2022 Legal Documents

FOREIGN TRADE UNIVERSITY - HCMC CAMPUS
DEPARTMENT OF ECONOMICS AND LAW
INTRODUCTION
TO LAW
PART II: LEGAL

DOCUMENTS
HCMC, 2021
LAW 59
ON
ENTERPRISES
Dated 17 June 2020
CONTENTS
CHAPTER 1............................................................................................................................. 1
GENERAL PROVISIONS ....................................................................................................... 1

Article 1 Governing scope ...................................................................................................................................1
Article 2 Applicable entities .................................................................................................................................1
Article 3 Application of Law on Enterprises and other laws .........................................................................1
Article 4 Interpretation of terms ..........................................................................................................................1
Article 5 State guarantees for enterprises and owners of enterprises ......................................................4
Article 6 Political organizations, socio-political organizations and organizations representing
employees at the grassroots level in enterprises...........................................................................5
Article 7 Rights of enterprises.............................................................................................................................5
Article 8 Obligations of enterprises....................................................................................................................5
Article 9 Rights and obligations of enterprises providing public utility products or services ................6
Article 10 Criteria applicable to and rights and obligations of social enterprises ......................................6
Article 11 Document retention regime of enterprises ......................................................................................7
Article 12 Legal representatives of enterprises.................................................................................................7
Article 13 Responsibilities of legal representatives of enterprises ...............................................................9
Article 14 Authorized representatives of owners, members and shareholders of companies being
organizations ..........................................................................................................................................9
Article 15 Responsibilities of authorized representatives of owners, members and shareholders of
company being organizations.......................................................................................................... 10
Article 16 Strictly prohibited practices .............................................................................................................. 10
CHAPTER 2........................................................................................................................... 11
ESTABLISHMENT OF ENTERPRISES .............................................................................. 11

Article 17 Right to establish, contribute capital to, purchase shares in, purchase capital contribution
portions in and manage enterprises............................................................................................... 11
Article 18 Contracts prior to enterprise registration....................................................................................... 12
Article 19 Application file for registration of a private enterprise ................................................................ 12
Article 20 Application file for registration of a partnership ........................................................................... 13
Article 21 Application file for registration of a limited liability company [LLC] ......................................... 13
Article 22 Application file for registration of a shareholding company ...................................................... 13
Article 23 Contents of request for enterprise registration............................................................................ 14
Article 24 Company charter................................................................................................................................ 14
Article 25 List of members of limited liability company or partnership and list of founding
shareholders and shareholders being foreign investors in the case of shareholding
company ............................................................................................................................................... 16
Article 26 Sequence and procedures for enterprise registration................................................................ 16
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Article 27 Issuance of enterprise registration certificate .............................................................................. 17
Article 28 Contents of enterprise registration certificate [ERC] .................................................................. 17
Article 29 Enterprise code numbers ................................................................................................................. 17
Article 30 Registration of change to contents of enterprise registration certificates.............................. 18
Article 31 Notice of change to contents of enterprise registration............................................................. 18
Article 32 Announcement of contents of enterprise registration ................................................................ 19
Article 33 Provision of information about contents of enterprise registration .......................................... 20
Article 34 Assets contributed as capital ........................................................................................................... 20
Article 35 Transfer of ownership of assets contributed as capital ............................................................. 20
Article 36 Valuation of assets contributed as capital .................................................................................... 21
Article 37 Name of enterprise............................................................................................................................. 22
Article 38 Prohibited practices in naming enterprises .................................................................................. 22
Article 39 Names of enterprises in foreign languages and abbreviated names of enterprises........... 22
Article 40 Names of branches, representative offices and business locations....................................... 23
Article 41 Identical names and names which cause confusion.................................................................. 23
Article 42 Head office of enterprise................................................................................................................... 24
Article 43 Seal of enterprise ............................................................................................................................... 24
Article 44 Branches, representative offices and business locations of enterprises............................... 24
Article 45 Registration of operation of branches and representative offices of enterprises; notification
of business locations ......................................................................................................................... 24
CHAPTER 3........................................................................................................................... 25
LIMITED LIABILITY COMPANIES ...................................................................................... 25
SECTION 1........................................................................................................................................................................... 25
Limited Liability Companies with Two or More Members .................................................................................. 25

Article 46 Limited liability companies with two or more members [Multiple member LLC] .................. 25
Article 47 Capital contribution for establishment of companies and issuance of capital contribution
certificates ............................................................................................................................................ 25
Article 48 Register of members ......................................................................................................................... 27
Article 49 Rights of members of Members' Council ...................................................................................... 27
Article 50 Obligations of members of Members' Council ............................................................................. 28
Article 51 Redemption of capital contribution portions ................................................................................. 29
Article 52 Assignment of capital contribution portions.................................................................................. 29
Article 53 Dealing with capital contribution portions in some special cases............................................ 29
Article 54 Organizational and management structure of companies ........................................................ 31
Article 55 Members’ Council............................................................................................................................... 31
Article 56 Chairman of Members’ Council....................................................................................................... 32
Article 57 Convening meetings of Members’ Council ................................................................................... 33
Article 58 Conditions and procedures for conducting meetings of Members’ Council.......................... 34
Article 59 Resolutions and decisions of Members’ Council ........................................................................ 34
Article 60 Minutes of meetings of Members’ Council.................................................................................... 35
Article 61 Procedures for passing resolutions and decisions of Members’ Council by way of
collection of written opinions ............................................................................................................ 36
Article 62 Effectiveness of resolutions and decisions of Members' Council............................................ 37
Article 63 Director or general director .............................................................................................................. 37
Article 64 Criteria and conditions to become director or general director................................................ 38
Article 65 Inspection Committee and inspectors ........................................................................................... 38
Article 66 Salary, remuneration, bonuses and other benefits of chairman of Members' Council,
director, general director and other managers ............................................................................ 39
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Article 67 Contracts and transactions which must be approved by Members’ Council ........................ 39
Article 68 Increase and reduction of charter capital...................................................................................... 40
Article 69 Conditions for distribution of profit .................................................................................................. 41
Article 70 Recovery of returned capital contribution portions or distributed profit.................................. 41
Article 71 Responsibilities of chairman of Members' Council, director, general director and other
managers, legal representative, and inspectors ......................................................................... 41
Article 72 Initiation of legal action against managers ................................................................................... 42
Article 73 Disclosure of information.................................................................................................................. 42
SECTION 2........................................................................................................................................................................... 42
One Member Limited Liability Companies............................................................................................................... 42

Article 74 One member limited liability companies [Single member LLCs] ............................................. 42
Article 75 Contribution of capital for establishment of companies ............................................................. 43
Article 76 Rights of company owner................................................................................................................. 43
Article 77 Obligations of company owner........................................................................................................ 44
Article 78 Exercise of rights of company owner in some special cases ................................................... 44
Article 79 Organizational and managerial structure of single member LLC owned by an organization
................................................................................................................................................................ 45
Article 80 Members’ Council............................................................................................................................... 46
Article 81 Chairman of company ....................................................................................................................... 46
Article 82 Director or general director .............................................................................................................. 47
Article 83 Responsibilities of members of the Members’ Council, chairman of company, director,
general director and other mangers, and inspectors.................................................................. 48
Article 84 Salary, remuneration, bonuses and other benefits of managers of company and
inspectors ............................................................................................................................................. 48
Article 85 Organizational and management structure of single member limited liability company
owned by an individual...................................................................................................................... 48
Article 86 Contracts and transactions of company with related persons ................................................. 48
Article 87 increase and reduction of charter capital ...................................................................................... 49
CHAPTER 4......................................................................................................................................................................... 50
State Owned Enterprises ............................................................................................................................................... 50

Article 88 State owned enterprises [SOEs]..................................................................................................... 50
Article 89 Application of provisions to State owned enterprises ................................................................ 51
Article 90 Organizational and managerial structure...................................................................................... 51
Article 91 Members' Council............................................................................................................................... 51
Article 92 Rights and obligations of Members' Council................................................................................ 51
Article 93 Criteria and conditions applicable to members of Members' Council .................................... 52
Article 94 Removal and dismissal of members of Members' Council ....................................................... 52
Article 95 Chairman of Members' Council....................................................................................................... 53
Article 96 Rights and obligations of members of Members' Council......................................................... 54
Article 97 Responsibilities of chairman and other members of Members' Council ................................ 54
Article 98 Working regime, conditions and procedures for conducting meetings of Members' Council
................................................................................................................................................................ 54
Article 99 Chairman of company ....................................................................................................................... 56
Article 100 Director or general director and deputy director or deputy general director ......................... 57
Article 101 Criteria and conditions applicable to director or general director............................................ 58
Article 102 Removal or dismissal of director, general director and other managers of company, and
chief accountant.................................................................................................................................. 58
Article 103 Inspection Committee and inspectors ........................................................................................... 59
Article 104 Obligations of Inspection Committee............................................................................................. 59
Article 105 Rights of Inspection Committee...................................................................................................... 60
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Article 106 Working regime of Inspection Committee..................................................................................... 61
Article 107 Responsibilities of inspectors .......................................................................................................... 61
Article 108 Removal and dismissal of head of Inspection Committee and inspectors............................ 62
Article 109 Periodical disclosure of information ............................................................................................... 62
Article 110 Extraordinary disclosure of information......................................................................................... 63
CHAPTER 5........................................................................................................................... 64
SHAREHOLDING COMPANIES.......................................................................................... 64
Article 111 Shareholding companies .................................................................................................................. 64
Article 112 Capital of shareholding companies ................................................................................................ 64
Article 113 Payment of shares which have been registered for subscription upon registration for
establishment of enterprise.............................................................................................................. 65
Article 114 Classes of shares ............................................................................................................................... 66
Article 115 Rights of ordinary shareholders ...................................................................................................... 67
Article 116 Voting preference shares and rights of voting preference shareholders............................... 68
Article 117 Dividend preference shares and rights of dividend preference shareholders ...................... 69
Article 118 Redeemable preference shares and rights of redeemable preference shareholders ........ 69
Article 119 Obligations of shareholders ............................................................................................................. 70
Article 120 Ordinary shares of founding shareholders ................................................................................... 70
Article 121 Share certificates................................................................................................................................ 70
Article 122 Register of shareholders................................................................................................................... 71
Article 123 Offer to sell shares ............................................................................................................................. 72
Article 124 Offer to sell shares to existing shareholders ................................................................................ 72
Article 125 Private share placement ................................................................................................................... 73
Article 126 Sale of shares ..................................................................................................................................... 74
Article 127 Assignment of shares ........................................................................................................................ 74
Article 128 Private placement of bonds.............................................................................................................. 75
Article 129 Sequence and procedures for private placement of bonds and assignment of privately
placed bonds ....................................................................................................................................... 75
Article 130 Decisions on private placement of bonds................................................................................... 76
Article 131 Purchase of shares and bonds ....................................................................................................... 76
Article 132 Redemption of shares upon demand by shareholders.............................................................. 76
Article 133 Redemption of shares pursuant to decision of company .......................................................... 76
Article 134 Conditions for payment for and dealing with redeemed shares .............................................. 77
Article 135 Payment of dividends ........................................................................................................................ 77
Article 136 Recovery of payments for redeemed shares or dividends ....................................................... 79
Article 137 Organizational and managerial structure of shareholding companies ................................... 79
Article 138 Rights and obligations of General Meeting of Shareholders.................................................... 79
Article 139 Meeting of General Meeting of Shareholders .............................................................................. 80
Article 140 Convening meeting of General Meeting of Shareholders ......................................................... 81
Article 141 List of shareholders entitled to attend meeting of General Meeting of Shareholders......... 82
Article 142 Program and agenda of meeting of General Meeting of Shareholders ................................. 82
Article 143 Invitations to meeting of General Meeting of Shareholders ..................................................... 83
Article 144 Exercise of the right to attend meeting of General Meeting of Shareholders....................... 83
Article 145 Conditions for conducting meeting of General Meeting of Shareholders.............................. 84
Article 146 Procedures for conducting and voting at a meeting of General Meeting of Shareholders 84
Article 147 Form of passing of resolutions of General Meeting of Shareholders ..................................... 86
Article 148 Conditions for passing resolutions of General Meeting of Shareholders .............................. 86
Article 149 Authority and procedures for collection of written opinions in order to pass resolutions of
General Meeting of Shareholders................................................................................................... 87
Article 150 Minutes of meeting of General Meeting of Shareholders.......................................................... 89
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Article 151 Demand for cancellation of resolutions of General Meeting of Shareholders ...................... 90
Article 152 Effectiveness of resolutions of General Meeting of Shareholders .......................................... 90
Article 153 Board of Management....................................................................................................................... 91
Article 154 Term of office and numbers of members of Board of Management ....................................... 92
Article 155 Organizational structure, criteria and conditions for acting as member of Board of
Management........................................................................................................................................ 93
Article 156 Chairman of Board of Management ............................................................................................... 94
Article 157 Meetings of Board of Management ................................................................................................ 95
Article 158 Minutes of meetings of Board of Management............................................................................ 96
Article 159 Rights of members of Board of Management to be provided with information.................... 97
Article 160 Discharge, removal, replacement and addition of members of Board of Management..... 97
Article 161 Auditing Committee .......................................................................................................................... 98
Article 162 Director or general director of company........................................................................................ 99
Article 163 Salary, remuneration, bonuses and other benefits of members of Board of Management
and director or general director..................................................................................................... 100
Article 164 Public disclosure of relevant interests ......................................................................................... 101
Article 165 Responsibilities of managers of company .................................................................................. 102
Article 166 Right to initiate legal action against members of Board of Management, director or
general director................................................................................................................................. 102
Article 167 Approval of contracts and transactions between company and related persons .............. 103
Article 168 Inspection Committee...................................................................................................................... 104
Article 169 Criteria and conditions for inspectors .......................................................................................... 104
Article 170 Rights and obligations of Inspection Committee....................................................................... 105
Article 171 Rights of Inspection Committee to be provided with information .......................................... 106
Article 172 Salaries, remuneration, bonuses and other benefits of inspectors....................................... 106
Article 173 Responsibilities of inspectors ........................................................................................................ 106
Article 174 Removal and discharge of inspectors ......................................................................................... 107
Article 175 Submission of annual reports ........................................................................................................ 107
Article 176 Public disclosure of information .................................................................................................... 108
CHAPTER 6......................................................................................................................... 109
PARTNERSHIPS................................................................................................................. 109
Article 177 Partnerships....................................................................................................................................... 109
Article 178 Capital contribution and issuance of capital contribution certificates ................................... 109
Article 179 Assets of partnership....................................................................................................................... 110
Article 180 Restrictions of rights applicable to unlimited liability partners................................................ 110
Article 181 Rights and obligations of unlimited liability partners ................................................................ 110
Article 182 Partners' Councils ............................................................................................................................ 112
Article 183 Convening meetings of Partners’ Council .................................................................................. 113
Article 184 Management of business of partnership..................................................................................... 113
Article 185 Termination of status as unlimited liability partner.................................................................... 114
Article 186 Admission of new partners ............................................................................................................. 115
Article 187 Rights and obligations of limited liability partners ..................................................................... 115
CHAPTER 7......................................................................................................................... 116
PRIVATE ENTERPRISES .................................................................................................. 116

Article 188 Private enterprises ........................................................................................................................... 116
Article 189 Invested capital of private enterprise owners ............................................................................ 116
Article 190 Management of private enterprises.............................................................................................. 117
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Article 191 Lease-out of private enterprises ................................................................................................... 117
Article 192 Sale of private enterprises.............................................................................................................. 117
Article 193 Exercise of rights of the owner of a private enterprise in a number of special cases....... 118
CHAPTER 8......................................................................................................................... 118
CORPORATE GROUPS..................................................................................................... 118

Article 194 Economic groups and corporations.............................................................................................. 118
Article 195 Parent companies and subsidiary companies ........................................................................... 118
Article 196 Rights, obligations and responsibilities of parent company to subsidiary company ......... 119
Article 197 Financial statements of parent companies and subsidiary companies................................ 119
CHAPTER 9......................................................................................................................... 120
RE-ORGANIZATION, DISSOLUTION AND BANKRUPTCY OF ENTERPRISES......... 120

Article 198 Division of companies ..................................................................................................................... 120
Article 199 Separation of companies ................................................................................................................ 121
Article 200 Consolidation of companies........................................................................................................... 122
Article 201 Merger of companies ....................................................................................................................... 123
Article 202 Conversion of limited liability companies into shareholding companies .............................. 124
Article 203 Conversion of shareholding companies into single member limited liability companies . 124
Article 204 Conversion of shareholding companies into limited liability companies with two or more
members............................................................................................................................................. 125
Article 205 Conversion of private enterprises into limited liability companies, shareholding companies
or partnerships .................................................................................................................................. 125
Article 206 Temporary suspension and suspension of operation, and termination of business ......... 126
Article 207 Cases of and conditions for dissolution of enterprises ............................................................ 126
Article 208 Sequence and procedures for dissolution of enterprises....................................................... 127
Article 209 Dissolution of enterprises in the case of revocation of enterprise registration certificates or
pursuant to decisions of courts ..................................................................................................... 128
Article 210 Application file for dissolution of enterprise................................................................................ 129
Article 211 Prohibited activities as from date of decision on dissolution .................................................. 129
Article 212 Revocation of enterprise registration certificate [ERC]............................................................ 130
Article 213 Termination of operation of branches, representative offices and business locations..... 130
Article 214 Bankruptcy of enterprises............................................................................................................... 131
CHAPTER 10....................................................................................................................... 131
IMPLEMENTING PROVISIONS......................................................................................... 131

Article 215 Responsibilities of State administrative agencies ..................................................................... 131
Article 216 Business registration offices .......................................................................................................... 131
Article 217 Implementing provisions ................................................................................................................. 132
Article 218 Transitional provision....................................................................................................................... 132
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NATIONAL ASSEMBLY SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
No. 59/2020/QH14
[Ha Noi, 17 June 2020]
LAW
ON
ENTERPRISES
Pursuant to the Constitution of the Socialist Republic of Vietnam;
The National Assembly promulgates the Law on Enterprises.
CHAPTER 1
General Provisions
Article 1 Governing scope
This Law regulates the establishment, organization of management, re-organization, dissolution and related
activities of enterprises comprising limited liability companies [LLC] 1, shareholding companies, partnerships
and private enterprises; and regulates corporate groups.
Article 2 Applicable entities
1. Enterprises.
2. Agencies, organizations and individuals involved in the establishment, organization of management,

re-organization, dissolution and related activities of enterprises.
Article 3 Application of Law on Enterprises and other laws
If any other law provides special regulations on the establishment, organization of management, re-
organization, dissolution and related activities of enterprises, the provisions of such law shall apply.
Article 4 Interpretation of terms
In this Law, the f ollowing terms are construed as follows:
1. Copy means a document which is copied from the original book or certified against the original by an
authorized agency or organization or which has been verified against the original.
2. Foreign individual means a person holding a document which identifies his/her foreign nationality.
3. Shareholder means an individual or organization holding at least one share of a shareholding

company.
1
Allens footnote: Square brackets contain translator's comments only.
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4. Founding shareholder means a shareholder holding at least one ordinary share and signing the list of
f ounding shareholders of a shareholding company.
5. Dividend means the net profit to be paid for each share in cash or other assets.
6. Company comprises limited liability companies [LLCs], shareholding companies and partnerships.
7. Limited liability company comprises one [single] member LLCs and LLCs with two or more members
[multi-member].
8. National enterprise registration information portal means the electronic information portal to be us ed
f or enterprise registration via the electronic communication network, for announcement of information
about enterprise registration and for access to information about enterprise registration.
9. National enterprise registration database means the collection of data on enterprise registration
throughout the whole country.
10. Enterprise means an organization having its own name, having assets and a transaction office, and
established or registered for establishment in accordance with law for business/trading purposes.
11. State owned enterprises comprise enterprises in which the State holds above fifty per cent (50% ) of
the charter capital and/or the total number of voting shares as prescribed in article 88 of this Law.
12. Vietnamese enterprise means an enterprise established or registered f or establishment in

accordance with the laws of Vietnam and having its head office in Vietnam.
13. Contact address means the registered head office address in the case of an o rganizat ion; or t he
permanent residential address or the workplace address or any other address of an ind ividual who
registered such address with the enterprise as the contact address.
14. Market price of a capital contribution portion or of a share means the market trading price at the
preceding time, the agreed price between a seller and a purchaser, or t he p rice det ermined by a
price evaluation organization.
15. Enterprise registration certificate means the paper or electronic doc ument rec ording inf ormat ion
about enterprise registration which is issued by the business registration office to the enterprise.
16. Personal legal document means any one of the following documents: citizen's identity card, people' s
identity card, passport and other lawful personal identification document.
17. Organizational legal document means any one of the following documents: establishment d ecision,
enterprise registration certificate and other equivalent document.
18. Capital contribution means the contribution of assets [to a company] in o rder t o f orm t he c harter
capital of the company, comprising capital contribution for establishment of a company or additional
contribution to the charter capital of a company already established.
19. National system of information about enterprise registration comprises the national enterprise
registration information portal, the national enterprise registration database, relevant databases and
systematic technical infrastructure.

20. Valid file means a f ile containing all documents stipulated in this Law and t he c ont ents of whic h
contain complete declarations as required by law.
21. Business means the continuous conduct of one, several or of all of the s t ages of a pro cess, f rom
investment, production to sale of products or provision of services on the market f or p rof it -mak ing
purposes.
22. Person with a family relationship comprises the spouse, natural or adoptive parent , f at her-in-law,
mother-in-law, child, adopted child, son-in-law, daughter-in-law, sibling, brother-in-law and sis ter-in-
law, and siblings of the spouse.
23. Related person means any individual or organization with a direct or indirect relationship wit h an
enterprise in the f ollowing cases:
(a) [Related person] means the parent company, a manager and the legal represent ative of t he
parent company, and any person with the authority to appoint the manager of the parent
company;
(b) [Related person] means any subsidiary company, and any manager and the legal
representative of the subsidiary company;
(c) An individual or organization, or a group of individuals or o rganizations wit h t he abilit y t o

control activities of such enterprise via ownership or takeover of shares or capital contribution
portions or via issuance of decisions of the company;
(d) A manager of the enterprise, the legal representative, and an inspector;
(dd) Spouse, natural or adoptive parent, father-in-law, mother-in-law, child, adopted child, son-in-
law, daughter-in-law, sibling, brother-in-law or sister-in-law of any manager of the company, of
the legal representative, of any inspector, or of any member and shareholder holding a
controlling portion of capital contribution or controlling shares;
(e) An individual who is the authorized representative of any company or organization stipulated in
sub-clauses (a), (b) and (c) of this clause;
(g) An enterprise in which any individual, company or organization stipulated in sub-clauses (a),
(b), (c), (d), (dd) and (e) of this clause owns [shares] at a level entitling it to control issuance of
decisions of the company.
24. Manager of an enterprise means a manager of a private enterprise o r a manager of a c ompany ,

comprising the owner of the private enterprise, unlimited liability partners, the chairman of the
members’ council, members of the members' council, the chairman of the company, the chairman of
the board of management, members of the board of management, the director or general direc tor,
and individuals holding other managerial positions as stipulated in the charter of the company 2.
25. Founder of an enterprise means an individual or organization establishing or contributing c apital t o

establish the enterprise.
26. Foreign investor means an individual or organization stipulated in the Law on Investment.
2
Allens footnote: The Vietnamese term for 'company' covers each and all of private enterprise, partnership, limited liability
company & shareholding company. Also in this Law, the Vietnamese text swap s between using 'company' and 'enterprise'.

27. Capital contribution portion means the total value of assets contributed or undertaken to be
contributed by a member to a LLC or partnership. Capital contribution ratio means t he rat io of t he
portion of capital contribution of a member to the charter capital of the LLC or the partnership.
28. Public utility products or services means products or services which are es s ent ial f or t he s ocio-
economic life of the country, localities or civilian communities, which the State needs t o ens ure f or
the general interest or for national defence and security purposes, and for which it would be d if ficult
to cover costs if production and supply were implemented in accordance with the market mechanism.
29. Member of a company means an individual or organization holding part or all of the charter capital of
a LLC or partnership.
30. Partner of a partnership3 comprises unlimited liability partners and limited liability partners 4.
31. Re-organization of an enterprise means the division, separation, consolidation, merger or conversion
of the type of the enterprise.
32. Foreign organization means an organization which is established overseas in accordance with
f oreign law.
33. Voting capital means the portion of capital contribution or shares entitling the owner to vote on
matters which fall within the decision-making power of the members’ council or general meet ing of
shareholders.
34. Charter capital means the total value of assets contributed or undertaken to be contributed by
members of the company and/or the owner of the company when establishing a LLC or partners hip;
or means the total aggregate par value of shares sold or registered f or subscription when
establishing a shareholding company.
Article 5 State guarantees 5 for enterprises and owners of enterprises
1. The State recognises the long term existence and development of the types of enterprise prescribed
in this Law, ensures the equality of enterprises before the law irrespective of their form of ownership
and economic sector; and recognises the lawful profit-making nature of business activities.
2. The State recognises and protects the ownership of assets, invested capital, income and other lawful
rights and interests of enterprises and their owners.
3. Lawf ul assets and invested capital of enterprises and their owners shall not be nationalized or
expropriated by administrative measures. In extremely necessary cases where the State
compulsorily acquires or requisitions assets of an enterprise, the enterprise shall be paid or
compensated in accordance with the law on compulsory acquisition and requisit ion of as sets . The
payment or compensation must ensure the interests of the enterprise without discrimination as
between types of enterprise.
3
Allens footnote: The literal translation is "member of a partnership", however 'partner' has been adopted throughout this
translation. The same Vietnamese term (“member” without “partnership”) is used to denote a member of a LLC.
4
Allens footnote: The literal translation is "capital contributing partners".
5
Allens footnote: An alternative translation is "assurances".

Article 6 Political organizations, socio-political organizations and organizations representing employees
at the grassroots level in enterprises
1. Political organizations, socio-political organizations and organizations representing employees at t he

grassroots level in enterprises shall operate in accordance with the provisions of the Constitution, the
law, and their charter.
2. An enterprise is obliged to respect and is not permitted to hinder or cause dif f iculties to the
establishment of a political organization, socio-political organization or o rganization repres enting
employees at the grassroots level in the enterprise; and is not permitted to hinder its employees from
or cause difficulties to its employees in participating in activities of such organization.
Article 7 Rights of enterprises
1. To f reely conduct business in the industries and trades which are not prohibited by law.
2. To conduct business autonomously and select the form of organizat ion of b us ines s; t o t ake t he
initiative in selecting the lines of business, the area f or and form of business, and to take the initiative
in adjusting the scope and lines of business.
3. To select f orms and methods of raising, allocating and utilizing capital.
4. To f reely seek markets and customers and sign contracts.
5. To conduct import and export business.
6. To recruit, hire and employ labourers [employees] in accordance with the law on labour.
7. To take the initiative in applying science and technology to increase business ef f iciency and
competitiveness; to have their intellectual property rights protected in accordance wit h t he law on
intellectual property.
8. To possess, use and dispose of assets of the enterprise.
9. To ref use requests from agencies, organizations and individuals not in acc ordance wit h law f or
provision of human resources.
10. To lodge complaints or participate in legal proceedings in accordance with law.
11. Other rights as stipulated by law.
Article 8 Obligations of enterprises
1. To satisfy all business investment conditions when conducting business in the industries and t rades
f or which business investment is subject to conditions [is conditional], or the industries and trades for
which market approach is subject to conditions applicable to foreign invest ors in ac cord anc e with
law, and to ensure maintenance of all such conditions during the process of business operation.
2. To f ully and promptly perf orm the obligations regarding enterprise registration, registration of
changes to contents of enterprise registration, public disclosure of information about es t ablishment
and operation of the enterprise, reporting and other obligations as stipulated in this Law.

3. To be responsible for the honesty and accuracy of declarations in the application file f or ent erprise
registration and in reports; in the case of discovery of any information which was declared or reported
inaccurately or incompletely, to promptly make amendment of or addition to such information.
4. To organize accounting work, to pay taxes and to perform other financial obligations as stipulated b y
law.
5. To ensure the lawf ul and legitimate rights and interests of employees in accordance with law; no t t o
discriminate between and of f end the honour and dignity of employees in the enterprise; not to
mistreat labour, force labour or use labour being minors contrary to law; to support and facilit ate it s
employees to participate in training to improve their qualifications and technical skills; t o implement
the policies and regimes on social insurance, job loss insurance, health insurance and other
insurance f or employees in accordance with law.
6. Other obligations stipulated by law.
Article 9 Rights and obligations of enterprises providing public utility products or services
1. The rights and obligations of enterprises stipulated in articles 7 and 8 and in other relevant provisions
of this Law.
2. To account for and to be covered for expenses at the price stipulated by the law on tendering, or t o
collect charges for provision of services in accordance with regulations of competent State agencies.
3. To be guaranteed an appropriate period for supply of products or provision of s ervices in o rder t o

recover invested capital and gain reasonable profit.
4. To supply products or provide services in the correct quantity and quality and on time as c ommitt ed
at the price or charge rate stipulated by competent State agencies.
5. To ensure that equitable and favourable conditions are applicable to customers.
6. To be responsible before the law and customers for quantity, quality, terms of supply and prices, and
charges for supply of products or provision of services.
Article 10 Criteria applicable to and rights and obligations of social enterprises
1. A social enterprise must satisfy the following criteria:
(a) It is registered for establishment in accordance with this Law;
(b) Its operational objective is to resolve social or environmental issues in t he int erest s of t he
community;
(c) It uses at least f ifty one (51) per cent of its total annual after-tax profit to conduct re-investment
f or the purpose of implementing the registered objectives.
2. In addition to the rights and obligations of enterprises stipulated in this Law, a social ent erprise has
the f ollowing rights and obligations:
(a) The owner or the manager of the social enterprise shall be considered f or and entitled to
receive f avourable conditions and assistance during issuance of relevant licences, [practising]
certif icates and certificates in accordance with law;

(b) To be permitted to raise and receive f unding [aid] f rom individuals, enterprises, non-
governmental organizations and other organizations in Vietnam and overseas in order to cover
managerial and operational expenses of the enterprise;
(c) To maintain the operational objectives and the conditions stipulated in clauses 1(b) and 1(c) of
this article during the course of operation;
(d) Not to use funding raised for purposes other than the purpose of c overing managerial and
operational expenses in order to resolve social or environment al is sues reg istered b y t he
enterprise;
(dd) In the case of receipt of incentives or assistance, the social enterprise must annually mak e a
report to the competent agency on its operational status.
3. The social enterprise must send a notice to the competent agency when it ceases to implement t he
social or environmental objectives or does not use profit for re-investment as prescribed in c lauses
1(b) and 1(c) of this article.
4. The State has policies to encourage, support and promote the development of social enterprises.
5. The Government shall provide detailed regulations on this article.
Article 11 Document retention regime of enterprises
1. Depending on the form of enterprise, an enterprise must retain the following documents:
(a) Charter of the company; rules on internal management of the company; and register of
members or register of shareholders;
(b) Certif icate of protection of industrial property rights; certificat e of regist ration of quality of
products, goods and services; and other licences and certificates;
(c) Documents and papers certifying ownership of assets of the company;
(d) Voting slips, vote counting minutes, minutes of meetings of the Members’ Council, the General
Meeting of Shareholders or the Board of Management; decisions of the enterprise;
(dd) Prospectus for offer for sale or listing of securities;
(e) Reports of the Inspection Committee, conclusions of inspection agencies and conc lusions of
auditing organizations;
(g) Books of accounts, accounting records and annual financial statements.
2. The enterprise must retain the documents stipulated in clause 1 of this article at it s head of f ice or
another place stipulated in the charter of the company; the duration for ret aining document s s hall
accord with law.
Article 12 Legal representatives of enterprises
1. Legal representative of an enterprise means an individual representing the enterprise to exercise the
rights and perform the obligations arising out of transactions of the enterprise, and representing t he

enterprise to act as the person lodging a petition f or resolution of a civil matter, as a plaintif f ,
def endant or person with related interests and obligations in arbitration proceedings or courts and t o
exercise other rights and perform other obligations in accordance with law.
2. LLCs and shareholding companies may have one or more legal representativ es. The c hart er o f a
company shall specify the number, managerial positions and right s and o bligat ions of t he legal
representative(s) of the enterprise. If the company has more than one legal representative, the
charter of the company shall specif y rights and obligations of each legal representative. If the
allocation of rights and obligations of each legal representative has not yet been clearly stipulat ed in
the charter of the company, each legal representative of the company will be a repres entat iv e with
f ull authority of the enterprise before a third party; all the legal representatives must be jointly liable
f or any loss and damage to the enterprise in accordance with the civil law and other relevant laws.
3. An enterprise must ensure that there is always at least one legal representative residing in Vietnam.
If there remains only one legal representative residing in Vietnam, such person must , when ex iting
Vietnam, authorize in writing another individual residing in Vietnam ["the attorney "] to ex erc is e t he
rights and perform the obligations of the legal representative. In such case, the legal representat ive
shall remain responsible for the performance of the authorized rights and obligations.
4. If upon expiry of the term of authorization stipulated in clause 3 of this article, the legal representative
of the enterprise has not yet returned to Vietnam and has not authorized another person, the
f ollowing provisions shall apply:
(a) The attorney shall continue to perform the rights and obligations of the legal representative of
the private enterprise until the legal representative of the enterprise returns to work at the
enterprise;
(b) The attorney shall continue to perform the rights and obligations of the legal representative of
a LLC, shareholding company or partnership until the legal repres entat iv e of t he c ompany
returns to work at the company or until the company owner, the Members' Council or the
Board of Management makes a decision appointing another person to act as legal
representative of the enterprise.
5. Except for the case prescribed in clause 6 below, if an enterprise has only one legal rep resentat ive
and this person is absent in Vietnam for a period of more than thirty (30) days without authorizing any
person to perf orm the rights and obligations of the legal representative of the enterprise or is
deceased, disappears [is missing], is prosecuted f or criminal liability, is subject to temporary
imprisonment, serves a prison sentence, is subject to administrative measures in a compulsory drug
rehabilitation establishment or compulsory educational establishment, has his or her capacity for civil
acts restricted or lost, has cognitive difficulties or difficulties with behavioural control, or is prohibited
by a court from assuming a certain position, from practising or from d oing c ert ain wo rk, t hen t he
company owner, the members' council or the board of management shall appoint another person t o
act as legal representative of the company.
6. In the case of a LLC with two members, if one member is an individual acting as the legal
representative of the company who is deceased, disappears [is missing], is prosecuted f or c riminal
liability, is subject to temporary imprisonment, serves a prison sentence, is subject to administ rative
measures in a compulsory drug rehabilitation establishment or compulsory educational
establishment, absconds from his or her place of residence, has his o r her c apacity f or c ivil ac ts
restricted or lost, has cognitive difficulties or difficulties with behavioural control, or is prohibited by a
court f rom assuming a certain position, from practising or from doing cert ain wo rk, t hen t he o ther
member shall automatically become legal representative of the company until there is a new decision
on the legal representative of the company made by the members' council.

7. Courts and other agencies authorized to perform legal proceedings have the right to ap point legal
representatives to participate in legal proceedings in accordance with law.
Article 13 Responsibilities of legal representatives of enterprises
1. A legal representative of an enterprise has the following responsibilities:
(a) To exercise the delegated rights and perform the delegated obligations honestly and prudently
and to the best of his or her ability in order to assure the lawful interests of the enterprise;
(b) To be loyal to the interests of the enterprise; not to abuse his or her position and power and
not to use information, know-how, business opportunities and other assets of the enterprise for
his or her personal benefit or that of other organizations or individuals;
(c) To promptly notify the enterprise in a complete and accurate manner of any enterprise in which
he or she or his or her related person is the owner or holds shares or a cap it al cont ribution
portion in accordance with this Law.
2. A legal representative of an enterprise is personally liable for any loss and damage to the enterprise
due to a breach of the responsibilities stipulated in clause 1 of this article.
Article 14 Authorized representatives of owners, members and shareholders of companies being

organizations
1. The authorized representative of an owner, member or shareholder of a company being an

organization must be an individual authorized in writing to exercise the rights and perf orm the
obligations stipulated in this Law in the name of such owner, member or shareholder.
2. The appointment of an authorized representative shall be implemented in accordance with the

f ollowing provisions, unless otherwise stipulated by the company charter:
(a) An organization being a member of a LLC with two or more members and ho lding at leas t
thirty f ive (35) per cent of the charter capital may authorize up to three authorized
representatives;
(b) An organization being a shareholder of a shareholding company and holding at least t en (10)
per cent of the total ordinary shares may authorize up to three authorized representatives.
3. If an owner, a member or a shareholder of a company being an organization appoints multiple

authorized representatives, the capital contribution portion or number of shares must be specif ically
determined f or each authorized representative. If such owner, member or shareholder f ails to
determine the capital contribution portion or number of shares corresponding t o each aut horized
representative, then the capital contribution portion or number of shares shall be equally dist ribut ed
to all the authorized representatives.
4. The letter appointing an authorized representative must be notified to the company and shall only b e
ef f ective in respect of the company as from the date of receipt of the letter by the c ompany . S uch
letter must contain the following particulars:
(a) Name, enterprise code number and head office address of the owner, member or shareholder;

(b) Number of authorized representatives and ratio of ownership of shares or capital contribution
portion corresponding to each authorized representative;
(c) Full name, contact address, nationality, serial number of the personal legal document of eac h
authorized representative;
(d) Respective term of authorization applicable to each authorized representative, specif ying t he
date of commencement of acting as [authorized] representative;
(dd) Full names and signatures of the legal representative of the owner, member or s hareholder
and of the authorized representatives.
5. An authorized representative must satisfy the following criteria and conditions:
(a) Not f all into the category of entities prescribed in article 17.2 of this Law;
(b) A member or shareholder being a State owned enterprise as prescribed in art icle 88. 1(b) of
this Law must not appoint any person with a f amily relationship with a manager of the
company or with a person with the authority to appoint the manager of the company to ac t as
representative at another company;
(c) Other criteria and conditions stipulated by the charter of the company.
Article 15 Responsibilities of authorized representatives of owners, members and shareholders of

company being organizations
1. An authorized representative shall, in the name of an owner, a member or a shareholder of the

company, perform the rights and obligations of such owner, member or shareholder at the Members ’
Council or the General Meeting of Shareholders in accordance with this Law. All restrictions imposed
by the owner, member or shareholder on the authorized representative during p erf ormance of t he
rights and obligations of the owner, member or shareholder of t he c ompany res pect iv ely at t he
Members’ Council or the General Meeting of Shareholders shall have no legal validity in respect of a
third party.
2. An authorized representative is responsible to attend all meetings of the Members’ Co unc il o r t he

General Meeting of Shareholders; and to perform the authorized rights and obligations honestly and
prudently and to the best of his or her ability in order to protect the lawful interests of the appointing
owner, member or shareholder.
3. An authorized representative is responsible before the appointing owner, member or shareholder f or

any breach of the responsibilities stipulated in this article. The appointing owner, member or
shareholder is responsible before a third party for any liability arising in connection with the rights and
obligations performed via the authorized representative.
Article 16 Strictly prohibited practices
1. To issue or ref use to issue enterprise registration certificates; to request founders of ent erprises t o
submit other additional documents contrary to the provisions of this Law; to cause any delay, trouble,
obstruction or difficulty to founders of enterprises and to the business activities of enterprises.
2. To prevent owners, members or shareholders of an enterprise f rom exercising their rights and
perf orming their obligations in accordance with this Law and the charter of the company.

3. To conduct business in the form of an enterprise without carrying out registration, or t o cont inue t o
conduct business when the enterprise registration certificate was revoked or the business activities of
the enterprise are being temporarily suspended.
4. To declare dishonestly or inaccurately the contents of the application file for enterprise regis trat ion
and of the application file for registration of changes in the registered items of the enterprise.
5. To wrongly declare the charter capital or to fail to contribute the amount of charter capit al in f ull as
registered; to deliberately valuate wrongly assets contributed as capital.
6. To conduct business in the industries and trades for which business invest ment is prohibited, t o
conduct business in the industries and trades for which market approach is no t y et p ermit ted wit h
respect to foreign investors, or to conduct business in the industries and trades for which b usines s
investment is subject to conditions without satisfying all of the business conditions stipulat ed by law
or without ensuring maintenance of all business investment conditions during the course of
operation.
7. Deceitful conduct, money laundering or terrorism financing activities.
CHAPTER 2
Establishment of Enterprises
Article 17 Right to establish, contribute capital to, purchase shares in, purchase capital contribution
portions in and manage enterprises
1. Organizations and individuals have the right to establish and manage enterprises in Vietnam in
accordance with this Law, except for the cases stipulated in clause 2 of this article.
2. The f ollowing organizations and individuals do not have the right to establish and manage
enterprises in Vietnam:
(a) State agencies and units of people’s armed forces using State assets to est ablis h business
enterprises to make private profit for their own agencies or units;
(b) Cadres [senior employees], State officials and State employees in accordance with the Law on
Cadres and State Officials and the Law on State Employees;
(c) Of f icers, non-commissioned officers, career servicemen and national def ence work ers and
employees in agencies and units of the People’s Army of Vietnam; of f icers, career non-
commissioned officers and public security workers in agencies and units of the People's Public
Security of Vietnam, except for persons appointed to be authorized representatives to manage
the State capital contribution portions in enterprises or to be managers in State owned
enterprises;
(d) Management personnel and professional management personnel in State owned enterpris es
as prescribed in article 88.1(a) of this Law, except f or those appointed to be authorized
representatives to manage the State capital contribution portions in other enterprises;
(dd) Minors; persons whose capacity for civil acts is res tric ted or lo st ; pers ons wit h cognitive
dif ficulties or difficulties with behavioural control; organizations without legal entity status;

(e) Persons who are prosecuted for criminal liability, are subject to temporary imprisonment, serve
prison sentences, serve administrative measures at compulsory drug rehabilitation
establishments or compulsory educational establishments or are prohibited b y court s f rom
assuming certain positions, practising or doing certain work ; other cases as stipulated by t he
Law on Bankruptcy and the Law on Anti-corruption.
If requested by the business registration of f ice [BRO], the applicant f or registration of

establishment of the enterprise must submit a legal record to the BRO.
(g) Organizations being commercial legal entities which are prohibited from conducting b usiness
or operating in certain sectors pursuant to the Criminal Code.
3. Organizations and individuals have the right to contribute capital to, purchase shares or p urchase a
capital contribution portion in shareholding companies, LLCs and partnerships in ac cordance wit h
this Law, except for the following cases:
(a) State agencies and units of the people’s armed forces using State assets to contribute capit al
to enterprises to make private profit for their own agencies and units;
(b) Entities not permitted to contribute capital to enterprises as stipulated in Law on Cadres and
State Officials and the Law on State Employees and the Law on Anti-Corruption.
4. Private profit for an agency or unit as stipulated in clauses 2(a) and 3(a) of this article means using
revenue in any f orm which was earned from business activities, from a capital cont ribution or f rom
the purchase of shareholding or the purchase of a capital contribution portion, for one of the following
purposes:
(a) Distributing in any form to some or all persons stipulated in clauses 2(b) and 2(c) of this article;
(b) Supplementing the operational budget of such agency or unit contrary to the law on the S tat e
budget;
(c) Establishing or supplementing a fund which services the private interests of s uch agenc y or
unit.
Article 18 Contracts prior to enterprise registration
1. The f ounder(s) of an enterprise may sign contracts for the purpose of establishing and operating t he
enterprise prior to and during enterprise registration.
2. Where the enterprise registration certificate is issued, the enterprise must continue t o exerc is e t he
rights and perform the obligations arising from the signed contracts as stipulated in clause 1 of t his
article and the parties [concerned] must transfer the contractual rights and obligations in accordance
with the Civil Code, unless otherwise agreed in the contracts.
3. Where the enterprise is not issued with an enterprise registration certif icate, the person(s) who
signed the contracts pursuant to clause 1 of this article shall be liable for the perf ormance of s uch
contracts; or shall be jointly liable for the performance of such contracts if there is any ot her person
participating in establishment of the enterprise.
Article 19 Application file for registration of a private enterprise
1. Request for enterprise registration.

2. Copy of the personal legal document with respect to the owner of the private enterprise.
Article 20 Application file for registration of a partnership
2. Charter of the partnership.
3. List of partners.
4. Copy of personal legal documents with respect to partners.
5. Copy of investment registration certificates with respect to foreign investors as stipulated in t he Law
on Investment.
Article 21 Application file for registration of a limited liability company [LLC]
2. Charter of the company.
3. List of members.
4. Copy of the following documents:
(a) Personal legal document in respect of a member being an individual and the legal
representative;
(b) Organizational legal document in respect of a member being an organization and letter
appointing an authorized representative; personal legal document in respect of the authorized
representative of a member being an organization;
In the case of a member being a foreign organization, the copy of t he o rganizational legal
document must have been consularized.
(c) Investment registration certificates with respect to foreign investors as stipulated in the Law on
Investment;
Article 22 Application file for registration of a shareholding company
2. Charter of the company.
3. List of founding shareholders; list of shareholders being foreign investors.
4. Copy of the following documents:
(a) Personal legal documents with respect to founding shareholders and s hareholders b eing
f oreign investors who are individuals, [and] the legal representative;

(b) Organizational legal documents with respect to shareholders being organizations, and lett ers
appointing authorized representatives; personal legal documents with respec t t o aut horized
representatives of founding shareholders and shareholders being foreign inv estors who are
organizations.
In the case of a shareholder being a foreign organization, the copy of the organizational legal
document of must have been consularized;
(c) Investment registration certificates with respect to foreign investors as stipulated in the Law on
Investment.
Article 23 Contents of request for enterprise registration
A request for enterprise registration shall contain the following particulars:
1. Name of the enterprise
2. Address of the head office of the enterprise; telephone number, facsimile number, email (if any).
3. Lines of business.
4. Charter capital; investment capital of the owner of the private enterprise.
5. Classes of shares, par value of shares of each class and total number of shares of each class which
may be offered for sale in the case of a shareholding company.
6. Inf ormation about registration of tax.
7. Proposed number of employees.
8. Full name, signature, contact address, nationality, details of the personal legal document with respect
to the owner of the private enterprise or unlimited liability partners of the partnership.
9. Full name, signature, contact address, nationality and details of the personal legal document wit h
respect to the legal representative of the LLC or shareholding company.
Article 24 Company charter6
1. The charter of a company comprises the charter upon enterprise registration and the amended
charter during the course of operation.
2. The charter of a company shall contain the following main contents:
(a) Name and head of f ice address of the company; names and addresses of branches and
representative offices (if any);
(b) Lines of business;
(c) Charter capital, total number of shares, classes of shares and par v alue of s hares of eac h
class in the case of a shareholding company;
6
Allens footnote: The Vietnamese term for "company" may also cover "partnership".

(d) Full names, contact addresses and nationalities of unlimited liability partners in the c ase of a
partnership; of the company owner or of members in the case of a LLC; of f ounding
shareholders in the case of a shareholding company. Capital contribution portion and its value
f or each member in the case of a LLC or a partnership, number of shares, classes of s hares,
par value of shares of each class of founding shareholders in t he c ase of a s hareholding
company;
(dd) Rights and obligations of members in the case of a LLC or a partnership; of shareholders in
the case of a shareholding company;
(e) Organizational and managerial structure;
(g) Number, managerial positions and rights and obligations of legal representatives of the
enterprise; allocation of rights and obligations of legal representatives in accordance wit h law
where the company has more than one legal representative;
(h) Procedures for passing decisions of the company; rules for resolution of internal disputes;
(i) Bases and methods of determining wages, remuneration and bonuses of managers and
inspectors;
(k) Circumstances in which a member or shareholder has the right t o req uire t he company t o
redeem its capital contribution portion in the case of a LLC or its shares in the case of a
shareholding company;
(l) Rules f or distribution of after-tax profit and dealing with losses in the business;
(m) Circumstances for dissolution, procedures for dissolution and procedures for liquidation of t he
assets of the company;
(n) Procedures for amendment of or addition to the charter of the company.
3. The charter of the company upon enterprise registration must contain full names and signatures of
the f ollowing persons:
(a) All unlimited liability partners in the case of a partnership;
(b) The company owner being an individual or the legal representative of t he c ompany o wner
being an organization in the case of a one [single] member LLC;
(c) The member(s) being individual(s) and the legal representative(s) or the authorized
representative(s) of the member(s) being organization(s) in the case of a LLC with two or more
members [multi-member];
(d) The f ounding shareholder(s) being individual(s) and the legal representative(s) or the
authorized representative(s) of the founding shareholder(s) being organization(s) in the case of
a shareholding company.
4. The amended charter of the company must contain f ull names and signatures of the f ollowing
persons:
(a) The chairman of the Partners' Council in the case of a partnership;

(b) The owner, the legal representative of the owner or the legal representative in t he c ase of a
one member LLC;
(c) The legal representative(s) in the case of a LLC with two or more members or a shareho lding
company.
Article 25 List of members of limited liability company or partnership and list of founding shareholders
and shareholders being foreign investors in the case of shareholding company
The list of members of a LLC or partnership and the list of founding shareholders and shareholders b eing
f oreign investors in the case of a shareholding company must contain the following main details:
1. Full names, signatures, nationalities and contact addresses of members being individuals in the case
of a LLC or a partnership; of founding shareholders and shareholders being foreign invest ors who
are individuals in the case of a shareholding company.
2. Names, enterprise code numbers and head office addresses of members being organizations in t he
case of a LLC or partnership; of founding shareholders and shareholders b eing f oreign inv es tors
which are organizations in the case of a shareholding company.
3. Full names, signatures, nationalities and contact addresses of legal representatives or aut horized
representatives of members being organizations in the case of a LLC; and of founding shareholders
and shareholders being foreign investors which are organizations in t he cas e of a s hare ho lding
company.
4. Capital contribution portion and its value, ratio of ownership of the capital contribution portion, type of
assets, quantity of assets, value of each type of asset contributed as capital, and time s chedule f or
contribution of capital of each member in the case of a LLC or a p art nership; number of s hares ,
classes of shares, ratio of ownership of shares, types of assets, quantity of assets and value of eac h
type of asset contributed as capital, and time schedule for contribution of capit al of eac h f ounding
shareholder and shareholder being a foreign investor in the case of a shareholding company.
Article 26 Sequence and procedures for enterprise registration
1. The f ounder(s) of an enterprise or an authorized person conducts enterprise reg istrat ion with t he
business registration office [BRO] in accordance with the following methods:
(a) Enterprise registration directly at the BRO;
(b) Enterprise registration via postal services;
(c) Enterprise registration via the electronic communication network [online].
2. Online enterprise registration means the founder(s) of an enterprise submits an applicat ion f ile f or
enterprise registration online at the national enterprise registration inf ormation portal. Such
application file shall contain the data stipulated in this Law and shall be presented in the form of an e-
document. An application file for enterprise registration conducted online has the equal legal validity
as a paper application file.
3. Entities may choose to use digital signatures in accordance with the law on e-t ransac tions o r use
business registration accounts in order to conduct enterprise registration online.

4. Business registration account means an account created by the national system of information about
enterprise registration and issued to an individual to conduct ent erprise regist rat ion o nline. The
individual to be issued with an business registration account is legally liable f or registration of
issuance and use of the business registration account for the p urpose of c onduc ting ent erprise
registration online.
5. The BRO is responsible to consider the validity of the application file and shall is sue an ent erprise
registration [certificate] within three working days from the date of receipt of the file. In a case where
the f ile is invalid, the BRO must notify the founder(s) of the enterprise in writing of the items required
to be amended or supplemented. In a case where the enterprise registration is reject ed, a writ t en
notice specifying the reasons must be sent to the founder(s) of the enterprise.
6. The Government shall provide regulations on the application file, sequence, procedures and int er-
service co-ordination for enterprise registration.
Article 27 Issuance of enterprise registration certificate
1. An enterprise shall be issued with an enterprise registration certificate [ERC] when it sat isfies all of
the f ollowing conditions:
(a) Its registered line of business is not prohibited from business investment;
(b) The name of the enterprise complies with the provisions of articles 37, 38, 39 and 41 of t his
Law;
(c) It has a valid application file for enterprise registration;
(d) It has paid in f ull the enterprise registration fee as stipulated by the law on charges and fees.
2. If the ERC is lost, damaged or ruined in any other form, the enterprise shall be re -is sued wit h an
ERC and must pay fees in accordance with law.
Article 28 Contents of enterprise registration certificate [ERC]
An ERC shall contain the following main contents:
1. Name of the enterprise and enterprise code number.
2. Head office address of the enterprise.
3. Full name, contact address, nationality and serial number of the personal legal document in res pect
of the legal representative of a LLC or shareholding company; and in respect of an unlimited liability
partner of a partnership, and in respect of the owner of a private ent erprise. Full names, cont act
addresses, nationalities, serial number of the personal legal documents in respect of members being
individuals; names, enterprise code numbers and head of f ice addresses of members being
organizations in the case of a LLC.
4. Charter capital in the case of a company, and invested capital in the case of a private enterprise.
Article 29 Enterprise code numbers
1. Enterprise code number means a row of numbers created by the nat ional s ys tem of inf ormation
about enterprise registration, issued to an enterprise upon establishment and s tat ed in t he E RC.

Each enterprise has one unique code number which shall not be re-used t o be iss ued to ano ther
enterprise.
2. Enterprise code numbers are used for the purpose of performing t ax obligat ions, ad ministrat ive
procedures and other rights and obligations.
Article 30 Registration of change to contents of enterprise registration certificates
1. When an enterprise changes any content of its ERC as stipulated in article 28 o f t his Law, it must
register [such change] with the BRO.
2. The enterprise is responsible to register such change within ten (10) days f rom the date of the
change.
3. The BRO is responsible to consider the validity of the application file and iss ue a new E RC wit hin
three working days from the date of receipt of the file. In a case where the f ile is inv alid, the B RO
must send a written notice to the enterprise of the items required to be amended or supplemented. In
the case of refusal to issue a new ERC, a written notice specifying the reasons must be s ent t o t he
enterprise.
4. The registration of change to any content of an ERC pursuant to a decision of a c ourt or arb itrat or
shall be implemented in accordance with the following sequence and procedures:
(a) The person requesting registration of change to the content of the ERC shall send a req uest
f or registration of change to the competent BRO within f if teen (15) days f rom the legally
ef f ective date of the judgement or decision of the court or from the effective date of the award
of the arbitrator. The f ile for registration must enclose a copy of the legally effective judgement
or decision of the court or the effective award of the arbitrator;
(b) The BRO is responsible to consider and issue a new ERC in accordanc e with t he c ontent s
stated in the legally effective judgement or decision of the court or in the effective award of the
arbitrator within three working days from the date of receipt of t he request f or regist ration
prescribed in sub-clause (a) above. In a case where the f ile [for registration] is invalid, the BRO
must notif y the requesting person in writing of the items required to be amended or
supplemented. In the case of ref usal to issue a new ERC, a written notice specif ying the
reasons must be sent to the requesting person.
5. The Government shall provide regulations on the application file, s equence and p rocedures f or
registration of change to contents of ERCs.
Article 31 Notice of change to contents of enterprise registration
1. An enterprise is required to notify the BRO of change to any of the following contents:
(a) Lines of business;
(b) A f ounding shareholder or shareholder being a f oreign investor in the case of a shareholding
company, except in the case of a listed company;
(c) Other contents in the application file for enterprise registration.
2. The enterprise is responsible to provide a notice of change to the content of enterpris e regist ration
within ten (10) days from the date of such change.

3. A shareholding company must send a written notice to the BRO in the locality where the head of fice
of the company is located within ten (10) days from the date of change t o any shareholder b eing
f oreign investor who is registered in the register of shareholders of the company. Such notic e mus t
contain the following particulars:
(a) Name, enterprise code number, head office address;
(b) In the case of a shareholder being a foreign investor who t ransf ers s hares , [ t he f ollowing
particulars must be stated]: name, head of f ice address of the shareholder being an
organization; full name, nationality, contact address of the shareholder b eing an ind ividual;
volume of shares and class of shares and ratio of ownership of its or his/her existing shares in
the company; volume of shares and class of shares transferred;
(c) In the case of a shareholder being a foreign investor who receives an assignment of s hares,
[the f ollowing particulars must be stated]: name, head office address of the shareholder b ei ng
an organization; full name, nationality, contact address of the shareholder being an individual;
volume of shares and class of shares of which the shareholder receives assignment; v olume
of shares, class of shares and ratio of ownership of its or his / her res pec tive s hares in t he
company;
(d) Full name and signature of the legal representative of the company.
4. The BRO is responsible to consider the validity [of the application f ile] and make c hanges t o the
contents of enterprise registration within three working days from the date of receipt of the not ice. In
a case where the f ile is invalid, the BRO must notify the enterprise in writing of the items required t o
be amended or supplemented. In the case of refusal to amend or supplement information pursuant to
the notice, a written notice specifying the reasons must be sent to the enterprise.
5. The notif ication of change to any content of enterprise registration pursuant to a decision of a court or
an arbitrator shall be carried out in accordance with the following sequence and procedures:
(a) The organization or individual requesting change to the content of enterprise registration s hall
send a notice of change of registered items to the competent BRO within ten (10) d ay s f rom
the legally effective date of the judgement or decision of the court or from the effective date of
the award of the arbitrator. Such notice must enclose a copy of the legally effective judgement
or decision of the court or the effective award of the arbitrator;
(b) The BRO is responsible to consider and make change to the content of enterprise registration
in accordance with the legally effective judgement or decision of t he c ourt o r t he ef f ect iv e
award of the arbitrator within three working days from the date of rec eipt of t he not ic e. In a
case where the f ile is invalid, the BRO must notify the requesting person in writing of the items
required to be amended or supplemented. In the case of ref us al t o amend or s upplement
inf ormation pursuant to the notice, a written notice specifying the reasons must be sent t o t he
requesting person.
Article 32 Announcement of contents of enterprise registration
1. Upon issuance of an ERC, the enterprise must make a public announcement on the national
enterprise registration information portal and pay fees in accordance with law. The anno uncement
must contain the contents of the ERC and the following information:
(a) Lines of business;

(b) List of founding shareholders; list of shareholders being foreign investors (if any) in the case of
a shareholding company.
2. Where any content of enterprise registration is changed, such change must be publicly announced
on the national enterprise registration information portal.
3. The time-limit for public announcement of information about an enterprise as stipulated in c lauses 1
and 2 of this article is thirty (30) days from the date of declaration.
Article 33 Provision of information about contents of enterprise registration
1. Organizations and individuals have the right to request the State administrative agency for business
registration and the BRO to provide information stored on the national system of inf ormat ion ab out
enterprise registration and must pay fees in accordance with law.
2. The State administrative agency for business registration and the BRO are obliged t o provide f ully
and promptly information stipulated in clause 1 of this article.
Article 34 Assets contributed as capital
1. Assets contributed as capital may be Vietnamese Dong, freely convertible foreign currenc y, g old,
land use rights, intellectual property rights, technologies, technical know-how and other assets which
can be valued in Vietnamese Dong.
2. Only individuals and organizations who are lawful owners of or have the lawful right to use the assets
prescribed in clause 1 above have the right to use such assets to contribute capital in ac cordanc e
with law.
Article 35 Transfer of ownership of assets contributed as capital
1. Members of a LLC or partnership or shareholders of a shareholding company must transf er

ownership of assets contributed as capital to the company in accordance with the f ollowing
provisions:
(a) With respect to assets over which ownership is registered or land use rights, the person
contributing capital must carry out the procedures to transfer ownership of such assets o r t he
land use rights to the company in accordance with law. Registration fees are no t payable in
respect of a transfer of ownership or transfer of the land use rig hts wit h res pect t o asset s
contributed as capital.
(b) With respect to assets without registered ownership, capital cont ribution must b e made b y
handing over assets contributed as capital, as evidenced by minutes, except where it is made
via an account.
2. The minutes of hand-over of assets contributed as capital must contain the following main contents:
(a) Name and address of the head office of the company;
(b) Full name, contact address, serial number of the personal legal document or serial number of
the organizational legal document of the person contributing capital;

(c) Type of asset and number of units of assets contribut ed as c apital; tot al value of as sets
contributed as capital and percentage of the total value of such assets in the charter capital of
the company;
(d) Date of hand-over; signatures of the person contributing capital or of the authorized
representative of the person contributing capital and of the legal representative of the
company.
3. Capital contribution shall be deemed to have been made only when the legal ownership of the assets
contributed as capital has been transferred to the company.
4. Procedures for transfer of ownership to the enterprise are not required where the as set is us ed for
the business operations of the owner of a private enterprise.
5. All payments for any purchase, sale or transfer of shares and capital contribution portions, receipt of
dividends and remittance of profit overseas by foreign investors must be made v ia t he ac counts
stipulated by the law on f oreign exchange control, except f or payment by assets and by other
non-cash payment forms.
Article 36 Valuation of assets contributed as capital
1. Assets contributed as capital which are not denominated in Vietnamese D ong, f reely c onvert ible
f oreign currency or gold must be valued by members, founding shareholders o r pric e evaluation
organizations, and must be denominated in Vietnamese Dong.
2. Assets contributed to an enterprise upon its establishment shall be valued by members o r f ounding
shareholders on the principle of consensus or shall be valued by a price evaluation organizat ion. In
the case of valuation by a price evaluation organization, the value of the assets contributed as capital
must be approved by more than fifty (50) per cent of members or founding shareholders.
If the assets contributed as capital are valued at more than their actual value at t he t ime of c apital
contribution, the members or founding shareholders must jointly make additional contribut ion in an
amount equal to the difference between the valuation and the actual value of the assets cont ributed
as capital at the time of completion of the valuation, and concurrently, are jointly liable f or any loss
and damage caused by the contributed assets being valued intentionally at more t han t heir ac tual
value.
3. Assets contributed as capital during the course of operations shall be valued on the basis of
agreement between the owner or the members' council [or the partners' council] in the case of a LLC
or partnership or the board of management in the case of a shareholding company [on the one hand]
and the person making the capital contribution [on the other hand] or by a price evaluation
organization. Where a price evaluation organization conducts the valuation, the value of the ass e ts
contributed as capital must be accepted by the person making the capital contribution and the owner,
the members' council [or the partners' council] or the board of management.
Where the assets contributed as capital are valued at more than their ac tu al v alue at t he t ime of
capital contribution, the person making the capital contribution, the owner or members of the
members' council [or the partners' council] in the case of a LLC or partnership or members of t he
board of management in the case of a shareholding company shall jointly make additional
contribution in an amount equal to the difference between the valuation and the actual value of t he
assets contributed as capital at the time of completion of the valuation, and concurrently, are jo intly
liable f or any loss and damage caused by the contributed assets being valued intentionally at more
than their actual value.

