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Decree
No. 06/ND-CP, 6 March/2000 of the Government on Investment
Co-operation With Foreign Entities in the Fields of Medical
Examination and Treatment of Diseases, Education and Training,
and Scientific Research |
| • |
Decree
No. 07/NQ-CP, 5 June 2000 of the Government On the
Building and Development of the Software Industry
During the Period 2000 – 2005 |
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Decree
No. 10/ND-CP, 23 January 1998 of The Government on
A Number Of Encouragement and Guarantee Measures for Foreign
Direct Investment Activities in Vietnam. |
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Decree
No. 12/CP, 18 February 1997 of the Government on Setting
Forth Detailed Regulations for Implementing The Law on
Foreign Investment in Vietnam |
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Decree
No. 24/ND-CP, 31 July 2000 of the Government on Regulating
in detail the implementation of the Law on Foreign Investment
("FIL") in Vietnam |
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Decree
No. 36/CP, 24 April 1997 of the Government on Industrial
Zones, Export Processing Zones and High-Tech Zones |
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Decree
No. 02/ND-CP, 15 August 2000 of the Government on
Investment in The Basis of Build-Operate-Transfer Contracts,
Build-Transfer Contracts Applicable to Foreign Investment
in Vietnam |
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Circular
No. 02/TT-NH7,
18 February 1997 of the Government on regulating details
in implementing the Law on foreign investment in VN,
the state bank of Vietnam issues the guideline in foreign
exchange control of foreign invested enterprises and
foreign parties of business cooperation contracts. |
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Decree
No. 62/ND-CP, 15 August 2000 of the Government on
Promulgating The Regulations on Investment in The Basis
of Build-Operate-Transfer Contracts, Build-Transfer-Operate
Contracts and Build-Transfer Contracts Applicable to
Foreign Investment in Vietnam. |
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Decree
No.45/2000/ND-CP: DECREE OF THE GOVERNMENT
Setting Forth Regulations on Representative Offices
and Branches in Vietnam of Foreign Merchants and Foreign
Tourism Enterprises
Decision
No.128/2000/QN-TTg:DECISION
OF THE PRIME MINISTER OF THE GOVERNMENT
On a number of policies and measures to stimulate investment
And development of the software industry |
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DECREE
NO 24
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No. 24/2000/ND-CP
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THE
GOVERNMENT SOCIALIST REPUBLIC OF VIETNAM
Independence
– Freedom – Happiness
--------- * --------- |
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Hanoi,
31 July 2000
DECREE OF THE GOVERNMENT
Regulating in detail the implementation of the Law
on Foreign Investment ("FIL") in Vietnam
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Chapter
I
GENERAL PROVISIONS
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Article 1. Scope of application
This Decree
makes detailed regulations on the
implementation of the FIL in Vietnam dated
12 November 1996, the Law on Amendments
and Additions to a number of Articles of
the FIL in Vietnam dated 16 May 2000
(hereinafter referred to as the FIL).
Foreign
investments in industrial zones
("IZ") and export processing
zones ("EPZ"); foreign
investments under Built-Operate-Transfer
("BOT") contracts,
Built-Transfer-Operate ("BTO")
contracts and Built-Transfer
("BT") contracts; foreign
investments in the areas of disease
examination and treatment, education and
training, scientific research shall comply
with the provisions of this Decree and
other relevant provisions of laws.
International
credit activities, operations of branches
of foreign companies in Vietnam, and other
forms of indirect investment and trade are
beyond the scope of this Decree. |
| >>
Article 2. Objects participating in
co-operation and investment
Entities
participating in investment co-operation
in accordance with the provisions of the
FIL in Vietnam shall include:
- Vietnamese
enterprises:
¤ State
owned enterprises established in
accordance with the Law on State owned
Enterprises;
¤ Co-operatives
established in accordance with the Law on
Co-operatives;
¤ Enterprises
belonging to socio-political
organisations;Enterprises
established in accordance with the Law on
Enterprises.
- Establishments
specialised in disease examination and
treatment, education and training,
scientific research which satisfy the
criteria stipulated by the Government;
- Foreign
investors;
- Foreign
invested enterprises
("FIE");
- Overseas
Vietnamese;
- State
bodies authorised to enter into BOT,
BTO and BT contracts.
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>> Article 3. Lists
and selections of investment projects
- To issue together
with this Decree:
¤ List of
specially encouraged projects;
¤ List of
encouraged projects;
¤ List of
encouraged areas for investment;
¤ List of
conditional investment fields;
¤ List of
unlicensed investment fields.
Based on the
economic and social development planning and
orientation for each period, the Ministry of
Planning and Investment ("MPI") shall
co-ordinate with ministries, branches and People’s
Committees of provinces and cities under central
authority (hereinafter referred to as provincial
People’s Committee) to submit to the Prime
Minister for consideration and amendments of the
above lists.
