ít những nhà đầu tư kể trên được tham gia vào vòng tiếp theo. Và cuối cùng, chỉ còn hai nhà đầu tư là Saigon Co.op và Central Group. Việc giữ hai đối tác có khả năng mua đến phút cuối cho phép bên bán có thể chủ động lựa chọn, xem xét năng lực của đối tác nào có đủ khả năng mua được trọn vẹn tất cả chuỗi cửa hàng bán lẻ của Big C Việt Nam với mức giá tốt nhất. Kết quả đạt được vượt trên cả mong đợi, Central Group đã mua với mức giá 1,1 tỷ USD, so với mức 880 triệu USD ban đầu mà bên bán kỳ vọng.

Có thể thấy, lý do chính dẫn đến thành công trong thương vụ thoái vốn tại Big C Việt Nam là bên bán đã thu hút được sự quan tâm của nhiều nhà đầu tư cùng với cơ chế đấu thầu minh bạch, cho phép các tập đoàn lớn được tiếp cận và có thời gian để tiến hành điều tra cẩn trọng một cách chi tiết để đưa ra mức chào cạnh tranh.

Trong khi đó, cách tiếp cận của bên bán trong thương vụ thoái vốn tại Vinamilk không đi theo con đường đấu thầu theo kiểu M&A (mua bán – sáp nhập), rõ ràng nhất có thể thấy là bên mua không có nhiều thời gian để thẩm định pháp lý, tài chính, hoặc kiểm tra lại kết quả thẩm định mà bên bán đã chuẩn bị. Một điều gần như chắc chắn là không có nhà đầu tư nào dám liều lĩnh mua lại phần vốn của một công ty khác mà không có thời gian để tìm hiểu, nghiên cứu kỹ về tình hình sản xuất – kinh doanh, tình trạng pháp lý và tài chính của công ty đó.

Vì thế, người viết cho rằng, bí quyết thành công của thoái vốn nhà nước tại các doanh nghiệp nằm ở chỗ: chọn được đơn vị tư vấn M&A quốc tế để có thể đấu thầu một cách công khai, minh bạch, đồng thời chuẩn bị kỹ hồ sơ pháp lý trước khi chào bán; bên bán cần có thời gian để chuẩn bị thẩm định pháp lý, tài chính công ty trước và bên mua cần có thời gian để kiểm tra kết quả thẩm định của bên bán, hoặc ngược lại.

Về việc “ế” hơn 52 triệu cổ phần Vinamilk trong phiên bán đấu giá ngày 12/12/2016, ông Đặng Quyết Tiến, Phó cục trưởng Cục Tài chính doanh nghiệp, Bộ Tài chính lý giải nguyên nhân là do thời gian thực hiện việc bán vốn gấp gáp, kế hoạch được duyệt tháng 9/2016, tới tháng 12/2016 đã tổ chức bán. Trong khi đó, tháng 12, nhà đầu tư nước ngoài thường thực hiện tất toán để nghỉ Tết. Ngoài ra, trước khi công bố giá khởi điểm là 144.000 đồng/cổ phiếu thì giá cổ phiếu Vinamilk trên thị trường ở mức cao, nhưng tại thời điểm tổ chức bán đấu giá lại giảm (đóng cửa phiên giao dịch ở mức 133.700 đồng/CP).

Nguồn: Báo Đầu tư chứng khoán

Dự án PetroVietnam Landmark – Luật sư Trần Thái Bình: “PVC Land khó xảy ra phá sản”

Liên quan đến dự án PetroVietnam Landmark vừa bị TAND TP.HCM công bố mở thủ tục phá sản đối với chủ đầu tư là Công ty Cổ phần Bất động sản Xây lắp Dầu khí Việt Nam (PVC Land), phóng viên Báo Người Tiêu Dùng đã có cuộc trao đổi với Luật sư Trần Thái Bình, Công ty Luật LNT & Partner, để làm rõ vấn đề này.


PV: Ngày 24/2, TAND TP.HCM đã ban hành Quyết định 52/201/QĐ-MTTPS mở thủ tục phá sản đối với chủ đầu tư dự án PetroVietnam Landmark. Ông đánh giá thế nào về khả năng phá sản trong trường hợp này?

Luật sư Trần Thái Bình:

Theo Luật Phá sản 2014, sau khi ra quyết định mở thủ tục phá sản, thì thẩm phán sẽ chỉ định quản tài viên, tập hợp các “chủ nợ” (người có quyền đòi nợ đối với PVC Land), triệu tập cuộc họp các chủ nợ. Nếu hội nghị các chủ nợ đồng ý cho doanh nghiệp một thời gian để phục hồi hoạt động kinh doanh, nhằm cải thiện tình hình tài chính và trả nợ cho các chủ nợ, thì PVC Land có cơ hội được tiếp tục kinh doanh.

Nếu sau một thời gian mà PVC Land không cải thiện tình hình, thì các chủ nợ sẽ tiếp tục thủ tục phá sản. Các tài sản còn lại của PVC Land sẽ được tòa án và quản tài viên thanh lý nhằm thanh toán cho các chủ nợ. Việc thanh toán theo thứ tự ưu tiên: Nợ tiền lương đối với người lao động, nghĩa vụ tài chính với cơ quan thuế hay Nhà nước, các khoản nợ có bảo đảm và nợ không có bảo đảm.

Theo đánh giá của tôi, thì có khả năng PVC Land đang đề nghị xem xét lại quyết định mở thủ tục phá sản vì ngoài dự án này thì họ cũng đang thực hiện một số dự án khác. Ngoài ra, họ là doanh nghiệp có vốn của PetroVietnam, nên khó có thể để xảy ra việc phá sản. Rất có thể họ sẽ dàn xếp thanh toán nợ với những đương đơn phá sản để rút lại đề nghị phá sản. Về phần PVC Land, họ có thể đề nghị TAND hay VKSND xem xét kháng nghị quyết định phá sản. Một tổ thẩm phán gồm 3 người sẽ xem xét việc kháng nghị này. Tuy nhiên, nếu họ thực sự lâm vào tình cảnh mất khả năng thanh toán, thì việc đề nghị này cũng vô ích.

