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GOVERNMENT SOCIALIST REPUBLIC Of VIETNAM
No. 18-CP Independence - freedom - Happiness
Hanoi,16 April, 1993
Pursuant to the Law on the Organization of the Government dated 30 September 1992;
Pursuant to the Law on foreign Investment in Vietnam dated 29 December 1992, the Law on Amendment of and Addition to a Number of Articles of the Law on foreign Investment in Vietnam dated 30 June 1990, and the Law on Amendment of and Addition to a Number of Articles of the Law on foreign Investment in Vietnam dated 23 December 1992 (hereinafter referred to as the foreign Investment Law);
On the proposal of the Minister-Chairman of the State Committee for Co-operation and Investment;
CHAPTER I General Provisions
Article 1
This Decree makes specific regulations on the forms of direct investment by foreigners. forms of indirect investment such as the provision of international credits and international aid are not subject to this Decree.
Article 2
for the purpose of this Decree, the following terms shall have the meanings ascribed to them thereunder:
1. Prescribed capital of an enterprise with foreign owned capital means the initial capital which is stipulated in the Charter of an enterprise. Loan capital is not included in the prescribed capital of an enterprise.
2. Invested capital means the capital to be employed in carrying out an investment project, including prescribed capital and loan capital.
Article 3
The following are subject to the foreign Investment Law:
1. Vietnamese enterprises of any economic sector, including:
- State-owned enterprises;
- Co-operatives;
- Enterprises established in accordance with the Law on Companies;
- Private enterprises established in accordance with the Law on Private Enterprises.
2. foreign legal entities which, and individuals who make direct investment in Vietnam.
3. Enterprises with foreign owned capital.
4. State bodies who are parties to build-operate-transfer contracts.
5. Overseas Vietnamese who make direct investment in Vietnam or jointly contribute capital with one or more Vietnamese economic organizations for the purpose of investment co-operation with a foreign party. In both of the above instances, they shall enjoy favorable conditions which shall be the subject of separate provisions.
Article 4
1. Enterprises established in accordance with the Law on Companies and the Law on Private Enterprises may independently enter into business co-operation contracts with foreign organizations and individuals in every sector of the national economy exce pt those in which investment is prohibited by the law and regulations of Vietnam.
2. In relation to investment areas for which, according to the provisions of the Law on Companies and the Law on Private Enterprises permission of the Prime Minister of the Government must be obtained before the investment takes place, any business c o-operation with a foreign party must also be carried out in accordance with those provisions.
Article 5
1. All foreign organizations which and individuals who invest in Vietnam shall observe the procedure set out in this Decree.
2. The allocation of land for business purposes under the foreign Investment Law shall comply with the provisions of the laws relating to land.
3. All construction projects shall comply with the regulations on Management of Capital Construction. During the construction phase, where it is proposed to use foreign standards and technology, the agreement of the Ministry of Construction shall fi rst be obtained.
4. Official fees for considering an application for a business or investment license and a certificate of registration of charter of an enterprise shall be paid once in full at the time the application is filed.
The parties shall agree which of them shall bear the fees payable in relation to a business co-operation contract or joint venture enterprise.
Article 6
The State body of the Government of the Socialist Republic of Vietnam, which is stated in Chapter V of the Investment Law to be in charge of foreign investment, is the State Committee for Co-operation and Investment.
Article 7
Documents submitted to the State Committee for Co-operation and Investment shall be in Vietnamese and a widely-used foreign language. Both the Vietnamese and foreign language versions shall be equally valid.
CHAPTER II
Business Co-operation Contract
Article 8
1. A business co-operation contract is a document signed by two or more parties (hereinafter called the contracting parties) with the object of conducting jointly one or more business operations in Vietnam, on the basis of mutual allocation of respon sibilities and sharing of profits or losses, without creating a legal entity.
Commercial contracts and economic contracts for the mere exchange of goods such as delivery of raw materials in return for finished products, or purchase of equipment in return for products in the future, are beyond the scope of this Decree.
2. The parties to a business co-operation contract shall agree upon its duration having taken into account the nature and objectives of the business and obtain the approval of the State Committee for Co-operation and Investment.
3. A business co-operation contract shall be signed by duly authorized representatives of the contracting parties.
Article 9
An application for the issue of a business license shall be signed by the contracting parties and submitted to the State Committee for Co-operation and Investment with the following documents:
1. A business co-operation contract.
2. All necessary information which relates to the contracting parties, such as details of their financial standing, the charter in the case of a company and details of legal capacity in the case of individuals.
3. The economic-technical statement of the contract.
Article 10
A business co-operation contract shall contain the following principal matters:
1. The nationalities, addresses, and the names of the duly authorized representatives, of the contracting parties.
2. A description of the intended business activities.
3. A list of the main equipment and materials, their quantity and quality; the specification, quantity and quality of the products of the business; the proportion of products to be sold in the domestic and international markets; and the proportion of revenue to be received in foreign currency and in Vietnamese currency.
In the case of production of import substitutes, the method of payment shall be clearly stated.
4. The rights and obligations of the contracting parties, the method of determination and distribution of profits or losses of the business, and the conditions for assignment by the parties of their rights and obligations under the contract.
5. The duration of the contract and the responsibilities of the parties in performance, amendment and termination of the contract.
6. The procedure for the resolution of disputes between the contracting parties.
7. The effectiveness of the contract.
Article 11
1. The State Committee for Co-operation and Investment shall, within three months from the date of receipt of an application for a business license, notify its decision to the contracting parties.
2. In the event that the State Committee for Co-operation and Investment requires the contracting parties to submit additional documentation or to amend some of the provisions of the contract, it shall send a request to them within one month from the date of receipt of the application.
In the event that the contracting parties do not reply in writing within forty-five (45) days from the date of receipt of the request from the State Committee for Co-operation and Investment, the application for issue of the business license shall be deem ed invalid.
In the event that a reply does not satisfy the request of the State Committee for Co-operation and Investment then the time for consideration and notification of approval as stated in clause 1 of this article shall be suspended until the reply is adequate .
3. In the event that an application for issue of the business license is approved, the State Committee for Co-operation and Investment shall issue a business license to the contracting parties. Copies of the business license shall be sent to the rel evant State administrative authorities.
Article 12
A business co-operation contract shall not be effective until a business license is issued by the State Committee for Co-operation and Investment. The contracting parties shall, within thirty (30) days after the date of issue of the business license, cau se to be published in a central or local newspaper the following principal details of the business license:
- the names, addresses and representatives of the contracting parties;
- a description of the business activities;
- the representatives of the contracting parties to appear before Vietnamese courts and State authorities;
- the duration of the business co-operation contract and the date of issue of the business license.