Article 37 Name of enterprise
1. The Vietnamese name of an enterprise contains two components in accordance wit h t he f ollowing
order:
(a) Type of enterprise;
(b) Proper name.
2. The type of the enterprise shall be written as "cong ty trach nhiem huu han" or "cong ty TNHH" in the
case of a limited liability company; or written as "cong ty co phan" or "cong ty CP " in t he c ase of a
shareholding company; or written as "cong ty hop danh" or "cong ty HD" in the case of a partnership;
or written as "doanh nghiep tu nhan", "DNTN" or "doanh nghiep TN" in the case of a private
enterprise.
3. The proper name shall be written using the letters in the Vietnamese alphabet, let ters F, J , Z, W,
numerals and symbols.
4. The name of an enterprise must be affixed at its head office, branches, representat ive of fices and
business locations. The name of the enterprise must be printed or written o n trans action p apers ,
documents, materials and printed matter issued by the enterprise.
5. Pursuant to the provisions in this article and articles 38, 39 and 41 of this Law, the BRO has the right
to ref use to accept the name proposed to be registered by an enterprise.
Article 38 Prohibited practices in naming enterprises
1. To use names which are identical to or cause confusion with the name of a registered enterpris e as
stipulated in article 41 of this Law.
2. To use the name of a State agency, a unit of the people’s armed forces, a politic al o rganization, a
socio-political organization, a socio-political occupational organization, a social organization, a socio-
occupational organization as the whole or a part of the proper name of an enterprise, ex cept where
such agency, unit or organization so approves.
3. To use terms or symbols which are contrary to historical traditions, culture, ethics and fine customs of
the people.
Article 39 Names of enterprises in foreign languages and abbreviated names of enterprises
1. The name of an enterprise in a f oreign language shall be the name which is translated f rom
Vietnamese into any of the foreign languages in the Latin lettering system. When [the name of the
enterprise] is translated into a foreign language, its proper name may remain unchanged o r may b e
translated into such foreign language with a corresponding meaning.
2. Where an enterprise has its name in a foreign language, then its name in the foreign language s hall
be printed or written in smaller size than that of its Vietnamese name at the head of f ice, b ranches,
representative offices and business locations of the enterprise or on transaction papers, document s,
materials and printed matter issued by the enterprise.
3. The abbreviated name of an enterprise may be an abbreviation of its Vietnamese name or its foreign
language name.

Article 40 Names of branches, representative offices and business locations
1. The name of a branch, representative office or business location must be written using the let ters in
the Vietnamese alphabet, letters F, J, Z, W, and numerals and symbols.
2. The name of a branch, representative of f ice or business location must include the name of the
enterprise together with the words "Chi nhanh" in the case of a branch or "Van phong dai dien" in the
case of a representative office or "Dia diem kinh doanh" in the case of a business location.
3. The name of a branch, representative office or business location must be writ ten or af f ixed at t he
head office of the branch, representative office or business location respectively . The name o f t he
branch or representative office shall be printed or written in smaller size than that of the Vietnamese
name of the enterprise on transaction papers, documents, materials and printed matter issued by the
branch or representative office.
Article 41 Identical names and names which cause confusion
1. Identical names means that the Vietnamese name of an enterprise requesting reg is trat ion, when
written, is completely similar to the Vietnamese name of a registered enterprise.
2. The cases in which a name is considered to cause conf usion with the name of a registered
enterprise comprise:
(a) The Vietnamese name of an enterprise requesting registration is pronounced the same as t he
name of a registered enterprise;
(b) The abbreviated name of an enterprise requesting registration is identical to the abbrev iated
name of a registered enterprise;
(c) The f oreign language name of an enterprise requesting registration is identical to t he f oreign
language name of a registered enterprise;
(d) The proper name of an enterprise requesting registration is different from the proper name of a
registered enterprise of the same type only by an ordinal number, a cardinal number, a letter in
the Vietnamese alphabet, or letters F, J, Z or W written next t o or s paced af t er t he proper
name of such enterprise;
(dd) The proper name of an enterprise requesting registration is different from the proper name of a
registered enterprise of the same type only by the symbol "&" or "va [and]", ".", "+", "-" and "_";
(e) The proper name of an enterprise requesting registration is different from the proper name of a
registered enterprise of the same type only by the word "tan" immediat ely prec eding o r t he
word "moi" 7 written next to or spaced af ter or bef ore the proper name of a registered
enterprise;
(g) The proper name of an enterprise requesting registration is different from the proper name of a
registered enterprise of the same type only by one of the following expres sions: " mien B ac
[northern]", "mien Nam [southern]", "mien Trung [central]", "mien Tay [ wes tern] " and “mien
Dong [eastern]”;
7
Allens footnote: Both of these words mean "new", but "tan" is a Vietnamese -Chinese word and is usually placed before a noun
(according to Chinese grammar) while "moi" is a pure Vietnamese word and is placed after the noun it complements.

(h) The proper name of an enterprise is identical to the proper name of a registered enterprise.
3. The cases stipulated in sub-clauses (d), (dd), (e) (g) and (h) of clause 2 abov e s hall not ap ply t o
subsidiary companies of registered companies.
Article 42 Head office of enterprise
The head of f ice of an enterprise is located in the territory of Vietnam, is the contact address of the
enterprise and is positioned on the basis of administrative boundaries and units, and has t elephone and
f acsimile numbers and an email address (if any).
Article 43 Seal of enterprise
1. Seals consist of seals made at seal engraving establishments or seals in the f orm of digital
signatures in accordance with the law on e-transactions.
2. An enterprise shall decide the type, quantity, form and contents of the seal of the enterprise, or of the
seal of its branch, representative office or other unit.
3. The management and retention of the seal shall be implemented in accordance with the provisions of
the company charter or rules which the enterprise or the branch, representative office or other unit of
the enterprise having the seal issues. The enterprise shall use the seal in transactions in accordance
with law.
Article 44 Branches, representative offices and business locations of enterprises
1. A branch is a dependent unit of an enterprise with the task of performing all or some of the functions
of the enterprise, including the function of authorized representative. The lines of b usines s of t he
branch must be consistent with the lines of business of the enterprise.
2. A representative office is a dependent unit of an enterprise with the task of acting as the aut horized
representative in the interests of the enterprise and protecting such interests. A representative of fice
is not permitted to conduct the business function of the enterprise.
3. A business location is a location where an enterprise carries out specific business activities.
Article 45 Registration of operation of branches and representative offices of enterprises; notification of

business locations
1. An enterprise has the right to establish branches and representative offices in Vietnam and overseas.
An enterprise may locate one or more branches or representative of f ices within [the same] one
locality [defined] on the basis of administrative boundaries and units.
2. In the case of establishment of a branch or representative office in Vietnam, the enterprise shall send
an application file for registration of operation of the branch or representative office to the BRO in the
locality where such branch or representative office of the enterprise is located. Such applic ation f ile
shall comprise:
(a) A notice of establishment of the branch or representative office;
(b) A copy of the establishment decision and a copy of the minutes of the meeting on
establishment of the branch or representative of f ice of the enterprise; and a copy of the
personal legal document in respect of the head of the branch or representative office.

3. The business registration office [BRO] is responsible to consider the validity of the application file and
issue a certificate of registration of operation of the branch or rep resent ative of fice wit hin t hree
working days from the date of receipt of the file; in a case where the file is inv alid, t he B RO must
notif y the enterprise in writing of the items required to be amended or supplemented. In t he c as e of
ref usal to issue such a certif icate, a written notice specif ying the reasons must be sent to the
enterprise.
4. The enterprise is responsible to register changes to the contents of the certificate of reg istrat ion of
operation of the branch or representative office within ten (10) days from the date of change.
5. The enterprise shall, within ten (10) days from the date of the decis ion o n t he business lo cation,
notif y the BRO thereof.
CHAPTER 3
Limited Liability Companies
SECTION 1
Limited Liability Companies with Two or More Members
Article 46 Limited liability companies with two or more members [Multiple member LLC]
1. A limited liability company [LLC] with two or more members [or multiple member LLC] is an enterprise
which has two to fifty (50) members being organizations and individuals. Members are liable f or t he
debts and other property obligations of the enterprise to the extent of the amount of capital
contributed to the enterprise, except for the case stipulated in article 47.4 of this Law. The port ion of
capital contribution of a member may only be assigned in accordance with articles 51, 52 and 53 of
this Law.
2. A multiple member LLC has legal entity status from the date of issuance of its ERC.
3. A multiple member LLC may not issue shares, except when it converts to become a s hareholding
company.
4. A multiple member LLC may issue bonds in accordance with this Law and other relevant laws .; t he
private placement of bonds must comply with articles 128 and 129 of this Law.
Article 47 Capital contribution for establishment of companies and issuance of capital contribution
certificates
1. The charter capital of a multiple member LLC when registering establishment of an enterprise s hall
be the total value of capital contribution portions which the members undertake to cont ribute t o t he
company and shall be recorded in the charter of the company.
2. Members must contribute capital to the company in full and in the type of assets as undertaken when
registering establishment of an enterprise, within a period of ninety (90) days f rom the date of
issuance of the ERC, excluding the duration of transporting or importing assets contributed as capital
and conducting administrative procedures for conversion of ownership of assets. Within such period,
the members have the rights and obligations corresponding to their ratios of capital contribution as
undertaken. A member of the company is only permitted to contribut e c apit al t o t he c ompany b y
another type of assets different from the assets undertaken if more than fifty (50) p er c ent of o ther
members so agree.
3. Where a member f ails to contribute capital or fails to contribute [pay] in full the capit al c ontribut ion
portion as undertaken upon expiry of the period stipulated in clause 2 of this article, it shall b e dealt
with as f ollows:
(a) The member f ailing to contribute capital as undertaken automatically ceases to be a member
of the company;
(b) The member f ailing to pay in full its capital contribution portion as undertaken has t he rights
corresponding to the capital contribution portion already paid;
(c) The capital contribution portion not yet paid by a member shall be of f ered f or sale in
accordance with a resolution or decision of the Members' Council.
4. If any member fails to contribute capital or fails to contribute in full the amount of capital undertaken,
the company must register change of its charter capital [and/or] capital contribution ratios of
members equal to the amount of contributed capital within thirty (30) days from the last day on which
the capital contribution portion is required to be fully paid as p rescribed in c lause 2 ab ove. A ny
member f ailing to contribute or failing to contribute in full the amount of capital undertak en mus t be
responsible for financial obligations of the company in proportion to t he c apital cont ribution rat io
undertaken which arose prior to the date on which the company regist ers c hange of t he c harter
capital and capital contribution ratios of members.
5. Except in the case prescribed in clause 2 above, a capital contribut or becomes a member of t he
company as from the time it/he/she has made payment of the capital contribution port ion and t he
inf ormation about such capital contributor as prescribed in sub-clauses (b), (c) and (dd) of article 48.2
of this Law is fully recorded in the register of members. Upon full payment of the capital contribut ion
portion [by a member], the company must issue a capital contribut ion c ert if icate t o t he member
corresponding to the value of the capital portion which has been contributed.
6. A capital contribution certificate must contain the following main details:
(a) Name, enterprise code number and head office address of the company;
(b) Charter capital of the company;
(c) Full name, contact address, nationality, serial number of the personal legal document in
respect of a member being an individual; name, enterprise code number or serial number o f
the organizational legal document, and head of f ice address of a member being an
organization;
(d) Capital contribution portion of the member and its ratio;
(dd) Number and date of issuance of the capital contribution certificate;
(e) Full name and signature of the legal representative of the company.
7. Where a capital contribution certificate is lost, damaged or otherwise ruined, the member shall be re-
issued by the company with a capital contribution certificate in accordance with t he s equence and
procedures stipulated in the charter of the company.

Article 48 Register of members
1. A company must establish a register of members immediately af ter issuance of its enterprise
registration certificate [ERC] which may be a paper document or a set of e-data recording information
about capital contribution portions of members of the company.
2. A register of members must contain the following main details:
(b) Full name, contact address, nationality, serial number of the personal legal document in
respect of a member being an individual; name, enterprise code number or serial] number of
the organizational legal document, and head of f ice address of a member being an
organization;
(c) Capital contribution portion and ratio of capital contribution paid, time of capital cont ribution;
types of asset contributed as capital, quantity [and] value of each type of asset contributed as
capital of each member;
(d) Signatures of members being individuals or of legal representatives of members being

organizations;
(dd) Number and date of issuance of the capital contribution certificate of each member.
3. The company must promptly update changes to any member in its register of members as requested
by the relevant member in accordance with the charter of the company.
4. The register of members shall be retained at the head office of the company.
Article 49 Rights of members of Members' Council
1. A member of the Members' Council has the following rights:
(a) To attend meetings of the Members’ Council, to discuss, make recommendations and vote on
the matters within the authority of the Members’ Council;
(b) To have the number of votes in proportion to its capital contribution portion, except for the case
stipulated in article 47.2 of this Law;
(c) To have profit distributed to it in proportion to its capital contribution portion after the company
has paid taxes in full and fulfilled all other financial obligations in accordance with law;
(d) To have distributed to it the remainder of the value of assets of the company in proportion to its
capital contribution portion in the company upon dissolution or bankruptcy of the company;
(dd) To be given priority in making additional capital contributions to the company upon any
increase of charter capital of the company;
(e) To dispose of its capital contribution portion by way of assignment of all or part [of it s c apit al
contribution portion], or by gift or other methods in accordance with law and the charter of t he
company;

(g) To initiate legal action regarding civil liability by itself or in the name of the c ompany against
the chairman of the Members' Council, the director or general director, the legal representative
or other managers in accordance with article 72 of this Law;
(h) Other rights as stipulated in this Law and in the charter of the company.
2. In addition to the rights stipulated in clause 1 of this article, any [one] member or a group of members
holding ten (10) per cent or more of the charter capital or a smaller percentage as stipulated in t he
charter of the company or falling into the case stipulated in clause 3 below has the following rights:
(a) To request that a meeting of the Members' Council be convened to deal with issues wit hin it s
authority;
(b) To inspect, sight or consult transaction monitoring rec ords, books of ac count and annual
f inancial statements;
(c) To inspect, sight, consult or copy the register of members, minutes of meetings, res olut ions
and decisions of the Members’ Council and other documents of the company;
(d) To request a court to cancel a resolution or decision of the Members' Council within ninety (90)
days f rom the date of closing of a meeting of the Members' Council if the sequence,
procedures and conditions [for holding] such meeting or the contents of s uch res olution or
decision are inconsistent with or do not comply with this Law and the charter of the company.
3. Where any [one] member of the company holds more than ninety (90) per cent of the charter capital
and the charter of the company does not stipulate a smaller percentage as provided in c laus e 2 of
this article, the other group of members automatically has the rights stipulated in c lause 2 o f this
article.
Article 50 Obligations of members of Members' Council
1. To contribute in full and on time the amount of capital as undertaken and to be liable f or t he debt s
and other property obligations of the company to the extent of the amount of capital c ontribute d t o
the company, except for the cases stipulated in articles 47.2 and 47.4 of this Law.
2. Not to withdraw its contributed capital from the company in any form, except for the cases stipulat ed
in articles 51, 52, 53 and 68 of this Law.
3. To comply with the charter of the company.
4. To observe resolutions and decisions of the Members’ Council.
5. To bear personal liability when performing the following acts in the name of the company:
(a) Breach of the law;
(b) Conduct of business or other transactions not in the interests of the company and [ thereby]
causing loss to other persons;
(c) Premature payment of debts in cases where the company is likely to be in financial danger.
6. Other obligations as stipulated in this Law.

Article 51 Redemption of capital contribution portions
1. A member may demand that the company redeem its capital contribution p ortion if suc h member
voted against a resolution or decision of the Members’ Council on the following issues:
(a) Amendment of or addition to the provisions of the charter of the company relating to the right s
and obligations of members and of the Members’ Council;
(b) Re-organization of the company;
(c) Other cases as stipulated in the charter of the company.
2. The demand for redemption of capital contribution portions must be made in writing and sent t o t he
company within fifteen (15) days from the date on which the res olution or d ecision st ipulat ed in
clause 1 above is passed.
3. Within f ifteen (15) days from the date of receipt of the demand stipulated in clause 1 of t his art icle,
the company must redeem the capital contribution portion of such member at the market price o r at
the price determined on the principle stipulated in the charter of the company, except where t he t wo
parties reach agreement on the price. Payment may only be made if, af ter f ull payment f or s uch
redeemed capital contribution portion, the company will still be able to s atisf y all debt s and o ther
property obligations.
4. Where the company is unable to pay the capital contribution portion demanded f or redemption as
stipulated in clause 3 of this article, such member has the right to freely assign its capital contribution
portion to another member or a non-member of the company.
Article 52 Assignment of capital contribution portions Chuyển nhượng phần vốn góp
1. Except in the cases stipulated in articles 51.4, 53.6 and 53.7 of this Law, a member of a mult iple
member LLC has the right to assign a part or all of its capital contribution portion to other persons in
accordance with the following provisions:
(a) Of f ering such capital contribution portion for sale to all other members in proport ion to t heir
respective capital contribution portions in the company on equal terms of offer;
(b) Assigning to non-members on the same conditions as the offer applicable to o ther members
as stipulated in sub-clause (a) above when the other members of the company do not
purchase or do not purchase in full within thirty (30) days from the date of the offer.
2. An assigning member still has the rights and obligations owed to the company corresponding t o it s
relevant capital contribution portion until the details of the purchaser as stipulated in c lauses 2(b ),
2(c) and 2(d) of article 48 of this Law are f ully recorded in the register of members.
3. Where the assignment or change of capital contribution portions by members results in t here b eing
only one member in the company, the company must organize management in the form of a s ingle
member LLC and register the change to its enterprise registration within fifteen (15) d ay s f rom t he
date of completion of the assignment.
Article 53 Dealing with capital contribution portions in some special cases
1. If the member of a company being an individual dies, then his or her heir under a will or at law s hall
be a member of the company.

2. In the case of a member being an individual who is declared missing by a court, the rights and
obligations of such member shall be perf ormed by the person managing the property of such
member as stipulated in the civil law.
3. In the case where a member has his or her capacity for civil acts restricted or lost o r has c ognitive
dif ficulties or difficulties with behavioural control, the rights and obligations of s uch member in t he
company shall be exercised by his or her representative.
4. The capital contribution portion of a member shall be redeemed by t he c ompany or as signed in

accordance with articles 51 and 52 of this Law in the f ollowing cases:
(a) An heir does not wish to become a member;
(b) A recipient of a gift as stipulated in clause 6 of this article is not approved by t he Members’
Council to become a member;
(c) A member of the company being an organization was dissolved or bankrupt.
5. Where the member of a company being an individual dies intestate or where his or her heir disclaims
the inheritance or the right to inherit is forfeited, the capital contribution port ion [of s uch member]
shall be dealt with in accordance with the civil law.
6. Where a member makes a gift of a part or all of its capital contribution port ion in t he company t o
another person, the recipient of the gift shall become a member of the company in accordance wit h
the f ollowing provisions:
(a) Where the recipient of the gif t is an heir at law in accordance with the Civil Code, such
recipient shall automatically become a member of the company;
(b) Where the recipient of the gif t is not the entity stipulated in sub -clause (a) above, such
recipient shall become a member of the company only upon approval of the Members’ Council.
7. Where a member uses its capital contribution portion to pay a debt, the payee may use such c apit al
contribution portion in either of the following methods:
(a) To become a member of the company upon approval of the Members’ Council;
(b) To of fer for sale and assign such capital contribution portion in accordance with art icle 52 of
this Law.
8. If the member of a company being an individual is subject to t emporary impris onment, s erves a
prison sentence, or is subject to administrative measures in a compulsory drug rehabilitation
establishment or compulsory educational establishment, then such member may authori ze ano ther
person to perform some or all of his or her rights and obligations in the company.
9. If the member of a company being an individual is prohibited by a c ourt f rom p ract is ing o r doing
certain work, or the member of a company being a commercial legal entity is prohibited b y a c ourt
f rom conducting business or operating in certain sectors within the scope of bus iness lines of t he
company, such member must not practise or do the prohibited work in such company or the
company must temporarily suspend or terminate business of t he relev ant indust ries and t rades
pursuant to the decision of the court.

Article 54 Organizational and management structure of companies
1. A multiple member LLC shall have a Members’ Council, a chairman of the Members’ Council and a
director or general director.
2. A multiple member LLC being a State owned enterprise as prescribed in article 88.1(b ) of t his Law
and any subsidiary of a State owned enterprise as prescribed in article 88.1 of this Law must have an
Inspection Committee; other cases shall be decided by the company.
3. The company must have at least one (1) legal representative holding the position of chairman of t he
Members' Council or director or general director. If the company charter does not contain any
[relevant] provision, then the chairman of the Members' Council is the legal rep resentat iv e of t he
company.
Article 55 Members’ Council
1. The Members’ Council is the highest decision-making authority of the company and comprises all
individual members of the company and authorized representatives of members being organizations
of the company. The charter of the company shall make provisions on the frequency of meetings of
the Members’ Council, but the Members’ Council shall meet at least once a year.
2. The Members’ Council has the following rights and obligations:
(a) To make decisions on annual business plans and developmental strategies of the company;
(b) To make decisions on any increase or reduction of the charter capital and on t he t iming and
method of raising additional capital; to make decisions on issuance of bonds;
(c) To make decisions on projects for investment and development of the company; on solutions
f or market development, marketing and technology transfer;
(d) To approve loan agreements8, contracts for sale of assets and other contracts as stipulated in
the charter of the company and valued at fifty (50) or more per cent of the total value of assets
recorded in the most recently published financial statements of t he c ompany, or a s maller
percentage or value as stipulated in the charter of the company;
(dd) To elect, remove or discharge the chairman of the Members’ Council; to make decisions o n
the appointment, removal, discharge, signing and termination of the contracts of the director or
general director, the chief accountant, inspectors and other managers stipulated in the charter
of the company;
(e) To make decisions on salary, remuneration, bonus and other benefits for the chairman of t he
Members’ Council, the director or general director, the chief accountant and other managers
stipulated in the charter of the company;
(g) To approve annual financial statements, plans for use and distribution of prof its o r plans f or
dealing with losses of the company;
(h) To make decisions on the organizational and managerial structure of the company;
8
Allens footnote: The literal translation is "agreements for obtaining loans, and for providing loans".

(i) To make decisions on the establishment of subsidiary companies, branches and
representative offices;
(k) To make amendments of or additions to the charter of the company;
(l) To make decisions on re-organization of the company;
(m) To make decisions on dissolution or petition for bankruptcy of the company;
(n) Other rights and obligations in accordance with this Law and the charter of the company.
Article 56 Chairman of Members’ Council
1. The Members’ Council shall elect a member to be its chairman. The chairman of the Members’
Council may concurrently act as the director or general director of the company.
2. The chairman of the Members’ Council has the following rights and obligations:
(a) To prepare working programs and plans of the Members’ Council;
(b) To prepare the program, agenda and documents for meetings of the Members’ Council o r f or
collecting opinions of members;
(c) To convene, preside over and chair meetings of the Members’ Co uncil o r t o organize t he
collection of opinions of members;
(d) To supervise or organize the supervision of implementation of resolutions and decisions of the
Members’ Council;
(dd) To sign resolutions and decisions of the Members’ Council on its behalf;
(e) Other rights and obligations in accordance with this Law and the charter of the company.
3. The term of the chairman of the Members’ Council shall be stipulated in the charter of the company
but shall not exceed five years, and the chairman may be re-elec ted f or an unlimited number of
terms.
4. Where the chairman of the Members' Council is absent or is unable to perform his or her rig ht s and
obligations, he or she must authorize a member in writing to perform the rights and obligations of t he
chairman of the Members’ Council in accordance with the principles stipulated in the c hart er of t he
company. Where no member is authorized, or the chairman of the Members' Counc il is deceased,
disappears [is missing], is subject to temporary imprisonment, serves a prison sentence, is subject to
administrative measures in a compulsory drug rehabilitation establishment or compulsory educational
court f rom assuming a certain position, practising or doing certain work, then one of the members of
the Members’ Council shall convene a meeting with all other members to elect one person f rom t he
members to temporarily act as the chairman of the Members’ Council on the principle that the
majority of the other members agrees until there is a new decision of the Members' Council.

Article 57 Convening meetings of Members’ Council
1. A meeting of the Members’ Council may be convened at the request of the chairman of the Members’
Council or at the request of a member or a group of members as stipulated in articles 49.2 and 49. 3
of this Law. If the chairman of the Members' Council does not convene a meeting at the request of a
member or a group of members within fifteen (15) days from the date of receipt of the request, suc h
member or group of members shall convene a meeting of the Members' Co uncil. A ny reas onable
expenses for convening and conducting the meeting of the Members' Council shall be reimbursed by
the company.
2. The chairman of the Members’ Council or the person convening the meeting shall prepare the
program, agenda and documents of the meeting, and convene, preside over and chair the meeting of
the Members’ Council. A member has the right to make written recommendations on addition t o t he
agenda. A recommendation must contain the following main details:
(a) Full name, contact address, nationality, serial number of the personal legal document in
respect of the member being an individual; name, enterprise code number or serial number of
the organizational legal document, and head of f ice address of the member being an
organization; full name and signature of the member making recommendations or his /her/ it s
authorized representative;
(b) Ratio of capital contribution, number and date of issuance of capital contribution certificate;
(c) Items recommended for inclusion in the agenda;
(d) Reason f or recommendation.
3. The chairman of the Members’ Council or the person convening the meeting must approve a
recommendation and include it in the agenda of a meeting of the Members’ Council if such
recommendation contains all of the details stipulated in clause 2 of this article, and s hall s end [ the
recommendation] to the head office of the company at least one working day prior to the date of t he
meeting of the Members’ Council; where a recommendation is submitted immediately prior to
commencement of a meeting, it shall be approved if the majority of the attending members so agree.
4. The notice of invitation to a meeting of the Members’ Council may be sent in the form of a let ter of
invitation or by telephone, fax, electronic means or any other method as stipulated in t he c harter of
the company and shall be sent directly to each member of the Members ’ Council. The no t ice of
invitation to the meeting must specify the time, venue and agenda of the meeting.
5. The agenda and documents for a meeting must be sent to members of t he c ompany prior t o t he
meeting. Documents to be used in a meeting relating to decisions on amendment of or addition to the
charter of the company, approval of the developmental strategies of the company, approval of annual
f inancial statements, or re-organization or dissolution of the company must be sent t o members no
later than seven working days prior to the date of the meeting. The period f or sending other
documents shall be as stipulated in the charter of the company.
6. Unless otherwise stipulated in the charter of the company, the request to convene a meeting of t he
Members’ Council as provided in clause 1 of this article must be in writing and contain the f ollowing
main details:
(a) Full name, contact address, nationality, serial number of the personal legal document in
respect of the member being an individual; name, enterprise code number or serial number of
the organizational legal document, and head of f ice address of the member being an

organization; ratio of capital contribution, and number and date of issuance of capital
contribution certificate of each requesting member;
(b) Reason f or request to convene a meeting of the Members’ Council and issues to be dealt with;
(c) Proposed agenda of the meeting;
(d) Full name and signature of each requesting member or his/her/its authorized representative.
7. Where a request to convene a meeting of the Members’ Council does not contain all of t he details
stipulated in clause 6 above, the chairman of the Members’ Council must, within seven working days
f rom the date of receipt of the request, notify the member or the group of members conc erned in
writing of not convening a meeting. In other cases, the chairman of t he Members ’ Co uncil mus t
convene a meeting of the Members’ Council within fifteen (15) days from the date of rec eipt of t he
request.
8. Where the chairman of the Members’ Council fails to convene a meeting of the Members’ Council in
accordance with clause 7 above, he or she must bear personal liability for any los s arising t o t he
company and to the relevant members of the company.
Article 58 Conditions and procedures for conducting meetings of Members’ Council
1. A meeting of the Members’ Council shall be conducted where the attending members hold sixty f iv e
(65) per cent or more of the charter capital; the specific percentage shall be stipulated in the c harter
of the company.
2. If the f irst meeting does not satisfy the condition to be conducted stipulated in clause 1 of this art ic le
and the charter of the company does not otherwise stipulate, a meeting of t he Members ' Counc il
shall be convened as follows:
(a) The notice of invitation to the second meeting must be sent within fifteen (15) d ays f rom t he
date on which the first meeting was intended to be conducted. The s econd meet ing of t he
Members’ Council shall be conducted where the attending members hold fifty (50) per cent or
more of the charter capital;
(b) Where the second meeting of the Members' Council does not satisfy the condition stipulated in
sub-clause (a) above, the notice of invitation to the third meeting must be sent within ten (10)
days from the date on which the second meeting was intended t o be c onduct ed. The t hird
meeting of the Members’ Council shall be conducted irrespective of the number of at t ending
members and of the amount of charter capital represented by attending members.
3. A member or an authorized representative of a member must attend and v ote at meetings of t he

Members’ Council. The procedures for conducting meetings of the Members’ Council and the v oting
method shall be stipulated in the charter of the company.
4. Where a meeting which satisfies the conditions stipulated in this article fails to complete its agenda
within the proposed time-limit, the time-limit may be extended but not exceeding thirty (30) days from
the date of opening of such meeting.
Article 59 Resolutions and decisions of Members’ Council
1. The Members’ Council shall pass resolutions and decisions within its authority by way of v oting at
meetings, collecting opinions in writing or in other forms as stipulated in the charter of the company.

2. Unless otherwise stipulated in the charter of the company, resolutions and decisions on the following
issues must be passed by way of voting at meetings of the Members’ Council:
(a) Amendment of or addition to the contents of the charter of the company;
(b) Decisions on the developmental direction of the company;
(c) Election, removal or discharge of the chairman of the Members’ Council; appointment, removal
or discharge of the director or general director;
(d) Approval of annual financial statements;
(dd) Re-organization or dissolution of the company.
3. Where the charter of the company does not stipulate another percentage, a resolution or decision of
the Members’ Council is [deemed] passed in a meeting in the following cases:
(a) It is agreed by the attending members who own sixty f ive (65) per cent or more of the
aggregate contributed capital of all attending members, except for the cases stipulated in sub-
clause (b) below;
(b) Agreement by the attending members who own seventy f ive (75) per cent or more of the
aggregate contributed capital of all attending members is required f or resolutions and
decisions relating to the sale of assets valued at fifty (50) or more per cent of the total value of
assets recorded in the most recent f inancial statement of the company, or a smaller
percentage or value as stipulated in the charter of the company, [and] for amendment of and
addition to the charter of the company, or for re-organization or dissolution of the company.
4. A member shall be deemed to attend and vote at a meeting of the Members' Council in the following
circumstances:
(a) Such member attends and votes in person at the meeting;
(b) Such member authorizes another person to attend and vote at the meeting;
(c) Such member attends and votes via an online meeting, by casting an electronic vote or voting
by other electronic forms;
(d) Such member sends its vote to the meeting by mail, fax or email.
5. A resolution or decision of the Members’ Council is deemed passed by way of collection of writ ten
opinions if it is agreed by members holding sixty five (65) per cent or more of the charter capital; t he
specific percentage shall be stipulated in the charter of the company.
Article 60 Minutes of meetings of Members’ Council
1. Meetings of the Members’ Council must be recorded in minut es and may be s ound rec orded o r
recorded and stored in other electronic forms.
2. Minutes of each meeting of the Members’ Council must be passed immediately prior to the closing of
the meeting. The minutes must include the following main details:

(a) Time and venue of the meeting; purposes and agenda of the meeting;
(b) Full names, ratios of capital contribution, serial number and date of issuance of capital
contribution certificates of members or their authorized representatives attending the meeting;
f ull names, ratios of capital contribution, serial number and date of issuance of capital
contribution certif icates of members or their authorized representatives not attending the
meeting;
(c) Matters discussed and voted on; summary of opinions of members o n each of t he matt ers
discussed;
(d) Total number of votes which are valid or invalid; and [total number of vot es] f or, against or
abstentions9 on each matter voted on;
(dd) Decisions passed and corresponding percentage of votes;
(e) Full names and signatures of the person writing the minutes and the chairman of the meeting,
except for the case stipulated in clause 3 of this article.
3. Where the chairman of the meeting or the person writing the minutes refuses to sign the minut es of
the meeting, the minutes shall become effective if the minutes are signed by all other members of the
Members’ Council who attend the meeting and contain all the contents stipulated in sub-clauses (a)
to (e) of clause 2 above. The minutes of the meeting shall clearly state the refusal to sign the minutes
of the meeting by the chairman of the meeting or the person writing the minutes. The signatories of
the minutes of the meeting are jointly responsible for the accuracy and truthfulness of the minutes of
the meeting of the Members' Council.
Article 61 Procedures for passing resolutions and decisions of Members’ Council by way of collection of
written opinions
If the charter of the company does not otherwise stipulate, the authority and procedures f or collect ion of
written opinions of members to pass a resolution or decision shall be implemented as follows:
1. The chairman of the Members’ Council makes a decision on collection of written opinions of
members of the Members’ Council to pass the resolution or decision on the matters within his
authority;
2. The chairman of the Members’ Council is responsible to organize the preparat ion and delivery of
reports and submissions on the issues to be decided upon, and d raf t res olut ion o r dec is ion and
opinion forms [slips] to members of the Members’ Council;
3. An opinion slip must contain the following main details:
(a) Name, enterprise code number and address of head office;
(b) Full name, contact address, nationality, serial number of the personal legal document, ratio of
capital contribution of member of the Members’ Council;
(c) Matters on which opinions are collected and corresponding res ponses in t he o rder of f or,
against and abstention;
9
Allens note: The literal translation is "vote of no opinion".

(d) Time-limit f or sending the opinion slip to the company;
(dd) Full name and signature of the chairman of the Members’ Council.
4. Opinion slips which contain complete details, which are signed by members of the Members' Council
and sent to the company within the stipulated time-limit, shall be deemed to be valid. The c hairman
of the Members’ Council shall organize the counting of opinion slips, prepare a rep ort t hereon and
notif y the results thereof and the passed resolution or decision to members wit hin s even work ing
days from the expiry date of the time-limit for opinion slips to be sent to the company b y members.
The report on results of counting slips shall have the same validity as the minutes of a meeting of the
Members' Council and must contain the following main details:
(a) Purposes and agenda of obtaining opinions;
(b) Full names, ratios of capital contribution, serial number and date of issuance of capital
contribution certificates of members already returning valid opinion slips; full names, rat ios of
capital contribution, serial number and date of issuance of capital contribution c ert if icates of
members from whom the company did not receive opinion slips or who returned invalid opinion
slips;
(c) Matters f or which opinions are collected and which are voted on; summary (if any) of opinions
of members on each of the matters for which opinions are collected;
(d) Total number of opinion slips which are valid, invalid or not received; and total number of valid
opinion slips for, against or abstentions on each matter voted on;
(dd) Passed resolutions and decisions and corresponding percentage of votes;
(e) Full names and signatures of the person counting opinion slips and the chairman of the
Members' Council. The person counting opinion slips and the chairman of the Members'
Council are jointly responsible for the completeness, accuracy and truthfulness of the report on
results of counting slips.
Article 62 Effectiveness of resolutions and decisions of Members' Council
1. Unless otherwise stipulated in the charter of the company, a resolution or decision of the Members'
Council is effective for implementation from the date on which it is passed or from the effective d ate
stated in such resolution or decision.
2. A resolution or decision of the Members' Council which is passed by 100% of the t ot al amount of
charter capital shall be lawful and effective even if the sequence and procedures f or p as sing suc h
resolution or decision are not implemented properly in accordance with regulations.
3. Where a member or a group of members requests a court or an arbitrator to cancel a res olut ion or
decision which was passed, such resolution or decision continues to be effective in accordance wit h
clause 1 of this article until a decision on cancellation issued by the court or the arbitrator b ecomes
legally effective, except where injunctive relief applies pursuant to a decision of a competent agency.
Article 63 Director or general director
1. The director or general director is the person who manages the day-to-day business o perat ions of
the company and is responsible to the Members’ Council for the exercise of his or her rights and t he
perf ormance of his or her obligations.

2. The director or general director has the following rights and obligations:
(a) To organize the implementation of resolutions and decisions of the Members’ Council;
(b) To make decisions on all matters relating to the day -to-day business operations of the
company;
(c) To organize the implementation of the business plan and investment plan of the company;
(d) To issue the rules on internal management of the company unless otherwise stipulated in t he
charter of the company;
(dd) To appoint, remove or discharge managers in the company, except for the positions within the
authority of the Members’ Council;
(e) To sign contracts in the name of the company, except for those wit hin t he aut hority of t he
chairman of the Members’ Council;
(g) To make recommendations on the organizational structure of the company;
(h) To submit the annual financial statements to the Members’ Council;
(i) To recommend the plan for use and distribution of profit or for dealing with losses in business;
(k) To recruit employees;
(l) Other rights and obligations as stipulated in the charter of the company, in res olut ions and
decisions of the Members' Council, and in the labour contract.
Article 64 Criteria and conditions to become director or general director
1. Not f all in the category of entities stipulated in article 17.2 of this Law.
2. Having professional qualifications and experience in business management of t he company and

satisfying other conditions stipulated in the charter of the company.
3. The director or general director of a State owned enterprise [SOE] as prescribed in article 88.1(b) of
this Law or any subsidiary of a SOE as prescribed in article 88.1 of this Law must satisfy the c riteria
and conditions stipulated in clauses 1 and 2 above, and must not have a f amily relationship with any
manager of the company or any inspector of the company and t he parent company, o r wit h t he
representative of capital portion of the enterprise or the representative of the State capital portion in
the company or the parent company.
Article 65 Inspection Committee and inspectors
1. The Inspection Committee comprises one (1) to five (5) inspectors. The term of an inspector shall not
exceed five (5) years and inspectors may be reappointed for an unlimited number of t erms. If t he
Inspection Committee has only one inspector, such inspector shall concurrently act as the head of
the Inspection Committee and must satisf y the criteria applicable to the head of the Inspection
Committee.

2. The head of the Inspection Committee and inspectors must satisf y the respective criteria and
conditions prescribed in articles 168.2 and 169 of this Law.
3. Rights, obligations, responsibilities, removal, discharge and working regime of the Inspection
Committee and inspectors shall be implemented respectively in accordance with articles 106, 170,
171, 172, 173 and 174 of this Law.
Article 66 Salary, remuneration, bonuses and other benefits of chairman of Members' Council, direc tor,
general director and other managers
1. The company shall pay salary, remuneration, bonuses and other benef its t o t he c hairman of t he
Members' Council, the director or general director and other managers in accordance with its
business results and efficiency.
2. The salary, remuneration, bonuses and other benefits of the chairman of the Members' Counc il, t he
director or general director and other managers shall be included in business expenses in
accordance with the law on corporate income tax and other relevant laws, and must be recorded as a
separate item in annual financial statements of the company.
Article 67 Contracts and transactions which must be approved by Members’ Council
1. A contract or transaction between the company and the following entities must be approved b y t he
Members’ Council:
(a) A member or the authorized representative of a member; the director or general director or the
legal representative of the company;
(b) A related person of any person prescribed in sub-clause (a) above;
(c) A manager of the parent company, [or] a person authorized to appoint managers of the parent
company;
(d) A related person of any person prescribed in sub-clause (c) above.
2. The person entering into a contract or transaction in the name of t he company must s end t o t he
members of the Members’ Council [and/or] inspectors a notice of related entities and related interests
in such contract or transaction; and must enclose the draft c ontract or t he main c ontents of t he
transaction intended to be conducted. Unless otherwise stipulated in the charter of the company, t he
Members’ Council must make a decision approving or not approving such c ont ract o r t ransact ion
within f ifteen (15) days from the date of receipt of the notice, and comply with article 59.3 of this Law.
Any member of the Members' Council related to the parties in such contract or transact ion may no t
be included for voting.
3. A contract or transaction shall be void pursuant to a decision of a court and be dealt with in
accordance with law where it is entered into not in accordance with the provisions in clauses 1 and 2
of this article. The signatory of the contract or transaction, the interested member and t he relat ed
persons of such member involved in the contract or transaction must compensate for any loss arising
and return to the company any benefits gained from the performance of such contract or transaction.

Article 68 Increase and reduction of charter capital
1. A company may increase its charter capital in the following cases:
(a) Increasing the contributed capital10 of members;
(b) Receiving additional contributed capital from new members.
2. In the case of increase of contributed capital of members, the additional contributed capital s hall b e
allocated to each member in proportion to its portion of capital contribution in the charter c apital of
the company. A member may assign his/her right to contribute capital to another person in
accordance with article 52 of this Law. Where any member fails to make contribut ion o r only p ays
part of the additional contributed capital, the remaining amount of additional contributed c apital of
such member shall be divided amongst other members in proportion to their respective p ortions of
capital contribution in the charter capital of the company, unless otherwise agreed by the members.
3. A company may reduce its charter capital in the following cases:
(a) Returning part of the contributed capital to members in proportion to their respective p ortions
of capital contribution in the charter capital of the company if business operations hav e b een
carried out continuously for two years or more f rom the date of registration for establishment of
the enterprise, and [but] ensuring that debts and other property obligations are able to be paid
in f ull af ter returning [part of the contributed capital] to members;
(b) The company redeems portions of capital contribution from its members as stipulated in article
51 of this Law;
(c) The members fail to pay the charter capital in full and on time as stipulated in article 47 of t his
Law.
4. Except for the case prescribed in clause 3(c) above, within ten (10) days from the date of completion
of payment for increase or reduction of the charter capital, the company must not if y t he b us ines s
registration of f ice [BRO] in writing of such increase or reduction. The notice must contain the
f ollowing main details:
(a) Name, head office address, enterprise code number;
(b) Charter capital, amount of capital already increased or reduced;
(c) Timing and f orm of increase or reduction of capital;
(d) Full name and signature of the legal representative of the enterprise.
5. The notice prescribed in clause 4 of this article must be accompanied by a resolution or decision and
the minutes of meeting of the Members’ Council; in the case of a reduction of the charter c apital in
accordance with sub-clauses (a) and (b) of clause 3 above, the most recent financial statements are
also required.
6. The BRO shall update information about the increase or reduction of c harter c apital wit hin t hree
working days from the date of receipt of the notice.
10
Allens footnote: This is the literal translation. An alternative translation is "equity".

Article 69 Conditions for distribution of profit
The company may distribute profit to its members only after it has fulfilled it s t ax o bligat ions and ot her
f inancial obligations in accordance with law, and must ensure that due debts and other property obligations
are able to be paid in full after distribution of profit.
Article 70 Recovery of returned capital contribution portions or distributed profit
Where part of contributed capital is returned as a result of a reduction of charter capital not in ac cordanc e
with article 68.3 of this Law or where profit is distributed to members not in accordance with art icle 69 of
this Law, all members of the company must surrender to the company the amount of money or other assets
they received; and must be jointly liable for all debts or ot her propert y o bliga tions of t he c ompany in
proportion to the amount or assets not yet returned in f ull until all monies or other assets they received are
returned in f ull.
Article 71 Responsibilities of chairman of Members' Council, director, general director and other
managers, legal representative, and inspectors
1. The chairman of the Members' Council, director or general director or any other manager, legal
representative or an inspector of a company has the following responsibilities:
(a) To exercise his or her rights and perform his or her obligations honestly and prudently and t o
the best of his or her ability in order to assure the maximum legitimate interests of the
company;
(b) To be loyal to the interests of the company; not to abuse his or her position or power or no t t o
use inf ormation, know-how, business opportunities or other assets of the company f or his or
her own personal benefit or for the benefit of other organizations or individuals;
(c) To promptly, fully and accurately notify the company of any enterprise in which he or she ac ts
as the owner or holds shares or a capital contribution portion and of any enterprise in which his
or her related person(s) acts as the owner, or jointly owns or s eparat ely owns shares or a
capital contribution portion;
(d) Other responsibilities as stipulated by law and in the charter of the company.
2. The director or general director is not entitled to any increase in salary or bonus when the c ompany
is not able to pay all of its due debts.
3. The notice stated in clause 1(c) above must be in writing and comprise the following particulars:
(a) Name, enterprise code number and address of the head office of the enterprise in which t hey
act as the owner or own a portion of capital contribution or shares; ratio of ownership of s uch
capital contribution portion or shareholding and the time when t hey ac ted as t he owner o r
acquired ownership;
(b) Name, enterprise code number and address of the head office of the enterprise in which t heir
related persons act as the owner or jointly or separately own controlling shares or a controlling
portion of capital contribution.
4. The notice stipulated in clause 3 above must be made within five wo rking days f rom t he dat e on
which a related change arises or occurs. The company must collate and update t he list of entit ies
stipulated in clause 3 above and their contracts and transactions with the company. Such list must be

kept at the head office of the company. Members, managers, inspectors of the c ompany and t heir
authorized representatives have the right to sight, make an extract of or copy part or all of the
inf ormation stipulated in clause 3 above during working hours in accordance with the sequenc e and
procedures stipulated in the charter of the company.
Article 72 Initiation of legal action against managers
1. A member of a company may, in its own name or in the name of the company, initiate a legal act ion
regarding civil liability against the chairman of the Members' Council, direc tor o r general direct or,
legal representative or other manager due to a breach of rights, obligations and res pons ibilities of
managers in the f ollowing circumstances:
(a) They commit a breach of the provisions of article 71 of this Law;
(b) They f ail to perform or fail to fully or promptly perform their delegated rights and obligations or
perf orm their delegated rights and obligations contrary to law, the charter of t he c ompany o r
resolutions and decisions of the Members' Council;
(c) Other circumstances in accordance with law and the charter of the company.
2. The sequence and procedures for initiation of a legal action is implemented in accordance wit h the
law on civil proceedings.
3. Where a member initiates a legal action in the name of the company, then any expenses for initiation
of the legal action shall be included in the expenses of the company, except where t he p et it ion f or
institution of the legal action is rejected.
Article 73 Disclosure of information
Multiple member LLCs prescribed in article 88.1(b) of this Law shall disclose information in accordance with
the provisions in sub-clauses (a), (c), (dd) and (g) of article 109.1 and article 110 of this Law.
SECTION 2
One Member Limited Liability Companies
Article 74 One member limited liability companies [Single member LLCs]
1. A one member limited liability company [single member LLC] is an enterprise owned by one
organization or individual (hereinafter referred to as company owner). The company owner is liable
f or all debts and other property obligations of the company to the extent of the amount of the chart er
capital of the company.
2. A single member LLC has legal entity status from the date of issuance of the ERC.
3. A single member LLC may not issue shares, except in a case of conversion to become a
shareholding company.
4. A single member LLC is permitted to issue bonds in accordance with this Law and ot her relev ant
laws; the private placement of bonds shall be in accordance with articles 128 and 129 of this Law.

Article 75 Contribution of capital for establishment of companies
1. The charter capital of a single member LLC when registering for establishment of the enterprise shall
be the total value of assets undertaken to be contributed by the company owner and s tat ed in t he
charter of the company.
2. The company owner must make contribution of capital to the c ompany in f ull and in t he t y pe of
assets as undertaken when registering establishment of the enterprise, within ninety (90) d ays f rom
the date of issuance of the ERC, excluding the duration of transportation or importat ion of as set s
contributed as capital, and the duration of implementation of administrative procedures for transfer of
ownership of assets. During such period, the company owner has the rights and obligations in
proportion to their capital contribution portion as undertaken.
3. In the case of failure to contribute in full to the charter capital within the period stipulated in c laus e 2
of this article, the company owner must register change of the charter capital equal t o t he v alue of
the contributed capital within thirty (30) days from the last day on which the charter capit al must be
f ully contributed. In this case, the owner must be responsible f or t he f inanc ial o bligations of t he
company in proportion to the portion of capital contribution as undertaken, which aro se bef ore t he
last day on which the company registers change of the charter capital in accordance with this clause.
4. The company owner is responsible to the extent of all asset s owned b y him o r her f or f inanc ial
obligations of the company, and for any loss and damage resulting from failure to contribute or failure
to contribute in full and on time to the charter capital in accordance with this article.
Article 76 Rights of company owner
1. A company owner being an organization has the following rights:
(a) To make decisions on the contents of the charter of the company, amendments of and
additions to the charter of the company;
(b) To make decisions on developmental strategies and annual business plans of the company;
(c) To make decisions on the organizational and managerial structure of t he c ompany, and t o
appoint, remove or discharge managers and inspectors of the company;
(d) To make decisions on projects for investment and development;
(dd) To make decisions on solutions for market development, marketing and technology;
(e) To approve loan agreements, contracts for sale of assets and other contracts as stipulat ed in
the charter of the company valued at fifty (50) or more per cent of the total value of the ass ets
recorded in the most recent financial statements of the company, or a smaller p ercentage o r
value as stipulated in the charter of the company;
(g) To approve the financial statements of the company;
(h) To make decisions on increase in charter capital of the company; on assignment of all or p art
of the charter capital of the company to other organizations or individuals; to make decisions
on issuance of bonds;
(i) To make decisions on establishment of subsidiary companies or o n capit al c ontribut ion t o

other companies;

(k) To organize supervision and assessment of the business operations of the company;
(l) To make decisions on use of prof it af ter f ulf ilment of tax obligations and other f inancial
obligations of the company;
(m) To make decisions on re-organization or dissolution and petition f or bankruptcy of the

company;
(n) To recover all of the value of assets of the company after the company completes dissolution
or bankruptcy [procedures];
(o) Other rights in accordance with this Law and the charter of the company.
2. A company owner being an individual has the rights prescribed in sub-clauses (a), (h), (l), (m), (n)
and (o) of clause 1 above; and [has the right to] make decisions on investment, business and internal
management of the company, unless otherwise stipulated in the charter of the company.
Article 77 Obligations of company owner
1. To contribute in full and on time to the charter capital of the company.
2. To comply with the charter of the company.
3. To identify and separate assets of the company owner from ass ets of t he c ompany. A c ompany
owner being an individual must separate his or her personal expenditure and the expenditure for his
or her f amily f rom the expenditure f or the chairman of the company and the director or general
director.
4. To comply with the law on contracts and other relevant laws with res pect t o any p urchase, sale,
borrowing, lending, lease or rental and other contracts and transactions between the company and
the company owner.
5. A company owner may withdraw capital only by way of assignment of a part or all of t he c hart er
capital to other organizations and individuals; in the case of withdrawal of all or part of its contribut ed
charter capital f rom the company in another f orm, the company owner and the organization or
individual concerned must be jointly liable for debts and other property obligations of the company.
6. The company owner may not withdraw profit in cases where the company has not paid in f ull all
debts and other property obligations which are due.
7. Other obligations in accordance with this Law and the charter of the company.
Article 78 Exercise of rights of company owner in some special cases
1. Where a company owner assigns or makes a gift of part of the charter capital to one o r more ot her
organizations or individuals or where a company admits new members, the company must organize
management in the corresponding form of enterprise and register change to its enterprise registration
within ten (10) days from the date of completion of the assignment or making the gift, or admission of
new members.
2. Where a company owner being an individual is subject to temporary imprisonment, serves a p rison
sentence or is subject to administrative measures at a compulsory drug rehabilitation establishment

or compulsory educational establishment, the owner shall authorize another person to exercise part
or all of the rights and perform the obligations of the company owner.
3. Where a company owner being an individual dies, then his or her heir(s) under a will or at law s hall
be the owner or a member of the company. The company must organize management in the
corresponding form of enterprise and must register change to its enterprise reg is trat ion wit hin t en
(10) days from the date of completion of resolution of inheritance. Where a company owner being an
individual dies intestate or where his or her heir disclaims the inheritance or where the right to inherit
is f orfeited, the capital contribution portion of the owner is dealt with in accordance with civil law.
4. Where a company owner being an individual disappears [is missing], the owner's capital contribution
portion shall be dealt with in accordance with the civil law.
5. Where a company owner being an individual has his or her capacity for civil acts restricted or lost or
has cognitive difficulties or difficulties with behavioural control , the rig hts and obligations of t he
company owner shall be performed via his or her representative.
6. Where a company owner being an organization is dissolved or bankrupt , t he p ers on(s) rec eiving
assignment of the capital contribution portion of the owner shall become the owner or member(s) of
the company. The company must organize management in the corresponding form of enterprise and
register change to its enterprise registration within ten (10) days from the date of complet ion of t he
assignment.
7. Where a company owner being an individual is prohibited by a court from practising or doing c ert ain
work, or where a company owner being a commercial legal entity is prohibited by a court f rom
conducting business or operating in certain sectors within the scope of business lines of the
enterprise, such individual must not practise or do such certain work in such comp any or the
company must temporarily suspend or terminate business in the relevant industries or trades
pursuant to the decision of the court.
Article 79 Organizational and managerial structure of single member LLC owned by an organization
1. A single member LLC owned by an organization shall be organized, managed and operate in eit her
of the following models:
(a) Chairman of the company, director or general director;
(b) Members' Council, director or general director.
2. A company of which the owner is a State owned enterprise as prescribed in article 88.1 of t his Law
must establish an Inspection Committee; other cases shall be decided by the company . The
organizational structure, working regime, criteria, conditions, removal, discharge, rights, obligations
and responsibilities of the Inspection Committee and inspectors are implement ed res pectively in
accordance with article 65 of this Law.
3. The company must have at least one (1) legal representative being a person holding the pos ition of
the chairman of the Members' Council or the chairman of the company o r t he direct or or g eneral
director. If the charter of the company does not contain a [relevant] provision, t he c hairman of t he
Members' Council or the chairman of the company shall be the legal representative of the company.
4. Unless otherwise stipulated in the charter of the company, t he organizational and operational
structure, functions, rights and obligations of the Members' Council, the chairman of t he c ompany ,
the director or general director shall be as stipulated in this Law.

Article 80 Members’ Council
1. The Members’ Council shall consist of three (3) to seven (7) members. Members of t he Members '
Council shall be appointed or removed by the company owner and t heir t erm of of fice s hall not
exceed five years. The Members' Council shall, in the name of the company owner, implement rights
and obligations of the company owner; and implement rights and obligations of the company in t he
name of the company except for the rights and obligations of the director or general direct or; and is
responsible before the law and to the company owner for the implementation of delegated rights and
obligations in accordance with the charter of the company, this Law and other provisions of relevant
laws.
2. The rights, obligations and working regime of the Members’ Council s hall b e as s t ipulated in t he
charter of the company, this Law and other relevant laws.
3. The chairman of the Members’ Council shall be appointed by the company owner or elec ted b y t he
members of the Members' Council on the principle of majority [vot e] and in ac cordance wit h t he
sequence and procedures stipulated in the charter of the company. Unless otherwise s tipulated in
the charter of the company, the term of office and the rights and obligations of the c hairman of t he
Members’ Council shall be as stipulated in article 56 and in other relevant provisions of this Law.
4. The authority and methods to convene meetings of the Members’ Council shall be as s tipulated in
article 57 of this Law.
5. A meeting of the Members’ Council shall be conducted where at leas t two t hirds (⅔) of t he t ot al
number of members of the Members' Council attend. Unless otherwise stipulated in the charter of the
company, each member of the Members' Council shall have an equal vote. The Members’ Co unc il
may pass a resolution or decision by way of collection of written opinions.
6. A resolution or decision of the Members’ Council shall be passed when it is agreed by more than fifty
(50) per cent of the attending members or when it is agreed by the attending members owning more
than f if ty (50) per cent of the total number of votes. Any amendment of or addition to t he c harter of
the company, any re-organization of the company, or any assignment of a part or all of t he c harter
capital of the company must be agreed by at least seventy f ive (75) per cent of the attending
members or by the attending members owning seventy five (75) per cent or more of the total number
of votes. A resolution or decision of the Members’ Council takes effect from the date of p assing or
f rom the date stated in such resolution or decision, unless otherwise stipulated in the charter of t he
company.
7. Meetings of the Members’ Council must be minuted, and may be sound recorded o r rec orded and
stored in other electronic f orms. The minutes of meetings of the Members’ Council shall be as
stipulated in article 60.2 of this Law.
Article 81 Chairman of company
1. The chairman of the company shall be appointed by the company owner. The chairman of the
company shall, in the name of the company owner, implement rights and obligations of the company
owner; and implement rights and obligations of the company in the name of the company except f or
the rights and obligations of the director or general director; and is responsible before the law and t o
the company owner for the implementation of delegated rights and obligations in accordance with the
charter of the company, this Law and other relevant laws.

2. The rights, obligations and working regime of the chairman of the company shall be as stipulat ed in
the charter of the company, this Law and other relevant laws.
3. A decision of the chairman of the company on implementation of the rights and obligations of t he
company owner shall take effect from the date of approval by the company owner, unless otherwise
stipulated in the charter of the company.
Article 82 Director or general director
1. The Members’ Council or the chairman of the company shall appoint or employ a director or general
director for a term not exceeding five years to manage the day-to-day business operat ions of t he
company. The director or general director is responsible before the law and to the Members’ Council
or to the chairman of the company for the implementation of his or her rights and obligations. The
chairman of the Members' Council, other members of the Members' Council or the chairman of t he
company may concurrently act as the director or general director unless otherwise stipulated by law
or the charter of the company.
2. A director or general director has the following rights and obligations:
(a) To organize the implementation of resolutions and decisions of the Members’ Council or of the
chairman of the company;
(b) To make decisions on all matters relating to the day -to-day business operations of the
company;
(c) To organize the implementation of the business plan and investment plan of the company;
(d) To issue the internal management rules of the company;
(dd) To appoint, remove or discharge managers in the company, except for t he pos it ions f alling
within the authority of the Members’ Council or of the chairman of the company;
(e) To sign contracts in the name of the company, except in cases falling within t he aut horit y of
the chairman of the Members’ Council or of the chairman of the company;
(g) To make recommendations with respect to the organizational structure of the company;
(h) To submit the annual financial statements to the Members’ Council or to the chairman of t he
company;
(i) To recommend the plan for use of profit or for dealing with losses in business;
(k) To recruit employees;
(l) Other rights and obligations as stipulated in the charter of t he company and in t he labour
contract.
3. A director or general director must satisfy the following criteria and conditions:
(a) Not f all into the category of entities stipulated in article 17.2 of this Law;
(b) Have professional qualifications and experience in business administration of t he company,

and [satisfy] other conditions stipulated in the charter of the company.

Article 83 Responsibilities of members of the Members’ Council, chairman of company, director, general
director and other mangers, and inspectors
1. To comply with the law, the charter of the company and the decisions of the company owner in t he
implementation of delegated rights and obligations.
2. To perf orm delegated rights and obligations honestly, prudently and to the best of their ability in order
to assure the maximum legitimate interests of the company and the company owner.
3. To be loyal to the interests of the company and the company owner; not to abuse their positions and
powers or not to use information, know-how, business opportunities and other assets of the company
f or personal benefit or for the benefit of other organizations or individuals.
4. To promptly notify the company owner in a complete and accurate manner of any enterprise in which
they are the owner or hold controlling shares or a controlling portion of capital c ontribut ion, and of
any enterprise in which their related person(s) is the owner or jointly or separately owns c ont rolling
shares or a controlling portion of capital contribution. The notice must be kept at the head of fice of
the company.
5. Other responsibilities as stipulated in this Law and in the charter of the company.
Article 84 Salary, remuneration, bonuses and other benefits of managers of company and inspectors
1. Managers of a company and inspectors are entitled to salary, remunerat ion, bonus es and ot her
benef its in accordance with the business results and efficiency of the company.
2. The company owner shall decide on the rate of salary, remuneration, bonuses and other benef it s of
members of the Members’ Council, the chairman of the company and inspectors. Salary,
remuneration, bonuses and other benefits of managers of the c ompany and inspect ors s hall b e
included in business expenses in accordance with the law on corporate inc ome t ax and relevant
laws, and must be recorded as a separate item in annual financial statements of the company.
3. Salary, remuneration, bonuses and other benefits of inspectors may be directly paid by the company
owner in accordance with the charter of the company.
Article 85 Organizational and management structure of single member limited liability c ompany owned
by an individual
1. A single member LLC owned by an individual shall have a chairman of the company and a director or
general director.
2. The owner of the company is the chairman of the company and may act conc urrently o r employ
another person as the director or general director.
3. The rights and obligations of the director or general director shall be stipulated in the chart er of t he
company and in the labour contract.
Article 86 Contracts and transactions of company with related persons
1. Unless otherwise stipulated in the charter of the company, any contract or t ransac tion bet ween a
single member LLC owned by an organization and the following persons must be ap proved b y t he
Members’ Council or the chairman of the company, the director or general director and inspectors:

(a) The company owner and a related person of the company owner;
(b) A member of the Members' Council, the chairman of the company , t he direc tor o r general
director and the inspectors;
(c) A related person of the persons stipulated in sub-clause (b) of this clause;
(d) A manager of the company owner, the person authorized to appoint such manager;
(dd) A related person of the persons stipulated in sub-clause (d) of this clause.
2. The person entering into the contract or transaction in the name of t he c ompany must not if y t he
Members’ Council or the chairman of the company, the director or general director and the inspectors
of related entities and related interests in such contract or transaction; and enclose the draft of suc h
contract or main contents of such transaction.
3. Unless otherwise stipulated in the charter of the company, members of the Members' Council o r t he
chairman of the company, the director or general director and inspec tors mus t make a d ecision
approving the contract or transaction within ten (10) days from the date of receipt of the notice on the
principle of majority. Each person has one vote. Persons related to the parties shall not have the right
to vote.
4. The contract or transaction stipulated in clause 1 above may be approved only upon satisf action o f
the f ollowing conditions:
(a) The parties entering into the contract or perf orming the transaction are independent legal
entities with separate rights, obligations, assets and interests;
(b) The price used in the contract or transaction is the market price at the time when the c ont ract
is entered into or when the transaction is performed;
(c) The company owner complies with the obligations stipulated in article 77.4 of this Law.
5. A contract or transaction shall be void pursuant to a decision of a court and dealt with in accord ance
with law where it is not entered into in accordance with the provisions of clauses 1, 2, 3 and 4 of t his
article. The signatories to the contract or transaction and related persons being t he part ies to t he
contract or transaction must be jointly responsible f or any loss arising and f or returning to the
company any benefit gained from the performance of such contract or transaction.
6. A contract or transaction between a single member LLC owned by an individual and t he company
owner or a related person of the company owner must be recorded and retained as a separate file of
the company.
Article 87 increase and reduction of charter capital
1. A single member LLC increases its charter capital by way of the company owner contributing
additional capital or raising additional capital contributed by other persons. The company owner shall
decide on the form of increase and the amount of increase of charter capital.
2. Where the charter capital is increased by way of raising additional capital contributed by other
persons, the company must organize management in the f orm of a multi member LLC or
shareholding company. The management of the company shall be organized as follows:

(a) In the case of organization of management in the form of a multi member LLC, t he company
must notify any change to its enterprise registration wit hin t en (10) d ays f rom t he dat e of
completion of change of the charter capital;
(b) In the case of conversion to become a shareholding company, the company shall comply wit h
3. A single member LLC reduces its charter capital in the following cases:
(a) Return of part of contributed capital to the company owner if t he c ompany has c onducted
business continuously for two years or more from the date of registration for establishment of
the enterprise, and ensures payment of all debts and other property obligations upon return t o
the company owner;
(b) The company owner fails to pay for the charter capital in f ull and on time in ac cordance wit h
CHAPTER 4
State Owned Enterprises
Article 88 State owned enterprises [SOEs]
1. State owned enterprises are organized and managed in the form of limited liability companies [LLCs ]
or shareholding companies, comprising:
(a) An enterprise in which the State holds 100% charter capital;
(b) An enterprise in which the State holds above 50% of the charter capital or the total number of
voting shares, except for the enterprises prescribed in sub-clause (a) above.
2. Enterprises in which the State holds 100% charter capital as prescribed in clause 1(a) above
comprise:
(a) A single member LLC in which the State holds 100% charter capital [ and] b eing t he p arent
company of a State economic group, parent company of a State corporation, or parent
company in a parent company – subsidiary group;
(b) A single member LLC being an independent company in which the State holds 100% c harter
capital.
3. Enterprises in which the State holds above 50% charter capital or the total number of voting s hares
as prescribed in clause 1(b) above comprise:
(a) A multiple member LLC or shareholding company in which the State holds above 50% charter
capital or the total number of voting shares [and] being the parent company of an ec onomic
group, parent company of a State corporation, or parent company in a p arent c ompany –
subsidiary group;
(b) A multiple member LLC or shareholding company being an independent company in which the
State holds above 50% charter capital or the total number of voting shares.

