Vietnam

Global Vietnam Lawyers is pleased to introduce an article by Lawyer Tran Huu Tien titled “Electronic Identification Accounts for Enterprises: What Bottlenecks Will FDI Enterprises Face?”. This article was originally published in The Saigon Times on 12 June 2025 and is shared here with permission from the publisher. From July 1, 2025, Decree 69/2024/ND-CP on electronic identification and authentication will officially take effect, marking a major step forward in Vietnam's digital transformation. Pursuant to Articles 7, 12 and 40.4 thereof, all enterprises established or registered to operate in Vietnam will need an electronic identification account to carry out all online administrative procedures. This Decree is aimed at digitizing administrative processes comprehensively, from tax declaration, customs, social insurance to business registration or license application, toward optimizing and making procedures transparent. This is a strong move demonstrating the Government's determination to build a convenient and modern business environment. However, a major challenge is present, especially for enterprises with foreign direct investment (FDI) when the legal representative is a foreigner. Big troubles loom large when the legal representative is a foreigner The problem arises right from the stage of registering a business identification account. Pursuant to Article 12.1 of Decree 69/2024/ND-CP, the issuance of this account requires the legal representative to use a level 2 electronic identification account. It is worth noting that the issuance of level 2 electronic identification accounts for foreigners is not currently supported by the registration system. While Vietnamese citizens are very familiar with citizen identification and the VNeID application, for foreigners, the process of obtaining a personal identification number or linking information to the VNeID system for business purposes has not yet been implemented. As a result, many FDI enterprises, including big names in the market, are in a "dilemma": they really want to comply with but cannot open an identification account as required by Decree 69/2024/ND-CP. This is a bottleneck in need of an urgent removal for the digital transformation process to take place smoothly and fairly for all economic sectors. What risks do FDI enterprises face? The time to apply Decree - July 1, 2025 - is approaching, but many FDI enterprises remain in a "waiting" state without determining the time when their identification accounts will be issued. If these problems are not unraveled promptly, FDI enterprises may face a barrage of serious challenges, directly affecting their operations and obligations to the State. The first is the possible administrative paralysis. Most obviously, FDI enterprises will not be able to carry out necessary administrative procedures at State agencies. Many important procedures such as labor, business registration, licensing, reporting, and other legal compliance obligations have been digitized and integrated on the National Public Service Portal. The lack of an identification account will lead to delays, interruptions, and even the impossibility to implement plans and projects, directly affecting business performance. More seriously, delays in fulfilling mandatory obligations can put businesses at risk of administrative sanctions, lawsuits, or even criminal prosecution in some cases. Next, it increases business operating costs and reduces business performance. Lack of identification accounts means that businesses cannot access the State's online administrative procedure processing systems. This forces them to return to traditional methods, which are more time-consuming to complete documents, mobilize personnel, print documents, and travel. The consequences not only incur unnecessary costs but also significantly affect overall performance of the business. These difficulties and challenges demand special attention from competent authorities, especially the Ministry of Public Security. It is necessary to promptly research, complete the process, issue specific and more convenient instructions on granting identification accounts to FDI enterprises. The timely removal of current "bottlenecks" not only helps FDI enterprises operate more smoothly but also clearly demonstrates Vietnam's commitment to a transparent, modern and friendly investment environment, contributing to promoting sustainable economic development. Author: Lawyer Tran Huu Tien - Global Vietnam Lawyers LLC