PV: Trong trường hợp xảy ra phá sản thì tài sản là dự án PetroVietnam Landmark sẽ được xử lý như thế nào?

Luật sư Trần Thái Bình:

Nếu tòa tuyên bố phá sản đối với PVC Land, hoạt động của công ty sẽ bị chấm dứt. Mọi giao dịch liên quan đến công ty bị đình chỉ. Các tài sản còn lại của công ty sẽ được thanh lý bán đấu giá để trả nợ.

Khách hàng mua nhà có tên trong danh sách chủ nợ được xem là chủ nợ không có bảo đảm và sẽ được thanh toán nợ từ tiền thu được sau khi thanh lý bán đấu giá tài sản theo thứ tự phân chia như đã trình bày phía trên. Nếu giá trị tài sản không đủ để thanh toán toàn bộ số nợ thì khách hàng sẽ được thanh toán theo tỷ lệ phần trăm tương ứng với số nợ.

Đối với các khách hàng mà chủ đầu tư đã bàn giao căn hộ theo hợp đồng mua bán nhà thì theo tôi quyền sở hữu của người mua nhà đối với các căn hộ này đã được thiết lập, nên khi kê biên tòa nhà hay các tài sản của PVC Land, tòa án sẽ loại các căn hộ đó ra.

PV: Những khách hàng đã mua căn hộ tại dự án PetroVietnam Landmark nên làm gì để tránh thiệt hại tối đa vào lúc này?

Luật sư Trần Thái Bình:

Khi tòa án thông báo quyết định mở thủ tục phá sản đối với doanh nghiệp này, những khách hàng chưa được giao căn hộ nên liên hệ với tòa án, xuất trình những chứng cứ để chứng minh quyền lợi của mình như tư cách chủ nợ của PVC Land để được đưa vào danh sách chủ nợ nhằm giải quyết quyền lợi của mình về sau.

Khi đã được đưa vào danh sách chủ nợ, người mua có quyền tham gia hội nghị chủ nợ. Tại đây, người mua với tư cách là chủ nợ không có bảo đảm sẽ được thảo luận, trình bày những vấn đề cụ thể, yêu cầu giải quyết, lý do mục đích của việc yêu cầu giải quyết phá sản và ra một trong các quyết định như: Đề nghị đình chỉ giải quyết yêu cầu mở thủ tục phá sản nếu PVC Land không mất khả năng thanh toán; đề nghị áp dụng biện pháp phục hồi hoạt động kinh doanh của PVC Land và đề nghị tuyên bố phá sản.


Đối với những khách hàng mua nhà không gửi giấy đòi nợ và không có tên trong danh sách chủ nợ sẽ mất quyền yêu cầu thanh toán đối với PVC Land.

PV: Lời khuyên của luật sư dành cho những người mua nhà để tránh trường hợp tương tự?

Luật sư Trần Thái Bình:

Thực ra, Luật Nhà ở 2015 đã phần nào khắc phục và bảo vệ quyền lợi cho người mua, là bên có vị thế yếu hơn trong giao dịch. Chẳng hạn, Luật Nhà ở quy định chủ đầu tư chỉ được phép thu tiền sau khi đã xây xong phần móng và việc thu tiền phải phù hợp theo tiến độ xây dựng; phải có ngân hàng bảo lãnh thanh toán cho dự án và theo đó nếu chủ đầu tư không giao nhà theo đúng tiến độ thì người mua có quyền đòi tiền thanh toán lại từ ngân hàng bảo lãnh; trước khi tiến hành bán nhà, chủ đầu tư phải thông báo với Sở Xây dựng về việc đủ điều kiện để bán nhà, thu tiền từ khách hàng; chủ đầu tư không được bán các căn hộ đang được thế chấp…

Nói chung, các quy định này rất chặt chẽ và bảo vệ quyền lợi cho người mua. Tuy nhiên, thực tế ở vị thế người mua cũng khó kiểm chứng các thông tin về chủ đầu tư, về dự án, hay việc chấp hành pháp luật của chủ đầu tư.

Thế nên, để tránh tình trạng như PetroVietnam Landmark, các cơ quan chức năng nên tăng cường việc chấp hành pháp luật của các chủ đầu tư đối với việc bán nhà. Ngoài ra, nên có hệ thống thông tin tại cơ quan chức năng về dự án nhà ở như tình hình thế chấp, đã đủ điều kiện bán nhà không và người mua có thể tiếp cận đối với các thông tin này theo cơ chế trả phí chẳng hạn.

Theo tôi, cơ quan chức năng chỉ cần thực hiện đúng theo chức năng quản lý quy định tại Luật Nhà ở hiện nay thì người mua đã có thông tin và tránh nhiều rủi ro lắm rồi.

Còn nếu khách hàng mua nhà từ các dự án thực hiện trước Luật Nhà ở 2015, mà đến nay vẫn chưa được nhận nhà, thì khả năng chủ đầu tư chậm bàn giao hay có vấn đề là rất cao. Người mua nhà nên có đề nghị đến cơ quan quản lý chức năng tăng cường giám sát và kiểm tra đối với các dự án này, như vậy có thể khắc phục tình trạng chậm trễ đó.

Tạm dừng phong tỏa

PVC Land cho hay Chi cục Thi hành án dân sự Q.2 đã có quyết định tạm dừng việc phong tỏa dự án này vì chủ đầu tư đã có động thái trả lời và chứng minh được dự án vẫn đang xây dựng.