- Investors are
allowed to take the initiative to select
investment projects, investment partners,
investment forms, investment duration, areas,
ratios of legal capital contribution, product
consumption markets, except the projects
included in the list of sectors in which
investment will not be licensed and the list
of sectors in which licensing of investment is
conditional as stipulated in the appendix
attached to this Decree.
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>> Article 4.
Governing laws
- During its
operation in Vietnam, an entity participating
in investment co-operation as stipulated in
article 2 of this Decree must comply with the
provisions of the FIL in Vietnam, the
provisions of this Decree and other relevant
provisions of the laws of Vietnam.
- In cases where
Vietnamese law does not yet provide for
dealing with particular situations relating to
foreign investment in Vietnam, the parties may
agree in the contract to apply foreign laws
provided that such agreement is not
inconsistent with the provisions of the laws
of Vietnam.
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>> Article 5.
Languages used
Documentation of an
investment project and official correspondence
with State bodies of Vietnam must be prepared in
Vietnamese or in Vietnamese and a commonly used
foreign language.
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Chapter
II
FORMS
OF INVESTMENT
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>> Article 6. Business
Co-operation Contract ("BCC")
A BCC is a document
signed by two or more parties (hereinafter
referred to as the parties to a BCC) which
stipulates the responsibilities of, and the
sharing of business results between, the parties
for the purposes of commencing business investment
in Vietnam without creating a legal entity.
BCCs for the
exploration for or exploitation of oil and gas and
a number of other natural resource s in the form
of a production sharing contract shall be governed
by the provisions of the law on petroleum, the
relevant law and the FIL in Vietnam.
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>> Article 7. Contents
of a BCC
A BCC must contain
the following principal matters:
- Names,
nationalities and addresses of the duly
authorised representatives of the parties to
the BCC; the business address or the address
of the project.
- Objectives and
scope of business.
- Contribution of
the parties to the BCC, the sharing of
business results, and the schedule for
performance of the contract.
- Main products
and the ratio of products for export and
products for domestic consumption.
- Duration of the
contract.
- Rights and
obligations of the parties to the business
co-operation contract.
- Financial
principles.
- Amendments and
termination of the contract and conditions of
assignment;
- Sanction,
dispute resolution.
In addition to the
above matters, parties to a BCC may agree upon
other matters in a BCC.
A BCC must be
signed by authorised representatives of the
parties to a BCC, and shall be effective as from
the date of issuance of the investment licence.
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>> Article 8.
Co-ordination board
During the course
of doing business, where necessary, parties to a
BCC may by agreement establish a co-ordination
board to co-ordinate activities and perform the
BCC.
Co-ordination board
is not the leading body of parties to a BCC.
Functions, duties and powers of the co-ordination
board shall be agreed by the parties.
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>> Article 9.
Operation Office
A foreign party to
the BCC shall be allowed to establish an operation
office in Vietnam to represent investors in
carrying out the BCC and shall be responsible for
the activities of this office.
The branch of the
foreign party shall be allowed to have a seal and
an account, recruit employees, sign economic
contracts and conduct other business activities
within the scope stipulated in the BCC and the
investment licence.
The operation
office the foreign parties must register with the
licensing body.
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>> Article 10. Tax
obligations of parties to a BCC
- The foreign
party to a BCC shall fulfill its obligations
to pay business income tax ("BIT")
and profit remittance tax ("PRT") in
accordance with the FIL in Vietnam; the
Vietnamese party to a BCC shall fulfill its
obligations to pay BIT in accordance with the
provisions of the law applicable to domestic
enterprises.
- The BIT and
other tax liabilities of parties to a BCC
(including land rent, natural resource tax,
etc.) may be aggregately charged to the
product shared to the Vietnamese party, and
the Vietnamese party is responsible for paying
taxes to the government.
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>> Article 11. JVC
- A JVC is an
enterprise established in Vietnam on the basis
of a joint venture contract signed by two or
more parties to invest and carry on business
in Vietnam.
In special cases,
a JVC may be established on the basis of an
agreement signed between the Vietnamese
Government and a foreign Government.
- A new JVC is an
enterprise which is established between an
existing JVC with:
¤ a foreign
investor;
¤ a Vietnamese
enterprise;
¤ an organisation
such as hospital, school, research institute
which satisfies the conditions stipulated by
the Government;
¤ a foreigner
residing in Vietnam;
¤ an existing
joint venture, a wholly foreign owned
enterprise ("WFOE") in Vietnam.