Article 89 Application of provisions to State owned enterprises
1. Enterprises in which the State holds 100% charter capital as prescribed in article 88.1(a) of this Law
shall be organized and managed in the f orm of a single member LLC in accordance with the
provisions of this Chapter and other relevant provisions of this Law; if there is any difference among
the provisions of this Law, the provisions of this Chapter shall apply.
2. Enterprises in which the State holds above 50% charter capital as prescribed in article 88.1(b) of this
Law shall be organized and managed in the form of a multiple member LLC in accordance wit h t he
provisions of Section 1 of Chapter 3 or in the f orm of a shareholding company as s t ipulated in t he
provisions of Chapter 5 of this Law.
Article 90 Organizational and managerial structure
The agency representing the owner shall make a decision on organization and management of a S t ate
owned enterprise in the form of a single member LLC in accordance with either of the following models:
1. The chairman of the company, the director or general director, and the Inspection Committee;
2. The Members' Council, the director or general director, and the Inspection Committee.
Article 91 Members' Council
1. The Member's Council shall, in the name of the company, exercise the rights and perf orm the
obligations of the company as stipulated in this Law and other provisions of relevant laws.
2. The Members' Council shall comprise a chairman and other members with the number not exceeding
seven. Members of the Members' Council shall be appointed, removed, d is missed, rewarded o r
disciplined by the agency representing the owner.
3. The term of the chairman and other members of the Members' Council shall not exceed f ive y ears.
Members of the Members' Council may be re-appointed. One individual s hall b e appointed as a
member of the Members' Council for no more than two terms of office in one company, except where
such individual has worked for a period of more than fifteen (15) consecutive years in such company
bef ore he or she is appointed for the first time.
Article 92 Rights and obligations of Members' Council
1. The Members' Council shall, in the name of the company, implement the rights and obligations of the
owner, shareholders and members with respect to companies in which the [former] company is t he
owner or holds shares or portion of capital contribution.
2. The Members' Council has the following rights and obligations:
(a) To make decisions on the contents as stipulated in the Law on Management and Use of Stat e
Capital Invested in Production and Business in Enterprises;
(b) To make decisions on establishment, re-organization and dissolution of branches,

representative offices and dependent cost accounting units;

(c) To make decisions on annual plans f or production and business and guidelines f or
development of the market, marketing and technology of the company;
(d) To organize internal audit activities and to make a decision establishing an internal audit unit of
the company;
(dd) Other rights and obligations as stipulated in the charter of the company, t his Law and ot her
relevant laws.
Article 93 Criteria and conditions applicable to members of Members' Council
1. Not f all into the category of entities prescribed in article 17.2 of this Law.
2. Have professional qualifications and experience in business administ ration or in t he o perat ional
sectors and industries of the enterprise.
3. Not be a person with a f amily relationship with the head or the deputy head of the agency
representing the owner, a member of the Members' Council, the director, deputy director or g eneral
director, deputy general director or the chief accountant of t he c ompany, or an ins pect or of t he
company.
4. Not be a manager of a member enterprise.
5. Except for the chairman of the Members' Council, other members of t he Members' Council may
concurrently act as the director or general director of the company or of another company not being a
member enterprise pursuant to a decision of the agency representing the owner.
6. Not ever have been dismissed from the position of the chairman of the Members' Council, a member
of the Members' Council, the chairman of the company, the director, the deputy director or the
general director, deputy general director of a State owned enterprise.
7. Other criteria and conditions in accordance with the charter of the company.
Article 94 Removal and dismissal of members of Members' Council
1. The chairman or any other member of the Members' Council shall be removed in the following cases:
(a) The chairman or such member no longer satisfies the criteria and conditions s t ipulated in
article 93 of this Law;
(b) The chairman or such member makes an application for res ignation which is approved in
writing by the agency representing the owner;
(c) The chairman or such member receives a decision on transfer, on arrangement of other wo rk
or retirement;
(d) The chairman or such member does not have sufficient capability or qualifications t o ass ume
the assigned work;
(dd) The chairman or such member is not in good health or is no longer creditworthy for holding the
position of a member of the Members' Council.

2. The chairman or any other member of the Members' Council shall be d ismissed in t he f ollowing
cases:
(a) The company fails to complete objectives or targets in annual plans, or fails to p reserve and
develop investment capital at the request of the agency representing the owner, and it is
unable to provide explanations on objective causes or provides explanations on c auses b ut
they are not accepted by the agency representing the owner;
(b) The chairman or such member is sentenced by a court, and the judgment or d ecision of t he
court has become lawfully effective;
(c) The chairman or such member acts dishonestly in performing his or her rights and obligations
or abuses his or her position and power and uses the property of the company f or his or her
own personal benefit or for the benefit of other organizations or individuals; o r pro vides an
untruthf ul report on the financial status and production and business results of the company.
3. Within sixty (60) days from the date of the decision on removal or dismissal of the chairman o r any
other member of the Members' Council, the agency representing the owner shall consider and make
a decision selecting and appointing another person for replacement.
Article 95 Chairman of Members' Council
1. The chairman of the Members' Council shall be appointed by the agency representing t he o wner in
accordance with law. The chairman of the Members' Council is not permitted to concurrent ly ac t as
the director or general director of the company and of other enterprises.
2. The chairman of the Members' Council has the following rights and obligations:
(a) To f ormulate quarterly and annual operational plans of the Members' Council;
(b) To prepare the program, agenda and documents for meetings of the Members' Council or t o
collect opinions from members of the Members' Council;
(c) To convene, preside over and chair meetings of the Members' Council or to organize collection
of opinions from members of the Members' Council;
(d) To organize implementation of decisions of the agency representing the owner and resolutions
of the Members' Council;
(dd) To organize supervision of, directly supervise and assess results of implementation of strategic
objectives, operational results of the company and results of management and operat ion b y
the director or general director of the company;
(e) To organize announcement and disclosure of information about the company in ac cordanc e
with law; to be responsible for the completeness, accuracy, truthfulness and systematic nature
of disclosed information and for updating same.
3. In addition to the cases stipulated in article 94 of this Law, the chairman of t he Members ' Co unc il
may be removed or dismissed if he or she fails to perform the rights and o bligat ions st ipulat ed in
clause 2 of this article.

Article 96 Rights and obligations of members of Members' Council
1. To attend meetings of the Members' Council, and to discuss, make recommendations and v ot e o n
issues within the authority of the Members' Council.
2. To inspect, sight, consult, copy or make an extract of contract and transaction monit oring records ,
books of account, financial statements, the register of minutes of meetings of the Members' Co uncil
and other papers and documents of the company.
3. Other rights and obligations as stipulated in the charter of the company, this Law and other relev ant
laws.
Article 97 Responsibilities of chairman and other members of Members' Council
1. To comply with the charter of the company and decisions of the company owner and the pro visions
of law.
2. To exercise their rights and perform their obligations honestly and prudently to the best of their ability
in order to assure the maximum legitimate interests of the company and of the State.
3. To be loyal to the interests of the company and the State; not to abuse their pos it ions and powers
and not to use information, know-how, business opportunities and other assets of t he company f or
their own personal benefit or for the benefit of other organizations or individuals.
4. To promptly notify the enterprise fully and accurately of any enterprise in which they are the owner or
hold controlling shares or a controlling portion of capital contribution, and of any enterprise in whic h
their related person(s) is the owner, or jointly or separately owns controlling shares or a c ont rolling
portion of capital contribution. This notice shall be compiled and kept at t he head of fice of t he
company.
5. To comply with resolutions of the Members' Council.
6. To be personally liable for doing the following acts:
(a) Taking advantage of the good name of the company to commit a breach of law;
(b) To carry out business or other transactions not for the interests of the company and caus ing
loss to other organizations and individuals;
(c) To pay debts prior to their maturity when the company may bear financial risks.
7. If a member of the Members' Council discovers that another member of the Members ' Counc il has
committed a breach when performing assigned rights and obligations, the former is res ponsible t o
make a written report to the agency representing the owner, and require the def aulting member t o
terminate the breach and remedy consequences.
Article 98 Working regime, conditions and procedures for conducting meetings of Members' Council
1. The Members' Council shall work on a collective basis; and it shall meet at least once every q uarter
in order to consider and decide issues within the scope of its rights and obligations. With res pect to
issues which do not require discussion, the Members' Council may c ollect writ ten opinions f rom
members in accordance with the charter of the company. The Members' Council may hold an
extraordinary meeting to resolve urgent issues at the request of the agency representing the

company owner or at the request of the chairman of the Members' Council or of above fift y (50) p er
cent of the total number of members of the Members' Council, or [at the request of ] t he d irector o r
general director.
2. The chairman of the Members' Council or a member authorized by the chairman of t he Members'
Council is responsible to prepare an agenda and documents and convene, preside over and chair
meetings of the Members' Council. Members of the Members' Council may make written
recommendations on the agenda of a meeting. The contents and documents of a meet ing mus t be
sent to the members of the Members' Council and persons invited to attend the meeting no later than
three working days prior to the date of the meeting. The documents t o be us ed in t he meet ing in
relation to recommendations to the agency representing the company owner on amendment of and
addition to the charter of the company, approval of developmental direction of the company, approval
of annual financial statements, re-organization or dissolution of the company must b e sent t o t he
members no later than five working days prior to the date of the meeting.
3. The notice of invitation to a meeting of the Members' Council may be sent in the form of a let t er of
invitation, by telephone, by facsimile, by other electronic means or by other methods as stipulat ed in
the charter of the company and shall be sent directly to each member of the Members' Co uncil and
persons invited to attend the meeting. The notice of invitation must specif y t he t ime, v enue and
agenda of the meeting. The f orm of an online meeting may be applied where necessary.
4. Meetings of the Members' Council shall be valid when at leas t t wo-t hirds of t he t otal number of
members of the Members' Council participate. A resolution of t he Members' Council is d eemed
passed when above half of the total number of attending members vote in favour; in t he c ase of a
tied vote, the content on which the chairman of the Members' Council or the person authorized by the
chairman of the Members' Council to chair the meeting casted a vote in f av our, s hall b e pass ed.
Members of the Members' Council have the right to reserve their opinions and to make
recommendations to the agency representing the company owner.
5. In the case of collection of written opinions from members of the Members' Council, a res olut ion of
the Members' Council is deemed passed when above half of the total number o f members of t he
Members' Council agree. A resolution may be passed by using a number of counterparts of the same
document if each counterpart bears the signature of at least one member of the Members' Council.
6. Based on the contents and agenda of a meeting, when it cons iders it nec essary , t he Members '
Council shall invite authorized representatives of related agencies and organizations to at t end t he
meeting and discuss specific issues on the agenda of the meeting. The rep res ent atives of s uch
agencies and organizations have the right to express their opinions but shall not participate in voting.
Any opinion of the representatives invited to attend the meeting shall be fully recorded in the minutes
of the meeting.
7. Contents of issues discussed, opinions expressed, results of v oting, resolutions p assed b y t he

Members' Council and conclusions of meetings of the Members' Council shall be minuted. The
chairman and the secretary of a meeting must be jointly responsible for the accuracy and truthfulness
of the minutes of the meeting of the Members' Council. The minutes of the meeting of the Members '
Council must be passed prior to the closing of the meeting. The minutes must contain the f ollowing
main particulars:
(a) Time, venue, purpose and agenda of the meeting; list of attending members; issues discussed
and voted on; and summary of opinions of the members and representatives invited to at tend
the meeting on each issue discussed;

(b) Number of votes for and against in a case where the abstaining method is not applied; number
of votes for, against and abstentions in a case where the abstaining method is applied;
(c) Decisions passed;
(d) Full names and signatures of attending members.
8. Any member of the Members' Council has the right to request the director, deputy director or general
director, deputy general director, chief accountant and managers of company or of a s ubs idiary
company in which the company holds 100% of the charter capital, and [request] the representative of
capital contribution of the company in any other enterprise to provide information and dat a on t he
f inancial and operational status of the enterprise pursuant to the information rules of, or a res olution
of the Members' Council. The person requested to provide information must promptly p rovide t he
complete and accurate information and data requested by the member of t he Members' Council ,
unless otherwise decided by the Members' Council.
9. The Members' Council shall use the managerial and executive apparatus and the assisting
department of the company to perform its duties.
10. Operational expenses of the Members' Council and wages, allowances and remunerat ion shall be
included in management expenses of the company.
11. In necessary cases, the Members' Council shall organize the collection of opinions f rom domestic
and f oreign consultants prior to making decisions on important matters wit hin the aut horit y of t he
Members' Council. Any expenses for collecting opinions from consultants shall be stipulat ed in t he
rules on f inancial management of the company.
12. Resolutions of the Members' Council shall take effect from the date of passing or from the ef fec tive
date stated in the resolution, except for cases in which the approval of the agency representing t he
owner is required.
Article 99 Chairman of company
1. The chairman of a company shall be appointed by the agency representing the owner in accordance
with law. The term of office of the chairman of the company shall not ex ceed f ive y ears, and [ the
chairman] may be re-appointed. One individual shall be appointed for no more t han t wo t erms of
of f ice, except where the appointed person has worked f or a period of more than f if teen (15)
consecutive years before he or she is appointed for the first time. The c rit eria and c ondit ions f or
removal or dismissal of the chairman of the company and c as es of removal or d ismissal of t he
chairman of the company shall be in accordance with articles 93 and 94 of this Law.
2. The chairman of the company shall exercise the rights and perf orm the obligations of the
representative of the owner directly in the company in accordance with the Law on Management and
Use of State Capital Invested in Production and Business in Enterprises , and other rights, obligations
and responsibilities as prescribed in articles 92 and 97 of this Law.
3. Salaries, allowances and remuneration of the chairman of the company shall be included in
management expenses of the company.
4. The chairman of the company shall use the managerial and executive apparatus and t he as sist ing
department of the company to exercise his or her rights and perf orm his or her obligations. In
necessary cases, the chairman of the company shall organize the collection of opinions f rom
domestic and foreign consultants prior to making decisions on important matters within the aut hority

of the chairman of the company. Any expenses for collecting opinions f rom cons ult ants s hall be
stipulated in the rules on financial management of the company.
5. Decisions within the authority stipulated in clause 2 of this article must be made in writing and signed
with the title of the chairman of the company, including the case where the chairman of the company
acts concurrently as the director or general director.
6. A decision of the chairman of the company shall take effect from the date of its signing or f rom t he
ef f ective date stated in the decision, except for the case where approval of the agency represent ing
the owner is required.
7. In a case where the chairman of the company exits Vietnam for a period of more t han t hirt y (30)
days, the chairman of the company must authorize another person in writing to perform a number of
rights and obligations of the chairman of the company. Such authorization must be promptly notif ied
in writing to the agency representing the owner. Other cases of authorization shall be as stipulated in
the rules on internal management of the company.
Article 100 Director or general director and deputy director or deputy general director
1. The director or general director shall be appointed or employed by t he Members ' Co uncil o r t he
chairman of the company in accordance with the personnel plan approved by the agency
representing the owner.
2. The director or general director is responsible to manage the day-to-day operations of the company,
and has the f ollowing rights and obligations:
(a) To organize implementation and assessment of results of implementation of business

schemes and plans and investment plans of the company;
(b) To organize implementation and assess results of implementation of resolutions and decisions
of the Members' Council, the chairman of the company and the agency representing the
company owner;
(c) To make decisions on daily affairs of the company;
(d) To promulgate rules on internal management of the company as approved by t he Members '
Council or the chairman of the company;
(dd) To appoint, employ, remove, dismiss or terminate labour contracts of managers of the
company, except for the positions within the authority of the Members' Council or the chairman
of the company;
(e) To enter into contracts and transactions in the name of the company, except for t hose wit hin
the authority of the chairman of the Members' Council or the chairman of the company;
(g) To prepare quarterly and annual reports on results of implementation of objectives of business
plans and financial statements and submit same to the Members' Council or the c hairman of
the company;
(h) To make recommendations on allocation and use of af ter-tax prof it and other f inancial
obligations of the company;
(i) To recruit employees;

(k) To make recommendations on plans for re-organization of the company;
(l) Other rights and obligations in accordance with law and the charter of the company.
3. The company shall have one or more deputy directors or deputy general directors. The numb er of
and authority to appoint deputy directors or deputy general directors shall be stipulated in the charter
of the company. Rights and obligations of deputy directors or d eputy g eneral d irectors s hall be
stipulated in the charter of the company or in their labour contracts.
Article 101 Criteria and conditions applicable to director or general director
1. Not f all into the category of entities prescribed in article 17.2 of this Law.
2. Have professional qualifications and experience in business administration or in the business sectors
and lines of the company.
3. Not be a person with a family relationship with the head or deputy head of the agency repres enting
the owner; a member of the Members' Council or the chairman of the company; the deputy general
director, deputy director or chief accountant of the company; or an inspector of the company.
4. Not ever have been dismissed from the position of the chairman of the Members' Council, a member
of the Members' Council, the chairman of the company, a director o r g eneral d irector, a d eputy
director or deputy general director in the company or in another State owned enterprise.
5. Not be permitted to act concurrently as the director or general director of another enterprise;
6. Other criteria and conditions stipulated in the charter of the company.
Article 102 Removal or dismissal of director, general director and other managers of company, and c hief
accountant
1. A director or general director shall be removed in the following cases:
(a) He or she no longer satisfies the criteria and conditions stipulated in article 101 of this Law;
(b) He or she makes an application for resignation.
2. A director or general director shall be considered and dismissed in the following cases:
(a) The enterprise f ails to maintain capital in accordance with law;
(b) The enterprise f ails to complete objectives of annual business plans;
(c) The enterprise commits a breach of law;
(d) He or she is not qualif ied and capable of satisf ying requirements of new developmental
strategies and business plans of the enterprise;
(dd) He or she commits a breach of one of the rights, obligations and responsibilities of managers
as stipulated in articles 97 and 100 of this Law;
(e) Other cases in accordance with the charter of the company.

3. Within sixty (60) days from the date of the decision on removal or dismissal, the Members' Council or
the chairman of the company shall consider and decide to select or ap point anot her person f or
replacement.
4. Cases [justifying] removal or dismissal of deputy general directors, deputy directors, other managers
of the company and chief accountant shall be stipulated in the charter of the company.
Article 103 Inspection Committee and inspectors
1. On the basis of the scale of the company, the agency representing the owner shall make a d ecision
establishing an Inspection Committee which comprises one to five inspectors, including the head of
the Inspection Committee. The term of an inspector shall not exceed five years and [inspectors] may
be re-appointed for no more than two consecutive terms of office in the company. If t he Ins pect ion
Committee has only one inspector, such inspector shall also be the head of the Inspection
Committee and must satisfy the criteria applicable to the head of the Inspection Committee.
2. One individual may be concurrently appointed as the head of the Inspection Committee or an
inspector of no more than four State owned enterprises.
3. The head of the Inspection Committee and an inspector must satisf y the f ollowing criteria and
conditions:
(a) Have a university or higher graduation degree specializing in economy, finance, ac counting,
auditing, law or business administration or in a specialized faculty appropriate for the business
activities of the enterprise, and have at least three years of work experience; the head of t he
Inspection Committee must have at least five years of work experience;
(b) Not be a manager of the company or a manager in another enterprise; no t be an inspec tor of
an enterprise not being a State owned enterprise; and not be an employee of the company;
(c) Not be a person with a f amily relationship with the head or deputy head of the agency
representing the owner of the company; a member of the Members' Council of the company;
the chairman of the company, the director or general director; or the deputy director or deputy
general director, chief accountant or any other inspector of the company;
(d) Other criteria and conditions stipulated in the charter of the company.
Article 104 Obligations of Inspection Committee
1. The Inspection Committee has the following obligations:
(a) To supervise the organization of implementation of developmental strat egies and business
plans;
(b) To supervise and assess the actual status of business activities and the actual financial status
of the company;
(c) To supervise and assess the implementation of rights and obligat ions by members of t he
Members' Council, by the Members' Council, by the chairman of the c ompany and by t he
director or general director of the company;

(d) To supervise and assess the effectiveness of and the level of compliance with internal auditing
regulations, regulations on management and prevention of risks, report ing regulations and
other rules on internal management of the company;
(dd) To supervise the lawfulness, systematic nature and truthfulness in accounting work, book s of
account, financial statements, appendices and related documents;
(e) To supervise contracts and transactions of the company with related parties;
(g) To supervise the implementation of large investment projects, purchase and sale c ontrac ts
and transactions, other business contracts and transactions on a large scale, and abnormal
business contracts and transactions of the company;
(h) To prepare and send reports on assessment of and recommendation on the contents
stipulated in sub-clauses from (a) to (g) of this clause to the agency repres enting t he owner
and the Members' Council;
(i) To perf orm other obligations at the request of the agency representing the owner and in
accordance with the charter of the company.
2. Salaries, remuneration, bonuses and other benefits of inspectors shall be decided and paid b y t he
agency representing the owner.
Article 105 Rights of Inspection Committee
1. To attend meetings of the Members' Council, and official and unofficial consultations and discussions
between the agency representing the owner and the Members' Council; t o f ormally q ues tion t he
Members' Council, members of the Members' Council, the chairman of the company and the director
or general director in relation to plans, projects or programs on investment in development and other
decisions during management and operation of the company.
2. To review books of account, reports, contracts, transactions and other documents of the company; to
inspect the management and operation work of the Members' Council, members of t he Members '
Council, the chairman of the company and the director or general direct or when t hey consider it
necessary or at the request of the agency representing the owner.
3. To request the Members' Council, members of the Members' Council, the chairman of the company,
the director, deputy director or general director, deputy general director, chief accountant and o ther
managers to make reports on or provide information within their scope of management and o n t he
business and investment activities of the company.
4. To request the managers of the company to make reports on the ac tual f inancial s t at us and t he
results of business of subsidiary companies when they consider it necessary in o rder t o c arry o ut
duties stipulated in law and the charter of the company.
5. To request the agency representing the owner to establish a unit which carries out auditing duties t o
provide advice to and directly assist the Inspection Committee in performing its delegated rights and
obligations.
8. Other rights in accordance with the charter of the company.

Article 106 Working regime of Inspection Committee
1. The head of the Inspection Committee shall formulate annual, quarterly and monthly working plans of
the Inspection Committee, and shall assign specific duties and work to each inspector.
2. Inspectors shall on their own initiative and independently perform their assigned duties and work, and
shall propose and recommend implementation of other inspection duties and work beyond the p lans
or scope assigned to them if considered necessary.
3. The Inspection Committee shall meet at least once every month in order t o rev iew, evaluat e and
pass reports on results of inspection in a month and submit same to the ag ency rep resenting t he
owner, and shall discuss and pass the next operational plans of the Inspection Committee.
4. A decision of the Inspection Committee is passed when a majority of the number of attending
members agree. Any opinion different from the contents of the passed decis ion must be f ully and
accurately recorded and must be reported to the agency representing the owner.
Article 107 Responsibilities of inspectors
1. To comply with law, the charter of the company, decisions of the agency representing the owner and
prof essional ethics during implementation of their rights and obligations.
2. To exercise their delegated rights and perform their delegated obligations honestly and prudently and
to the best of their ability to protect the interests of the State and of the company and the leg it imat e
interests of parties in the company.
3. To be loyal to the interests of the State and of the company; not to abuse their positions and powers
and not to use information, know-how, business opportunities and other assets of t he company f or
their own personal benefit or for the benefit of other organizations or individuals.
4. In the case of breach of the responsibilities stipulated in this article which causes loss to the
company, the inspectors must be personally or jointly liable to compensate for such loss , and may
also be disciplined or subject to administrative penalties or subject to criminal prosecution in
accordance with law depending on the nature and seriousness of the breach and the loss; and must
return the company all income and interests obtained f rom the breach of the responsibilities
stipulated in this article.
5. To promptly report to the agency representing the owner, and also request an inspector to terminate
any breach and remedy any consequences if such inspector is discovered t o c ommit a b reach of
rights, obligations and responsibilities assigned to him or her.
6. To promptly report to the agency representing the company owner, other inspectors and the relat ed
individual, and also request such individual to terminate any breach and remedy any consequenc es
in the f ollowing cases:
(a) It is discovered that a member of the Members' Council, the chairman of t he c ompany, t he
director or general director or any other manager contravenes the provisions on t heir right s,
obligations and responsibilities or is likely to contravene such provisions;
(b) An act is discovered to breach the law or contravene the charter of the company or the internal
management rules of the company.
7. Other responsibilities stipulated in this Law and the charter of the company.

Article 108 Removal and dismissal of head of Inspection Committee and inspectors
1. The head of the Inspection Committee or an inspector shall be removed in the following cases:
(a) No longer satisfying the criteria and conditions as prescribed in article 103 of this Law;
(b) Making an application for resignation which is approved by the agency representing the owner;
(c) Being transferred or assigned to carry out other duties by the agency representing t he owner
or other competent agencies;
(d) Other cases as stipulated in the charter of the company.
2. The head of the Inspection Committee or an inspector shall be dismissed in the following cases:
(a) Failing to perform his or her delegated obligations, dut ies and wo rk f or a p eriod of t hree
consecutive months, except for cases of force majeure;
(b) Failing to complete his or her delegated obligations, duties and work for one year;
(c) Committing a breach on a number of occasions or committing a serious breach of t he right s,

obligations and responsibilities of the head of the Inspection Committee or of ins pectors as
stipulated in this Law and the charter of the company;
(d) Other cases stipulated in the charter of the company.
Article 109 Periodical disclosure of information
1. A company must make periodical disclosure of the following inf ormation on t he web site s of t he
company and of the agency representing the owner:
(a) Basic information about the company and the charter of the company;
(b) General objectives, specific objectives and targets of annual business plans;
(c) [Annual f inancial] statements and summary of annual financial statements which were audited
by an independent auditing organization within one hundred and fifty (150) days from t he end
of a f inancial year, including financial statements of the parent c ompany and c onsolidated
f inancial statements (if any);
(d) [Semi-annual f inancial] statements and summary of semi-annual financial s tat ements which
were audited by an independent auditing organization; the time-limit for d isclosure must be
prior to 31 July each year, including f inancial statements of the parent company and
consolidated financial statements (if any);
(dd) Reports on evaluation of results of implementation of production and business plans f or eac h
year;
(e) Reports on results of implementation of public duties which are assigned in accordance wit h
plans or subject to tendering (if any) and other social responsibilities;
(g) Reports on the actual status of management and the organizational structure of the company.

2. A report on the actual status of management of the company shall comprise the f ollowing
inf ormation:
(a) Inf ormation about the agency representing the owner, the head and the deput y head of t he
agency representing the owner;
(b) Inf ormation about the managers of the company, including professional qualif ic ations, work
experience, managerial positions held, methods of appointment, managerial work assigned,
amount and methods of payment of salaries, remuneration, bonuses and other benef its;
related persons and related interests of managers of the company;
(c) Related decisions of the agency representing the owner; res olutions and d ecisions of t he
Members' Council or of the chairman of the company;
(d) Inf ormation about the Inspection Committee and inspectors and about their activities;
(dd) Reports on conclusions of the inspectorate agency (if any ) and rep orts of t he Ins pect ion
Committee and inspectors;
(e) Inf ormation about related persons of the company, and cont ract s and t ransac tions of t he
company with related persons;
(h) Other inf ormation as stipulated in the charter of the company.
3. Inf ormation must be promptly disclosed in a complete and accurate manner in accordance with law.
4. The legal representative or the person authorized to disclose information shall make d is closure of
inf ormation. The legal representative must be responsible for the completeness, updat e, honesty and
accuracy of disclosed information.
Article 110 Extraordinary disclosure of information
1. A company must publish on its website and in its printed matter (if any) and p ublic ly display at it s
head office and business locations extraordinary information within thirty six (36) hours from the time
of occurrence of one of the following events:
(a) An account of the company is blockaded or is permitted to resume operat ion after blockade;
(b) The business activities are partly or wholly suspended; or the ERC, the establishment licence,
the licence f or establishment and operation, the operational licence or any other licence
relating to the operation of the company is revoked;
(c) Amendment or addition is made to the ERC, the establishment licence, the licence f or
establishment and operation, the operational licence or any other licence relating to the
operation of the company;
(d) There is a change of any member of the Members' Council, the chairman of the company, t he
director, deputy director or general director, deputy general director, the chief accountant , t he
head of the finance and accounting department, the head of the Inspection Committee or any
inspector;

(dd) There is a decision on discipline, prosecution of, or there is a judgement or decision of a court
with respect to, any manager of the enterprise;
(e) There is a conclusion of the inspectorate agency or of the tax administ rative ag ency on a
breach of law by the enterprise;
(g) There is a decision on change of the independent auditing organizat ion , o r t he auditing of
f inancial statements is refused;
(h) There is a decision on establishment, dissolution, consolidation, merger o r c onversion of a

subsidiary company, branch or representative office; or there is a d ecision on inves tment ,
reduction of capital or de-investment in other companies.
CHAPTER 5
Shareholding Companies
Article 111 Shareholding companies
1. A shareholding company is an enterprise in which:
(a) The charter capital is divided into equal portions called shares;
(b) Shareholders may be organizations or individuals; the minimum number of s hareholders is

three (3) and there is no restriction on the maximum number;
(c) Shareholders are liable for the debts and other property obligations of t he ent erprise t o t he
extent of the amount of capital contributed to the enterprise;
(d) Shareholders may freely assign their shares to other persons, except in the cases stipulated in
article 120.3 and article 127.1 of this Law.
2. A shareholding company has legal entity status from the date of issuance of the ERC.
3. A shareholding company may issue shares, bonds and other types of securities of the company.
Article 112 Capital of shareholding companies
1. Charter capital of a shareholding company means the total aggregat e par v alue of s hares of all
classes which have been sold. The charter capital of a shareholding c ompany when reg ist ering
establishment of enterprise shall be the total aggregate par value of shares of all classes which have
been registered for subscription and stated in the charter of the company.
2. Shares which have been sold means the shares entitled to be of f ered f or sale f or which the
shareholders have paid in full to the company. When registering establishment of t he ent erprise,
shares which have been sold shall be the total number of shares of all c lasses whic h hav e been
registered for subscription.

3. Shares entitled to be offered for sale of a shareholding company means the total number of shares of
all classes which the General Meeting of Shareholders decides to of fer f or s ale in o rder t o raise
capital. The number of shares to be offered for sale of a shareholding c ompany when reg istering
establishment of the enterprise shall be the total number of shares of all classes which the company
will of fer to sell to raise capital, including shares which have been registered f or subs cription and
shares which have not been registered for subscription.
4. Unsold shares means shares which may be offered for sale and have not been paid to the company .
When registering establishment of the enterprise, unsold shares shall be the total number of s hares
of all classes which have not yet registered for subscription.
5. A company may reduce its charter capital in the following cases:
(a) Pursuant to a decision of the General Meeting of Shareholders, the company shall return part
of the capital contribution to the shareholders in proportion to their ratio of ownership of shares
in the company if the company has conducted business activities for two or more consecut iv e
years f rom the date of registration f or establishment of the enterprise, and must ensure
payment of all debts and other property obligations upon return to the shareholders;
(b) The company redeems shares which have been sold in accordance with articles 132 and 133
of this Law;
(c) The shareholders fail to pay for the charter capital in full and on time in accordance with article
113 of this Law.
Article 113 Payment of shares which have been registered for subscription upon registration for
establishment of enterprise
1. Shareholders must pay in full for the number of shares which have been registered for s ubscript ion
within ninety (90) days from the date of issuance of the enterprise reg is trat ion c ert if icate [ E RC],
except where the charter of the company or share subscription agreement stipulates a shorter t ime-
limit. If a shareholder contributes capital in the form of assets, then the time taken for transportat ion,
import and conduct of administrative procedures in order to transfer ownership of the ass et s is not
included in the above deadline f or contributing such capital. The Board of Management is
responsible to supervise and monitor [to ensure that] shares which have been registered f or
subscription shall be paid in f ull and on time by the shareholders.
2. Within the period from the date on which the company is issued with an ERC to the last day on which
the shares which have been registered for subscription must be paid in full in accordance with clause
1 of this article, the number of votes of the shareholders shall be c alculat ed on t he bas is of t he
number of ordinary shares which have been registered for subscription, unless otherwise st ipulat ed
in the charter of the company.
3. If upon expiry of the period stipulated in clause 1 above, any shareholder has not paid or has o nly
paid f or part of the number of shares registered for subscription, the following provisions shall apply:
(a) The shareholder who has not paid for the number of shares registered for subs cription s hall
automatically no longer be a shareholder of the company and must not assign t he right t o
purchase such shares to another person;

(b) The shareholder who has only paid for part of the number of shares registered for subscription
shall have the right to vote and receive dividends and other rights in proportion to the number
of shares paid; and must not assign the right to purchase t he number of s hares unp aid t o
another person;
(c) Shares which have not been paid f or shall be deemed unsold shares and the Board of
Management has the right to sell such shares;
(d) Within thirty (30) days from the date of expiry of the period in which the shares reg is tered f or
subscription must be paid for in full as stipulated in clause 1 above, the company must register
adjustment of the charter capital on the basis of the par value of shares which have been paid
f or in f ull, except where shares which have not been paid for have been sold o ut during t his
period; and register any change to founding shareholders.
4. Any shareholder who has not paid or has not paid in full for the number o f shares reg ist ered for
subscription must be responsible for the financial obligations of the company in proportion to the total
aggregate par value of shares registered for subscription, which arise prior to the date on whic h t he
company registers adjustment of its charter capital as prescribed in clause 3(d) of this article.
Members of the Board of Management and the legal representative must be jointly res ponsible for
any loss arising from failure to implement or failure to implement correctly the provisions of clauses 1
and 3(d) of this article.
5. Except in the case prescribed in clause 2 above, a capital contributor becomes a shareholder in t he
company as from the time of payment for share purchase and information about the shareholder as
prescribed in sub-clauses (b), (c), (d) and (dd) of article 122.2 of this Law is recorded in the reg ister
of shareholders.
Article 114 Classes of shares
1. A shareholding company must have ordinary shares. Owners of ordinary shares s hall be o rdinary
shareholders.
2. In addition to ordinary shares, a shareholding company may have pref erence s hares. Owners of
pref erence shares are referred to as preference shareholders. Preference s hares s hall b e of t he
f ollowing classes:
(a) Dividend preference shares;
(b) Redeemable preference shares;
(c) Voting preference shares;
(d) Other pref erence shares as stipulated in the charter of the company and in the law on
securities.
3. Persons being entitled to purchase dividend preference shares, redeemable preference shares and
other pref erence shares shall be stipulated in the charter of the company or decided by the General
Meeting of Shareholders.
4. Each share of the same class shall entitle its holder to the same rights, obligations and interests.
5. Ordinary shares may not be converted into preference shares. Preference shares may be converted
into ordinary shares pursuant to a resolution of the General Meeting of Shareholders.

6. Ordinary shares used as the underlying assets for issuing non-voting depos it ory c ert if icates are
ref erred to as underlying ordinary shares. Non-voting depository cert if icat es have t he ec onomic
interests and obligations corresponding to underlying ordinary shares, except for voting rights.
7. The Government shall provide regulations on non-voting depository certificates.
Article 115 Rights of ordinary shareholders
1. Ordinary shareholders have the following rights:
(a) To attend and express opinions at meetings of the General Meeting of Shareholders and t o
exercise the right to vote directly or through an authorized representat iv e or in o ther f orms
stipulated in the charter of the company and in law. Any ordinary share shall carry one vote;
(b) To receive dividends at the rate decided by the General Meeting of Shareholders;
(c) To be given priority in subscribing for new shares in proportion to the rat io of owners hip of
ordinary shares each shareholder holds in the company;
(d) To f reely assign their shares to other persons, except in the cases stipulated in articles 120. 3
and 127.1 of this Law and other relevant laws;
(dd) To sight, consult and make an extract of information about names and contact address es on
the list of shareholders with voting rights; to request amendment of incorrect information about
them;
(e) To sight, consult and make an extract or copy of t he c harter of t he c ompany, minut es of
meetings of the General Meeting of Shareholders and resolutions of the General Meeting of
Shareholders;
(g) Upon dissolution or bankruptcy of the company, to receive a part of the remaining as set s in
proportion to the ratio of ownership of shares in the company.
2. A shareholder or a group of shareholders holding five (5) o r more per c ent of t he t ot al o rdinary
shares or holding a smaller percentage as stipulated in the charter of the company, has the following
rights:
(a) To sight, consult and make an extract of the book of minutes and resolutions or dec is ions of
the Board of Management, mid-year and annual financial statements, reports of the Inspection
Committee, and contracts and transactions which must be passed by the Board of
Management and other data except for data relating to commercial secrets or business secrets
of the company;
(b) To request the convening of a General Meeting of Shareholders in t he c ases s tipulated in

clause 3 of this article;
(c) To request the Inspection Committee to inspect each issue relating to the management and
administration of the operation of the company where it is considered necessary. The reques t
must be made in writing and must contain the following contents: full name, contact ad dress,
nationality, serial number of the personal legal document in respect of a shareholder being an
individual; name, enterprise code number of the organizational leg al d ocument , and head
of fice address in respect of a shareholder being an organization; number of shares and date of

registration of shares of each shareholder, total number of shares of the group of shareholders
and the percentage of ownership in the total number of shares of the company; is sues t o b e
inspected and purpose of the inspection;
(d) Other rights in accordance with this Law and the charter of the company.
3. A shareholder or a group of shareholders stipulated in clause 2 of this article has the right to reques t
the convening of a General Meeting of Shareholders in the following cases:
(a) The Board of Management commits a serious breach of t he rig hts of s hareholders or t he
obligations of managers or makes a decision which falls outside its delegated authority;
(b) Other cases as stipulated in the charter of the company.
4. The request prescribed in clause 3 above must be made in writing and must cont ain t he f ollowing
contents: full name, contact address, nationality, serial number of the pers onal legal doc ument in
respect of a shareholder being an individual; name, enterprise code number or serial number of t he
organizational legal document, and head of f ice address in respect of a shareholder being an
organization; number of shares and date of registration of shares of each shareholder, total number
of shares of the group of shareholders and the percentage of ownership in the total number of shares
of the company; and grounds and reasons for the request to c onvene a meet ing of t he General
Meeting of Shareholders. The request must be accompanied by document s and ev idence of t he
breaches of the Board of Management and the seriousness of such breaches, or o n t he decision
which f alls outside authority.
5. A shareholder or group of shareholders owning ten per cent (10% ) or more of t he t ot al o rdinary
shares or a smaller percentage as prescribed in the company charter has the right to nominate
candidates for the Board of Management or the Inspection Committee. Unless otherwise stipulated in
the charter of the company, the nomination of candidates t o t he B oard of Management and t he
Inspection Committee shall be carried out as follows:
(a) Ordinary shareholders forming a group to nominate candidates to the Board of Management
and the Inspection Committee must notify attending shareholders of the formation of the group
prior to the opening of the General Meeting of Shareholders;
(b) Based on the number of members of the Board of Management and the Inspection Committee,
the shareholder or group of shareholders stipulated in this clause has t he right to no minate
one or more persons as decided by the General Meeting of Shareholders as candidates to the
Board of Management and the Inspection Committee. Where the number of candidates
nominated by the shareholder or the group of shareholders is lower than the number of
candidates they are entitled to nominate as decided by the General Meeting of Shareholders ,
the remaining candidates shall be nominated by the Board of Management , t he Ins pect ion
Committee and other shareholders.
6. Other rights in accordance with this Law and the charter of the company.
Article 116 Voting preference shares and rights of voting preference shareholders
1. A voting preference share is an ordinary share which carries more votes than other ordinary shares.
The number of votes per voting preference share shall be stipulated in the charter of t he company.
Only the organization authorized by the Government and founding shareholders hav e t he right t o
hold voting preference shares. Voting preference of founding shareholders shall be effec tive wit hin
three years as f rom the date on which the company is issued with an E RC. Vot ing rights and t he

duration of voting preference with respect to voting preference s hares held b y t he organizat ion
authorized by the Government shall be stipulated in the charter of the company. Upon ex piry of t he
duration of voting preference, voting preference shares shall be converted into ordinary shares.
2. Voting preference shareholders have the following rights:
(a) To vote on matters which fall within the authority of the General Meeting of Shareholders wit h
the number of votes in accordance with clause 1 of this article;
(b) Other rights as ordinary shareholders, except as stipulated in clause 3 of this article.
3. Voting preference shareholders may not assign such shares to other persons , except for assignment
pursuant to a legally effective judgment or decision of a court or inheritance.
Article 117 Dividend preference shares and rights of dividend preference shareholders
1. A dividend preference share is a share for which a dividend is paid at a rate higher than that paid f or
an ordinary share or at an annual fixed rate. Annually paid dividends shall include f ix ed d ividends
and bonus dividends. Fixed dividends shall not depend on t he out come of t he b us ines s of t he
company. The specific rate of fixed dividends and method for determination of bonus dividends shall
be specified in dividend preference share certificates.
2. Dividend preference shareholders have the following rights:
(a) To receive dividends as stipulated in clause 1 above;
(b) Upon dissolution or bankruptcy of the company, to receive a part of the remaining as set s in
proportion to the ratio of ownership of shares in the company after the company has paid in full
its debts and redeemable preference shares;
(c) Other rights as ordinary shareholders, except as stipulated in clause 3 above.
3. Dividend preference shareholders do not have the right to vote, the right to attend meet ings of t he
General Meeting of Shareholders or the right to nominate candidates to the Board of Management
and the Inspection Committee, except for the case prescribed in article 148.6 of this Law.
Article 118 Redeemable preference shares and rights of redeemable preference shareholders
1. A redeemable pref erence share is a share the contributed capital of which is redeemed by the
company at the demand of its owner or in accordance with the conditions stipulated in the
redeemable preference share certificate and the charter of the company.
2. Rights of redeemable preference shareholders are the same as those of ordinary s hareholders,
except as stipulated in clause 3 above.
3. Redeemable preference shareholders do not have the right to vote, the right to att end meet ings of
the General Meeting of Shareholders or the right to nominate candidates to the Board of
Management and the Inspection Committee, except for the case prescribed in art icle s 114. 5 and
148.6 of this Law.

Article 119 Obligations of shareholders
1. To pay in f ull and on time for the shares undertaken to be subscribed.
2. Not to withdraw the ordinary share capital contributed from the company in any form, exc ept where
shares are redeemed by the company or other persons. Where a shareholder withdraws a part or all
of the share capital contributed not in accordance with this clause, such shareholder and any pers on
with related interests in the company must be jointly liable for debts and other property obligations of
the company to the extent of the value of shares withdrawn and any loss occurring.
3. To comply with the charter and the rules on internal management of the company.
4. To observe resolutions and decisions of the General Meeting of S hareholders and t he B oard of
Management.
5. To preserve confidentiality of information provided by the company pursuant to the company chart er
and law; and only to use information provided in order to perform and protect their lawful right s and
interests, and not to distribute, copy or send such information to other organizations or individuals.
6. Other obligations in accordance with this Law and the charter of the company.
Article 120 Ordinary shares of founding shareholders
1. A newly established shareholding company must have at least three f ounding shareholders. A
shareholding company which is converted from a State owned enterprise or f rom a limited liabilit y
company or which is divided, de-merged, consolidated or merged f rom another shareholding
company need not necessarily have founding shareholders; in such case, the charter of the company
which is included in the application file for enterprise registration must bear the signature of the legal
representative or signatures of ordinary shareholders of such company.
2. Founding shareholders must together register to subscribe at least twenty (20) per cent of t he t ot al
number of ordinary shares which may be offered for sale when reg is tering es tablis hment of t he
enterprise.
3. Within a period of three years from the date of issuance of the ERC to the company, ordinary shares
of a f ounding shareholder may be freely assigned to other f ounding shareholders, and shall only b e
assigned to persons not being founding shareholders upon ap proval of t he General Meet ing of
Shareholders. In this case, founding shareholders intending to assign ordinary shares may not v ot e
on the assignment of such shares.
4. All restrictions prescribed in clause 3 above do not apply to the following ordinary shares:
(a) Additional shares which founding shareholders have after registration of establishment of t he
enterprise;
(b) Shares which have been assigned to others not being founding shareholders.
Article 121 Share certificates
1. Share certif icates are certificates issued by a shareholding company, book entries or electronic dat a
certif ying the ownership of one or more shares of such company. A share certificate must contain the
f ollowing main details:

(b) Number of shares and class of shares;
(c) Par value of each share and total par value of shares included in the share certificate;
(d) Full name, contact address, nationality, serial number of the personal legal document in
respect of a shareholder being an individual; name, enterprise code number or serial number
of the organizational legal document, and head office address in res pect of a s hareholder
being an organization;
(dd) Signature of the legal representative of the company;
(e) Registration number in the register of shareholders of the company and date of is sue of t he
share certif icate;
(g) Pref erence share certificates shall also include other details as stipulated in articles 116, 117
and 118 of this Law.
2. Where there are errors in the contents and form of a share certificate issued by a company, the rights
and interests of its owner shall not be affected. The legal representative of the company is liable f or
any loss caused by such errors.
3. Where a share certif icate is lost, damaged or otherwise ruined, the shareholder shall be re-issued b y
the company with a share certif icate at the request of such shareholder. Such request of the
shareholder must contain the following particulars:
(a) Inf ormation about the share certificate which was lost, damaged or otherwise ruined;
(b) Commitment to take responsibility for any disputes arising from the re-issuance of a new share
certif icate.
Article 122 Register of shareholders
1. A shareholding company must establish and maintain a register of shareholders f rom t he date of
issuance of the ERC. The register of shareholders may be in the form of a paper document o r a s et
of electronic data which records information about owners hip of s hare s b y s hareho lders of t he
company.
2. A register of shareholders must contain the following main details:
(a) Name and address of head office of the company;
(b) Total number of shares which may be offered for sale, classes of shares which may be offered
f or sale, and number of shares of each class which may be offered for sale;
(c) Total number of shares of each class already sold and value of share capital already
contributed;
(d) Full name, contact address, nationality, serial number of the personal legal document in
of the organizational legal document, and head office address in res pect of a s hareholder
being an organization;

(dd) Number of shares of each class of each shareholder and date of share registration.
3. The register of shareholders shall be retained at the head office of t he company or at any ot her
organization having the function of retaining the register of shareholders. Shareholders have the right
to inspect, consult or make an extract or copy of the name and contact address of any shareholder of
the company in the register of shareholders.
4. Where a shareholder changes his or her contact address, such shareholder must promptly notify t he
company of such change in order for the latter to update the register of shareholders. The c ompany
is not responsible for failure to contact the shareholder resulting from the fact that the company is not
notif ied of such change.
5. The company must promptly update changes to shareholders in the register of shareholders at the
request of related shareholders in accordance with the charter of the company.
Article 123 Offer to sell shares
1. Offer to sell shares means a company increasing the number of shares [and/or] c lasses of s hares
which may be offered for sale in order to increase the charter capital.
2. The of fer to sell shares may be implemented by the following methods:
(a) Of f er for sale of shares to existing shareholders;
(b) Private share placement;
(c) Public offer for sale of shares.
3. The public of f er or of f er to sell shares of public companies and other organizations shall be
implemented in accordance with the law on securities.
4. The company shall register any change to its charter capital within ten (10) d ay s f rom t he d ate of
completion of a tranche of sale of shares.
Article 124 Offer to sell shares to existing shareholders
1. Offer to sell shares to existing shareholders means a company increases the number of shares
[and/or] classes of shares which may be offered for sale and sells all such shares to all shareholders
in proportion to their current ratio of ownership of shares in the company.
2. The of fer to sell shares to existing shareholders by a shareholding company not b eing a p ublic
company is implemented as follows:
(a) The company must notif y shareholders in writing by a method guaranteed to reach their
contact addresses as stated in the register of shareholders no later than fifteen (15) days prior
to expiry of the period for registration to subscribe shares;
(b) The notice must contain full name, contact address, nationality, serial number of the personal
legal document in respect of a shareholder being an individual; name, enterprise code number
or serial number of the organizational legal document, and head office address in respect of a
shareholder being an organization; the number of shares and current rat io of o wnership of
shares of the shareholder in the company; total number of shares intended t o be of fered f or

sale and number of shares which the shareholder is entitled to subscribe for; of f ered s elling
price of shares; time-limit for registration to subscribe; and full name and signature of the legal
representative of the company. The notice must be accompanied by a reg istrat ion f orm f or
share subscription issued by the company. If the registration form for share subscription is not
returned to the company within the notified time-limit, such shareholder s hall be d eemed t o
have rejected 11 the priority right for subscription;
(c) Shareholders have the right to transfer their priority right for subscription for s hares t o ot her
persons.
3. Where shareholders and transferees of priority rights for subscription do not register to subscribe f or
all of the shares intended to be offered for sale, the Board of Management has the right to s ell t he
remaining shares which may be offered for sale to shareholders of the company and to other persons
with conditions not more favourable than the conditions of fered t o s hareholders, except where
otherwise approved by the General Meeting of Shareholders o r otherwise stipulat ed in t he law on
securities.
4. Shares are deemed to have been sold when such shares have been paid for in full and all details of
purchasers as stipulated in article 122.2 of this Law have been recorded in the register of
shareholders; f rom such point of time, the purchasers of shares become shareholders of the
company.
5. Af ter shares are paid f or in f ull, the company shall issue and deliver share certif icates to the
purchasers. If share certificates are not delivered, the details of shareholders as stipulated in art ic le
122.2 of this Law shall be recorded in the register of shareholders to certify the ownership of shares
of such shareholders in the company.
Article 125 Private share placement
1. Private share placement by a shareholding company not being a public company must s at isf y t he
f ollowing conditions:
(a) The placement is not made via the mass media;
(b) The placement is made to less than one hundred (100) excluding institutional securities
investors or is only made to institutional securities investors.
2. A shareholding company not being a public company shall make a private share placement in
(a) The company decides a plan for private share placement in accordance with this Law;
(b) Shareholders of the company exercise the priority right f or subscription f or shares in
accordance with article 124.2 of this Law, except for the case of merger or consolidation of the
company;
(c) Where shareholders and transferees of priority rights for subscription do not subscribe f or all
[shares], the remaining shares shall be sold to other persons in accordance wit h t he plan on
private share placement with conditions no more favourable than the conditions offered to t he
shareholders, unless otherwise approved by the General Meeting of Shareholders.
11
Allens footnote: The literal translation is "to have not accepted".

3. Foreign investors purchasing shares offered for sale in accordance with this article must carry out the
procedures for purchase of shares in accordance with the Law on Investment.
Article 126 Sale of shares
The Board of Management shall make a decision on the time and method of selling shares and selling price
of shares. The selling price of shares must not be lower than the market price at t he t ime of s ale o r t he
book value of shares at the most recent time, except for the following cases:
1. Shares are initially sold to persons not being founding shareholders;
2. Shares are sold to all shareholders in proportion to their current ratio of ownership of s hares in t he
company;
3. Shares are sold to brokers or underwriters. In this case, the specific amount or ratio of discount mus t
be approved by the General Meeting of Shareholders, unless otherwise stipulated in t he chart er of
the company;
4. Other cases and the rate of discount in such cases as stipulated in the charter of the company or in a
resolution of the General Meeting of Shareholders.
Article 127 Assignment of shares
1. Shares may be freely assigned, except in the cases stipulated in article 120.3 of this Law and except
where the charter of the company provides restrictions on assignment of shares. Where the c harter
of the company provides restrictions on assignment of shares, such restrictions shall only be
ef f ective if they are specified in the corresponding share certificates.
2. Assignment shall be conducted in the form of a contract or a transaction on the securities market . In
the case of assignment by a contract, assignment documents must be signed by t he as signor and
the assignee or their authorized representatives. In the case of a transaction on the securities
market, the sequence and procedures for assignment shall be as stipulated in the law on securities.
3. Where a shareholder being an individual dies, the heir of such shareholder under a will or at law shall
become a shareholder of the company.
4. Where a shareholder being an individual dies intestate or where his or her heir disclaims the
inheritance or the right to inherit is forfeited, then shares of such shareholder shall be dealt with in
accordance with the civil law.
5. A shareholder has the right to make a gift of part or all of his or her shares in the company to another
individual or organization or use his or her shares to pay debts. The individual or organization
receiving such gift or receiving payment of debts by s hares s hall b ecome a s hareholder of t he
company.
6. Individuals and organizations receiving shares in the cases stipulated in this article shall only become
shareholders of the company f rom the time when inf ormation about such individuals and
organizations as stipulated in article 122.2 of this Law is fully recorded in the register of shareholders.
7. The company must register changes to shareholders in the register of shareholders at the request of
related shareholders within twenty four (24) hours of receipt of the request in ac cordanc e with t he

Article 128 Private placement of bonds
1. A shareholding company not being a public company may make a privat e placement of bonds in
accordance with this Law and other relevant laws. Private placement of bonds by public companies
and other organizations, and public offers to sell bonds shall comply with the law on securities.
2. Private placement of bonds by a shareholding company not being a public company means an o f fer
f or sale which is made not via the mass media to less than one hundred (100) investors , ex cluding
institutional securities investors, and must satisfy the conditions o n entit ies pu rchas ing p rivately
placed bonds as follows:
(a) Strategic investors in the case of privately placed convertible bonds and privat ely placed
bonds with warrants;
(b) Institutional securities investors in the case of privately placed convert ible bonds , priv ately
placed bonds with warrants and other types of privately placed bonds.
3. A shareholding company not being a public company which makes a private p lacement of b onds
must satisfy the following conditions:
(a) The company has paid in f ull for the principal and interest on bonds already of f ered f or sale
which are due f or payment or has paid in full all due debts for three consecutive years prior t o
the bond placement tranche (if any), except for bond placement to credit ors b eing s elected
f inancial institutions;
(b) It has audited annual f inancial statements f or the year immediately preceding the year of
issuance;
(c) It satisf ies the conditions on financial safety ratios and prudential ratios d uring operat ion as
prescribed by law;
(d) Other conditions stipulated in relevant laws.
Article 129 Sequence and procedures for private placement of bonds and assignment of privately placed
bonds
1. A company shall decide a plan for private placement of bonds in accordance with this Law.
2. The company shall disclose inf ormation bef ore a placement tranche to investors registering to
purchase bonds and notify the Stock Exchange of the placement tranche at least o ne wo rking day
prior to the date on which the placement tranche of bonds is proposed to be organized.
3. The company shall disclose information about the results of the placement tranche to t he invest ors
who purchased bonds and notify the Stock Exchange of such results within ten (10) d ays f rom t he
date of completion of the placement tranche of bonds.
4. Privately placed bonds may be assigned among investors who satisf y t he c ondit ions on ent ities
purchasing privately placed bonds as prescribed in article 128.2 of this Law, except f or t he c ase of
compliance with a legally effective judgement or decision of a c ourt or a n ef f ect iv e award of an
arbitrator, or except for the case of inheritance in accordance with law.
5. Pursuant to this Law and the Law on Securities, the Government shall provide detailed reg ulat ions
on the types of bonds, on the application file, sequence and procedures for issuance and t rading of

privately placed bonds, on disclosure of information, and on is sue of bonds o n t he internat ional
market.
Article 130 Decisions on private placement of bonds
1. A company shall make a decision on private placement of bonds in accordance wit h t he f ollowing
provisions:
(a) The General Meeting of Shareholders makes a decision on the type, total value of bonds and
the time of placement in the case of convertible bonds and bonds with warrants. Article 148 o f
this Law applies to voting to approve a resolution on private placement of bonds by the
company;
(b) Unless otherwise stipulated in the charter of the company and except for the case pres cribed
in sub-clause (a) above, the Board of Management has the right t o mak e decisions o n t he
class of bonds, total value of bonds and timing of placement, but must report t o t he General
Meeting of Shareholders at its next meeting. The report must be accompanied by document s
and f iles on placement of bonds;
2. The company shall register any change to its charter capital within ten (10) d ay s f rom t he d ate of
completion of conversion of bonds into shares.
Article 131 Purchase of shares and bonds
Shares and bonds of shareholding companies may be paid for in Vietnames e Dong, f reely convert ible
f oreign currency, gold, land use rights, intellectual property rights, technology, technical know-how, or other
assets stipulated in the charter of the company, and shall be paid in full in one instalment.
Article 132 Redemption of shares upon demand by shareholders
1. A shareholder casting a vote which does not agree with a resolution on re-organization of the
company or against a change to the rights and obligations of shareholders stipulated in the charter of
the company may demand the company redeem its shares. Such demand must be made in writ ing
and specify the name and address of the shareholder, the number of s hares of eac h c las s, t he
intended selling price, and the reason for demanding redemption by t he company. S uch d emand
must be sent to the company within ten (10) days from the date on which t he General Meeting of
Shareholders passed the resolution on the matter referred to in this clause.
2. The company must redeem shares upon demand by the shareholder as stipulated in clause 1 of this
article at the market price or the price determined on the basis of t he princ iples s tipulated in t he
charter of the company, within a period of ninety (90) days from the date of receipt of t he d emand.
Where there is disagreement about the price, the parties may request valuation by a price evaluation
organization. The company shall recommend at least three price evaluation o rganizat ions f or t he
shareholder to select from, and such selection shall be the final decision.
Article 133 Redemption of shares pursuant to decision of company
A company may redeem no more than thirty (30) per cent of the total number of ordinary shares sold, and
part or all of the dividend preference shares sold, in accordance with the following provisions:
1. The Board of Management has the right to decide on redemption of no more than ten (10) per cent of
the total number of shares of each class already sold within a period of twelve (12) months. In o t her
cases, redemption of shares shall be decided by the General Meeting of Shareholders;

2. The Board of Management shall decide on the price f or redemption of shares. The price f or
redemption of ordinary shares shall not be higher than the market price at the t ime of red empt ion,
subject to the exception in clause 3 of this article. In respec t of s hares of ot her c lass es, unles s
otherwise stipulated in the charter of the company or agreed between the company and the relevant
shareholders, the price for redemption shall not be lower than the market price;
3. The company may redeem shares of each shareholder in proportion to their rat io of owners hip of
shares in the company in accordance with the following sequence and procedures:
(a) The decision to redeem shares of the company must be notified by a method guaranteed t o
reach all shareholders within thirty (30) days from the date on which such decision is p assed.
The notice must include the name and address of the head of f ice of the company, total
number of shares and class of shares to be redeemed, price for redempt ion or p rinc iple f or
determination of the price f or redemption, procedures and time-limit f or payment, and
procedures and time-limit for shareholders to sell their shares to the company;
(b) Shareholders agreeing to have their shares redeemed must send a letter agreeing to sell their
shares by a method guaranteed to reach the company within thirty (30) days from the d at e of
notice. The letter agreeing to sell shares must include the full name, contact ad dress, serial
number of the personal legal document of a shareholder being an individual; name, enterprise
code number or serial number of the organizational legal document, and head offic e ad dress
of a shareholder being an organization; number of shares owned and number o f shares
agreed to be sold; payment methods; and signature of the shareholder or the legal
representative of the shareholder. The company may only redeem shares wit hin t he above
time-limit.
Article 134 Conditions for payment for and dealing with redeemed shares
1. A company may only pay shareholders for redeemed shares in accordance with articles 132 and 133
of this Law if, after such redeemed shares are paid for, the company will still be able to satisfy in f ull
its debts and other property obligations.
2. All shares redeemed in accordance with articles 132 and 133 of this Law shall be considered uns old
shares in accordance with article 112.4 of this Law. The company must regist er reduct ion of its
charter capital corresponding to the total par value of shares redeemed by the company wit hin t en
(10) days f rom the date of completion of payment f or redemption of shares, unless otherwise
stipulated in the law on securities.
3. Share certif icates certifying the ownership of redeemed shares must be destroyed immediately af t er
the corresponding shares are paid for in full. The chairman of the Board of Management and t he
director or general director must be jointly responsible for any loss caused by failure to destroy o r by
delayed destruction of share certificates.
4. Af ter the redeemed shares are paid for in full, if the total value of assets recorded in the ac counting
books of the company is reduced by more than ten (10) per cent, the c ompany must notif y all
creditors thereof within fifteen (15) days from the date on which the redeemed shares are paid f or in
f ull.
Article 135 Payment of dividends
1. Dividends paid on preference shares shall be in accordance with the respective conditions applicable
to each class of preference shares.

