The LOE addresses the types of companies and business establishments permitted to operate in Vietnam, their governance, liability and way of operation. The LOI includes provisions on investment activities, rights and obligations of investors, the registration and evaluation of investment projects, investment incentives, investment guarantees and State management of investment. This Law replaces the old Law on Foreign Investment in Vietnam and the Law on Encouragement in Domestic Investment and is commonly applicable to both foreign and domestic investors.

Vietnam has signed and acceded to various bilateral and multilateral arrangements on investment, such as agreements for the promotion and protection of investments with 47 countries and territories, the ASEAN Framework Agreement on Investment (AIA), the BTA with the United States of America containing an investment charter, the Convention on the Establishment of the Multilateral Investment Guarantee Agency (MIGA), and other related international investment agreements. Where the international agreements contain provisions inconsistent with the provisions of the legal instruments on FDI, the provisions of those international agreements shall be applied.

In 1995, Vietnam became a member of ASEAN and three years later it joined Asia-Pacific Economic Cooperation (APEC). In 2000, Vietnam signed a Bilateral Trade Agreement (BTA) with the United States. This trend towards regional and global integration is expected to promote socio-economic stability, better mobilization of domestic resources, and improve efficient allocation of these resources. Moreover, the Government has embarked on and prioritized a long-term reform program for the administrative and regulatory framework governing foreign investment. This combination of internal and external factors should serve to improve the general investment climate.

Vietnam officially joined the WTO on 7 November 2006 and put its commitments into force from 11 January 2007. The accession of Vietnam to WTO has brought a positive impact to Vietnam’s market and economy, including:

• The considerable reduction of import duties on goods for domestic production as well as for private and government consumption
• The liberalization of Vietnam’s services market. Under the WTO’s classification, provision of services is divided into four modes: (i) cross-border (e.g., electronic money transfer services between countries; (ii) services consumed abroad (e.g., tourist services); (iii) commercial presence (e.g., FDI in services in Vietnam); and (iv) people (e.g., foreigners providing services in Vietnam).

The liberalization of the services sector, especially in modes (i) and (iv), will affect FDI flow in Vietnam. The services sub-sectors that used to be closed or restricted to foreign investment (such as distribution, transport, telecommunication, finance, etc.) is largely liberalized from the year 2009 (despite some limited conditions and a transitional period of three or five years)

 

2. Government owned industries and privatization

The Government is working towards improving the investment environment for the private sector despite a high degree of state control of the key sectors of the economy. The privatization process is proceeding slowly, and from 4,700 SOEs in 2001, the Government intends to divest them all by 2010: a process which involved the equalization of 350 SOEs in 2006 and 116 in 2007. Additionally, the State will reduce its holding in the equitized SOEs to 51% or 35%. The State has established the State Capital Investment Corporation (SCIC) which holds the majority of the State’s share in equitized and privatized enterprises, in addition to conducting other activities, akin to other sovereign wealth funds like Singapore’s’ Temasek. Large SOEs operating in key areas, such as electricity, cement, metallurgy, chemicals, construction, transportation, banking, telecommunication, the airlines and insurance industries are being equitized. One major example is the December 2007 Bank for Foreign Trade of Vietnam (Vietcombank) share issue – supported by newly-issued Government regulations.

To promote this, the Government has fulfilled the conditions of economic reform that were necessary for its WTO entry and in efforts to meet its obligations under the bilateral trade agreement with the US.

The new laws streamlining the formation and operation of private companies have resulted in an increase in the number of Small and Medium-sized Enterprises (SMEs). This process is being encouraged by the World Bank structural adjustment processes and by reform in the banking sector.

 

3. Investment guarantees

The Vietnamese Government guarantees fair treatment for investors. Investors’ capital and other legal assets will not be expropriated or confiscated by law or administrative measures, and businesses with foreign-invested capital will not be nationalized. Foreign investors are allowed to remit abroad investment capital and profits, loan principal and interest, and other legal proceeds and assets. Expatriates working for businesses with foreign-invested capital or for a BCC are allowed to remit their income abroad. The interests of foreign investors are satisfactorily guaranteed in the event of adverse effects caused by a change in law through the application of a number of measures. The LOI warrants that such changes will be disregarded or that disadvantages to the investor stemming from a change in law will be compensated by permission to amend its operations, the granting of compensatory tax exemptions or by other means of compensation for damages. Moreover, where more favorable provisions are enacted, existing investors will be able to reap those benefits. Upon the completion of company liquidation procedures, foreign investors may transfer abroad any remaining capital.