- A JVC shall be
established in the form of a limited liability
company. Each joint venture party shall be
responsible to the other party and to the JVC
to the extent of its contribution to the legal
capital of the enterprise. A JVC shall have a
legal status in accordance with the law of
Vietnam, be established and operate as from
the date of issuance of the investment
licence.
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>> Article 12.
Contents of a joint venture contract
A joint venture
contract shall contain the following principal
matters:
- Names,
nationalities, addresses of authorised
representatives of the joint venture parties;
the name and address of the enterprise.
- Objectives and
scope of business.
- Investment
capital, legal capital, legal capital
contribution ratio, method and schedule for
making capital contribution, and schedule for
construction of the enterprise.
- Main products
and the ratio of products for export and
products for domestic consumption.
- Duration of
operation of the enterprise.
- Representatives
of the enterprise before the courts.
- Rights and
obligations of the parties.
- Financial
principles.
- Amendments and
termination of the contract; conditions of
assignment, conditions for termination and
dissolution of the enterprise.
- Responsibilities
from violation of contract, dispute
resolution.
In addition to the
above matters, the joint venture parties may agree
on other matters in in the joint venture contract.
A joint venture
contract must be signed by authorised
representatives of the joint venture parties, and
shall be effective as from the date of the
issuance of the investment licence.
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>> Article 13. Joint
venture’s charter
The JVC’s charter
must contain the following principal matters:
- Name and address
of the enterprise; the names, nationalities
and addresses of authorised representatives of
the joint venture parties.
- Objectives and
scope of business of the enterprise.
- Investment
capital, legal capital, legal capital
contribution ratio, method and schedule for
making legal capital contribution.
- Organisational
structure of the enterprise.
- Procedure for
passing decisions of the enterprise; the
principles of internal dispute resolution;
- Representatives
of the enterprise.
- Financial
principles.
- Ratio for
distribution of profits and losses between the
joint venture parties.
- Labour relation
within the enterprise, training plans for
executives, technical and professional staff,
and employees.
- Duration of
operation, termination and dissolution of the
enterprise.
- Procedures for
amendment and addition to the charter of a
JVC.
In addition to
the above matters, the joint venture parties may
agree on other matters in the charter of a JVC.
The charter of a
JVC must be signed by authorised representatives
of the joint venture parties and registered with
the licensing body.
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>> Article 14. JVC’s
legal capital
- Legal capital of
a JVC must be at least equal to 30% of the
total investment capital. With respect to
infra-structure projects, projects invested in
encouraged areas, afforestration projects,
large size projects, this ratio may be
reduced, but not lower than 20% of the
investment capital, and must be approved by
the licensing body.
- The ratio of
capital contribution of a party or parties to
a JVC shall be decided by the parties, but it
shall not be less than 30% of the legal
capital of the JVC. Considering fields of
investment, technology, market, investment
return and other socio-economic benefits, the
licensing body will approve a lower
percentage, but it shall not lower than 20% of
the legal capital of a JVC.
In case of a new
JVC, the percentage of capital contribution by
foreign parties must ensure the above
conditions.
- With respect to
important projects as approved by the
government, when signing a joint venture
contract, parties to the joint venture shall
agree to increase the capital contribution
portion of the Vietnamese party in the legal
capital of the joint venture.
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>> Article 15.
Progress schedule of contribution of legal capital
- The legal capital
may be contributed once in full at the time of
establishment of a JVC or by installments over a
reasonable period, following the method and
progress schedule stipulated in a joint venture
contract.
- In cases where the
joint venture parties fail, without reasonable
cause, to make capital contributions in
accordance with the agreed schedule, the
licensing body shall have the power to withdraw
the investment licence.
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>> Article 16. Legal
capital contribution in the form of land use
rights
The contribution to
the legal capital of a JVC in the form of land use
rights by the Vietnamese party shall be agreed by
parties on the basis of the land rent tariff
decided by the provincial People’s Committee
based on the Ministry of Finance’s
("MOF") general tariff.
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>> Article 17. Joint
venture’s Board of Management ("BOM")
- The BOM shall be
the body in charge of the JVC. The BOM shall
comprise a chairperson, a vice chairperson and
members.
The number of
members constituting the BOM, the members
representing each of the joint venture parties,
and the appointments of the board members, the
chairperson of the BOM, the GD and the first
deputy GD shall be in accordance with the
provisions of the FIL in Vietnam.
The Chairman of
the BOM, the vice chairman of the BOM and other
members of the BOM may concurrently hold the
positions of GD, deputy GDs and other positions
of a JVC.
- The term of
office of the BOM shall be agreed by the joint
venture parties but shall not exceed 5 years.
- When
establishing a new JVC, the existing JVC must
have at least two members in the BOM, with at
least one of those members being a Vietnamese
citizen representing the Vietnamese party in
the joint venture.
