Entering a business venture with a Vietnamese

I’m considering entering a business venture with some Vietnamese colleagues. I’m able to draw up a simple contract in English but am not sure what I need to do to make it legal and binding. Would I have to get it translated? If so, can it be translated by anyone, or are there registered agencies I’d have to go through?

First, let’s go back to the fundamentals: the most secure way for different people to join forces to create a business is to establish a company. I would strongly advise you to take that step with the business venture that you are considering. The good news is that foreign and Vietnamese investors are allowed to establish companies together for the purpose of doing business in Vietnam. Such a company with a mix of Vietnamese and foreign capital is commonly called a joint venture company.

The first thing you need to do is confirm that the business sector you’re involved in is open to foreign investment under the commitments of Vietnam upon its accession to the World Trade Organization. That schedule may be easily found on the WTO website, although you may need a lawyer to help you wade through it (often how I get free drinks in bars!). Fortunately, most sectors are open to foreign investment.

Share Holder

The company, regardless of its corporate form (mainly, the limited liability company and the shareholding company), will legally operate from the date of issuance of the investment certificate by the Vietnamese authorities, which evidences the approval of the authorities on both the implementation of the project and the establishment of the company. As you may already know, the procedures for the issuance of investment certificates are very long and complicated. It’s possible to prepare the application dossier and follow up with the authorities yourself, however there are a lot of technical details and undisclosed preferences of each authority that actually require the involvement of an experienced lawyer for the process to not to drag out longer than strictly necessary.

The rights, powers and responsibilities of the shareholders of the company are ruled by the joint venture contract (effective from the date of the issuance of the investment certificate), which must be in writing but is not required to be notarized or certified.

The joint venture contract is not to be mistaken with the charter of the company, which provides all details in respect of that company and, most importantly, its decision making process and the responsibilities of the management team.

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Vietnamese law does not expressly require a joint venture contract to be executed in Vietnamese. However, the executed joint venture contract and the charter must be submitted to the Vietnamese authorities as part of the application file for the establishment of the company neither
of which needs to be notarized. To facilitate their review of such documents, Vietnamese authorities require either executed Vietnamese originals in addition to the foreign language originals to be submitted or with a certified Vietnamese translation of the notarized and legalized original executed in a foreign language. So even if it’s not the law, you’ll need to have a Vietnamese copy of everything!

In case of submission of certified translations, the document must be translated by a duly licensed private translating company or a State authority with the functions of translation and certification.

If you have any legal questions you want answered, send them to legal@oivietnam.com.

Bio: A member of the Paris Bar, Hadrien Wolff has been practicing law in Vietnam for six years, currently as a partner of Audier & Partners. He specializes in banking and corporate law, regularly advising major foreign banks and assisting foreign investors in setting up joint venture companies with Vietnamese partners in sensitive sectors such as media, power and natural resources

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