 

4. Forms of enterprises

Limited liability company

Under the LOE, the following forms of enterprise exist in Vietnam:

• Limited liability company with one member (one-member LLC)
• Limited liability company with more than one member

A limited liability company is a legal entity established by its members by way of capital contribution to the limited liability company. The capital contribution of each member is treated as equity. The members of a limited liability company are liable for the financial obligations of the limited liability company to the extent of their capital contributed – or undertaken to be contributed - to the limited liability company.

A limited liability company established by one or more foreign investors may take the form of either a 100% Foreign Owned Enterprise (FOE) (where all members are foreign investors) or of a foreign-invested joint-venture enterprise between one or more foreign investors and one or more domestic investors.

Joint stock company/shareholding company

A joint stock company is a legal entity established by its founding shareholders on the basis of their subscription of shares of the joint stock company. The charter capital of a joint stock company is divided into shares and each founding shareholder holds a number of shares corresponding to their subscribed and paid up shares in the joint stock company.

A joint stock company is required to have at least three shareholders (with no maximum number of shareholders).

 

Partnerships

A partnership is required to have at least two members and the unlimited liability partners are liable for the obligations to the extent of all their assets.

 

Private enterprise

A private enterprise is owned by one individual who is liable for all activities of the enterprise to the extent of all his/her assets. Private enterprises may not issue any type of security. An individual may only establish one private enterprise.

The LOE does not address the establishment of a private enterprise of a foreign investor. It will be regulated by separate regulations issued by the Government which are not available at this time.

5. Forms of direct investment

The LOI provides for the following basic forms of direct investment: joint ventures, 100% FOEs and BCC.

 

Joint venture

Fundamentally, the foreign investor and its Vietnamese partner jointly apply to establish a company. The investor has two ways to create a joint venture: (i) create a new enterprise (including merger & acquisition); or (ii) participate in an existing enterprise via the purchase of a proportion of the company’s shares.

There is no requirement on the minimum amount of foreign equity, unless it is a joint venture between the State or its bodies and the foreign investor.

A joint venture may be established as a limited liability company with more than one member, as a joint stock company or as a partnership and is a legal entity with limited liability established on the basis of a joint venture contract between:

• A Vietnamese party and a foreign party
  
• A Vietnamese party and a 100% FOE
• A joint venture enterprise and a foreign party 
• A joint venture enterprise and a 100% FOE
• Two joint venture enterprises.

100% FOEs/wholly foreign-owned

A 100% FOE is a legal entity set up by one or more foreign investors under a form of enterprise as set out above. The common form of 100% FOE is a limited liability company or a joint stock company, except in cases where a partnership is a compulsory form. Foreign investors are prevented from engaging in certain sectors in form of 100% FOE.

Foreign investors are not subject to minimum investment capital restrictions as Vietnam does not have thin capitalization rules. It previously had a maximum 70:30 debt to equity limit; however, this was removed in 2006, and the debt to equity structure of the company will be subject to, negotiation with, and approval of, the licensing authority, except certain sectors where a fixed amount of legal capital (equity) is regulated.

Business cooperation contract

A BBC is an agreement between one or more foreign investors and one or more Vietnamese partners with the objective of cooperating to operate one or more specific business activities. This form of investment does not constitute a new legal entity and the investors have unlimited liability for the debts of the BCC. This form of investment is generally only chosen by foreign investors with respect to projects where investment is restricted to a BCC, such as certain telecommunications projects or projects in relation to airlines, railways or sea transportation. A BCC provides, however, more flexibility than a joint venture or a 100% FOE. Within the framework of Vietnamese law, the parties involved are free to decide on the subject, content, interests, obligations and responsibilities of and relations among the parties, and to specify these in the contract.

Build operate transfer, build transfer, build transfer operate or build operate arrangements

Build Operate Transfer (BOT), Build Transfer Operate (BTO), Build Transfer (BT) and Build Operate (BO) investments are recognized under the Law on Foreign Investment, but are largely governed by a separate legislation. Foreign investors may sign a BOT, BT and BTO contract with a competent state body to implement infrastructure construction projects in Vietnam. These are often in the areas of traffic, electricity production and trade, water supply or drainage, and waste treatment. The rights and obligations of foreign investors will be regulated by the signed BOT, BT and BTO contracts.

Under BOT, the investor is fully in charge of construction and management of a project for a specific duration, after which the project is to be transferred to the state without any compensation.