- Board members
shall not be paid salaries, but may be
entitled to an allowance related to the
activities of the board, which shall be
decided by the board. These expenses shall be
accounted for as the joint venture’s
operating expenses.
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>> Article 18.
Meetings of joint venture’s BOM
- The BOM shall
hold a meeting at least once a year.
Extraordinary meetings must be requested by at
least two thirds (2/3) of the members of the
BOM, or by one of the joint venture parties,
the GD or the first deputy GD. Meetings of the
BOM shall be convened abd chaired by the
chairman of the BOM. Chairman of the board may
authorised the vice chairman to convene and
chair the board meetings.
- Meetings of the
BOM must have a quorum of at least two thirds
(2/3) of the members of the BOM representing
the joint venture parties. A member of the BOM
may appoint, by a written instrument, a proxy
to attend meetings and vote on that member’s
behalf on matters in respect of which the
proxy is authorised to vote.
- The BOM shall
pass the decisions within its power by voting
at the meeting or by obtaining opinions in
written document.
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>> Article 19. Power
and duties of Chairman of the BOM
The chairman of the
BOM shall have the following powers and duties:
- To convene and
chair meetings of the BOM.
- To have a key
role in supervising and monitoring the
execution of resolutions of the BOM.
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>> Article 20. Powers
and responsibities of GD and Deputy GD
- General Director
("GD") and Deputy GD of a JVC shall be
responsible for the management and conduct of
the day-to-day activities of the JVC. The GD
shall be the representative of the enterprise
before the court and Vietnamese State bodies,
unless otherwise stipulated in the charter of
the JVC. The GD or the First Deputy GD must be a
representative of the Vietnamese party and must
be a Vietnamese citizen residing permanently in
Vietnam. In cases where the joint venture has
only one Deputy GD, that Deputy GD shall be the
first Deputy GD.
- The BOM shall
determine the power and duties of the GD and the
First Deputy GD. The GD shall be responsible
before the BOM for the operations of the JVC.
The GD needs to discuss with the Deputy GD about
the implementation of the board’s resolution
on a certain important issues such as:
organisation, nomination, dismissal of key
personnel, financial statements approval,
capital expenditure approval, economic contract
conclusions.
In cases where the
GD and the First Deputy GD have a difference of
opinion in relation to the operation of the
enterprise, the opinion of the GD must be complied
with, however, the First Deputy GD may reserve his
or her opinion and raise it with the BOM at its
next meeting for consideration and decision.
- In absence of the
GD, the Deputy GD shall represent the GD to
operate the enterprise and shall be responsible
for his/her activities before the board.
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>> Article 21. A
wholly foreign owned enterprise ("WFOE")
A WFOE is an
enterprise owned and established in Vietnam by a
foreign investor who shall be responsible for the
operations and the financial results of the
enterprise.
A WFOE shall be
established in the form of a limited liability
company having a legal entity in accordance with
the law of Vietnam, and shall be operational since
the date of receiving investment license.
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>> Article 22. A WFOE’
charter
A WFOE’s charter
shall have the following principal contents:
- Name and address
of the enterprise; the names, nationalities
and addresses of authorised representatives of
the foreign investors.
- Objectives and
scope of business of the enterprise.
- Investment
capital, legal capital, legal capital
contribution ratio, method and progress
schedule of legal capital contribution.
- Representatives
of the enterprise.
- Financial
principles.
- Labour relation
within the enterprise, training plans for
executives, technical and professional staff,
and employees.
- Duration of
operation, termination and dissolution of the
enterprise.
- Procedures for
amendment and addition to the charter of the
enterprise.
In addition to the
above, the enterprise’s charter may have other
contents.
A WFOE’s charter
must be initialed on each page and signed on the
last page by authorised representatives. The
enterprise’s charter shall be registered with
the licensing body.
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>> Article 23. Legal
capital of a WFOE
- The legal capital
of a WFOE must constitute at least thirty (30)
percent of the investment capital. In respect of
infrastructure construction projects, projects
invested in encourage areas, afforestration
projects, and large-scale projects, this ratio
may be reduced to twenty (20) percent provided
that approval from the licensing body is
obtained.
- Method and
progress schedule of legal capital contribution
shall be stipulated in the enterprise’s
charter. In cases where foreign investors fail
to follow the schedule without good reasons, the
licensing body shall have the rights to withdraw
the investment license.
- Any adjustments of
the enterprise’s investment capital and legal
capital shall be decided by the foreign
investors and should be approved by the
licensing body.
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>> Article 24. Legal
representatives of a WFOE
The legal
representatives of an enterprise with 100% foreign
owned capital shall be the GD of the enterprise
unless otherwise stipulated in the charter of the
enterprise.
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