Article 13
Each contracting party shall have the right to assign its share of the invested capital, provided that priority is given to the other contracting parties. Where the parties fail to agree on terms for assignment, the intending assignor shall have the righ t to assign to a third party. The terms of the assignment offered to the third party shall not be more favorable than the terms offered to the other contracting parties.
An assignee shall submit to the State Committee for Co-operation and Investment the contract of assignment and attach documents which relate to its legal capacity, financial standing, and authorized representative.
In the event that the value of the assignment is higher than the initial value, an assignor shall be liable to pay tax in accordance with the law of Vietnam.
An assignment must have the unanimous approval of the other contracting parties and shall be effective as of the date that it is approved by the State Committee for Co-operation and Investment.
Article 14
In the event that the contracting parties agree to extend the duration of the contract, they shall file an application for approval with the State Committee for Co-operation and Investment no later than six months prior to the expire of the contract. The State Committee for Co-operation and Investment shall notify its decision to the contracting parties within fifteen (15) days after the date of receipt of the application.
Article 15
1. A business co-operation contract may be terminated prior to its expire if the conditions for its termination as specified in the contract are satisfied.
2. After the contract expires, its relevant clauses concerning the resolution of disputes and rights of action shall remain valid for the period otherwise provided by law, or in the event that there is no law, for the period agreed upon by the contra cting parties.
3. The State Committee for Co-operation and Investment shall have the right to withdraw a business license prior to its expire if the business activities of the parties breach the law or do not conform with the objectives and provisions stated in the business license.
Article 16
The contracting parties shall submit a report on the results of the performance of the contract in accordance with the regulations enacted by the State Committee for Co-operation and Investment.
Article 17
Each contracting party shall:
1. Ensure full payment is made of all taxes due: foreign parties must pay tax in accordance with the provisions of the foreign Investment Law; and the Vietnamese parties must pay tax in accordance with the taxation laws applicable to domestic busines ses.
2. Be responsible for its activities before the law of the Socialist Republic of Vietnam.
Article 18
1. Contracting parties must carry out the liquidation of a contractual business co-operation in accordance with the provisions stipulated in the contract. The duration of the liquidation process shall not exceed six months after the decision to term inate the contract is made or after the expiration of the contract. When necessary, this period may be extended provided that the total period shall not exceed one year. 2. All expenses incurred in the process of liquidation shall be met by the contracting parties, and payment of these expenses shall take priority over payment of all other liabilities.
3. All other liabilities shall be paid in accordance with the following order of priorities:
- salaries and labour insurance premiums due by the joint venture enterprise to or in respect of its employees;
- taxes and imposts in the nature of tax which the contracting parties are liable to pay to the State of Vietnam;
- loans (including interest);
- other liabilities.
CHAPTER III
Joint Venture Enterprises
Article 19
1. A joint venture enterprise may be established in Vietnam on the basis of a joint venture contract signed by one or more Vietnamese parties and one or more foreign parties, or between a joint venture enterprise and one or more foreign parties (here inafter referred to as joint venture parties) for the purpose of carrying out business activities in Vietnam.
In special cases, a joint venture enterprise may be established on the basis of treaties signed between the Government of the Socialist Republic of Vietnam and the Government of a foreign country.
2. A joint venture enterprise shall be established as a limited liability company and shall have the status of a Vietnamese legal person; the liability of each joint venture party to the other parties, to the joint venture enterprise, and to third pa rties shall be limited to its contribution to the prescribed capital.
3. A joint venture enterprise shall operate on the principle of financial autonomy, on the basis of the joint venture contract, the charter of the joint venture enterprise, and in conformity with the investment license and the law of the Socialist Re public of Vietnam.
4. A joint venture enterprise shall be established formally when the State Committee for Co-operation and Investment issues an investment license and a certificate of registration of the charter of the enterprise.
Article 20
The application for the investment license signed by the joint venture parties shall be submitted to the State Committee for Co-operation and Investment together with the following documents:
1. The joint venture contract.
2. The charter of the joint venture enterprise.
3. Relevant information relating to the legal capacity, and financial standing of the joint venture parties.
4. A feasibility study.
Article 21
A joint venture contract shall contain the following principal matters:
1. The nationalities, addresses, and authorized representatives of the joint venture parties.
2. The name, address and business activities of the joint venture enterprise.
3. The invested capital, the prescribed capital, the proportion of capital contribution to be made by each party, the form and timing of the making of capital contributions, the timetable for construction of the enterprise and the conditions and proc edure for assignment of the invested capital.
4. A description of the main equipment and materials required for the establishment of the joint venture enterprise; the products of the business and the markets in which they will be sold; the proportion of the revenue to be received in Vietnamese c urrency and in foreign currency. In the case of production of import substitutes, the method of payment shall be clearly stated.
5. The duration of the joint venture enterprise, and events which may give rise to termination and dissolution.
6. The resolution of disputes between the joint venture parties; the arbitration procedures and law to be applied in case of a dispute.
7. The responsibilities of each party in the performance of the joint venture contract.
8. The effectiveness of the contract.
Article 22
The charter of the joint venture enterprise shall include the following principal matters:
1. The nationalities, addresses, and authorized representatives of the joint venture parties.
2. The name, address and business activities of the joint venture enterprise.
3. The invested capital, the prescribed capital, the proportion of contribution to the prescribed capital to be made by each party, and timing of the making of capital contributions.
4. The number of members, composition, rights and obligations and duration of the board of management of office of the members of the board of management, and of the general director and deputy directors of the joint venture enterprise.
5. The representatives of the joint venture enterprise before the law courts, arbitration and State bodies of Vietnam.
6. The principles governing financial management, standards of accounting and statistics systems, and the insurance of assets of the joint venture enterprise.
7. The ratio for distribution of profits and losses by the joint venture parties.
8. The duration of the enterprise, and its termination and dissolution.
9. Labour relations in the joint venture enterprise.
10. Training plans for executives, technical and business persons and employees.
11. The procedure for amending the charter of the joint venture enterprise.
Article 23
1. The State Committee for Co-operation and Investment shall, within three months from the date of receipt of an application for an investment license, notify the joint venture parties of its decision.
2. In the event that the State Committee for Co-operation and Investment requires the joint venture parties to submit additional documents or to amend certain articles in the contract, the charter, or the feasibility study, it shall send a request to them within one month from the date of receipt of the application for an investment license.
In the event that the joint venture parties do not reply in writing within forty-five (45) days of receipt of the request from the State Committee for Co-operation and Investment, the application for the investment license shall be deemed invalid. In the event that a reply does not satisfy the request made by the State Committee for Co-operation and Investment then, the time for consideration and approval as stated in clause 1 of this article shall be suspended until the reply is adequate.
