How to Transfer Shares in a Joint Stock Company?

   

According to Vietnam law, joint stock company is one form of typical company types in Vietnam. For a joint stock company to be set-up, there should be at least three shareholders. In the joint stock company, the charter capital is divided into equal parts called shares. Shareholders have the right to freely transfer their shares to others, but there will be some certain restrictions.

Within three years from the establishment of the company and the issuance date of the Certificate of Enterprise Registration, the ordinary shares of founding shareholders may be transferred to other founding shareholders and may only be transferred to a person that is not a founding shareholder if the transfer is accepted by the General Meeting of Shareholders. In this case, the transferor does not have the right to vote on this transfer. In addition, if the company’s charter has provisions restricting the transfer of shares, the transfer of shareholders must also comply with the provisions of the Charter and these regulations will only applicable if they are written in the certificates of the shares subject to restriction.

The transfer of shares is usually made by the parties by contract or transaction on the securities market. In case of transfer under a contract, the documents shall bear the signatures of the transferor and the transferee or their authorized representatives. In case shares are transferred on the securities market, the transfer procedures prescribed by securities laws shall apply.

Shareholders of a joint-stock company have the right to donate part or all of their shares in the company to other individuals or organizations; use shares to pay off debt. At that time, individuals and organizations that are given or received the donation or debt payment will become a shareholder of the company. However, they will only become shareholders of the company from the time their information is fully recorded in the register of shareholders.

In case of the death of a shareholder that is an individual, his/her heir at law or designated by a will shall become a shareholder of the company. If such shareholder dies without an heir or the heir refuses the inheritance or is disinherited, his/her shares shall be settled in accordance with civil laws.

The last point to pay attention is when there is a share transfer event, the company shall register the changes of shareholders in the shareholder register as requested by relevant shareholders within 24 hours after the request is received.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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How Vietnam Support Start-up Company in Vietnam?

   

Start-up company is a topic that is receiving much attention in Vietnam, especially in the context of the country’s strong integration with the world economy. Starting a business is expected to create economic growth, make a positive contribution to socio-economic development. From start-up ideas gradually appears startup businesses in Vietnam. Every year, Vietnam has hundreds of new businesses established, in which the number of small and medium enterprises account for the majority. Because they are small and medium-sized enterprises, it is inevitable to face great competitive pressure from large traditional enterprises as well as competitors.

The identification of small and medium enterprises is the basis for the State to have supportive policies to help enterprises face competitive pressure in the market. Criteria to determine small and medium enterprises include: field of operation, average number of employees participating in social insurance per year, total revenue or total capital of the enterprise.

Firstly, micro-enterprise in the field of agriculture, forestry, aquaculture; industry and construction that has an average annual number of employees who participate in social insurance not exceeding 10 people and the total revenue in the year not exceeding 3 billion VND or the total capital of the year is not more than 3 billion VND. Micro enterprises in the field of commerce and services employing no more than 10 employees per year on average with social insurance contributions and total annual revenue is not more than 10 billion VND or the year’s total capital is not more than 3 billion VND.

Second, small enterprise in the field of agriculture, forestry, aquaculture; industry and construction that has an average annual number of employees who participate in social insurance not exceeding 100 people, total revenue in the year not exceeding 50 billion VND or total capital of the year not exceeding 20 billion VND, except micro-enterprises. Small enterprises in the field of commerce and service that have an average annual number of employees who participate in social insurance no more than 50 employees total revenue in the year is not more than 100 billion VND or total capital of the year is not more than 30 billion VND, except micro enterprises.

Third, medium enterprise in the field of agriculture, forestry, aquaculture; industry and construction that has an average annual number of employees who participate in social insurance not exceeding 200 people, total revenue in the year not exceeding 200 billion VND or total capital of the year not exceeding 100 billion VND but not micro-enterprises and small enterprises. Medium enterprises in the field of commerce and service that have an average annual number of employees who participate in social insurance no more than 100 employees, total revenue in the year is not more than 300 billion VND or total capital of the year is not more than 100 billion VND but not micro enterprises and small enterprises.

Because there are a large number of enterprises in the Vietnamese market, the State has introduced policies to support small and medium enterprises such as technology support, information support, consulting support, supporting human resource development, supporting small and medium enterprises to transform from household businesses, small and medium enterprises to innovative start-ups, small and medium enterprises joining industry clusters, value chains. Small and medium enterprises play an increasingly important role in the economic development of countries around the world. With the ability to create business opportunities and effective jobs, this business model is increasingly encouraged to develop and receive support from state agencies to expand and develop this business model in Vietnam.