2. Dividends paid on ordinary shares shall be determined on the basis of the realized net p rofit and
payment f or dividends shall be sourced f rom prof it retained by the company. A shareholding
company may pay dividends for ordinary shares only when the company satisfies all t he f ollowing
conditions:
(a) The company has fulfilled its tax obligations and other financial obligations in accordance wit h
law;
(b) The company has made appropriation for all f unds of the c ompany and has made up f or
previous losses in accordance with law and the charter of the company;
(c) Af ter payment of all dividends, the company will still be able t o s atisf y it s d ebt s and o ther
property obligations which become due.
3. Dividends may be paid in cash, by shares of the company or by other as sets as s tipulated in t he
charter of the company. Where payment is made in cash, it must be made in Vietnamese Dong and
by the payment methods stipulated by law.
4. Dividends must be paid in full within six months from the date of c losing of the annual General
Meeting of Shareholders. The Board of Management shall prepare a list of shareholders t o b e paid
dividends and shall determine the rate of dividend paid for each share and the time-limit and method
of payment no later than thirty (30) days prior to each payment of dividends. The notice on p ayment
of dividends shall be sent by a method guaranteed to reac h t he s hareholders at t he ad dresses
registered in the register of shareholders no later than fifteen (15) days prior to the actual payment of
dividends. The notice must contain the following particulars:
(a) Name and head office address of the company;
(b) Full name, contact address, nationality, serial number of the personal legal document in
respect of a shareholder being an individual;
(c) Name, enterprise code number or serial number of the organizational legal doc ument, and
head office address in respect of a shareholder being an organization;
(d) Number of shares of each class of such shareholder, dividend rate for eac h s hare and t ot al
dividends to be paid to such shareholder;
(dd) Time and method for payment of dividends;
(e) Full names and signatures of the chairman of the Board of Management and the legal
representative of the company.
5. Where shares are assigned between the [time of] completion of the list of shareholders and the t ime
of payment of dividends, the assignor shall receive the dividends from the company.
6. In the case of payment of dividends by shares, the company is not required to carry out the
procedures for offer to sell shares in accordance with articles 123, 124 and 125 of t his Law. The
company must register an increase of its charter capital corres ponding t o t he t otal par v alue of
shares used to pay for dividends, within ten (10) days from the date of c omplet ion of p ayment of
dividends.

Article 136 Recovery of payments for redeemed shares or dividends
Where a payment for redeemed shares is made other than pursuant to article 134.1 of this Law o r where
dividends are paid other than pursuant to article 135 of this Law, all shareholders s hall s urrender t o t he
company the monies or other assets received; where a shareholder is not able to surrender s ame t o t he
company, all members of the Board of Management shall be jointly liable for the debts and other p ropert y
obligations of the company to the extent of the monies or assets which have been paid to shareholders but
not surrendered.
Article 137 Organizational and managerial structure of shareholding companies
1. Unless otherwise stipulated in the law on securities, shareholding companies may select either of the
f ollowing models of organization of management and operation:
(a) A General Meeting of Shareholders, a Board of Management, an Inspection Committee and a

director or general director. If a shareholding company has less than eleven (11) shareholders
and the shareholders being organizations together own less than fifty (50) per cent of the tot al
shares of the company, it is not required to have an Inspection Committee;
(b) A General Meeting of Shareholders, a Board of Management and a director or general

director. In this case, at least twenty (20) per cent of the number of members of t he B oard of
Management must be independent members and there must be an auditing committee under
the Board of Management. The organizational structure, functions and duties of t he aud it ing
committee shall be regulated in the co mpany charter or in the operational rules of such
auditing committee issued by the Board of Management.
2. Where the company has only one legal representative, the chairman of the Board of Management or
the director or general director shall be the legal representative of t he c ompany. Where it is no t
stipulated in the charter, the chairman of the Board of Management shall be the legal represent ative
of the company. Where the company has more than one legal representative, the c hairman of t he
Board of Management and the director or general director shall automatically be the legal
representatives of the company.
Article 138 Rights and obligations of General Meeting of Shareholders
1. The General Meeting of Shareholders shall include all shareholders entitled to vote and shall b e t he
highest decision-making authority of a shareholding company.
2. The General Meeting of Shareholders has the following rights and obligations:
(a) To pass the developmental direction of the company;
(b) To make decisions on the classes of shares and total number of shares of each c lass whic h
may be offered for sale; to make decisions on the rate of annual dividend f or eac h class of
shares;
(c) To elect, remove or discharge members of the Board of Management and inspectors;
(d) To make investment decisions or decisions on sale of assets valued at thirty five (35) or more
per cent of the total value of assets recorded in the most recent financial s tatement s of t he
company, except where the charter of the company stipulates some other percentage or value;
(dd) To make decisions on amendments of and additions to the charter of the company;

(e) To approve annual financial statements;
(g) To make decisions on redemption of more than ten (10) per cent of the total number of shares
of each class already sold;
(h) To consider and deal with breaches by members of the Board of Management and inspect ors
which cause loss to the company and its shareholders;
(i) To make decisions on re-organization and dissolution of the company;
(k) To decide the budget or the total remuneration, bonuses and other benef it s of t he Board of
Management and of the Inspection Committee;
(l) To approve the internal management rules, and the operational rules of the Board of
Management and of the Inspection Committee;
(m) To approve the list of independent auditing companies, and t o dec ide o n an independent
auditor to conduct inspection of activities of the company, and t o remove t he independ ent
auditor when considered necessary;
(n) Other rights and obligations in accordance with this Law and the charter of the company.
Article 139 Meeting of General Meeting of Shareholders
1. The General Meeting of Shareholders shall convene annual meetings once per year. In ad dition t o
such annual meetings, the General Meeting of Shareholders may convene extraordinary meetings.
The location of meetings of the General Meeting of Shareholders shall be determined as the location
where the chairman [of the meeting] attends the meeting and must be in the territory of Vietnam.
2. The General Meeting of Shareholders must hold its annual meeting within four months from t he end
of the f inancial year. Unless otherwise stipulated in the charter of the company, the Board of
Management may extend the time-limit for holding an annual meeti ng of t he General Meeting of
Shareholders where necessary, but not beyond six months from the end of the financial year.
3. An annual meeting of the General Meeting of Shareholders shall debat e and pass t he following
issues:
(a) Annual business plan of the company;
(b) Annual f inancial statements;
(c) Report of the Board of Management regarding management by and operational results of t he
Board of Management and each member of the Board of Management;
(d) Report of the Inspection Committee regarding business results of the company [and/or]
operational results of the Board of Management and the director or general director;
(dd) Report on self -assessment of operational results of the Inspection Committee and of
inspectors;
(e) Amount of dividend payable on each class of share;

(g) Other matters within its authority.
Article 140 Convening meeting of General Meeting of Shareholders
1. The Board of Management shall convene annual and extraordinary meetings of the General Meeting
of Shareholders. The Board of Management shall convene an extraordinary meeting of the General
Meeting of Shareholders in the following cases:
(a) The Board of Management considers that it is necessary to do s o in the interests of the
company;
(b) The number of the remaining members of the Board of Management or of t he Ins pec tion
Committee is less than the minimum number of members required by law;
(c) Upon request by a shareholder or a group of shareholders as stipulated in article 115.2 of t his
Law;
(d) Upon demand by the Inspection Committee;
(dd) In other cases as stipulated by law and in the charter of the company.
2. Unless otherwise stipulated in the charter of the company, the Board of Management must convene
a meeting of the General Meeting of Shareholders within thirty (30) days from the date on whic h t he
event stipulated in clause 1(b) above occurs or from the date of receipt of a request for convening a
meeting as stipulated in clauses 1(c) and 1(d) above. If the Board of Management fails to convene a
meeting of the General Meeting of Shareholders as stipulated, the chairman of the Board of
Management and members of the Board of Management must c ompens at e f or any loss t o t he
company.
3. Where the Board of Management fails to convene a meeting of the General Meeting of Shareholders
as stipulated in clause 2 above, within thirty (30) days thereafter, the Inspection Committee shall, in
place of the Board of Management, convene a meeting of the General Meeting of S hareholders in
accordance with this Law. If the Inspection Committee fails to convene a meeting as stipulated, t he
Inspection Committee must compensate for any loss to the company.
4. Where the Inspection Committee fails to convene a meeting as stipulated in clause 3 of this art ic le,
the shareholder or group of shareholders stipulated in article 115.2 of this Law has the right to
represent the company to convene a meeting of the General Meeting of Shareholders in accordanc e
with this Law.
5. The convenor of a meeting of the General Meeting of Shareholders must carry out t he f ollowing
work:
(a) To prepare a list of shareholders entitled to attend the meeting;
(b) To provide information and deal with complaints relating to the list of shareholders;
(c) To prepare the program and agenda of the meeting;
(d) To prepare documents for the meeting;

(dd) To draf t a resolution of the General Meeting of Shareholders in accordance with the proposed
agenda of the meeting; a list and details of candidates in the case of election of members of
the Board of Management or inspectors;
(e) To determine the time and venue of the meeting;
(g) To send a notice of invitation to the meeting to each shareholder entitled to attend the meeting
in accordance with this Law;
(h) Other work serving the meeting.
6. The expenses for convening and conducting a meeting of the General Meeting of Shareholders as
stipulated in clauses 2, 3 and 4 of this article shall be reimbursed by the company.
Article 141 List of shareholders entitled to attend meeting of General Meeting of Shareholders
1. The list of shareholders entitled to attend a meeting of the General Meeting of Shareholders is
prepared based on the register of shareholders of the company. The list of shareholders ent itled t o
attend a meeting of the General Meeting of Shareholders shall be prepared no earlier than t en (10)
days prior to the date on which the notice of invitation to the meet ing of t he General Meeting of
Shareholders is sent, if the charter of the company does not stipulate a shorter time-limit.
2. The list of shareholders entitled to attend a meeting of the General Meeting of S hareholders shall
include the full name, contact address, nationality and serial number of the personal legal document
in respect of shareholders being individuals; name, enterprise code number or serial number of t he
organizational legal document, and head of f ice address in respect of shareholders being
organizations; and number of shares of each class and number and dat e of regist ration of each
shareholder.
3. Shareholders have the right to inspect, consult, make an extract of and c opy names and c ontac t
addresses of shareholders on the list of shareholders entitled to attend a meet ing of t he General
Meeting of Shareholders; and to request correction of wrong information or addition of nec es sary
inf ormation about themselves in the list of shareholders entitled to attend a meeting of t he General
Meeting of Shareholders. The manager of the company must promptly provide inf ormation in t he
register of shareholders, and must amend or supplement any wrong informat ion at t he req uest of
shareholders; and must be responsible to compensate for any loss from failure to provide or failure to
provide promptly and accurately inf ormation in the register of shareholders as requested. The
sequence and procedures f or requesting inf ormation in the register of shareholders shall be in
Article 142 Program and agenda of meeting of General Meeting of Shareholders
1. The convenor of a meeting of the General Meeting of Shareholders must prepare the pro gram and
agenda of the meeting.
2. A shareholder or group of shareholders stipulated in article 115.2 of this Law may recommend it ems
to be included in the agenda of a meeting of the General Meeting of Shareholders. The
recommendation must be made in writing and be sent to the company no later t han t hree wo rking
days prior to the date of opening, unless the charter of the company stipulates some other time-limit.
The recommendation must specify the name of shareholder(s), the number of shares of each c lass
of shareholder(s) and the items recommended to be included in the agenda.

3. Where the convenor of a meeting of the General Meeting of Shareholders ref uses the
recommendation stipulated in clause 2 of this article, the convenor must prov ide a writ t en reply
specifying the reasons no later than two working days prior to the date of opening of t he meet ing .
The convenor is only permitted to refuse such recommendation in one of the following cases:
(a) The recommendation is not sent in accordance with clause 2 of this article;
(b) The item recommended does not f all within the decision-making authority of the General
Meeting of Shareholders;
4. The convenor of a meeting of the General Meeting of Shareholders must acc ept and inc lude t he
recommendations stipulated in clause 2 above into the draft program and agenda f or t he meet ing,
except in the cases stipulated in clause 3 above; the recommendation shall be added officially to t he
program and agenda for the meeting if the General Meeting of Shareholders so agrees.
Article 143 Invitations to meeting of General Meeting of Shareholders
1. The convenor of a meeting of the General Meeting of Shareholders shall send a notice of invitation to
all shareholders on the list of shareholders entitled to attend the meeting no lat er t han twent y o ne
(21) days prior to the date of opening, unless the charter of the company does not stipulate a longer
time-limit. The notice of invitation must contain the name, head of fice addres s, ent erpris e code
number; name and contact address of the shareholder, time and location of the meeting, and ot her
requirements applicable to attendees.
2. The notice of invitation to the meeting must be sent by a method guaranteed t o reach t he c ontac t
addresses of shareholders and must be published on the website of the company ; if t he company
considers it necessary, [the notice] shall be published in a central or local daily newspaper in
3. The notice of invitation must be accompanied by the following documents:
(a) The program of the meeting, documents to be used in the meeting and draf t res olution f or
each matter in the program;
(b) Voting slips.
4. Where the company has its own website, the sending of documents of the meeting enclosed with the
notice of invitation stipulated in clause 3 above may be replaced by the publication of s ame o n t he
website of the company. In this case, the notice of invitation must specif y where and how to
download documents.
Article 144 Exercise of the right to attend meeting of General Meeting of Shareholders
1. A shareholder [or] an authorized representative of a shareholder being an organization may attend a

meeting in person, or authorize one or more other organizations or individuals in writing t o at tend a
meeting or may attend a meeting in any of the forms stipulated in clause 3 below.
2. The authorization for an organization or individual to attend a meeting of t he General Meeting of

Shareholders must be made in writing. Written authorization must be made in accordance wit h t he
civil law and must specify the name of the organization or individual authorized and t he number of
shares f or which there is authorization. When registering to attend a meeting of the General Meeting

of Shareholders, the organization or individual authorized to attend the meeting must present t he
written authorization prior to entering the meeting room.
3. A shareholder shall be deemed to attend and vote at a meeting of the General Meeting of
Shareholders in the following cases:
(a) Such shareholder attends and votes in person at the meeting;
(b) Such shareholder authorizes another organization or individual to attend and vote at the
meeting;
(c) Such shareholder attends and votes [at a meeting] via an online conference, or by casting an
electronic vote or by other electronic forms;
(d) Such shareholder sends his or her voting slip to the meeting by mail, by fax or email;
(dd) Such shareholder sends his or her voting slip by other means stipulated in the c harter of t he
company.
Article 145 Conditions for conducting meeting of General Meeting of Shareholders
1. A meeting of the General Meeting of Shareholders shall be conducted where the number of attending
shareholders represents more than fifty (50) per cent of the total number of voting slips. The specif ic
percentage shall be stipulated in the charter of the company.
2. Where a meeting is not able to be conducted for the first time because the c ondition st ipulat ed in
clause 1 of this article is not satisfied, the notice of invitation to the second meet ing must be s ent
within thirty (30) days from the date of the intended opening of the first meeting, unless ot herwise
stipulated in the charter of the company. The second meeting of the General Meeting of
Shareholders shall be conducted where the number of attending shareholders represents thirty three
(33) or more per cent of the total number of voting slips. The specific percentage shall be st ipulat ed
in the charter of the company.
3. Where the second meeting is not able to be conducted because the condition stipulated in c lause 2
of this article is not satisfied, the notice of invitation to the third meeting must be sent wit hin t wenty
(20) days from the date of the intended opening of the second meeting, unless otherwise s tipulat ed
in the charter of the company. The third meeting of the General Meeting of Shareholders s hall be
conducted irrespective of the total number of voting slips of shareholders attending the meeting.
4. Only the General Meeting of Shareholders may make decisions on change of the agenda
accompanying the notice of invitation to the meeting as stipulated in article 142 of this Law.
Article 146 Procedures for conducting and voting at a meeting of General Meeting of Shareholders
Unless otherwise stipulated in the charter of the company, the procedures for conducting and v oting at a
meeting of the General Meeting of Shareholders are as follows:
1. Prior to the time of opening of a meeting, procedures shall be carried out f or regis tration of
shareholders attending the meeting of the General Meeting of Shareholders;
2. The election of the chairman, secretary and vote-counting committee [of a meeting] shall be
stipulated as follows:

(a) The chairman of the Board of Management shall act as chairman or authorize a member of the
Board of Management to act as chairman of meetings of the General Meeting of Shareholder
which are convened by the Board of Management; if the chairman is absent or is not
temporarily able to work, the remaining members of the Board of Management shall elect one
of them to act as the chairman of the meeting on the principle of majority; if they cannot elect a
person to act as chairman, the head of the Inspection Committee shall arrange for the General
Meeting of Shareholders to elect the chairman of the meeting, and the person with the highes t
number of votes shall act as the chairman of the meeting;
(b) Except for the case stipulated in sub-clause (a) above, the person who signed t he doc ument
convening the meeting of the General Meeting of Shareholders shall arrange for the General
Meeting of Shareholders to elect a chairman of the meeting, and the person with t he highest
number of votes shall act as the chairman of the meeting;
(c) The chairman shall elect one or more persons to act as secretary of the meeting;
(d) The General Meeting of Shareholders shall elect one or more persons t o t he vot e-count ing
committee on the proposal of the chairman of the meeting;
3. The program and agenda of the meeting must be passed by the General Meeting of Shareholders in
the opening session. The program must specify the time [duration] applicable t o each is sue in t he
agenda f or the meeting;
4. The chairman has the right to take necessary and reasonable measures to direct the conduct of t he
meeting in an orderly manner, correctly in accordance with the program as p assed, and s o t hat it
ref lects the wishes of the majority of attendees;
5. The General Meeting of Shareholders shall discuss and vote on each issue in t he agenda f or t he
meeting. Voting shall be conducted by votes which agree, which do not agree, and abstentions. The
chairman shall announce the results of the voting counts immediately p rior t o the c losing of t he
meeting, unless otherwise stipulated in the charter of the company;
6. Any shareholder or person authorized to attend a meeting who arrives af ter the opening of the
meeting shall still be registered and has the right to participate in voting immediately af ter
registration; in such case, the effectiveness of any item which was previously voted on s hall not be
af f ected;
7. The convenor or the chairman of a meeting of the General Meeting of Shareholders has the following
rights:
(a) To require all persons attending the meeting to be [security] checked or subject to other lawf ul
and reasonable security measures;
(b) To request a competent agency to maintain order during the meeting; to expel from a meeting
of the General Meeting of Shareholders any person who fails to comply wit h t he right of the
chairman to control the meeting, who intentionally disrupts order or prevents normal pro gress
of the meeting or who fails to comply with a request to undergo a security check ;
8. The chairman has the right to adjourn a meeting of the General Meeting of Shareholders f or whic h
suf f icient attendees have registered f or a period of no more than three working days f rom the
proposed date of opening of the meeting and may only adjourn a meeting or change the locat ion of
the meeting in the following cases:

(a) The location for the meeting has insufficient suitable seating for all of the attendees;
(b) The communication means at the location of the meeting do not ensure the attending
shareholders participate, discuss and vote [at the meeting];
(c) There is an attendee who obstructs the meeting or disrupts order, and there is a d anger t hat
the meeting might not be conducted fairly and lawfully.
9. If the chairman adjourns or suspends a meeting of the General Meeting of Shareholders contrary t o
the provisions in clause 8 of this article, the General Meeting of Shareholders s hall elec t anot her
person from the attendees to replace the chairman in conducting the meeting unt il it s c omplet ion ;
and all resolutions passed at such meeting shall be effective.
Article 147 Form of passing of resolutions of General Meeting of Shareholders
1. The General Meeting of Shareholders shall pass resolutions which fall wit hin it s p ower by way of
voting in a meeting or collecting written opinions.
2. Unless otherwise stipulated in the charter of the company, a resolution of t he General Meeting of
Shareholders on the following matters must be passed by way of voting in a meeting of the General
Meeting of Shareholders:
(a) Amendment of or addition to contents of the charter of the company;
(b) Developmental direction of the company;
(c) Classes of shares and total number of shares of each class;
(d) Election, removal or discharge of members of the B oard of Management and Ins pect ion
Committee;
(dd) Decision on any investment or sale of assets valued at thirty five (35) or more per cent of t he
total value of assets recorded in the most recent financial statements of the company, ex cept
where the charter of the company stipulates some other percentage or value;
(e) Approval of the annual financial statements;
(g) Re-organization or dissolution of the company.
Article 148 Conditions for passing resolutions of General Meeting of Shareholders
1. A resolution on the following matters shall be passed if it is agreed b y a number of s hareholders

representing sixty f ive (65) or more per cent of the total number of voting slips of all attending
shareholders, except in the case prescribed in clauses 3, 4 and 6 below; the s pecif ic percent age
shall be stipulated in the charter of the company:
(a) Classes of shares and the total number of shares of each class;
(b) Change of lines of business and business sectors;
(c) Change of the organizational and managerial structure of the company;

(d) Investment project or sale of assets valued at thirty five (35) or more per cent of the total value
of assets recorded in the most recent financial statements of the company, except where t he
charter of the company stipulates some other percentage or value;
(dd) Re-organization or dissolution of the company;
(e) Other matters as stipulated in the charter of the company.
2. Resolutions shall be passed when they are agreed by a number of shareholders owning more t han
f if ty (50) per cent of the total number of voting slips of all attending shareholders, except in the cases
stipulated in clauses 1, 3, 4 and 6 of this article; the specific percentage shall be s tipulated in t he
3. Unless otherwise stipulated in the charter of the company, voting to elect members of t he B oard of
Management and of the Inspection Committee must be implemented by the method of c umulative
voting, whereby each shareholder has as its total number of votes the total number of shares it owns
multiplied by the number of members to be elected to the Board of Management or t he Ins pect ion
Committee, and each shareholder has the right to accumulate all or part of its total votes f or one o r
more candidates. Persons to be elected as members of the Board of Direc tors o r inspec tors are
determined on the basis of a descending vote count, starting with the c andidat e wit h t he highest
number of votes until the number of members required by the company charter have been elected. If
there are two or more candidates who obtain the same number of votes for being the last member of
the Board of Management or the Inspection Committee, such member shall be elected amongst t he
number of candidates having an equal number of votes or selected in accordance wit h t he crit eria
stated in the regulations on election or the charter of the company.
4. Where a resolution is passed by way of collection of written opinions, a res olution of t he General
Meeting of Shareholders [is deemed] passed when it is agreed by a number of shareholders owning
more than f ifty (50) per cent of the total votes of all shareholders having the voting right. The specif ic
percentage shall be stipulated in the charter of the company.
5. Resolutions of the General Meeting of Shareholders must be notified t o s hareholders ent itled t o
attend a meeting of the General Meeting of Shareholders within fifteen (15) d ay s f rom t he d ate of
approval thereof. If the company has its own website, the res olut ions may be p ublished o n t he
website of the company instead.
6. A resolution of the General Meeting of Shareholders on any item which results in an adverse change
of rights and obligations of a preference shareholder [is only deemed] passed if it is ag reed by t he
number of attending preference shareholders of the same type owning seventy five (75) or more per
cent of the total number of pref erence shares of such type or if it is agreed by the pref erence
shareholders of the same type owning seventy five (75) or more per c ent of t he t ot al number of
pref erence shares of such type if such resolution is passed by way of collection of written opinions.
Article 149 Authority and procedures for collection of written opinions in order to pass resolutions of
General Meeting of Shareholders
Unless otherwise stipulated in the charter of the company, the authority and procedures f or collect ion of
written opinions of shareholders in order to pass a resolution of the General Meeting of S hareholders is
implemented in accordance with the following provisions:
1. The Board of Management has the right to collect written opinions of shareholders in order to pass a
resolution of the General Meeting of Shareholders if it is considered necessary in the interests of t he
company; except for the case prescribed in article 147.2 of this Law.

2. The Board of Management shall prepare written opinion f orms, a draf t of the resolution of the
General Meeting of Shareholders, and other documents explaining the draf t resolut ion , and s hall
send same to all shareholders with voting rights no later than ten (10) d ays prior t o t he t ime-limit
within which they are required to return their written opinion forms, if the charter of the company does
not stipulate a longer time-limit. The preparation of a list of shareholders s ending writ ten opinion
f orms shall be implemented in accordance with articles 141.1 and 141.2 of this Law. The request f or
and method of sending written opinion forms and enclosed documents s hall be implemente d in
accordance with article 143 of this Law;
3. The written opinion form must contain the following basic details:
(a) Name, head office address, and enterprise code number;
(b) Purpose of collecting written opinions;
(c) Full name, contact address, nationality, and serial number of the personal legal d ocument in
of the organizational legal document, and head office ad dress of a s hareholder being an
organization or full name, contact address, nationality, serial number of t he personal legal
document of the representative of a shareholder being an organisation; number of s hares of
each class and number of votes of the shareholder;
(d) Issue on which it is necessary to obtain opinions for passing;
(dd) Voting options, comprising agreement, non-agreement, or abstention;
(e) Time-limit within which the completed written opinion form must be returned to the company;
(g) Full name and signature of the chairman of the Board of Management.
4. A shareholder may send a completed written opinion form to the company by mail, f ax o r email in
(a) If sent by mail, the completed written opinion form must bear the signature of the shareholder
being an individual, and of the authorized representative or of the legal representat iv e of t he
shareholder being an organization. The written opinion form which is returned to the company
must be enclosed in a sealed envelope and must not be opened by any person prior t o vot e -
counting;
(b) If sent by fax or email, the written opinion form which is sent to t he c ompany mus t b e kept
conf idential until the time of counting of votes;
(c) Any written f orm which is returned to the company after the expiry of the time-limit stated in the
written opinion form or any form which has been opened in the case of sending b y mail and
disclosed in the case of sending by fax or electronic mail shall be invalid. Written opinion forms
which are not returned shall be deemed to be forms not participating in the vote;
5. The Board of Management shall organize the vote-counting and prepare the minutes of vote-
counting in the presence and under supervision of the Inspection Committee or of shareholders not
holding managerial positions in the company. The minutes of vote-counting shall contain the
f ollowing basic details:

(b) Purpose of collection of written opinions and issues on which it is necessary to obtain writ t en
opinions in order to pass a resolution;
(c) Number of shareholders with total numbers of votes having participated in the vote, classifying
the votes into valid and invalid and method of sending votes and including an appendix being a
list of the shareholders having participated in the vote;
(d) Total number of votes for, against and abstentions on each issue voted on;
(dd) Matters which have been passed and corresponding percentage of votes for passing;
(e) Full names and signatures of the chairman of the Board of Management and of t he p erson
who supervised the vote-counting, and of the person who counted votes.
The members of the Board of Management, the person who counted v ot es and t he pers on who
supervised the vote-counting are jointly liable for the truthfulness and acc uracy of t he minutes of
vote-counting, and are jointly liable for any loss arising from a decision whic h is p assed d ue t o an
untruthf ul or inaccurate counting of votes;
6. The minutes of vote-counting and the resolution must be sent to shareholders within a t ime-limit of
f if teen (15) days from the date of completion of the v ote -c ounting. If t he company has it s o wn
website, the minutes of vote-counting and the resolution may be published on t he webs it e o f t he
company instead;
7. Completed written opinion forms, the minutes of vote-counting, the resolution which was passed and
any related documents sent with all of the written opinion forms shall be archived at the head office of
the company;
8. A resolution which is passed by way of collection of written opinions of shareholders shall have t he
same validity as a resolution passed in a meeting of the General Meeting of Shareholders.
Article 150 Minutes of meeting of General Meeting of Shareholders
1. Meetings of the General Meeting of Shareholders shall be minuted and may be sound rec orded or
recorded and stored in other electronic forms. Minutes must be prepared in V ietnames e and may
also be in a f oreign language, and must contain the following main details:
(b) Time and location of the meeting of the General Meeting of Shareholders;
(c) Program and agenda of the meeting;
(d) Full names of the chairman and secretary;
(dd) Summary of developments of the meeting and of opinions stated in the General Meeting of
Shareholders on each matter set out in the meeting agenda;
(e) Number of shareholders and total number of votes of attending shareholders, and an appendix
listing registered shareholders and representatives of shareholders attending the meeting wit h
the corresponding number of shares and number of votes;

(g) Total number of votes for each issue voted on, specifying the method of voting, the number of
valid or invalid votes, the number of votes for, against, and abstentions; and the corresponding
percentage of the total number of votes of shareholders attending the meeting;
(h) Matters which were passed and corresponding percentage of votes for passing;
(i) Full names and signatures of the chairman and the secretary.
If the chairman or the secretary refuses to sign the minutes of the meeting, the minut es s hall
take ef f ect if the minutes are signed by all other attending members of the Board of
Management and contain all the contents stipulated in this clause. The minutes of the meeting
must specify the refusal to sign the minutes of the meeting by the chairman or the secretary.
2. The minutes of a meeting of the General Meeting of Shareholders must be completed and approv ed
prior to the closing of the meeting.
3. The chairman and secretary of the meeting or any other person signing the minutes of meeting must
be jointly liable for the truthfulness and accuracy of the contents of the minutes.
4. Minutes prepared in Vietnamese and minutes prepared in a f oreign language shall be of equal legal
validity. In the case of any difference in the contents of the minutes between the Vietnamese text and
the f oreign language text, the contents in the Vietnamese text shall prevail.
5. The minutes of a meeting of the General Meeting of Shareholders must be sent to all s hareholders
within a time-limit of fifteen (15) days from the date of the closing of t he meeting. The minut es of
vote-counting may be published on the website of the company instead.
6. The minutes of a meeting of the General Meeting of Shareholders, the appendix listing the
shareholders registered to attend the meeting, the resolutions passed and any relat ed doc uments
sent together with the notice of invitation to attend the meeting must be archived at the head office of
the company.
Article 151 Demand for cancellation of resolutions of General Meeting of Shareholders
Within ninety (90) days from the date of receipt of a resolution or the minutes of a meeting of t he General
Meeting of Shareholders or the minutes of the results of vote-counting by way of written opinions f rom t he
General Meeting of Shareholders, a shareholder or a group of shareholders stipulated in art icle 115.2 of
this Law have the right to request a court or an arbitrator to consider and cancel a resolution or part of t he
contents of a resolution of the General Meeting of Shareholders in the following cases:
1. The sequence and procedures for convening the meeting and issuing the decision of t he General
Meeting of Shareholders seriously breached this Law and the charter of the company, except in t he
case stipulated in article 152.2 of this Law;
2. The content of the resolution breaches the law or the charter of the company.
Article 152 Effectiveness of resolutions of General Meeting of Shareholders
1. A resolution of the General Meeting of Shareholders is effective as from the date it is pas sed or as
f rom the effective date stated in such resolution.

2. Any resolution of the General Meeting of Shareholders which is passed by one hund red (100) p er
cent of the total voting shares is lawful and effective even when the sequence and p rocedures f or
convening the meeting and passing such resolution breaches this Law and the charter of the
company.
3. If a shareholder or a group of shareholders requests a court or an arbitrator to cancel a resolution of

the General Meeting of Shareholders as stipulated in article 151 of this Law, such resolution remains
ef f ective until the decision repealing such resolution issued by the court or arb itrat or t akes ef f ect,
except where temporary emergency measures are applied pursuant to a decision of a c ompet ent
agency.
Article 153 Board of Management
1. The Board of Management is the body managing the company and has f ull authority to make
decisions in the name of the company and to exercise the rights and perform the obligations of t he
company, except for those within the authority of the General Meeting of Shareholders.
2. The Board of Management has the following rights and obligations:
(a) To make decisions on medium term developmental strategies and plans, and on annual
business plans of the company;
(b) To recommend the classes of shares and total number of shares of each class which may be
of fered;
(c) To make decisions on selling unsold shares within the number of shares of each class whic h
may be offered for sale; to make decisions on raising additional funds in other forms;
(d) To make decisions on the selling price of shares and bonds of the company;
(dd) To make decisions on redemption of shares in accordance with the provisions in articles 133.1
and 133.2 of this Law;
(e) To make decisions on investment plans and investment projects within the authority and limits
stipulated by law;
(g) To make decisions on solutions for market expansion, marketing and technology;
(h) To approve contracts f or purchase, sale, borrowing, lending and other contracts and
transactions valued at thirty five (35) or more per cent of the total value of assets record ed in
the most recent financial statements of the company, except where the charter of the company
stipulates some other percentage or value, and contracts and transactions within the decision-
making authority of the General Meeting of Shareholders as stipulated in clause 2(d) of article
138 and clauses 1 and 3 of article 167 of this Law;
(i) To elect, remove or discharge the chairman of the Board of Management; to appoint, remov e,
and sign contracts or terminate contracts with the director or the general director and other key
managers of the company as stipulated in the charter of the company; to make dec is ions on
salaries, remuneration, bonuses and other benefits of such managers; to appoint aut horized
representatives to participate in the members' council or general meeting of s hareholders of
other companies, and to make decisions on the level of remuneration and o ther b enef its of
such persons;

(k) To supervise and direct the director or general director and other managers in t heir wo rk of
conducting the day-to-day business of the company;
(l) To make decisions on the organizational structure and the rules on internal management of
the company, to make decisions on the establishment of subsidiary companies, branches and
representative of f ices and the capital contribution to or purchase of shares of other
enterprises;
(m) To approve the agenda and contents of documents for the meetings of the General Meeting of
Shareholders; to convene meetings of the General Meeting of Shareholders or to obtain
opinions in order for the General Meeting of Shareholders to pass resolutions;
(n) To submit annual financial statements to the General Meeting of Shareholders;
(o) To recommend the dividend rates to be paid, to make decisions on the time-limit and
procedures f or payment of dividends or f or dealing with losses incurred in the business
operations;
(p) To recommend re-organization or dissolution of the company, or to request bankruptcy of t he

company;
(q) Other rights and obligations in accordance with this Law and the charter of the company.
3. The Board of Management passes resolutions and decisions by way of voting at a meeting,
collecting written opinions or otherwise as stipulated in the charter of the company. Each member of
the Board of Management has one vote.
4. If a resolution or decision is passed by the Board of Management c ontrary to law, c ontrary t o a

resolution of the General Meeting of Shareholders or contrary to the provisions of the charter of t he
company, thereby causing loss to the company, the members who agreed to pass such resolution or
decision shall be personally jointly liable for such resolution or decision and they must c ompens ate
the company for loss; any member who opposed the passing of such resolution or decision s hall be
relieved f rom liability. In such case, a shareholder of the company has the right to request a court t o
suspend implementation of or to rescind the above-mentioned resolution or decision.
Article 154 Term of office and numbers of members of Board of Management
1. The Board of Management shall have three to eleven (11) members. The chart er o f t he company
shall specify the number of members of the Board of Management.
2. The term of office of members of the Board of Management shall not exceed f ive y ears; and t hey
may be re-elected f or an unlimited number of terms. One individual shall only be elected as an
independent member of the Board of Management of one company f or no more than two
consecutive terms of office..
3. If the term of office of all members of the Board of Management expires at the s ame t ime, s uch
members shall continue to be members of the Board of Management until new members are elect ed
as replacements and take over the work, unless otherwise stipulated in the charter of the company.
4. The charter of the company shall specify the number, rights, obligations, methods of o rganizat ion
and co-ordination of activities of independent members of the Board of Management.

Article 155 Organizational structure, criteria and conditions for acting as member of Board of Management
1. A member of the Board of Management must satisfy the following criteria and conditions:
(b) Have professional expertise and experience in business management or in t he s ect ors or
business lines of the company and not necessarily be a shareholder of the company, unles s
otherwise stipulated in the charter of the company;
(c) A member of the Board of Management may concurrently be a member of the board of
management of another company;
(d) In the case of a State owned enterprise as prescribed in article 88.1(b) of t his Law and of a
subsidiary of a SOE as prescribed in article 88.1 of this Law, a member of the Board of
Management must not be a person with a f amily relationship with the director or general
director or other managers of the company, or with a manager or a person with the authority to
appoint managers of the parent company.
2. Unless otherwise stipulated in the law on securities, an independent member of the Board of
Management stipulated in article 137.1(b) of this Law must satisf y the f ollowing criteria and
conditions:
(a) Not being a person currently working for the company, the parent company or any subsidiary
company of the company; or not being a person having worked for the company, t he p arent
company or any subsidiary company of the company for at least the three preceding years;
(b) Not being a person who is currently entitled to salary or remuneration f rom t he c ompany ,
except f or allowances which members of the Board of Management are entitled to in
accordance with regulations;
(c) Not being a person whose spouse, natural or adoptive parent, child, adopted child or sibling is
a major shareholder of the company, or a manager of the company or its subsidiary company;
(d) Not being a person directly or indirectly owning at least one per cent of the total voting shares
in the company;
(dd) Not being a person who was a member of the Board of Management or the Inspection
Committee of the company for at least five preceding years, except in the case of appointment
f or two (2) consecutive terms.
3. An independent member of the Board of Management must notify the Board of Management t hat
such member no longer satisfies all the criteria and conditions stipulated in clause 2 above; and such
member shall automatically no longer be an independent member of the Board of Management from
the date of failure to satisfy all the criteria and conditions. The Board of Management must provide a
notice of the case where an independent member of the Board of Management no longer satisfies all
the criteria and conditions at the next General Meeting of Shareholders or must convene a meeting
of the General Meeting of Shareholders to elect an additional member or to replace the independent
member of the Board of Management within six months from the date of receipt of the notice from the
related independent member of the Board of Management.

Article 156 Chairman of Board of Management
1. The chairman of the Board of Management shall be elected, removed or discharged by the Board of
Management among members of the Board of Management.
2. The chairman of the Board of Management of a public company or a s hareho lding c ompany as
prescribed in article 88.1(b) of this Law is not permitted to act concurrently as the director or general
director.
3. The chairman of the Board of Management has the following rights and obligations:
(a) To prepare working plans and programs of the Board of Management;
(b) To prepare the program, agenda and documents for meetings of the Board of Management; to
convene, preside over and chair meetings of the Board of Management;
(c) To organize f or resolutions and decisions of the Board of Management to be passed;
(d) To monitor the implementation of resolutions and decisions of the Board of Management;
(dd) To chair meetings of the General Meetings of Shareholders;
(e) Other rights and obligations in accordance with this Law and the charter of the company.
4. Where the chairman of the Board of Management is absent or is not able to perform his or her duties,
he or she must authorize in writing another member to exercise the rights and perform the obligations
of the chairman of the Board of Management in accordance with t he principles s tipulated in t he
charter of the company. Where no person is authorized or the chairman of the Board of Management
dies, goes missing [is lost], is temporarily detained in prison, serves a prison sentence, is subject to
administrative measures in a compulsory drug rehabilitation establishment or compulsory educational
court f rom assuming a certain position or practising or doing certain work then the remaining
members shall select one of them to hold the position of the chairman of the Board of Manageme nt
in accordance with the principle that the majority of the remaining members agree until there is a new
decision of the Board of Management.
5. If considered necessary, the Board of Management may decide to appoint a secretary f or the
company. The secretary of the company has the following rights and obligations:
(a) To assist the convention [convening] of meetings of the General Meeting of Shareholders or of
the Board of Management; to record minutes of meetings;
(b) To assist members of the Board of Management to exercise their assigned rights and perform
their assigned obligations;
(c) To assist the Board of Management to apply and implement the corporate governance
principles;
(d) To assist the company to build up the relationship with the shareholders and protect the lawful
rights and interests of the shareholders; to comply with the obligations to provide and disclos e
inf ormation and comply with administrative procedures.

(dd) Other rights and obligations as stipulated in the charter of the company.
Article 157 Meetings of Board of Management
1. The chairman of the Board of Management shall be elected at the init ial meet ing of t he B oard of
Management within a time-limit of seven working days from the date of completion of the election of
the Board of Management. Such meeting shall be convened and chaired by the member who obtains
the highest number of votes or the highest percentage of votes. If two or more members obt ain t he
same highest number of votes or the same highest percentage of votes, the members shall elect by
a majority vote to select a person amongst them to convene the meeting.
2. Meetings of the Board of Management shall be held at least once every quarter and may be held on
an extraordinary basis.
3. The chairman of the Board of Management shall convene a meeting of the Board of Management in
the f ollowing circumstances:
(a) Upon request of the Inspection Committee or an independent member of the Board of
Management;
(b) Upon request of the director or general director or upon request of at least f ive other
managers;
(c) Upon request of at least two members of the Board of Management;
(d) In other circumstances as stipulated in the charter of the company.
4. The request prescribed in clause 3 above must be made in writing and must specify t he object iv e s
and issues which require to be discussed, and decisions within the authority of the Board of
Management.
5. The chairman of the Board of Management must convene a meeting of the Board of Management
within a time-limit of seven working days from the date of receipt of a request stipulated in c lause 3
above. If a meeting of the Board of Management is not convened pursuant to a request, the
chairman of the Board of Management shall be liable for loss caused to the c ompany; t he p erson
making the request has the right to convene a meeting of the Board of Management in p lace of t he
chairman of the Board of Management.
6. The chairman of the Board of Management or the convenor of the meeting of the Board of
Management must send a notice of invitation to attend the meeting at least three working days p rior
to the date of meeting, unless otherwise stipulated in the charter of t he c omp any. The no t ic e of
invitation must specify the time and location of the meeting, the agenda and issues to be disc us sed,
and decisions. The notice must enclose documents to be used at the meeting and vot ing f orms f or
the members.
The notice of invitation to a meeting of the Board of Management may be sent in the form of a let t er
of invitation, or by telephone, fax, electronic mail or other method stipulat ed in t he chart er of t he
company and guaranteed to reach the contact address of each member of the Board of Management
as registered with the company.
7. The chairman of the Board of Management or the convenor shall send t he no tice of invit ation t o
attend the meeting together with the enclosed documents to all inspectors in the same manner as to
the members of the Board of Management.

Inspectors have the right to attend meetings of the Board of Management and to discuss is sues b ut
not to vote.
8. A meeting of the Board of Management shall be conducted where three quarters (3/4) or more of the
total members are in attendance. If the meeting convened in accordance with this clause d oes not
have suf ficient attending members as stipulated, it shall be convened for a second time within seven
days from the intended date of the first meeting, except where the charter of the company stipulat es
some other shorter time-limit. In this case, the meeting shall be conducted if more t han half of the
number of members of the Board of Management attend the meeting.
9. A member of the Board of Management shall be deemed to attend and vote at t he meeting in t he
f ollowing cases:
(a) Such member attends and votes at the meeting in person;
(b) Such member authorizes another person to attend and vote at the meeting in accordance with
clause 11 of this article;
(c) Such member attends and votes [at the meeting] via an o nline c onf erenc e , by cas ting an
electronic vote or by other electronic forms;
(d) Such member sends his or her written vote to the meeting by mail, fax or email;
(dd) Such member sends his or her written vote by other means stipulated in t he c hart er o f the
company.
10. Where a written vote is sent to the meeting by mail, it must be enclosed in a s ealed envelope and
delivered to the chairman of the Board of Management at least one hour prior to the opening of t he
meeting. Written votes shall be opened only in the presence of all persons attending the meeting.
11. Members must participate in all meetings of the Board of Management. A member may aut horize
another person to attend and vote at a meeting if the majority of members of the Board of
Management agrees.
12. Except where the charter of the company provides for some other higher percentage, a resolution o r
decision of the Board of Management shall be passed when it is agreed by the majority of the
members in attendance; in the case of a tied vote, the final decision shall be made in f avour of t he
vote of the chairman of the Board of Management.
Article 158 Minutes of meetings of Board of Management
1. All meetings of the Board of Management must be minuted and may be sound recorded [or] recorded
and stored in other electronic forms. Minutes must be prepared in Vietnamese and may also be in a
f oreign language, and must include the following main contents:
(a) Name, address of the head office, and enterprise code number;
(b) Time and location of meeting;
(c) Purpose, program and agenda of meeting;

(d) Full names of each member attending the meeting or other persons authorized t o at tend t he
meeting and method of attending the meeting ; f ull names of members not attending the
meeting and reasons for not attending;
(dd) Issues discussed and voted on in the meeting;
(e) Summary of opinions of each member attending the meeting during the process of the
meeting;
(g) Result of voting, indicating members who agree, who do not ag ree and who abst ain f rom
voting;
(h) Approved matters and corresponding percentage of votes for passing;
(i) Full names and signatures of the chairman [of the meeting] and the person writing the minutes,
except for the case stipulated in clause 2 of this article.
2. If the chairman or the person writing the minutes ref uses to sign the minutes of the meeting, but t he
minutes are signed by all other attending members of the Board of Management and contain all t he
contents prescribed in sub-clauses (a) to (h) of clause 1 above, then the minutes are effective.
3. The chairman, the person writing the minutes and the persons signing the minutes must be
responsible f or the accuracy and truthf ulness of the minutes of meetings of the Board of
Management.
4. Minutes of meetings of the Board of Management and documents used in t he meet ings mus t b e
archived at the head office of the company.
5. Minutes prepared in Vietnamese and foreign languages shall have equal validity. In the cas e of any
dif ference in the contents of the minutes between the Vietnamese text and the foreign language text ,
the contents in the Vietnamese text shall prevail.
Article 159 Rights of members of Board of Management to be provided with information
1. A member of the Board of Management may demand the director, deputy director or general director,
deputy general director, and other managers in the company provide information and documents on
the f inancial situation and business operations of the company and of units in the company.
2. A manager receiving such a demand must provide all inf ormation and documents promptly ,
completely and accurately as demanded by a member of the Board of Management. The s equence
and procedures for requesting for and providing information shall be as stipulated in t he c harter of
the company.
Article 160 Discharge, removal, replacement and addition of members of Board of Management
1. A member of the Board of Management shall be discharged by the General Meeting of Shareholders
in the f ollowing cases:
(a) Failure to satisfy the criteria and conditions stipulated in article 155 of this Law;
(b) Upon written notice of resignation which is approved;

2. A member of the Board of Management shall be removed in the following cases:
(a) Failure to participate in activities of the Board of Management f or s ix consec utive months ,
except for cases of force majeure;
(b) Other cases as stipulated in the charter of the company.
3. When considered necessary, the General Meeting of Shareholders shall decide to replace any
member of the Board of Management; or discharge or remove any member of the Board of
Management in the cases other than those stipulated in clauses 1 and 2 of this article.
4. The Board of Management must convene a meeting of the General Meeting of Shareholders to elect
additional members of the Board of Management in the following cases:
(a) The number of members of the Board of Management is reduced by more than one third (1/ 3)
of the number stipulated in the charter of the company. In this case, the Board of Management
must convene a meeting of the General Meeting of Shareholders within sixty (60) d ay s f rom
the date on which the number of members is reduced by more than one third (1/3);
(b) The number of independent members of the Board of Management is reduced and does not
ensure the percentage stipulated in article 137.1(b) of this Law.
(c) Except for the cases stipulated in sub-clauses (a) and (b) ab ove, t he General Meeting of
Shareholders shall elect new members of the Board of Management to rep lac e members of
the Board of Management who have been removed or discharged at the next meeting.
Article 161 Auditing Committee
1. The Auditing Committee is the prof essional body of the Board of Management. The Auditing
Committee consists of two or more members. The chairman [head] of the Auditing Committ ee must
be an independent member of the Board of Management. Other members of the Auditing Committee
must be non-executive members of the Board of Management.
2. The Auditing Committee passes a decision by way of voting in a meeting, by way of c ollection of
written opinions or by other methods as stipulated in the charter of the company or in the operational
regulations of the Auditing Committee. Each member of the Auditing Committee shall have one vote.
Unless the charter of the company or the operational regulations of the Auditing Committee stipulate
a higher percentage, a decision of the Auditing Committee [is deemed] passed if it is agreed by t he
majority of attending members; in the case of a tied vote, the final decision shall be made in favour of
the vote of the chairman of the Auditing Committee.
3. The Auditing Committee has the following rights and obligations:
(a) To supervise the truthfulness of the financial statement s of t he c ompany and any of ficial
announcement relating to the financial results of the company;
(b) To conduct a review of the internal control and risk management system;
(c) To review related person transactions within the authority of approval of the Board of
Management or the General Meeting of Shareholders and to make recommendations on
transactions requiring approval of the Board of Management or the General Meeting of
Shareholders;

(d) To supervise the internal auditing division of the company;
(dd) To recommend an independent auditing company, the level of remunerat ion and relev ant
terms in the contract signed with the auditing company to the Board of Management f or it s
approval before submitting same to the annual General Meeting of Shareholders for approval;
(e) To monitor and assess the independence and objectiveness of the auditing company and t he
ef f iciency of the auditing process, especially where the company uses non-auditing services of
the auditing party;
(g) To conduct supervision in order to ensure that the company complies with all laws and
requirements of administrative agencies and other internal rules of the company.
Article 162 Director or general director of company
1. The Board of Management shall appoint one member of the Board of Management or employ
another person as the director or general director.
2. The director or general director manages the day-to-day business operat ions of t he c ompany; is
supervised by the Board of Management, and is responsible to the Board of Management and before
the law f or the exercise of his or her delegated powers and the performance of his or her d elegat ed
obligations.
The term of the director or general director shall not exceed five years and [ a direct or or g eneral
director] may be re-appointed for an unlimited number of terms.
3. The director or general director has the following powers and obligations:
(a) To make decisions on all issues relating to the day-to-day business operations of the company
which do not fall within the authority of the Board of Management;
(b) To organize the implementation of resolutions and decisions of the Board of Management;
(c) To organize the implementation of business plans and investment plans of the company;
(d) To make recommendations with respect to the plan on organizational structure and t he rules
on internal management of the company;
(dd) To appoint, remove and discharge managerial positions in t he c ompany, except f or t hose
under the scope of authority of the Board of Management;
(e) To make decisions on salary and other benefits for employees of t he company, inc luding
managers who may be appointed by the director or general director;
(g) To recruit employees;
(h) To make recommendations on plans on payment of dividends and on dealing with b usiness
losses;
(i) Other powers and obligations in accordance with provisions of law, the charter of the company
and resolutions and decisions of the Board of Management.

4. The director or general director must manage the day-to-day business operations of t he company
strictly in accordance with law, the charter of the company, the employment contract signed wit h t he
company and the resolutions and decisions of the Board of Management. Where such management
is inconsistent with this clause and causes loss to the company, the director or general director s hall
be responsible before the law and shall compensate the company for the loss.
5. In the case of a public company and a State owned enterprise as prescribed in article 88.1(b) of t his
Law and a subsidiary of a SOE as prescribed in article 88.1 of this Law, the director or general
director must satisfy the following criteria and conditions:
(b) Not be a person with a family relationship with a manager of the enterprise or an ins pector of
the company and the parent company; or with the representative of the State capital portion or
the representative of the capital portion of the enterprise in the company and the parent
company;
(c) Must have prof essional qualif ications and experience in business management of the
company.
Article 163 Salary, remuneration, bonuses and other benefits of members of Board of Management and
director or general director
1. The company is entitled to pay remuneration and bonuses to members of the Board of Management
and salary and bonuses to the director or general director and other managers based on the
business results and efficiency.
2. Unless otherwise stipulated in the charter of the company, the salary , remunerat ion, bonuses and
other benefits of members of the Board of Management and the director or general director are p aid
in accordance with the following provisions:
(a) Members of the Board of Management are entitled to remuneration for work and bonuses.
Remuneration for work is calculated on the basis of the working days which are neces sary t o
f ulf il the duties of the members of the Board of Management and the daily rate of
remuneration. The Board of Management shall estimate the remuneration for each member on
the principle of agreement. The total amount of remuneration and bonuses f or t he B oard of
Management shall be decided by the General Meeting of Shareholders at the annual meeting;
(b) Members of the Board of Management are entitled to reimbursement of expenses f or meals,
accommodation and travel and other reasonable expenses in order to f ulf il t heir d elegat ed
duties;
(c) The director or general director is entitled to salary and bonuses. The salary and b onuses of
the director or general director shall be decided by the Board of Management.
3. The remuneration of each member of the Board of Management and the salary of t he d irec tor o r
general director and other managers shall be included in the business expenses of the c ompany in
accordance with the law on corporate income tax, and shall be presented as a separate item in t he
annual f inancial statements of the company and must be reported to the General Meeting of
Shareholders at its annual meeting.

Article 164 Public disclosure of relevant interests
If the charter of the company does not provide any other stricter provisions, the public disclosure of relevant
interests and related persons of a company shall be implemented in accordance with the f ollowing
provisions:
1. The company must gather and update a list of related persons of the company in ac cordance wit h
article 4.23 of this Law and corresponding contracts and transactions between them and the
company.
2. Members of the Board of Management, inspectors, the director or general director and other
managers of the company must declare their relevant interests to the company, including:
(a) Names, enterprise code numbers, head office addresses, business lines of ent erpris es in
which they are owners or own a capital contribution portion or shares ; rat io of s uch c apit al
contribution portion or shares and time in which they became owners or owned suc h capital
contribution portion or shares;
(b) Names, enterprise code numbers, head office addresses, business lines of ent erpris es in
which their related persons are owners or jointly own or separately own a capital contribut ion
portion or shares of more than ten (10) per cent of charter capital.
3. The declaration stipulated in clause 2 above must be made within seven working days from the date
of the relevant interest arising; any amendment and addition shall be notified to the company wit hin
seven working days from the date of amendment or addition;
4. The retention, public disclosure, review, extract and copy of the list of related persons and relev ant
interests as declared in accordance with clauses 1 and 2 above are implemented as follows:
(a) The company must report such list to the General Meeting of Shareholders at its annual
meeting;
(b) The list shall be retained at the head office of the enterprise; in necessary cases, part or all of
the contents of the list mentioned above may be retained at branches of the company;
(c) Shareholders, authorized representatives of shareholders, members of the Board of

Management or the Inspection Committee, the director or general director, and other
managers have the right to review, make an extract and copy part or all of the contents
declared;
(d) The company must facilitate the persons stipulated in sub-clause (c) above to ac cess, s ight ,
make an extract and copy the list of related persons and relevant interests in the f ast est and
most convenient manner, and the company is not permitted to prevent t hem f rom o r c ause
dif ficulties to them in exercising such rights. The sequence and p rocedures f or rev iewing,
making an extract and copying the declarations of related persons and relevant interests shall
be implemented in accordance with the charter of the company.

5. [Each] member of the Board of Management and the director or general director must, if perf orming
any f orm of work on behalf of himself or herself or on behalf of others within the sc ope of b usiness
operations of the company, report the nature and content of that work to the Board of Management
and Inspection Committee and shall only be permitted to perform [this work ] if t he majorit y of t he
remaining members of the Board of Management approve; if the work is performed without reporting
or without the approval from the Board of Management, all income arising from s uch act ivity s hall
belong to the company.
Article 165 Responsibilities of managers of company
1. Each member of the Board of Management, the director or general director or other manager [ of a
company] has the following responsibilities:
(a) To exercise his or her delegated powers and perf orm his or her delegated obligations in
accordance with this Law, other relevant laws, the charter of the company, and the resolutions
of the General Meeting of Shareholders;
(b) To exercise his or her delegated powers and perform his or her delegated obligations honestly
and prudently to the best of his or her ability in order to assure the maximum legitimate
interests of the company;
(c) To be loyal to the interests of the company and shareholders; not to abuse his or her pos it ion
and power and not to use information, know-how, business opportunities and other as set s of
the company for his or her own personal benefit or f or the benefit of o ther o rganizations o r
individuals;
(d) To promptly notify the company fully and accurately of the items prescribed in article 164. 2 of
this Law;
(dd) Other responsibilities in accordance with this Law and the charter of the company.
2. Any member of the Board of Management, the director or general director and any o ther manager
prescribed in clause 1 above shall be personally or jointly liable to pay compensation f or lost
benef its/interests and to return benefits received and to pay compensation for all loss to the company
and to third parties.
Article 166 Right to initiate legal action against members of Board of Management, director or general
director
1. A shareholder or a group of shareholders owning at least one per cent of t he number of o rdinary
shares has the right, on its own behalf or on behalf of the company, to initiate a legal action regarding
personal liability or joint liability against a member of the Board of Management o r t he direct or or
general director and to apply for ref und of benefits or p ayment of c ompens ation f or loss to t he
company or to others in the following cases [if such member of the B oard of Management or t he
director or general director]:
(a) Commit a breach of the responsibilities of managers of the company in accordance with article
165 of this Law;
(b) Fail to implement or f ail to implement completely and promptly their assigned rights and
obligations or implement same contrary to the provisions of law, the charter of the company o r
resolutions and decisions of the Board of Management;

(c) Abuse his or her position and power and use information, know-how, business o pport unities
and other assets of the company for their own personal benef it or f or t he benef it of o ther
organizations or individuals;
(d) Other cases in accordance with law and the charter of the company.
2. The sequence and procedures for initiating a legal action is implement ed in ac cordance wit h t he
provisions of the law on civil proceedings. The expenses for initiating a legal action by a shareholder
or group of shareholders in the name of the company shall be included in expenses of the company ,
except where a petition initiating legal action is rejected.
3. A shareholder or group of shareholders stipulated in this article has the right to review, cons ult and
make an extract of necessary information pursuant to a decision of a court or arbitrator or during t he
process of initiation of a legal action.
Article 167 Approval of contracts and transactions between company and related persons
1. The General Meeting of Shareholders or the Board of Management shall approv e cont ract s and
transactions between the company and the following related persons:
(a) Shareholders or authorized representative of shareholders being organizations holding more

than ten (10) per cent of the ordinary shares of the company, and their related persons;
(b) Members of the Board of Management, director or general director and their related persons;
(c) Enterprises to be declared by members of the Board of Management, inspectors, the d irector
or general director and other managers of the company as stipulated in art ic le 164. 2 of t his
Law.
2. Any contract or transaction stipulated in clause 1 above and valued at less than thirt y f ive (35) p er
cent of the total value of assets recorded in the most recent financial statement s of the company, or a
smaller percentage or value as stipulated in the charter of the company, shall be ap proved by t he
Board of Management. In this case, the person representing the company t o s ign t he c ontract or
transaction must notify members of the Board of Management and/or inspectors of entities involved
in such contract or transaction, and enclose the draf t of the contract or main contents of the
transaction. The Board of Management shall make a decision on approval of the contract or
transaction within fifteen (15) days from the date of receipt of the notice, except where the charter of
the company stipulates some other time-limit; members of the Board of Management wit h int erests
relating to the parties to the contract or transaction shall not have the right to vote.
3. The General Meeting of Shareholders shall approve the following contracts and transactions:
(a) Contracts and transactions other than those stipulated in clause 2 of this article;
(b) Contracts for and transactions of borrowing, lending or sale of assets valued at more than ten
(10) per cent of the total value of assets of the enterprise stated in the most recent f inanc ial
statements between the company and shareholders owning fifty one (51) or more per c ent of
the total number of voting shares or their related persons.
4. Where a contract or transaction is approved in accordance with clause 3 above, the person
representing the company to sign the contract or transaction must notify the Board of Management
and inspectors of entities involved in such contract or transaction, and enclose the draft cont ract o r
the notice of main contents of the transaction. The Board of Management s hall submit t he draf t

contract or transaction or explain the main contents of the contract o r t ransact ion at t he General
Meeting of Shareholders or collect written opinions from shareholders. In such case, s hareholders
with interests relating to the parties to the contract or transaction do not have the right t o v ot e; and
the contract or transaction shall be approved in accordance with clauses 1 and 4 of article 148 of this
Law, unless otherwise stipulated in the charter of the company.
5. Contracts and transactions shall be invalid pursuant to a decision of a court and shall be dealt with in
accordance with law if they were signed contrary to the provisions of this article. The person s igning
the contract or transaction, shareholders, members of the Board of Management or t he d irec tor o r
general director concerned must jointly compensate for the los s c aus ed and must ret urn t o t he
company any benefits gained from the performance of such contract and transaction.
6. The company must publicize relevant contracts and transactions in accordance with relevant laws.
Article 168 Inspection Committee
1. The Inspection Committee shall have from three to five inspectors. The term of an inspector shall be
not more than five years, and [inspectors] may be re-elected for an unlimited number of terms.
2. The head of the Inspection Committee shall be elected by the Inspection Committee from among the
inspectors; the election, removal or discharge shall be implemented o n t he p rinciple of majority
[vote]. The rights and obligations of the head of the Inspection Committee shall be stipulated in t he
charter of the company. More than half of the inspectors of the Inspection Co mmit tee must reside
permanently in Vietnam. The head of the Inspection Committee must have a univ ers it y or hig her
graduation degree in one of the following specialities: economics, finance, accounting, auditing, law,
business management or in a specialized faculty relating to the business activities of the enterprise ,
except where the charter of the company provides for other higher standards.
3. If the term of office of [all] inspectors expires at the same time and if inspectors of t he new t erm of
of fice have not been elected, the inspectors of the term which has expired shall retain their rights and
obligations until inspectors of the new term of office are elected and take over the duties.
Article 169 Criteria and conditions for inspectors
1. Inspectors must satisfy the following criteria and conditions:
(a) Not f alling within the category of entities stipulated in article 17.2 of this Law;
(b) Having been trained in one of the following specialities: ec onomics , f inance, ac count ing,
auditing, law, business management or in a specialized faculty appropriate f or t he bus ines s
activities of the enterprise;
(c) Not be a person with a family relationship with any member of the Board of Management, t he
director or general director or other managers;
(d) Not being a manager of the company; and is not required to be a shareholder or an employee
of the company, unless otherwise stipulated in the charter of the company;
(dd) Other criteria and conditions in accordance with other relevant laws and t he c harter of t he
company.
2. In addition to the criteria and conditions prescribed in clause 1 above, inspectors of a public company
or of a SOE as prescribed in article 88.1(b) of this Law must not be a person with a f amily

relationship with an enterprise manager of the company and the parent company; or with the
representative of the capital portion of the enterprise or the representative of the State capital in t he
parent company and in the company.
Article 170 Rights and obligations of Inspection Committee
1. To supervise the Board of Management and the director or general director with respect to
management and administration of the company.
2. To inspect the reasonableness, legality, truthf ulness and prudence in management and
administration of business activities; and the systematic nature, consistency and appropriateness of
statistic and accounting work and preparation of financial statements.
3. To evaluate the completeness, lawfulness and truthfulness of reports on business, half -yearly and
annual f inancial statements and reports on evaluation of the management of the Board of
Management; and to submit evaluation reports at annual meetings of the General Meeting of
Shareholders. To review contracts and transactions with related persons which f all within the
authority of approval of the Board of Management or the General Meeting of S hareholders and to
make recommendations on contracts and transactions requiring approval of the Board of
Management or the General Meeting of Shareholders.
4. To review, inspect and evaluate the effectiveness and efficienc y of s yst ems of int ernal cont rol,
internal audit, risk management and early warning of the company.
5. To review books of account, records of accounts and other document s of t he c ompany, and t he
management and administration of the operations of the company if deemed necessary or pursuant
to a resolution of the General Meeting of Shareholders or as requested by a shareholder or group of
shareholders as stipulated in article 115.2 of this Law.
6. Upon request by a shareholder or group of shareholders as stipulated in article 115.2 of this Law, the
Inspection Committee shall carry out an inspection within a period of seven working days fro m t he
date of receipt of the request. The Inspection Committee must submit a report on the issues required
to be inspected to the Board of Management and the requesting shareholder or group of
shareholders within a period of fifteen (15) days from t he dat e of c omplet ion of t he inspec tion.
Inspections stipulated in this clause may not disrupt the normal activities of the Board of
Management and shall not interrupt the administration of the business operations of the company.
7. To recommend to the Board of Management or the General Meeting of Shareholders any chan ges
and improvements in the organizational and management structure, supervision and administ ration
of the business operations of the company.
8. Upon discovery that a member of the Board of Management or a director or general direc tor is in
breach of the provisions in article 165 of this Law, to give immediate written notice t o t he B oard of
Management and request the person in breach to cease the breach and take meas ures t o remedy
any consequences.
9. To attend and participate in discussions at meetings of the General Meeting of Shareholders and of
the Board of Management and other meetings of the company.
10. To use an independent consultant or the internal audit department of the company t o p erf orm t he
assigned duties.