3. In the event that the application for issue of an investment license is approved, the State Committee for Co-operation and Investment shall issue an investment license and certificate of registration of the charter of the joint venture enterprise. Copies of the investment license shall be sent to the relevant State administrative bodies.
Article 24
The joint venture contract shall become effective and the joint venture enterprise shall become a legal entity from the date of the issue by the State Committee for Co-operation and Investment of the investment license and certificate of registration of t he charter of the joint venture enterprise.
The joint venture enterprise shall, within thirty (30) days from the date of the issue of the investment license, cause to be published in a central or local newspaper, the details stated in the investment license including:
1. The full names, addresses, and representatives of the joint venture parties.
2. The name and address of the joint venture enterprise and its business activities.
3. The invested capital, the prescribed capital, and the proportion of the prescribed capital to be contributed by each joint venture party.
4. The representatives of the joint venture enterprise before the law courts, arbitration and State bodies of Vietnam.
5. The proposed duration of the joint venture enterprise and the date of the issue of the investment license.
Article 25
Any amendment to the joint venture contract or the charter of the joint venture enterprise agreed upon by the joint venture parties shall not take effect until it is approved by the State Committee for Co-operation and Investment.
Article 26
The joint venture parties shall make their contributions to the prescribed capital of the joint venture enterprise in accordance with the provisions of articles 7 and 8 of the foreign Investment Law. Vietnamese parties shall contribute wholly owned capit al or other capital resources of domestic enterprises and individuals in order to ensure that they contribute reasonable proportions of the prescribed capital of joint venture enterprises.
When necessary, Vietnamese parties may make their contributions in the form of natural resources and the value of the legal right to use land, water surface and sea surface, provided that it is legally permitted by competent State bodies of Vietnam.
An existing joint venture enterprise which is a party to a new joint venture enterprise has the power to determine the form of capital contribution to the prescribed capital of the new joint venture enterprise, provided that in doing so, it does not reduc e its own prescribed capital.
The value of the capital contribution of each party shall be agreed by the parties, based on international market prices at the time the contribution is made.
The State Committee for Co-operation and Investment shall have the power to review such agreement and to require the enterprise and the joint venture parties to reassess the attributed values of the prescribed capital. When necessary, the State Committee for Co-operation and Investment shall have the power to designate a specialized organization to fulfill this requirement. Where an error which is due to the fault of the enterprise or the joint venture parties is discovered, the costs of reassessment sh all be borne by the enterprise or the joint venture parties.
Article 27
The prescribed capital shall constitute at least thirty (30) per cent of the invested capital of the joint venture enterprise. In special cases, however, this proportion may be less than thirty (30) per cent, provided that approval has been granted by th e State Committee for Co-operation and Investment.
The proportion of capital contributions of one or more foreign parties shall be agreed by the parties, provided that it shall be no less than thirty (30) per cent of prescribed capital of the joint venture enterprise.
In relation to those investment projects which are determined by the State Committee for Co-operation and Investment as having economic significance, the joint venture parties are permitted, when entering into a joint venture contract, to agree upon the t iming of and the rate at which the Vietnamese party shall increase the proportion of its capital contribution to the prescribed capital of the joint venture enterprise.
Article 28
Contributions made by the joint venture parties to the prescribed capital may be effected either once in full at the time of establishment of the joint venture enterprise or by installments over a reasonable period agreed by the parties.
The form and timetable for the making of contributions to the prescribed capital shall be stipulated in the joint venture contract, and shall be consistent with the economic-technical feasibility study.
In the event that the joint venture parties fail, without reasonable cause, to comply with the timing for making contributions to the prescribed capital the State Committee for Co-operation and Investment has the power to withdraw their investment license .
Article 29
A joint venture enterprise is prohibited from reducing prescribed capital during its period of operation. Any increase in the invested capital, and in the prescribed capital, and any change to the proportion of capital contribution in the prescribed capi tal decided by the board of management of the joint venture enterprise shall be approved by the State Committee for Co-operation and Investment.
Article 30
Each of the joint venture parties shall be entitled to assign its capital contribution in a joint venture enterprise and, in doing so, shall give priority to the other parties to the joint venture enterprise. Where the joint venture parties fail to agree on terms and conditions for assignment, the intending assignor shall have the right to assign its invested capital to a third party, provided that the terms and conditions of such assignment shall not be more favorable than those offered to the other joi nt venture parties.
The assignee shall submit to the State Committee for Co-operation and Investment the contract of assignment and attach any documents which relate to its legal capacity, financial standing and authorized representative.
In the event that value of the assignment is higher than the initial value, the assignor shall pay tax in accordance with the law of Vietnam.
Any such assignment shall not be effective until it is unanimously agreed upon by the board of management of the joint venture enterprise and approved by the State Committee for Co-operation and Investment.
Article 31
1. The highest body in charge of the joint venture enterprise shall be its board of management.
2. The appointment of members of the board of management, the proportion of such members which each party may appoint, the total number of such members and appointment of the board chairman, the general director and deputy general directors shall be determined in accordance with article 12 of the foreign Investment Law. The chairman of the board of management may concurrently hold the post of general director of the joint venture enterprise.
3. The term of office of the members of the board of management shall be agreed by the joint venture parties but shall not exceed five years.
4. Where a joint venture enterprise and a foreign party are parties to a new joint venture enterprise, each of them shall appoint at least two members to the board of management; where there are multiple parties to a new joint venture enterprise cons isting of an existing joint venture enterprise and a number of foreign parties, the existing joint venture enterprise shall appoint at least two members to the board of management.
Article 32
1. The board of management shall meet at least once a year.
Meetings of the board of management shall be convened at the request of the board chairman or two thirds of its members. The general directors or the deputy general directors shall have the right to recommend that the board chairman convene a meeting of the board of management.
2. Any meeting of the board of management shall require the attendance of at least two thirds of its members who represent the joint venture parties.
A member of the board of management may appoint, by lawfully signed written instrument, a proxy to attend meetings and vote on that member's behalf on the matters in respect of which the proxy is authorized to vote.
Article 33
1. The board of management shall have the power to make decisions on all matters relating to the joint venture enterprise. A unanimous vote by the members of the board of management shall be required in relation to any of the following important mat ters:
- The long term and annual production and business plans of the joint venture enterprise, its budget, and decisions to make borrowings.
- Any amendment of, and addition to the charter of the joint venture enterprise.
- Appointment, and dismissal of the chairman of the board of management, the general director, the first deputy general director and the chief accountant.
2. Other decisions made by the board of management shall be valid only if they have been approved by a majority of two thirds of the board members present.
