LEGAL UPDATE: Did you know that since the early 1990s Vietnam has signed bilateral investment treaties (often referred to as BITs) with over 40 countries pursuant to which investors from such countries can sue the Vietnamese Government if their investments in Vietnam have been affected adversely by actions of the Vietnamese Government in accordance with the terms of such treaties?
Unlike in other countries, it is not yet common in Vietnam for investors to initiate such treaty claims.
The Government has recently issued a decision regarding how such claims are to be handled. This is a really good sign that the Government takes seriously its commitments to protect the interests of investors against unfair Government action.
The practical point to consider is when investing in Vietnam, where you choose to incorporate the offshore vehicle to be the investor in Vietnam is very important not just from a tax standpoint. You should choose to incorporate in a country that has entered into a favourable investment treaty with Vietnam so that you have the additional protection for your investment.
Some of the countries that have entered into such treaties with Vietnam include:
Europe: Austria, Belarus, Belgium & Luxembourg, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Latvia, Netherlands, Romania, Sweden, Switzerland and The United Kingdom
Americas: Argentina, Chile, Cuba and Venezuela
Middle East: Egypt and the UAE
Asia & Oceania: Australia, Cambodia, China, Indonesia, Japan, Malaysia, Singapore, South Korea, Tajikistan and Thailand
Decision 04/2014/QD-TTg dated 14 January 2014 (valid 3 March 2014)