11. The Inspection Committee may consult the Board of Management prior t o s ubmis sion of rep orts ,
conclusions and recommendations to the General Meeting of Shareholders.
12. Other rights and obligations as stipulated in this Law, the charter of the company and resolutions of
the General Meeting of Shareholders.
Article 171 Rights of Inspection Committee to be provided with information
1. Documents and information must be sent to inspectors at the same time and in the same manner as
to members of the Board of Management, comprising:
(a) Notice of invitation to a meeting, opinion forms to members of the Board of Management and
enclosed documents;
(b) Resolutions, decisions and minutes of meetings of the General Meeting of Shareholders o r of
the Board of Management;
(c) Reports of the director or general director for submission to the Board of Management or other
documents issued by the company.
2. Inspectors have the right to access files and documents of the company retained in the head of fice,
branches and other locations; have the right to access the workplace of managers and employees of
the company during working hours.
3. The Board of Management, members of the Board of Management, the director or general direct or
and other managers must provide in full, accurately and on t ime all inf ormat ion and doc uments
relating to the management, administration and business operations of the company upon d emand
by inspectors or by the Inspection Committee.
Article 172 Salaries, remuneration, bonuses and other benefits of inspectors
Unless otherwise stipulated in the charter of the company, salaries , remuneration, bonuses and ot her
benef its of inspectors are implemented in accordance with the following provisions:
1. Inspectors shall be paid salaries, remuneration, bonuses and other benef its as decided by the
General Meeting of Shareholders. The General Meeting of Shareholders shall d ecide on t he t otal
salaries, remuneration, bonuses and other benefits and annual operating budget of t he Ins pect ion
Committee;
2. Inspectors shall be reimbursed f or expenses f or meals, accommodation, travel and f or use of

independent consultancy services at reasonable rates. The total amount of such remunerat ion and
expenses shall not exceed the total annual operating budget of the Inspection Committee approved
by the General Meeting of Shareholders, unless otherwise decided by the General Meeting of
Shareholders;
3. Salaries and operating costs of the Inspection Committee shall be included in business expenses of
the company in accordance with the law on corporate income tax and other relevant laws, and must
be presented in a separate item in the annual financial statements of the company.
Article 173 Responsibilities of inspectors
1. To comply with law, the charter of the company, resolutions of the General Meeting of Shareholders
and professional ethics during the exercise of delegated rights and obligations.

2. To exercise delegated rights and perform delegated obligations honestly, prudently and to the best of
their ability in order to assure the maximum lawful interest of the company.
3. To be loyal to the interests of the company and shareholders; not to abuse their positions and
powers and not to use inf ormation, know-how, business opportunities and other assets of the
company for their personal benefit or for the benefit of other organizations or individuals.
4. Other obligations as stipulated in this Law and in the charter of the company.
5. In the case of breaching the provisions in clauses 1, 2, 3 or 4 above causing loss to the company or
to other persons, inspectors must bear personal or joint responsibility for compensating for such loss.
Other income and benef its which an inspector gains f rom the breach must be returned to the
company.
6. Where it is discovered that an inspector commits a breach during the exercise of delegated rig hts
and obligations, a written notice thereof must be sent to the Inspection Committ ee, req uesting t he
person in breach to cease the breach and remedy any consequences.
Article 174 Removal and discharge of inspectors
1. The General Meeting of Shareholders shall remove an inspector in the following cases:
(a) No longer meeting the criteria and conditions to be an inspector as stipulated in article 169 of
this Law;
(b) Written resignation notice which is approved;
2. The General Meeting of Shareholders shall discharge an inspector in the f ollowing cases:
(a) Failing to fulfil his or her assigned duties or work;
(b) Not exercising his or her rights and obligations in six consecutive months, except for cases of
f orce majeure;
(c) Committing a number of serious breaches of the obligations of inspectors as stipulated in t his
Law and the charter of the company;
(d) Other cases pursuant to a resolution of the General Meeting of Shareholders.
Article 175 Submission of annual reports
1. At the end of a f iscal year, the Board of Management must submit the f ollowing reports to the
General Meeting of Shareholders:
(a) Report on the business results of the company;
(b) Financial statements;
(c) Report on the evaluation of the management and administration of the company;

(d) Evaluation report of the Inspection Committee.
2. In respect of shareholding companies which are required by law to be audited, the annual f inancial
statements of such shareholding companies must be audited b ef ore s ubmiss ion t o t he General
Meeting of Shareholders for consideration and approval.
3. The reports stipulated in sub-clauses (a) to (c) of clause 1 above mus t be s ent t o t he Ins pec tion
Committee for evaluation no later than thirty (30) days before the opening day of the annual meeting
of the General Meeting of Shareholders unless otherwise stipulated in the charter of the company.
4. The reports stipulated in sub-clauses 1 to 3 above, evaluation reports of the Inspection Co mmit tee
and audited reports must be retained at the head office of the company no later than t en (10) d ay s
bef ore the opening day of the annual meeting of the General Meeting of Shareholders if the chart er
of the company does not provide for any other longer period. A shareholder o wning s hares in a
company for a consecutive [period of] at least one year has the right to review d irectly t he rep orts
stipulated in this article by himself or herself, or together with a lawyer or an acc ountant o r audit or
who has a practising certificate.
Article 176 Public disclosure of information
1. Shareholding companies must submit annual financial reports as approved by the General Meeting
of Shareholders to competent State agencies in accordance with the law on account ing and ot her
relevant laws.
2. A shareholding company shall publish the following information on its website:
(a) Charter of the company;
(b) Curricula vitae, educational qualifications and work experience of members of t he Board of
Management, inspectors, and the director or general director of the company;
(c) Annual f inancial reports approved by the General Meeting of Shareholders;
(d) Annual reports on evaluation of operational results of the Board of Management and the
Inspection Committee.
3. A shareholding company not being a listed company must provide a notice to the BRO in the localit y
where the company has its head office no later than three working days after it obtains or c hanges
the f ollowing information: full name, nationality, passport number, contact address, number of shares
and classes of shares in respect of a shareholder being a f oreign individual; name, enterprise c ode
number, head office address, number of shares and classes of shares in respect of a s hareholder
being a f oreign organization and full name, nationality, passport number and contact addres s of t he
authorized representative in respect of a shareholder being a foreign organization.
4. Public companies shall publicly announce and disclose information in accordance wit h t he law on
securities. Shareholding companies stipulated in article 88.1(b) of this Law shall publicly announce
and disclose information in accordance with sub-clauses (a), (c), (dd) and (g) of art icle 109. 1 and

CHAPTER 6
Partnerships
Article 177 Partnerships
1. A partnership is an enterprise in which:
(a) There must be at least two members being co-owners of t he company jointly c onduct ing
business under one common name (hereinafter ref erred to as unlimited liabilit y part ners) . In
addition to unlimited liability partners, the company may also have limited liability partners12;
(b) Unlimited liability partners must be individuals who shall be liable f or t he obligations of t he
company to the extent of all of their assets;
(c) Limited liability partners may be organizations or individuals and shall only b e liable f or t he
debts of the company to the extent of the amount of capital they have undertaken to contribute
to the company.
2. A partnership shall enjoy legal entity status as from the date of issuance of the ERC.
3. Partnerships may not issue any type of securities.
Article 178 Capital contribution and issuance of capital contribution certificates
1. Unlimited liability partners and limited liability partners must contribute capital in full and o n time as
undertaken.
2. Where an unlimited liability partner f ails to contribute capital in f ull and on time as undertaken
causing loss to the company, such partner must be liable to compensate the company for the loss.
3. Where a limited liability partner fails to contribute capital in f ull and on time as undertaken, the unpaid
amount shall be considered as a debt owed by that partner to the company; in this case, the relevant
limited liability partner may be excluded from the partnership in accordance wit h a d ec is ion of t he
Partners' Council.
4. Upon payment in full of capital contribution as undertaken, the partner shall be issued with a c apit al
contribution certificate. A capital contribution certificate must contain the following main details:
(a) Name, enterprise code number, head office address of the partnership;
(b) Charter capital of the partnership;
(c) Name, contact address, nationality and serial number of the personal legal document in
respect of a partner being an individual; name, enterprise code number or serial number of the
organizational legal document, and head of f ice address in respect of a partner being an
organization; type of partner;
(d) Value of capital contribution and types of assets contributed as capital by such partner;
(dd) Number and date of issuance of the capital contribution certificate;
12
Allens footnote: The literal translation is "capital contributing partners".

(e) Rights and obligations of the holder of the capital contribution certificate;
(g) Full names and signatures of the owner of the capital contribution certificate and of unlimited
liability partners of the company.
5. Where a capital contribution certificate is lost, damaged or otherwise ruined, the partner shall be re-
issued by the company with a capital contribution certificate.
Article 179 Assets of partnership
Assets of a partnership comprise:
1. Assets contributed as capital by partners the ownership of which has been transf erred to the
company;
2. Assets created in the name of the company;
3. Assets derived from business activities conducted by unlimited liability partners in t he name of t he
company and from business activities of the company conducted by unlimited liability partners in their
personal name;
4. Other assets as stipulated by law.
Article 180 Restrictions of rights applicable to unlimited liability partners
1. An unlimited liability partner is not allowed to act as the owner of a p rivat e ent erpris e , and is not
permitted to act as an unlimited liability partner of another partnership unless he or she obt ains the
consent from other unlimited liability partners.
2. An unlimited liability partner is not allowed to conduct in his or her own name or in the name of
another person the same line of business as the partnership for his or her p ers onal b enef it o r t o
serve the benefit of another organization or individual.
3. An unlimited liability partner is not allowed to transfer all or part of its portion of capital contribution in
the company to another organization or individual without the consent of o ther unlimit ed liability
partners.
Article 181 Rights and obligations of unlimited liability partners
1. An unlimited liability partner has the following rights:
(a) To attend meetings, to discuss and vote on matters of the company; each unlimited liabilit y
partner shall have one vote or another number of votes as s tipulated in t he c harter of t he
company;
(b) To conduct business in the name of the company in the lines of business of the c ompany; t o
negotiate and sign contracts, transactions or covenants [MOUs] on terms that such unlimited
liability partner considers most favourable for the company;

(c) To use assets of the company to conduct business in the lines of business of the company ; if
such partner advances his or her own money in order to conduct business for the company, he
or she shall be entitled to require the company to ref und the principal and interest at the
market rate of interest on the amount of principal advanced;
(d) To claim compensation from the company for loss arising from the business ac tivit ies within
scope of his or her delegated duties if such loss is not caused by a personal mistak e of s uch
partner;
(dd) To request the company and other unlimited liability partners to prov ide inf ormat ion on t he
business of the company; to inspect assets, books of account and o ther doc uments of t he
company where he or she considers necessary;
(e) To be distributed with profit in proportion to his or her ratio of capital contribution or as ag reed
in the charter of the company;
(g) Upon dissolution or bankruptcy of the company, to be distributed wit h t he remainder of t he

value of assets of the company in proportion to his or her ratio of capital c ontribution in t he
company unless the charter of the company provides for another ratio;
(h) Where an unlimited liability partner dies, his or her heir may enjoy the share of the value of the
assets in the company after deduction of debts and other property obligations for whic h s uch
partner is responsible. The heir may become an unlimited liability partner if the Partners'
Council so approves;
(i) Other rights in accordance with this Law and the charter of the company.
2. An unlimited liability partner has the following obligations:
(a) To manage and conduct business activities honestly, prudently to the best of his or her ab ilit y
in order to assure the best lawful interests of the company;
(b) To manage and conduct business activities strictly in accordance with law, the chart er of t he
company and resolutions and decisions of the Partners' Council; he or she shall be
responsible for compensation for loss caused by his or her b reac h of t he provision of t his
clause;
(c) Not to use the assets of the company for his or her p ers onal b enef it o r f or t he benef it of
another organization or individual;
(d) To return to the company any amount of money or assets received and compensate f or any
loss caused to the company in the case where he or she receives such money or assets f rom
the business activities of the company in the name of the company or in his or her name o r in
the name of another person, but fails to pay [such money or assets] to the company;
(dd) To be jointly liable to pay in full outstanding debts of the company in the case where the assets
of the company are insufficient for the discharge of its debts;
(e) To bear losses in proportion to his or her portion of capital contribution in the company or as
agreed in the charter of the company in the case where the company suffer losses d uring its
business;

(g) To submit regular truthful and accurate reports on his or her business operations and results to
the company on a monthly basis; to provide information on his or her business and business
results to any partner who so requests;
(h) Other obligations in accordance with this Law and the charter of the company.
Article 182 Partners' Councils
1. The Partners’ Council shall consist of all partners. The Partners' Council shall elect an unlimit ed
liability partner to be the chairman of the Partners' Council who may concurrently act as the d irector
or general director of the company, unless otherwise stipulated in the charter of the company.
2. An unlimited liability partner has the right to request that a meeting of the Partners' Council be
convened to discuss and resolve the business affairs of the company. The requesting part ner must
prepare the program, agenda and documents for the meeting.
3. The Partners' Council has the right to resolve all of business affairs of the company. Unless regulated
by the charter of the company, the decisions on the following issues shall require the agreement of at
least three-quarters of the total number of unlimited liability partners:
(a) Strategic direction for development of the company;
(b) Amendments of or additions to the charter of the company;
(c) Admission of a new partner;
(d) Approval f or an unlimited liability partner to withdraw f rom the company or decision on
exclusion of a partner;
(dd) Decisions on investment projects;
(e) Decisions on borrowing and raising capital in other forms or providing loans valued at fifty (50)
per cent or more of the charter capital of the company, unless a higher percentage is
stipulated in the charter of the company;
(g) Decisions on sales or purchases of assets valued equal to or more than the charter capital of
the company, unless a higher percentage is stipulated in the charter of the company;
(h) Approval of annual financial statements, total profit distributable and amount of p rofit to b e
distributed to each partner;
(i) Decisions on dissolution; or request for bankruptcy of the company.
4. Decisions on other matters not covered by clause 3 of this article shall be adopted by the agreement
of at least two-thirds (2/3) of the total number of unlimited liability partners; the specif ic perc entage
shall be stipulated in the charter of the company.
5. The right to vote of limited liability partners shall be subject to the provisions of t his Law and t he

Article 183 Convening meetings of Partners’ Council
1. The chairman of the Partners' Council may convene a meeting of the Partners' Council where
necessary or at the request of an unlimited liability partner. If the chairman of the Part ners’ Co uncil
does not convene a meeting at the request of an unlimited liability partner, such partner shall
convene a meeting.
2. A notice of invitation to a meeting of the Partners' Council may b e sent in t he f orm of a let t er of
invitation or by telephone, facsimile, electronic means or other methods stipulated in t he c harter of
the company. The notice must clearly stipulate the purpose, requirement and agenda of the meeting;
the program and location of the meeting and the name of the partner who requests to c onvene t he
meeting.
Discussion documents to be used to resolve the matters stipulated in article 182.3 of this Law mus t
be f orwarded to all the partners in advance; such prior period shall be stipulated in the charter of t he
company.
3. The chairman of the Partners’ Council or the requesting partner shall chair the meeting. The meeting
shall be recorded in the minutes, comprising the following main contents:
(a) Name, enterprise code number, head office address;
(b) Time and location of the meeting
(c) Purpose, program and agenda of the meeting;
(d) Full names of the chairman [of the meeting] and participant members of the meeting;
(dd) Opinions of the participant members;
(e) The passed resolutions and decisions, number of members v oting in f avour, against and
abstentions and main contents of such resolutions and decisions;
(g) Full names and signatures of the participant members.
Article 184 Management of business of partnership
1. Unlimited liability partners are legal representatives of the partnership and shall organize
management of the day-to-day business of the partnership. Any res t riction on unlimit ed liabilit y
partners with respect to the conduct of the day-to-day business of the partnership shall be ef f ective
against a third party only if such [third] party knows of such restriction.
2. In management of business activities of the partnership, unlimited liability part ners s hall allocat e
amongst themselves the tasks of management and control of the partnership.
Where a number of or all unlimited liability partners together carry out a number of business
operations, decisions shall be passed on the principle that they are approved by a majority.
Activities carried out by an unlimited liability partner beyond the scope of business ac tiv it ies of t he
partnership shall not fall within the scope of liability of the partnership, unles s s uch act ivities are
approved by the other partners.

3. The partnership may open an account or a number of accounts at banks. The Partners’ Council shall
appoint the partner authorized to deposit or withdraw money from such accounts.
4. The chairman of the Partners’ Council, director or general director has the following obligations:
(a) To manage and operate the day-to-day business activities of the partnership in the capacity of
an unlimited liability partner;
(b) To convene and organize meeting of the Partners' Council; to sign resolutions and decisions of
the Partners' Council;
(c) To allocate tasks, co-ordinate business activities among the unlimited liability partners;
(d) To organize, arrange and store fully and truthfully books of account, invoices, v ouchers and
other documents of the partnership in accordance with law;
(dd) To represent the partnership in the capacity of the person lodging the petition for resolution of
a civil matter, the defendant, the plaintiff or the person with related interests and obligations in
arbitration or court proceedings; and to represent the company to perf orm o ther rig hts and
obligations stipulated by law;
(e) Other obligations as stipulated in the charter of the partnership.
Article 185 Termination of status as unlimited liability partner
1. Status as an unlimited liability partner shall terminate in the following cases:
(a) Voluntarily withdrawing capital from the partnership;
(b) On death, or being missing or having his or her capacity for civil ac ts res t ricted o r lost or
having cognitive difficulties or difficulties with behavioural control;
(c) Having been excluded from the partnership;
(d) Serving a prison sentence or being prohibited by a court from practising or doing certain work
in accordance with law;
(dd) Other cases as stipulated in the charter of the partnership.
2. An unlimited liability partner is entitled to withdraw capital f rom the partnership if the Partners’
Council so agrees. In such case, the partner who wants to withdraw capital from the partnership must
give written notice of the capital withdrawal request no later than s ix months p rior t o t he date of
withdrawal. He or she may withdraw capital only at the end of the financial year af ter t he f inancial
report of such year has been approved.
3. An unlimited liability partner shall be excluded from the partnership in the following cases:
(a) Being unable to contribute capital or f ailing to contribute capital as undertaken af ter the
partnership makes its request for the second time;
(b) Breaching provisions of article 180 of this Law;

(c) Not carrying out business activities truthfully and prudently, or carrying out other inappropriat e
acts causing serious loss and damage to the interests of the partnership and other partners;
(d) Not properly performing the obligations of an unlimited liability partner.
4. In the case of termination of the status as partner of a partner who has his or her c apac it y f or c ivil
acts restricted or lost or has cognitive dif f iculties or dif f iculties with behavioural control, the
contributed capital of such partner shall be refunded fairly and equitably.
5. During a period of two years from the date of termination of status as an unlimited liability partner as
stipulated in sub-clauses (a), (c), (d) and (dd) of clause 1 above, such individual shall remain jointly
liable to the extent of all of his or her assets for any debts of the partnership arising prior to t he d ate
of termination of status as a partner.
6. Af ter termination of status as an unlimited liability partner, if the name of such partner has been used
as a part or all of the name of the partnership, such individual or his or her heir or legal
representative has the right to request the company to cease use of such name.
Article 186 Admission of new partners
1. A partnership may admit new unlimited liability partners or limited liability partners; admission of new
partners shall be approved by the Partners’ Council.
2. An unlimited liability partner or limited liability partner must contribute capital in full as undert aken t o
the partnership within f if teen (15) days f rom the date of approval, unless the Partners’ Council
decides on a different time-limit.
3. The new unlimited liability partner must be jointly liable for the debts and other property obligations of
the partnership to the extent of all his or her assets, unless such partner and o ther part ners hav e
otherwise agreed.
Article 187 Rights and obligations of limited liability partners
1. A limited liability partner has the following rights:
(a) To attend meetings of the Partners’ Council, to discus s and v ote o n amendments of and
additions to the charter of the partnership; amendments of and ad dit ions t o t he rights and
obligations of limited liability partners, on re-organization and dissolution of the partnership and
other contents of the charter of the partnership directly relating to his or her rights and
obligations;
(b) To be distributed with annual profit in proportion to his or her ratio of capital contribution in t he
charter capital of the partnership;
(c) To be provided with the annual financial report of the partnership; to request the chairman of
the Partners’ Council and the unlimited liability partners to provide complete and truthf ul
inf ormation on the business and business results of the partnership; to check books of
account, minutes, contracts, transactions, files and other documents of the partnership;
(d) To transf er his or her contributed capital in the partnership to another person;
(dd) To conduct business activities in the lines of business of the part nership in his o r her o wn
name or in the name of another person;

(e) To dispose of his or her contributed capital by way of bequest, gift, mortgage, pledge and other
f orms in accordance with law and the charter of the partnership; in the ev ent t hat he or s he
dies, his or her heir shall replace him or her as a limited liability partner of the partnership;
(g) To be distributed with part of the remainder of the value of assets of the partnership in
proportion to his or her ratio of capital contribution in the charter capital of the partnership upon
dissolution or bankruptcy of the partnership;
(h) Other rights in accordance with this Law and the charter of the partnership.
2. A limited liability partner has the following obligations:
(a) To be liable f or the debts and other property obligations of the partnership to the extent of his
or her contributed capital as undertaken;
(b) Not to manage the partnership, not to conduct business activ ities in the name of the
partnership;
(c) To comply with the charter of the partnership and resolutions and decisions of t he P art ners’
Council;
(d) Other obligations in accordance with this Law and the charter of the partnership.
CHAPTER 7
Private Enterprises
Article 188 Private enterprises
1. A private enterprise is an enterprise owned by one individual who shall be liable for all ac tivities of
the enterprise to the extent of all his or her assets.
2. Private enterprises may not issue any type of securities.
3. Each individual may only establish one private enterprise. The owner of a private enterprise must not
concurrently act as the head of a business household or an unlimited liability member of a
partnership.
4. Private enterprises are not permitted to contribute capital to establish or purchase shares or of capital
contribution portions in partnerships, limited liability companies or shareholding companies.
Article 189 Invested capital of private enterprise owners
1. The invested capital of the owner of a private enterprise shall be registered b y himself o r hers elf .
The owner of a private enterprise is obliged to register accurately the total invested capital, specifying
the amount of capital denominated in Vietnamese Dong, in freely convertible foreign currency, in gold
or in other assets; in respect of capital denominated in other assets, the types of asset, quantity and
residual value of each type of assets must be specified.

2. All capital and assets, including loans and leased assets, used for the b usiness operat ions of an
enterprise shall be recorded fully in its books of account and financial statements of the enterprise in
accordance with law.
3. In the course of operation, the owner of a private enterprise may increase or reduce the capital
invested in the business operations of the enterprise. The increase o r reduc tion of t he invest ed
capital of the private enterprise owner must be recorded fully in the books of account. The owner of a
private enterprise may only reduce the invested capital below the amount of invested capital
registered after registration with the BRO.
Article 190 Management of private enterprises
1. The owner of a private enterprise shall have total discretion in making all b usiness dec is ions of t he
private enterprise; and in deciding on the use of profit after payment of tax es and p erf ormance of
other f inancial obligations as stipulated by law.
2. The owner of a private enterprise may directly act as or employ another person to act as the direct or
or general director to manage and administer the business operations; in this case, the private
enterprise owner shall remain liable for all business activities of the private enterprise.
3. The owner of a private enterprise shall be the legal representative and shall repres ent t he priv ate
enterprise in the capacity of the person lodging the petition for resolution of a civil matter, the plaintiff,
the def endant, or the person having related interests and obligations in arbitration or court
proceedings, and represent the private enterprise to perf orm other rights and obligations in
Article 191 Lease-out of private enterprises
The owner of a private enterprise may lease out his or her whole private enterprise provided that a writ t en
notice and a notarized copy of the lease contract must be submitted to the BRO and the t ax of f ic e within
three working days from the effective date of the lease contract. During the term of the lease, the owner of
the private enterprise shall remain responsible before the law as the owner of the private ent erpris e. The
rights, obligations and responsibilities of the owner and the lessee with respect to the business activities of
the private enterprise shall be stipulated in the lease contract.
Article 192 Sale of private enterprises
1. The owner of a private enterprise may sell his or her private enterprise to another individual or
organization.
2. Af ter the private enterprise is sold, the owner of the private enterprise shall remain liable for all debts
and other property obligations of the private enterprise which arose prior to the date of transfer of the
enterprise, unless otherwise agreed by the private enterprise owner, the purchaser and credit ors of
the private enterprise.
3. The private enterprise owner and the purchaser of the private enterprise must comply with the
provisions of the law on labour.
4. The purchaser of the private enterprise must register any change to the owner of the private
enterprise in accordance with the provisions of this Law.

Article 193 Exercise of rights of the owner of a private enterprise in a number of special cases
1. If the owner of a private enterprise is subject to temporary imprisonment, serves a prison sentence or
is subject to administrative measures at a compulsory drug rehabilitation establishment or
compulsory educational establishment, then he or she shall authorize another person to exercise his
or her rights and discharge his or her obligations.
2. Where the owner of a private enterprise dies, then his or her heir or one of the heirs in ac cord anc e
with the will or in accordance with law shall be the owner of the private enterprise as agreed by s uch
heirs. If the heirs are unable to reach agreement, then they must register to convert the company o r
dissolve the private enterprise.
3. If the owner of a private enterprise dies without an heir, or if the heir ref uses to accept the inheritance
or is deprived of the right to inherit, then assets of the private enterprise shall be dealt with in
accordance with the civil law.
4. If the owner of a private enterprise has his or her capacity for c i vil act s res trict ed or lo st o r has
cognitive difficulties or difficulties with behavioural control, then the rights and obligations of s uch
owner are exercised via his or her representative.
5. If the owner of a private enterprise is prohibited by a court from practising or doing certain work within
the scope of business lines of the enterprise, the owner of the private enterpris e mus t t emporarily
suspend or terminate business in the relevant industries or trades pursuant to a decision of the court
or assign the private enterprise to another individual or organization.
CHAPTER 8
Corporate Groups
Article 194 Economic groups and corporations
1. An economic group or corporation in any economic sector means a gro up of c ompanies hav ing
relations with each other through ownership of shares, capital contribution portions or [through] other
[f orms of] association. Economic group or corporation is not a f orm of enterprise, does not have legal
entity status, and is not required to be registered for establishment in accordance with this Law.
2. An economic group or corporation shall have a parent company, subsidiary companies and ot her
member companies. The parent company, subsidiary companies and each member company in o ne
economic group or corporation shall have the same rights and obligations as applicable to
independent enterprises in accordance with law.
Article 195 Parent companies and subsidiary companies
1. A company is deemed to be the parent company of another company if it f alls into one of the
f ollowing cases:
(a) It owns more than f if ty (50) per cent of the charter capital or the total number of ordinary
shares of such [another] company;
(b) It has the right to directly or indirectly make decisions on appointment of t he majorit y or all
members of the Board of Management, the director or general director of such [another]
company;

(c) It has the right to make decisions on amendment of and addition to the charter of such
[another] company.
2. Subsidiary companies are not permitted to invest in purchase of shares in or contribute capital to t he
parent company. Subsidiary companies of the same parent company are no t p ermitt ed t o jointly
contribute capital or purchase shares at the same time in order to have mutual cross ownership.13
3. Subsidiary companies having the same parent company which is an enterprise with ownership of at
least sixty five (65) per cent of State capital are not permitted to jointly contribute capital or purchase
shares in another enterprise or in order to establish a new enterprise in accordance with this Law.
4. The Government shall provide detailed regulations on clauses 2 and 3 of this article.
Article 196 Rights, obligations and responsibilities of parent company to subsidiary company
1. Depending on the legal form of a subsidiary company, the parent company shall exercise it s right s
and perf orm its obligations as a member, owner or shareholder in the relat ion with t he s ubsidiary
company in accordance with the relevant provisions of this Law and other provisions of relevant laws.
2. Contracts, transactions and other relations between the parent company and a subsidiary c ompany
shall be made and performed independently and equally in accordance with the conditions applicable
to independent legal subjects.
3. Where the parent company interferes beyond the authority of the owner, member or shareholder and
compels a subsidiary company to conduct business operations inconsistently with normal business
practices or conduct non-profitable activities without reasonable compensation in a relev ant f isc al
year which causes loss to the subsidiary company, the parent company shall be responsible for such
loss.
4. The managers of the parent company which is responsible f or the interf erence compelling the
subsidiary company to conduct the business operations specified in clause 3 of this article are joint ly
liable with the parent company for such loss.
5. Where the parent company fails to compensate the subsidiary company in accordance with clause 3
of this article, the creditors or members or shareholders holding at least one per cent of t he chart er
capital of the subsidiary company may on their own behalf or on behalf of the s ubsidiary c ompany
require the parent company to compensate the subsidiary company.
6. Where the business operations ref erred to in clause 3 above and conducted by the subsidiary
company provide any benefit to another subsidiary company of the s ame p arent c ompany, s uch
benef icial subsidiary company and the parent company shall be jointly responsible for ret urning t he
benef it to the subsidiary company suffering loss.
Article 197 Financial statements of parent companies and subsidiary companies
1. At the end of a fiscal year, in addition to the statements and documents specified b y law, a p arent
company must prepare the following statements:
(a) Consolidated f inancial statements of the parent company in accordance with the law on
accounting;
13
Allens footnote: See the transitional provision article 219.

(b) General report on annual business results of the parent company and subsidiary companies;
(c) General report on management and administration of the parent company and s ubsidiary
companies.
2. Upon the request of the legal representative of the parent company, the legal represent ative of t he
subsidiary company must provide stipulated reports, document s and inf ormat ion necess ary f or
preparation of the consolidated financial statements and general reports of the parent company and
subsidiary companies.
3. The person in charge of preparing reports of the parent company shall use the statements stipulat ed
in clause 2 above to prepare the consolidated financial statements and general reports of the parent
company and subsidiary companies if there is no doubt that the statements prepared and submit ted
by the subsidiary companies do not contain any wrong, incorrect or forged information.
4. The person in charge of preparing the statements stipulated in clause 1 above shall not prepare and
submit such statements if he or she does not yet receive complete f inancial statements of the
subsidiary companies. Where the managers of the parent company have taken all necessary
measures within their authority, but have not received the necessary reports, documents and
inf ormation as stipulated from a subsidiary company, they shall prepare and submit the consolidat ed
f inancial statements and general reports of the parent company and the subsidiary company. S uch
statements may or may not include information from such subsidiary c ompany, but must c ontain
necessary explanatory statements to avoid any misunderstanding or incorrect understanding.
5. Reports and final annual financial statements, consolidated financial statements and general rep orts
of the parent company and subsidiary companies shall be retained at the head office of t he parent
company. Copies of statements and documents specified in this clause must be retained at branches
of the parent company in Vietnam.
6. In addition to statements and documents stipulated by law, subsidiary companies must prepare a
general report on purchases, sales and other transactions with their parent company.
CHAPTER 9
Re-organization, Dissolution and Bankruptcy of Enterprises
Article 198 Division of companies
1. Limited liability companies and shareholding companies may divide their assets, rights and
obligations, members or shareholders of the existing company (hereinaf ter ref erred to as the
company being divided) in order to establish two or more new companies.
2. Procedures for division of a limited liability company or shareholding company shall be as follows:
(a) The Member’s Council, the company owner or the General Meeting of S hareholders of t he
company being divided shall pass a resolution or d ecision on d ivision of t he c ompany in
accordance with the provisions of this Law and the charter of the company. The reso lution or
decision on division of the company shall have the f ollowing main details: the name and
address of the head of f ice of the company being divided; names of companies to be
established; the principles, methods and procedures for division of assets of the company; the
plan f or employment of employees; methods of distribution, the time-limit and proc edures f or

transf er of capital contribution portions, shares and bonds of the company being divided to the
newly-established companies; the principles for dealing with the obligations of t he c omp any
being divided; and the time-limit for implementing the division of the company. The res o lution
or decision on division of the company shall be sent to all creditors and notified to employ ees
within f ifteen (15) days from the date of issuance of the decision or passing of the resolution;
(b) Members, company owner or shareholders of newly-established companies s hall p ass t he

charter, elect or appoint the chairman of the Member’s Council, chairman of the company, t he
Board of Management, director or general director and carry out ent erp rise regist ration in
accordance with this Law. In this case, the application file for enterprise regis trat ion f or new
companies shall include the resolution or decision on division of the company ref erred t o in
sub-clause (a) of this clause.
3. The number of members or shareholders and the number and ratio of ownership of shares or capital
contribution of members or shareholders and charter capital of new companies shall be stated
accordingly in accordance with methods of division and transfer of capital contribution o r s hares of
the company being divided to new companies in accordance wit h t he res olut ion o r dec is ion o n
division of the company.
4. The company being divided ceases to exist after the new companies are issued with ERCs. The new
companies must be jointly liable for unpaid obligations and debts, labour contracts and other property
obligations of the company being divided or shall agree with creditors, customers and employees in
order f or one of such companies to perform such obligations. The new companies shall automatically
inherit all of the lawful rights, obligations and interests which were divided pursuant to the resolut ion
or decision dividing the company.
5. The BRO shall update the legal status of the company being divided on the national enterprise
registration database upon issuance of ERCs to new companies. If the head office address of a new
company is located outside the province or city under central authority where t he c ompany being
divided has its head office, the BRO in the locality where the new company has its head off ic e mus t
notif y the enterprise registration for the new company to the BRO in the locality where the c ompany
being divided has its head office in order to update the legal status of the company being divided on
the national enterprise registration database.
Article 199 Separation of companies
1. Limited liability companies and shareholding companies may be separated by transferring part of th e
assets, rights, obligations, members or shareholders of the existing company (hereinafter referred t o
as the company being separated) to establish one or more new LLCs or shareholding companies
(hereinaf ter ref erred to as the separated company) without terminating the existence of the company
being separated.
2. The company being separated must register any change to the charter capit al and t he number of
members or shareholders corresponding to their capital contribut ion p ort ions o r s hares and t he
number of members or shareholders reduced (if any), and at the same time, implement ent erprise
registration for separated companies.
3. Procedures for separation of a LLC or shareholding company are as f ollows:
(a) The Member’s Council, the company owner or the General Meeting of S hareholders of t he
company being separated shall pass a resolution or decision on separation of the company in
accordance with the provisions of this Law and the charter of the company. The reso lution or
decision on separation of the company shall have the following main d etail s: t he name and

address of the head of f ice of the company being separated; the names of separated
companies to be established; the plan for employment of employees; method of separation of
the company; the value of assets, rights and obligations to be transferred from t he c ompany
being separated to the separated company(ies); and the time-limit f or implementing the
separation of the company. The resolution or decision on separation of the company shall be
sent to all creditors and notified to employees within fifteen (15) days from the date of issuance
of the decision or passing of the resolution;
(b) Members, company owners or shareholders of the separated companies shall pass a charter,
elect or appoint a chairman of the Member’s Council, chairman of the company, the Board of
Management, director or general director, and implement enterprise registration in accordance
with this Law.
4. Af ter enterprise registration, the company being separated and the separated company(ies) must be
jointly liable for unpaid obligations and debts, labour contracts and other property obligations of t he
company being separated, unless otherwise agreed as between the company being separat ed, t he
separated company, creditors, customers and employees of the c ompany b eing separat ed . The
separated companies automatically inherit all the lawful rights, obligations and interests which were
separated pursuant to the resolution or decision on separation of the company.
Article 200 Consolidation of companies
1. Two or more companies (hereinaf ter ref erred to as companies being consolidated) may be
consolidated into a new company (hereinafter referred to as the consolidated company) and at t he
same time, terminate the existence of the companies being consolidated.
2. Procedures for consolidation of companies are as follows:
(a) Companies being consolidated shall prepare a consolidation contract and the draft c harter of
the consolidated company. The consolidation contract shall have the following main d etails:
the names and head office addresses of the companies being consolidat ed; t he name and
address of the head office of the consolidated company; the procedures and c ondit ions f or
consolidation; the plan for employment of employees; the time-limit, procedures and conditions
f or conversion of assets, for conversion of capital contribution portions, shares and bonds of
the companies being consolidated into capital contribution portions, shares and bonds of the
consolidated company; and the time-limit for implementing the consolidation;
(b) Members, owners or shareholders of companies being consolidated shall pass the
consolidation contract and the charter of the consolidat ed c ompany, elect o r appoint t he
chairman of the Member’s Council, chairman of the company, the Board of Management, t he
director or general director of the consolidated company and implement enterprise registration
f or the consolidated company in accordance with this Law. The consolidation contract shall be
sent to all creditors and notified to employees within fift een (15) d ays f rom t he dat e of it s
passing.
3. A company being consolidated must ensure compliance with the Law on Compet ition regarding
consolidation of companies.

4. Af ter the consolidated company has conducted enterprise registration, the companies being
consolidated cease to exist; the consolidated company is entitled to the lawful right s and int erest s
and is liable for unpaid obligations and debts, labour contracts and other property obligations of t he
companies being consolidated. The consolidated company automatically inherits all the lawful right s,
obligations and interests of the companies being consolidated pursuant to the contract f or
consolidation of companies.
5. The business registration office [BRO] shall update the legal status of companies being consolidat ed
on the national enterprise registration database upon issuance of an ERC to the consolidated
company. If the head office address of a company being separated is located outside the province or
city under central authority where the consolidated company has it s head of fice, the B RO in t he
locality where the consolidated company has its head office must notify the enterprise registration t o
the BRO in the locality where the company being consolidated has its head office in order to updat e
the legal status of the company being consolidated on the national enterprise registration database.
Article 201 Merger of companies
1. One or more companies (hereinafter ref erred to as merging companies) may be merged into another
company (hereinafter referred to as the merged company) by way of transf er of all lawf ul as set s,
rights, obligations and interests to the merged company and, at the same time, terminat e the
existence of the merging companies.
2. Procedures for merger of companies shall be stipulated as follows:
(a) Related companies shall prepare a merger contract and a draf t charter of the merged
company. The merger contract must have the following main details: the name and address of
the head office of the merged company; the name(s) and addresses of the head of fice(s ) of
the merging company(ies); the procedures and conditio ns f or the merger; the plan f or
employment of employees; the methods, procedures, time-limit and conditions for conversion
of assets, for conversion of capital contribution portions, shares and bonds of t he merging
company(ies) to capital contribution portions, shares and bonds of the merged company ; and
the time-limit for implementing the merger;
(b) Members, company owners or shareholders of related companies shall pass the merger
contract and the charter of the merged company and implement enterprise registration for t he
merged company in accordance with this Law. The merger contract shall be sent to all
creditors and notified to employees within fifteen (15) days from the date of its passing;
(c) Af ter the merged company has conducted enterprise registrat ion, t he merging c ompanies
cease to exist; the merged company is entitled to the lawful rights and interests and is liable for
unpaid obligations and debts, labour contracts and other property obligations of t he merg ing
companies. The merged company automatically inherits all the lawful rights, obligations and
interests of the merging companies pursuant to the merger contract.
3. Companies involved in conducting the merger must comply with the Law on Competition regarding
merger of companies.

4. The BRO shall update the legal status of merging companies on the national enterprise regist ration
database and shall make amendment to the contents of enterprise registration f or the merged
company. If the head office address of a merging company is located outside t he p rovince or c ity
under central authority where the merged company has its head office, the BRO in the locality where
the merged company has its head office shall notify the enterprise reg is trat ion t o t he B RO in t he
locality where the merging company has its head office in order to up date t he legal s tatus of the
merging company on the national enterprise registration database.
Article 202 Conversion of limited liability companies into shareholding companies
1. State owned enterprises shall be converted into shareholding companies in accordance with relevant
laws.
2. A limited liability company may be converted into a shareholding company by the following methods:
(a) It is converted into a shareholding company without raising additional contributed capital f rom
other organizations or individuals or without selling any portion of capital contribution t o o ther
(b) It is converted into a shareholding company by way of raising additional cont ributed c apit al
f rom other organizations or individuals;
(c) It is converted into a shareholding company by way of selling all or part of capital contribut ion
portion to one or more other organizations or individuals;
(d) Combination of the methods stated in sub-clauses (a), (b) and (c) of t his c lause and o ther
methods.
3. A company must register its conversion with the BRO within ten (10) days f rom the date of
completion of the conversion. Within three working days from the date of receipt of an application file
f or conversion, the BRO shall issue a new ERC and update the legal status of the c ompany o n t he
national enterprise registration database.
4. The converted company automatically inherits all lawful rights and interests of t he company being
converted, and is responsible for debts, including tax debts, labour contracts and other obligations of
the company being converted.
Article 203 Conversion of shareholding companies into single member limited liability companies
1. A shareholding company may be converted into a single member LLC by the following methods:
(a) One shareholder receives an assignment of the entire corresponding shares of all remaining
shareholders;
(b) One organization or individual not being a shareholder receives an assignment of t he ent ire
shares of all shareholders of the company;
(c) The company still has only one shareholder.
2. The assignment or receipt of an investment capital contribution stipulated in clause 1 above must be
implemented on the basis of market price [and/or] price determined by the asset method, the
discounted cash flow method or other methods.

3. Within f ifteen (15) days from the date on which the company has only one shareholder or completes
assignment of shares as stipulated in clauses 1(a) and 1(b) of this article, the company shall send an
application file for conversion with the BRO at the place where the enterprise implemented [business]
registration. Within three working days from the date of receipt of the application file for convers ion,
the BRO shall issue an ERC and update the legal status of the company on the national ent erprise
registration database.
4. A converted company automatically inherits all the lawful rights and legal interests and is responsible
f or all debts including tax debts and labour contracts and other obligat ions of t he company being
converted.
Article 204 Conversion of shareholding companies into limited liability companies with two or more
members
1. A shareholding company may be converted into a limited liability company with two or more
members [multiple LLC] by the following methods:
(a) It is converted into a multiple LLC without raising additional [capital] from or assigning s hares
to other organizations or individuals;
(b) It is converted into a multiple LLC at the same time as it raises contributed capital f rom o ther
(c) It is converted into a multiple LLC at the same time as it assigns all or part of shares t o o ther
capital contributing organizations or individuals;
(d) It only has two remaining shareholders;
(dd) Combination of the methods stipulated in sub-clauses (a), (b) and (c) above and other
methods.
2. A company must register its conversion with the BRO within ten (10) days f rom the date of
completion of the conversion. Within three working days from the date of receipt of an application file
f or conversion, the BRO issues an ERC and updates the legal status of the company on the national
enterprise registration database.
3. A converted company automatically inherits all lawful rights and int eres ts of t he c ompany being
converted and is responsible for debts, including tax debts, labour contracts and other obligations of
the company being converted.
Article 205 Conversion of private enterprises into limited liability companies , shareholding c ompanies or
partnerships
1. A private enterprise may be converted into a LLC, shareholding company or partnership pursuant t o
a decision of the owner of the private enterprise if it satisfies all the following conditions:
(a) The converted enterprise must satisfy the conditions stipulated in article 27.1 of this Law;
(b) The owner of the private enterprise undertakes in writing to be personally responsible by all his
own assets for all unpaid debts and undertakes to pay all debts when due;

(c) The owner of the private enterprise agrees in writing with parties to contracts whic h have no t
yet been discharged [liquidated] that the converted company shall take over and perform such
contracts;
(d) The owner of the private enterprise provides written undertakings or enters into a written
agreement with other capital contributing members on receipt and employment of ex is ting
employees of the private enterprise.
2. Within three working days from the date of receipt of an application file, the BRO shall consider and
issue an ERC if all the conditions stipulated in clause 1 of this article are satisfied, and up date t he
legal status of the enterprise on the national enterprise registration database.
3. A converted company automatically inherits all rights and obligations of the private ent erpris e f ro m
the date of issuance of the ERC. The private enterprise owner is personally responsible by his or her
entire assets for all debts arising prior to the date on which the converted company is issued with the
ERC.
Article 206 Temporary suspension and suspension of operation, and termination of business
1. An enterprise must notify the BRO in writing no later than three wo rking day s bef ore t he date of
temporary suspension of its business or resumption of its business prior to the notified time-limit.
2. The BRO or a competent State agency shall require an enterprise to temporarily suspend or suspend
its activities or terminate its business in the following cases:
(a) Temporary suspension or termination of business in an industry or trade subject to condit ions or in
an industry or trade for which market approach is subject to conditions applicable to foreign investors
on discovery that the enterprise fails to satisfy the conditions as stipulated by law;
(b) Temporary suspension of business when required by the relevant agency pursuant to the laws on tax
management, the environment and/or other relevant laws;
(c) Suspension of operation and termination of one or more b usiness lines o r a number of s ectors
pursuant to a decision of a court.
3. During the period of any temporary suspension of business, the enterprise must pay any outstanding
taxes, social insurance, health insurance and unemployment insurance, must continue to p ay ot her
debts and must complete performance of contracts signed with customers and emp loy ees, unles s
otherwise agreed by the enterprise, creditors, customers and employees.
4. The Government shall provide detailed regulations on the sequence and procedures for co-ordination
between the BRO and other relevant State agencies in the cases prescribed in clause 2 above.
Article 207 Cases of and conditions for dissolution of enterprises
1. An enterprise shall be dissolved in the following cases:
(a) The duration of operation stipulated in the charter of the company expires without a decision to
extend;

(b) Pursuant to a resolution or decision of the enterprise owner in the case of a private enterprise ,
of the partners' council in the case of a partnership, of the members’ council or t he c ompany
owner in the case of a LLC, or by the general meeting of shareholders in the case of a
shareholding company;
(c) The company does not have the minimum number of members stipulated in t his Law f or a
period of six consecutive months and does not conduct procedures t o c onvert t he f orm of
enterprise;
(d) The ERC is revoked, unless otherwise stipulated in the Law on Tax Management.
2. An enterprise is only allowed to be dissolved when it ensures it will pay all debts and other p ropert y
obligations and is not in the process of resolution of a dispute at a court or arbitrat ion agency. The
relevant managers and the enterprise stipulated in clause 1(d) of this article are jointly responsible for
the debts of the enterprise.
Article 208 Sequence and procedures for dissolution of enterprises
Dissolution of an enterprise in the cases stipulated in clauses 1(a), 1(b) and 1(c) of article 207 of t his Law
shall be carried out in accordance with the following provisions:
1. A resolution or decision on dissolution of the enterprise shall be passed. The resolution o r decision
on dissolution of the enterprise must contain the following main details:
(a) Name and address of the head office of the enterprise;
(b) Reasons for dissolution;
(c) Time-limit and procedures for discharging [liquidating] cont ract s and p aying d ebts of t he
enterprise;
(d) Plan f or dealing with obligations arising from labour contracts;
(dd) Full name and signature of the owner of the private enterprise, the company owner, or
chairman of the Members' Council or Board of Management.
2. The owner of a private enterprise, the members' council or company owner or the board of
management shall directly organize the liquidation of assets of the ent erpris e, ex cept where t he
establishment of a separate liquidation organization is stipulated by the charter of the company.
3. Within seven working days from the date of passing, the resolution or decision on dissolution and the
minutes of the meeting must be sent to the BRO, the tax office, and employees in the enterprise. The
resolution or decision on dissolution must be published on the national enterprise registration
inf ormation portal, and must be displayed publicly at the head office, branches and repres entat iv e
of fices of the enterprise.
If the enterprise has unpaid f inancial obligations, it must send the resolution or decision on
dissolution together with a plan on settlement of debts to creditors and people with relat ed rig ht s,
obligations and interests. The plan on settlement of debts shall include the name and address of t he
creditor; the amount of the debt, the time-limit, location and method of payment of such debt; and the
method and time-limit for dealing with complaints of creditors.

4. The BRO must make an announcement of the status of the enterprise which is currently conduc ting
procedures for dissolution on the national enterprise registration information portal immediately af t er
receiving the resolution or decision on dissolution f rom the enterprise, and must publish the
resolution or decision on dissolution and the plan on settlement of debts (if any) t oget her wit h the
announcement.
5. Debts of the enterprise shall be paid in the following order of priority:
(a) Unpaid wages, retrenchment allowances, social insurance, health insurance and
unemployment insurance in accordance with law and other benefits of employees pursuant t o
the signed collective labour agreement and labour contracts.
(b) Tax liabilities;
(c) Other debts.
6. Af ter payment of costs of the dissolution proceeding of the enterprise and debts, the remainder s hall
be distributed to the owner of the private enterprise, the members, shareholders or company owner
in proportion to their ratio of ownership of capital contribution portions or shares.
7. The legal representative of the enterprise shall send an application f ile f or dissolution of the
enterprise to the BRO within five working days from the date of payment of all debts of the enterprise.
8. The BRO shall update the legal status of the enterprise on the national enterprise registration
database if upon expiry of one hundred and eighty (180) days f rom the date of receipt of the
resolution or decision on dissolution as stipulated in clause 3 of this article the BRO does not receive
any opinion on the dissolution from the enterprise or any objection from related parties, o r does not
receive same within five working days from the date of receipt of an application file for dissolution.
9. The Government shall provide detailed regulations on the sequence and procedures for d issolution
of enterprises.
Article 209 Dissolution of enterprises in the case of revocation of enterprise registration certificates or
pursuant to decisions of courts
Dissolution of an enterprise in the case of revocation of its ERC or purs uant t o a d ecision of a c o urt is
carried out in accordance with the following sequence and procedures:
1. The BRO must make an announcement of the status of the enterprise which is currently carrying out
the procedures for dissolution on the national enterprise registration information portal at t he same
time as it issues a decision revoking the ERC or immediately after receipt of t he legally ef fec tive
decision on dissolution from a court. The BRO must publish the decision rev oking the E RC o r t he
legally effective decision of the court together with the announcement;
2. Within ten (10) days from the date of receipt of the decision revoking the ERC or the legally effective
decision of the court, the enterprise must convene a meeting to make a decision on dissolution. The
resolution or decision on dissolution and the copy of the decision revoking t he E RC or t he legally
ef f ective decision of the court must be sent to the BRO, the tax of f ice and employees in the
enterprise, and must be publicly displayed at the head office, branches and representative offices of
the enterprise. Where the law requires publication in a newspaper, t he res olut ion o r dec is ion o n
dissolution must be published in at least one printed or electronic newspaper in t hree c onsecut ive
issues.

If the enterprise has unpaid financial obligations, it must send a plan on settlement of debts toget her
with the resolution or decision on dissolution of the enterprise to creditors and people wit h relat ed
interests and obligations. The notice shall include the name and address of the creditor; the amount
of the debt, the time-limit, location and method of payment of such debt; and the method and t ime-
limit f or dealing with complaints of creditors.
3. The payment of debts of the enterprise shall be made in accordance with article 208.5 of this Law.
4. The legal representative of the enterprise shall send an application f ile f or dissolution of the
enterprise to the BRO within five working days from the date on which all debts of the enterprise are
f ully paid.
5. The BRO shall update the legal status of the enterprise on the national enterprise registration
database if upon expiry of the period of one hundred and eighty (180) days f rom the date of
notif ication of the status of carrying out the procedures for dissolution of the enterprise as stipulated
in clause 1 of this article the BRO does not receive any written objection from the related parties, or
[any written objection] within five working days from the date of rec eipt of an applicat ion f ile f or
dissolution.
6. The manager of the company concerned must be personally responsible for any loss caused b y t he
f ailure to implement or failure to correctly implement the provisions of this article.
Article 210 Application file for dissolution of enterprise
1. An application file for dissolution of an enterprise shall comprise the following documents:
(a) Notice of dissolution of the enterprise;
(b) Report on liquidation of assets of the enterprise; list of creditors and amount of debt s paid,
including full payment of tax liabilities and payment of social insurance, health insurance and
unemployment insurance contributions for employees after the decision on dissolut ion of t he
enterprise is made (if any).
2. Members of the board of management of a shareholding c ompany, members of t he members '

council of a LLC, the company owner, the owner of a private enterprise, the director or general
director, unlimited liability partners, or the legal representative of the ent erprise are liab le f or t he
truthf ulness and accuracy of the application file for dissolution of the enterprise.
3. If the application f ile f or dissolution is inaccurate or contains f alse materials, then the persons
ref erred to in clause 2 above are jointly liable to pay f or interests of employees which remain
unresolved, unpaid tax debts, and other unpaid debts,, and are personally liable bef ore t he law f or
any consequences arising during a period of five years as from the date of lodging the application file
f or dissolution of the enterprise to the BRO.
Article 211 Prohibited activities as from date of decision on dissolution
1. As f rom the date of the decision on dissolution of an enterprise, the enterprise and managers of t he
enterprise shall be strictly prohibited from conducting the following activities:
(a) Concealing, or dispersing14 any asset;
14
Allens footnote: That is, so that such assets may not be included in the dissolution process.

(b) Waiving or reducing the right to claim any debt;
(c) Converting any unsecured debts into debts secured by assets of the enterprise;
(d) Signing any new contract except where [the signing of a new contract] is for t he p urpose of
dissolution of the enterprise;
(dd) Pledging, mortgaging, donating, giving or leasing out any assets;
(e) Terminating the performance of any contract which has taken effect;
(g) Raising capital in any other forms.
2. Depending on the nature and seriousness of the breach, the individual in breach of clause 1 ab ove
may be subject to administrative penalties or criminal prosecution, or must pay compensation for any
loss or damage caused.
Article 212 Revocation of enterprise registration certificate [ERC]
1. The ERC of an enterprise shall be revoked in the following cases:
(a) Content declared in the application file for enterprise registration is false;
(b) The enterprise is established by persons prohibited from establishing enterprises as stipulated
in article 17.2 of this Law;
(c) The enterprise ceases its business activities for one year without notifying the BRO and the tax
of fice;
(d) The enterprise f ails to send reports as stipulated in clause 1(c) of article 216 of this Law to t he
BRO within six months from the date of expiry of the period for sending report s o r f rom t he
date of a written demand;
(dd) Other cases pursuant to a decisions of a court or as requested b y a c ompet ent ag ency in
2. The Government shall provide regulations on the sequence and procedures for revocation of ERCs.
Article 213 Termination of operation of branches, representative offices and business locations
1. A branch, representative office or business location of an enterprise may t erminat e it s o peration

pursuant to a decision of such enterprise or pursuant to a decision revoking the certif icate of
registration of operation of the branch or representative office made by a competent State agency.
2. The legal representative of the enterprise and the head of the branch or representative office who se
operation is being terminated are jointly liable for the truthfulness and accuracy of the application f ile
f or termination of operation of the branch, representative office or business location.
3. An enterprise whose branch has terminated its operation is responsible to perform all cont ract s, t o
pay all debts including tax debts of the branch, and to continue to employ the employees or t o f ully
resolve the legal interests of the employees who have worked in the branch in accordance with law.