Under BTO, the title has to be transferred to the state immediately upon completion of construction; however, the state will allow the investor to operate the project over the period of time agreed by both parties in the contract so that the investor can recover capital and reasonable profits.

Under BT, the project is transferred to the state on completion of construction and the State pays the investor by either granting the right to implement another project or making payment as agreed in the BT contract.

Other facilities for business and investment in Vietnam

 

Branch

A branch office is a dependent unit of a foreign entity and may conduct commercial activities for direct profit-making purposes in line with international treaties to which Vietnam is a signatory.

This is not a common form of foreign direct investment but banks, tobacco companies, airlines, law firms, and foreign companies operating in the fields of culture, education and tourism are allowed to establish branches in Vietnam. Foreign companies may also establish branches in Vietnam to conduct trading activities and activities directly related to trading of goods.

The establishment of a foreign company branch is simpler than the establishment of a 100% FOE (i.e. time frame for granting branch license is within 15 days), with the difference that a 100% FOE is a Vietnamese legal entity separate from its parent company while a branch still holds foreign legal entity status and is dependent on its parent company.

 

Representative office

In addition to obtaining investment licenses for establishment of a legal entity in Vietnam, foreign companies which have business relations with Vietnam, or investment projects in Vietnam, can apply to open representative offices in Vietnam.

A Representative Office (RO) is not an independent legal entity and is not permitted to conduct direct commercial activities (such as execution of contracts, direct payment or receipt of monies, sale or purchase of goods, or provision of services). However, a RO can:

 

6. Investment incentives

The system of tax and other incentives offered to foreign investors and domestic businesses is relatively complex. Standard benefits include reduced corporate tax rates, tax-free periods or tax reductions during the start-up phase, land-rent reductions and import-duty exemptions. As a general guide, the following incentives are available to investors:

 

BOT projects

Incentives offered to BOT projects include the following:

 

Location in special zones

The Government encourages Vietnamese enterprises in all economic sectors, foreign economic organizations and FIEs to invest in IZs, Economic and High-Technology Zones (HTZs).

In Ho Chi Minh City, there are over 10 IZs which are in operation, covering a total area of about 3,000 hectares. The city’s master plan for IZs until 2020 envisages 21 zones (17 IZs, 3 EPZs and 1 HTZ) covering a total area of 7,100 hectares. There is a high-tech zone in Ho Chi Minh City. These zones have the following infrastructure conditions:

 

Indirect investment

In addition to carrying out direct investment activities, foreign investors may conduct indirect investments by way of purchasing shares, bonds and other valuable papers; investing through securities investment funds and investing through other intermediary financial institutions, where the investor does not participate directly in the management of the investment activity.

 

7. Conditional sectors

Under the LOI, certain sectors are subject to particular conditions for investment. In order to engage in these sectors, a foreign or local investor must meet certain conditions set by the Vietnam Government including the conditions regarding forms of investment, the conditions applicable to establishment of economic organizations and conditions on market access.

In addition, a number of investment sectors are unconditional for Vietnamese enterprises but conditional for foreign investors (e.g., exploitation and processing of mineral resources, and investment in the fields of importing, exporting, trading and distribution, etc.). The LOI and its guiding Decree No. 108/2006/ND-Cp dated 22 September 2006 provide for such list of investment sectors, however, relevant sectoral legislation shall provide the "conditions" that foreign investors are required to meet. In certain industries, this may mean that the FOE may only operate in the form of a foreign-invested JVE with the majority or minority participation of a Vietnamese enterprise. In other sectors, FOEs operating in conditional investment sectors may nevertheless operate as 100% FOEs but must meet certain conditions of capital structure, project-specific experience and so forth.

The List of Conditional Investment Sectors include the following sectors: television, production and publishing of cultural products, telecommunications, transportation by all means, cigarette manufacturing, exploring and processing natural resources, real-estate business, education, and medical services distribution.

 

8. Investment licensing

8.1 Licensing authorities

The authorities who are authorized to issue establishment licenses to Vietnamese and foreign-owned companies include (i) the PM of the Government whose approval is limited to “investment policy”, (ii) the People’s Committees (PCs) in the provinces and cities under the central state administration and (iii) the management authorities of industrial zones, export processing zones, high-tech zones and economic zones in the provinces and cities under the central state administration (Management Authorities (MAs)).

