The Socialist Republic of Vietnam encourages foreign organizations and individuals to transfer technology into Vietnam on the basis equality and mutual benefit.

The Socialist Republic of Vietnam guarantees the rights and legal interests of foreign organizations which and foreign individuals who transfer technology into Vietnam, and shall create favorable conditions for such transfer.

for the purpose of this Ordinance, the following terms shall have the meanings ascribed to them hereunder:

• 1. the transferor of technology means a party consisting of one or more foreign economic, scientific, technological or other legal entities which or individuals who transfer technology into Vietnam.

• 2. the transferee of technology, means a party consisting of one or more Vietnamese economic, scientific, technological or other legal entities which or individuals who, are receiving the technology being transferred into Vietnam.

• 3. the two parties means the transferor and the transferee of technology.

The following activities constitute the transfer of technology :

• 1. Transfer of ownership rights or of the right to use patents, licenses, utility models or other industrial property rights;

• 2. Transfer of know-how or specialized technology in the form of technical solutions, design documents, formulate, and technical specifications with or without equipment;

• 3. Provision of technical assistance and consultancy services, including training and the supply of information.

The transfer of technology into Vietnam shall be subject to the following requirements:

• 1. It shall enhance technological standards and production efficiency and improve the quality of products or be capable of developing new products.

• 2. It must not be detrimental to the safety of production.

• 3. It shall make rational use of energy, natural resources, and manpower.

• 4. It shall not adversely affect the environment.

Any transfer of technology which is commercial by nature or which involves the rights and obligations of the parties concerned shall take place pursuant to a written contract.

A technology transfer contract shall contain the following principal information:

• 1. Objects of the technology transfer : name, content, technological specification and result to be achieved;

• 2. Price, terms, and mode of payment;

• 3. Place, time, and schedule for transfer;

• 4. Details concerning industrial property rights;

• 5. The effective duration of the contract and conditions for its amendment and termination.

• 6. Undertakings of the two parties in respect of quality, reliability, guarantees, confidentiality of the technology, and other guarantees against defect in the technology and its transfer;

• 7. Training related to the transferred technology;

• 8. The law and procedures to be applied in the resolution of any disputes which may arise from the performance of the technology transfer contract.

Unless authorized by an authorized State body of Vietnam the following restrictive clauses shall not be permitted in the contract:

• 1. Obligations on the technology transferee to purchase raw materials, equipment, intermediate goods and parts or to use permanently manpower from sources stipulated by the transferor.

• 2. Restrictions concerning quantity of production, prices and terms for the sale of products of the transferee, including the appointment of sales agents or commercial representative.

• 3. Restriction on the markets to which transferee may export their products, other than those markets in which the transferor already manufactures or sells similar products, or has granted a franchise license to a third party.

• 4. Restrictions on the research and development of transferred technology by transferees or on the acquisition of similar technology from other sources.

The price of the transferred technology shall be agreed upon between the parties.

The method of payment shall be agreed upon between the parties and may be by installments.

The duration of the contract shall not exceed seven years from the date of its commencement. In necessary cases, extensions to the contract may be permitted by the authorized State body.

During the performance of a contract, either of the parties may request the other to inform it of details of improvements and innovations which have been made or discovered in relation to the transferred technology.

Where one of the parties is interested in the improvements and innovations referred to in paragraph 1 of this article, the other party shall be obliged to transfer all related information on the basis of reciprocity.

The two parties shall attempt to resolve any disputes which arise out of a contract by negotiation.

In the event that the two parties to the dispute fail to reach an agreement, the dispute shall be referred to an economic arbitration body of Vietnam or any other arbitration or judicial body agreed upon in the contract.

A technology transfer contract shall be effective only after it has been officially approved. The application for approval may be made by either the transferor, the transferee or both.

In order that the contract may be approved, the following documents shall be submitted to the appropriate State body of Vietnam.

• 1. An application for approval.

• 2. The contract of technology transfer and its annexes.

• 3. A statement justifying the objectives and feasibility of the technology to be transferred.

• 4. Information concerning the legal status of the two parties.

The State body shall notify its approval of the contract within three months of receiving the application and enclosed documents referred to in article 14 of this Ordinance. The approval shall be given in the form of a technology transfer certificate.

Where any false information is discovered in the application made by either or both of the parties, the technology transfer certificate may be withdrawn, in which case the contract shall automatically become invalid.

The parties may agree to amend, add to, terminate or extend the duration of the contract. These changes shall come into effect upon their approval by the authorized State body.

The Council of Ministers shall issue regulations concerning the delegation to a specific State body of the task of approving technology transfer contracts.

The Government of the Socialist Republic of Vietnam shall announce policies and implement measures necessary for encouraging technology transfers and for granting privileges in cases of priority.

Taxes shall be imposed in relation to technology transfers in accordance with the taxation regulations in force in Vietnam at the time.

A transferor or transferee of technology may transfer abroad any payment received, in the form of currency or in kind, as agreed upon by the two parties to the contract.

A transferor or transferee of technology may, in its application to the authorized State body for approval of the contract, also apply for incentives or privileges.

The appropriate State body shall, within two months of receiving the application, accept or reject such request for incentives privileges.

The Government of the Socialist Republic of Vietnam shall, pursuant to the provisions of this Ordinance, issue regulations to facilitate the transfer of technology into Vietnam by overseas Vietnamese, as their contribution to national development.