Article 214 Bankruptcy of enterprises
The bankruptcy of enterprises shall be carried out in accordance with the law on bankruptcy.
CHAPTER 10
Implementing Provisions
Article 215 Responsibilities of State administrative agencies
1. The Government shall exercise uniform State administration of enterprises.
2. Ministries and ministerial equivalent agencies are responsible bef ore the Government f or
perf ormance of assigned duties during State administration of enterprises.
3. Provincial people's committees shall exercise State administration of enterprises in their localities.
4. Ministries, ministerial equivalent agencies, relevant agencies and provincial p eople's c ommit tees
shall, within the scope of their assigned duties and powers, establish connection with, link and share
the f ollowing information with the national enterprise registration database:
(a) Inf ormation about the business licence, certificate of sat isfac tion of business c onditions,
practising certificate, certificate or written approval of business conditions issued to enterprises
and decisions imposing penalties for administrative breaches on enterprises;
(b) Inf ormation about operational status and tax payment status of enterprises from tax report s of
the enterprises, and financial statements of enterprises;
(c) Co-ordination and sharing of information about the operational status of enterprises in order to
increase the effectiveness of State administration.
Article 216 Business registration offices
1. A business registration office [BRO] has the following duties and powers:
(a) To carry out enterprise registration and to issue enterprise registration certif icates in
accordance with law;
(b) To co-operate to establish and manage a national system of inf ormation on enterprise
registration; to publicize and provide inf ormation to State agencies, organizations and
individuals upon demand/request in accordance with law;
(c) To require enterprises to report on their compliance with the provisions of this Law when
considered necessary; and to monitor the perf ormance of the reporting obligation by
enterprises;
(d) To examine and supervise directly, or request competent S tate ag encies t o examine and
supervise, enterprises with respect to the matters in application files for enterprise registration;

(dd) To be responsible for the validity of application files for enterprise registrat ion and not t o b e
responsible for breaches committed by enterprises before and after enterprise registration;
(e) To deal with breaches of the law on enterprise registration; to revoke enterprise regist rat ion
certif icates and to request enterprises to carry out procedures for dissolution in ac cordance
with this Law;
(g) Other duties and powers in accordance with this Law and other provisions of relevant laws.
2. The Government shall provide for the organizational system of business registration offices.
Article 217 Implementing provisions
1. This Law is of full force and effect as from 1 January 2021.
2. The Law on Enterprises 68/2014/QH13 shall no longer be effective as from the effective date of t his
Law
3. The expression "State owned enterprise" is replaced by the expression "enterprise in which the State
holds 100% charter capital" as stated in articles 35.1(m) and 37.1(k) of t he Law on S t at e Budget
83/2015/QH13; in article 23.3(a) of the Law on Irrigation 08/2017/QH14 as amended by Law
35/2018/QH14; in article 74.2(b) of the Civil Proceedings Code 92/2015/QH13 as amended b y Law
45/2019/QH14; in article 43.2(a) of the Law on Management and Use of Weapons, Explosive
Materials and Supporting Instruments 14/2017/Qh14 as amended by Law 50/2019/QH14; in art icle
19 of the Law on Denunciations 25/2018/QH14; and in articles 3, 20, 30, 34, 39 and 61 of the Law on
Anti-Corruption 36/2018/QH14.
4. The Government shall provide regulations on registration and operation of business households.
5. Subject to the provisions of this Law, the Government shall provide detailed regulations on
organization of management and operation of State owned enterprises direct ly serv ing nat ional
def ence and security or the economy in combination with national defence and security.
Article 218 Transitional provision
1. Companies which do not have shares or capital contribution portions held by t he S t ate and whic h
contributed capital or purchased shareholding prior to 1 July 2015 are not bound by article 195. 2 of
this Law but are not permitted to increase the rate of cross-ownership;
2. People being managers of enterprises, inspectors and authorized representatives who fail to s atisf y
the criteria and conditions prescribed in articles 14.5(b), 64.3, 93.3, 101.3, 103.3(a), 103.3(b),
103.3(c), 155.1(d), 162.5(b) and 169.2 of this Law are permitted to continue perf ormanc e of t heir
duties until the end of the remaining period of their term of office.
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This Law was passed by Legislature XIV of the National Assembly of the Socialist Republic of V iet nam at
its 9th session on 17 June 2020.
Chairman of the National Assembly
NGUYEN THI KIM NGAN

COMMERCIAL LAW (REVISED - 2005)
THE STATE PRESIDENT
ORDER No. 10/2005/L-CTN OF JUNE 27, 2005, ON PROMULGATION OF LAW
THE PRESIDENT OF THE SOCIALIST REPUBLIC OF VIETNAM
Pursuant to Article 103 and Article 106 of the 1992 Constitution of the Socialist Republic of
Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10 of 25
December, 2001, of the Xth National Assembly, the 10th session;
Pursuant to Article 91 of the Law on Organization of the National Assembly;
Pursuant to Article 50 of the Law on Promulgation of Legal Documents,
HEREBY PROMULGATES:
The Commercial Law,
which was passed on June 14,2005, by the XIth National Assembly of the Socialist Republic of Vietnam at
its 7th session.
President of the Socialist Republic of Vietnam
TRAN DUC LUONG
COMMERCIAL LAW
(No. 36/2005/QH11)
Pursuant to Article 103 and Article 106 of the 1992 Constitution of the Socialist Republic of Vietnam,
which was amended and supplemented under Resolution No. 51/2001/QH10 of 25 December, 2001, of
the Xth National Assembly, the 10 th session;
This Law provides for commercial activities.
CHAPTER 1: GENERAL PROVISION
Chapter I
GENERAL PROVISION
Section 1. GOVERNING SCOPE AND SUBJECTS OF APPLICATION
Article 1.- Governing scope
1. Commercial activities conducted in the territory of the Socialist Republic of Vietnam.
2. Commercial activities conducted outside the territory of the Socialist Republic of Vietnam in cases
where the involved parties agree to this Law for application, or where a foreign law or a treaty to which
the Socialist Republic of Vietnam is a contracting party stipulates the application of this Law.
3. Activities not for profit purposes conducted by a party in its transactions with traders in the territory of
the Socialist Republic of Vietnam in cases where the party conducting such not-for-profit activities
chooses to apply this Law.
Article 2.- Subjects of application
1. Traders conducting commercial activities as provided for in Article 1 of this Law.
2. Other organizations and individuals conducting commerce-related activities.
3. Basing itself on the principles provided for by this Law, the Government shall specify the application of
this Law to individuals who independently and regularly conduct commercial activities without having to
make business registration.
Article 3.- Interpretation of terms
In this Law, the following terms shall be construed as follows:
1. Commercial activities mean activities for the purpose of generating profits, including: sale and
purchase of goods, provision of services, investment, commercial promotion and other activities for the
profit purpose.
2. Goods include:
a/ All types of movables, including those to be formed in the future;
b/ Things attached to land;
3. Custom in commercial activities means a code of conduct that has an explicit meaning, is established
and repeated time and again for a long period of time between and implicitly recognized by involved
parties in order identify their respective rights and obligations in commercial contracts.
4. Commercial practice means a custom that is widely recognized in commercial activities in an area, a
region or a commercial domain, has an
explicit meaning, and is recognized by involved parties in order to identify their respective rights and
obligations in commercial activities.
5. Data message means information created, sent, received and stored in electronic media.
6. Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader,
which is established under the provisions of Vietnamese law to conduct market survey and a number of
commercial promotion activities permitted by Vietnamese law.
7. Vietnam-based branch of a foreign trader means a dependent unit of the foreign trader, which is
established and conducts commercial activities in Vietnam under the provisions of Vietnamese law or
treaties to which the Socialist Republic of Vietnam is a contracting party.
8. Purchase and sale of goods mean commercial activities whereby the seller is obliged to deliver
goods, transfer ownership of goods to the purchaser and receive payment; the purchaser is obliged to
pay to the seller and receive goods and the ownership thereof as agreed.
9. Provision of services means commercial activities whereby a party (hereinafter referred to as the
service provider) is obliged to provide a service to another party and receive payment; the service-using
party (hereinafter referred to as the customer) is obliged to pay to the service provider and use the
service as agreed.
10. Commercial promotion means activities of promoting and seeking opportunities for the purchase or
sale of goods and provision of services, including sale promotion, commercial advertisement, display and
exhibition of goods and services, and trade fairs and exhibitions.
11. Commercial intermediary activities mean activities carried out by a trader to effect commercial
transactions for one or several identified traders, including representation for traders, commercial
brokerage, goods sale or purchase entrustment, and commercial agency.
12. Contractual breach means the failure of a party to perform, to fully or properly perform its obligations
according to the agreement between the involved parties or the provisions of this Law.
13. Substantial breach means a contractual breach by a party, which causes damage to the other party
to an extent that the other party cannot achieve the purpose of the entry into the contract.
14. Origin of goods means a country or a territory where all the goods are turned out or where the last
stage of substantial processing of goods is performed in cases where many countries or territories join in
the process of producing such goods.
15. Forms of validity equivalent to documents include telegraph, telex, facsimile, data message and other
forms provided for by law.
Article 4.- Application of the Commercial Law and relevant laws
1. Commercial activities must comply with the Commercial Law and relevant laws.
2. Particular commercial activities provided for in other laws shall comply with the provisions of such
laws.
3. Commercial activities which are not provided for in the Commercial Law and other laws shall comply
with the provisions of the Civil Code.
Article 5.- Application of treaties, foreign laws and international commercial practices
1. Where a treaty to which Vietnam is a contracting party stipulates the application of foreign laws or
international commercial practices, or contain provisions different from those of this Law, the provisions of
such treaty shall apply.
2. Parties to commercial transactions involving foreign elements may agree to apply foreign laws or
international commercial practices if such foreign laws or international commercial practices are not
contrary to the fundamental principles of the Vietnamese law.
Article 6.- Traders
1. Traders include lawfully established economic organizations and individuals that conduct commercial
activities in an independent and regular manner and have business registrations.
2. Traders are entitled to conduct commercial activities in occupations and sectors, in geographical
areas, in forms and by modes which are not banned by law.
3. The right of traders to conduct lawful commercial activities is protected by the State.
4. The State exercises for a definite time its monopoly over commercial activities in respect to a number
of goods and services or in a number of geographical areas in order to ensure the national interests. The
Government shall specify the lists of goods, services and geographical areas subject to the State
monopoly.
Article 7.- Obligation of traders to register business
Traders are obliged to register their business according to the provisions of law. Where traders have not
yet registered their business, they are still held responsible for all of their activities according to the
provisions of this Law and other provisions of law.
Article 8.- Agencies in charge of state management over commercial activities
1. The Government performs the unified state management over commercial activities.
2. The Trade Ministry is answerable to the Government for performing the state management over
activities of goods sale and purchase and specific commercial activities provided for in this Law.
3. Ministries and ministerial-level agencies shall, within the scope of their respective tasks and powers,
have to perform the state management over commercial activities in their assigned domains.
4. People's Committees at all levels perform the state management over commercial activities in their
respective localities according to the decentralization by the Government.
Article 9.- Commercial associations
1. Commercial associations are established to protect the legitimate rights and interests of traders,
mobilize traders to take part in commercial development, and disseminate and propagate the provisions
of law on commerce.
2. Commercial associations are organized and
operate according to the provisions of law on associations.
Section 2. FUNDAMENTAL PRINCIPLES IN COMMERCIAL ACTIVITIES
Article 10.- Principle of traders' equality before law in commercial activities
Traders of all economic sectors are equal before law in commercial activities.
Article 11.- Principle of freedom and freewill to agreement in commercial activities
1. Parties have the rights of freedom to reach agreements not in contravention of the provisions of law,
fine traditions and customs and social ethics in order to establish their rights and obligations in
commercial activities. The State respects and protects such rights.
2. In commercial activities, the parties shall act on their own freewill, and neither party is allowed to
impose its own will on, to force, intimidate or obstruct, the other party.
Article 12.- Principle of application of customs in commercial activities pre-established between
parties
Except otherwise agreed, the parties shall be regarded as automatically applying customs in commercial
activities pre-established between them which they have already known or ought to know, provided that
such customs are not contrary to the provisions of law.
Article 13.- Principle of application of practices in commercial activities
Where it is neither provided for by law nor agreed by the parties, and there exist no customs pre-
established between them, commercial practices shall be applied provided that such practices are not
contrary to the principles provided for in this Law and the Civil Code
Article 14.- Principle of protection of legitimate interests of consumers
1. Traders conducting commercial activities are obliged to provide consumers with sufficient and truthful
information on goods and/or services they trade in or provide and take responsibility for the accuracy of
such information.
2. Traders conducting commercial activities must be responsible for the quality and lawfulness of goods
and/or services they trade in or provide.
Article 15.- Principle of recognition of legal validity of data messages in commercial activities
In commercial activities, data messages which satisfy all technical conditions and standards provided for
by law shall be recognized legally valid as documents.
Section 3. FOREIGN TRADERS CONDUCTING COMMERCIAL ACTIVITIES IN VIETNAM
Article 16.- Foreign traders conducting commercial activities in Vietnam
1. Foreign traders mean traders established and making their business registrations according to the
provisions of foreign laws or recognized by foreign laws.
2. Foreign traders are entitled to set up their representative offices or branches in Vietnam; to establish in
Vietnam foreign-invested enterprises in the forms provided for by Vietnamese law.
3. Vietnam-based representative offices and branches of foreign traders have the rights and obligations
specified by Vietnamese law. Foreign traders shall be held responsible before Vietnamese law for all
activities of their Vietnam-based representative offices and branches.
4. Foreign-invested enterprises established in Vietnam by foreign traders according to the provisions of
Vietnamese law or international treaties to which the Socialist Republic of Vietnam is a contracting party
shall be regarded as Vietnamese traders.
Article 17.- Rights of representative offices
1. To operate for the purposes, within the scope and duration stipulated in their establishment licenses.
2. To rent offices, rent and purchase equipment and facilities necessary for their operations.
3. To recruit Vietnamese and expatriate employees to work for them according to the provisions of
Vietnamese law.
4. To open accounts in foreign currencies or foreign currency-based Vietnam dong at banks licensed to
operate in Vietnam, and to be allowed to use those accounts solely for their operations.
5. To have seals bearing their names according to the provisions of Vietnamese law.
6. To have other rights as defined by law.
Article 18.- Obligations of representative offices
1. Not to directly conduct profit-generating activities in Vietnam.
2. To conduct commercial promotion activities within the scope permitted by this Law.
3. Not to enter into contracts, not to amend or supplement contracts already entered into by foreign
traders, except where chief representatives obtain valid letters of authorization from foreign traders or
other cases specified in Clauses 2, 3 and 4, Article 17 of this Law.
4. To pay taxes, fees and charges, and fulfil other financial obligations provided for by Vietnamese law.
5. To report on their operations according to Vietnamese law.
6. To have other obligations as defined by Vietnamese law.
Article 19.- Rights of branches
1. To rent offices, rent and purchase equipment and facilities necessary for their operations.
2. To recruit Vietnamese and expatriate employees to work for them according to Vietnamese law.
3. To enter into contracts in Vietnam in compliance with their operation contents specified in their
establishment licenses and the provisions of this Law.
4. To open Vietnam dong accounts and foreign-currency accounts at banks licensed to operate in
Vietnam.
5. To transfer profits overseas according to the provisions of Vietnamese law.
6. To have seals bearing their own names according to the provisions of Vietnamese law.
7. To conduct activities of goods purchase and sale and other commercial activities in compliance with
their establishment licenses according to the provisions of Vietnamese law and treaties to which the
Socialist Republic of Vietnam is a contracting party.
8. To have other rights provided for by law.
Article 20.- Obligations of branches
1. To observe the accounting regime provided for by Vietnamese law; in cases where it is necessary to
apply another commonly used accounting system, the approval by the Finance Ministry of the Socialist
Republic of Vietnam is required.
2. To report on their operations according to the provisions of Vietnamese law.
3. To have other obligations provided for by law.
Article 21.- Rights and obligations of foreign-invested enterprises
Rights and obligations of foreign invested enterprises shall be determined according to the provisions of
Vietnamese law or treaties to which the Socialist Republic of Vietnam is a contracting party.
Article 22.- Competence to license foreign traders to conduct commercial activities in Vietnam
1. The Government shall uniformly manage the licensing of commercial activities of foreign traders in
Vietnam.
2. The Planning and Investment Ministry shall be answerable to the Government for managing the
issuance of licences to foreign traders investing in Vietnam according to the provisions of Vietnamese
law.
3. The Trade Ministry shall be answerable to the Government for managing the issuance of licences to
set up Vietnam-based representative offices of foreign traders; or licenses to set up branches, joint-
venture enterprises or enterprises with 100% foreign capital in Vietnam in cases where such traders are
specialized in conducting activities of goods purchase and sale or other activities directly related to goods
purchase and sale in compliance with Vietnamese law and treaties to which the Socialist Republic of
Vietnam is a contracting party.
4. Where a specialized law contains specific provisions on the competence of ministries or ministerial-
level agencies, which are responsible before the Government for managing the issuance of licences to
foreign traders for conducting commercial activities in Vietnam, the provisions of such specialized law
shall apply.
Article 23.- Termination of operations in Vietnam of foreign traders
1. Foreign traders shall terminate their operations in Vietnam in the following cases:
a/ Upon expiration of the operation duration stipulated in their licenses;
b/ At the request of traders, which is approved by competent state management agencies;
c/ Under decisions of competent state management agencies as a sanction against their violations of law
and their licenses;
d/ Where traders are declared bankrupt;
e/ Where foreign traders terminate their operations according to foreign laws, for representative offices,
branches or foreign parties to business cooperation contracts with Vietnamese parties;
f/ Other cases provided for by law.
2. Before terminating their operations in Vietnam, foreign traders are obliged to pay debts and fulfill other
obligations toward the State, concerned organizations and individuals in Vietnam.
CHAPTER II: PURCHASE AND SALE OF GOODS
Section 1: GENERAL PROVISIONS ON ACTIVITIES OF PURCHASE AND SALE OF

GOODS
Article 24.- Form of contracts for purchase and sale of goods
1. Contracts for sale and purchase of goods may be expressed in verbal or written form or established by
specific acts.
2. For types of contracts for purchase and sale of goods, which, as provided for by law, must be made in
writing, such provisions must be complied with.
Article 25.- Goods banned from business, goods subject to business restrictions and goods
subject to conditional business
1. On the basis of socio-economic conditions of each period and international treaties to which the
Socialist Republic of Vietnam is a contracting party, the Government shall specify the lists of goods
banned from business, goods subject to business restrictions, and goods subject to conditional business
and the conditions for trading in such goods.
2. For goods subject to business restrictions and goods subject to conditional business, the purchase and
sale thereof shall be effected only when goods and the goods purchasing and selling parties fully meet
the conditions provided for by law.
Article 26.- Application of urgent measures with respect to domestically circulated goods
1. Goods legally and domestically circulated may be subject to the application of one or all of such
measures as compulsory withdrawal from circulation, circulation ban, circulation suspension, conditional
circulation, or compulsory circulation permission in the following cases:
a/ Where such goods constitute sources or transmitters of various epidemics and diseases;
b/ Where an emergency circumstance occurs.
2. Specific conditions, order, procedures and competence for announcing the application of urgent
measures to domestically circulated goods shall comply with the provisions of law.
Article 27.- International purchase and sale of goods
1. International purchase and sale of goods shall be conducted in form of export, import, temporary import
for re-export, temporary export for re-import and transfer through border-gates.
2. International purchase and sale of goods shall be conducted on the basis of written contracts or other
forms of equal legal validity.
Article 28.- Export and import of goods
1. Export of goods means the bringing of goods out of the territory of the Socialist Republic of Vietnam or
into special zones in the Vietnamese territory, which are regarded as exclusive customs zones according
to the provisions of law.
2. Import of goods means the bringing of goods into the territory of the Socialist Republic of Vietnam from
foreign countries or special zones in the Vietnamese territory, which are regarded as exclusive customs
zones according to the provisions of law.
3. On the basis of socio-economic conditions in each period and treaties to which the Socialist Republic
of Vietnam is a contracting party, the Government shall specify the lists of goods banned from import
and/or export, goods to be imported or exported under permits of competent state management agencies,
and the procedures for granting permits.
Article 29.- Temporary import for re-export and temporary export for re-import of goods
1. Temporary import of goods for re-export means the bringing of goods into Vietnam from foreign
countries or special zones locating in the Vietnamese territory, which are regarded as exclusive customs
zones according to the provisions of law, with the completion of the procedures for importing such goods
into Vietnam, then procedures for exporting the same goods out of Vietnam.
2. Temporary export of goods for re-import means the bringing of goods overseas or into special zones
in the Vietnamese territory which are regarded as exclusive customs zones according to the provisions of
law, with the completion of procedures for exporting such goods out of Vietnam, then procedures for
importing the same goods back into Vietnam.
3. The Government shall specify activities of temporary import for re-export and temporary export for re-
import of goods.
Article 30.- Transfer of goods through border-gates
1. Transfer of goods through border-gates means the purchase of goods from a country or territory for
sale to another country or territory outside the Vietnamese territory without carrying out the procedures for
importing such goods into Vietnam and the procedures for exporting such goods out of Vietnam.
2. Transfer of goods through border-gates shall be conducted in the following forms:
a/ Goods are transported directly from the exporting country to the importing country without going
through Vietnamese border-gates;
b/ Goods are transported from the exporting country to the importing country through Vietnamese border-
gates without carrying out the procedures for importing them into Vietnam and
the procedures for exporting them out of Vietnam; c/ Goods are transported from the exporting country to
the importing country through Vietnamese border-gates and brought into bonded warehouses or areas for
transshipment of goods at Vietnamese ports without carrying out the procedures for importing them into
Vietnam and the procedures for exporting them out of Vietnam.
3. The Government shall provide for in detail activities of transfer of goods through border-gates.
Article 31.- Application of urgent measures to activities of international purchase and sale of
goods
Where it is necessary to protect the national security or other national interests in compliance with
Vietnamese law and treaties to which the Socialist Republic of Vietnam is a contracting party, the Prime
Minister shall decide on the application of urgent measures to activities of international purchase and sale
of goods.
Article 32.- Labels for domestically circulated, exported and imported goods
1. Goods labels mean writings, prints, drawings or photos of texts, pictures or images, which are stuck,
printed, affixed, molded, carved or engraved directly on goods or their commercial packing or other
materials which are attached to the goods or their packing.
2. All goods that are domestically circulated, imported and exported must have their labels, except for
some cases specified by law.
3. Contents which must be inscribed in goods labels and the labeling of goods shall comply with
regulations of the Government.
Article 33.- Certificates of origin of goods and rules of origin of goods
1. Export goods and import goods must have certificates of origin in the following cases:
a/ Goods are eligible for tax or other preferences;
b/ It is so provided for by Vietnamese laws or treaties to which the Socialist Republic of Vietnam is a
contracting party.
2. The Government shall provide in detail for the rules of origin for exports and imports.
Section 2. RIGHTS AND OBLIGATIONS OF PARTIES TO CONTRACTS FOR PURCHASE
AND SALE OF GOODS
Article 34.- Delivery of goods and goods-related documents
1. The seller must deliver goods and relevant documents, as agreed in contracts on quantity, quality,
packing and preservation modes and other contractual terms.
2. In cases where there is no specific agreement, the seller is obliged to deliver goods and relevant
documents according to the provisions of this Law.
Article 35.- Place of delivery of goods
1. The seller is obliged to deliver goods at the agreed place.
2. In cases where there is no agreement on place of goods delivery, such a place shall be specified as
follows:
a/ In cases where goods are things attached to land, the seller must deliver goods at the place where
such goods exist;
b/ In cases where the contract contains a provision on goods transportation, the seller is obliged to deliver
goods to the first carrier;
c/ In cases where the contract contains no provision on goods transportation, and at the time the contract
is entered into, the parties know the location of the goods storage, the place of goods loading or the place
of goods manufacture, the seller shall have to deliver the goods at such place;
61 In other cases, the seller shall have to deliver goods at his/her place of business, or his/her place of
residence identified at the time the purchase and sale contract is entered into in cases he/she has no
place of business.
Article 36.- Responsibilities upon delivery of goods where carriers are involved
1. Where goods are handed over to the carrier without being identified with specific signs or marks on
them, accompanied with transportation documents or otherwise, the seller must notify the purchaser of
the handover of goods to the carrier and clearly identify names and method of recognizing transported
goods.
2. Where the seller is obliged to arrange the goods transportation, the seller shall have to enter into
necessary contracts for the transportation of goods to the destination by means of transportation suitable
to specific circumstances and under normal conditions for such modes of transportation.
3. Where the seller is not obliged to purchase insurance for the goods in the course of transportation and
if requested by the purchaser, the seller must supply to the purchaser all necessary information on the
goods and the transportation thereof to enable the purchaser to purchase insurance for the goods.
Article 37.- Time limit for delivery of goods
1. The seller must deliver goods at the time already agreed upon in the contract;
2. Where only the time limit for delivery of goods is agreed upon without a specific time for delivery of
goods, the seller may deliver goods at any time within such time limit and must notify the purchaser of the
delivery in advance;
3. Where there is no agreement on the time limit for delivery of goods, the seller must deliver goods within
a reasonable time limit after the contract is entered into.
Article 38.- Delivery of goods before the agreed time
Where the seller delivers goods earlier than the agreed time, the purchaser may receive or reject the
goods, unless otherwise agreed upon by the parties.
Article 39.- Goods which are not appropriate to contracts
1. Where it is not specified in the contract, goods shall be considered not appropriate to the contract when
they fall into one of the following cases:
a/ They are not suitable to common use purposes of goods of the same type;
b/ They are not suitable to any specific purpose that has been notified by the purchaser to the seller or
the seller should have known at the time the
contract is entered into;
c/ Their quality is not the same as the quality of the samples previously handed over by the seller to the
purchaser;
d/ They are not preserved or packaged by a method common to such goods, or not preserved by proper
preserving methods in cases where no common preserving method is available.
2. The purchaser may reject the goods if such goods are not appropriate to the contract according to the
provisions of Clause 1 of this Article.
Article 40.- Liability for goods which are not appropriate to contracts
Unless otherwise agreed upon by the parties, the liability for goods which are not appropriate to contracts
is provided for as follows:
1. The seller shall not be liable for any defect of the goods if the purchaser, at the time the contract is
entered into, knew or should have known such defect;
2. Except for the case specified in Clause 1 of this Article, within the time limit for lodging complaint
provided for in this Law, the seller shall be liable for any defect of the goods which already exists before
the time of passing the risk to the purchaser despite the fact that such defect may be discovered after
passing the risks.
3. The seller shall be liable for defects of goods occurring after the pass of risks if such defects are
attributable to contract breaches by the seller.
Article 41.- Remedies in case of delivery of goods in insufficient quantity or delivery of goods not
appropriate to contracts
1. Unless otherwise agreed, and where the contract only provides for a time limit for delivery of goods
and does not determine a specific time for delivery of goods, and the seller delivers goods before the
expiration of such time limit but in insufficient quantity or goods not appropriate to the contract, the seller
may still deliver the deficit quantity of goods or provide substitute goods which are appropriate to the
contract or remedy the inappropriateness of the goods within the remaining duration.
2. Where the seller, when applying the remedies provided for in Clause 1 of this Article, causes
disadvantages or unreasonable costs to the purchaser, the purchaser shall have the right to request the
seller to deal with such disadvantages or bear such costs.
Article 42.- Delivery of goods-related documents
1. Where there is an agreement on the delivery of documents, the seller is obliged to deliver all goods-
related documents to the purchaser within the time limit, at the place and by mode already agreed.
2. Where there is no agreement on the time limit and place for delivery of goods-related documents to the
purchaser, the seller must deliver such documents to the purchaser within a reasonable time limit and at
a convenient place so that the purchaser can receive the goods.
3. Where the seller has delivered goods-related documents before the agreed time, the seller can still
rectify errors of such documents within the remaining duration of the time limit.
4. When the seller, when rectifying errors mentioned in Clause 3 of this Article, causes disadvantages or
unreasonable costs to the purchaser, the purchaser shall have the right to request the seller to deal with
such disadvantages or bear such costs.
Article 43.- Delivery of goods in excessive quantity
1. Where the seller delivers goods in excessive quantity, the purchaser may reject or accept such
excessive quantity of goods.
2. Where the purchaser accepts the excessive quantity of goods, the purchaser must pay for that
quantity at the price agreed in the contract unless otherwise agreed upon by the parties.
Article 44.- Pre-delivery examination of goods
1. Where it is agreed by the parties that the purchaser or the purchaser's representative shall examine
the goods before the delivery, the seller must ensure that the purchaser or the purchaser's representative
shall be given conditions for conducting such examination.
2. Except where it is otherwise agreed, the purchaser or the purchaser's representative in the cases
mentioned in Clause 1 of this Article must examine the goods within the shortest period of time allowed
by practical circumstances. Where the contract provides for the transportation of goods, the examination
of goods may be postponed until the goods are transported to the destination.
3. Where the purchaser or the purchaser's representative does not conduct the examination of goods
before the delivery of goods as agreed, the seller may deliver the goods according to the contract.
4. The seller shall not be liable for defects of goods which the purchaser or the purchaser's
representative has known or should have known but failed to notify them to the seller within a reasonable
time limit after the examination of goods.
5. The seller shall be liable for defects of goods already examined by the purchaser or the purchaser's
representative if the defects of the goods cannot be detected in the course of examination through
common measures and the seller knew or should have known such defects but failed to notify them to the
purchaser.
Article 45.- Obligation to assure the ownership right over goods
The seller must assure that:
1. The ownership right of the purchaser over goods sold is not disputed by any third party;
2. The goods are lawful;
3. The handover of the goods is lawful.
Article 46.- Obligation to assure intellectual property rights over goods
1. The seller must not sell goods infringing upon intellectual property rights. The seller shall be held
responsible for any dispute related intellectual property rights over goods sold.
2. Where the purchaser requests the seller to observe technical drawings, designs, formulas or
specifications furnished by the purchaser, the
purchaser shall be liable for complaints related to infringements of intellectual property rights which arise
from the fact that the seller has complied with the request of the purchaser.
Article 47.- Notification requirements
1. The seller shall lose the right to invoke the provisions of Clause 2, Article 46 of this Law when failing to
promptly notify the purchaser of a third party's complaint about the delivered goods after the seller knew
or should have known such complaint, except for cases where the purchaser knew or should have known
a third party's complaint.
2. The purchaser shall lose the right to invoke the provisions of Article 45 and Clause 1, Article 46 of this
Law when failing to promptly notify the seller of a third party's complaint about the delivered goods after
the purchaser knew or should have known such complaint, except for cases where the purchaser knew or
should have known a third party's complaint.
Article 48.- Obligation of the seller in cases where goods are subject to measures of security for
performance of civil obligations
Where the goods sold are subject to measures of security for performance of civil obligations, the seller
must notify the purchaser of such security measures and must obtain the consent of the security
beneficiary regarding the sale of such goods.
Article 49.- Obligation to provide warranty for goods
1. Where goods are purchased and sold under warranty, the seller shall have to provide warranty for such
goods according to the agreed contents and duration.
2. The seller must fulfill the warranty obligation as soon as the practical situation permits.
3. The seller must bear all warranty expenses unless otherwise agreed.
Article 50.- Payment
1. The purchaser is obliged to pay for goods and receive goods as agreed upon.
2. The purchaser must comply with the payment modes and make the payment according to the agreed
order and procedures and the provisions of law.
3. The purchaser shall still have to pay for goods in cases where goods are lost or damaged after the time
the risk is passed from the seller to the purchaser, except for cases where the loss or damage is caused
due to the fault of the seller.
Article 51 .-Suspension of payment for goods
Unless otherwise agreed, the suspension of payment for goods is provided for as follows:
1. The purchaser that has proofs of deceit of the seller shall have the right to suspend the payment.
2. The purchaser that has proofs that the goods are subject to a dispute shall have the right to suspend
the payment until the said dispute is settled.
3. The purchaser that has proofs that the seller has delivered goods which do not conform with the
contract shall have the right to suspend the payment until the seller remedy such inconformity.
4. If the proofs produced by the purchaser for the cases of payment suspension mentioned in Clauses 2
and 3 of this Article are unfounded, thus causing damage to the seller, the purchaser must pay
compensations for such damage and be subject to other penalties provided for in this Law.
Article 52.- Determination of prices
Where there is neihter agreement on goods price or on the price-determining method nor other price
indexes, the goods price shall be determined according to the price of such type of goods under similar
conditions on mode of goods delivery, time of goods purchase and sale, geographical market, payment
mode and other conditions which affect the prices.
Article 53.- Pricing by weight
Unless otherwise agreed, if the goods price is determined according to the weight of the goods, such
weight must be net weight.
Article 54.- Place of payment
Where there is no agreement on specific place of payment, the purchaser must pay to the seller at one of
the following places:
1. The seller's place of business, which is identified at the time of entering into the contract; or the seller's
place of residence where the seller has no place of business.
2. The place where the goods or documents are delivered, if the payment is made concurrently with the
delivery of goods or documents.
Article 55.- Time limit for payment
Unless otherwise agreed, the time limit for payment is provided for as follows:
1. The purchaser must make payment to the seller at the time the seller delivers the goods or the goods-
related documents.
2. The purchaser is not obliged to make payment until the goods examination can be completed in cases
where an agreement is reached according to the provisions of Article 44 of this Law.
Article 56.- Receipt of goods
The purchaser is obliged to receive the goods as agreed upon and do appropriate things to help the seller
deliver the goods.
Article 57.- Pass of risks in cases where there is a fixed place of delivery of goods
Unless otherwise agreed, if the seller is obliged to deliver the goods to the purchaser at a particular place,
the risk of goods loss or damage shall be passed to the purchaser as soon as the goods are delivered to
the purchaser or the person authorized by the purchaser to receive the goods at such place, even in
cases where the seller is authorized to retain the documents which establish the ownership rights over
the goods.
Article 58.- Pass of risks in cases where there is no fixed place of delivery of goods
Unless otherwise agreed, if the contract contains provisions on the goods transportation and the seller is
not obliged to deliver the goods at a given place, the risk of goods loss or damage shall be passed to the
purchaser as soon as the goods are delivered to the first carrier.
Article 59.- Pass of risks in cases where goods are handed over to a bailee that is not a carrier
Unless otherwise agreed, if the goods are being kept by a bailee that is not a carrier, the risks of goods
loss or damage shall be passed to the purchaser in one of the following cases:
1. Upon receipt by the purchaser of documents of title to the goods;
2. Upon the confirmation by the bailee of the purchaser's right to possession of the goods.
Article 60.- Pass of risks in case of purchase and sale of goods in transportation
Unless otherwise agreed, if the subject matter of the contract is goods in transportation, the risk of goods
loss or damage shall be passed to the purchaser as from the time the contract is entered into.
Article 61.- Pass of risks in other cases
Unless otherwise agreed, the pass of risks in other cases is provided for as follows:
1. For cases not specified in Articles 57, 58, 59 and 60 of this Law, the risk of goods loss or damage is to
be passed to the purchaser as from the time the goods fall under the purchaser's right of disposal and the
purchaser breaches the contract by rejecting the goods.
2. Risk of goods loss or damage is not to be passed to the purchaser if the goods are neither clearly
identified by their signs, codes or bills of transportation, nor notified to the purchaser, nor identified by any
means.
Article 62.- Time of transferring ownership of goods
Unless otherwise provided for by law or agreed upon by the parties, ownership of goods shall be passed
from the seller to the purchaser as from the time of handover of the goods.
Section 3. PURCHASE AND SALE OF GOODS THROUGH THE GOODS EXCHANGE
Article 63.- Purchase and sale of goods though the Goods Exchange
1. Purchase and sale of goods through the Goods Exchange mean commercial activities whereby the
parties agree to purchase and sell a defined quantity of goods of a defined type through the Goods
Exchange under the standards of the Goods Exchange, at a price agreed upon at the time the contract is
entered into, and with the time of goods delivery determined to be a specific point of time in the future.
2. The Government shall specify activities of purchase and sale of goods through the Goods Exchange.
Article 64.- Contracts for purchase and sale of goods through the Goods Exchange
1. Contracts for purchase and sale of goods through the Goods Exchange include forward contracts and
option contracts.
2. Forward contract means an agreement whereby the seller undertakes to deliver and the purchaser
undertakes to receive the goods at a specific point of time in the future under the contract.
3. Call option or put option contract means an agreement whereby the purchaser has the right to
purchase or sell a specific goods at a pre-fixed price level (hereinafter called executed price) and must
pay a certain sum of money to buy this right (hereinafter called option money). The option purchaser may
opt to effect or not to effect such purchase or sale of goods.
Article 65.- Rights and obligations of parties to forward contracts
1. Where the seller delivers the goods under the contract, the purchaser is obliged to receive the goods
and pay for them.
2. Where the parties agree that the purchaser may make cash payment and reject the goods, the
purchaser shall have to pay to the seller a sum of money equal to the difference between the price
agreed upon in the contract and the market price announced by the Goods Exchange at the time the
contract is performed.
3. Where the parties agree that the purchaser may make cash payment and refuse to deliver the goods,
the seller shall have to pay to the purchaser a sum of money equal to the difference between the market
price announced by the Goods Exchange at the time the contract is performed and the price agreed upon
in the contract.
Article 66.- Rights and obligations of parties to option contracts
1. The call option or put option purchaser shall have to pay for option purchase in order to become call
option or put option holder. The sum of money to be paid for option purchase shall be agreed upon by
the parties.
2. The call option holder has the right to purchase but is not obliged to purchase goods ascertained in
the contract. Where the call option holder decides to perform the contract, the seller shall be obliged
to sell goods to the call option holder. The seller that has no goods to deliver shall have to pay to the
call option holder a sum of money equal to the difference between the price agreed upon in the
contract and the market price announced by the Goods Exchange at the time the contract is
performed.
3. The put option holder has the right to sell but is not obliged to sell goods ascertained in the contract.
Where the put option holder decides to perform the contract, the purchaser shall be obliged to
purchase goods from the put option holder. Where the purchaser does not purchase goods, it shall
have to pay to the put option holder a sum of money equal to the difference between the market price
announced by the Goods Exchange at the time the contract is performed and the price agreed upon
in the contract.
4. Where the call option or put option holder decides not to perform the contract within the valid duration
of the contract, the contract shall automatically be invalidated.
Article 67.- The Goods Exchange
1. The Goods Exchange has the following functions:
a/ Providing the material - technical conditions necessary for transactions of purchasing or selling
goods;
b/ Running trading operations;
c/ Listing specific prices formed at the Goods Exchange at each specific time.
2. The Government shall specify the conditions for the establishment of the Goods Exchange, the
powers and tasks of the Goods Exchange, and the approval of the operation charter of the Goods
Exchange.
Article 68.- Goods traded at the Goods Exchange
The list of goods traded at the Goods Exchange shall be promulgated by the Trade Minister.
Article 69.- Brokers for purchase and sale of goods through the Goods Exchange
1. Brokers for purchase and sale of goods through the Goods Exchange shall be allowed to operate at
the Goods Exchange only when they fully satisfy the conditions provided for by law. The Government
shall specify the conditions for operation of brokers for the purchase and sale of goods through the Goods
Exchange.
2. Brokers for purchase and sale of goods through the Goods Exchange shall be allowed to conduct only
activities of brokerage for purchase and sale of goods through the Goods Exchange and must not be a
party to a contract for purchase and sale of goods through the Goods Exchange.
3. Brokers for purchase and sale of goods through the Goods Exchange shall be obliged to deposit
money at the Goods Exchange to secure the performance of their obligations arising in the course of
goods purchase and sale brokerage activities. The deposit level shall be set by the Goods Exchange.
Article 70.- Prohibited acts of brokers for purchase and sale of goods through the Goods
Exchange
1. Enticing customers to enter into contracts by promising to compensate the whole or part of loss
incurred or to guarantee profits for them.
2. Offering or conducting brokerage for goods without entering into contracts with customers.
3. Using sham prices or other fraudulent measures in the course of brokerage.
4. Refusing or unreasonably delaying the brokerage for contracts in accordance with contents agreed
upon with customers.
5. Other prohibited acts specified in Clause 2, Article 71 of this Law.
Article 71.- Prohibited acts in activities of purchase and sale of goods through the Goods
Exchange
1. Staff members of the Goods Exchange shall not be allowed to conduct the brokerage for, purchase or
sale of goods through the Goods Exchange.
2. Parties involved in the purchase and sale of goods through the Goods Exchange must not conduct the
following acts:
a/ Committing fraudulences or deceits about volumes of goods in forward or option contracts which are
transacted or may be transacted, and fraudulences and deceits about real prices of goods in forward or
option contracts;
b/ Supplying false information on transactions, the market or prices of goods purchased or sold through
the Goods Exchange;
c/ Applying illegal measures to cause disorder of the goods market at the Goods Exchange;
d/ Committing other prohibited acts provided for
by law.
Article 72.- Application of management measures in emergency cases
1. Emergency cases mean circumstances where the disorder of the goods market occurs, making
transactions through the Goods Exchange unable to accurately reflect the goods supply and demand
relation.
2. In emergency cases, the Trade Minister shall be entitled to apply the following measures:
a/ Temporarily suspending transactions through the Goods Exchange;
b/ Limiting transactions within a price bracket or a specific quantity of goods;
c/ Changing the schedule of transactions;
d/ Adjusting the operation charter of the Goods Exchange;
el Other necessary measures as provided for by the Government.
Article 73.- Right to conduct the purchase and sale of goods through overseas Goods Exchanges
Vietnamese traders are entitled to conduct purchase and sale of goods through overseas Goods
Exchanges according to regulations of the Government.
CHAPTER III: PROVISION OF SERVICES
Section 1. GENERAL PROVISIONS ON ACTIVITIES OF PROVISION OF SERVICES

Article 74.- Forms of service contracts
1. A service contract shall be expressed in verbal or written form or established with specific acts.
2. For those types of service contract which are required by law to be made in writing, such requirement
must be abided by.
Article 75.- Rights of traders to provide and use services ,
1. Unless otherwise provided for by law or treaties to which the Socialist Republic of Vietnam is a
contracting party, traders shall have the following rights to provide services:
a/ To provide services to residents in Vietnam for use in the Vietnamese territory;
b/ To provide services to non-residents in Vietnam for use in the Vietnamese territory;
c/ To provide services to residents in Vietnam for use in foreign territories;
d/ To provide services to non-residents in Vietnam for use in foreign territories.
2. Unless otherwise provided for by law or treaties to which the Socialist Republic of Vietnam is a
contracting party, traders shall have the following rights to use services:
a/ To use services provided in the Vietnamese territory by residents in Vietnam;
b/ To use services provided in the Vietnamese territory by non-residents in Vietnam;
c/ To use services provided in foreign territories by residents in Vietnam;
d/ To use services provided in foreign territories
by non-residents in Vietnam.
3. The Government shall specify the residents and non-residents that are subject to the implementation of
tax and import-export management policies toward various types of services.
Article 76.- Services banned from business, services subject to business restrictions and services
subject to conditional business
1. On the basis of socio-economic conditions in each period and treaties to which the Socialist Republic
of Vietnam is a contracting party, the Government shall specify the lists of services banned from
business, services subject to business restrictions and services subject to conditional business as well as
the conditions for providing such services.
2. Services subject to business restrictions and services subject to conditional business shall be provided
only when these services and parties involved in the provision thereof fully satisfy the conditions defined
by law.
Article 77.- Application of urgent measures to activities of providing or using services
Where it is necessary to protect the national security and other national interests in compliance with the
Vietnamese law and treaties to which the Socialist Republic of Vietnam is a contracting party, the Prime
Minister shall decide on application of urgent measures to activities of providing or using services,
including temporary ban on the provision or use of one or several types of service or other urgent
measures to one or several particular markets for a definite time period.
Section 2. RIGHTS AND OBLIGATIONS OF PARTIES TO SERVICE CONTRACTS
Article 78.- Obligations of the service providers
Unless otherwise agreed, the service provider shall have the following obligations:
1. To provide services and fully perform related jobs in accordance with agreements and the provisions of
this Law;
2. To preserve and hand back to their customers documents and means supplied to them for the service
provision after the completion thereof;
3. To promptly notify to their customers in cases where information and documents are insufficient and
means are inadequate for completion of the service provision;
4. To keep secret information they know in the course of service provision if so agreed upon by the
parties or provided for by law.
Article 79.- Obligations of the service providers according to performance result
Unless otherwise agreed, if the nature of the type of service to be provided requires a service provider to
achieve a certain result, the service provider must conduct the service provision with a result appropriate
with the terms and purpose of the contract. Where the contract does not specify the standards of result to
be achieved, the service provider must conduct the service provision with a result compliant with the
common standards applicable to such type of service.
Article 80.- Obligations of the service providers to make the best effort
Unless otherwise agreed, if the nature of the type of service to be provided requires a service provider to
make the best effort to achieve a desired result, the service provider shall perform the obligation of
service provision with the best effort and the highest capacity.
Article 81.- Cooperation among service providers
Where under a contractual agreement or on the basis of practical circumstances, a service is jointly
performed by many service providers or performed by a service provider in cooperation with other service
providers, each of the said service providers shall have the following obligations:
1. To exchange and communicate to each other information on the performance progress and its
demands related to the service provision, at the same time to provide services at a proper time and by an
appropriate mode so as not to impede operations of other service providers;
2. To carry out any necessary cooperation with other service providers.
Article 82.- Time limit for completion of services
1. Service providers must complete their services within the time limits already agreed upon in contracts.
2. Where there is no agreement on the time limits for completing services, service providers shall have to
complete their services within a reasonable time limit on the basis of taking into account all conditions and
circumstances which service providers knew at the time the contracts were entered into, including any
specific needs of
customers regarding such time limit for service completion.
3. Where a service can be completed only when the customer or another service provider satisfies certain
conditions, the provider of such service is not obliged to complete his/her service until those conditions
are satisfied.
Article 83.- Customers' requests for changes during the provision of services
1. During the provision of services, service providers must satisfy all reasonable requests of their
customers for changes during the provision of services.
2. Unless otherwise agreed, customers must bear reasonable expenses for the satisfaction of their
requests for changes.
Article 84.- Continued provision of services after the expiration of the time limit for completing the
provision of services
If services, after the expiration of the time limit for completing the provision thereof, are not yet completed,
and if customers have no objection, service providers shall have to continue providing the agreed
services and compensate for damage, if any.
Article 85.- Obligations of customers
Unless otherwise agreed, customers shall have the following obligations:
1. To pay charges for provision of services as agreed upon in contracts;
2. To provide in a timely manner plans, instructions and other details so that the provision of services
can be made without any delay or interruption;
3. To cooperate with service providers in all other matters necessary for the proper provision of services;
4. Where a service is performed jointly by many service providers or by a provider in coordination with
other service providers, customers shall be obliged to coordinate operations of these service providers so
as not to impede the work of any service provider.
Article 86.- Service charge rate
Where there is no agreement on service charge rate, no agreement on methods of determining service
charge rate, and also there is not any indication to service charge rate, the service charge rate shall be
determined according to the charge rate of the same type of service under similar conditions on mode of
provision, time of provision, geographical market, mode of payment and other conditions which can affect
the service charge rate.
Article 87.- Time limit for payment
Where there is no agreement and there exist no customs pre-established between the parties j
concerning payment for services, the time limit for payment shall be the time when the provision c:
services is completed.
CHAPTER IV: COMMERCIAL PROMOTION
Section 1: SALE PROMOTION

Article 88.- Sale promotion
1. Sale promotion means activities of commercial promotion conducted by traders to promote the
purchase and sale of goods or the provision of services by offering certain benefits to customers.
2. Traders conducting sale promotion are those falling into one of the following cases:
a/ Traders directly conduct sale promotion for goods and/or services that they trade in;
b/ Traders engaged in providing sale promotion services conduct sale promotion for goods and/or
services of other traders under an agreement with the latter.
Article 89.- Provision of sale promotion service
Provision of sale promotion services means commercial activities whereby a trader conducts sale
promotion for goods and/or services of other traders on a contractual basis.
Article 90.- Sale promotion service contracts
Sale promotion service contracts must be made in writing or in other forms of equal legal validity.
Article 91.- Rights of traders to conduct sale promotion
1. Vietnamese traders, branches of Vietnamese traders, and Vietnam-based branches of foreign traders
shall have the right to conduct sale promotion themselves or to hire traders engaged in provision of sale
promotion services to do so.
2. Representative offices of traders shall not be allowed to conduct sale promotion themselves or
to hire other traders to conduct sale promotion in Vietnam for the traders that they are representing.
Article 92.- Forms of sale promotion
1. Giving samples of goods or providing samples of services to customers for trial use free of charge.
2. Presenting goods as gifts or providing free-of-charge services to customers.
3. Selling goods or providing services at prices lower than goods sale prices or service provision charge
rates previously applied during the period of sale promotion already registered or announced. In case of
goods or services subject to the State management over their prices, the sale promotion in this form shall
comply with regulations of the Government.
4. Selling goods or providing services together with coupons that allow customers to enjoy one or several
benefits.
5. Selling goods or providing services together with prize-contest entrance tickets to customers, for
purpose of selecting prize winners according to the rules and prizes already announced.
6. Selling goods or providing services together with opportunities for customers to participate in games of
chance, the participation in which comes after the purchase of goods or services and the winning of
prizes depends on the luck of participants according to the rules and prizes already announced.
7. Organizing programs for frequent customers whereby gifts are presented to customers on the basis of
the quantities or values of goods purchased or services used by such customers and expressed
in forms of customers' cards, coupons acknowledging the purchase of goods or services, or other forms.
8. Organizing cultural, artistic or entertainment programs or other events for customers for the purpose of
sale promotion.
9. Other forms of sale promotion if approved by the State management agency in charge of commerce.
Article 93.- Sale promotion goods and services
1. Sale promotion goods and services mean goods and services use by traders to promote their sale and
provision in various forms of sale promotion.
2. Sale promotion goods and services must be those traded lawfully.
Article 94.- Goods and services used for sale promotion, sale promotion discount rates
1. Goods and services used for sale promotion mean those given as gifts or prizes or provided free of
charge by traders to customers.
2. Goods and services used by traders for sale j promotion may be goods and services they are i trading
in or other goods and services.
3. Goods and services used for sale promotion must be those traded lawfully.
4. The Government shall specify the maximum value of goods and services used for sale promotion, and
the maximum discount rate for sale promotion goods and services, which traders can fapply in their sale
promotion activities. v
Article 95.- Rights of traders conducting sale promotion
1. To choose the form, time and venue for sale promotion, goods and services to be used for sale
promotion.
2. To define specific benefits which customers shall be entitled to enjoy according to Clause 4, Article 94
of this Law.
3. To hire traders engaged in the business of providing sale promotion services to conduct sale
promotion for them.
4. To organize the application of the sale promotion forms specified in Article 92 of this Law.
Article 96.- Obligations of traders conducting sale promotion
1. To fully comply with the order and procedures provided for by law for conducting sale promotion in
various forms.
2. To publicly notify all information on sale promotion activities to customers according to Article 97 of this
Law.
3. To strictly adhere to the sale promotion program already announced, and to fulfill their commitments
with customers.
4. With regard to the forms of sale promotion specified in Clause 6, Article 92 of this Law, traders must
set aside and remit 50% of the value of the prizes already announced into the state budget in cases
where there is no prize-winner.
The Trade Minister shall provide for specific forms of sale promotion under prize programs which must
comply with this provision.
5. To comply with agreements in sale promotion service contracts if traders conducting sale promotion
are those providing sale promotion services.
Article 97.- Information that must be publicly notified
1. For all forms of sale promotion specified in Article 92 of this Law, traders conducting sale promotion
must publicly notify the following information:
a/ Names of sale promotion activities;
b/ Sale prices or charge rates of sale promotion goods or services and related costs for delivery of sale
promotion goods or services to customers;
c/ Names, addresses and telephone numbers of traders conducting the sale promotion;
d/ Sale promotion duration, the starting date and ending date and area of sale promotion activities;
el Where benefits of the participation in sale promotion depend on specific conditions, notices must
clearly state that such sale promotion activities are conditional and specific conditions.
2. Apart from the information defined in Clause 1 of this Article, traders shall also publicly notify the
following sale promotion-related information:
a/ Sale prices of goods or charge rates of services given as gifts to customers, for the form of sale
promotion mentioned in Clause 2, Article 92 of this Law;
b/ Absolute value or discount percentage of normal prices of goods, or normal charge rates of services
before the sale promotion duration, for the form of sale promotion specified in Clause 3, Article 92 of this
Law;
c/ Monetary values or specific benefits of coupons which customers are entitled to enjoy; places of sale of
goods or provision of services as well as types of goods or services which customers may receive from
coupons, for the form of sale promotion specified in Clause 4, Article 92 of this Law;
6/ Types of prize and value of each prize; rules for participation in sale promotion programs, method of
selecting prize-winners, for the form of sale promotion specified in Clauses 5 and 6, Article 92 of this Law;
el Expenses which must be borne by customers, for the form of sale promotion specified in Clauses 7 and
8, Article 92 of this Law.
Article 98.- Modes of notification
1. The notification of sale promotion for goods according to the provisions of Article 97 of this Law shall
be made by one of the following modes:
a/ At places where goods are sold and where goods are displayed for sale;
b/ On goods or their packing;
c/ In any other forms which must be attached to goods when such goods are sold.
2. The notification of sale promotion for services according to the provisions of Article 97 of this Law shall
be made by one of the following modes:
a/ At places where services are provided;
b/ In any other forms which must be provided together with services when such services are provided.
Article 99.- Keeping secret information on sale promotion programs and details
Where sale promotion programs must be approved by competent state agencies, such agencies must
keep secret the sale promotion programs and details provided by traders until such programs are
approved by competent state agencies.
Article 100.- Prohibited acts in sale promotion activities
1. Conducting sale promotion for goods and services banned from business; goods and services subject
to business restrictions; goods not yet permitted for circulation; and services not yet permitted for
provision;
2. Using, for sale promotion purpose, goods and services which are banned from business; goods and
services subject to business restrictions; goods not yet permitted for circulation; and services not yet
permitted for provision;
3. Conducting sale promotion for alcohol and beer, or using alcohol and beer for sale promotion targeted
at under-18 people;
4. Conducting sale promotion for, or using cigarette or alcohol of an alcoholic volume of 30° or higher for
sale promotion in any form;
5. Conducting untruthful or misleading sale promotion for goods and services so as to deceive
customers;
6. Conducting sale promotion for selling inferior-quality goods, causing harms to the environment, human
health and other public interests;
7. Conducting sale promotion at schools, hospitals or offices of state agencies, political organizations,
socio-political organizations and people's armed forces units;
8. Promising to present gifts or prizes but failing to do so or doing it improperly;
9. Conducting sale promotion for purpose of unfair competition;
10. Conducting sale promotion with the value of sale promotion goods and/or services exceeding the
maximum limit or the maximum discount rate of sale promotion goods and services mentioned in Clause
4, Article 94 of this Law.
Article 101.- Registration for sale promotion activities with, and notification of sale promotion
results to, the State management agency in charge of commerce
1. Before conducting sale promotion activities, traders must register them with the state management
agency in charge of commerce, and after such sale promotion activities are completed, report sale
promotion results to such agency.
2. The Government shall provide for in detail the registration of sale promotion activities with, and the
notification of results of such activities to, the state management agency in charge of commerce.
Section 2. COMMERCIAL ADVERTISING
Article 102.- Commercial advertising
Commercial advertising means commercial promotion activities of traders aimed at introducing to
customers their goods and service business activities.
Article 103.- Right to commercial advertising
1. Vietnamese traders, branches of Vietnamese traders and branches of foreign traders licensed to
conduct commercial activities in Vietnam shall have the right to advertise their goods and/or service
business activities or to hire traders providing advertising services to do so for them.
2. Representative offices of traders must not directly conduct commercial advertising activities. When
being authorized by traders, representative offices may sign contracts with traders providing commercial
advertising services to advertise for the traders they are representing.
3. Foreign traders who wish to commercially advertise their goods and/or service business activities in
Vietnam shall have to hire Vietnamese traders engaged in business of providing commercial advertising
services to do so.
Article 104.- Provision of commercial advertising services
Provision of commercial advertising services means commercial activities of traders aimed at conducting
commercial advertisement for other traders.
Article 105.- Commercial advertising products
Commercial advertising products consist of information in images, actions, sounds, voices, scripts,
symbols, colors and lights containing commercial advertising details.
Article 106.- Means of commercial advertising
1. Means of commercial advertising are instruments used for introducing commercial advertising
products.
2. Means of commercial advertising include:
a/ The mass media;
b/ Means of communications;
c/ Publications of all kinds;
61 All kinds of boards, signs, banners, panels, posters, fixed objects or means of transportation and other
movable objects;
el Other means of commercial advertising.
Article 107.- Use of means of commercial advertising
1. The use of means of commercial advertising specified in Article 106 of this Law must comply with the
regulations of the competent state management body.
2. The use of means of commercial advertising must satisfy the following requirements:
a/ Being in compliance with the provisions of law on press, publishing, information, programs on cultural
or sport activities, trade fairs and exhibitions;
b/ Being in compliance with the regulations on locations of advertisement, causing no adverse impact on
the landscape, environment, traffic order and safety, and social safety;
c/ Being in accordance with the intensity, time volume and timing prescribed for each type of mass media.
Article 108.- Protection of intellectual property rights over commercial advertising products
Traders shall have the right to register for protection of their intellectual property rights over commercial
advertising products according to the provisions of law.
Article 109.- Prohibited commercial advertisements
1. Advertisements which reveal state secrets, are detrimental to the national independence, sovereignty
and security, and social order and safety.
2. Advertisements that use advertising products or means of advertisement which are contrary to the
historic, cultural and ethical traditions and the fine customs and practices of Vietnam and in contravention
of law.
3. Advertisements for goods and services which are banned or restricted from business or banned from
advertisement by the State.
4. Advertisements for cigarette and alcohol with an alcoholic volume of 30° or higher and products and
goods not yet permitted for circulation or services not yet permitted for provision in the Vietnamese
market at the time of advertising.
5. Commercial advertisements which can be taken advantage of to cause harms to interests of the State,
organizations and/or individuals.
6. Advertisements using the method of comparing a trader's goods and service production and business
activities with goods and service production and business activities of the same kind of other traders.
7. Advertisements containing untruthful information on any of the following contents: quantity, quality,
price, utility, design, origin, category, packing, service mode and warranty duration of goods or services.
8. Advertisements for a trader's business activities by using advertising products which infringe upon
intellectual property rights; using images of other organizations or individuals for advertising purpose
without the consent of such organizations or individuals.
9. Advertisements for the purpose of unfair competition according to the provisions of law.
Article 110.-Commercial advertising service contracts
Commercial advertising service contracts must be made in writing or in other forms of equivalent legal
validity.
Article 111.- Rights of commercial advertising hirers
Unless otherwise agreed, commercial advertising hirers shall have the following rights:
1. To select commercial advertising distributors, forms, contents, means, scope and duration;
2. To inspect and supervise the performance of commercial advertising service contracts.
Article 112.- Obligations of commercial advertising hirers
Unless otherwise agreed, commercial advertising hirers shall have the following obligations:
1. To supply commercial advertising service providers with truthful and accurate information on goods
and commercial service business activities, and to be responsible for such information;
2. To pay commercial advertising service charges and other reasonable costs.
Article 113.- Rights of commercial advertising service providers
Unless otherwise agreed, commercial advertising service providers shall have the following rights:
1. To request commercial advertising hirers to supply truthful and accurate information according to
agreements in contracts;
2. To receive commercial advertising service charges and other reasonable costs.
Article 114.- Obligations of commercial advertising service providers
Unless otherwise agreed, commercial advertising service providers shall have the following obligations:
1. To comply with service hirers' choice of commercial advertising distributors, forms, contents, means,
scope and duration;
2. To organize truthful and accurate advertisement for goods or commercial service business activities
according to information supplied by advertising hirers;
3. To perform other obligations agreed upon in commercial advertising service contracts.
Article 115.- Commercial advertising distributors
Commercial advertising distributors are persons who directly distribute commercial advertising products.
Article 116.- Obligations of commercial advertising distributors
Commercial advertising distributors shall have the following obligations:
1. To comply with the provisions of Article 107 of this Law on the use of means of commercial
advertising;
2. To perform advertising distribution contracts already entered into with advertising distribution hirers;
3. To perform other obligations provided for by law.
Section 3. DISPLAY AND INTRODUCTION OF GOODS AND SERVICES
Article 117.- Display and introduction of goods and services
Display and introduction of goods and services mean commercial promotion activities of traders that use
goods and/or services and documents thereon to introduce such goods and/or services to customers.
Article 118.- Right to display and introduce goods and services
1. Vietnamese traders, branches of Vietnamese traders and Vietnam-based branches of foreign
traders shall have the right to display and introduce goods and/or services; to select appropriate
forms of display and introduction; to organize by themselves or hire traders providing
goods/service display and introduction services to display and introduce their goods and/or
services.
2. Representative offices of traders shall not be allowed to directly display and introduce goods
and/ or services of traders they are representing, except for displays and introductions at their
offices. When being authorized by traders, representative offices shall have the right to enter into
contracts with traders providing goods/service display and introduction services for the display
and introduction of goods and/or services of traders they are representing.
3. 3. Foreign traders not yet licensed to conduct commercial activities in Vietnam and wishing to
display and introduce their goods and/or services in Vietnam must hire Vietnamese traders
providing goods/service display and introduction services to do so.
Article 119.- Provision of goods/service display and introduction services
Provision of goods/service display and introduction services means commercial activities
whereby a trader provides goods/service display and introduction services to other traders.
Article 120.- Forms of display and introduction of goods and services
1. Opening showrooms for displaying and introducing goods and/or services.
2. Displaying and introducing goods and/or services at trade centers or in entertainment, sport,
cultural or artistic activities.
3. Organizing conferences and seminars involving the display and introduction of goods and/ or
services.
4. Displaying and introducing goods and/or services online and in other forms specified by law
Article 121.- Conditions for displayed and introduced goods and/or services
1. Displayed and introduced goods and/or services must be those which are legally traded in the
market.
2. Displayed and introduced goods and/or services must comply with the provisions of law on goods
quality and goods labeling.
Article 122.- Conditions for goods imported into Vietnam for display and introduction
Goods imported into Vietnam for display and introduction must, apart from the conditions defined
in Article 121 of this Law, also satisfy the following conditions:
1. Being goods permitted for import into Vietnam;
2. Goods which are temporarily imported for display and introduction must be re-exported after the
end of such display and introduction within six months as from the date of temporary import; past this
time limit, the procedures for time limit prolongation must be carried out at the customs offices where
the temporary import has been made:
3. Goods temporarily imported for display and introduction which are sold in Vietnam shall comply
with the provisions of Vietnamese law on import goods.
Article 123.- Cases where display and introduction of goods and/or services are prohibited
1. The organization of display and introduction of goods and/or services, or the use of forms and
means of goods and/or service display and introduction, which are detrimental to national
security, social order and safety, landscape, environment and human health;
2. Display and introduction of goods and/or services or use of forms and means of display and
introduction, which are contrary to the historic, cultural and ethical traditions and fine customs of
Vietnam;
3. Display and introduction of goods and/or services, which reveal state secrets;
4. Display and introduction of goods of other traders for comparison with one's own goods, except
where the goods for comparison are counterfeit goods or goods infringing upon intellectual property
rights according to the provisions of law;
5. Display and introduction of goods samples which are inconsistent with goods being traded in
terms of quality, price, utility, design, category, packing, warranty duration and other quality standards
in order to deceive customers.
Article 124.-Contracts for provision of goods and/or service display and introduction services
Contracts for provision of goods and/or service display and introduction services must be made in
writing or in other forms of equivalent legal validity.
Article 125.- Rights of goods and/or service display and introduction service hirers
Unless otherwise agreed, goods and/or service display and introduction service hirers shall have
the following rights:
1. To request goods and/or service display and introduction service providers to fulfill agreements in
contracts;
2. To inspect and supervise the performance of goods and/or service display and introduction service
contracts.
Article 126.- Obligations of goods and/or service display and introduction service hirers
Unless otherwise agreed, goods and/or service display and introduction service hirers shall have the
following obligations:
1. To supply all goods and/or services to be displayed and introduced, or means to service providers
as agreed upon in contracts;
2. To supply information on goods and/or services to be displayed and introduced and take
responsibility for such information;
3. To pay service charges and other reasonable expenses.
Article 127.- Rights of goods and/or service display and introduction service providers
Unless otherwise agreed, goods and/or service display and introduction service providers shall have
the following rights:
1. To request service hirers to supply goods and/ or services to be displayed and introduced within
time limits agreed upon in contracts;
2. To request service hirers to supply information on goods and/or services to be displayed and
introduced and other necessary means as agreed upon in contracts;
3. To receive service charges and other reasonable expenses.
Article 128.- Obligations of goods and/or service display and introduction service providers
Unless otherwise agreed, goods and/or service display and introduction service providers shall have
the following obligations:
1. To display and introduce goods and/or services as agreed upon in contracts;
2. To preserve displayed and introduced goods, documents and means supplied to them during the
performance of contracts; and upon the completion of the goods and/or service display and
introduction, to return all displayed and introduced goods, documents and means to service hirers;
3. To conduct the goods and/or service display and introduction according to contents agreed with
service hirers.
Section 4: TRADE FAIRS AND EXHIBITIONS
Article 129.- Trade fairs and exhibitions
Trade fairs and exhibitions mean commercial promotion activities conducted in a concentrated
manner at particular locations and for given periods of time for traders to display and introduce their
goods and/or services for the purpose of promoting them and seeking opportunities for entering into
contracts for sale and purchase of goods or service contracts.
Article 130.- Provision of trade fair and exhibition services
1. Provision of trade fair and exhibition services means commercial activities whereby traders dealing
in these services provide services of organizing or participating in trade fairs and exhibitions to other
traders for receiving trade fail and exhibition organization service charges.
2. Trade fair and exhibition organization service contracts must be made in writing or in other forms of
equivalent legal validity.
Article 131.- Rights to organize or participate in trade fairs and exhibitions
1. Vietnamese traders, branches of Vietnamese traders, Vietnam-based branches of foreign traders
shall have the right to directly organize or participate in trade fairs and exhibitions for goods and/or
services they trade in or hire traders providing trade fair and exhibition services to do so.
2. Representative offices of traders shall not be allowed to directly organize or participate in trade
fairs and exhibitions. When being authorized by traders, representative offices shall have the right to
sign contracts with traders providing trade fair and exhibition services to do so for the traders they are
representing.
3. Foreign traders shall have the right to directly participate or hire Vietnamese traders providing trade
fair and exhibition services to participate, on their behalf, in trade fairs and exhibitions in Vietnam.
Where they wish to organize trade fairs and exhibitions in Vietnam, foreign traders must hire
Vietnamese traders providing trade fair and exhibition services to do so.
Article 132.- Organization of trade fairs and exhibitions in Vietnam
1. Trade fairs and exhibitions organized in Vietnam must be registered with and certified in writing by
the state management agencies in charge of commerce of the provinces or centrally-run cities where
such trade fairs and exhibitions are to be organized.
2. The Government shall specify the order, procedures, contents of registration and certification of
the organization of trade fairs and exhibitions in Vietnam provided for in Clause 1 of this Article.
Article 133.- Organization of and participation in overseas trade fairs and exhibitions
1. Traders not providing trade fair and exhibition services, when directly organizing or participating in
overseas trade fairs and exhibitions for goods and/or services they trade in, must comply with the
regulations on export of goods.
2. Traders providing trade fair and exhibition services, when arranging for other traders to participate
in overseas trade fairs and exhibitions, must register such with the Ministry of Trade.
3. Traders that have not yet registered their business of providing trade fair and exhibition services
shall not be allowed to arrange for other traders to participate in overseas trade fairs and exhibitions.
4. The Government shall specify the order, procedures and contents of registration for organization
of, and participation in, overseas trade fairs and exhibitions provided for in Clauses 1 and 2 of this
Article.
Article 134.- Goods and/or services
displayed and introduced at trade fairs and exhibitions in Vietnam
1. Goods and/or services which are not permitted for participation in trade fairs and exhibitions
include:
a/ Goods and/or services banned from business, subject to business restrictions, or not yet permitted
for circulation according to the provisions of law;
. b/ Goods and/or services provided by overseas traders and banned from import according to the
provisions of law;
c/ Counterfeit goods and goods infringing upon intellectual property rights, except where they are
displayed and introduced for comparison with genuine ones.
2. Apart from the provisions of this Law on trade fairs and exhibitions, goods and/or services subject
to specialized management must also comply with regulations on specialized management of such
goods and/or services.
3. Goods temporarily imported for participation in trade fairs or exhibitions in Vietnam must be re-
exported within thirty days after the end of such trade fairs or exhibitions.
4. The temporary import for re-export of goods for participation in trade fairs or exhibitions in Vietnam
must comply with the provisions of customs law and other relevant provisions of law.
Article 135.- Goods and/or services participating in overseas trade fairs and exhibitions
1. All types of goods and services shall be permitted to participate in overseas trade fairs and
exhibitions, except for those banned from export according to the provisions of law.
2. Goods and/or services banned from export shall only be permitted for participation in overseas
trade fairs and exhibitions when so approved by the Prime Minister.
3. The time limit for temporary export of goods for participation in overseas trade fairs and exhibitions
shall be one year from the date such goods are temporarily exported. If past that time limit, the goods
are not re-imported yet, such goods shall be subject to taxes and other financial obligations as
provided for by Vietnamese law.
4. The temporary export for re-import of goods for participation in overseas trade fairs and exhibitions
must comply with the provisions of customs law and other relevant provisions of law.
Article 136.- Sale, presentation of goods as gifts and provision of services at trade fairs and
exhibitions in Vietnam
1. Goods and services displayed and introduced at trade fairs and exhibitions in Vietnam are
permitted to be sold, presented as gifts or provided at such trade fairs and exhibitions; for imported
goods, registration thereof must be made with customs offices, except for the cases specified in
Clause 2 of this Article.
2. Goods which are imported under permits of competent state agencies shall be sold or presented
as gifts only after written approvals of such competent state agencies are obtained.
3. The sale and presentation of goods as gifts at trade fairs and exhibitions mentioned in Clause 2,
Article 134 of this Law must comply with regulations on specialized import management of
such goods.
4. Goods sold or presented as gifts, and service provided at trade fairs and exhibitions in Vietnam
shall be subject to taxes and other financial obligations as provided for by law.
Article 137.- Sale, presentation of Vietnamese goods as gifts and provision of Vietnamese
services participating in oversea trade fairs and exhibitions
1. Vietnamese goods and services participating in overseas trade fairs and exhibitions are permitted
to be sold, presented as gifts or provided at such trade fairs and exhibitions, except the cases defined
in Clauses 2 and 3 of this Article.
2. The sale and presentation as gifts of goods which are banned from export but have beer
temporarily exported for participation in overseas trade fairs and exhibitions, shall be made only after
the Prime Minister's approval is obtained.
3. Goods exported under permits of competent state agencies shall be sold or presented as gifts only
after written approvals of such competent state agencies are obtained.
4. Vietnamese goods and/or services participating in overseas trade fairs and exhibitions and being
sold, presented as gifts or provided overseas shall be subject to taxes and other financial obligations
as provided for by law.
Article 138.- Rights and obligations of organizations and individuals participating in trade fairs
and exhibitions in Vietnam.
1. To exercise rights and perform obligations as agreed upon with traders organizing trade fairs and
exhibitions.
2. To sell, present goods as gifts and provide services displayed and introduced at trade fairs and
exhibitions according to the provisions of law.
3. To temporarily import and re-export goods and documents on goods and/or services for display at
trade fairs and exhibitions.
4. To comply with regulations on organization of trade fairs and exhibitions in Vietnam.
Article 139.- Rights and obligations of traders organizing or participating in overseas trade
fairs and exhibitions
1. To temporarily export and re-import goods and documents on goods and/or services for display
and introduction at trade fairs or exhibitions.
2. To comply with regulations on organization of, and participation in, overseas trade fairs and
exhibitions.
3. To sell and present as gifts goods displayed and introduced at overseas trade fairs and exhibitions;
and to pay taxes and fulfill other financial obligations as provided for by Vietnamese law.
Article 140.- Rights and obligations of traders providing trade fair and exhibition services
1. To post up topics and durations of trade fairs and exhibitions at places where such trade fairs and
exhibitions are to be organized before their opening dates.
2. To request service hirers to supply goods for participation in trade fairs and exhibitions within
time limits agreed upon in contracts.
3. To request service hirers to supply information on goods and/or services for participation in trade
fairs and exhibitions and other necessary means as agreed upon in contracts;
4. To receive service charges and other reasonable expenses;
5. To organize trade fairs and exhibitions as agreed upon in contracts.
CHAPTER V: INTERMEDIARY ACTIVITIES IN COMMERCE
Section 1: REPRESENTATION OF TRADERS