Theo đó, PVC Land có quyền sử dụng trở lại đối với 15.000 m2 đất của dự án cao ốc thương mại dịch vụ PetroVietnam Landmark bao gồm diện tích đất ở, đất công trình công cộng có kinh doanh, đất công viên cây xanh, giao thông, sân bãi, mặt nước.

Với quyết định này, PVC Land có quyền đăng ký, chuyển quyền sở hữu, sử dụng hay thay đổi hiện trạng với phần tài sản như trên.

 Nguồn: Báo Người tiêu dùng

LNT & Partners’ lawyers have been ranked as Leading Lawyer of the year – 2017 by Chamber & Partners

We are delighted to announce that our Partners: Dr. Net Le and Ms. Quyen Hoang have continued to be named as Leading lawyers in Vietnam by Chamber & Partners for Corporate/M&A this year.

Chamber & Partners has asked in-house counsels for their comments on the quality and the effect of our lawyers. The results indicate our Partners have been responsive to their clients’ needs beyond the norm.

Congratulate Dr. Net le and Ms Quyen Hoang and thank you for your continual support for LNT & Partners.

Click link to see the ranking



PVC Land phá sản, bất động sản rùng mình

Phá sản có thể là một điều không ai muốn nhưng đó có thể là lối thoát tốt nhất cho các doanh nghiệp để thoát khỏi áp lực dòng tiền.

Phá sản có thể là một điều không ai muốn nhưng đối với một số trường hợp, đó có thể là lối thoát tốt nhất cho các doanh nghiệp để thoát khỏi áp lực dòng tiền, cũng như mang lại cho các chủ nợ cơ hội để thu hồi được phần nào số tiền đầu tư. Một ví dụ là sự kiện bị buộc phải phá sản mới đây của Công ty Bất động sản Xây lắp Dầu khí Việt Nam, chủ đầu tư dự án PetroVietnam Landmark.

Quyết định mở thủ tục phá sản đối với PVC Land của Tòa án Nhân dân TP.HCM đã tạo nên một tiền lệ chưa từng xảy ra, có thể sẽ kéo theo làn sóng phá sản, đóng cửa của nhiều doanh nghiệp địa ốc khác trên địa bàn TP.HCM trong thời gian tới. Dù đau đớn nhưng việc cho các chủ đầu tư thiếu uy tín phá sản cũng là một cơ chế thanh lọc, loại bỏ các doanh nghiệp không có năng lực thanh toán, giúp thị trường phát triển tốt hơn.

Tính đến cuối năm 2016, vẫn còn đến 500 dự án bất động sản trên địa bàn TP.HCM bị đóng băng, chậm tiến độ trong đó nhiều dự án có tình cảnh thê thảm tương tự PetroVietnam Landmark như dự án Vạn Hưng Phát (quận 8), dự án Kenton Residences (quận 7), Tân Bình Apartment (Tân Bình), Vinaland Tower (Quận 7)… Vì thế các chủ đầu tư, người mua nhà ở các dự án này đang chăm chú theo dõi diễn biến phá sản của PVC Land để đưa ra quyết định cho riêng mình.

PVC Land pha san, bat dong san rung minh

PetroVietnam Landmark từng là một dự án đình đám ở khu Đông vào năm 2010. Do lượng cầu quá lớn nên chủ đầu tư đã phải tiến hành bốc thăm để lựa chọn người mua nhà. Tổng số tiền PVC Land đã thu được từ khách hàng đến cuối năm 2011 gần 500 tỉ đồng. Tính đến 30.6.2011, giá trị đầu tư của PVC Land vào dự án PetroVietnam Landmark là 315,4 tỉ đồng nhưng dự án vẫn chậm tiến độ cho đến nay.

Không chỉ có người mua nhà chịu thiệt hại mà các ngân hàng cho vay vốn cũng chịu chung số phận. Ngoài việc huy động vốn từ người mua, chủ đầu tư dự án PetroVietnam Landmark còn nhận thế chấp để vay vốn của Ngân hàng Bưu Điện Liên Việt và ngân hàng này cũng đã khởi kiện ra tòa. Như vậy, tranh chấp quyền lợi một khi tài sản bị thanh lý giữa người mua nhà và ngân hàng sẽ là một trong những điểm đáng chú ý trong quá trình mở thủ tục quá sản đối với PVC Land.

Theo Luật sư Trần Thái Bình, Công ty LNT & Partners, sau khi ra tòa án quyết định mở thủ tục phá sản, thẩm phán sẽ chỉ định quản tài viên, kê biên tài sản và triệu tập cuộc họp các chủ nợ. Nếu như hội nghị các chủ nợ đồng ý cho doanh nghiệp một thời gian để phục hồi hoạt động kinh doanh, nhằm cải thiện tình hình tài chính và trả nợ cho các chủ nợ thì PVC Land có cơ hội được tiếp tục kinh doanh.

Trường hợp xấu hơn, nếu sau một thời gian tình hình vẫn không cải thiện, Công ty sẽ bị tuyên bố phá sản. Các tài sản còn lại của PVC Land sẽ được tòa án và quản tài viên thanh lý nhằm thanh toán cho các chủ nợ. Việc thanh toán theo thứ tự ưu tiên là chi phí phá sản, nợ tiền lương đối với người lao động, nghĩa vụ tài chính với Nhà nước, các khoản nợ có bảo đảm và nợ không có bảo đảm. Nếu giá trị tài sản không đủ để thanh toán toàn bộ số nợ, khách hàng sẽ được thanh toán theo tỉ lệ phần trăm tương ứng với số nợ.

Trong trường hợp của PVC Land, những người mua nhà có thể được xếp vào những chủ nợ không có bảo đảm. “Người mua nhà mất trắng là trường hợp có thể xảy ra nếu như tài sản còn lại của PVC Land không đủ để thanh toán các khoản nợ”, luật sư Trần Thái Bình nói.

