Investment Guarantee in Vietnam

To maximize investment, Vietnam has been developing different measures for investment guarantee taking the principle of being simple and transparent in the procedures and in practice to ensure fairness among investors, effectiveness and cost-effectiveness in order to develop a stable investment environment. Below are several policies to ensure the investment according to the 2005 Investment Law.

Guarantee for rights to the legal ownership

Investment capital and legal assets of the investors are not used either for national purposes or confiscated through administrative measures.

In cases vital for national security and benefits, the Government will claim for purchasing and using assets of the investors, investors will be paid or compensated based on market values at the current time of government’s buying and usage.

Payment or compensation to the investors must ensure their legal benefits and have no discrimination among different investors.

Guarantee for fairness among investors

Based on the 2005 investment law, the Government of Vietnam eliminated discrimination between foreign and local investors. According to the current law, measures for investment guarantee & encouragement, rights & obligations are the same for investors.

The State ensures investors benefiting from equal investment incentives and support, based on criteria relating to investment fields and locations, not on investment sources or nationality of investors.

Guarantee for solutions to potential conflicts from investment activities

The 2005 investment Law provides solutions to any conflicts occurring which are applied to all investors regardless of their nationalities. When conflicts occur during the investment process in Vietnam, investors can select different solutions either through negotiation, reconciliation, arbitrators or through courts in accordance with legal documents.

Conflicts in which one party is a foreign investor or an enterprise with foreign capital and conflicts among foreign investors can be solved through the Vietnamese courts, Vietnamese arbitrators, foreign arbitration, international arbitrators or through the arbitrators agreed by the conflicting parties.

Conflicts between foreign investors and the State’s management agencies over investment activities in Vietnam are solved through arbitrators or Vietnamese courts except for cases having agreements signed between an authorized State agency and foreign investors or as indicated in the international conventions of which the SRV is one of the members.

Guarantee for transferring profits and legal incomes from abroad

Upon compliance with all financial obligations to the Government of Vietnam, foreign investors are entitled to transfer their profits abroad the following items:

§ Profits from business

§ Payment for providing technical services, techniques and intellectual property

§ Capital and interest from foreign creditors

§ Investment capitals and incomes from investment liquidation

§ Other legal money and assets of the investors.

Foreigners working for investment projects in Vietnam are entitled to transfer their legal incomes abroad after fully complying with financial obligations to the SRV.

Transfer of money abroad as mentioned above can be converted into any currency applying the exchange rate at a commercial bank of choice of investors. Procedures for these transactions are applied as stated in the legal documents on foreign currency management.

Guarantee for investors’ rights in aspect of changes in policies and laws

In case the new laws or new polices offering better conditions and rights to investors compared with the previous ones, investors are entitled to enjoy new benefits, conditions and rights as indicated in the new laws and policies since they are put into effects.

In case the new laws or policies which negatively influence legal rights of investors as compared with the previous ones, investors are entitled to benefit from favorable conditions as stated in the Investment certificate or entitled to one or a number of the following solutions:

§ Continue their rights and favorable conditions

§ Being compensated through taxable incomes

§ Being allowed to adjust operation objectives of projects

§ Being considered for compensation in some necessary cases.

Opening market and investment relating to trade

To be in line with regulations or articles stated in the international conventions which Vietnam is one of the members, the State ensures investors to open investment market in accordance with the agreed process. And investors are not obligated to carry out the following requirements:

§ Give priorities to purchase, use domestic goods and services or purchase and use goods and services from certain defined local manufacturers or suppliers.

§ Export goods or services reaching a defined rate; limit quantity, value and types of goods or services which are produced or exported from local suppliers or manufacturers.

§ Import goods with the same quantity and values as those of exported goods or self adjust foreign currency balance from exported sources in order to meet the import demands.

§ Reach a certain rate for localization in production;

§ Reach a certain level or certain values in research and development fields in domestic market

§ Provide goods and services in certain locations in local or foreign market

§ Locate headquarters in a nominated location.

Other investment guarantee measures

The State assures the rights to intellectual property in investment activities; ensures the legislation for investors in transferring technology in Vietnam according to legal documents on intellectual property and other related legal documents.

During the process of investment in Vietnam, prices and fees to goods and services controlled by the State are consistently applied to all investors.