Article 141.- Representation of traders
1. Representation of traders means an activity whereby a trader (referred to as representative) is
authorized by another trader (referred to as nominator) to conduct commercial activities in the name
and under the instructions of the latter for remuneration.
2. Where a trader nominates his/her/its personnel to act as his/her/its representative, the provisions
of the Civil Code shall apply.
Article 142.- Contracts for representation of traders
Contracts for representation of traders must be made in writing or in other forms of equivalent legal
validity.
Article 143.- Scope of representation
Parties may agree that the representative may conduct part or all of commercial activities within the
scope of operation of the nominator.
Article 144.- Duration of representation of traders
1. The duration of representation is agreed upon by the parties.
2. Where no agreement is reached, the duration of representation shall expire when the nominator
notifies the representative of the termination of the representation contract, or the representative
notifies the nominator of the termination of the contract.
3. Unless otherwise agreed, if the nominator unilaterally notifies the termination of the representation
contract according to Clause 2 of this Article, the representative may request the nominator to pay an
amount of remuneration for the signing by the nominator of contracts with customers with whom the
representative has negotiated and to pay other remunerations which the representative would
otherwise have been entitled to.
4. Where the duration of representation expires according to Clause 2 of this Article at the request of
the representative, the representative shall forfeit the right to remuneration for transactions which he/
she/it would otherwise have been entitled to unless otherwise agreed upon by the parties.
Article 145.- Obligations of representatives
Unless otherwise agreed, a representative shall have the following obligations:
1. To conduct commercial activities in the name and for the interest of the nominator;
2. To notify the nominator of opportunities and results of performance of authorized commercial
activities;
3. To follow instructions of the nominator if such instructions do not violate the provisions of law;
4. To refrain from conducting commercial activities in his/her/its own name or in the name of a third
party within the scope of representation;
5. To refrain from disclosing or supplying to other people secrets related to commercial activities of
the nominator during the period of representation and within two years after the termination of the
representation contract;
6. To preserve assets and documents assigned for performing activities of representation.
Article 146.- Obligations of nominators
Unless otherwise agreed, a nominator shall have the following obligations:
1. To notify the representative immediately of the signing of contracts negotiated by the
representative, the performance of contracts entered into by the representative, and the acceptance
or non-acceptance of activities conducted by the representative outside the scope of representation;
2. To supply assets, documents and informatic-necessary for the representative to perform activities
of representation;
3. To pay remuneration and other reasonable expenses to the representative;
4. To notify promptly the representative of the impossibility of entering into or performing the contract
within the scope of representation.
Article 147.- Right to enjoy representation remuneration
1. Representatives shall enjoy remunerations for contracts entered into within the scope of
representation. The right to enjoy remunerations arises from the time agreed upon by the parties in
representation contracts.
2. Where it is not agreed upon, the remuneration rate for the representative shall be determined
according to Article 86 of this Law.
Article 148.- Payment of incurred expenses
Unless otherwise agreed, representatives shall have the right to claim the payment of reasonable
expenses incurred for the performance of representation activities.
Article 149.- Lien
Unless otherwise agreed, representatives shall have lien over assets and documents assigned to
them to secure the payment of remunerations and expenses which are due.
Section 2: COMMERCIAL BROKERAGE
Article 150.- Commercial brokerage
Commercial brokerage means a commercial activity whereby a trader acts as an intermediary
(referred to as broker) between parties selling and purchasing goods or providing commercial
services (referred to as principals) in the course of negotiations and entering into contracts for sale
and purchase of goods or provision of services and shall be entitled to a remuneration under a
brokerage contract.
Article 151.- Obligations of commercial brokers
Unless otherwise agreed, a commercial broker shall have the following obligations:
1. To preserve samples of goods and documents assigned for the performance of brokerage
activities, and to return them to the principals after the completion of brokerage;
2. Not to disclose or supply information to the detriment of the interests of the principals;
3. To be responsible for the legal status, but not for the solvency, of the principals;
4. Not to take part in the performance of contracts between the principals, except where so
authorized by the principals.
Article 152.- Obligations of principals
Unless otherwise agreed, a principal shall have the following obligations:
1. To supply information, documents, necessary means related to goods and services;
2. To pay brokerage remuneration and other reasonable expenses to the broker.
Article 153.- The right to enjoy brokerage remuneration
1. Unless otherwise agreed, the right to enjoy brokerage remuneration arises from the time the
principals enter into contracts.
2. Where there is no agreement, brokerage remuneration rates shall be determined according to the
provisions of Article 86 of this Law.
Article 154.- Payment of expenses incurred in relation to brokerage
Unless otherwise agreed, principals must pay all reasonable expenses incurred in relation to
brokerage to brokers, even where the brokerage does not bring about any results for principals.
Section 3: SALE AND PURCHASE OF GOODS BY MANDATED DEALERS
Article 155.- Purchase and sale of goods by mandated dealers
Purchase and sale of goods by mandated dealers mean commercial activities whereby the
mandatory conducts the purchase and sale of goods in his/her/its own name under terms agreed
upon with the mandator and is entitled to receive mandate commission.
Article 156.- Mandatories
A mandatory for purchase and sale of goods is a trader dealing in goods which are consistent with
the mandated goods and conducting the purchase and sale of goods under terms agreed upon with
the mandator.
Article 157.- Mandators
A mandator of purchase and sale of goods may, or may not, be a trader that authorizes a mandatory
to conduct the purchase and sale of goods at his/ her/its request and pays a commission.
Article 158.- Mandated goods
All goods which are lawfully circulated may become the subject matter of a mandated sale and
purchase.
Article 159.- Mandate contracts
Mandate contracts for purchase and sale of goods must be made in writing or in other forms of
equivalent legal validity.
Article 160.- Sub-mandate to a third party
A mandatory shall not be allowed to sub-mandate a third party to perform the signed mandate
contract for purchase and sale of goods, except where it is so approved in writing by the mandator.
Article 161.- Multilateral mandate
A mandatory may accept the mandate for purchase and sale of goods from different mandators.
Article 162.- Rights of mandators
Unless otherwise agreed, mandators shall have the following rights:
1. To request mandatories to supply adequate information on the performance of mandate contracts;
2. Not to bear responsibility in cases where mandatories commit law violations, except for cases
specified in Clause 4, Article 163 of this Law.
Article 163.- Obligations of mandators
Unless otherwise agreed, mandators shall have the following obligations:
1. To provide information, documents and means necessary for the performance of mandate
contracts;
2. To pay mandate commissions and other reasonable expenses to mandatories;
3. To hand over money and goods as agreed upon;
4. To bear joint responsibility in cases where mandatories commit law violations which are
attributable to acts of mandators or intentional law-breaking acts of the parties.
Article 164.- Rights of mandatories
Unless otherwise agreed, mandatories shall have the following rights:
1. To request mandators to provide information and documents necessary for the performance of
mandate contracts;
2. To receive mandate commissions;
3. Not to bear responsibility for goods handed over to mandators strictly under agreement.
Article 165.- Obligations of mandatories
Unless otherwise agreed, mandatories shall have the following obligations:
1. To conduct the purchase and sale of goods as agreed upon;
2. To notify mandators of matters related to the performance of mandate contracts;
3. To follow instructions of mandators as agreed upon;
4. To preserve assets and documents assigned to them for the performance of mandate contracts;
5. To keep secret information related to the performance of mandate contracts;
6. To hand over money and goods as agreed
upon;
7. To bear joint responsibility for law violation acts of mandators, in cases where such law violation
acts are partially attributable to their own faults
Section 4: COMMERCIAL AGENCY
Article 166.- Commercial agency
Commercial agency means a commercial activity whereby the principal and the agent agree that the
agent, in its own name, sells or purchases goods for the principal or provides services of the principal
to customers for remuneration.
Article 167.- Principals and agents
1. Principals are traders that deliver goods to agents for sale or provide money to agents for
purchase of goods, or traders that authorize the provision of services to service-providing agents.
2. Agents are traders that receive goods to act as sale agents or receive money to act as purchase
agents or accepts the authorization to provide services.
Article 168.- Agency contracts
Agency contracts must be made in writing or in other forms of equivalent legal validity.
Article 169.- Forms of agency
1. Off-take agency is a form of agency whereby the agent definitely sells or purchases a specific
quantity of goods or provides a full service for the principal.
2. Exclusive agency is a form of agency whereby a sole agent is authorized by the principal to sell or
purchase one or more goods items or to provide one or more types of services within a given
geographical area.
3. General goods sale or purchase or service provision agency is a form of agency whereby an agent
organizes a network of sub-agents to sell or purchase goods, or provide services for the principal.
The general agent represents the network of sub-agents. Sub-agents operate under the management
and in the name of the general agent.
4. Other forms of agency agreed upon by the parties.
Article 170.- Ownership right in commercial agency
The principal is the owner of goods or money delivered to the agent(s).
Article 171.- Agency remuneration
1. Unless otherwise agreed, agency remuneration shall be paid to agents in the form of commission
or price margin.
2. Where principals fix goods purchase or sale prices or service charge rates, agents shall enjoy
commissions calculated in percentage of such goods purchase or sale prices or service charge rates.
3. Where principals do not fix goods purchase or sale prices or service charge rates but fix only
agency prices, agents shall enjoy price margins. Price margin is determined to be the difference
between goods purchase or sale price or service charge rate and the price fixed by the principals for
the agent.
4. Where the parties do not agree upon the agency remuneration level, the remuneration level shall
be calculated as follows:
a/ The actual remuneration level which has been previously paid by/to parties;
b/ Where Point a of this Clause cannot apply, the agency remuneration level shall be the average
remuneration level applicable to the same type of goods or service paid by the principal to other
agents;
c/ Where Points a and b of this Clause cannot apply, the agency remuneration level shall be the
ordinary remuneration level applicable to the same type of goods or service in the market.
Article 172.- Rights of principals
Unless otherwise agreed, principals shall have the following rights:
1. To fix prices of goods purchased or sold or charge rates of services provided to customers under
agency;
2. To fix agency prices;
3. To request agents to take security measures as provided for by law;
4. To request agents to make payments or deliver goods under agency contracts;
5. To inspect and supervise the performance of contracts by agents;
Article 173.- Obligations of principals
Unless otherwise agreed, principals shall have the following obligations:
1. To guide, supply information to, and facilitate, agents to perform agency contracts;
2. To bear responsibility for quality of goods of goods sale or purchase agents, and quality of services
of service-providing agents;
3. To pay remuneration and other reasonable expenses to agents;
4. To return to agents their assets used as security (if any) upon the termination of agency contracts;
5. To bear joint responsibility for law violation acts of agents if such law violation acts are partly
attributable to their faults.
Article 174.- Rights of agents
Unless otherwise agreed by the parties, agents shall have the following rights:
1. To enter into agency contracts with one or more principals, except for cases specified in Clause 7,
Article 175 of this Law;
2. To request principals to deliver goods or money under agency contracts; to take back assets used
as security (if any) upon the termination of agency contracts;
3. To request principals to guide, supply information and create other related conditions for the
performance of agency contracts;
4. To decide on goods sale prices or service charge rates for customers, for off-take agents;
5. To enjoy remunerations and other lawful rights and interests brought about by agency activities.
Article 175.- Obligations of agents
Unless otherwise agreed, agents shall have the following obligations:
1. To purchase or sell goods or provide services to customers at prices or charge rates fixed by
principals;
2. To comply strictly with agreements on handover and receipt of money and goods with principals;
3. To take security measures for performance of civil obligations as provided for by law;
4. To pay to principals any proceeds of the sale of goods, for sale agents; to deliver purchased goods
to principals, for purchase agents; or to pay service charges to principals, for service-providing
agents;
5. To preserve goods after the receipt thereof, for sale agents, or prior to the delivery thereof, for
purchase agents; to bear joint responsibility for quality of goods of purchase or sale agents or quality
of services of service-providing agents in cases where they are at fault;
6. To submit to inspection and supervision by principals, and to report to principals on their agency
activities;
7. Where it is specified by law that an agent shall be allowed to enter in to an agency contract with a
principal for a certain type of goods or service, such provision of law must be complied with.
Article 176.- Payment in agency activities
Unless otherwise agreed, payments for goods, payment of service charges and payment of agency
remunerations shall be made in installments after agents complete the purchase or sale of a specific
quantity of goods or the provision of a specific volume of services.
Article 177.- Duration of agency
1. Unless otherwise agreed, the duration of agency shall expire only after a reasonable period of time
which must be at least 60 days after either party to the agency contract notifies the other party of the
termination of such agency contract.
2. Unless otherwise agreed, if the principal notifies the termination of the agency contract according
to the provisions of Clause 1 of this Article, the agent shall have the right to request the principal to
pay a compensation for the period of time during which it has acted as an agent for such principal.
The value of such compensation shall be an average one-month's agency remuneration for each year
the agent has acted as an agent for the principal. Where the duration of agency is less than one year,
such compensation shall be equal to an average one-month's agency remuneration during the
agency term.
3. Where an agency contract is terminated at the request of the agent, the agent shall not have the
right to request the principal to pay compensation for the period of time during which it has acted as
an agent for the principal.
CHAPTER VI: SOME OTHER SPECIFIC COMMERCIAL ACTIVITIES
Section 1. COMMERCIAL PROCESSING

Article 178.- Commercial processing
Commercial processing means a commercial activity whereby a processor uses part or whole of raw
materials and materials supplied by the processee to perform one or several stages of the production
process at the latter's request in order to receive remuneration.
Article 179.- Processing contracts
Processing contracts must be made in writing or in other forms of equivalent legal validity.
Article 180.- Goods for processing
1. Goods of all types can be processed, except for goods banned from business.
2. In case of processing of goods for foreign traders for overseas consumption, goods banned from
business, goods banned from export or import may be processed if so permitted by competent state
agencies.
Article 181.- Rights and obligations of processees
1. To hand over part or whole of raw materials and materials for processing in accordance with
processing contracts or transfer money for purchase of materials with agreed quantities, quality and
at agreed prices;
2. To take back all processed products, leased or lent machinery and equipment, raw materials,
auxiliary materials, supplies and discarded materials after the liquidation of processing contracts,
unless otherwise agreed.
3. To sell, destroy, donate or give as gifts on the spot processed products, leased or lent machinery
and equipments, raw materials, auxiliary materials.
redundant supplies, faulty products and discarded materials according to agreements and provisions
of law.
4. To send their representatives to examine and supervise processing activities at processing places,
to assign experts to guide production technology and inspect quality of processed products according
to agreements in processing contracts.
5. To be responsible for the legality of the intellectual property rights over processed goods, raw
materials, materials, machinery and equipment for processing handed over to processors.
Article 182.- Rights and obligations of processors
1. To supply a part or whole of raw materials and materials for processing as agreed upon with
processees in terms of quantities, quality, technical standards and prices.
2. To receive processing remunerations and other reasonable expenses.
3. In case of processing for foreign organizations and individuals, to be entitled to export on spot
processed products; leased or borrowed machinery and equipment, raw materials, materials,
redundant supplies, faulty products and discarded materials under the authorization of processees.
4. In case of processing for foreign organizations and individuals, to be exempt from import tax on
machinery, equipment, raw materials, auxiliary materials and supplies, that are temporarily imported
for the performance of processing contracts according to the provisions of tax law.
5. To be responsible for the legality of goods processing activities in cases where goods being
processed are those banned from business, export or import.
Article 183.- Processing remuneration
1. Processors may receive processing remunerations paid in cash or in processed products, or
machinery and equipment used for the processing.
2. In case of processing for foreign organizations and individuals, if processors receive processing
remunerations in processed products, machinery and equipment used for processing, regulations on
import of such products, machinery and equipment must be complied with.
Article 184.- Technology transfer in goods processing with foreign organizations and
individuals.
Technology transfer in goods processing with foreign organizations and individuals shall be carried
out in accordance with agreements in processing contracts and the provisions of Vietnamese law on
technology transfer.
Section 2. AUCTION OF GOODS
Article 185.- Auction of goods
1. Auction of goods means a commercial activity whereby sellers themselves conduct or hire auction
organizers to conduct public sale of goods to select purchasers that offer the highest prices.
2. Auctions of goods shall be performed by either of the following two modes:
a/ Upward bidding mode, which is an auctioning mode whereby the person who offers the highest
price as compared with the reserve price shall have the right to purchase the auctioned goods;
b/ Downward bidding mode, which is an auctioning mode whereby the person who first accepts the
reserve price or the lower price next to the reserve price shall have the right to purchase the
auctioned goods.
Article 186.- Auction organizers, goods sellers
1. Auction organizers are traders that register the business of providing auctioning services or sell
their own goods in cases where goods sellers conduct auctions by themselves.
2. Goods sellers are owners of such goods or persons mandated by goods owners to sell goods or
persons entitled to sell goods of others according to the provisions of law.
Article 187.- Auction participants, auctioneers
1. Auction participants are organizations and individuals that register to participate in auctions.
2. Auctioneers are auction organizers or persons authorized by auction organizers to run auctions.
Article 188.- Auctioning principles
The auction of goods in commerce must be conducted on the principles of publicity, honesty and
assurance of legitimate rights and interests of auction participants.
Article 189.- Rights of auction organizers
Unless otherwise agreed, auction organizers shall have the following rights:
1. To request goods sellers to provide fully, accurately and promptly necessary information on
auctioned goods, to create conditions for auction organizers or auction participants to examine
auctioned goods and hand over auctioned goods to goods purchasers in cases where auction
organizers are not goods sellers;
2. To determine reserve prices in cases where auction organizers are sellers of auctioned goods or
persons authorized by goods sellers;
3. To organize auctions;
4. To request goods purchasers to make payments;
5. To receive auction service charges paid by goods sellers according to the provisions of Article 211
of this Law.
Article 190.- Obligations of auction organizers
1. To organize auctions of goods in compliance with the principles and procedures provided for by
law and by auction modes agreed upon with goods sellers.
2. To notify and post up in a public, full and accurate manner necessary information on auctioned
goods.
3. To preserve auctioned goods when they are entrusted by sellers for safe-keeping.
4. To display goods, goods samples or documents introducing goods for auction participants to
consider.
5. To compile documents on auctions of goods and send them to goods sellers and purchasers and
relevant parties according to the provisions of Article 203 of this Law.
6. To deliver auctioned goods to purchasers according to contracts for provision of goods auctioning
services.
7. To carry out the procedures for transferring ownership rights over auctioned goods which are
subject to the ownership registration as provided for by law, unless otherwise agreed with goods
sellers.
8. To pay to goods sellers proceeds from the sale of goods, including differences collected from
persons that withdraw their offered prices defined in Clause 3, Article 204 of this Law or return unsold
goods to goods sellers according to agreements. In case of no agreement, to pay money to goods
seller within three working days after receiving money from goods purchasers, or to return the goods
immediately within a reasonable time after auctions;
Article 191.- Rights of goods sellers that are not auction organizers
Unless otherwise agreed, goods sellers shall have the following rights :
1. To receive money amounts for auctioned goods and differences collected in cases specified in
Clause 3, Article 204 of this Law or receive goods back in case of unsuccessful auctions;
2. To supervise the organization of auctions of goods.
Article 192.- Obligations of goods sellers that are not auction organizers
Unless otherwise agreed, goods sellers shall have the following obligations:
1. To deliver goods to auction organizers, create conditions for auction organizers and auction
participants to examine goods, and supply in a full, accurate and timely manner necessary
information on auctioned goods;
2. To pay auction organizing service charges according to Article 211 of this Law.
Article 193.- Goods auction-organizing service contracts
1. Goods auction organizing service contracts must be made in writing or in other forms of equivalent
legal validity.
2. In cases where auctioned goods are objects of pledges or mortgages, goods auction organizing
service contracts must be approved by pledgees or mortgagees, and sellers shall have to notify
auction participants of the pledged or mortgaged goods.
3. If the auction is agreed upon in pledge or mortgage contracts but pledgors or mortgagors are
absent without plausible reasons or refuse to enter into goods auction organizing service contracts,
such contracts shall be entered into between pledgees or mortgagees and auction organizers.
Article 194.- Determination of reserve prices
1. Goods sellers must determine reserve prices. In cases where auction organizers are authorized to
determine reserve prices, goods sellers must be notified thereof before auctions are posted up.
2. In cases where auctioned goods are objects of pledges or mortgages, pledgees or mortgagees
must reach agreements with pledgors or mortgagors on the determination of reserve prices.
3. If the auction is agreed upon in pledge or mortgage contracts but pledgors or mortgagors are
absent without plausible reasons or refuse to enter into goods auction organizing service contracts,
the reserve prices shall be determined by pledgees or mortgagees.
Article 195.- Notification to persons with rights and obligations related to goods being objects
of mortgage or pledge
In cases where goods are objects of pledge or mortgage, auction organizers, simultaneously with
posting up goods auctions, must notify persons with related rights and obligations within seven
working days before such goods are auctioned according to the provisions of Article 197 of this Law.
Article 196.- Time limit for notification and posting up of goods auctions
1. Within seven working days before a goods auction is held, the auction organizer must post up the
auction at the auction venue, the place of goods display and his/her/its head office according to the
provisions of Article 197 of this Law.
2. In cases where auction organizers are also goods sellers, the time limit for posting up auctions
shall be decided by goods sellers themselves.
Article 197.- Contents of goods auction notification and posting up
A notice and post-up of a goods auction must have all the following contents:
1. The date and venue of auction;
2. The name and address of the auction organizer;
3. The name and address of the goods seller:
4. The list of goods, their quantities and quality:
5. The reserve prices;
6. Necessary information on the goods;
7. The place and time for displaying the goods:
8. The place and time for consulting the goods files;
9. The place and time for registering the purchase of goods.
Article 198.- Persons not allowed to participate in auctions
1. Persons who do not have civil act capacity, lose civil act capacity, or have restricted civil act
capacity under the provisions of the Civil Code, or persons who, at the time of auction, are unable to
cognize or control their acts;
2. Persons working in auctioning organizations; their parents, spouses and children;
3. Persons who have personally conducted the assessment of to be-auctioned goods; their parents,
spouses and children;
4. Persons who do not have the right to purchase auctioned goods as provided for by law.
Article 199.- Registration for participation in auctions
1. Auction organizers may request persons who wish to participate in auctions to register for the
auction participation before such auctions take place.
2. Auction organizers may request persons who wish to participate in auctions to make token
payments which must not exceed 2% of the reserve prices of auctioned goods.
3. Where persons participating in auctions purchase auctioned goods, their token payments shall be
cleared against the purchase prices; if they cannot purchase auctioned goods, their token payments
shall be refunded to them right after auctions are completed.
4. Where persons who register for participation in auctions have made token payments but later failed
to participate in auctions, auction organizers shall be entitled to retain such token payments.
Article 200.- Display of auctioned goods
Goods, goods samples, documents introducing goods and other necessary information on such
goods must be displayed at places announced since the posting up.
Article 201.- Conducting of auctions
An auction shall be conducted in the following order:
1. The auctioneer makes a roll call of registered participants in the goods auction;
2. The auctioneer presents each auctioned goods item, repeats their reserve prices, answer
questions of the auction participants, and ask them to offer bids;
3. As for the upward bidding mode, the auctioneer must clearly and accurately repeat the latest
offered price which is higher than the price offered by the previous bidder for at least three times with
an interval of at least thirty seconds. The auctioneer shall announce the winning bidder to purchase
the auctioned goods only if after repeating for three times the price offered by such person, no one
offers a higher price;
4. As for the downward bidding mode, the auctioneer must clearly and accurately repeat every
reduced price level below the reserve price for at least three times with an interval of at least thirty
seconds. The auctioneer shall announce immediately the person who first accepts the reserve price
or any reduced price level below the reserve price to have the right to purchase the auctioned goods.
5. In cases where many persons concurrently offer the last price as for the upward bidding mode, or
the first price as for the downward bidding mode, the auctioneer shall have to organize a lot drawing
among such persons and announce the person who has drawn the winning lot as the purchaser of
auctioned goods.
6. The auctioneer shall have to prepare a document on goods auction right at the auction venue,
even when the auction is unsuccessful. The auction document must clearly state the auction result
and be signed by the auctioneer, the purchaser and two witnesses from among the auction
participants. For auctioned goods which must be notarized by the State Notary according to the
provisions of law, the auction document must also be notarized.
Article 202.- Unsuccessful auctions
An auction shall be considered unsuccessful in the following cases:
1. There is no auction participant or no bid price is offered;
2. The highest price offered is lower than the reserve price, for the upward bidding mode.
Article 203.- Goods auction documents
1. Goods auction documents are documents certifying the goods purchase and sale. A goods auction
document must have the following contents:
a/ The name and address of the auction organizer;
b/ The name and address of the auctioneer;
c/ The name and address of the goods seller;
d/ The name and address of the goods purchaser;
e/ The time and venue of the auction;
f/ The auctioned goods;
g/ The price at which the goods were sold;
h/ The names and addresses of two witnesses.
2. Auction documents must be sent to goods sellers, goods purchasers and related parties.
3. In case of unsuccessful auctions, auction documents must clearly state that the auctions were
unsuccessful and have the contents specified at Points a, b, c, e, f and h, Clause 1 of this Article.
Article 204.- Withdrawal of offered prices
1. In case of an auction by the upward bidding mode, if the person offering the highest price
immediately withdraws his/her bid, the auction shall still continue, starting again from the preceding
offered price. In case of an auction by the downward bidding mode, if the person who first accepts the
price immediately withdraws the accepted price,
the auction shall still continue, starting again from the preceding accepted price.
2. The person who withdraws his/her offered price or withdraws his/her acceptance of the price shall
not be allowed to further participate in the auction.
3. Where the auctioned goods are sold at a price lower than the withdrawn price which is previously
offered for the upward bidding mode, or accepted for the downward bidding mode, the bid withdrawer
shall have to pay the price difference to the auction organizer. Where the goods are sold at a higher
price, the bid withdrawer shall not be entitled to such a difference.
4. In case of an unsuccessful auction, the bid withdrawer shall have to bear expenses for the auction
and not be refunded his/her token payment.
Article 205.- Refusal to purchase
1. Unless otherwise agreed, after auctions are declared to be complete, purchasers shall be held
liable. If purchasers refuse to purchase goods, they must obtain consents of goods sellers and bear
all costs related to the organization of auctions.
2. In cases where purchasers of auctioned goods have paid token payments but refuse to purchase
such goods, they shall not be refunded such token payments. Such token payments shall belong to
goods sellers.
Article 206.- Registration of ownership right
1. Auction documents shall serve as basis for the transfer of the ownership right over auctioned
goods, which must be registered according to the provisions of law.
2. On the basis of goods auction documents and other valid papers, competent state agencies shall
have to register the goods ownership rights for goods purchasers according to the provisions of law.
3. Sellers and auction organizers are obliged to carry out procedures for transferring goods ownership
rights to goods purchasers. Expenses for carrying out procedures for such transfer shall be deducted
from proceeds from goods sale, unless otherwise agreed.
Article 207.- Time of payment for goods purchase
Time of payment for goods purchase shall be agreed upon by auction organizers and auctioned
goods purchasers. If no agreement is reached, the time of payment for goods purchase shall be the
time provided for in Article 55 of this Law.
Article 208.- Place of payment for goods purchase
Place of payment for goods purchase shall be agreed upon by auction organizers and goods
purchasers. If no agreement is reached, the place of payment shall be the places of business of
auction organizers.
Article 209.- Time limit for delivery of auctioned goods
Unless otherwise agreed upon by auction organizers and goods purchasers, the time limit for delivery
of auctioned goods is provided for as follows:
1. For goods over which the ownership right is not required to be registered, auction organizers
must deliver goods to their purchasers immediately after auction documents are made;
2. For goods over which the ownership rights have been registered, auction organizers must
immediately carry out procedures for transferring the ownership rights and deliver goods to their
purchasers immediately after the procedures for ownership right transfer are completed. .
Article 210.- Place of delivery of auctioned goods
1. Where goods are things attached to land, the place of delivery thereof is the place where such
goods are located.
2. Where goods are movables, the place of delivery thereof is the place where the auction is
organized, unless otherwise agreed upon by auction organizers and goods purchasers.
Article 211.- Goods auction service charges
Where there is no agreement on goods auction service charges, such charges shall be determined as
follows:
1. In case of successful auctions, auction service charges shall be determined according to Article 86
of this Law;
2. In case of unsuccessful auctions, goods sellers must pay a charge equal to 50% of the charge rate
provided for in Clause 1 of this Article.
Article 212.- Expenses related to auctions of goods
Unless otherwise agreed upon between goods sellers and auction organizers, expenses related to
auctions of goods shall be determined as follows
1. Goods sellers shall bear the expenses for transportation of goods to the agreed places and the
expenses for preservation of goods in cases where they do not deliver the goods to auction
organizers for preservation;
2. Auction organizers shall bear the expenses for preservation of goods delivered to them, the
expenses for posting up, notification and organization of auctions and other related expenses.
Article 213.- Responsibilities for auctioned goods untrue to notified or posted up ones
1. Within the time limit provided for in Article 318 of this Law, goods purchasers may return the goods
to auction organizers and request compensations for damage if the auctioned goods are untrue to
notified or posted up ones.
2. Where the auction organizer defined in Clause 1 of this Article is not the seller and the untruthful
notified or posted up contents are attributable to the fault of the seller, the auction organizer shall
have the right to return the goods and claim damages from the seller.
Section 3. BIDDING FOR GOODS OR SERVICES
Article 214.- Bidding for goods or services
1. Bidding for goods or services means a commercial activity whereby a party purchases goods or
services through bidding (referred to as bid solicitor) in order to select, among traders participating in
the bidding (referred to as bidders), a trader that satisfies the requirements set forth by
the bid solicitor and is selected to enter into and perform a contract (referred to as bid winner).
2. The provisions on bidding in this Law shall not apply to bidding for public procurement according to
the provisions of law.
Article 215.- Forms of bidding
1. Bidding for goods or services shall be conducted in either of the following two forms:
a/ Open bidding which is a form of bidding whereby the bid solicitor does not limit the number of
bidders;
b/ Restricted bidding which is a form of bidding whereby the bid solicitor invites only a limited number
of bidders to participate in the bidding.
2. The selection of the form of open bidding or restricted bidding shall be decided by bid solicitors.
Article 216.- Modes of bidding
1. Modes of bidding include bidding with one bid dossier bag and bidding with two dossier bags. Bid
solicitors shall have the right to select the mode of bidding and must notify such in advance to
bidders.
2. In case of bidding by mode of one dossier bag, a bidder shall submit its bid dossier consisting of
technical and financial proposals in one dossier bag according to the requirements in the tendering
dossier and the opening of bids shall be effected only once.
3. In case of bidding by mode of two dossier bags, a bidder shall submit its bid dossier consisting of
technical and financial proposals in two separate dossier bags submitted simultaneously, and the
opening of bids shall be effected twice. The dossier on technical proposals shall be opened first.
Article 217.- Pre-qualification of bidders
Bid solicitors may organize the pre-qualification of bidders in order to select those bidders that are
capable of satisfying the conditions set forth by bid solicitors.
Article 218.- Tendering dossiers
1. A tendering dossier comprises: a/ Tendering notice;
b/ Requirements related to goods or services subject to bidding;
c/ Methods of evaluation, comparison, grading and selection of bidders;
d/ Other instructions related to bidding.
2. Expenses for supply of documents provided to bidders shall be stipulated by bid solicitors.
Article 219.- Tendering notice
1. A tendering notice comprises the following principal contents:
a/ Name and address of the bid solicitor;
b/ Brief description of bidding contents;
c/ Time limit, place and procedures for receipt of tendering dossiers;
d/ Time limit, place and procedures for submission of bid dossiers;
el Instructions for reading tendering dossiers.
2. Bid solicitors shall have to notify on the mass media in case of open bidding or send notices on
invitation to register for bidding participation to
qualified bidders in case of restricted bidding.
Article 220.- Instructions to bidders
Bid solicitors shall have to provide bidders with instructions on the tendering conditions, procedures to
be applied in the bidding process, and to answer questions of bidders.
Article 221.- Management of bid dossiers
Bid solicitors shall have to manage bid dossiers.
Article 222.- Bid bonds
1. Bid bonds shall be made in the form of bid deposit, collateral or guarantee.
2. Bid solicitors may request bidders to make bid deposits, bid collaterals or provide bid guarantees
when submitting their bid dossiers. The percentage of a bid deposit or collateral shall be set out by
bid solicitor but must not exceed 3% of the total estimated value of goods or services subject to
bidding.
3. Bid solicitors shall stipulate the mode and conditions for making deposits, collaterals or providing
bid guarantees. In case of bid deposits or collaterals, such deposits or collaterals shall be returned to
unsuccessful bidders within seven working days from the date the bidding results are announced.
4. Bidders shall not be allowed to receive back their bid deposits or collaterals in cases where they
withdraw bid dossiers after the expiration of the time limit for submitting bid dossiers (referred to as
"bidding closure"), fail to enter into contracts or refuse to perform contracts in cases where they are
bid winners.
5. Guarantors for bidders are obliged to guarantee bids for the guaranteed within the value equal to
deposits or collaterals.
Article 223.- Confidentiality of bidding information
1. Bid solicitors must keep confidential bid dossiers.
2. Organizations and individuals involved in the organization of bidding and in the evaluation and
selection of bids must keep confidential information relevant to the bidding.
Article 224.- Bid opening
1. Bid opening is the opening of bid dossiers at a fixed time or in cases where there is no prefixed
time, the time of bid opening shall be the time immediately after the bidding closure.
2. All bid dossiers submitted on time must be opened publicly by bid solicitors. Bidders shall be
entitled to attend the bid opening.
3. Bid dossiers which are not submitted on time shall be rejected and returned to bidders unopened.
Article 225.- Consideration of bid dossiers upon bid opening
1. Bid solicitors consider the validity of bid dossiers.
2. Bid solicitors may request bidders to clarify unclear contents in their bid dossiers. Requests and
clarification of bid dossiers must be made in writing.
Article 226.- Minutes of bid opening
1. Upon bid opening, the bid solicitor and bidders
that are present shall have to sign the minutes of bid opening.
2. A minutes of bid opening must have the following contents:
a/ Name of goods or service subject to bidding;
b/ Date, time and place of the bid opening;
c/ Names and addresses of the bid solicitor and bidders;
d/ Bidding prices of bidders;
el Written amendments or supplements and relevant contents, if any.
Article 227.- Evaluation and comparison of bid dossiers
1. Bid dossiers shall be evaluated and compared according to each criterion for an overall evaluation
The criteria for evaluation of bid dossiers shall be provided for by bid solicitors.
2. The criteria mentioned in Clause 1 of this Article shall be evaluated by the score-giving method or
other methods determined prior to the bid opening.
Article 228.- Amendment of bid dossiers
1. Bidders are not allowed to amend their bid dossiers after the bid opening.
2. In the course of evaluation and comparison of bid dossiers, bid solicitors may request bidtiers to
clarify matters related to their bid dossiers Requests of solicitors and replies of bidders must be made
in writing.
3. Where bid solicitors amend some contents in tendering dossiers, they must send such
amendments in writing to all bidders at least ten days before the deadline for submitting bid dossiers
so that bidders have enough time to finalize their bid dossiers.
Article 229.- Classification and selection of bidders
1. On the basis of the result of the evaluation of bid dossiers, bid solicitors shall have to classify and
select bidders according to the method already determined.
2. Where many bidders obtain equal scores and equally satisfy criteria to win the bidding, the bid
solicitor shall have the right to select winning bidder.
Article 230.- Notification of bidding results and entry into contracts
1. Immediately after bidding results are available, bid solicitors shall have to notify them to bidders.
2. Bid solicitors shall finalize and enter into contracts with bid winners on the following bases:
a/ Bidding results;
b/ Requirements stated in tendering dossiers;
c/ Contents in bid dossiers.
Article 231.- Contract performance security
1. Involved parties may agree that bid winners should make deposits or collaterals or be provided
with guarantees to secure the performance of contracts. Money amount to be deposited or used as a
collateral shall be set by bid solicitors but must not exceed 10% of the contract value.
2. Contract performance security measures
shall be effective up to the time of completion of contractual obligations by bid winners.
3. Unless otherwise agreed, bid winners shall receive back deposits or collaterals as security for the
performance of contracts upon the liquidation of such contracts. Bid winners shall not be entitled to
receive back deposits or collaterals as security for the performance of contracts if they refuse to
perform such contracts after they are entered into.
4. After paying deposits or making collaterals to secure the contract performance, bid winners shall
have their bid deposits or collaterals refunded.
Article 232.- Reorganization of bidding
A bidding shall be reorganized in one of the following cases:
1. Where there is a violation of the regulations on bidding;
2. Where all bidders fail to satisfy the bidding requirements.
Section 4. LOGISTIC SERVICES
Article 233.- Logistic services
Logistic services are commercial activities whereby traders organize the performance of one or many
jobs including reception, transportation, warehousing, yard storage of cargoes, completion of customs
procedures and other formalities and paperwork, provision of consultancy to customers, services of
packaging, marking, delivery of goods, or other services related to goods according to agreements
with customers in order to enjoy service charges.
Article 234.- Conditions for logistic service provision
1. Traders providing logistic services are enterprises fully satisfying the conditions for logistic service
business provided for by law.
2. The Government shall specify logistic service business conditions.
Article 235.- Rights and obligations of traders providing logistic services
1. Unless otherwise agreed, traders providing logistic services shall have the following rights and
obligations:
a/ To enjoy service charges and other reasonable expenses;
b/ To depart from instructions of customers during the performance of contracts for plausible reasons
and in the interests of customers, provided that customers must be notified thereof immediately;
c/ To notify such customers immediately for further instructions in cases where instructions of
customers cannot be followed in part or in whole;
d/ To perform their obligations within a reasonable period of time if there is no agreement on specific
time limit for performance of their obligations to customers.
2. In the course of transportations of goods, traders providing logistic services must comply with the
provisions of law and transportation practices.
Article 236.- Rights and obligations of customers
Unless otherwise agreed, customers shall have the following rights and obligations:
1. To guide, inspect and supervise the performance of contracts;
2. To provide sufficient instructions to traders providing logistic services;
3. To provide sufficient, detailed and accurate information on the goods to traders providing logistic
services;
4. To pack and mark the goods according to contracts for purchase and sale of goods, except where
there is an agreement that traders providing logistic services shall undertake to do such job;
5. To compensate for damage caused to, and pay reasonable costs incurred by, traders providing
logistic services if such traders have strictly complied with customers' instructions or if the customers
are at fault;
6. To pay traders providing logistic services all amounts due.
Article 237.- Liability exemption for traders providing logistic services
1. Apart from the cases of liability exemption specified in Article 294 of this Law, traders providing
logistic services shall not be liable for the goods loss caused in the following cases:
a/ The loss is caused by faults of customers at their authorized persons;
b/ The loss is caused by traders that have strictly followed the instructions of their customers or
persons authorized by customers;
c/ The loss is attributed to defects of the goods;
d/ The loss occurs in cases of liability exemption according to law and transportation practices, if
traders providing logistic services organize transportation;
e/ Trader providing logistic services are not notified of complaints within fourteen days from the date
they deliver goods to recipients;
f/ After being complained against, traders providing logistic services are not notified of lawsuits
against them being instituted at arbitrations or courts within nine months from the date of delivery of
goods.
2. Traders providing logistic services shall not be liable for the loss of profits which their customers
would have earned, for any services delayed or provided at wrong addresses, for which they are not
at fault.
Article 238.- Limitation to liability
1. Unless otherwise agreed, the full liability of traders providing logistic services shall not exceed the
limitation of liability for the full loss of the goods.
2. The Government shall provide in detail for the limitation of liability of traders providing logistic
services in compliance with provisions of law and international practices.
3. Traders providing logistic services shall not enjoy the limitation of liability for damage
compensation if persons with related rights and benefits prove that the loss, damage or delayed
delivery of goods is caused by deliberate actions or inactions of traders providing logistic services
with the intention to cause such loss, damage or delayed delivery or their actions or inactions are
known to be risky who were also aware of such loss, damage, or delay would certainly occur.
Article 239.- The right to withhold and dispose of goods
1. Traders providing logistic services shall be entitled to withhold a certain quantity of goods and
related documents in order to claim payment of due debts by customers but shall have to notify
promptly customers thereof in writing.
2. After forty five days from the date of notification of the withholding of goods or their related
documents, if customers fail to pay debts, traders providing logistic services shall be entitled to
dispose of such goods or documents according to provisions of law. Where there are indications of
deterioration of goods, traders providing logistic services shall have the right to dispose of the goods
immediately after any debt of customers becomes due.
3. Before disposing of goods, traders providing logistic services must immediately notify their
customers of such disposal.
4. All expenses for the withholding and disposal of goods shall be borne by customers.
5. Traders providing logistic services shall be entitled to use proceeds from the disposal of goods to
pay for debts owed to them by their customers and related expenses. If the proceeds from the
disposal of goods exceed the value of debts, the difference must be returned to customers. From that
point of time, traders providing logistic services shall no longer be responsible for the goods or
documents already disposed of.
Article 240.- Obligations of traders providing logistic services when withholding goods
When the right to dispose of goods provided for in Article 239 of this Law is not yet exercised, traders
providing logistic services and withholding goods shall have the following obligations:
1. To preserve and keep the goods;
2. Not to use goods without consent of the parties whose goods are withheld;
3. To return goods where the conditions for withholding and disposal of goods provided for in Article
239 of this Law no longer exist;
4. To pay damages to the parties whose goods are withheld if they cause loss or damage to withheld
goods.
Section 5. TRANSIT OF GOODS THROUGH THE VIETNAMESE TERRITORY; AND
GOODS TRANSIT SERVICES
Article 241.- Transit of goods
Transit of goods means the transportation of goods owned by foreign organizations or individuals
through the Vietnamese territory, including transshipment, portage, warehousing, shipment
separation or alteration of modes of transportation or other jobs performed in the course of transit.
Article 242.- Right to transit goods
1. All goods owned by foreign organizations and individuals are allowed to be transited through the
Vietnamese territory and subject only to customs clearance at import border-gates and export border-
gates according to the provisions of law, except for the following cases:
a/Goods are weapons, ammunitions, explosive materials and other type of highly dangerous goods,
unless they are permitted by the Prime Minister;
b/ Goods are banned from business, export or import, which shall be allowed to be transited
through the Vietnamese territory only when so permitted by the Trade Minister.
2. Goods in transit when being exported frorm, and means of transport carrying goods in trans when
leaving, the Vietnamese territory must be the goods or means of transport which have previously
entered the Vietnamese territory.
3. Foreign organizations or individuals that wish to transit their goods through the Vietnamese territory
must hire Vietnamese traders providing transit services to do so, except for cases mentioned in
Clause 4 of this Article.
4. The transit of goods through the Vietnamese territory by foreign organizations and individuals
themselves or by hired foreign traders must comply with treaties to which the Socialist Republic of
Vietnam is a contracting party and the provisions of Vietnamese law on exit, entry and transport.
Article 243.- Routes for transit
1. Goods shall only be transited through international border-gates and on certain routes in the
Vietnamese territory.
2. On the basis of treaties to which the Socialist Republic of Vietnam is a contracting party, the
Transport Minister shall specify routes on which the transportation of goods in transit is allowed.
3. In the course of transit, any change of routes on which the transportation of goods in transit is
allowed must be consented by the Transport Minister.
Article 244.- Transit by airways
Transit by airways shall be carried out in accordance with treaties on aviation to which the Socialist
Republic of Vietnam is a contracting party.
Article 245.- Supervision of goods in transit
Goods in transit through the Vietnamese territory shall be subject to the supervision by Vietnamese
customs authorities throughout the course of transit. .
Article 246, Transit duration
1. The maximum duration of transit through the Vietnamese territory shall be thirty days from the date
of completion of customs procedures at import border-gates, except where goods are warehoused in
Vietnam or damaged or lost in the course of transit.
2. Where goods are warehoused in Vietnam or damaged or lost in duration of transit and require
more time for warehousing, remedying such damage or loss, the transit duration may be prolonged
according to the amount of time required for such jobs and with approval of customs authorities
where transit procedures are carried out; in cases where goods are transited under permits of the
Trade Minister, approval of the Trade Minister is required.
3. During the period of warehousing or remedying damage and loss mentioned in Clause 2 of this
Article, transit goods and means of transport carrying transit goods must still be subject to supervision
by Vietnamese customs authorities.
Article 247.- Goods in transit consumed in Vietnam
1. Goods in transit defined at Points a and b,
Clause 1, Article 242 of this Law shall not be permitted for consumption in Vietnam
2. Except for cases mentioned in Clause 1 of this Article, goods in transit shall be permitted for
consumption in Vietnam only when it is so approved in writing by the Trade Minister.
3. The consumption of transit goods in Vietnam must comply with the provisions of Vietnamese law
on import of goods, taxes, charges, fees and other financial obligations.
Article 248.- Prohibited acts during transit
1. To pay transit remunerations in transit goods.
2. To illegally consume goods in transit or means of transport carrying goods in transit.
Article 249.- Goods transit services
Goods transit services mean commercial activities whereby traders carry out the transit of goods
under the ownership of foreign organizations or individuals through the Vietnamese territory for
remunerations.
Article 250.- Conditions for providing transit services
Traders providing transit services must be enterprises with registrations of business of providing
transportation services or logistic services according to Article 234 of this Law.
Article 251.- Transit service contracts
Transit service contracts must be made in writing or in other forms of equivalent legal validity.
Article 252.- Rights and obligations of transit service hirers
1. Unless otherwise agreed, transit service hirers shall have the following rights:
a/ To request transit service providers to receive goods at import border-gates at the agreed time;
b/ To request transit service providers to promptly notify the conditions of goods in the course of
transit through the Vietnamese territory;
c/ To request transit service providers to carry out all necessary procedures to limit damage or loss of
goods in transit in the course of transit through the Vietnamese territory.
2. Unless otherwise agreed, transit service hirers shall have the following obligations:
a/ To deliver goods to import border-gates of Vietnam on time as agreed;
b/ To supply transit service providers with sufficient information on the goods;
c/ To supply sufficient documents necessary for transit service providers to carry out procedures for
import or transportation in the Vietnamese territory and the export procedures;
d/ To pay transit remunerations and other reasonable expenses to transit service providers.
Article 253.- Rights and obligations of transit service providers
Unless otherwise agreed, transit service providers shall have the following rights:
a/ To request transit service hirers to deliver goods to import border-gates of Vietnam on time as
agreed;
b/ To request transit service hirers to supply sufficient necessary information on the goods;
c/ To request transit service hirers to supply sufficient necessary documents for carrying out
procedures for import and transportation in the Vietnamese territory and export procedures;
d/ To receive transit remunerations and other reasonable expenses.
2. Unless otherwise agreed, transit service providers shall have the following obligations:
a/ To receive the goods at import border-gates at the agreed time;
b/ To carry out procedures to import and export the goods in transit into and out of the Vietnamese
territory;
c/ To be responsible for goods in transit in the course of transit through the Vietnamese territory:
d/ To perform necessary jobs to minimize loss and/or damage to the goods in transit in the course of
transit through the Vietnamese territory;
e/ To pay assorted fees and charges and other financial obligations applicable to goods in transit as
provided for by Vietnamese law;
f/ To cooperate with competent state agencies of Vietnam in dealing with matters related to the goods
in transit.
Section 6. ASSESSMENT SERVICES
Article 254.- Assessment services
Assessment services are commercial activities whereby traders perform necessary jobs to determine
actual conditions of goods, results of the provision of services and other contents at the request of
customers.
Article 255.- Contents of assessment
Assessment comprises one or a nurmber of contents regarding the quantity, quality, packing value of
goods, origin of goods, losses, safety, hygienic and quarantine standards, results of the provision of
services, method of providing services and other contents at the request of customers.
Article 256.- Traders providing commercial assessment services
Only traders that satisfy all the conditions provided for by law and are granted business registration
certificates for provision of commercial assessment services shall be allowed to provide assessment
services and issue assessment certificates.
Article 257.- Conditions for providing commercial assessment services
Traders providing commercial assessment services must fully satisfy the following conditions:
1. Being enterprises established according to the provisions of law;
2. Having assessors who have all the qualifications specified in Article 259 of this Law;
3. Being capable of carrying out procedures and methods for assessing goods or services under the
provisions of law, the international standards or which are commonlly applied by countries in
assessment of such goods or services.
Article 258.- Scope of providing commercial assessment services
Traders providing commercial assessment services shall be allowed to provide assessment services
in domains of assessment only when they fully satisfy the conditions provided for in Clauses 2 and 3,
Article 257 of this Law.
Article 259.- Criteria of assessors
1. An assessor must fully satisfy the following criteria:
a/ Possessing a university or college degree suitable to the requirements of the domain of
assessment;
b/ Having a professional certificate for the assessment domain in cases where such professional
certificate is required by law;
c/ Having worked for at least three years in the domain of assessment of goods or services.
2. Basing themselves on the criteria specified in Clause 1 of this Article, directors of enterprises
providing commercial assessment services shall recognize assessors and be responsible before law
for their decisions.
Article 260.- Assessment certificates
1. Assessment certificates are documents determining the actual conditions of goods and services
according to the assessment contents required by customers.
2. Assessment certificates must be signed by competent representatives of enterprises providing
commercial assessment services, have signatures and full names of assessors, and be affixed with
professional seals already registered with competent agencies.
3. Assessment certificates shall only be valid for those contents already assessed.
4. Traders providing assessment services shall be responsible for accuracy of results and
conclusions in assessment certificates.
Article 261.- Legal validity of assessment certificates with respect to assessment requesters
Assessment certificates shall be legally binding on assessment requesters in cases where they
cannot prove that assessment results are non-objective, untruthful or obtained with technical or
professional errors.
Article 262.- Legal validity of assessment certificates with respect to contracual parties
1. Where contracting parties agree on the use of an assessment certificate issued by a particular
trader providing assessment services, such assessment certificate shall be legally binding on all the
parties if they cannot prove that the assessment results are non-objective, untruthful or obtained with
technical or professional errors.
2. Where contractual parties do not agree on the use of an assessment certificate issued by a
particular trader providing assessment services, such assessment certificate shall only be binding on
the party requesting the assessment according to Article 261 of this Law. The other contractual party
shall have the right to request re-assessment.
3. If a re-assessment certificate is inconsistent with the original assessment certificate:
a/ Where the trader providing assessment services and issuing the original assessment certificate
accepts the results stated in the reassessment certificate, such results shall be legally binding on all
the parties;
b/ Where the trader providing assessment services and issuing the original assessment certificate
does not accept the results stated in the reassessment certificate, the parties shall agree to select
another trader providing assessment services to perform the re-assessment for the second time. The
results of the second-time reassessment shall be legally binding on all the parties.
Article 263.- Rights and obligations of traders providing assessment services
1. Traders providing assessment services shall have the following rights:
a/To request customers to supply in a sufficient, accurate and timely manner necessary documents
for performance of assessment services;
b/ To receive assessment service charges and other reasonable expenses.
2. Traders providing assessment services shall have the following obligations:
a/ To observe the standards and other relevant provisions of law on assessment services;
b/ To perform the assessment in an honest, objective, independent, timely manner and according to
the assessment procedures and methods;
c/ To issue assessment certificates;
d/ To pay violation fines and/or damages according to the provisions of Article 266 of this Law.
Article 264.- Rights of customers
Unless otherwise agreed, customers shall have the following riqhts:
1. To request traders providing assessment services to perform the assessment according to the
agreed contents;
2. To request re-assessment if they have sound reasons to believe that traders providing assessment
services fail to properly satisfy their requirements or perform the assessment in an untruthful and non-
objective manner or with technical and professional errors;
3. To request payment of fines or damages according to the provisions of Article 266 of this Law.
Article 265.- Obligations of customers
Unless otherwise agreed, customers shall have the following obligations:
1. To supply in a sufficient, accurate and timely manner necessary documents to traders providing
assessment services when so requested;
2. To pay assessment service charges and other reasonable expenses.
Article 266.- Fines and damages in case of incorrect assessment results
1. Where traders providing assessment services issue assessment certificates showing incorrect
results caused by their unintentional faults, they must pay fines therefor to customers. The fine level
shall be agreed upon by the parties but must not exceed ten times the assessment service charge.
2. Where traders providing assessment services issue assessment certificates showing incorrect
results caused by their intentional faults, they must pay compensations for damage caused to
customers that directly request the assessment.
3. Customers are obliged to prove that assessment results are incorrect and traders providing
assessment services are at fault.
Article 267.- Authorized assessment
Where foreign traders providing assessment services are hired to perform assessment while having
no license to operate in Vietnam, such traders may authorize traders providing assessment services
which have been licensed to operate in Vietnam to provide assessment services but must still be held
responsible for the assessment results.
Article 268.- Assessment at the request of state agencies
1. Traders providing assessment services which fully satisfy the conditions and criteria suitable with
assessment requirements shall have to perform assessment at the request of state agencies.
2. State agencies which request the assessment shall have to pay assessment remunerations to
traders providing assessment services according to agreements between the two parties on the basis
of market prices.
Section 7. LEASE OF GOODS
Article 269.- Lease of goods
Lease of goods means commercial activities whereby one party transfers the right to possess and
use goods (referred to as lessor) to another party (referred to as lessee) for a certain duration to
enjoy rentals.
Article 270.- Rights and obligations of lessors
Unless otherwise agreed, lessors shall have the following rights and obligations:
1. To deliver leased goods to lessees as agreed upon in lease contracts;
2. To ensure that the right of lessees to possess and use leased goods is not disputed by a
concerned third party in the lease duration;
3. To ensure that leased goods are suitable to the use purposes of lessees as agreed upon by the
parties;
4. To maintain and repair leased goods within a reasonable duration. Where the maintenance and
repair of leased goods cause harms to the use of such goods by lessees, lessors shall have to
reduce rent rates or prolong lease duration corresponding to the time of maintenance and repair;
5. To receive rentals according to agreements or provisions of law;
6. To take back leased goods upon the expiration of the lease duration.
Article 271.- Rights and obligations of lessees
Unless otherwise agreed, lessees shall have the following rights and obligations:
1. To possess and use leased goods according to lease contracts and the provisions of law. Where
there is no specific agreement on the manner in which leased goods should be used, such leased
goods shall be used in a manner appropriate to their nature;
2. To maintain and preserve leased goods in the lease duration and return such goods to lessors
upon the expiration of the lease duration;
3. To request lessors to perform the maintenance and repair of goods. If lessors fail to perform such
obligation within a reasonable period of time, lessees may perform the maintenance and repair of
leased goods and lessors shall bear all reasonable expenses for such maintenance and repair;
4. To pay rentals as agreed or according to the provisions of law;
5. Not to sell or sub-lease the leased goods.
Article 272.- Repair or alteration of original status of leased goods
1. Lessees must not repair or alter the original status of leased goods if not so consented by lessors.
2. Where lessees perform the repair or alter the original status of the leased goods without lessors'
consents, lessors shall have the right to request lessees to restore the original status of the leased
goods or claim damages.
Article 273.- Liability for loss occurring in the lease duration
1. Unless otherwise agreed, lessors shall bear loss of leased goods occurring in the lease duration if
lessees are not at fault in causing such loss.
2. In cases mentioned in Clause 1 of this Article, lessors shall have to repair leased goods within a
reasonable duration to ensure the achievement of use purposes of lessees.
Article 274.- Pass of risks incurred to leased goods
Where the parties agree on the pass of risk to the lessee but the point of time of passing risks is not
determined, that point of time shall be determined as follows:
1. In cases where the lease contract involves the transportation of goods:
a/ If the contract does not require the leased goods to be delivered at a designated place, risks shall
be passed to the lessee when the leased goods are delivered to the first carrier;
b/ If the contract requires the leased goods to be delivered at a designated place, risks shall be
passed to the lessee or the person authorized by the lessee to receive the goods at such place;
2. In cases where the leased goods are received by a bailee other than a carrier for delivery, risks
shall be passed to the lessee as soon as the bailee acknowledge the lessee's right to possess the
leased goods;
3. In other cases not mentioned in Clauses 1 and 2 of this Article, risks shall be passed to the lessee
upon the receipt of the leased goods by the lessee.
Article 275.- Leased goods inappropriate to contracts
Where there is no specific agreement, goods shall be deemed inappropriate to contracts when such
goods fall into one of the following cases:
1. They are suitable to common utility of goods of the same type;
2. They are not suitable to specific purposes which the lessee has informed the lessor or the lessor
should have known at the time the contract was entered into;
3. Their quality is not the same as goods samples handed over by the lessor to the lessee.
Article 276.- Rejection of goods
1. The lessor shall give the lessee a reasonable time after the receipt of goods for inspection thereof.
2. The lessee may reject the goods in the following cases:
a/ The lessor does not give conditions and a reasonable time to the lessee for inspecting the goods;
b/ When inspecting the goods, the lessee discovers that the goods are inappropriate to the contract.
Article 277.- Rectification or replacement of leased goods inappropriate to contracts
1. Where the lessee rejects leased goods inappropriate to the contract, if the time limit for delivery of
goods has not yet expired, the lessor may promptly notify the lessee of the rectification or
replacement of the goods and then perform such rectification or replacement of goods within the
remaining duration.
2. Where the lessor, when performing the rectification mentioned in Clause 1 of this Article, causes
inconvenience or unreasonable expenses to be borne by the lessee, the lessee shall have the right to
request the lessor to remedy such inconvenience or pay such unreasonable expenses.
Article 278.- Acceptance of leased goods
1. The lessee shall be deemed having accepted the leased goods after being given a reasonable
opportunity to inspect the leased goods and taking one of the following acts:
a/ Not rejecting the leased goods;
b/ Certifying the appropriateness of the leased goods to agreements in the contract;
c/ Confirming the acceptance of the goods despite their inappropriateness to agreements in the
contract.
2. If the lessee discovers the inappropriateness of the leased goods to the contract after accepting
such goods and such inappropriateness is detectable through a reasonable inspection before the
acceptance, the lessee shall not be entitled to rely on such inappropriateness as an excuse for
returning the goods.
Article 279.- Withdrawal of acceptance
1. Lessees may withdraw their acceptance of part or whole of the leased goods if the
inappropriateness of such leased goods may render them unable to achieve the objectives of the
entry into of contracts and falls into one of the following cases:
a/ Lessors fail to make reasonable rectification according to Article 277 of this Law;
b/ Lessees fail to detect the inappropriateness of the goods due to lessors' guarantee.
2. The withdrawal of acceptance must be made within a reasonable period of time, which must not
exceed three months as from the date lessees accept the goods.
Article 280.- Responsibility for defects of leased goods
Unless otherwise agreed, responsibility for
defects of leased goods is provided for as follows:
1. In the lease duration, lessors shall be responsible for any defects of leased goods which already
exist at the time of delivery of such goods to lessees, except for cases mentioned in Clauses 2 and 3
of this Article;
2. Lessors shall not be responsible for any defects of leased goods which already exist prior to the
entry into of contracts and which lessees knew or should have known;
3. Lessors shall not be responsible for any defects of leased goods which are detected after lessees
have accepted the leased goods and which would have been detected by lessees through
reasonable inspections before accepting the goods.
4. Lessors shall be responsible for any defects of leased goods appearing after the time of passing
risks due to lessors' breaches of their committed obligations.
Article 281.- Sub-lease
1. Lessees shall be entitled to sub-lease goods only when they obtain consents of lessors. Lessees
shall be responsible for sub-leased goods, unless they otherwise agree with lessors.
2. Where lessees sub-lease leased goods without consents of lessors, lessors may revoke lease
contracts. Sub-lessees shall have to return the goods to lessors immediately
Article 282.- Benefits arising in the lease duration
Unless otherwise agreed, all benefits arising from leased goods in the lease duration shall belong to
lessees.
Article 283.- Change of ownership in the lease duration
Any change of ownership over leased goods shall not affect the validity of lease contracts.
Section 8. COMMERCIAL FRANCHISE
Article 284.- Commercial franchise
Commercial franchise means a commercial activity whereby franchisors permit and require
franchisees to undertake by themselves to purchase or sell goods or provide services on the following
conditions:
1. The purchase or sale of goods or provision of services shall be conducted in accordance with
methods of business organization prescribed by franchisors and associated with the franchisors'
trademarks, trade names, business knows-how, business slogans, business logos and
advertisements.
2. Franchisors shall be entitled to supervise and assist franchisees in conducting their business
activities.
Article 285.- Commercial franchise contracts
Commercial franchise contracts must be made in writing or in other forms of equivalent legal validity.
Article 286.- Rights of franchisors
Unless otherwise agreed, franchisors shall have the following rights:
1. To receive franchise sums.
2. To organize advertising for the commercial franchise system and the commercial franchise
network.
3. To conduct periodical or extraordinary inspections of activities of franchisees in order to ensure the
uniformity of the commercial franchise system and the stability of quality of goods and services.
Article 287.- Obligations of franchisors
Unless otherwise agreed, franchisors shall have the following obligations:
1. To supply documents guiding the commercial franchise system to franchisees;
2. To provide initial training and regular technical assistance to franchisees for managing the latter's
activities in accordance with the commercial franchise system;
3. To design and arrange places of sale of goods or provision of services at the expenses of
franchisees;
4. To guarantee the intellectual property rights over objects stated in franchise contracts;
5. To equally treat all franchisees in the commercial franchise system.
Article 288.- Rights of franchisees
Unless otherwise agreed, franchisees shall have the following rights:
1. To request franchisors to provide fully technical assistance related to the commercial franchise
system;
2. To request franchisors to equally treat all franchisees in the commercial franchise system.
Article 289.- Obligations of franchisees
Unless otherwise agreed, franchisees shall have the following obligations:
1. To pay franchise sums and other amounts under commercial franchise contracts;
2. To invest adequate material facilities, financial sources and human resources to take over business
rights and know-how transferred by franchisors;
3. To submit to the control, supervision and instruction by franchisors; to comply with all
requirements set forth by franchisors on designing and arrangement of places of sale of goods or
provision of services;
4. To keep secret the franchised business know-how even after the expiration or termination of
commercial franchise contracts;
5. To stop using trademarks, trade names, business slogans, logos and other intellectual property
rights (if any) or systems of franchisors upon the expiration or termination of commercial franchise
contracts;
6. To manage their activities in accordance with the commercial franchise system;
7. Not to sub-franchise without permissions of franchisors.
Article 290.- Sub-franchise to a third party
1. A franchisee shall be entitled to sub-franchise to a third party (referred to as sub-franchisee) if it is
so consented by the franchisor.
2. Sub-franchisees shall have the rights and obligations of franchisees provided for in Articles 288
and 289 of this Law.
Article 291.- Registration of commercial franchises
1. Before granting commercial franchises, intended franchisors must register them with the Trade
Ministry.
2. The Government shall specify the conditions for conducting business under commercial franchise
and the order and procedures for registering commercial franchises.
CHAPTER VII: COMMERCIAL REMEDIES AND RESOLUTION OF COMMERCIAL