PVC Land pha san, bat dong san rung minh

Việt Nam có thể nói là một trong những thị trường kinh doanh bất động sản “dễ chịu” nhất thế giới. Bởi lẽ, các chủ đầu tư trong nước được phép huy động đến 70% vốn đầu tư từ khách hàng để phát triển dự án (tỉ lệ tối đa là 50% dành cho các dự án bất động sản của nhà đầu tư nước ngoài). Trong khi đó, tại các quốc gia khác, chủ đầu tư chỉ có thể vay vốn từ ngân hàng để hoàn thành dự án trước, sau đó mới mở bán.

Các quy định “dễ chịu” đó một mặt đã hỗ trợ cho thị trường phát triển nhanh chóng, nhưng cũng dễ dẫn đến các hình thức huy động và sử dụng vốn kém minh bạch của một số chủ đầu tư. Cuối cùng, người chịu thiệt nhất vẫn là người mua nhà bởi không có điều kiện nắm rõ thông tin.

Điều lạc quan là một số quy định mới đang giúp thị trường phát triển bền vững và minh bạch hơn. Theo luật sư Bình, Luật Nhà ở 2014 đã bổ sung những khắc phục và bảo vệ tốt hơn quyền lợi cho người mua – bên yếu thế hơn trong giao dịch – bằng một số quy định mới như chủ đầu tư chỉ được phép thu tiền sau khi đã xây xong phần móng và việc thu tiền phải phù hợp theo tiến độ xây dựng. Ngoài ra, phải có ngân hàng bảo lãnh thanh toán cho dự án. Trước khi tiến hành bán nhà, chủ đầu tư cũng phải thông báo với Sở Xây dựng về việc đủ điều kiện để bán nhà, thu tiền từ khách hàng. Hay như chủ đầu tư không được bán các căn hộ đang được thế chấp…

Nhưng vấn đề là do yếu kém trong quá trình thực thi và giám sát từ phía các cơ quan quản lý, một số chủ đầu tư vẫn có cơ hội né tránh các quy định nhằm tiết kiệm chi phí, gia tăng lợi nhuận. “Các cơ quan chức năng chỉ cần thực hiện đúng theo chức năng quản lý quy định tại Luật Nhà ở hiện nay thì đã giúp cho người mua nhà tránh nhiều rủi ro lắm rồi”, luật sư Bình nói.

Một trong những giải pháp cần làm trước tiên là Nhà nước nên trang bị hệ thống thông tin trực tuyến hoặc tại cơ quan về dự án nhà ở hoặc thông tin về chủ đầu tư như Luật Nhà ở đã quy định. Người mua có thể tiếp cận các thông tin này theo cơ chế trả phí. Về phần mình, để kiểm soát rủi ro, trước khi xuống tiền, khách hàng cần tìm hiểu kỹ tình trạng pháp lý của dự án cũng như năng lực tài chính của chủ đầu tư. Khách hàng nên chọn các chủ đầu tư lớn, có uy tín và vị thế trên thị trường để đầu tư, thậm chí trước khi mua nên yêu cầu chủ đầu tư công bố thông tin về tình trạng thế chấp và giải chấp của căn nhà để tránh những tranh chấp sau này nếu có.

Thống kê của Cục Quản lý Nhà và Thị trường bất động sản cho thấy tính đến cuối năm 2016, tổng giá trị tồn kho bất động sản trên cả nước là hơn 31.800 tỉ đồng. Trong đó, lượng tồn kho của Hà Nội là 5.611 tỉ đồng, TP.HCM là 5.954 tỉ đồng. Tồn kho bất động sản đang là một trong những nguyên nhân chính khiến tỉ lệ nợ xấu ở một số ngân hàng vẫn đang ở mức rất cao. Việc phá sản của PVC Land vì thế có thể sẽ mang đến một cú hích mới cho quá trình tái cấu trúc thị trường bất động sản trong năm nay.

Nguyễn Sơn – Báo Nhịp cầu đầu tư

Kinh nghiệm mua nhà không thể bỏ qua

Trong quá trình giao dịch một bất động sản, khách hàng có thể vướng phải nhiều rủi ro khác nhau. Rủi ro đó có thể đến từ chủ đầu tư, từ các quy định của hợp đồng liên quan đến vấn đề thanh toán và điều kiện của bất động sản được giao dịch.

Luật sư Trần Thái Bình, Công ty Luật LNT & Partners – Đoàn luật sư TP.HCM.

Để hạn chế những rủi ro có thể gặp phải khi giao dịch một bất động sản hình thành trong tương lai, PV Báo Người Tiêu Dùng có cuộc trao đổi với Luật sư Trần Thái Bình, Công ty Luật LNT & Partners – Đoàn luật sư TP.HCM.

PV: Luật sư có thể đưa ra những rủi ro mà khách hàng có thể gặp phải khi giao dịch một bất động sản, đặc biệt là bất động sản hình thành trong tương lai?

Luật sư Trần Thái Bình:

Thứ nhất, không đáp ứng đủ các điều kiện luật định khi thực hiện ký kết hợp đồng mua bán bất động sản hình thành trong tương lai. Ví dụ, hiện nay theo quy định của luật kinh doanh bất động sản, chủ đầu tư chỉ được phép tiến hành ký kết hợp đồng tương lai khi (i) công trình đã hoàn thành xong phần móng; (ii) dự án nhà ở đó được một ngân hàng bảo lãnh; (iii) có thông báo xác nhận của cơ quan Nhà nước có thẩm quyền về việc dự án đã đáp ứng đủ điều kiện để có thể thực hiện giao dịch mua bán tài sản hình thành trong tương lai. Tuy nhiên, nhiều chủ đầu tư vẫn tiến hành ký hợp đồng mua bán bất động sản hình thành trong tương lai khi chưa đáp ứng đầy đủ các điều kiện này. Điều này có thể dẫn đến rủi ro là hợp đồng đã ký vô hiệu nếu như có tranh chấp pháp lý.