Global Vietnam Lawyers is pleased to introduce an article by Lawyer Nguyen Thi Hang – Lawyer Vu Nguyen Thanh Luong titled “The Land Law 2024 And Business Cooperation Contracts: Legal Obstacles Arising From “Production and Business Cooperation with Land Use Rights”. The contribution of land use rights (LUR) to business cooperation contracts (BCC) poses numerous legal challenges, leaving investors grappling with complex issues in search of viable solutions. While the Land Law 2024 is expected to address and resolve previous legal obstacles, the current legal framework governing this matter remains unclear. It contains significant gaps that require further clarification and reform, as analyzed below. The Land Law 2024 provides new provisions on (i) capital contribution with LUR and (ii) production and business cooperation with LUR The practice of utilizing LUR for BCC has long been prevalent in Vietnam. This structure enables parties to effectively leverage land resources without establishing a new legal entity. However, the legal framework governing such cooperation remains inadequate and lacks clarity, creating significant challenges for investors and other parties. To gain a clearer understanding of the changes introduced by the Land Law 2024 and to assess its potential impact on business cooperation activities involving LUR, it is necessary first to review the historical development of the relevant laws. First, the use of LUR under previous laws Before the enactment of the Land Law 2024, neither the Land Law 2003 nor the Land Law 2013 provided a specific definition of “capital contribution with LUR” nor did they contain provisions distinguishing between (1) the contribution of LUR to establish a legal entity and (2) the contribution of LUR for business cooperation under a BCC. Second, the Land Law 2024 provides a significant change. To address the limitations of the previous laws, the Land Law 2024 drafting process incorporated feedback and introduced substantial revisions. Report No. 86/BC-BTNMT dated 03 August 2022 by the Ministry of Natural Resources and Environment (now the Ministry of Agriculture and Environment) on the review of the Land Law 2013 noted that: “The Land Law 2013 provides that land users may contribute capital with their LUR. However, under the Investment Law 2020 and the Enterprise Law 2020, land users may contribute capital with LURs for business cooperation or to form part of a company’s charter capital. Nonetheless, the Land Law 2013 does not clearly regulate these two forms of capital contribution, nor does it provide distinct mechanisms suitable to the nature and characteristics of each type of transaction. It is therefore recommended that the Land Law 2013 be revised and supplemented to clearly and comprehensively regulate the contribution of LURs for both business cooperation and capital contribution to a company’s charter capital.”[1] To address this matter, the Ministry of Natural Resources and Environment proposed a clear distinction between the two concepts of “capital contribution with LUR” (in Vietnamese: "góp vốn bằng QSDĐ") and “contribution of LUR” (in Vietnamese: "góp QSDĐ"). Based on this proposal and comments received during the drafting process, the Land Law 2024 was officially enacted and now differentiates the following concepts: “Capital contribution with LUR” refers to the transfer of LUR to form or increase the charter capital of an economic organization.[2] “Production and business cooperation with LUR” (in Vietnamese: "Hợp tác sản xuất, kinh doanh bằng quyền sử dụng đất") refers to the use of LUR by the land user to engage in production or business cooperation without transferring LUR.[3] These newly defined terms in the Land Law 2024 reflect a legislative effort to remedy the shortcomings of the Land Law 2013. However, upon further analysis and practical application of the Land Law 2024 and its associated legal instruments, we have observed that these new provisions still contain ambiguities and give rise to legal uncertainties. As a result, implementation in practice remains challenging, and further guidance and clarification from the relevant authorities are necessary. The contribution of LUR to BCC: Ambiguities and Limitations? First, the Land Law 2024 does not clearly specify whether LUR’s contribution to BCC would constitute “production and business cooperation with LUR” or clarify which types of land are eligible for such contribution. Upon reviewing the relevant provisions, the phrase “production and business cooperation with LUR” appears only twice in the Land Law 2024—once in a definitional clause and once in Article 192 regarding the consolidation of agricultural land. Accordingly, although the Land Law 2024 does define “cooperation in production and business with LUR”, as outlined above, it is limited to one of several mechanisms intended to consolidate and increase the area of agricultural land[4] for more efficient agricultural production. Specifically, Article 192.1 of the Land Law 2024 provides: “Consolidation of agricultural land means increasing the area of agricultural land for