The hierarchy of the investment approval and licensing authority is as follows:

All investment certificates (previously called “investment licenses”) are now issued by either the relevant PCs or MAs. However, in specialized sectors, such as banking or insurance, the relevant line ministries are still empowered with the approval and licensing authority.

 

8.2 Licensing procedures

Depending on the size and the sector of investment, different licensing and registration procedures will be applied:

• Business registration
• Investment registration
• Investment evaluation

 

8.3 Business registration

Domestic projects of less than VND15 billion (approximately US$830,000), and which are not included in conditional sectors are subject to business registration procedures. However, these projects shall be subject to investment registration where (i) they fall within a conditional sector, or (ii) if they wish to apply for investment incentives recorded in their license.

 

8.4 Investment registration

Registration procedures under the LOE and LOI apply to foreign investment projects which have an invested capital of less than VND300 billion (approx. US$16.75 million) and are not in a conditional investment sector.

Domestic invested projects with total invested capital of between VND15 billion to VND300 billion (approx. US$16.75 million) are also subject to this registration procedure. Local investors tend to set up their corporate entity separately and then file for registration of any project without receiving an investment certificate. Enterpriserises can register additional investment projects without the need to create a legal entity.

 

8.5 Evaluation procedures

Apply to foreign and domestic invested projects which are:

• Invested capital of VND300 billion or more
• Included in the list of conditional investments

Foreign investors investing in Vietnam for the first time must have an investment project and carry out either registration or evaluation procedures, in order for an investment certificate to be issued.

 

8.6 Application dossier

In general, the following documents are required for the establishment of a 100% FOE:

• Request for the issuance of an investment certificate in the prescribed form
• A draft charter of the company to be established
• A list of investors in the prescribed format

• A report of the financial capability of the investors
• An economic and technical explanation of the project “Feasibility Study”
• An explanation of how the conditions will be satisfied

• The investor’s Certificate of Incorporation

Depending on particular case and during the evaluation process, the licensing authority may request the investors to provide additional documents (such as audited financial reports or banker letter of comfort) or further clarifications.

 

8.7 Post licensing procedures

Upon obtaining the Investment Certificate, a FOE is required to conduct certain administrative formalities, including, but not limited to:

1. Obtaining the seal and the seal registration
2. Placing an announcement of its establishment in a print or electronic newspaper permitted to be circulated in Vietnam in three consecutive issues
3. Opening a bank account
4. Registering the tax code
5. Arranging accounting team/policy
6. Recruitment/register employees with relevant labor authorities
   

 

9. Labor and recruitment regulations

 

9.1 Labor recruitment by a FIE

Under the revised Labor Code, a FOE may either directly recruit Vietnamese employees or recruit via an authorized labor agency. The FOE is then required to register the list of recruited Vietnamese employees with the local labor department, and submit reports on the utilization of and changes to staff to the labor department on a periodic basis.

9.2 Registration of expatriate employees

All expatriates working for a Vietnamese employer for a period of more than three (03) months are required to obtain a work permit. The employer is required to submit applications to the local labor department to obtain work permits for its expatriate employees.

9.3 Social insurance, health insurance and unemployment insurance contributions for employees

The Law on Social Insurance (SI) became effective on 1 January 2007 which providing guidance of SI and Unemployment Insurance (UI). The Law on Health Insurance (HI) became effective on 1 July 2009. SI, UI and HI contributions are compulsory for Vietnamese employees.

The SI contributions, 15% by the employer and 5% by the employee, are required with respect to Vietnamese employees.

The UI contributions, 1% by the employer and 1% by the employee, are required with respect to Vietnamese employees. It is only required for the employer that has 10 employees or more.

HI contributions, which are 2% by the employer and 1% by the employee, are also required to be made with respect to Vietnamese employees and also foreign employee (effective from 1 October 2009). HI contributions, which will increase to 3% by the employer and 1.5% by the employee effective from 1 January 2010. These contributions are calculated based on the contracted basic salary, but capped at 20 times the minimum salary.

 

9.4 Minimum salary

Under the Decree No. 97/2009/ND-CP dated 30 October 2009 of the Government, the current monthly minimum salary applicable to government staff, employees working for SOEs and domestic enterprises from 1 January 2010 is divided into four levels depending on the location of the enterprises, detail as follows:

10. Mergers and acquisitions

 

10.1 Regulatory aspects

During the process of investment within Vietnam, businesses with foreign-invested capital and BCC are allowed to restructure their investment by way of division, separation, merger or consolidation, or foreign investors may convert their investment into a different legal form. Foreign investors can also transfer their interest to other entities.