To maximize investment, Vietnam has been developing different measures for investment guarantee taking the principle of being simple and transparent in the procedures and in practice to ensure fairness among investors, effectiveness and cost-effectiveness in order to develop a stable investment environment. Below are several policies to ensure the investment according to the 2005 Investment Law.

Guarantee for rights to the legal ownership

Investment capital and legal assets of the investors are not used either for national purposes or confiscated through administrative measures.

In cases vital for national security and benefits, the Government will claim for purchasing and using assets of the investors, investors will be paid or compensated based on market values at the current time of government’s buying and usage.

Payment or compensation to the investors must ensure their legal benefits and have no discrimination among different investors.

Guarantee for fairness among investors

Based on the 2005 investment law, the Government of Vietnam eliminated discrimination between foreign and local investors. According to the current law, measures for investment guarantee & encouragement, rights & obligations are the same for investors.

The State ensures investors benefiting from equal investment incentives and support, based on criteria relating to investment fields and locations, not on investment sources or nationality of investors.

Guarantee for solutions to potential conflicts from investment activities

The 2005 investment Law provides solutions to any conflicts occurring which are applied to all investors regardless of their nationalities. When conflicts occur during the investment process in Vietnam, investors can select different solutions either through negotiation, reconciliation, arbitrators or through courts in accordance with legal documents.

Conflicts in which one party is a foreign investor or an enterprise with foreign capital and conflicts among foreign investors can be solved through the Vietnamese courts, Vietnamese arbitrators, foreign arbitration, international arbitrators or through the arbitrators agreed by the conflicting parties.

Conflicts between foreign investors and the State’s management agencies over investment activities in Vietnam are solved through arbitrators or Vietnamese courts except for cases having agreements signed between an authorized State agency and foreign investors or as indicated in the international conventions of which the SRV is one of the members.

Guarantee for transferring profits and legal incomes from abroad

Upon compliance with all financial obligations to the Government of Vietnam, foreign investors are entitled to transfer their profits abroad the following items:

§ Profits from business

§ Payment for providing technical services, techniques and intellectual property

§ Capital and interest from foreign creditors

§ Investment capitals and incomes from investment liquidation

§ Other legal money and assets of the investors.

Foreigners working for investment projects in Vietnam are entitled to transfer their legal incomes abroad after fully complying with financial obligations to the SRV.

Transfer of money abroad as mentioned above can be converted into any currency applying the exchange rate at a commercial bank of choice of investors. Procedures for these transactions are applied as stated in the legal documents on foreign currency management.

Guarantee for investors’ rights in aspect of changes in policies and laws

In case the new laws or new polices offering better conditions and rights to investors compared with the previous ones, investors are entitled to enjoy new benefits, conditions and rights as indicated in the new laws and policies since they are put into effects.

In case the new laws or policies which negatively influence legal rights of investors as compared with the previous ones, investors are entitled to benefit from favorable conditions as stated in the Investment certificate or entitled to one or a number of the following solutions:

§ Continue their rights and favorable conditions

§ Being compensated through taxable incomes

§ Being allowed to adjust operation objectives of projects

§ Being considered for compensation in some necessary cases.

Opening market and investment relating to trade

To be in line with regulations or articles stated in the international conventions which Vietnam is one of the members, the State ensures investors to open investment market in accordance with the agreed process. And investors are not obligated to carry out the following requirements:

§ Give priorities to purchase, use domestic goods and services or purchase and use goods and services from certain defined local manufacturers or suppliers.

§ Export goods or services reaching a defined rate; limit quantity, value and types of goods or services which are produced or exported from local suppliers or manufacturers.

§ Import goods with the same quantity and values as those of exported goods or self adjust foreign currency balance from exported sources in order to meet the import demands.

§ Reach a certain rate for localization in production;

§ Reach a certain level or certain values in research and development fields in domestic market

§ Provide goods and services in certain locations in local or foreign market

§ Locate headquarters in a nominated location.

Other investment guarantee measures

The State assures the rights to intellectual property in investment activities; ensures the legislation for investors in transferring technology in Vietnam according to legal documents on intellectual property and other related legal documents.

During the process of investment in Vietnam, prices and fees to goods and services controlled by the State are consistently applied to all investors.