production through the following methods: (a) Conversion of agricultural LUR through land readjustment and land swap plans; (b) Leasing of LUR; (c) Production and business cooperation with LUR.” This raises the question of whether “production and business cooperation with LUR” is synonymous with contributing LUR to BCC. If the answer is yes, does it follow that this form of cooperation applies exclusively to agricultural land within the narrow context of “agricultural land consolidation”? If so, does this mean that other types of land, such as commercial or residential land, cannot be contributed to BCC? Is the legislature being overly cautious in regulating transactions involving LUR, thereby inadvertently restricting the rights of land users? In addition, Article 219 of the Land Law 2024 provides for “contributing LUR and land readjustment” as a mechanism for rearranging land within a specified area, based on the consensus of land users to reallocate all or part of their LUR in accordance with a plan approved by a competent authority. This raises further questions: Is a “cooperation agreement”[5] entered into by land users under this provision, a form of “production and business cooperation with LUR”? Or is it a different type of BCC that may apply to land types other than agricultural land (considering that the contribution and readjustment of LURs may also be used for redevelopment projects in rural residential areas, urban renewal projects, or the renovation or reconstruction of old apartment buildings)? In any case, it is evident that the above provision, and the Land Law 2024 as a whole, adopt a relatively narrow approach to regulating “production and business cooperation with LUR” and “contributing LUR.” If applied strictly, these provisions do not appear to provide a sufficient legal basis for an investor to contribute LURs (which are neither agricultural land nor part of an urban redevelopment, renovation, or reconstruction project) to the BCC with another party. These ambiguities significantly hinder the ability to determine the scope of the Land Law 2024 in regulating cooperative business arrangements involving LURs and to identify which types of land are legally permissible for such contributions. Second, the Land Law 2024 does not explicitly provide for the right of land users to "production and business cooperation with LUR," nor does it recognize the LUR’s contribution to BCC. A review of the provisions on land users’ rights under the Land Law 2024[6] reveals that no category of land user—including individuals, economic organizations, or foreign-invested economic organizations—is expressly granted the right to “production and business cooperation with LUR,” or any other right that would permit the use of LUR for business cooperation through the BCC. Is this an oversight in the Land Law 2024, or does it reflect a deliberate legislative intention? If the law is interpreted, applied, and enforced strictly according to its wording, land users, including domestic organizations and foreign-invested economic organizations, would not have the right to use LUR (particularly for project-related land types such as commercial/service land or residential land) to engage in business cooperation under the BCC, as the Land Law 2024 does not provide for such a right. This creates legal uncertainty and could be viewed as a restriction on the rights of land users. This omission in the Land Law 2024 appears to be inconsistent with the provisions of the Investment Law 2020, which grants investors the right to use project LUR for business cooperation[7] as well as with the Civil Code 2015, which permits parties to establish civil transactions that are not prohibited by law. This raises the question: can it be inferred that land users may still use LUR for participation in the BCC under other laws, notwithstanding the absence of such a right in the Land Law 2024? Third, does LUR become jointly owned property of the BCC members under the Civil Code 2015? Compared to previous legislation, the Land Law 2024 introduces definitions to clarify that “production and business cooperation with LUR” is not considered as capital contribution in the form of LUs and does not entail a transfer of LUR. However, as analyzed above, the Land Law 2024 still does not clearly address whether “production and business cooperation with LUR” constitutes a form of contribution of LUR to BCC, and whether a party is permitted to contribute LUR to BCC. Suppose that such contribution is permissible under the 2020 Law on Investment and the Civil Code 2015, the question remains: what is the legal status of ownership of the contributed LURs? The Land Law 2024 fails to clarify or resolve the overlap with the provisions of the Civil Code 2015 regarding cases where LURs are used under the