Thứ hai, rủi ro về chậm tiến độ dự án và mục đích sử dụng vốn của chủ đầu tư. Chẳng hạn, tiến độ của dự án bất động sản hình thành trong tương lai bị chậm do năng lực chủ đầu tư yếu kém hoặc do chủ đầu tư đã sử dụng số tiền mua nhà đặt trước của khách hàng sai mục đích dẫn đến việc không đủ nguồn lực tài chính để hoàn thành công trình đúng tiến độ. Mặc dù, Luật nhà ở đã quy định chủ đầu tư phải sử dụng tiền thanh toán của người mua nhà để phát triển dự án nhà ở, nhưng thực tế không có cơ chế hiệu quả để cơ quan thẩm quyền hay người mua nhà kiểm soát được việc sử dụng vốn.

Thứ ba, rủi ro về chất lượng công trình khi người mua nhà nhận sản phẩm. Có thể chất lượng sản phẩm không đúng theo kỳ vọng của người mua, nhưng người mua không thể làm gì được vì phù hợp với thể hiện trong hợp đồng.

PV: Khách hàng cần làm gì để hạn chế rủi ro khi mua căn hộ hình thành trong tương lai?

Luật sư Trần Thái Bình:

Theo kinh nghiệm của tôi, khách hàng khi mua các căn hộ hình thành trong tương lai cần thực hiện việc kiểm tra các thông tin có liên quan, chứ không chỉ hoàn toàn căn cứ thông tin do chủ đầu tư cung cấp. Các thông tin cơ bản về cơ sở pháp lý cho phép chủ đầu tư đầu tư dự án, ví dụ như giấy chứng nhận quyền sử dụng đất của chủ đầu tư đối với khu đất dự án, xác nhận bảo lãnh của ngân hàng đối với dự án, thông báo của chủ đầu tư cho Sở Xây dựng về việc đã đáp ứng điều kiện để bán nhà.

Người mua cũng nên có thói quen sử dụng dịch vụ tư vấn pháp lý để hỗ trợ khi mua nhà, nhằm hiểu rõ hơn quyền lợi của mình, cũng như bảo vệ quyền lợi của mình.

PV: Nếu được đưa ra một điều luật nào đó để bảo vệ tuyệt đối người tiêu dùng và minh bạch nhất cho thị trường bất động sản. Luật sư sẽ đưa ra vấn đề gì?

Luật sư Trần Thái Bình:

Theo hiểu biết của tôi, ở một số nước như Úc, Hồng Kông, hay Singapore, đối với việc bán nhà ở hình thành trong tương lai, pháp luật nơi đó quy định chủ đầu tư phải gửi tiền thanh toán của người mua nhà vào một tài khoản ký quỹ (escrowed account) và chỉ được sử dụng tiền trong tài khoản này sau khi đã giao nhà cho người mua. Lý do của việc này là để bảo vệ quyền lợi của người mua nhà, bảo đảm chủ đầu tư phải hình thành đúng tiến độ cũng như phải có đủ khả năng tài chính để phát triển dự án. Tôi nghĩ, nếu áp dụng được như vậy ở Việt Nam thì tuyệt đối có thể bảo vệ quyền lợi của người mua nhà.

Còn nếu như chưa thể áp dụng được tuyệt đối như vậy thì khung pháp luật hiện nay cũng đã phần nào bảo vệ tốt quyền lợi của người mua nhà. Vấn đề là ở khâu thực hiện. Ví dụ, người mua muốn kiểm tra các thông tin thì phải kiểm tra ở đâu nếu như chủ đầu tư không cung cấp đủ? Cho nên cần có một cơ quan thẩm quyền nào đó (ví dụ Sở Xây dựng) có thể cung cấp các thông tin cơ bản của dự án nhà ở cho người mua nhà, như quyền sử dụng đất của chủ đầu tư có hợp pháp hay không, có bị thế chấp hay không, dự án có được bảo lãnh ngân hàng hay không, chủ đầu tư có đủ điều kiện để thu tiền khách hàng mua nhà chưa… Cơ quan thẩm quyền nên tạo điều kiện để người mua có thể tiếp cận dễ dàng các thông tin như vậy đối với một dự án nhà ở.

Nguồn: Báo Người tiêu dùng

Khách hàng mua nhà tại dư án Cao ốc Xanh (Q.9) vì chủ đầu tư thiếu uy tín nên gần cả thập kỷ nay chưa nhận được nhà.

Chậm giao nhà, dân yêu cầu phá sản doanh nghiệp

Thay vì mòn mỏi chờ đợi, người dân đã dùng quyền yêu cầu phá sản doanh nghiệp (DN) bất động sản nợ tiền, chây ì giao nhà.

TAND TP.HCM vừa ban hành quyết định về việc mở thủ tục phá sản đối với Công ty cổ phần Bất động sản xây lắp dầu khí VN (PVC Land) – chủ đầu tư dự án PetroVietnam Landmark.

“Mạnh tay” để đòi tiền

Bà Trần Thị Châu Giang (Q.3, TP.HCM) – người trực tiếp nộp đơn yêu cầu tòa án mở thủ tục phá sản đối với PVC Land – cho biết đã chờ đợi mòn mỏi, nhiều lần “đòi” tiền không được nên mới yêu cầu tòa mở thủ tục phá sản.

Bà Giang mua nhà tại dự án PetroVietnam Landmark từ năm 2010 với giá hơn 2 tỉ đồng và đã đóng gần 2 tỉ. Quá hạn hai năm chủ đầu tư không bàn giao nhà, bà Giang khởi kiện.