3. In the event that the matters referred to in paragraph 1 of this article are not resolved by a unanimous vote of the board members, and the operation of the enterprise is adversely affected, the board of management may choose one of the following options:
- To submit the matters to a conciliatory council. The conciliatory council shall be established on the basis of agreement between the joint venture parties and shall be composed of equal numbers of members representing each party and a representative of the State Committee for Co-operation and Investment who shall act as the chairman of the conciliatory council. Any decision of the conciliatory council shall be adopted by majority vote and shall be the final decision binding on the joint venture partie s.
- To propose that the State Committee for Co-operation and Investment be reconciliatory; in such a case, any decision made by the State Committee for Co-operation and Investment shall be final.
- To dissolve the joint venture enterprise.
Article 34
The general director and deputy general directors of the joint venture enterprise shall be responsible for the management and conduct of the day to day business of the joint venture enterprise. Where the joint venture enterprise has more than one deputy general director, the board of management shall appoint one of them as the first deputy general director. The general director or the first deputy general director shall be a Vietnamese citizen residing in Vietnam and working for the Vietnamese joint vent ure party. Where a joint venture enterprise has only one deputy general director, the deputy general director shall have the functions of a first deputy general director.
The board of management shall determine the respective responsibilities and powers of the general director and the first deputy director. The general director and the first deputy general director shall be responsible to the board of management for the o peration of the joint venture enterprise. In the event that there is a difference of opinion between the general director and the first deputy general director in relation to management, the opinion of the general director shall be complied with, however , the opinion of the first deputy general director shall be reserved and submitted to the board of management, and decided upon at the next meeting, or the first deputy general director shall propose that the chairman of the board of management convene a special meeting.
Article 35
1. The duration of a joint venture enterprise shall be agreed upon by the joint venture parties in the joint venture contract in accordance with article 15 of the foreign Investment Law and shall be approved by the State Committee of Co-operation and Investment.
2. The duration of a joint venture enterprise shall commence from the date on which an investment license is issued.
Article 36
If the joint venture parties agree to extend the duration stated in the investment license, they shall, at least six months prior to the expire of the duration, file an application to this effect with the State Committee for Co-operation and Investment fo r consideration and approval.
The State Committee for Co-operation and Investment shall, within thirty (30) days from the date of receipt of the application, notify the joint venture parties of its decision. In the event that the application is approved, the joint venture parties may continue in operation without the need to proceed with re-registration.
Article 37
A joint venture enterprise may, in the following circumstances, terminate its operation and be dissolved prior to the expire of its duration stated in the investment license:
1. The occurrence of any event of force majeure which results in the performance of the contract becoming impossible.
2. The failure of one or more joint venture parties to discharge its or their obligations under the contract, thereby depriving the joint venture enterprise of the ability to continue in operation.
3. Where the losses of the joint venture enterprise are such that it is no longer able to pursue its activities.
4. Other circumstances as provided for in the joint venture contract.
In the event that the joint venture enterprise is dissolved due to the default of one or more of the parties, the defaulting party or parties shall, in accordance with any terms stated in the contract and which are not contrary to the law of the Socialist Republic of Vietnam, indemnify the other party or parties for all losses suffered.
Article 38
Any decision to dissolve a joint venture enterprise prior to the expire of its duration shall be made by the board of management and submitted to the State Committee for Co-operation and Investment for its approval.
The State Committee for Co-operation and Investment has the power to dissolve a joint venture enterprise prior to the expire of its duration where the activities of the joint venture enterprise breach the law or deviate from the objectives and responsibil ities stated in its charter and investment license.
Article 39
1. The duration of the liquidation period of a joint venture enterprise shall not exceed six months after the date of the expire of the joint venture enterprise or the date of the decision to dissolve the joint venture enterprise. When necessary, th is period may be extended provided that the total period shall not exceed one year.
2. The board of management shall, at least six months prior to the expire of the joint venture enterprise or no later than one month after the decision to dissolve the joint venture enterprise prior to its expire, as the case may be, form, and determ ine the duties and powers of, a liquidation committee of at least three members. Members of the liquidation committee may be selected from the personnel of the joint venture enterprise or from outside experts.
3. All expenses incurred in the process of liquidation shall be met by the joint venture enterprise, and payment of these expenses shall take priority over payment of all other liabilities of the joint venture enterprise.
4. All other liabilities of the joint venture enterprise shall be paid in accordance with the following order of priorities:
- salaries and insurance premiums due by the joint venture enterprise to or in respect of its employees;
- taxes and imposts in the nature of tax which the joint venture enterprise is liable to pay to the State of Vietnam;
- loans (including interest);
- other liabilities of the joint venture enterprise.
Article 40
If a liquidation committee is not established within the time period stipulated in article 39 of this Decree, the State Committee for Co-operation and Investment will decide on the establishment of a liquidation committee to carry out the liquidation of t he joint venture enterprise. Where necessary, the State Committee for Co-operation and Investment may require an audit company to assist a liquidation committee. All expenses incurred in the process of liquidation shall be met by the joint venture enter prise.
Article 41
The liquidation committee of a joint venture enterprise shall notify the State Committee for Co-operation and Investment of the date on which it is established and commences work. The liquidation committee shall be responsible before the law courts and s tate bodies in all matters concerning the liquidation.
The liquidation committee shall, no later than two months after the conclusion of its work, return the original investment license and seal and prepare and submit a liquidation report to the State Committee for Co-operation and Investment.
Article 42
The State Committee for Co-operation and Investment shall, upon the expire of the duration of the liquidation period stipulated in article 39 of this Decree, terminate the work of the liquidation committee, even if there are disputes between the joint ven ture parties in relation to the liquidation. Such disputes shall be settled in accordance with the provisions of article 100 of this Decree.
The State Committee for Co-operation and Investment shall issue a decision to withdraw the investment license and shall notify its decision to the authorities concerned.
CHAPTER IV
Enterprises with One Hundred (100) Per Cent foreign Owned Capital
Article 43
An enterprise with one hundred (100) per cent foreign owned capital is one which is established and owned by a foreign organization or individual in Vietnam, and which is fully responsible for its own management and business results.
Article 44
An enterprise with one hundred (100) per cent foreign owned capital shall be established as a limited liability company and shall be a Vietnamese legal entity.
An enterprise with one hundred (100) per cent foreign owned capital shall be established after the State Committee for Co-operation and Investment issues an investment license and certificate of registration of the charter of the enterprise.
Article 45
The duration of an enterprise with one hundred (100) per cent foreign owned capital shall be determined in the same manner as that provided for a joint venture enterprise in article 35 of this Decree.
Article 46
An application for an investment license shall be signed by a fully authorized representative of the enterprise and shall be submitted to the State Committee for Co-operation and Investment with the following documents:
1. The charter of the enterprise.
2. All necessary information relating to the legal capacity and the financial standing of the foreign investor.
3. A feasibility study.
Article 47
The State Committee for Co-operation and Investment shall determine those projects which are of economic importance and shall provide guidance for the foreign investor to state in the application for investment that it will consent to a Vietnamese enterpr ise, on the basis of agreement, purchasing a share of the capital of the enterprise so as to have the result of converting it into a joint venture enterprise. The principles, the proportion and the timing of any assignment shall be stated clearly in the application for investment.