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The Business Conditions for Sports Betting in Vietnam

 

Law on amendments to Physical Training and Sports No. 26/2018/QH14 is in valid as of February 1st, 2019. The highlight that must be noted is sports betting as provided in Article 67a. This activity is officially governed by laws. Sports betting is a form of entertainment with rewards in which bettors predict the results of sporting events used for betting purpose.

The sports betting has a long history, but it had not been recognized by the State for a long time. Therefore, the betting was considered a violation of laws and was liable to administrative and criminal remedies. Before sports betting is restricted and just allowed to bet on horse racing, greyhound racing and pilot international soccer as specified in the Decree 06/2017/ND-CP effective from March 31st, 2017 on business of betting on horse racing, greyhound racing and international soccer. After the amendment law takes effect, the sports are allowed to bet will be extended according to the List of sports activities allowed to trade in betting issued by the Government.

What Conditions Required for Sports Betting?

Relating to condition of sports betting business in Vietnam, the enterprises need to be granted a certificate of eligibility for betting business. This is one of the conditional business lines under the strict management.

Regarding horse racing and greyhound racing, the enterprises need to obtain the Certificate of investment registration for the project for construction of horse and/or greyhound racecourses and the Certificate of eligibility for betting business. For horseracing, the charter capital requirement is VND 1 trillion ($44.2 million), while for greyhound racing it is VND 300 billion ($13.2 million). Locations of horse and/or greyhound racecourses are conformable to the socio-economic development planning of the area where such racecourses are located. Therefore, if the project attracts more than one investor, the investor for the project for the construction of horse racecourses and/or greyhound racecourses which covers the business of betting on horse racing and/or greyhound racing shall be selected through bidding process according to law.

Regarding international soccer, the procedures is similar to horse racing and greyhound racing. However, The Government allows one enterprise to pilot the business of betting on international soccer. The duration of pilot international soccer betting business shall be 05 years since the date on which the Certificate of eligibility for international soccer betting business is issued. After such period, the Government shall consider whether or not to continue the pilot international soccer betting business upon the assessment of the collected results. The list of international football matches and tournaments which are selected to provide the basis for the business of betting on international football is stipulated in the Decision No. 1064/QĐ-BVHTTDL issued by the Ministry of Culture, Sports and Tourism.

Which Authorities Will Approve the Sports Betting Activities?

The Ministry of Finance will publicize the conditions, dossiers, procedures for organizing bidding to select enterprises to pilot international football betting business according to the provisions of law. To be able to participate in bidding, the enterprises need to meet the following conditions:

(1) The minimum charter capital shall be VND 1 trillion ($44.2 million)or an equivalent amount;

(2) Having a plan on investment in the technological system, technical equipment and business software to ensure their accurate, safe and stable operation;

(3) There shall be a feasible plan on the business of betting on international soccer and ticket selling methods and locations;

(4) Committing to community assistance.

There are 135 countries in the world officially legalizing sports betting activities. Betting is increasingly on the rise, along with the development of information technology and entertainment. In Vietnam, sports betting is put under the strict management.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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How Exploiting and Using Water Resources are Regulated in Vietnam

 

Water is an important resource of the country, all business activities, production and living all need water resources. Therefore, the exploitation and use of water resources are under the control of the Vietnam state authorities, to protect the resources, and avoid the waste that impact the environment.

The Vietnamese legal system has a wide range of legal provisions on water resources, including the Law on Water Resources; Law on Environmental Protection and supporting decrees. These legal documents are firm legal basis in the management and protection of water resources.

The state shall define the principles for exploitation, use and protection of water resources, which are the responsibility of all agencies, organizations and individuals; Must comply with strategies and master plans on water resources already approved by competent state management agencies; Effective exploitation and use, the law stipulates the order of priority for allocating water sources to ensure the balance between regions and domains. This priority includes prioritizing regional allocations (agreements between regions, governmental decisions) and prioritizing allocations based on water use purposes (domestic, agricultural, fisheries, power generation, industrial, transportation, preservation of cultural and historical value, exploitation and processing of minerals).

The Vietnam legal system on water resources is divided into two groups, one is the exploitation and use of water resources without registration and permission; the other is the exploitation and uses of water resources have to register and apply the license. For exploitation and use, registration must include water used for household activities; Small scale use for production, business and services; using sea water to produce salt; using water for religious activities, scientific research; water use for fire prevention, incident response and other emergencies. Water users will be required to pay water use fees as agreed in the water service contract. The price of water used by state agencies is determined and adjusted in accordance with the principles and actual use.