BCC. Specifically, if the use of LURs in the BCC is deemed a form of "cooperation contract" under Article 504.1 of the Civil Code 2015, then the contributed LURs will be considered as common property in proportion among the cooperating members ("property contributed by members, jointly created by them, and other property as prescribed by law shall be considered common property in proportion among the cooperating members"[8]). In such cases, the disposal of this property must be agreed upon in writing by all members under Article 506.2 of the Civil Code 2015. As a result, the provision under the Civil Code 2015 that property, including LUR, contributed to BCC becomes jointly owned in proportion among members raises further complications concerning the procedures for registration of changes and updates to the Certificate of LUR, ownership of residential housing and other assets attached to land (LURC) after LUR has been contributed to BCC. At present, the Land Law 2024 does not provide regulations on this issue and appears to leave it unaddressed. The competent State authorities’ lack of regulation via updates to the LURC for LUR contributed to the BCC may create the risk that the status of land bound by BCC may become difficult to detect or verify. This leads to legal uncertainty in cases where a party who has contributed LUR to BCC (but LURC still only reflects the original contributor’s name without any updates) subsequently carries out transactions such as transferring LUR to another party. In such instances, the remaining BCC members would be unaware of and unable to control the transaction. This could adversely affect the rights of the cooperating parties as well as bona fide third parties. In essence, it appears that the Land Law 2024 has not resolved the overlaps and inconsistencies among the relevant legal provisions regarding the contribution of LURs to BCCs, resulting in divergent interpretations and practical difficulties in implementation. Therefore, at this stage, when investing in the form of contributing LUR to BCC, the involved parties should seek official guidance from the competent state authority prior to implementation, based on a comparison of the applicable legal provisions against the specific case files. Besides, in order to address the aforementioned legal uncertainties and to establish a clear and transparent legal framework for transactions involving the contribution of LUR to BCC, it is respectfully proposed as follows First, detailed provisions should be added to the Land Law 2024 or incorporated into a guiding Decree or Circular to clarify the scope of application of the term “production and business cooperation with LUR,” including a clear determination of whether this concept encompasses the use of LURs in BCCs, and specifying which categories of land are permitted for such cooperative arrangements.   Second, regulations should be added to affirm the right of land users to contribute LUR to BCC, along with any applicable conditions or restrictions on the exercise of such right.   Third, the law should clearly provide whether ownership of LUR is transferred when contributed to the BCC, including whether such LUR becomes jointly owned assets, and the procedures for registering changes in LUR. Author: Nguyen Thi Hang and Vu Nguyen Thanh Luong – Global Vietnam Lawyers [1] Page 17 of Report No. 86/BC-BTNMT dated 03 August 2022 [2] Article 3.22 of the Land Law 2024 [3] Article 3.26 of the Land Law 2024 [4] Article 192.1 of the Land Law 2024 [5] Article 100.3(a) of Decree 102/2024 [6] From Article 26 to Article 44 of the Land Law 2024, only Article 37.1(h) provides a regulation regarding the rights and obligations of individuals using land, which states: “To contribute capital with LUR, or assets under their ownership attached to the land, to an organization; or to contribute land use rights jointly with other individuals or overseas Vietnamese for the purposes of production and business cooperation.” We understand that this case still constitutes a “capital contribution with LUR” for the purpose of establishing or increasing the charter capital of an economic organization. [7] Article 53.1 of Decree No. 31/2021 stipulates that “Investors may use land use rights and assets attached to land under an investment project for business cooperation purposes.” [8] "Joint ownership by shares is a form of co-ownership in which each co-owner's share of ownership in the common property is determined." (under Article 209.1 of the Civil Code 2015)