TAND TP.HCM tuyên bà thắng, buộc chủ đầu tư hoàn trả số tiền bà đóng. Tuy nhiên, công ty trả lời thẳng “còn tiền đâu mà trả”.

Thời điểm đó trao đổi với Tuổi Trẻ, ông Lương Đình Thành – giám đốc PVC Land – cũng cho biết công ty không còn tiền trả. Nếu bà Giang đồng ý thỏa thuận chỉ lấy tiền gốc không tính lãi, hằng tháng công ty sẽ trích một khoản trả dần.

Chậm giao nhà, dân yêu cầu phá sản doanh nghiệp 
Dự án chung cư PetroVietnam Landmark tại Q.2, TP.HCM – Ảnh: HỮU THUẬN

Tới nay PVC Land mới trả cho bà Giang 300 triệu đồng. Hết cách, bà Giang mới làm đơn yêu cầu tòa án ban hành quyết định mở thủ tục phá sản đối với PVC Land.

“Nếu công ty phá sản sẽ ảnh hưởng đến nhiều khách hàng, nhưng gần bảy năm nay đã quá khổ, cùng đường nên tui mới chọn giải pháp này” – bà Giang nói.

Trong số hơn 400 khách hàng mua căn hộ tại dự án PetroVietnam Landmark có những khách hàng mua lại từ một công ty khác.

Câu chuyện đòi tiền chủ đầu tư của những khách hàng này còn bi đát hơn. Bà B.A.K. (Q.2) mua căn hộ tại dự án PetroVietnam Landmark.

Sáu năm nay, gia đình bà K. vẫn phải đi ở trọ, mỏi mòn chờ nhận nhà. Bà K. cho biết để mua nhà, bà phải vay ngân hàng 2 tỉ đồng.

Nhà không nhận được, nhưng hằng tháng bà vừa phải đóng tiền thuê trọ vừa phải trả tiền ngân hàng. Giờ nghe PVC Land có thể bị phá sản, bà thêm hoang mang, không biết có mất tiền hay không…

DN bị áp lực phải trả tiền

Trao đổi với Tuổi Trẻ, ông Lương Đình Thành cho biết công ty đã nhận được quyết định của tòa án và đang làm việc với tòa, không để công ty phá sản.

Dự án PetroVietnam Landmark có tất cả 420 căn hộ đã bán hết cho khách hàng. Hiện dự án đã hoàn thiện phần thô và bàn giao cho khoảng 50 khách tiến hành sửa chữa. Dự kiến đầu năm 2018 cho khách vào ở.

Ông Thành cho hay do công ty đang làm thủ tục giám đốc thẩm, kháng án yêu cầu chỉ trả số tiền bà Giang đã đóng cho chủ đầu tư, không trả tiền lãi nên chưa thanh toán hết số tiền cho bà Giang. Công ty không mất khả năng thanh toán.

“Chúng tôi sẽ thuê luật sư làm việc với tòa án, chứng minh khả năng trả nợ của công ty. Chủ trương là làm sao vẫn tồn tại để cố gắng giải quyết giao nhà cho khách hàng đã mua nhà” – ông Thành nói.

Còn nhiều dự án ngưng trệ

Không chỉ dự án PetroVietnam Landmark, tại TP.HCM còn nhiều dự án ngưng trệ, khiến không ít người mua nhà phải điêu đứng.

Như dự án Cao ốc Xanh (Q.9) của Công ty cổ phần đầu tư và xây dựng số 8 (CIC8) khởi công từ năm 2008 gồm ba block A, B, C.

Đến nay chỉ có block C được bàn giao, hai block 19 tầng còn lại ngưng thi công nhiều năm nay.

Giữa năm 2016, chủ đầu tư tái khởi công, nhưng vừa cất nóc lại tiếp tục “trùm mền”. Chị Nguyễn Nữ Thanh Thảo đã bán nhà và vay 400 triệu đồng để mua căn hộ tại dự án Cao ốc Xanh.

Theo hợp đồng, chủ đầu tư sẽ giao nhà vào tháng 9-2011. Cả nhà năm người ra thuê căn trọ nhỏ, “mơ” ngày nhận căn hộ rộng rãi, thoáng mát.

Nghe thông tin khách hàng dự án PetroVietnam Landmark nộp đơn yêu cầu tòa án mở thủ tục phá sản, chị Thảo cho biết chị và nhóm khách hàng mua nhà dự án Cao ốc Xanh cũng đang tìm hiểu thủ tục pháp lý để “mạnh tay”, buộc chủ đầu tư sớm giao nhà.

“Sáu, bảy năm nghe chủ đầu tư hứa tôi mệt mỏi lắm rồi. Giờ có giải pháp gì để chủ đầu tư nhanh chóng giao nhà hay trả tiền chúng tôi đều làm” – chị Thảo nói.

Trong khi đó năm 2012, anh Trần Thanh Tâm (Q.Bình Thạnh) ký hợp đồng mua căn hộ tại dự án Happy Plaza (H.Bình Chánh) do DN Thanh Tùng làm chủ đầu tư. Lúc đó dự án đã xây phần khung đến tầng 4.

Thời điểm mua, chủ đầu tư dự kiến quý 4-2013 giao nhà và đưa ra chính sách nếu người mua đóng vượt tiến độ sẽ hưởng chiết khấu cao, nên anh đóng 90% giá trị căn hộ.

“Mỗi lần điện lên hỏi thì chủ đầu tư hứa sẽ khởi công giao nhà sớm, nhưng bốn năm rồi chưa xây nổi thêm tầng nào” – anh Tâm nói.

Giải pháp cần thiết

Việc khách hàng nộp đơn yêu cầu tòa án mở thủ tục phá sản đối với chủ đầu tư dù còn hiếm, nhưng nhiều chuyên gia cho rằng đây là giải pháp cần thiết với các chủ đầu tư chây ì.

