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Rights and obligations of enterprises in Vietnam with more than 50% foreign capital
The enterprises in Vietnam with more than 50% foreign capital have rights and obligations (according to Vietnamese laws) as follows:
Viet Nam lays legal foundation for franchising
Before the Commercial Law was enacted, a franchise was regarded as a type of technology transfer or licensing agreement and was governed by Decree No 45/CP/1998. The decree tended to have a freezing effect on the establishment of franchises, imposing a maximum royalty of 5 per cent of net sales such that parties to franchise agreements were not free to agree a higher rate of return.
Application dossier for Licence for establishment of representative offices
Licence for establishment of representative offices expires in five years but no more than expiration date of business registration or equal documents of foreign businesses in case foreign legislation establishes such a date.
Application dossier for Licence for establishment of branches
Licence for establishment of branhes expires in five years but no more than expiration date of business registration or equal documents of foreign businesses in case foreign legislation establishes such a date.
Licensing logistics services get easier
Since the passage of the Commercial Law, its provisions on logistics services, contained in Articles 233, 234 and 238, have cried out for clarification.
WTO dispute settlement: where does Viet Nam stand?
The WTO dispute settlement mechanism, dating back to the establishment of the World Trade Organisation in 1995, is a cornerstone of the WTO system. It provides an instrument through which WTO members can police each other and ensure compliance with agreements and commitments.
Administrative reform takes more than words
In the past three years, Viet Nam has completed a landmark course of legal reform in the field of investment, with the National Assembly passing such legislation as the Bankruptcy Law and Competition Law in 2004; the amended Civil Code, the Commercial Law, the Intellectual Property Law, and the Foreign Exchange Law in 2005; and the Law on Enterprises, Law on Investment, and Securities Law in 2006.
Cumulative voting protects minority voice
The new Law on Enterprises, which took effect on July 1, introduced the concept of cumulative voting in shareholder elections.
Technology transfer law: a step in right direction
On November 22, the National Assembly passed the Law on Technology Transfer, a piece of legislation expected to solve various issues arising out of technology transfers in Viet Nam. It replaced Decree No 11 of February 2005.
Law adds confusion to appointment of directors
The Law on Enterprises was passed by the National Assembly on November 29, 2005, and took effect on July 1, 2006.The law provides the legal basis for establishing, organising and operating enterprises in Viet Nam. However, some provisions of the Law remain sketchy or confusing, and provisions on the selection of general directors are a case-in-point.
Cap on hiring foreigners has chilling effect on investment
Despite the rapid growth of the Vietnamese economy, the ability of enterprises to employ foreign staff and tap into this source of professional expertise is still highly restricted.
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