The prescribed capital shall constitute at least thirty (30) per cent of the invested capital of the enterprise. In special cases, the proportion of the prescribed capital to the invested capital may be less than thirty (30) per cent, provided that it is approved by the State Committee for Co-operation and Investment.
A one hundred (100) per cent foreign owned enterprise shall be prohibited from reducing its prescribed capital during its period of operation. Any increase in the prescribed capital or the invested capital shall be decided by the enterprise and shall be subject to the approval of the State Committee for Co-operation and Investment.
Article 48
The charter of an enterprise with one hundred (100) per cent foreign owned capital shall include the following principal matters:
1. The nationality, address, and authorized representative of the foreign investor.
2. The name of the enterprise, its address and its activities.
3. The invested capital, the prescribed capital, the timetable for capital contribution and any construction project.
4. The representatives of the enterprise before the law courts, arbitration and State bodies of Vietnam.
5. The principles governing financial matters, accounting standards, and statistics, and the insurance of the assets of the enterprise.
6. The duration of the enterprise, termination and dissolution.
7. Labour relations in the enterprise.
8. Training plans for executives, technical and business persons and employees.
9. The procedure for amending the charter of the enterprise.
Article 49
The issue of an investment license to an enterprise with one hundred (100) per cent foreign owned capital shall take place in accordance with the same procedure as that provided for a joint venture enterprise in article 23 of Chapter III of this Decree.
An enterprise with one hundred (100) per cent foreign owned capital shall, within thirty (30) days from the date of issue of its investment license, cause to be published in a central or local newspaper the contents of the investment license including the following:
- The name and address of the foreign investors;
- The name, address and business activities of the enterprise;
- The invested capital and the prescribed capital of the enterprise;
- The representative of the enterprise before the law courts, arbitration and State bodies of Vietnam;
- The duration of the operation of the enterprise and the date of issue of its investment license.
Article 50
Each amendment to the charter of an enterprise with one hundred (100) per cent foreign owned capital shall not take effect until it is approved by the State Committee for Co-operation and Investment.
Article 51
A non-resident owner of an enterprise shall appoint, in writing, a duly authorized representative who shall reside in Vietnam, and who shall register with the State Committee for Co-operation and Investment.
Article 52
In the event that the activities of the enterprise breach the law or deviate from the objectives and responsibilities as stated in the charter of the enterprise and investment license, the State Committee for Co-operation and Investment shall have the pow er to issue a decision which either temporarily suspends its operation or which dissolves it prior to the expire of the duration of its operation.
Article 53
1. Any decision in relation to the liquidation of an enterprise with one hundred (100) per cent foreign owned capital shall be made by the enterprise. The duration of the liquidation of the enterprise shall not exceed six months after the date of th e expire of the license or after the date on which a decision to dissolve the enterprise prior to its expire is made. When necessary, this period may be extended provided that the total period shall not exceed one year.
2. All expenses incurred in the process of liquidation of an enterprise shall be met by the enterprise, and payment of these expenses shall take priority over the payment of all other liabilities.
3. All other liabilities shall be paid in accordance with the following order of priority:
- Salaries and labour insurance premiums due by the enterprise to, or in respect of, employees;
- Taxes and imposts in the nature of tax which the enterprise is liable to pay to the State of Vietnam;
- Loans (including interest);
- Other liabilities.
4. The enterprise has the responsibility, no later than two months after the conclusion of the liquidation, to return the original investment license and seal, and submit a liquidation report to the State Committee for Co-operation and Investment.
CHAPTER V
Export Processing Zones, Export Processing Enterprises, and Build-Operate-Transfer Contracts
Article 54
Regulations on Export Processing Zones and Export Processing Enterprises referred to in the Law on the Amendment of and Addition to a Number of Articles in the Law on foreign Investment in Vietnam dated 23 December 1992 shall be provided for in separate l egislation promulgated by the Government.
The Government of Vietnam encourages the establishment of joint venture enterprises between one or more Vietnamese parties and one or more foreign parties for the purpose of constructing and operating the infrastructure of Export Processing Zones.
Article 55
A Build-Operate-Transfer contract means a document signed by investors and an authorized State body for the construction in Vietnam of infrastructure project such as bridges, roads, airports, sea ports, power stations.
A Build-Operate-Transfer contract may be performed with one hundred (100) per cent foreign owned capital or with foreign owned capital and the capital of the Government of Vietnam and/or Vietnamese organizations and individuals.
All investors have the responsibility to organize the construction of the project and manage it within a time period of sufficient length in order to recover their invested capital plus a reasonable profit; after which they have an obligation to transfer, without compensation, the project to the Government of Vietnam.
Article 56
Regulations on Build-Operate-Transfer contracts referred to in the Law on the Amendment of and Addition to a Number of Articles of the Law on foreign Investment in Vietnam dated 23 December 1992 shall be provided for in separate legislation promulgated by the Government.
Article 57
A Build-Operate-Transfer contract shall take effect after the issue of an investment license by the State Committee for Co-operation and Investment.
CHAPTER VI
Technology Transfer
Article 58
The Government of the Socialist Republic of Vietnam shall protect the legal rights and interests of the parties transferring foreign technology into Vietnam and shall create favorable conditions for such transfer; and encourages and grants preferential tr eatment to the transfer of advanced technology.
Article 59
The transfer of foreign technology into an investment project in Vietnam shall be in the form of capital contribution or in return for periodical payment under a contract for transfer of technology.
Article 60
The transfer of technology into an investment project in Vietnam shall satisfy all the requirements stipulated in article 4 of the Ordinance on Transfer of foreign Technology into Vietnam dated 5 December 1988.
Article 61
The transfer of technology into Vietnam in the form of capital contribution shall be considered and determined by the State Committee for Co-operation and Investment during its evaluation of the investment project, and after receiving written recommendati ons of the Ministry of Science, Technology and Environment.
The transfer of technology into Vietnam in return for periodical payment on the basis of a contract for transfer of technology shall take place in accordance with the procedure provided for in the Ordinance on the Transfer of foreign Technology into Vietn am.
CHAPTER VII
Business Organization
Article 62
Contracting parties and enterprises with foreign owned capital are fully entitled to determine their own business programs and plans.
Article 63
1. One or more import applications may be submitted for the import of equipment, machinery, transport vehicles or raw and other materials into Vietnam for the construction of the enterprise.