Luật sư Lê Cao (Đoàn luật sư TP Đà Nẵng) cho rằng việc mở thủ tục phá sản như với PVC Land có lợi cho các chủ nợ, tránh việc DN âm thầm tẩu tán hết tài sản. Với DN “yếu”, việc xử lý sớm may ra còn thu lại phần nào. Càng để DN tồn tại, lãi suất cộng dồn mỗi ngày, chủ nợ ngày càng thua thiệt.

Luật sư Trần Thái Bình (đoàn luật sư TP.HCM) cũng đồng tình nên tính đến đề nghị cho DN phá sản nếu chây ì kéo dài.

Tuy nhiên, ông Bình nêu ngay cả khi còn tài sản thì thứ tự thanh toán sẽ ưu tiên như sau: chi phí cho thủ tục phá sản, lương của người lao động…

Đặc biệt, nếu như tại dự án PetroVietnam Landmark chủ đầu tư đã bàn giao 10 căn hộ thì khi kê biên tòa nhà phải chừa 10 căn hộ đó ra.

Trao đổi với Tuổi Trẻ, một cán bộ Sở KH-ĐT TP.HCM cho biết sau khi mở thủ tục phá sản, DN vẫn hoạt động bình thường dưới sự giám sát của quản tài viên.

Sở KH-ĐT sẽ công bố thông tin trên cổng thông tin đăng ký DN quốc gia nếu có yêu cầu của tòa án.

Nhưng với vụ việc mở thủ tục tuyên bố phá sản của PVC Land, hiện Sở KH-ĐT TP.HCM chưa nhận được yêu cầu đăng thông tin của TAND TP.HCM.

Luật sư Võ Xuân Trung (Đoàn luật sư TP.HCM):

Minh bạch để giảm rủi ro cho dân

Để tránh “mắc kẹt” với những dự án chây ì, người mua cần tìm hiểu kỹ tình trạng pháp lý của dự án.

Đặc biệt, nên xem dự án đó có thế chấp ngân hàng, có được ngân hàng bảo lãnh nghĩa vụ tài chính của chủ đầu tư đối với khách hàng hay không.

Tuy nhiên, các cơ quan quản lý nhà nước cũng cần công bố công khai trên các trang web đầy đủ các dự án thế chấp ngân hàng, dự án được ngân hàng bảo lãnh… để người dân tra cứu, tìm hiểu.

Ngoài ra, các cơ quan thi hành án nên công khai thông tin quyết định kê biên, ngăn chặn giao dịch đối với các dự án dạng này để người dân biết, tránh được rủi ro khi mua nhà.

Cơ hội nào cho PVC Land?

Theo Luật phá sản DN 2014, khi ra quyết định mở thủ tục phá sản, tòa án đồng thời kê biên luôn tài sản của DN để tránh tẩu tán tài sản.

Lúc này, DN còn một “đường sống” là hội nghị các chủ nợ quyết định cho DN thời gian để cơ cấu lại hoạt động, cải thiện tình hình dưới sự giám sát của quản tài viên và thẩm phán.

Nếu trong thời gian này DN phục hồi khả năng thanh toán, trên cơ sở ý kiến của hội nghị các chủ nợ, thẩm phán ra quyết định đình chỉ thủ tục phá sản.

Còn hội nghị các chủ nợ không đồng ý cho DN thời gian khắc phục, tòa sẽ cùng với quản tài viên thanh lý tài sản của DN để trả nợ.

Nguồn: Tuổi trẻ


 “Having signature on the commercial invoice in respect of imported goods” is not a new requirement in the importation and custom clearance procedures. However, this requirement has caused difficulties to importers when they import goods in practice, as there are still a number of discrepancies between the laws of Vietnam and international practices, without any remedy.

From the legal perspective, the requirements of the Ministry of Finance and Vietnamese Customs Authorities are base on Decree 51/2010/ND-CP, which stipulates that invoices must present signatures of the seller, seal of the buyer (if any), and signatures of the buyer. The entities who must comply with Decree 51/2010 are Vietnamese organizations, individuals who are selling goods, providing services in Vietnam’s territory or abroad; organizations, individuals imported goods in the local market regardless of producers or suppliers being Vietnamese or foreign organizations or individuals under Circular 64/2015/TTLT- BTC- BCT- BCA- BQP “With regard to goods sold or stored by entities other than importers, it is required to have invoices and/or documents of the selling entities as prescribed in Decree No. 51/2010/ND-CP.”

From the practical perspective, this regulation embarks a conflict with the common practice of making invoices by European countries in which all invoices are formed, retrieved electronically and without sellers’ signatures and seals in every single invoice. Annually, an automobile manufacturer can sell hundred thousands of products per year, the signing in each invoice is a hand work which makes time-squandering, human resource and increasing expenses. However, in order to complete the import procedure, enterprise must seek for ways to convince the manufacturers to provide their signature on invoices. This step has caused a lot of difficulties to enterprises because it is too hard for the manufacturers to change their goods trading management method contrary to the ordinary method in their home country. As a result, the completion of custom clearance of enterprises is often delayed for months from the scheduled business plan, which causes a lost in term of in business opportunity and cost burden to enterprises. In addition, the fact that the requirement on provision of invoice is still retained which is not caught up with the principle of Article 3.6(b) of Resolution 30c/NQ-CP enhancing the “application of information – telecommunication technology in the process of handling of works of administrative authorities, among administrative authorities and within transactions with organizations and individuals”.