Global Vietnam Lawyers is pleased to introduce an article by Lawyer Le Thanh Tam – Lawyer Tran Thanh Tung titled “Wavering Between Shareholders’ Right to Access Information and Corporate Need of Maintaining Confidentiality”. This article was originally published in The Saigon Times on 08 May 2025 and is shared here with permission from the publisher. Providing information to shareholders – how to balance shareholder rights and corporate operational efficiency? At a meeting at the beginning of the year, the general director of a public company shared a dilemma in the company with more than ten thousand shareholders when a group of shareholders continuously requested the company to provide documents, from resolution of the board of directors (BOD), company regulations to contracts, and even any invoices for a certain payment. Continuous and repetitive requests made shareholder-serving staff busy, not having enough time to take care of other shareholders, and the general director had to spend time assessing whether the documents are sensitive or bound by confidentiality obligations with partners before approving the provision of information to shareholders. Although knowing for sure that such shareholders intentionally caused troubles to the executive board, the general director could not rely on any basis for refusal. On the other hand, shareholders often complained that the company provides information slowly, with restrictions, or even rejections on the grounds of "business secrets". So how to balance the right of shareholders to request information and the effective operation of the company? Right to access information: a tricky conflict to resolve Shareholders are the owners of a joint stock company, so it is reasonable for them to have the right to access information. Article 115 of the 2020 Enterprise Law stipulates that shareholders or groups of shareholders owning 5% or more of common shares (or a smaller percentage according to the charter) are entitled to review, search, and extract minutes, resolutions of the BOD, financial statements, reports of the supervisory board, contracts, transactions that must be approved by the BOD, and other documents, except for documents related to “trade secrets” or “business secrets”. Article 115 is given priority aimed at ensuring shareholders’ access to important information, but this provision leaves a controversial loophole. First, the phrase “other documents” is unclear, allowing shareholders to request any document except “trade secrets” or “business secrets”. However, the 2020 Enterprise Law does not clearly define these concepts. Meanwhile, the 2009 Intellectual Property Law (Article 4) stipulates that “trade secrets” are information obtained from financial and intellectual investments, which has not been disclosed, being of a business value. The 2018 Competition Law (Article 45) defines acts of trade secret infringement in the form of unauthorized access and use of information. The lack of consistency between the laws makes it difficult to apply and reduces transparency. Second, the Enterprise Law does not have a protection mechanism to classify “trade secrets” or “business secrets”. Enterprises must decide by themselves, facing not only complaints from shareholders if they refuse, but also risking the disclosure of sensitive information if they provide it without control. Third, the contradiction between the Enterprise Law, the Intellectual Property Law and the Competition Law further complicates the problem. For example, documents that are not “business secrets” under the Intellectual Property Law may be considered as “trade secrets” by enterprises, causing disputes with shareholders. Eventually, the law does not clearly stipulate the process for requesting information, such as how to do it or the deadline for responding. This leads to the risk of shareholders abusing their rights, making excessive requests, and affecting the company's operations. Recommendations for enterprises Pending the legal amendments, enterprises need to proactively address the problem. First of all, it is necessary to formulate regulations on classifying information, identifying “trade secrets” and “business secrets” based on the criteria of the Intellectual Property Law and the Competition Law, such as business strategies or customer data. Based on that, enterprises should issue regulations on providing internal information, determining the scope of information that shareholders can access, distinguishing readable documents, that can only be viewed on the ground (such as meeting minutes of the BOD), from copyable documents (such as financial statements). The regulations should clearly state the information request process, response time, and dispute resolution. In addition, to prevent abuse of rights (such as illegal use of competitive information), enterprises can require shareholders to commit to confidentiality or impose sanctions if they violate. These measures help balance shareholder rights and the stable operation of the company, improve governance efficiency, and cement investor sentiment.