The LOI provides that investors are permitted to (i) contribute capital to; and (ii) purchase shareholding in companies and branches operating in Vietnam. However, the LOI also provides that the ratio of capital contribution and purchase of shareholding by foreign investors in a number of sectors, industries and trades will be regulated by the Government. The Government Decree No. 108/2008/ND-CP issued on 22 September 2006, stated that investors who intend to acquire an interest in businesses in Vietnam must implement the provisions in the international treaties of which Vietnam is a member with respect to the ratio of capital contribution, form of investment and schedule for opening market; comply with the provisions in Law on Competition and LOE and other related regulations.

10.2 Buying shares in existing companies

Foreign investors who intend to acquire an interest in a joint venture company or a FOE 100% may do so by acquiring the capital contribution portion of another  existing foreign investor. A new foreign investor may acquire some or all of the shares in an offshore company that holds the interest of an existing FOE, or the foreign party in a joint venture may acquire the capital contribution portion of its Vietnamese partner to convert the joint venture to a 100% FOE. A Vietnamese party to a joint venture may also buy the foreign investors’ interest to become a 100% local entity. Gains from transfer of shares shall be subject to income tax on capital gains. Transfer/purchase of assets (Assets deal).

In addition to purchasing shares from an existing company, the buyer buys the assets of the target company. The cash the target receives from the sell-off is paid back to its shareholders by dividend or through liquidation. This type of transaction leaves the target company as an empty shell, if the buyer buys out the entire assets. A buyer often structures the transaction as an asset purchase to "cherry-pick" the assets that it wants and leave out the assets and liabilities that it does not. This can be particularly important where foreseeable liabilities may include future, unquantified damage awards, such as those that could arise from litigation over defective products, employee benefits or terminations, or environmental damage.

Asset deals have not been common in practice to date. The transaction is likely to involve the following main steps:

Sellers must charge output VAT (capital gains are VAT exempt). The gain and loss derived from the sale of assets is taxable and deductible, respectively, for EIT purposes. Buyers must pay registration fees for assets of which the ownership is required to register (i.e. housing, land, vehicles, boats or vessel). The applicable rate is 1% for housing, land, boats and ships, and 2% for other specified assets (such as motor vehicles). However, registration fees are capped at VND500 million per asset per transaction.

11. Dispute settlement

In Vietnam, legal disputes may be settled by negotiation, in court or by domestic or foreign arbitration.

The judiciary

The hierarchy of Vietnamese courts include: (i) Supreme People’s Court; (ii) Provincial People’s Courts; and (iii) District People’s Courts. The courts operate in five divisions: (i) Criminal; (ii) Civil; (iii) Administrative; (iv) Economic and (v) Labor.

Unlike common law countries, Vietnam does not follow the doctrine of precedence under which cases decided by judges in the past are used as authority for later cases. Judgments are based only on legislation and principles of interpretation of the laws.

Running parallel to the court systems is the People’s Procuracy which is responsible for supervising the operation of judicial authorities and exercising the power of public prosecution. The People’s Procuracy can lodge protests against a judgment and ask for its review.

 

Arbitration and dispute resolution

To supplement the court system, Vietnam has a system of independent arbitration centers, established under the Commercial Arbitration Ordinance (2003). An arbitral award given by an arbitration center or an arbitration panel established by the parties in accordance with the provisions of the Ordinance will be enforceable in Vietnam without need for prior recognition.

Disputes involving foreign investors may be also settled by foreign arbitration. In 1995, Vietnam became a member of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. An arbitral award recognized by a Vietnamese court.

Accordingly, where a dispute occurs:

12. Exit provisions

The termination, liquidation, or dissolution of a FOE or a BCC shall occur in the following circumstances:

 

13. Other investment related regulations

13.1 Foreign investment in the securities market

Foreign organizations and individuals are allowed to buy shares and other types of securities (listed or non-listed) in the Vietnamese securities market.

 

13.2 Accession to trading service by foreign investor

Under WTO’s commitments, from 2009, 100% FOE on trading is allowed. Trading activity and activities directly related to trading are defined under the Commercial Law as exportation, importation, distribution, etc.

The importation right under Decree No. 23/2007/ND-CP dated 12 February 2007 (Decree No. 23) on trading and related activities of foreign-invested companies in Vietnam is the right to import goods into Vietnam for sale to dealers who have the right to distribute such goods in Vietnam. The right to import, however, does not include the right to organize or take part in the distribution of goods in Vietnam.

