Asia Legal

Currently, the Government of Vietnam has not yet issued license to any investor wishing to do cryptocurrency business in Vietnam In a press conference on monetary policy and banking operations in the first quarter of 2019. Mr. Nghiem Thanh Son, Deputy Director of Payment Department of the State Bank of Vietnam (SBV) verbally affirmed that the State Bank of Vietnam has not yet issued any license to any company wishing to do cryptocurrency business in Vietnam. Running cryptocurrency business has been excluded by Vietnam in the Schedule of WTO Commitments, and in the absence of Vietnamese legislation on this kind of business, any investor wishing to do cryptocurrency business in Vietnam is requested to consult with and obtain the approval from various competent authorities in Vietnam, including Ministry of Planning and Investment, the Ministry of Finance, Ministry of Industry and Trade, the State Bank of Vietnam; and other relevant Ministry (if any) in accordance with clause dd, Article ...

In the first article, we answered the question “Is Forex trading regulated under the laws of Vietnam?”. Accordingly, Forex business is not regulated under the laws of Vietnam and the competent authority in Vietnam, i.e., the State Bank of Vietnam has not, so far, issued any further guidance or instruction on such kind of business in Vietnam. Today, in the second article, we will discuss the legal risks in doing Forex business in Vietnam without license. Doing Forex business in Vietnam without license: legal risks Doing Forex business has been excluded by Vietnam in the Schedule of WTO Commitments. Since Vietnamese legislation does not have specific regulations on this kind of business, any investor wishing to do Forex business in Vietnam must consult with and obtain the approval from various competent authorities in Vietnam, including Ministry of Planning and Investment, the Ministry of Finance, Ministry of Industry and Trade, the State Bank of Vietnam; and other relevant Ministry (if...

Further to our article on Cryptocurrency, today we will discuss another related topic which is increasingly popular in emerging markets, including Vietnam: Forex business/ trading. In the first part of this Article, we will answer the question: “Is Forex trading regulated under the laws of Vietnam?” With Forex trading, the Traders attempt to profit by buying and selling currencies by actively speculating on the direction currencies which are likely to fluctuate in the future. On the other hand, investing in foreign exchange trading is investing in the difference between the exchange rate of a pair of one currency or the price fluctuations of other commodities. It means Forex trading is not about buying and selling foreign exchange to serve the needs of using foreign exchange but rather to speculate on price fluctuations. However, the applicable laws of Vietnam do not provide any clauses on price fluctuation speculation as a legal foreign exchange activity. According to the Schedule of...

In the first part of the article, we answered the question: “Are cryptocurrencies recognized as non-cash payment instrument under Vietnamese laws?, and in the second part, we will answer the question: “Is usage of cryptocurrencies as a payment method prohibited under Vietnamese laws?” Article 1 Decree No. 80/2016/ND-CP, amending the Decree No. 101/2012/ND-CP, on non-cash payments provide that “6. Non-cash payment instruments in payment transactions (hereinafter referred to as payment instruments), including cheques, payment orders, collection orders, bank cards and other payment instruments as prescribed by the State Bank. 7. Illegal payment instruments are payment instruments not included in Clause 6 of this Article.” Accordingly, only non-cash payment instruments, including cheques, payment orders, collection orders, bank cards, and other payment instruments as prescribed by the State Bank are recognized as legal payment instruments. Since the cryptocurrency has not yet been prescri...

In this Article, we will help foreign companies wishing to do cryptocurrency business in Vietnam to understand legal aspects on this type of business under the applicable laws of Vietnam. The first part of the Article will answer the question: “Are cryptocurrencies recognized as non-cash payment instrument under Vietnamese laws?” To answer the above question, we have to review, among others, the following key legal documents: a. Civil Code No. No. 91/2015/QH13 issued by the National Assembly of the Socialist Republic of Vietnam dated 24th November 2015 (“Civil Code 2015”); b. Criminal Code No. 100/2015/QH13 issued by the National Assembly of the Socialist Republic of Vietnam dated 27th November 2016 (“Criminal Code 2015”); c. Law on Credit Institutions No. 47/2010/QH12 issued by the National Assembly of the Socialist Republic of Vietnam dated 16th Jun 2010 (“Law on Credit Institutions 2010”); d. Law No.17/2017/QH14 issued by the National...

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 ...

We advised a corporate client in a transaction to acquire 3 ha-land and assets attached to land (hereinafter referred to as “the land”) in a Northern province of Vietnam, from another company. We act on behalf of the Buyer. Since our client is not familiar with legal services and it is the first time they have been using legal services, our scope of works is limited to a number of key works such as drafting the contract, assisting the client during negotiations of the contract and following up until our client is legally recorded as the new owner of the land. Other works which our client can do itself including checking master plan to make sure that the land they acquire is not included in the construction planning for other projects, are carried out by the client. Nevertheless, when drafting the contract, we still include “representations and warranties” clause into the contract, in which we clearly specify that the Seller undertakes and warrants that the land is not included in any ...

Few months ago, a corporate client (the Buyer) requested me to assist in its purchase of 100% equity from the owners of a private university in Vietnam (the Sellers). The Buyer and the Sellers had worked together before and reached an agreement on the payment. Accordingly, the Buyer shall deposit 10% of the value of the sale and purchase agreement (the SPA) to the Sellers after signing the Memorandum of Understanding and the remaining 90% shall be paid after the Buyer and the Sellers sign the notarized SPA at a licensed notary office, and after the Sellers hand over all original legal documents in connection with the private university to the Buyer. This way of doing transaction was quite familiar in Vietnam 15-20 years ago. However, it is so risky for the Buyer if it follows this transaction structure when key steps in an M&A transaction, including without limitation, legal and financial due diligence are not done, which can help define the requirements that the Sellers must meet...

I often receive the same and popular question from many of my clients whether they can write contract value in Vietnamese Dong, which is converted from USD in their contracts? One of the reasons, among others, why many Vietnamese people want to write the contract value in USD or in Vietnamese Dong, which is converted from USD in their contracts, is because of the exchange rate fluctuations between VND and USD, where the VND is often seen to suffer from price escalation. It is very simple to answer this kind of question as it is clearly stated under the applicable regulations of Vietnam. Specifically, pursuant to Ordinance No. 06/2013/UBTVQH13, within the territory of Vietnam, all transactions, payments, listings, advertisements, quotation, pricing, writing price on contracts, agreements and other similar forms of residents and non- residents must not be effected in foreign exchange except for cases permitted in accordance with regulation of the State bank of Vietnam. This regulation i...