On 17 July 2020, the National Assembly of Vietnam issued Investment Law No. 61/2020/QH14 which will replace the current Investment Law No. 67/2014/QH13 of 26 November 2014 as of 1 January 2021. Please run through key changes in bullet points as follows. Prohibition of ‘debt collection’ services and, still, the highly controversal prostitution; addition and removal of some conditional business activities (Article 6 and 7). First time introduction of negative approach to foreign investment (Article 9). Addition of special investment incentives (Article 20). The change of control threshold, whic ..read more

I am so proud to be a contributor for this comprehensive report that taps into various aspects of startup ecosystem in Vietnam ranging from fintech, cybersecurity, fundraising, venture capital, crowfunding, etc. just to name a few. The full report is available for viewing here  The post Everything (Almost) About Startup EcoSystem in Vietnam (USAID Report) appeared first on Vietnam Startup Law ..read more

(The full note in PDF is available here) Vietnam is one of the fastest growing e-commerce markets in the Asia-Pacific region, with e-commerce sales in the country reached approximately USD 13,1 billion in 2020. A catalyst for this is the lockdown and restricted access to physical outlets, but one must account for the country’s young and tech-savvy population, increase in national income as well as internet and smartphone penetration. The booming has resulted in a new wave of foreign investment in Vietnamese e-commerce startups, especially during the last 3-month lockdown in Dong Nai, Long An ..read more

Imagine that, on a beautiful day, you stand in front of a fancy private club. To get in, you need to show the gatekeeper your membership card. Of course, you don’t forget to bring enough money to buy stuffs there, once inside. In the world of the New Investment Law (NIL), the membership card represents market access conditions (MACs); the private club is Vietnam market while money you brought can be linked to investment business conditions (IBCs).  Needless to say, you need to know all the stuffs before making your investment. If the New Investment Law (NIL) just blows a light wind throug ..read more

I am recommended by Asia Law Portal as one of its annual 30 people to watch in the business of law in Asia, cited: Hoang Minh Duc, Special Counsel, Duane Morris, Hanoi, Vietnam – Author of Vietnam Startup Law blog, he recently explained to Asia Law Portal what unique opportunities and challenges Vietnam offers to startups and venture capital investors – and what the Vietnamese Government is doing to help encourage Vietnam’s startup ecosystem. Please read the full text on other interesting people here ***     The post Me on the News appeared first on ..read more

This note discusses possible impacts of employing intra-group ‘zero interest’ loans and respective solutions prefered by involved parties. 1. Debt Financing or Equity Financing? When a foreign investor decides to invest in Vietnam, generally that investor will be required to register an investment project (or a business plan) with the Government of Vietnam (GoV). If the application file is deemed complete, the relevant licensing authority will issue an investment registration certificate (often abbreviated as the IRC).[1] Notably, the investor must explain in the application file for the IRC o ..read more

In this note, we discuss significant issues relating to a proposed acquisition of a non-Vietnam investor in a Vietnamese electronic game company (Local Target), particularly: 1 – Market Access Electronic game business (CPC 964) is not fully open up to foreign investment, evidenced by two following significant restrictions: Corporate forms: Investment must be in the form of either a business cooperation contract (BCC) or a joint venture with a local partner (JVC). Foreign ownership cap: 49% of the charter capital (analogous to paid-up equity in other jurisdictions). Note: The above re ..read more

This post compares major differences between a foreign-invested education establishment and a purely domestic one to help foreign investors better structure their deals in this industry at the outset. For that purpose, we assume the investment will land on 02 ‘hot’ educational sectors just now which are foreign language and IT training. Items Domestic Enterprises[1] FIEs[2] Main regulating documents 1.   Law on Education (2019) 2.   Decree 46/2017/ND-CP prescribing regulatory requirements for educational investment and operation as amended by Decree 135/2018/ND-CP 3.&n ..read more

Please first read Part I here to understand what is e-commerce in Vietnamese legal context and how it is classified. *** 1 – Is investment in ‘e-commerce’ business subject to any market access conditions? Yes and No. That depends. For a Sale Web, essentially No. For a Service Provision Web, Yes. The latest regulation on e-commerce[1] officially confirmed that foreign investment in a Service Provision Web is subject to the following conditions: 1 – Investment form. Foreign investment can take the form of either greenfield investment i.e. – creating a brand-new e-commerce Vietnamese subsidiary o ..read more

Please ONLY read this post if you have gone through that post (and then that post) so that you will have initial ideas of what the New Investment Law (NIL) seeks to change the investment world. 1 – Reduction of the Change of Control Threshold Pursuant to the NIL, a foreign owned (albeit Vietnam-based) company can be treated as a foreign investor if its ultimate foreign ownership is more than 50% (currently less than 51%).  In such case, that foreign invested company is automatically subject to strict market access conditions or abbreviated as MACs which per se apply to non-Vietnamese ..read more