Based on Decree No. 23, a foreign invested company in Vietnam can carry out importation activities, provided that the imported goods are sold to licensed distributors. Decree No. 23 sets out procedures for a foreign invested company to obtain a trading license. Depending on the location of the company to be established and the activity to be carried out, the licensing authority may be the Ministry of Industry and Trade (a merger of former Ministry of Trade and Ministry of Industry), the Management Board of Industrial Zones or the Provincial Peoples’ Committees.

13.3 Intellectual property rights

In recent years the Government has taken various measures to increase the legal protection of intellectual property, and created an environment of respect for intellectual property. Intellectual property rights are protected by the Civil Code (1995 and 2005), the Law on Intellectual Property (2005) and a host of subordinate legislation.

Vietnam is a long time signatory to the Paris Convention, the Madrid Agreement on International Trademark Registration, and the Patent Cooperation Treaty (PCT) and became a member of the World Intellectual Property Organization in 1976. On 27 June 1997, Vietnam entered into an Agreement on Copyright with the US. According to the Vietnam - US Bilateral Trade Agreement, Vietnam is also obliged to adhere to the Berne Convention.

The National Office of Industrial Property (NOIP) is the authority responsible for the registration of industrial property and the resolution of disputes with regard to industrial property in the first instance. Foreign organizations and individuals who seek to register their industrial ownership should file their applications through an authorized agent, who will transfer their application to the NOIP. Also, trademark license agreements must be registered with the NOIP. The Office of Copyright Protection under the Ministry of Culture and Information has also been established and is responsible for the protection of copyright. Works may be registered with the Ministry of Culture and Information; registration is however, not a prerequisite for copyright protection.

Currently, patents are protected for a period of 20 years. A certificate of utility solutions may be granted for 10 years. A certificate of industrial design is granted for five years and may be renewed every five years; however, the total effective period of a certificate cannot exceed 15 years. Certificates of trademarks are granted for 10 years with no restrictions on the number of renewals. Some moral rights of copyrighted works are protected indefinitely, and other rights are protected up to 50 years for post mortem actors.

 

13.4 Competition regulations

With the Government’s committed and continuous efforts, Vietnam is transforming from a centrally planned, socialist economy into a more competitive market. On the one hand, SOEs continue to occupy monopoly positions in key industries like electricity generation and distribution andtelecommunications with a market share of at least 80%. Other heavily regulated industries tend to have some foreign and private sector participation but are dominated by a state owned oligopoly where several large firms have a market share of 10% to 40% each. These industries include cement, sugar, minerals and petroleum, in which prices tend to be high and most firms are neither efficient nor competitive.

On the other hand, the Government sees the merits of market competition and as a result, the long-awaited Competition Law was passed in November 2004 by Vietnam’s National Assembly. This law applies to business individuals and organizations, professional associations, including foreign enterprises operating in Vietnam, public utilities and state monopoly enterprises. If measures in other laws contradict the Competition Law, the latter will prevail. The Competition Law prohibits the following four broad types of anti-competitive activity:

• Agreements that substantially restrict competition
• Abuse of a dominant or monopoly market position
• Concentrations of economic power that substantially restricts competition; and acts of unhealthy competition

An enterprise in a dominant or monopoly market position is prohibited from carrying out the following practices aimed at maintaining or strengthening that market position:

• Deliberately (either directly or indirectly) increasing prices or temporarily reducing prices to below production cost
• Limiting production or distribution, or restricting the market or technical or technological developments
• Applying discriminatory commercial conditions

• Imposing conditions for signing contracts for the purchase and sale of goods and services, or forcing other enterprises to agree to obligations that are not directly related to the object of the contract; or Preventing market entry by new competitors

13.5 Use of electronic documents

Under the Law on Electronic Transaction issued on 29 November 2005 and the Decree No. 26/2007/ND-CP dated 15 February 2007of the Government Electronic documents are valid for implementing financial operations, account entry or checking purposes only. They are not valid for transactions or payments if they have been converted from written documents. An electronic signature on an electronic document bears the same validity as a signature on a written document.

 

13.6 Government inspection of FIEs

FOEs may be inspected by the following entities:

• Investment license issuing bodies are entitled to carry out periodic checks and inspections of FOEs
• Other organizations as stipulated by law, may undertake random inspections relating to their area of jurisdiction (i.e. tax authorities, labor authorities)

Procedures for inspection are defined by regulations.