2. The procedure for the import of equipment, machinery, spare parts, transport vehicles, raw and other materials, and fuel, into Vietnam, which items amongst others, are required for business purposes may be carried out once each year based on the p roposals of the contracting parties and of the enterprise with foreign owned capital.
3. Where necessary, additions to, or adjustments of the list of imports may be approved.
4. The contracting parties and enterprises with foreign owned capital shall give priority to the procurement, in Vietnam, of equipment and materials as substitution for imports, provided comparable commercial conditions are available.
5. The Ministry of Commerce shall issue import licenses on the basis of the investment or business license issued by the State Committee for Co-operation and Investment, and in accordance with the provisions contained in paragraphs 1, 2, 3 and 4 of t his article.
Article 64
The contracting parties and enterprises with foreign owned capital shall have the right to export directly their own products, or they may export through their agents.
In relation to the products which are permitted to be sold in the Vietnamese market, the contracting parties and enterprises with foreign owned capital may conduct sales directly, or through their agents.
CHAPTER VIII
Labour Relations
Article 65
Labour relations in an enterprise with foreign owned capital shall be regulated by the Ordinance on Labour Contracts dated 10 September 1990 and the Regulations on Labour in Enterprises with foreign owned capital issued with and attached to Decree No. 233 -HDBT dated 22 June 1990 of the Council of Ministers (now called the Government).
CHAPTER IX
financial Matters
Article 66
An enterprise with foreign owned capital and the foreign parties to business co-operation contracts shall be liable to pay profits tax at the rate of twenty-five (25) per cent of the profits earned, except in cases which are within the incentive category where foreign investment is encouraged as provided for in article 67 of this Decree.
In relation to the exploitation of oil and gas and a number of other rare and precious natural resources the profits tax rate applicable shall be determined on a case by case basis, taking into account the nature and activities of the project, but shall b e no less than twenty-five (25) per cent of the profits earned.
Article 67
The profits tax rates applicable to the incentive category shall be as follows:
1. A rate of twenty (20) per cent shall apply to investment projects which satisfy two of the following criteria:
- five hundred (500) or more people are employed;
- Advanced technology is introduced;
- At least eighty (80) per cent of products are exported;
- The prescribed capital of the enterprise or the capital contributed to a contractual business co-operation is no less than ten (10) million US dollars.
2. A rate of fifteen (15) per cent shall apply to the following investment projects:
- Infrastructure construction projects;
- Exploitation of natural resources (except oil, gas, and a number of rare and precious resources);
- Heavy industries such as metallurgy, basic chemicals, machinery manufacturing and cement;
- Cultivation of perennial industrial crops;
- Investment projects which are located in mountainous regions, and other regions where natural, economic, and social conditions are unfavorable (including hotel projects but excluding projects for the exploitation of rare and precious minerals); and
- Projects where all assets are assigned to Vietnam after the expiration of duration of operation without payment of any compensation (including hotel projects).
3. A ten (10) per cent rate shall apply to enterprises with foreign owned capital involved in:
- Infrastructure construction projects which are located in mountainous regions, and other regions where natural, economic, and social conditions are unfavorable;
- Reforestation projects;
- Projects of special significance.
Article 68
The tax rates provided for in article 67 of this Decree shall not apply to hotel projects (except in cases where the investment is located in mountainous regions, and other regions where natural, economic, and social conditions are unfavorable, or in case s where all assets shall be assigned to Vietnam after the expiration of the duration of operations without any compensation), and projects in the fields of banking, finance and insurance and accounting, auditing and commercial services.
Article 69
Exemptions from and reductions of profits tax shall be granted to enterprises with foreign owned capital as follows:
1. In respect of the projects stated in article 66 of this Decree, an enterprise may be exempted from payment of profits tax for one year as from the time it starts to make profit and may be granted a fifty (50) per cent reduction of profits tax for a maximum period of the two subsequent years.
2. In respect of the projects stated in paragraph 1 of article 67, an enterprise may be exempted from payment of profits tax for two years commencing from the first profit-making year and may be granted a fifty (50) per cent reduction of profits tax for a maximum period of the three subsequent years.
3. In respect of the projects stated in paragraph 2 of article 67, an enterprise shall be exempted from payment of profits tax for two years commencing from the first profit-making year and shall be granted a fifty (50) per cent reduction of profits tax for the four successive years.
4. In respect of the projects stated to in paragraph 3 of article 67, an enterprise shall be exempted from payment of profits tax for four years commencing from the first profit-making year and shall be granted a fifty (50) per cent reduction of prof its tax for the four successive years.
5. The provisions in relation to exemption from profits tax which are stipulated in this article shall not apply to hotel projects (except in cases where the investment is located in the mountainous regions, and other regions where natural, economic, and social conditions are unfavorable, or in cases where all assets shall be transferred to Vietnam after the expiration of the duration of the operations without any compensation), and projects in the fields of banking, finance and insurance and account ing, auditing and commercial services.
Article 70
A foreign economic organization or individual shall, on the transfer of profits abroad, pay a withholding tax at the following rates:
1. for a foreign economic organization or individual which has contributed no less than ten (10) million US dollars to the prescribed capital or capital of a business co-operation: five per cent of total profits transferred.
2. for a foreign economic organization or individual which has contributed no less than five million US dollars to the prescribed capital or capital of a business co-operation: seven per cent of total profits transferred.
3. for all other cases not described in clauses 1 and 2 of this article: ten (10) per cent of total profits transferred.
Article 71
The State Committee for Co-operation and Investment shall, after receipt of recommendations, in writing, of the Ministry of finance, decide on a case by case basis the specific tax rates to be applied, the time period during which the tax rates apply and the circumstances where exemptions from and reductions of tax are allowed in accordance with the provisions of articles 66, 67, 69 and 70 of this Decree.
Where an enterprise with foreign owned capital or a foreign party to a contractual business co-operation, during the period of implementation of the project, ceases to satisfy the conditions for encouragement of the investment, the State Committee for Co- operation and Investment shall adjust the tax rates and permission for exemptions from and reductions of tax stipulated in the license.
Article 72
A foreign economic organization which, or individual who, for a period of three years or more, reinvests any part of its or his or her share of the profits earned, shall be entitled to a refund from the tax office of the amount of profits tax paid on that part of those profits.
Article 73
The tax year applicable to an enterprise with foreign owned capital and to contracting parties shall commence on the first day of January and end on the thirty first day of December of each year.
Enterprises with foreign owned capital or contracting parties may, however, apply to the Ministry of finance for permission to adopt an alternative twelve (12) month period for accounting and tax payment purposes.
Article 74
The taxable profits of an enterprise with foreign owned capital shall be the difference between its revenue and expenditure plus other additional profit of the enterprise, in the tax year. The taxable profits of an enterprise shall include both those of its headquarters and any branch establishments.
