VIETNAM LEGAL DOCUMENTS

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This Law regulates investment activities for business purposes; the rights and obligations of investors; the guarantee of lawful rights and interests of investors; encouragement of investment and investment incentives; State administration of investment activities in Vietnam and offshore investment from Vietnam.

 

NATIONAL ASSEMBLY

 

No. 59-2005-QH11


 

 

 

 

 

 

 

 

LAW

ON


 

 

SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness


INVESTMENT

 

 

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam as amended by

Resolution 51-2001-QH10 passed by Legislature X of the National Assembly at its 10th Session

on 25 December 2001;

 

This Law regulates investment activities.

 

 

CHAPTER 1

 

General Provisions

 

Article 1         Governing scope

 

This Law regulates investment activities for business purposes; the rights and obligations of

investors; the guarantee of lawful rights and interests of investors; encouragement of investment

and investment incentives; State administration of investment activities in Vietnam and offshore

investment from Vietnam.

 

Article 2         Applicable entities

 

1.       Domestic investors and foreign investors carrying out investment activities within the

territory of Vietnam; offshore investments made from Vietnam.

 

2.       Organizations and individuals involved in investment activities.

 

Article 3         Interpretation of terms

 

In this Law, the following terms shall be construed as follows:

 

1.       Investment means the use of capital in the form of tangible or intangible assets for the

purposes of forming assets by investors to carry out investment activities in accordance

with the provisions of this Law and other provisions of the relevant laws.

 

2.       Direct investment means a form of investment whereby the investor invests its invested

capital and participates in the management of the investment activity.

 

3.       Indirect investment means a form of investment through the purchase of shares, share

certificates, bonds, other valuable papers or [investment through]1 a securities investment

fund and through other intermediary financial institutions and whereby the investor does

not participate directly in the management of the investment activity.

 

 

1          Phillips Fox Note: Words not appearing in the Vietnamese text have been inserted in square parentheses to aid

comprehension.

© Phillips Fox Translation



 

 

4.       Investor means any organization or individual carrying out investment activities in

accordance with the law of Vietnam, comprising:

 

(a)      Enterprises from all economic sectors established in accordance with the Law on

Enterprises;

 

(b)      Co-operatives and co-operative groups established in accordance with the Law on

Co-operatives;

 

(c)      Enterprises with foreign owned capital established prior to the date of effectiveness

of this Law;

 

(d)      Business households, individuals;

 

(dd)  Foreign organizations and individuals; Vietnamese residing overseas; foreigners

permanently residing in Vietnam;

 

(e)      Other organizations as permitted by the law of Vietnam.

 

5.       Foreign investor means any foreign organization or individual using capital in order to

carry out an investment activity in Vietnam.

 

6.       Enterprises with foreign owned capital comprise any enterprise established by a foreign

investor in order to conduct investment activities in Vietnam; or a Vietnamese enterprise

in which a foreign investor purchases shares, [with which it] merges or which it acquires.   

 

7.       Investment activity means activities of investors throughout the investment process,

comprising the stages of investment preparation, performance and management of the

investment project.

 

8.       Investment project means a collection of proposals for the expenditure of medium and

long-term capital in order to carry out an investment activity in a specific geographical

area and for a specified duration.

 

9.       Invested capital means the money and other lawful assets used to carry out the

investment activity either in the form of direct investment or indirect investment.

 

10.     State capital means capital for investment and development funded from the State

Budget, capital funded by credit facilities guaranteed by the State, capital funded by credit

facilities for investment and development of the State, and other investment capital of the

State.

 

11.     Investment owner means an organization or individual being a capital owner, a person

representing an owner or a borrower which directly manages and uses capital in order to

carry out an investment activity.

 

12.     Foreign investment means the remittance of capital in cash or other lawful assets by

foreign investors into Vietnam in order to carry out investment activities.

 

13.     Domestic investment means the use of capital in cash or other lawful assets by domestic

investors in order to carry out investment activities in Vietnam.


 

 

© Phillips Fox Translation


 

 

2



 

14.     Offshore investment means [investment where] investors send overseas their capital in

lawful cash or other assets from Vietnam in order to carry out investment activities.

 

15.     Sector in which investment is conditional means a sector in which investment shall only

be permitted subject to specific conditions as stipulated by law.

 

16.     Business co-operation contract (BCC) means the investment form signed between

investors in order to co-operate in business and to share profits or products without

creating a legal entity.

 

17.     Build-operate-transfer contract (BOT) means the investment form signed by a competent

State body and an investor in order to construct and operate commercially an

infrastructure facility for a fixed duration; and, upon expiry of the duration, the investor

shall, without compensation, transfer such facility to the State of Vietnam.

 

18.     Build-transfer-operate contract (BTO) means the investment form signed by a competent

State body and an investor in order to construct an infrastructure facility; and, upon

completion of construction, the investor shall transfer the facility to the State of Vietnam

and the Government shall grant the investor the right to operate commercially such facility

for a fixed duration in order to recover the invested capital and gain profits.

 

19.     Build-transfer contract (BT)       means the investment form signed by a competent State

body and an investor in order to construct an infrastructure facility; and, upon completion

of construction, the investor shall transfer the facility to the State of Vietnam and the

Government shall create conditions for the investor to implement another project in order

to recover the invested capital and gain profits or to make a payment to the investor in

accordance with an agreement in the BT contract.

 

20.     Industrial zone means a zone which specializes in the manufacture of industrial products

and the provision of services for industrial manufacture, which has defined geographical

boundaries and which is established in accordance with regulations of the Government. 

 

21.     Export processing zone means an industrial zone which specializes in the manufacture of

export products and the provision of services for the manufacture of export products and

export activities, which has defined geographical boundaries and which is established in

accordance with regulations of the Government. 

 

22.     High-tech zone means a zone which specializes in research, development and

application of high technologies and which provides a centre for fostering high-tech

enterprises, for training human resources in high technologies and for manufacturing and

trading high-tech products, which has defined geographical boundaries and which is

established in accordance with regulations of the Government. 

 

23.     Economic zone means a zone which has an economic area separated from the general

investment and business environment and with specially favourable conditions for

investors, and which has defined geographical boundaries and which is established in

accordance with regulations of the Government. 


 

 

 

 

 

 

 

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