With the understanding of these international practices, World Customs Organization (WCO) recommends its members not to have sellers sign commercial invoices when conducting the customs declaration, in particularly:

(16th MAY 1979)

RECOMMENDS that Members of the Council and members of the United Nations Organization or its specialized agencies, and Customs or Economic Unions, should :

  1. refrain from requiring a signature, for Customs purposes, on commercial invoices presented in support of a Goods declaration;[1]

Vietnam Customs authorities has been a member of WCO as of 01 July 1993 and entered into Kyoto Convention on the Simplification and Harmonization of Customs Procedures. After many renovations to adapt WCO’s objectives and policies, Vietnam Customs procedures have been modernized and reduced significantly yet not abrogated the requirements on signatures affixed to invoices due to existing “barriers” in Decree 51.

The main purpose for presentation of commercial invoices in customs procedures is to make a basis for determining customs values of the goods, goods origin and tax amounts imposed on goods at the time of import. In the Internet age, the authenticity of invoices can be checked by various methods. Therefore, we should learn a feasible way of other countries to check manufacturers’ database to conclude the accuracy of total value of goods rather than request them to sign in each of invoices. Customs Authorities can request the manufacture to send the detailed information of imported goods for checking, or confirm the accuracy and completeness of such invoices. From the author’s perspective, by taking advantage of the internet tool, the checking and verifying the accuracy of commercial bills will easier and more efficient.

 Author: Nguyen Thi Chau Thanh – LNT & Partners




High hopes for Vietnam’s capital markets in 2017

Vietnam is hoping the combination of a relaxation of foreign investment rules, for, stock exchange growth, a push for state-owned enterprises (SOE) equitisation and a gradual opening of bond markets will help its economy to grow this year. Asialaw spoke to lawyers in the jurisdiction to get a glimpse into the latest changes and expected trends in the capital markets for 2017.

Encouraging foreign investment

One of the major changes to encourage foreign investment in Vietnam is that certain industries including, securities firms, were opened up to 100% foreign holding in 2016.

 Le Net

“With the removal on foreign ownership cap at 49%, those needing capital to grow will be able to,” says Le Net, partner at LNT & Partners. “PE [private equity] and M&A interest have been coming from Thailand, Japan, China, Korea and Indonesia,”

 “There are other 18 sectors including transportation, construction and real estate where offshore investors can take a degree of ownership subject to certain conditions,” says Dang The Duc, managing partner at Indochine Counsel. “The increase of foreign ownership will create positive sentiment for the investors, enhancing stock market liquidity and M&A activities in Vietnam, especially for big companies with the aim to increase their market share.”

Growth of stock exchanges

Vietnam’s benchmark VN Index (VNI) has been one of the fastest growing markets in Southeast Asia so far this year. “VNI has gotten a new peak in 2016,” says Duc. “The Ho Chi Minh City Stock Exchange (HOSE) is expected to break into the top five biggest stock markets in the region by 2020, with market capitalisation of 60% of the country’s GDP and average daily trading value at $250 million. However, there were still some garbage stocks which were margin forced to sell in 2016 that were harmful to the quality of stock market.”

Dang The Duc

“Hanoi Stock Exchange (HNX) has developed the action plans for sorting stocks on the unlisted public company market (UPCoM), including selection of the best stocks break down by criteria such as size of the business, production and business situation – financial, situation governance, liquidity, etc., to put on the UPCoM premium list which is aimed towards adoption of open policy for good business groups,” adds Duc.

A merger of the HNX and HOSE, which was first announced in 2012, is expected to be completed by early 2017.

State owned enterprises equitisation

To support the development of the unlisted public company market, the Vietnamese government has put together a series of policies targeting divestment of SOEs associated with registration and listing on the stock market. It is mandatory for an equitised SOE to list the company’s shares on the stock exchange after one year, if it satisfies the listing criteria.

After the equitisation of SOEs, there will be an increased scale of listed enterprises registered for trading in the near future.

The deadline for divestment of state economic groups and state corporations from non-core sectors expired on December 31. “However, just over one-third of total investment capital were completed,” says Duc. “Therefore, the stock market will receive a boost from the country’s efforts to accelerate share sales in SOEs.”

Debt capital markets poised for growth

The trading volume in the Vietnam bond market reached $40.13 billion in the first half of 2016, an increase of 4.7% compared to 2015. Of that, 98% were government bond sales, which amounted to 22% of total GDP and is expected to increase to 40% by 2020. At $5.7 billion in 2015, the corporate bond market in Vietnam is still relatively small. “However, this is expected to grow as Vietnam plans to open its first corporate bond trading platform in early 2017 as it expects a rise in issuances of company debt,” says Duc. “The SSC has been actively implementing the corporate bond scheme to make the local corporate bond market work next year.”

“The bonds market has been nascent,” says Le. “There hasn’t been many corporate bonds since the companies have to be profitable and they need to be able to show investors that they can pay interest. Many newly established companies aren’t ready yet.”

Strengthening regulations

A number of rules have been amended to strengthen regulation around the banking and securities sector. Circular No. 07/2016/TT-BTC of the Ministry of Finance was issued in 2016 to amend 43 of the securities lending restrictions such that securities companies cannot use money and property of the company or the customer to ensure payment obligations for third parties by the securities companies.

“The government will continue restructuring banking sector, owing to the high level of bad debts, to reduce the number of local commercial banks by 2020, but these efforts will make only gradual headway,” says Duc.

The Ministry of Planning and Investment has drafted a banking restructuring plan for the 2016-2020 to:

  • continue reducing non-performing loans sustainably;
  • reduce numbers of illiquid banks;
  • reduce the lending interest rate to 5%; and
  • ensure 70% of commercial banks comply with Basel II, the second of the Basel Committee on Banking Supervision’s recommendations to set minimum capital requirements for financial institutions by 2020.

With the combination of the stock exchanges, opening up of the derivatives and bonds markets and encouragement for foreign investment, the increased availability of products and liquidity for capital markets in the emerging markets of Vietnam pose a world of opportunity for investors, both domestic and abroad.

Source: Asialaw