Global Vietnam Lawyers respectfully introduces the article under the headline “Can I claim compensation after receiving insurance payment in case of my vehicle encountering an incident?” written by GV Lawyers’ team of lawyers, to analyze some practical legal aspects related to compensation liability in accident situations and insurance payments. Such incidents as electrical short circuits, fire-explosion, sudden failed operation, unsafe states… can occur to vehicles due to many different reasons from driver mistakes to accident impacts, to poor vehicle maintenance, to possible defects arising from the manufacturing process. Upon occurrence of such a problem, many vehicle owners may believe that the vehicle is at fault and the vehicle manufacturer must be to blame for. In fact, in addition to the aforesaid case, there are many other cases where vehicle owners choose to sue the vehicle manufacturer to seek a compensation decided by competent authorities.  Is it possible for a lawsuit to be filed for compensation for damages to any insured property? The current Law on Consumer Protection stipulates that consumers have the right to request business organizations and individuals to compensate for damages when products and goods are defective or unsafe (Article 4). The principle of civil law also gives people who suffer from any hurts to their health, honor, dignity, reputation, property or life, the right to claim compensation from the damage perpetrator (Articles 11, 13, 584 of the Civil Code and Articles 4, 185 of the Civil Procedure Code). Accordingly, if the vehicle owners believe that the incident is caused by the manufacturer's fault, leaving them aggrieved by any damages, they, at their own discretion, then can take legal action against the vehicle company at the competent authority to protect their rights. However, in many incidents, the vehicles, especially those with high value such as cars, large-displacement motorcycles, etc., might participate in voluntary insurance to prevent unexpected events. In that case, according to the insurance policy for each specific type of insurance, the vehicle owner can receive insurance benefits corresponding to the value of the vehicle before the incident. Given such scenario, the law on insurance business stipulates in Article 16 of the Law on Insurance Business 2022 as follows: “… the insured person is responsible for transferring to the insurance enterprise or branch of a foreign non-life insurance enterprise the right to request a third party who has caused damage to be held accountable for compensation within the scope of the insurance compensation amount. This principle does not apply to life insurance contracts and health insurance contracts;”  The aforesaid Article is understood that if the vehicle owner has received insurance compensation from the insurer within the scope of the right to claim compensation from the flawed party, the vehicle owner will not provide the basis for suing the vehicle company corresponding to the insured object. Instead, the insurer will receive the vehicle owner's right to claim compensation and decide whether or not to claim compensation. Although the vehicle owner can still file a lawsuit and have it accepted by the competent authority, the likelihood of losing the lawsuit is very high if the vehicle company proves that the vehicle owner has received the insurance money and transferred the right to claim compensation by signing agreements and documents with the insurer. This is called the "subrogation principle" in concluding and implementing insurance contracts according to the law on insurance business. Claiming compensation for other damages Note that in addition to the scope of insured damages, the aforesaid law on insurance business will not cause the vehicle owner to lose the right to claim compensation if other damages or losses occur, such as a vehicle fire-explosion that spreads to surrounding vehicles, properties, houses, or causes human casualties. In these cases, it will be necessary to determine which damages are caused by the vehicle's manufacturing defect and who suffers from the damages for the purposes of providing a basis for claiming compensation. Depending on the case, the vehicle owner also has the right to request the manufacturer to compensate for mental damage at the agreed compensation level or according to the law if no agreement can be reached. However, the process of pursuing litigation to seek compensation is far from simple because the vehicle owner will have to prove "manufacturing defect" as a causal correlation triggering the above damages. The manufacturing defect is a purely technical issue and can only be determined by experts or authorities, while most vehicle owners - consumers often do not have enough expertise. Especially for the vehicles that have had incidents such as fire- explosion, serious deformation, and have been stored for a long time, determining whether the vehicle is truly defective from the manufacturing process and whether the defect leads to any incident becomes all the more difficult and may face objections from the manufacturer. After all, although the competent authority may still request a technical assessment, there is no guarantee that the assessment results will be favorable or helpful in clarifying the “manufacturing defect”. Accidents or incidents occurring to a vehicle always make much emotional inflictions on the owner who has spent a lot of effort and money to create assets. At that time, the desire to pursue responsibility for the manufacturer's fault is completely understandable. However, to prepare for a complicated lawsuit, the vehicle owner will need to pay attention to the aforesaid issues to avoid wasting time and money ineffectively, not to mention achieving no expected results.