Apart from the above-said cases, the exploitation and use of water resources for permission of state agencies, including: exploitation of surface water and sea water; Groundwater exploration; exploitation and use of underground water; The above-said forms must be registered, permitted and permitted to conduct investment activities only when they are granted permits according to the provisions of law. The term of the license varies from 2 years to 10 years, suitable for exploitation and use, ensuring the stability as well as the protection of the environment to the maximum. At the end of the license period, the license renewal will be considered.

In addition to the exploitation and use of water resources of individuals and organizations, water resources investigation and assessment are also strictly regulated. Accordingly, the inventory of water resources must be implemented uniformly throughout the country, every five years, in accordance with national socio-economic development regulations. The responsibility for inventorying water resources is the coordination among relevant agencies, ministries and agencies such as the Ministry of Natural Resources and Environment; Ministries and ministerial-level agencies related to construction activities; Provincial People’s Committee.

In addition to using, exploiting water resources, another issue that is always on top of wastewater treatment. The treatment of wastewater must comply with the technical standards for wastewater. The Vietnam state always has projects and incentives for investment in wastewater treatment such as preferential land use fees, technical infrastructure investment support, other incentives.

All acts of violating the provisions of law on water resource and waste water treatment shall be handled according to the provisions of law. Depending on the circumstances, the level of treatment will be different, such as the handling of administrative violations or the handling of criminal offenses. The maximum fines amount to 1 billion VND for individual violations and 2 billion VND for organizations.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Law firm in Hanoi, Law firm in Ho Chi Minh and Law firm in Danang.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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Construction Operation License Instead of Contractor’s Permits for Foreign Contractor in Vietnam

  

The foreign contractors are only permitted to carry out construction activities in Vietnam so long as being granted construction operation license by Ministry of Construction as per the Construction Law.

EPC Contractors have increasingly been interested to learn the requirements of licenses and permits to operate in Vietnam. It is advised that the construction law firms in Vietnam with lawyers specializing in construction area to assist the foreign contractors to understand the legal frameworks, and requirements of foreign contractors before and after taking on construction projects in Vietnam after bidding result.

The regulations and procedures are promulgated in Decree No. 59/2015/NĐ-CP on management of construction investment projects and Circular No.14/2016/TT-BXD guiding on licensing construction activities and management of foreign construction contractors in Vietnam.

Investment in construction activities has been growingly rapidly. In order to meet the tender conditions and take part in construction activities in Vietnam, foreign contractors shall follow the regulations in Vietnam and obtain proper license during the preparation and the execution of the construction of the project.

Prior to construction operation license, foreign constructors have experienced another form of permit named contractor’s permits for foreign contractors in Vietnam. These are two concepts however the process of registration and document requirements are not so different.

There has been an effort to harmonize and reduce differences and conflicts arisen in many fields of laws regulating the mentioned subject and the new provisions of the Law on Bidding, Construction Law and the Investment Law to be issued in 2014 which establish a stable legal framework for the implementation of foreign contractor’s bidding and construction activities in Vietnam. This changes does not differentiate which position the foreign contractors are appointed from the lead contractor, the main contractor, contractor to subcontractor consortium. Unlike domestic contractors, foreign contractors must be granted construction operation license for each awarded contract. The amendment from the contractor’s permits for foreign contractor contribute to the unity of the same concept in different legal instruments regulating the license procedure of foreign contractors operating within the territory of Vietnam, and limit the unnecessary overlaps, difficulties to law interpretation and application of legal entities.

We shouldn’t forget to mention that the amendment of the foreign contractor’s construction operation license is to increase the relevance between the name and nature of the licensed activities of foreign contractors in construction operation. One of the initial conditions to a foreign contractor to be licensed is when the contractor has won a bid or been selected to be sub-contractor of an investment project. Therefore, the terms construction operation license shall demonstrate the role of the contractor in the construction projects they have been participated in.

The new construction operation license for foreign contractor is expected to be easier to relate to when foreign contractor take part in construction project in Vietnam. This would attract more foreign contractors to undertake construction projects in Vietnam to bring in the technology equipment, as well as the management skills to Vietnam.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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Draft and Review Contracts – A Lawyer’s View

  

In Vietnam, certain type of contracts has to follow forms requested by laws as such client is recommended to seek help from professional contract lawyers in Vietnam to help draft or review.

Contract is an agreement enforced by law. In Vietnam, contract is a civil transaction which parties enter into voluntarily, each of whom intends to create, change, or terminate one or more rights or obligations between them according to Vietnam Civil Code. Contract plays an important roles in business transaction. Written contract provide individuals and businesses a legal document reflecting agreement, expectation and mechanism to resolve potential disagreement or disputes.