(a) Revenue shall include revenue from sales of products, or provision of services and other revenue of the enterprise.
(b) Expenditure shall include:
- Costs of raw and other materials and fuel required for the manufacture of principal products and by-products or for the provision of services;
- Wages, salaries and allowances paid to employees;
- Depreciation of fixed assets used in production and business operations;
- Costs of acquisition of or fees paid for the right to use technical documents, patents, or technology and costs of technical services;
- Enterprise management expenses;
- Taxes paid and imposts in the nature of taxation;
- Interest payments on loans;
- Costs and expenses directly connected with the marketing of products or the provision of services;
- Payments to the social insurance fund;
- Costs of insurance of the assets of the enterprise;
- Any losses brought forward from previous years;
- Other expenditure not exceeding five per cent of the total amount of expenditure.
The taxation office has the power to consider the reasonableness of claimed revenue and expenditure.
Article 75
The method, by which profits earned from business co-operation contracts shall be calculated, shall be determined by the State Committee for Co-operation and Investment, taking into account the type of co-operation and the proposals of the contracting par ties.
In the case of production sharing contracts, all benefits enjoyed by the Vietnamese party, such as the right to use land, water surface, sea surface, and any royalty received, shall be aggregated with its share of the production for the purposes of calcul ation of profits tax to be paid.
Article 76
An enterprise with foreign owned capital and contracting parties shall be entitled to exemption from import duties in the following cases:
1. Where the imported equipment, machinery, spare parts, production and business facilities, (including transport vehicles), and other materials are utilized in capital construction to establish the enterprise, or are part of the fixed assets of cont ractual business co-operation.
2. Where the imported raw materials, components, spare parts and materials are utilized in the production of goods for export, import duties shall be temporarily levied on the imported goods and shall be refunded in proportion to the export of finish ed goods when the finished goods are exported.
3. Patents, technical know-how, technology processes and technical services to be used by the foreign party as a contribution to the prescribed capital of an enterprise with foreign owned capital or as initial capital in a contractual business co-ope ration, shall be exempt from any tax applicable to transfers of technology.
4. All the imported goods referred to in clauses 1 and 2 of this article shall, if sold or otherwise disposed of in Vietnam, be subject to the approval of the Ministry of Commerce, and the payment of import duties, turnover tax or special sales tax i n accordance with the provisions of the law of Vietnam.
Article 77
An enterprise with foreign owned capital or the foreign party to a contractual business co-operation shall pay other taxes in accordance with the law of Vietnam.
Article 78
foreign and Vietnamese individuals who are employed by enterprises with foreign owned capital or in relation to a business co-operation contract shall pay personal income tax in accordance with the Ordinance on Income Tax of High Income Earners dated 27 D ecember 1990.
Article 79
Enterprises with foreign owned capital and contracting parties shall pay royalties and rents for land, water surface, and sea surface in the event that such royalties and rents are not part of the capital contribution of the Vietnamese party as provided f or in article 7 of the foreign Investment Law.
Rents for land, water surface or sea surface shall be stipulated by the Ministry of finance.
CHAPTER IX
foreign Exchange Control
Article 80
All capital funds and income in both foreign and Vietnamese currency of an enterprise with foreign owned capital shall be deposited into accounts opened with a Vietnamese bank, or a joint Vietnamese foreign bank, or a branch of a foreign bank in Vietnam. All receipts and expenditure of the enterprise shall be effected through these accounts. A foreign party to a contractual business co-operation may open accounts in the manner referred to above.
In special cases, where a lender insists that a borrower opens a loan account with a bank abroad, the enterprise shall open a loan account with a bank abroad, provided that the approval of the State Bank of Vietnam is obtained.
Article 81
An enterprise with foreign owned capital and foreign parties to a contractual business co-operation shall comply fully with the regulations on foreign exchange control of the Socialist Republic of Vietnam.
Article 82
An enterprise shall, except in particular cases, such as production of import substitutes and construction of infrastructure projects, ensure that foreign currency receipts from exports and other legal sources at least be sufficient to meet all its foreig n currency expenditure, including transfer of profits of the investors abroad.
In the particular cases referred to in this article, where there is an imbalance between the foreign currency receipts and expenditure the State Committee for Co-operation and Investment, shall, taking into account proposals of the State Bank, the Ministr y of Commerce and the enterprise, review the matter and make a decision based on any of the following methods:
(a) Conversion of Vietnamese currency into a foreign currency.
(b) Payment in kind to equivalent value.
Article 83
1. foreign economic organizations and foreign individuals investing in Vietnam shall be permitted to transfer abroad:
- The profits earned from business operations;
- Any revenue accruing to them in respect of provision of services and transfer of technology;
- The principal amount of foreign loans made during the period of operation together with interest thereon;
- Invested capital;
- Any other sums of money and assets legally owned by them.
The transfer of money obtained from the depreciation of fixed assets which form part of the invested capital shall only be carried out once the prescribed capital has been contributed in full. The amount of money withdrawn and deducted shall be in propor tion to the depreciation fund established in accordance with the rates of depreciation of fixed assets as determined by the Ministry of finance.
All of the transfers of money referred to in this article may be made only after payment in full of all applicable taxes, provided that the remaining capital of the enterprise must be no less than the prescribed capital stipulated in the investment licens e.
2. At the time of termination and dissolution of an enterprise, foreign economic organizations and individuals shall, following payment of all their liabilities, have the right to transfer abroad their capital contributions to, and any capital reinve sted in, the enterprise.
3. In cases where the amount proposed to be transferred abroad under clause 2 of this article is greater than the initial amount of capital contributed and reinvested, then the excess amount can only be transferred abroad if the approval of the State Committee for Co-operation and Investment is obtained.
Article 84
All foreigners who are working under a business co-operation contract or who are employed by enterprises with foreign owned capital shall be permitted to transfer abroad, in foreign currency, their salaries and other legal income after deductions for inco me tax and other expenses have been made.
Article 85
The conversion of foreign currency into Vietnamese currency and vice versa for the purposes of investment, transfers of money and capital, and production and business operations of the enterprise shall be effected at the official exchange rate announced b y the State Bank of Vietnam at the time of the conversion and shall take place in accordance with the foreign exchange control regulations of the Government of the Socialist Republic of Vietnam.
CHAPTER XI
Standards for Accounting and Statistics
Article 86
1. The State of the Socialist Republic of Vietnam encourages enterprises with foreign owned capital to adopt the accounting and statistics standards provided for in the Ordinance on Accounting and Statistics dated 10 May 1988.
2. Enterprises with foreign owned capital may, subject to the control of Vietnam's financial and statistics bodies be permitted to adopt accounting and statistic standards which accord with those international principles and standards which are widel y accepted and are recognized by the Ministry of finance and the General Department of Statistics of the Socialist Republic of Vietnam.
