Language in the commercial contract with foreign partner
One of my Clients asks: “My company is a local company. We plan to sign a commercial contract with a foreign partner. Can we draft the contract in both English and Vietnamese? I heard from the accountant that the contract in both English and Vietnamese is not allowed as our company is a local company”
I’m joking: “It’s fine, even when you add Lao language into that contract”
Vietnam has been deeply integrating into the world economy, with 13 free trade agreements signed. More and more Vietnamese businesses are doing business with foreign partners, and the parties usually agree that the contract is made in bilingual, including Vietnamese and another foreign language, most commonly English, followed by other languages such as Chinese (when the foreign partner is Chinese), and Japanese (when the foreign partner is Japanese), Korean (when the foreign partner is Korean)…
In addition to a number of special cases, for which the contract must be in Vietnamese (in the field of technology transfer, consumption, information technology …), the laws of Vietnam governing commercial transactions, typically the Civil Code 2015 and Commercial Law 2005, do not have specific regulations on language in the contract. In other words, the parties have the right to choose the appropriate language to express their will, not necessarily Vietnamese.
However, it should be noted that:
1) For state management agencies, including tax authorities: the language in the documents (including contracts) submitted … shall be Vietnamese. The state management agencies don’t care how many languages the contract is made into, what language the contract has, instead, they request that all documents submitted must be in Vietnamese. If the documents are not in Vietnamese, then they must be translated into Vietnamese, as provided in Vietnamese tax law, accounting law…;
2) For the local Courts: the language in civil proceedings must be Vietnamese, as provided in the Civil Procedure Code 2015. Similar to the item (1) above, the Courts don’t care how many languages the contract is made into, what language the contract has, instead, they request that all documents submitted must be in Vietnamese. If the documents are not in Vietnamese, then they must be translated into Vietnamese and the translation must be notarized;
3) For the Commercial Arbitration: the language for dispute settlement, in which at least one party is a foreign-invested enterprise, is agreed upon by the parties in the contract in accordance with the Commercial Arbitration Law 2010. Vietnamese language is NOT REQUIRED in this case. During the dispute settlement process, the parties may also agree otherwise, on the language for dispute settlement, provided that this agreement is accepted by the arbitration council.
Just few words to share with you all. Hope it is helpful to those (Vietnamese) who have been doing business with foreign partners.
Is there any difference in similar case within your jurisdiction? Please share your idea.
Thank you!
I’m joking: “It’s fine, even when you add Lao language into that contract”
Vietnam has been deeply integrating into the world economy, with 13 free trade agreements signed. More and more Vietnamese businesses are doing business with foreign partners, and the parties usually agree that the contract is made in bilingual, including Vietnamese and another foreign language, most commonly English, followed by other languages such as Chinese (when the foreign partner is Chinese), and Japanese (when the foreign partner is Japanese), Korean (when the foreign partner is Korean)…
In addition to a number of special cases, for which the contract must be in Vietnamese (in the field of technology transfer, consumption, information technology …), the laws of Vietnam governing commercial transactions, typically the Civil Code 2015 and Commercial Law 2005, do not have specific regulations on language in the contract. In other words, the parties have the right to choose the appropriate language to express their will, not necessarily Vietnamese.
However, it should be noted that:
1) For state management agencies, including tax authorities: the language in the documents (including contracts) submitted … shall be Vietnamese. The state management agencies don’t care how many languages the contract is made into, what language the contract has, instead, they request that all documents submitted must be in Vietnamese. If the documents are not in Vietnamese, then they must be translated into Vietnamese, as provided in Vietnamese tax law, accounting law…;
2) For the local Courts: the language in civil proceedings must be Vietnamese, as provided in the Civil Procedure Code 2015. Similar to the item (1) above, the Courts don’t care how many languages the contract is made into, what language the contract has, instead, they request that all documents submitted must be in Vietnamese. If the documents are not in Vietnamese, then they must be translated into Vietnamese and the translation must be notarized;
3) For the Commercial Arbitration: the language for dispute settlement, in which at least one party is a foreign-invested enterprise, is agreed upon by the parties in the contract in accordance with the Commercial Arbitration Law 2010. Vietnamese language is NOT REQUIRED in this case. During the dispute settlement process, the parties may also agree otherwise, on the language for dispute settlement, provided that this agreement is accepted by the arbitration council.
Just few words to share with you all. Hope it is helpful to those (Vietnamese) who have been doing business with foreign partners.
Is there any difference in similar case within your jurisdiction? Please share your idea.
Thank you!
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