The lawyers in Vietnam drafting or reviewing contracts under Vietnam laws will need to initially review the legal resources in relevant to the transactions, research related documents and the parties involved to provide legal opinions, make suggestions and propose an optimal solution to the client for negotiation and contract finalization.

Basic terms and conditions of the contracts being rights and obligations of parties to the contracts, and other terms in regard to duration, quality, payment, dispute handling procedures, applicable law and/or jurisdiction, confidentiality, force majeure, intellectual property clauses…among others have to be carefully taken into considerations.

Further, a contract should ensure the following points to be covered:

Use right legal terms or terminology;

Foresee the future scenarios;

Describe the specific matters;

Clearly mention obligations;

Obtain a balance between parties involved.

There are specific contracts in Vietnam for various transactions being:

Joint venture contract;

Share purchase contract;

Sales contract;

Business cooperation contract;

Licensing contract;

Investment contract;

Labour contract;

Lease contract;

Distribution contract;

Construction contract;

Prenuptial agreement.

Each business transaction is different as such a contract is not a compilation of standard terms and conditions. Professional contract lawyers in Vietnam would consider the purpose of the contract, transaction type, significance of the deal, industry, Vietnam legal requirements and expectation of the client to prepare a legally enforceable contract for the client, to avoid misunderstanding and protect the client against legal disputes.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Law firm in Hanoi, Law firm in Ho Chi Minh and Law firm in Danang.

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How Foreigners Could Apply for Residence Permits to Stay in Vietnam from 2022?

In the current process of industrialization and international integration, it is common for foreigners to reside and work in Vietnam permanently or temporarily. In order to legally reside in Vietnam, a foreigner must be eligible to be granted a permanent residence card or a temporary residence card in accordance with Vietnam immigration law.

Temporary residence card is a document issued by an immigration management agency or a competent agency of the Ministry of Foreign Affairs to a foreigner who is allowed to reside in Vietnam for a definite time and has a valid temporary residence card visa replacement. Subjects granted temporary residence cards in Vietnam include: (i) Foreigners who are members of diplomatic missions, consular offices, representative offices of international organizations of the United Nations, inter-governmental organizations the government in Vietnam and their spouses, children under 18 years of age, and domestic servants who accompany them for their respective terms; (ii) Foreigners enter with visas with symbols LV1, LV2, LS, DT1, DT2, DT3, NN1, NN2, DH, PV1, LD1, LD2, TT. Depending on each person who is granted a temporary residence card in Vietnam, the duration of the temporary residence card is different.

Foreigners who are eligible to be granted temporary residence cards in Vietnam according to the two subjects mentioned above must be sponsored and applied for residence card in Vietnam by the agencies, organizations, individuals at the Immigration Department or the Immigration Department Police Department of the province, centrally run city where the agency or organization sponsoring is headquartered or where the sponsored party resides.

It is very challenging to apply for the permanent residence card in Vietnam. The permanent residence is issued by the immigration authority to foreigners who are allowed to reside indefinitely in Vietnam and is valid in lieu of a visa. Foreigners who are considered for permanent residence in Vietnam include: (i) Foreigners who have made meritorious, contributions to the cause of construction and defense of the Vietnamese fatherland are awarded medals or titles by the Vietnamese government state honor; (ii) Foreigners who are scientists, experts temporarily residing in Vietnam; (iii) The foreigner is guaranteed by father, mother, wife, husband, child who are Vietnamese citizens who are permanently residing in Vietnam; (iv) Stateless people who have temporarily resided continuously in Vietnam from 2000 or earlier. At the same time, the following conditions must be met: (i) Having a lawful place of residence and a stable income to ensure life in Vietnam; (ii) If a scientist, expert is temporarily residing in Vietnam, must be requested by a Minister, Deputy Minister of a ministerial-level agency, a government-attached agency in charge of state management in that professional field, (iii) If sponsored by father, mother, wife, husband, child who is a Vietnamese citizens who are permanently residing in Vietnam, the duration of temporary residence in Vietnam for a foreigner applying for permanent residence shall be determined as follows: Foreigners who have temporarily resided in Vietnam for 03 consecutive years or more are determined on the basis of the entry verification stamp, the exit verification stamp issued at the border gate with a total temporary stay in Vietnam from 03 years or more in the last 4 years from the date of applying for permanent residence.

To save time and hassles, it is suggested to consult with lawyers in Hanoi, or Da Nang or Ho Chi Minh City on immigration matters.

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