3. The foreign party to a business co-operation contract shall keep accounting records appropriate for the type of business co-operation concerned.
Article 87
1. The standard unit of measure used for the purposes of accounting and statistics shall be the official measures of Vietnam. All other units of measure must be converted into those official Vietnamese measures.
2. The monetary unit to be used in bookkeeping shall be the Vietnamese Dong. A foreign currency may, however, also be used for this purpose, provided that it is proposed by the enterprise, and approved by the Ministry of finance.
3. The books of accounts and statistics shall be kept in the Vietnamese language or in Vietnamese and a widely used foreign language which is stated in the charter of the enterprise and approved by the financial and statistics bodies of Vietnam.
Article 88
The financial year shall be in conformity with the tax year as prescribed in article 73 of this Decree.
Article 89
The statement of accounts of each enterprise with foreign owned capital and of the contracting parties shall, within three months of the close of its financial year, be submitted to the State Committee for Co-operation and Investment and the tax office of the Ministry of finance.
The statement of accounts shall be verified by an audit company before their submission. The audit company shall be legally responsible for the accuracy and objectiveness of the audit results.
Article 90
The audit company shall make a report on the results of its work, which report shall include the following main contents:
1. The status of the carrying out of the accounting work at the enterprise.
2. The accuracy of the accounting figures and statements of accounts.
3. The compliance with accounting standards and regulations.
4. Recommendations.
CHAPTER XII
Customs, Immigration, Residence and Communications
Article 91
Personal effects imported into Vietnam by the foreign parties of enterprises with foreign owned capital, by foreign contracting parties, or by foreigners working in investment projects, shall be given preferential treatment in accordance with the regulati ons in force at the time.
Article 92
The General Department of Customs shall issue licenses for the import into, and export from Vietnam, of the personal effects of foreigners referred to in article 91 of this Decree.
Article 93
foreigners entering Vietnam, for the purposes of investigating and preparing for investment, may be granted multi-entry visas for a period not exceeding three months. Such visas may be extended for further periods of three months each.
Article 94
foreigners participating in the implementation of investment projects (including their domestic staff) shall be granted multiple entry visas for a period which shall not exceed one year but which may be extended for further one year periods for the durati on of the contract with due consideration for the length of time required for the process of dissolution of the enterprise or termination of the contract.
Article 95
1. Entry visas shall be issued by diplomatic missions or consular offices of the Socialist Republic of Vietnam in foreign countries, no later than five days following the completion, by interested persons, of the formalities required for visa applica tions.
2. Where a foreign applicant is a citizen of a country with which the Government of the Socialist Republic of Vietnam has entered into a treaty providing for exemption from the requirements for exit and entry visas, that arrangement shall apply.
3. In urgent cases, where immediate assistance is required in unforeseen circumstances, a foreigner may be issued with an entry visa at the port of entry in accordance with the regulations in force.
Article 96
Any foreigner referred to in articles 93 and 94 of this Decree shall be entitled to travel freely in the territory of Vietnam, apart from "prohibited areas".
Article 97
The provisions relating to entrance, residence, and travel referred to in the above articles shall, during a foreigner's residence in Vietnam, be applicable to his or her spouse, children and other members of the family, (including domestic staff) referre d to in article 94 of this Decree, who live together with the foreigner.
Article 98
following completion of all formalities required by the relevant postal administration authorities, a foreigner working in an enterprise with foreign owned capital shall be entitled to:
- The use of available postal and telecommunication facilities of Vietnam; and
- Set up his own communication system for the internal operations of the enterprise.
CHAPTER XIII
Investment Guarantee Measures and Settlement of Disputes
Article 99
The Government of Vietnam guarantees that foreign economic organizations and individuals investing in Vietnam shall be entitled to fair and equal treatment in accordance with the provisions of the foreign Investment Law. Where a treaty on the promotion an d protection of investment has been entered into between the Government of the Socialist Republic of Vietnam and the Government of a foreign country, the provisions of that agreement shall prevail.
In the event that there is a change in the law of Vietnam which adversely affects the interests of foreign economic organizations and individuals investing in Vietnam which are stated in their investment or business licenses, the State Committee for Co-op eration and Investment shall, on the basis of mutual agreement, take one of the following appropriate measures to protect the interests of the investors:
1. Change the stated objectives of the project.
2. Reduce or grant exemption from payment of tax in accordance with the law. 3. Deem the adverse effect on the investor to be a loss and set off the loss in accordance with the provisions contained in paragraph 2 of article 27 of the foreign Investment Law.
4. Permit the operations to continue in accordance with the provisions stated in the investment license issued, where such continued operation of the project is deemed to have no significant impact on the national interests.
Article 100
Disputes between parties to joint venture enterprises and business co-operation contracts shall be resolved primarily through conciliation and negotiations between the parties.
If the parties to a dispute fail to reach a resolution through conciliation, they shall, on the basis of mutual agreement, select either of the following arbitration alternatives:
- A Vietnamese arbitration body, or an arbitration body of a third country, or an international arbitration body; or
- An arbitration council established pursuant to an agreement between the parties to the dispute.
Article 101
Disputes between enterprises with foreign owned capital, or foreign parties to business co-operation contracts and Vietnamese economic organizations, shall be resolved in accordance with the law of Vietnam and by Vietnamese bodies.
Article 102
Disputes between enterprises with foreign owned capital, foreign parties to business co-operation contracts and State bodies of Vietnam shall be resolved through conciliation. If a dispute is not resolved through conciliation, the parties shall refer the dispute to a competent State body.
CHAPTER XIV
final Provisions
Article 103
This Decree shall replace Decree No. 28-HDBT of the Council of Ministers dated 6 february 1991 and shall be of full force and effect as of the date of its signing.
Article 104
The Minister-Chairman of the State Committee for Co-operation and Investment, the Minister-Chairman of the State Planning Committee, the Ministers of the Ministries of Commerce, foreign Affairs, finance, Labour War Invalids and Social Affairs, Science Tec hnology and Environment, Construction, Transport and Communications, the Interior, the Governor of the State Bank, the General Directors of the General Department of Land and farm Management, and of the General Department of Customs and the General Depart ment of Statistics shall be responsible, each within his own function and power, for the issue of circulars which make provisions for the implementation of this Decree, and for amending and supplementing documents previously enacted in order that they con form with this Decree, no later than forty-five (45) days from the date on which this Decree takes effect.
Article 105
Ministers, heads of Departments at ministerial level, heads of Departments under the Government, and chairmen of people's committees of the provinces and cities under central authority shall be responsible for the implementation of this Decree.
for The Government Prime Minister
VO VAN KIET