DISPUTES
Section 1. COMMERCIAL REMEDIES

Article 292.- Types of commercial remedies
1. Specific performance of contracts.
2. Fines for breaches.
3. Forcible payment of damages.
4. Suspension of performance of contracts.
5. Stoppage of performance of contracts.
6. Cancellation of contracts.
7. Other remedies agreed upon by involved parties which are not contrary to the fundamental
principles of Vietnamese law, treaties to which the Socialist Republic of Vietnam is a contracting party
and international commercial practices.
Article 293.- Application of commercial remedies against insubstantial breaches
Unless otherwise agreed, aggrieved parties are not entitled to apply the remedy of suspension of
performance of contracts, stoppage of performance of contracts or cancellation of contracts against
insubstantial breaches.
• Article294.- Cases of exemption from liability for breaching acts
1. A party that breaches a contract shall be exempted from liability in the following cases:
a/ A case of liability exemption agreed upon by the parties occurs;
b/A force majeure event occurs;
c/A breach by one party is entirely attributable to the other party's fault;
d/A breach is committed by one party as a result of the execution of a decision of a competent state
management agency which the party cannot know, at the time the contract is entered into.
2. The contract-breaching party shall bear the burden of proof of cases of liability exemption.
Article 295.- Notification and certification of cases of liability exemption
1. The party must promptly notify in writing the other party of cases of liability exemption and possible
consequences there of.
2. When a case of liability exemption no longer exists, the contract-breaching party must promptly
notify such to the other party. The breaching party must pay damages if it fails to notify or notifies the
other party not in a prompt manner.
3. Breaching parties are obliged to prove their cases of liability exemption to aggrieved parties.
Article 296.- Extension of time limit for performance of contracts, or refusal to perform
contracts in force majeure circumstances
1. In a force majeure circumstance, the parties may agree to extend the time limit for performing their
respective contractual obligations. If the parties do not agree or cannot agree upon such extension,
the time limit for performing contractual obligations shall be extended for a period of time equal to the
time length of such force majeure circumstance plus a reasonable period of time for remedying
consequences, but not exceeding:
a/ Five months for goods or services for which the agreed time limit for their delivery or provision does
not exceed twelve months from the date the contract is entered into;
b/ Eight months for goods or services for which the agreed time limit for their delivery or provision
exceeds twelve months from the date the contract is entered into.
2. Beyond the time limits specified in Clause 1 of this Article, the parties may refuse to perform the
contract and neither party is entitled to request the other party to pay damages.
3. Where a party refuses to perform a contract, it must, within ten days from the expiry date of the
time limit specified in Clause 1 of this Article, notify the other party thereof before the latter begins to
perform its contractual obligations.
4. The extension of the time limit for performing contractual obligations mentioned in Clause 1 of this
Article does not apply to contracts for purchase and sale of goods or contracts for provision of
services with fixed time limit for goods delivery or service completion.
Article 297.- Specific performance of contracts
1. Specific performance of a contract means a remedy whereby the aggrieved party requests the
breaching party to properly perform the contract or apply other measures to cause the contract to be
performed and the breaching party shall have to bear any costs incurred.
2. Where the breaching party fails to deliver goods in full or provide services in accordance with the
contract, it shall have to deliver goods in full or provide services in accordance with the contract.
Where the breaching party delivers goods or provides services of inferior quality, it shall have to
rectify defects of the goods or shortcomings of the services or to deliver other goods as substitutes or
provide services in accordance with the contract. The breaching party must not use money or goods
or services of other types as substitutes unless so consented by the aggrieved party.
3. Where the breaching party fails to comply with Clause 2 of this Article, the aggrieved party may
purchase goods or receive services of correct type as stated in the contract from another seller or
provider for substitution and the breaching party must bear the price difference and relevant
expenses, if any; or may rectify defects of the goods or shortcomings of the services by itself, and the
breaching party must pay actual and reasonable expenses for the rectification.
4. The aggrieved party shall have to receive
goods or services and make payments therefor if the breaching party has fulfilled all obligations
according to Clause 2 of this Article.
5. Where the breaching party is the purchaser, the seller may request the purchaser to pay for and
receive goods or fulfill other obligations stipulated in the contract and provided for in this Law.
Article 298.- Extension of time limit for performance of obligations
In case of specific performance of a contract, the aggrieved party may extend the time limit for a
reasonable period for the breaching party to perform its contractual obligations.
Article 299.- Relationship between the remedy of specific performance of contracts and other
remedies
1. Unless otherwise agreed, during the period of application of specific performance of a contract, the
aggrieved party may claim for damages and fines to be paid but must not apply other remedies.
2. If the breaching party fails to carry out the remedy of specific performance of a contract within the
time limit set by the aggrieved party, the aggrieved party may apply other remedies in order to protect
its legitimate rights.
Article 300.- Fine for breach
Fine for breach means a remedy whereby the aggrieved party requests the breaching party to pa_.
an amount of fine for its breach of a contract, if so agreed in the contract, except for cases of liability
exemption specified in Article 294 of this Law.
Article 301.- Fine level
The fine level for a breach of a contractual obligation or the aggregate fine level for more than one
breach shall be agreed upon in the contract by the parties but must not exceed 8% of the value of the
breached contractual obligation portion, except for cases specified in Article 266 of this Law.
Article 302.- Damages
1. Damages means a remedy whereby the breaching party pays compensation for the loss caused
by a contract-breaching act to the aggrieved party.
2. The value of damages covers the value of the material and direct loss suffered by the aggrieved
party due to the breach of the breaching party and the direct profit which the aggrieved party would
have earned if such breach had not been committed.
Article 303.- Grounds for liability to pay damages
Except for cases of liability exemption specified in Article 294 of this Law, liability to pay damages
shall arise upon existence of all of the following elements:
1. Breach of the contract;
2. Material loss;
3. Act of breaching the contract is the direct cause of the loss.
Article 304.- Burden of proof of loss
The party claiming damages shall bear the burden of proof of the loss, the extent of the loss caused
by the act of breach, and direct profit amount which the aggrieved party would have earned if the
breach had not been committed.
Article 305.- Obligations to mitigate loss
The party claiming damages must apply appropriate measures to mitigate the loss caused by a
contract breach, including the loss of direct profit which it would have earned. If the party claiming
damages fails to do so, the breaching party may request a rebate of the value of damages to the
extent of the loss that would have been mitigated.
Article 306.- Right to claim interest on delayed payment
Where a contract-breaching party delays making payment for goods or payment of service charges
and other reasonable fees, the aggrieved party may claim an interest on such delayed payment at the
average interest rate applicable to overdue debts in the market at the time of payment for the delayed
period, unless otherwise agreed or provided for by law.
Article 307.- Relationship between remedy of fines and remedy of damages
1. Where the parties do not agree upon fines for breaches, the aggrieved party shall only be entitled
to claim damages, unless otherwise provided for by this Law.
2. Where the parties agree upon fines for breaches, the aggrieved party shall be entitled to apply
both remedies of fines and damages, unless otherwise provided for by this Law.
Article 308.- Suspension of performance of contracts
Except for cases of liability exemption specified in Article 294 of this Law, suspension of performance
of a contract means a remedy whereby a party temporarily ceases the performance of its contractual
obligations in one of the following cases:
1. Upon commission of a breaching act which serves as a condition for the suspension of
performance of the contract as agreed upon by the
2. Upon a substantial breach of contractual obligations by a party.
Article 309.- Legal consequences of suspension of performance of contracts
1. Contracts which are suspended from performance are still in full force and effective.
2. Aggrieved parties are entitled to claim damages according to the provisions of this Law.
Article 310.- Stoppage of performance of contracts
Except for cases of liability exemption specified in Article 294 of this Law, stoppage of performance of
a contract means a remedy whereby a party terminates the performance of its contractual obligations
in one of the following cases:
1. Upon commission of a breaching act which serves as a condition for stoppage of the performance
of the contract as agreed upon by the parties;
2. Upon a substantial breach of contractual obligations by a party.
Article 311.- Legal consequences of stoppage of performance of contracts
1. Where a contract is stopped from performance, it shall be terminated from the date when one
party receives the notice on stoppage The parties shall not have to further perform the contractual
obligations. A party that has performed its contractual obligations may request the other party to pay
or perform its reciprocal obligations.
2. The aggrieved party may claim damages according to the provisions of this Law.
Article 312.- Cancellation of contracts
1. Cancellation of a contract include; cancellation of part of a contract or cancellation of the entire
contract.
2. Cancellation of the entire contract means the complete annulment of the performance of all
contractual obligations for the entire contract.
3. Cancellation of part of a contract means the annulment of the performance of some contractual
obligations while other parts of the contract are still valid.
4. Except for cases of liability exemption specified in Article 294 of this Law, the remedy c
cancellation of contracts shall be applied in the following cases:
a/ Upon commission of a breaching act which serves as a condition for the cancellation of the
contract as agreed upon by the parties;
b/ Upon a substantial breach of contractual obligations by a party.
Article 313.- Cancellation of contracts in case of delivery of goods or provision of services in
installments
1. Where there is an agreement on delivery of goods or provision of services in installments, if one
party fails to perform its obligation for the delivery of goods or provision of services and such failure
constitutes a substantial breach in that time of delivery of goods or provision of services, the other
party shall have the right to declare the cancellation of the contract for such delivery of goods or
provision of services.
2. Where the failure of a party to perform its obligation for a delivery of goods or a provision of
services serves as the basis for the other party to conclude that a substantial breach of the contract
shall happen in subsequent deliveries of goods or provisions of services, the aggrieved party shall
have the right to declare the cancellation of the contract for subsequent deliveries of goods or
provisions of services, provided that such party must exercise that right within a reasonable period of
time.
3. Where a party has declared the cancellation of a contract for a single delivery of goods or provision
of services, such party shall still have the right to declare the cancellation of the contract for a delivery
of goods or provision of services that has been conducted or will be conducted subsequently if the
interrelation between the deliveries of goods makes the delivered goods or provided services unable
to be used for the purposes intended by the parties at the time they enter into the contract.
Article 314.- Legal consequences of cancellation of contracts
1. Except for cases specified in Article 313 of this Law, following the cancellation of a contract, such
contract shall be invalid from the time it is entered into, and the parties shall not have to continue
performing their contractual obligations, except for their agreements on their post-cancellation rights
and obligations and resolution of disputes.
2. The parties shall have the right to claim benefits brought about by their performance of their
contractual obligations. Where both parties have indemnity obligations, their obligations must be
performed concurrently. Where it is impossible to make the indemnity with benefits which one party
has enjoyed, the obliged party must make the indemnity in cash.
3. Aggrieved parties are entitled to claim damages according to the provisions of this Law.
Article 315.- Notification of suspension of performance of contracts, stoppage of performance
of contracts or cancellation of contracts
A party that suspends the performance of a contract, stops the performance of a contract or cancels a
contract must immediately notify the other party of such suspension, stoppage or cancellation. Where
a failure to do so causes a loss to the other party, the party that suspends the performance of the
contract, stops the performance of the contract or cancels the contract must pay damages.
Article 316.- Right to claim damages when other remedies have been applied
A party shall not lose its right to claim damages for the loss caused by a contract breach by the other
party when other remedies have been applied.
Section 2. RESOLUTION OF COMMERCIAL DISPUTES
Article 317.- Forms of resolution of disputes
1. Negotiations between the parties.
2. Conciliation between the parties by a body, organization or individual selected by the parties to act
as the conciliation mediator.
3. Resolution by the Arbitration or the Court.
Procedures for resolution of commercial disputes by arbitration or a court shall comply with
procedures applicable to arbitrations or courts provided for by law.
Article 318.- Time limit for lodging complaints
Except for cases specified at Point e, Clause 1, Article 237 of this Law, the time limit for lodging
complaints shall be agreed upon by the parties, where there is no such agreement, the time limit for
lodging complaints shall be provided for as follows:
a/ Three months from the date of delivery of goods for complaints about quantity of goods;
b/ Six months from the date of delivery of goods for complaints about quality of goods. Where goods
are under warranty, the time limit for lodging complaints shall be three months from the expiry of the
warranty period;
c/ Nine months from the date on which the breaching party shall have to fulfil its contractual
obligations; or in the case of a warranty, from the expiry of the warranty period, for complaints about
other violations.
Article 319.- Statute of limitations for initiating lawsuits
The statute of limitations for lawsuits applicable to commercial disputes shall be two years from the
moment when the legitimate rights and interests are infringed upon, except for cases specified at
Point f, Clause 1, Article 237 of this Law.
CHAPTER VIII: HANDLING OF VIOLATIONS OF COMMERCIAL LAW
Article 320.- Acts of violation of commercial law

1. Acts of violation of commercial law include:
a/ Violating provisions on business registration; business licenses of traders; establishment and
operation of representative offices and branches of Vietnamese traders and foreign traders;
b/ Violating provisions on domestically traded goods and services, and exported or imported goods
and services; temporary import for re-export, temporary export for re-import; transfer through border-
gates; transit;
c/ Violating provisions on taxes, invoices documents, accounting books and reports;
d/ Violating provisions on prices of goods and services;
e/ Violating provisions on labeling of domestically circulated goods and exports and imports;
f/ Smuggling, trading in goods illegally imported counterfeit goods or raw materials and materials for
production of counterfeit goods, or conducting illegal business;
g/ Violating provisions on quality of domestically traded goods and services, and exported or imported
goods and services;
h/ Defrauding and deceiving customers in the purchase and sale of goods or the provision of
services;
i/ Violating provisions on protection of interests of customers;
j/ Violating provisions on intellectual property rights to domestically traded goods and services; and
exported or imported goods and services;
k/ Violating provisions on origin of goods;
1/ Other violations in commercial activities according to the provisions of law.
2. The Government shall specify acts of violation of commercial law provided for in Clause 1 of this
Article.
Article 321.- Forms of handling of violations of commercial law
1. Depending on the nature, seriousness and consequences of violations, violating organizations and
individuals shall be handled in one of the following forms:
a Sanctions according to the provisions of law on handling of administrative violations;
b/ Where an act of violation involves all elements constituting a crime, the violator shall be examined
for penal liability according to the provisions of law.
2. Where an act of violation causes harm to the interests of the State or legitimate rights and interests
of organizations and/or individuals, compensation must be paid according to the provisions of law.
Article 322.- Sanctioning of administrative violations in commercial activities
The Government shall specify the sanctioning of administrative violations in commercial activities.
CHAPTER IX: IMPLEMENTATION PROVISIONS
Article 323.- Implementation effect

This Law takes effect on January 1, 2006.
This Law replaces the Commercial Law of May 10, 1997.
Article 324.- Detailed provisions and implementation guidance
The Government shall detail and guide the implementation of this Law.
This Law was passed on June 14, 2005, by the XIth National Assembly of the Socialist Republic of
Vietnam at its 7th session.
Chairman of the National Assembly
NGUYEN VAN AN
United Nations Convention
on Contracts for the
International Sale of Goods
UNITED NATIONS
Further information may be obtained from:
UNCITRAL secretariat, Vienna International Centre,

P.O. Box 500, 1400 Vienna, Austria
Telephone: (+43-1) 26060-4060 Telefax: (+43-1) 26060-5813

Internet: www.uncitral.org E-mail: uncitral@uncitral.org
UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW
United Nations Convention on

Contracts for the
International Sale of Goods
UNITED NATIONS
New York, 2010
Note
Symbols of United Nations documents are composed of capital letters combined with
figures. Mention of such a symbol indicates a reference to a United Nations document.
UNITED NATIONS PUBLICATION

Sales No. E.10.V.14
ISBN 978-92-1-133699-3
© United Nations, November 2010. All rights reserved.
The designations employed and the presentation of material in this publication do not
imply the expression of any opinion whatsoever on the part of the Secretariat of the
United Nations concerning the legal status of any country, territory, city or area, or
of its authorities, or concerning the delimitation of its frontiers or boundaries.
Publishing production: English, Publishing and Library Section, United Nations

Office at Vienna.
This publication has not been formally edited.

Contents
Page
I. nited Nations Convention on Contracts for the International

U
Sale of Goods................................................................................................. 1
PREAMBLE.................................................................................................... 1
Part I. Sphere of application and general provisions........................... 1
CHAPTER I. Sphere of application........................................................ 1

Article 1................................................................................................... 1
Article 2................................................................................................... 2
Article 3................................................................................................... 2
Article 4................................................................................................... 2
Article 5................................................................................................... 3
Article 6................................................................................................... 3
CHAPTER II. General provisions........................................................... 3

Article 7................................................................................................... 3
Article 8................................................................................................... 3
Article 9................................................................................................... 4
Article 10................................................................................................. 4
Article 11................................................................................................. 4
Article 12................................................................................................. 4
Article 13................................................................................................. 5
Part II. Formation of the contract........................................................... 5
Article 14................................................................................................. 5
Article 15................................................................................................. 5
Article 16................................................................................................. 5
Article 17................................................................................................. 6
Article 18................................................................................................. 6
Article 19................................................................................................. 6
Article 20................................................................................................. 7
Article 21................................................................................................. 7
Article 22................................................................................................. 7
Article 23................................................................................................. 7
Article 24................................................................................................. 7
iii
Page
Part III. Sale of goods........................................................................................ 8
CHAPTER I. General provisions............................................................ 8

Article 25................................................................................................. 8
Article 26................................................................................................. 8
Article 27................................................................................................. 8
Article 28................................................................................................. 8
Article 29................................................................................................. 8
CHAPTER II. Obligations of the seller.................................................. 9

Article 30................................................................................................. 9
Section I. Delivery of the goods and handing over of documents....... 9

Article 31................................................................................................. 9
Article 32................................................................................................. 9
Article 33................................................................................................. 10
Article 34................................................................................................. 10
Section II. Conformity of the goods and third-party claims................. 10

Article 35................................................................................................. 10
Article 36................................................................................................. 11
Article 37................................................................................................. 11
Article 38................................................................................................. 11
Article 39................................................................................................. 12
Article 40................................................................................................. 12
Article 41................................................................................................. 12
Article 42................................................................................................. 12
Article 43................................................................................................. 13
Article 44................................................................................................. 13
Section III. Remedies for breach of contract by the seller................... 13

Article 45................................................................................................. 13
Article 46................................................................................................. 14
Article 47................................................................................................. 14
Article 48................................................................................................. 14
Article 49................................................................................................. 15
Article 50................................................................................................. 16
Article 51................................................................................................. 16
Article 52................................................................................................. 16
CHAPTER III. Obligations of the buyer................................................ 16

Article 53................................................................................................. 16
iv
Page
Section I. Payment of the price............................................................... 17

Article 54................................................................................................. 17
Article 55................................................................................................. 17
Article 56................................................................................................. 17
Article 57................................................................................................. 17
Article 58................................................................................................. 17
Article 59................................................................................................. 18
Section II. Taking delivery....................................................................... 18

Article 60................................................................................................. 18
Section III. Remedies for breach of contract by the buyer................... 18

Article 61................................................................................................. 18
Article 62................................................................................................. 19
Article 63................................................................................................. 19
Article 64................................................................................................. 19
Article 65................................................................................................. 20
CHAPTER IV. Passing of risk................................................................ 20

Article 66................................................................................................. 20
Article 67................................................................................................. 20
Article 68................................................................................................. 21
Article 69................................................................................................. 21
Article 70................................................................................................. 21
CHAPTER V. Provisions common to the obligations of the seller

and of the buyer............................................................... 21
Section I. Anticipatory breach and instalment contracts........................ 21

Article 71................................................................................................. 21
Article 72................................................................................................. 22
Article 73................................................................................................. 22
Section II. Damages................................................................................. 23

Article 74................................................................................................. 23
Article 75................................................................................................. 23
Article 76................................................................................................. 23
Article 77................................................................................................. 24
Section III. Interest................................................................................... 24

Article 78................................................................................................. 24
Section IV. Exemptions............................................................................ 24

Article 79................................................................................................. 24
Article 80................................................................................................. 25
v
Page
Section V. Effects of avoidance............................................................... 25

Article 81................................................................................................. 25
Article 82................................................................................................. 25
Article 83................................................................................................. 26
Article 84................................................................................................. 26
Section VI. Preservation of the goods.................................................... 26

Article 85................................................................................................. 26
Article 86................................................................................................. 26
Article 87................................................................................................. 27
Article 88................................................................................................. 27
Part IV. Final provisions............................................................................ 27
Article 89................................................................................................. 27
Article 90................................................................................................. 27
Article 91................................................................................................. 28
Article 92................................................................................................. 28
Article 93................................................................................................. 28
Article 94................................................................................................. 29
Article 95................................................................................................. 29
Article 96................................................................................................. 30
Article 97................................................................................................. 30
Article 98................................................................................................. 30
Article 99................................................................................................. 31
Article 100............................................................................................... 32
Article 101............................................................................................... 32
II. Explanatory note by the UNCITRAL Secretariat on the

United Nations Convention on Contracts for the International
Sale of Goods................................................................................................. 33
Introduction..................................................................................................... 33
Part One. Scope of application and general provisions........................ 34
A. Scope of application................................................................................ 34
B. Party autonomy........................................................................................ 35
C. Interpretation of the Convention............................................................. 36
D. Interpretation of the contract; usages..................................................... 36
E. Form of the contract................................................................................ 36
Part Two. Formation of the contract....................................................... 37
vi
Page
Part Three. Sale of goods.......................................................................... 38
A. Obligations of the seller.......................................................................... 38

B. Obligations of the buyer......................................................................... 38
C. Remedies for breach of contract............................................................. 39
D. Passing of risk......................................................................................... 39
E. Suspension of performance and anticipatory breach............................. 40
F. Exemption from liability to pay damages.............................................. 40
G. Preservation of the goods....................................................................... 40
Part Four. Final clauses............................................................................. 41
Complementary texts....................................................................................... 41
vii
1. United Nations Convention on Contracts for
the International Sale of Goods
PREAMBLE
The States Parties to this Convention,
Bearing in mind the broad objectives in the resolutions adopted by the

sixth special session of the General Assembly of the United Nations on the
establishment of a New International Economic Order,
Considering that the development of international trade on the basis of

equality and mutual benefit is an important element in promoting friendly
relations among States,
Being of the opinion that the adoption of uniform rules which govern
contracts for the international sale of goods and take into account the
different social, economic and legal systems would contribute to the removal
of legal barriers in international trade and promote the development of
international trade,
Have agreed as follows:
Part I. Sphere of application and general provisions
Chapter I. Sphere of application
Article 1
(1) This Convention applies to contracts of sale of goods between

parties whose places of business are in different States:
(a) when the States are Contracting States; or
(b) when the rules of private international law lead to the application
of the law of a Contracting State.
1
2 United Nations Convention on Contracts for the International Sale of Goods
(2) The fact that the parties have their places of business in different
States is to be disregarded whenever this fact does not appear either from
the contract or from any dealings between, or from information disclosed
by, the parties at any time before or at the conclusion of the contract.
(3) Neither the nationality of the parties nor the civil or commercial
character of the parties or of the contract is to be taken into consideration
in determining the application of this Convention.
Article 2
This Convention does not apply to sales:

(a) of goods bought for personal, family or household use, unless the
seller, at any time before or at the conclusion of the contract, neither knew
nor ought to have known that the goods were bought for any such use;
(b) by auction;
(c) on execution or otherwise by authority of law;
(d) of stocks, shares, investment securities, negotiable instruments or
money;
(e) of ships, vessels, hovercraft or aircraft;
(f) of electricity.
Article 3
(1) Contracts for the supply of goods to be manufactured or produced

are to be considered sales unless the party who orders the goods undertakes
to supply a substantial part of the materials necessary for such manufacture
or production.
(2) This Convention does not apply to contracts in which the

p reponderant part of the obligations of the party who furnishes the goods
consists in the supply of labour or other services.
Article 4
This Convention governs only the formation of the contract of sale and
the rights and obligations of the seller and the buyer arising from such a
contract. In particular, except as otherwise expressly provided in this Convention,
it is not concerned with:
I. United Nations Convention on Contracts for the International Sale of Goods 3
(a) the validity of the contract or of any of its provisions or of any

usage;
(b) the effect which the contract may have on the property in the
goods sold.
Article 5
This Convention does not apply to the liability of the seller for death
or personal injury caused by the goods to any person.
Article 6
The parties may exclude the application of this Convention or, subject to
article 12, derogate from or vary the effect of any of its provisions.
Chapter II. GENERAL PROVISIONS
Article 7
(1) In the interpretation of this Convention, regard is to be had to its

international character and to the need to promote uniformity in its application
and the observance of good faith in international trade.
(2) Questions concerning matters governed by this Convention which

are not expressly settled in it are to be settled in conformity with the general
principles on which it is based or, in the absence of such principles, in
conformity with the law applicable by virtue of the rules of private international
law.
Article 8
(1) For the purposes of this Convention statements made by and other
conduct of a party are to be interpreted according to his intent where the
other party knew or could not have been unaware what that intent was.
(2) If the preceding paragraph is not applicable, statements made by and

other conduct of a party are to be interpreted according to the understanding
that a reasonable person of the same kind as the other party would have had
in the same circumstances.
(3) In determining the intent of a party or the understanding a

r easonable person would have had, due consideration is to be given to all
relevant circumstances of the case including the negotiations, any practices
which the parties have established between themselves, usages and any
subsequent conduct of the parties.
Article 9
(1) The parties are bound by any usage to which they have agreed and
by any practices which they have established between themselves.
(2) The parties are considered, unless otherwise agreed, to have

impliedly made applicable to their contract or its formation a usage of which
the parties knew or ought to have known and which in international trade
is widely known to, and regularly observed by, parties to contracts of the
type involved in the particular trade concerned.
Article 10
For the purposes of this Convention:

(a) if a party has more than one place of business, the place of business
is that which has the closest relationship to the contract and its performance,
having regard to the circumstances known to or contemplated by the parties
at any time before or at the conclusion of the contract;
(b) if a party does not have a place of business, reference is to be
made to his habitual residence.
Article 11
A contract of sale need not be concluded in or evidenced by writing

and is not subject to any other requirement as to form. It may be proved
by any means, including witnesses.
Article 12
Any provision of article 11, article 29 or Part II of this Convention that

allows a contract of sale or its modification or termination by agreement or
any offer, acceptance or other indication of intention to be made in any form
other than in writing does not apply where any party has his place of business
in a Contracting State which has made a declaration under article 96 of this

Convention. The parties may not derogate from or vary the effect of this
article.
Article 13
For the purposes of this Convention “writing” includes telegram and

telex.
Part II. Formation of the contract
Article 14
(1) A proposal for concluding a contract addressed to one or more

specific persons constitutes an offer if it is sufficiently definite and indicates
the intention of the offeror to be bound in case of acceptance. A proposal
is sufficiently definite if it indicates the goods and expressly or implicitly
fixes or makes provision for determining the quantity and the price.
(2) A proposal other than one addressed to one or more specific persons
is to be considered merely as an invitation to make offers, unless the contrary
is clearly indicated by the person making the proposal.
Article 15
(1) An offer becomes effective when it reaches the offeree.
(2) An offer, even if it is irrevocable, may be withdrawn if the withdrawal

reaches the offeree before or at the same time as the offer.
Article 16
(1) Until a contract is concluded an offer may be revoked if the revocation

reaches the offeree before he has dispatched an acceptance.
(2) However, an offer cannot be revoked:

(a) if it indicates, whether by stating a fixed time for acceptance or
otherwise, that it is irrevocable; or
(b) if it was reasonable for the offeree to rely on the offer as being
irrevocable and the offeree has acted in reliance on the offer.
Article 17
An offer, even if it is irrevocable, is terminated when a rejection reaches

the offeror.
Article 18
(1) A statement made by or other conduct of the offeree indicating assent

to an offer is an acceptance. Silence or inactivity does not in itself amount to
acceptance.
(2) An acceptance of an offer becomes effective at the moment the

indication of assent reaches the offeror. An acceptance is not effective if the
indication of assent does not reach the offeror within the time he has fixed
or, if no time is fixed, within a reasonable time, due account being taken of
the circumstances of the transaction, including the rapidity of the means of
communication employed by the offeror. An oral offer must be accepted
immediately unless the circumstances indicate otherwise.
(3) However, if, by virtue of the offer or as a result of practices which

the parties have established between themselves or of usage, the offeree may
indicate assent by performing an act, such as one relating to the dispatch of
the goods or payment of the price, without notice to the offeror, the acceptance
is effective at the moment the act is performed, provided that the act is performed
within the period of time laid down in the preceding paragraph.
Article 19
(1) A reply to an offer which purports to be an acceptance but contains

additions, limitations or other modifications is a rejection of the offer and
constitutes a counter-offer.
(2) However, a reply to an offer which purports to be an acceptance

but contains additional or different terms which do not materially alter the
terms of the offer constitutes an acceptance, unless the offeror, without undue
delay, objects orally to the discrepancy or dispatches a notice to that effect.
If he does not so object, the terms of the contract are the terms of the offer
with the modifications contained in the acceptance.
(3) Additional or different terms relating, among other things, to the

price, payment, quality and quantity of the goods, place and time of delivery,
extent of one party’s liability to the other or the settlement of disputes are
considered to alter the terms of the offer materially.
Article 20
(1) A period of time for acceptance fixed by the offeror in a telegram

or a letter begins to run from the moment the telegram is handed in for dispatch
or from the date shown on the letter or, if no such date is shown, from the
date shown on the envelope. A period of time for acceptance fixed by the
offeror by telephone, telex or other means of instantaneous communication,
begins to run from the moment that the offer reaches the offeree.
(2) Official holidays or non-business days occurring during the

p eriod for acceptance are included in calculating the period. However, if
a notice of acceptance cannot be delivered at the address of the offeror
on the last day of the period because that day falls on an official holiday
or a non-business day at the place of business of the offeror, the period
is extended until the first business day which follows.
Article 21
(1) A late acceptance is nevertheless effective as an acceptance if

ithout delay the offeror orally so informs the offeree or dispatches a notice
w
to that effect.
(2) If a letter or other writing containing a late acceptance shows that it

has been sent in such circumstances that if its transmission had been normal it
would have reached the offeror in due time, the late acceptance is effective as
an acceptance unless, without delay, the offeror orally informs the offeree that
he considers his offer as having lapsed or dispatches a notice to that effect.
Article 22
An acceptance may be withdrawn if the withdrawal reaches the offeror

before or at the same time as the acceptance would have become effective.
Article 23
A contract is concluded at the moment when an acceptance of an offer

becomes effective in accordance with the provisions of this Convention.
Article 24
For the purposes of this Part of the Convention, an offer, declaration
of acceptance or any other indication of intention “reaches” the addressee
when it is made orally to him or delivered by any other means to him

personally, to his place of business or mailing address or, if he does not
have a place of business or mailing address, to his habitual residence.
Part III. Sale of goods

Chapter I. General provisions
Article 25
A breach of contract committed by one of the parties is fundamental

if it results in such detriment to the other party as substantially to deprive
him of what he is entitled to expect under the contract, unless the party in
breach did not foresee and a reasonable person of the same kind in the same
circumstances would not have foreseen such a result.
Article 26
A declaration of avoidance of the contract is effective only if made by

notice to the other party.
Article 27
Unless otherwise expressly provided in this Part of the Convention, if

any notice, request or other communication is given or made by a party in
accordance with this Part and by means appropriate in the circumstances, a
delay or error in the transmission of the communication or its failure to arrive
does not deprive that party of the right to rely on the communication.
Article 28
If, in accordance with the provisions of this Convention, one party is

entitled to require performance of any obligation by the other party, a court
is not bound to enter a judgement for specific performance unless the court
would do so under its own law in respect of similar contracts of sale not
governed by this Convention.
Article 29
(1) A contract may be modified or terminated by the mere agreement

of the parties.
(2) A contract in writing which contains a provision requiring any

modification or termination by agreement to be in writing may not be
otherwise modified or terminated by agreement. However, a party may be
precluded by his conduct from asserting such a provision to the extent that
the other party has relied on that conduct.
Chapter II. OBLIGATIONS OF THE SELLER
Article 30
The seller must deliver the goods, hand over any documents relating to
them and transfer the property in the goods, as required by the contract and
this Convention.
Section I. Delivery of the goods and handing over of documents
Article 31
If the seller is not bound to deliver the goods at any other particular
place, his obligation to deliver consists:
(a) if the contract of sale involves carriage of the goods—in handing
the goods over to the first carrier for transmission to the buyer;
(b) if, in cases not within the preceding subparagraph, the contract relates
to specific goods, or unidentified goods to be drawn from a specific stock or
to be manufactured or produced, and at the time of the conclusion of the
contract the parties knew that the goods were at, or were to be manufactured
or produced at, a particular place—in placing the goods at the buyer’s disposal
at that place;
(c) in other cases—in placing the goods at the buyer’s disposal at the
place where the seller had his place of business at the time of the conclusion
of the contract.
Article 32
(1) If the seller, in accordance with the contract or this Convention,

hands the goods over to a carrier and if the goods are not clearly identified
to the contract by markings on the goods, by shipping documents or
otherwise, the seller must give the buyer notice of the consignment specifying
the goods.
(2) If the seller is bound to arrange for carriage of the goods, he must
make such contracts as are necessary for carriage to the place fixed by means
of transportation appropriate in the circumstances and according to the usual
terms for such transportation.
(3) If the seller is not bound to effect insurance in respect of the

carriage of the goods, he must, at the buyer’s request, provide him with all
available information necessary to enable him to effect such insurance.
Article 33
The seller must deliver the goods:

(a) if a date is fixed by or determinable from the contract, on that date;
(b) if a period of time is fixed by or determinable from the contract,
at any time within that period unless circumstances indicate that the buyer
is to choose a date; or
(c) in any other case, within a reasonable time after the conclusion of
the contract.
Article 34
If the seller is bound to hand over documents relating to the goods, he

must hand them over at the time and place and in the form required by the
contract. If the seller has handed over documents before that time, he may,
up to that time, cure any lack of conformity in the documents, if the exercise
of this right does not cause the buyer unreasonable inconvenience or
unreasonable expense. However, the buyer retains any right to claim damages
as provided for in this Convention.
Section II. Conformity of the goods and third-party claims

Article 35
(1) The seller must deliver goods which are of the quantity, quality
and description required by the contract and which are contained or packaged
in the manner required by the contract.
(2) Except where the parties have agreed otherwise, the goods do not
conform with the contract unless they:
(a) are fit for the purposes for which goods of the same description
would ordinarily be used;
(b) are fit for any particular purpose expressly or impliedly made known
to the seller at the time of the conclusion of the contract, except where the
circumstances show that the buyer did not rely, or that it was unreasonable
for him to rely, on the seller’s skill and judgement;
(c) possess the qualities of goods which the seller has held out to the
buyer as a sample or model;
(d) are contained or packaged in the manner usual for such goods or,
where there is no such manner, in a manner adequate to preserve and protect
the goods.
(3) The seller is not liable under subparagraphs (a) to (d) of the
p receding paragraph for any lack of conformity of the goods if, at the time
of the conclusion of the contract, the buyer knew or could not have been
unaware of such lack of conformity.
Article 36
(1) The seller is liable in accordance with the contract and this
onvention for any lack of conformity which exists at the time when the risk
C
passes to the buyer, even though the lack of conformity becomes apparent
only after that time.
(2) The seller is also liable for any lack of conformity which occurs
after the time indicated in the preceding paragraph and which is due to a
breach of any of his obligations, including a breach of any guarantee that for
a period of time the goods will remain fit for their ordinary purpose or for
some particular purpose or will retain specified qualities or characteristics.
Article 37
If the seller has delivered goods before the date for delivery, he may, up
to that date, deliver any missing part or make up any deficiency in the quantity
of the goods delivered, or deliver goods in replacement of any non-conforming
goods delivered or remedy any lack of conformity in the goods delivered,
provided that the exercise of this right does not cause the buyer unreasonable
inconvenience or unreasonable expense. However, the buyer retains any right
to claim damages as provided for in this Convention.
Article 38
(1) The buyer must examine the goods, or cause them to be examined,
within as short a period as is practicable in the circumstances.
(2) If the contract involves carriage of the goods, examination may be

deferred until after the goods have arrived at their destination.
(3) If the goods are redirected in transit or redispatched by the buyer

without a reasonable opportunity for examination by him and at the time of
the conclusion of the contract the seller knew or ought to have known of
the possibility of such redirection or redispatch, examination may be deferred
until after the goods have arrived at the new destination.
Article 39
(1) The buyer loses the right to rely on a lack of conformity of the
goods if he does not give notice to the seller specifying the nature of the
lack of conformity within a reasonable time after he has discovered it or
ought to have discovered it.
(2) In any event, the buyer loses the right to rely on a lack of conformity
of the goods if he does not give the seller notice thereof at the latest within
a period of two years from the date on which the goods were actually handed
over to the buyer, unless this time limit is inconsistent with a contractual
period of guarantee.
Article 40
The seller is not entitled to rely on the provisions of articles 38 and 39

if the lack of conformity relates to facts of which he knew or could not
have been unaware and which he did not disclose to the buyer.
Article 41
The seller must deliver goods which are free from any right or claim of
a third party, unless the buyer agreed to take the goods subject to that right
or claim. However, if such right or claim is based on industrial property or
other intellectual property, the seller’s obligation is governed by article 42.
Article 42
(1) The seller must deliver goods which are free from any right or
claim of a third party based on industrial property or other intellectual
property, of which at the time of the conclusion of the contract the seller
knew or could not have been unaware, provided that the right or claim is
based on industrial property or other intellectual property:
(a) under the law of the State where the goods will be resold or
o therwise used, if it was contemplated by the parties at the time of the
conclusion of the contract that the goods would be resold or otherwise used
in that State; or
(b) in any other case, under the law of the State where the buyer has
his place of business.
(2) The obligation of the seller under the preceding paragraph does
not extend to cases where:
(a) at the time of the conclusion of the contract the buyer knew or
could not have been unaware of the right or claim; or
(b) the right or claim results from the seller’s compliance with technical
drawings, designs, formulae or other such specifications furnished by the buyer.
Article 43
(1) The buyer loses the right to rely on the provisions of article 41 or
article 42 if he does not give notice to the seller specifying the nature of
the right or claim of the third party within a reasonable time after he has
become aware or ought to have become aware of the right or claim.
(2) The seller is not entitled to rely on the provisions of the preceding
paragraph if he knew of the right or claim of the third party and the nature
of it.
Article 44
Notwithstanding the provisions of paragraph (1) of article 39 and

p aragraph (1) of article 43, the buyer may reduce the price in accordance
with article 50 or claim damages, except for loss of profit, if he has a
reasonable excuse for his failure to give the required notice.
Section III. Remedies for breach of contract by the seller
Article 45
(1) If the seller fails to perform any of his obligations under the
contract or this Convention, the buyer may:
(a) exercise the rights provided in articles 46 to 52;
(b) claim damages as provided in articles 74 to 77.
(2) The buyer is not deprived of any right he may have to claim
damages by exercising his right to other remedies.
(3) No period of grace may be granted to the seller by a court or arbitral

tribunal when the buyer resorts to a remedy for breach of contract.
Article 46
(1) The buyer may require performance by the seller of his obligations
unless the buyer has resorted to a remedy which is inconsistent with this
requirement.
(2) If the goods do not conform with the contract, the buyer may
r equire delivery of substitute goods only if the lack of conformity constitutes
a fundamental breach of contract and a request for substitute goods is made
either in conjunction with notice given under article 39 or within a reasonable
time thereafter.
(3) If the goods do not conform with the contract, the buyer may require
the seller to remedy the lack of conformity by repair, unless this is unreasonable
having regard to all the circumstances. A request for repair must be made
either in conjunction with notice given under article 39 or within a reasonable
time thereafter.
Article 47
(1) The buyer may fix an additional period of time of reasonable length
for performance by the seller of his obligations.
(2) Unless the buyer has received notice from the seller that he will
not perform within the period so fixed, the buyer may not, during that
period, resort to any remedy for breach of contract. However, the buyer is
not deprived thereby of any right he may have to claim damages for delay
in performance.
Article 48
(1) Subject to article 49, the seller may, even after the date for delivery,
remedy at his own expense any failure to perform his obligations, if he can
do so without unreasonable delay and without causing the buyer unreasonable
inconvenience or uncertainty of reimbursement by the seller of expenses
advanced by the buyer. However, the buyer retains any right to claim damages
as provided for in this Convention.
(2) If the seller requests the buyer to make known whether he will
accept performance and the buyer does not comply with the request within
a reasonable time, the seller may perform within the time indicated in his
request. The buyer may not, during that period of time, resort to any remedy
which is inconsistent with performance by the seller.
(3) A notice by the seller that he will perform within a specified period
of time is assumed to include a request, under the preceding paragraph, that
the buyer make known his decision.
(4) A request or notice by the seller under paragraph (2) or (3) of this
article is not effective unless received by the buyer.
Article 49
(1) The buyer may declare the contract avoided:

(a) if the failure by the seller to perform any of his obligations under the
contract or this Convention amounts to a fundamental breach of contract; or
(b) in case of non-delivery, if the seller does not deliver the goods
within the additional period of time fixed by the buyer in accordance with
paragraph (1) of article 47 or declares that he will not deliver within the
period so fixed.
(2) However, in cases where the seller has delivered the goods, the
buyer loses the right to declare the contract avoided unless he does so:
(a) in respect of late delivery, within a reasonable time after he has
become aware that delivery has been made;
(b) in respect of any breach other than late delivery, within a reasonable
time:
(i) after he knew or ought to have known of the breach;
(ii) after the expiration of any additional period of time fixed by the
buyer in accordance with paragraph (1) of article 47, or after the seller
has declared that he will not perform his obligations within such an
additional period; or
(iii) after the expiration of any additional period of time indicated by
the seller in accordance with paragraph (2) of article 48, or after the
buyer has declared that he will not accept performance.
Article 50
If the goods do not conform with the contract and whether or not the
price has already been paid, the buyer may reduce the price in the same
proportion as the value that the goods actually delivered had at the time of
the delivery bears to the value that conforming goods would have had at
that time. However, if the seller remedies any failure to perform his
obligations in accordance with article 37 or article 48 or if the buyer refuses
to accept performance by the seller in accordance with those articles, the
buyer may not reduce the price.
Article 51
(1) If the seller delivers only a part of the goods or if only a part
of the goods delivered is in conformity with the contract, articles 46 to
50 apply in respect of the part which is missing or which does not
conform.
(2) The buyer may declare the contract avoided in its entirety only if
the failure to make delivery completely or in conformity with the contract
amounts to a fundamental breach of the contract.
Article 52
(1) If the seller delivers the goods before the date fixed, the buyer may
take delivery or refuse to take delivery.
(2) If the seller delivers a quantity of goods greater than that provided
for in the contract, the buyer may take delivery or refuse to take delivery
of the excess quantity. If the buyer takes delivery of all or part of the excess
quantity, he must pay for it at the contract rate.
Chapter III. OBLIGATIONS OF THE BUYER
Article 53
The buyer must pay the price for the goods and take delivery of them
as required by the contract and this Convention.
Section I. Payment of the price
Article 54
The buyer’s obligation to pay the price includes taking such steps and
complying with such formalities as may be required under the contract or
any laws and regulations to enable payment to be made.
Article 55
Where a contract has been validly concluded but does not expressly or
implicitly fix or make provision for determining the price, the parties are
considered, in the absence of any indication to the contrary, to have impliedly
made reference to the price generally charged at the time of the conclusion
of the contract for such goods sold under comparable circumstances in the
trade concerned.
Article 56
If the price is fixed according to the weight of the goods, in case of

doubt it is to be determined by the net weight.
Article 57
(1) If the buyer is not bound to pay the price at any other particular
place, he must pay it to the seller:
(a) at the seller’s place of business; or
(b) if the payment is to be made against the handing over of the goods
or of documents, at the place where the handing over takes place.
(2) The seller must bear any increase in the expenses incidental to
payment which is caused by a change in his place of business subsequent
to the conclusion of the contract.
Article 58
(1) If the buyer is not bound to pay the price at any other specific
time, he must pay it when the seller places either the goods or documents
controlling their disposition at the buyer’s disposal in accordance with the
contract and this Convention. The seller may make such payment a condition
for handing over the goods or documents.
(2) If the contract involves carriage of the goods, the seller may
d ispatch the goods on terms whereby the goods, or documents controlling
their disposition, will not be handed over to the buyer except against payment
of the price.
(3) The buyer is not bound to pay the price until he has had an
o pportunity to examine the goods, unless the procedures for delivery or
payment agreed upon by the parties are inconsistent with his having such
an opportunity.
Article 59
The buyer must pay the price on the date fixed by or determinable from
the contract and this Convention without the need for any request or compliance
with any formality on the part of the seller.
Section II. Taking delivery
Article 60
The buyer’s obligation to take delivery consists:

(a) in doing all the acts which could reasonably be expected of him
in order to enable the seller to make delivery; and
(b) in taking over the goods.
Section III. Remedies for breach of contract by the buyer
Article 61
(1) If the buyer fails to perform any of his obligations under the
contract or this Convention, the seller may:
(a) exercise the rights provided in articles 62 to 65;
(b) claim damages as provided in articles 74 to 77.
(2) The seller is not deprived of any right he may have to claim
damages by exercising his right to other remedies.
(3) No period of grace may be granted to the buyer by a court or arbitral

tribunal when the seller resorts to a remedy for breach of contract.
Article 62
The seller may require the buyer to pay the price, take delivery or
perform his other obligations, unless the seller has resorted to a remedy
which is inconsistent with this requirement.
Article 63
(1) The seller may fix an additional period of time of reasonable length
for performance by the buyer of his obligations.
(2) Unless the seller has received notice from the buyer that he will
not perform within the period so fixed, the seller may not, during that period,
resort to any remedy for breach of contract. However, the seller is not
deprived thereby of any right he may have to claim damages for delay in
performance.
Article 64
(1) The seller may declare the contract avoided:

(a) if the failure by the buyer to perform any of his obligations under
the contract or this Convention amounts to a fundamental breach of contract;
or
(b) if the buyer does not, within the additional period of time fixed by
the seller in accordance with paragraph (1) of article 63, perform his
obligation to pay the price or take delivery of the goods, or if he declares
that he will not do so within the period so fixed.
(2) However, in cases where the buyer has paid the price, the seller
loses the right to declare the contract avoided unless he does so:
(a) in respect of late performance by the buyer, before the seller has
become aware that performance has been rendered; or
(b) in respect of any breach other than late performance by the buyer,
within a reasonable time:
(i) after the seller knew or ought to have known of the breach; or
(ii) after the expiration of any additional period of time fixed by the seller
in accordance with paragraph (1) of article 63, or after the buyer has declared
that he will not perform his obligations within such an additional period.
Article 65
(1) If under the contract the buyer is to specify the form, measurement
or other features of the goods and he fails to make such specification either
on the date agreed upon or within a reasonable time after receipt of a request
from the seller, the seller may, without prejudice to any other rights he may
have, make the specification himself in accordance with the requirements of
the buyer that may be known to him.
(2) If the seller makes the specification himself, he must inform the buyer
of the details thereof and must fix a reasonable time within which the buyer
may make a different specification. If, after receipt of such a communication,
the buyer fails to do so within the time so fixed, the specification made by the
seller is binding.
Chapter IV. PASSING OF RISK
Article 66
Loss of or damage to the goods after the risk has passed to the buyer
does not discharge him from his obligation to pay the price, unless the loss
or damage is due to an act or omission of the seller.
Article 67
(1) If the contract of sale involves carriage of the goods and the seller
is not bound to hand them over at a particular place, the risk passes to the
buyer when the goods are handed over to the first carrier for transmission
to the buyer in accordance with the contract of sale. If the seller is bound
to hand the goods over to a carrier at a particular place, the risk does not
pass to the buyer until the goods are handed over to the carrier at that place.
The fact that the seller is authorized to retain documents controlling the
disposition of the goods does not affect the passage of the risk.
(2) Nevertheless, the risk does not pass to the buyer until the goods
are clearly identified to the contract, whether by markings on the goods, by
shipping documents, by notice given to the buyer or otherwise.
Article 68
The risk in respect of goods sold in transit passes to the buyer from the
time of the conclusion of the contract. However, if the circumstances so indicate,
the risk is assumed by the buyer from the time the goods were handed over to
the carrier who issued the documents embodying the contract of carriage.
Nevertheless, if at the time of the conclusion of the contract of sale the seller
knew or ought to have known that the goods had been lost or damaged and did
not disclose this to the buyer, the loss or damage is at the risk of the seller.
Article 69
(1) In cases not within articles 67 and 68, the risk passes to the buyer
when he takes over the goods or, if he does not do so in due time, from
the time when the goods are placed at his disposal and he commits a breach
of contract by failing to take delivery.
(2) However, if the buyer is bound to take over the goods at a place
other than a place of business of the seller, the risk passes when delivery is
due and the buyer is aware of the fact that the goods are placed at his
disposal at that place.
(3) If the contract relates to goods not then identified, the goods are
considered not to be placed at the disposal of the buyer until they are clearly
identified to the contract.
Article 70
If the seller has committed a fundamental breach of contract, articles 67,
68 and 69 do not impair the remedies available to the buyer on account of
the breach.
Chapter V. PROVISIONS COMMON TO THE OBLIGATIONS

OF THE SELLER AND OF THE BUYER
Section I. Anticipatory breach and instalment contracts
Article 71
(1) A party may suspend the performance of his obligations if, after
the conclusion of the contract, it becomes apparent that the other party will
not perform a substantial part of his obligations as a result of:
(a) a serious deficiency in his ability to perform or in his credit

worthiness; or
(b) his conduct in preparing to perform or in performing the
contract.
(2) If the seller has already dispatched the goods before the grounds
described in the preceding paragraph become evident, he may prevent the
handing over of the goods to the buyer even though the buyer holds a document
which entitles him to obtain them. The present paragraph relates only to the
rights in the goods as between the buyer and the seller.
(3) A party suspending performance, whether before or after dispatch

of the goods, must immediately give notice of the suspension to the other
party and must continue with performance if the other party provides adequate
assurance of his performance.
Article 72
(1) If prior to the date for performance of the contract it is clear that
one of the parties will commit a fundamental breach of contract, the other
party may declare the contract avoided.
(2) If time allows, the party intending to declare the contract avoided
must give reasonable notice to the other party in order to permit him to
provide adequate assurance of his performance.
(3) The requirements of the preceding paragraph do not apply if the

other party has declared that he will not perform his obligations.
Article 73
(1) In the case of a contract for delivery of goods by instalments, if

the failure of one party to perform any of his obligations in respect of any
instalment constitutes a fundamental breach of contract with respect to that
instalment, the other party may declare the contract avoided with respect to
that instalment.
(2) If one party’s failure to perform any of his obligations in respect

of any instalment gives the other party good grounds to conclude that a
fundamental breach of contract will occur with respect to future instalments,
he may declare the contract avoided for the future, provided that he does
so within a reasonable time.
(3) A buyer who declares the contract avoided in respect of any delivery
may, at the same time, declare it avoided in respect of deliveries already
made or of future deliveries if, by reason of their interdependence, those
deliveries could not be used for the purpose contemplated by the parties at
the time of the conclusion of the contract.
Section II. Damages
Article 74
Damages for breach of contract by one party consist of a sum equal to

the loss, including loss of profit, suffered by the other party as a consequence
of the breach. Such damages may not exceed the loss which the party in
breach foresaw or ought to have foreseen at the time of the conclusion of
the contract, in the light of the facts and matters of which he then knew or
ought to have known, as a possible consequence of the breach of contract.
Article 75
If the contract is avoided and if, in a reasonable manner and within a

reasonable time after avoidance, the buyer has bought goods in replacement
or the seller has resold the goods, the party claiming damages may recover
the difference between the contract price and the price in the substitute
transaction as well as any further damages recoverable under article 74.
Article 76
(1) If the contract is avoided and there is a current price for the goods,
the party claiming damages may, if he has not made a purchase or resale
under article 75, recover the difference between the price fixed by the contract
and the current price at the time of avoidance as well as any further damages
recoverable under article 74. If, however, the party claiming damages has
avoided the contract after taking over the goods, the current price at the time
of such taking over shall be applied instead of the current price at the time
of avoidance.
(2) For the purposes of the preceding paragraph, the current price is
the price prevailing at the place where delivery of the goods should have
been made or, if there is no current price at that place, the price at such
other place as serves as a reasonable substitute, making due allowance for
differences in the cost of transporting the goods.
Article 77
A party who relies on a breach of contract must take such measures as

are reasonable in the circumstances to mitigate the loss, including loss of
profit, resulting from the breach. If he fails to take such measures, the party
in breach may claim a reduction in the damages in the amount by which
the loss should have been mitigated.
Section III. Interest
Article 78
If a party fails to pay the price or any other sum that is in arrears, the
other party is entitled to interest on it, without prejudice to any claim for
damages recoverable under article 74.
Section IV. Exemptions
Article 79
(1) A party is not liable for a failure to perform any of his obligations
if he proves that the failure was due to an impediment beyond his control
and that he could not reasonably be expected to have taken the impediment
into account at the time of the conclusion of the contract or to have avoided
or overcome it, or its consequences.
(2) If the party’s failure is due to the failure by a third person whom
he has engaged to perform the whole or a part of the contract, that party is
exempt from liability only if:
(a) he is exempt under the preceding paragraph; and
(b) the person whom he has so engaged would be so exempt if the
provisions of that paragraph were applied to him.
(3) The exemption provided by this article has effect for the period
during which the impediment exists.
(4) The party who fails to perform must give notice to the other party
of the impediment and its effect on his ability to perform. If the notice is
not received by the other party within a reasonable time after the party who
fails to perform knew or ought to have known of the impediment, he is
liable for damages resulting from such non-receipt.
(5) Nothing in this article prevents either party from exercising any
right other than to claim damages under this Convention.
Article 80
A party may not rely on a failure of the other party to perform, to the
extent that such failure was caused by the first party’s act or omission.
Section V. Effects of avoidance
Article 81
(1) Avoidance of the contract releases both parties from their obligations
under it, subject to any damages which may be due. Avoidance does not
affect any provision of the contract for the settlement of disputes or any other
provision of the contract governing the rights and obligations of the parties
consequent upon the avoidance of the contract.
(2) A party who has performed the contract either wholly or in part may
claim restitution from the other party of whatever the first party has supplied
or paid under the contract. If both parties are bound to make restitution, they
must do so concurrently.
Article 82
(1) The buyer loses the right to declare the contract avoided or to
require the seller to deliver substitute goods if it is impossible for him to
make restitution of the goods substantially in the condition in which he
received them.
(2) The preceding paragraph does not apply:

(a) if the impossibility of making restitution of the goods or of making
restitution of the goods substantially in the condition in which the buyer
received them is not due to his act or omission;
(b) if the goods or part of the goods have perished or deteriorated as
a result of the examination provided for in article 38; or
(c) if the goods or part of the goods have been sold in the normal
course of business or have been consumed or transformed by the buyer in
the course of normal use before he discovered or ought to have discovered
the lack of conformity.
Article 83
A buyer who has lost the right to declare the contract avoided or to
require the seller to deliver substitute goods in accordance with article 82
retains all other remedies under the contract and this Convention.
Article 84
(1) If the seller is bound to refund the price, he must also pay interest
on it, from the date on which the price was paid.
(2) The buyer must account to the seller for all benefits which he has
derived from the goods or part of them:
(a) if he must make restitution of the goods or part of them; or
(b) if it is impossible for him to make restitution of all or part of
the goods or to make restitution of all or part of the goods substantially
in the condition in which he received them, but he has nevertheless declared
the contract avoided or required the seller to deliver substitute goods.
Section VI. Preservation of the goods
Article 85
If the buyer is in delay in taking delivery of the goods or, where

payment of the price and delivery of the goods are to be made concurrently,
if he fails to pay the price, and the seller is either in possession of the
goods or otherwise able to control their disposition, the seller must take
such steps as are reasonable in the circumstances to preserve them. He is
entitled to retain them until he has been reimbursed his reasonable expenses
by the buyer.
Article 86
(1) If the buyer has received the goods and intends to exercise any
right under the contract or this Convention to reject them, he must take such
steps to preserve them as are reasonable in the circumstances. He is entitled
to retain them until he has been reimbursed his reasonable expenses by the
seller.
(2) If goods dispatched to the buyer have been placed at his disposal
at their destination and he exercises the right to reject them, he must take
possession of them on behalf of the seller, provided that this can be done
without payment of the price and without unreasonable inconvenience or
unreasonable expense. This provision does not apply if the seller or a person
authorized to take charge of the goods on his behalf is present at the
destination. If the buyer takes possession of the goods under this paragraph,
his rights and obligations are governed by the preceding paragraph.
Article 87
A party who is bound to take steps to preserve the goods may deposit
them in a warehouse of a third person at the expense of the other party
provided that the expense incurred is not unreasonable.
Article 88
(1) A party who is bound to preserve the goods in accordance with

article 85 or 86 may sell them by any appropriate means if there has been
an unreasonable delay by the other party in taking possession of the goods
or in taking them back or in paying the price or the cost of preservation,
provided that reasonable notice of the intention to sell has been given to the
other party.
(2) If the goods are subject to rapid deterioration or their preservation would
involve unreasonable expense, a party who is bound to preserve the goods in
accordance with article 85 or 86 must take reasonable measures to sell them. To
the extent possible he must give notice to the other party of his intention to sell.
(3) A party selling the goods has the right to retain out of the proceeds
of sale an amount equal to the reasonable expenses of preserving the goods
and of selling them. He must account to the other party for the balance.
PART IV. FINAL PROVISIONS

Article 89
The Secretary-General of the United Nations is hereby designated as

the depositary for this Convention.
Article 90
This Convention does not prevail over any international agreement

which has already been or may be entered into and which contains provisions
concerning the matters governed by this Convention, provided that the parties
have their places of business in States parties to such agreement.
Article 91
(1) This Convention is open for signature at the concluding meeting

of the United Nations Conference on Contracts for the International Sale of
Goods and will remain open for signature by all States at the Headquarters
of the United Nations, New York until 30 September 1981.
(2) This Convention is subject to ratification, acceptance or approval

by the signatory States.
(3) This Convention is open for accession by all States which are not
signatory States as from the date it is open for signature.
(4) Instruments of ratification, acceptance, approval and accession are

to be deposited with the Secretary-General of the United Nations.
Article 92
(1) A Contracting State may declare at the time of signature, ratification,

acceptance, approval or accession that it will not be bound by Part II of this
Convention or that it will not be bound by Part III of this Convention.
(2) A Contracting State which makes a declaration in accordance with

the preceding paragraph in respect of Part II or Part III of this Convention
is not to be considered a Contracting State within paragraph (1) of article 1
of this Convention in respect of matters governed by the Part to which the
declaration applies.
Article 93
(1) If a Contracting State has two or more territorial units in which,

according to its constitution, different systems of law are applicable in
relation to the matters dealt with in this Convention, it may, at the time of
signature, ratification, acceptance, approval or accession, declare that this
Convention is to extend to all its territorial units or only to one or more of
them, and may amend its declaration by submitting another declaration at
any time.
(2) These declarations are to be notified to the depositary and are to

state expressly the territorial units to which the Convention extends.
(3) If, by virtue of a declaration under this article, this Convention

extends to one or more but not all of the territorial units of a Contracting
State, and if the place of business of a party is located in that State, this
place of business, for the purposes of this Convention, is considered not to
be in a Contracting State, unless it is in a territorial unit to which the
Convention extends.
(4) If a Contracting State makes no declaration under paragraph (1)

of this article, the Convention is to extend to all territorial units of that
State.
Article 94
(1) Two or more Contracting States which have the same or closely
related legal rules on matters governed by this Convention may at any
time declare that the Convention is not to apply to contracts of sale or to
their formation where the parties have their places of business in those
States. Such declarations may be made jointly or by reciprocal unilateral
declarations.
(2) A Contracting State which has the same or closely related legal
rules on matters governed by this Convention as one or more non-Contracting
States may at any time declare that the Convention is not to apply to contracts
of sale or to their formation where the parties have their places of business
in those States.
(3) If a State which is the object of a declaration under the preceding

paragraph subsequently becomes a Contracting State, the declaration made
will, as from the date on which the Convention enters into force in respect
of the new Contracting State, have the effect of a declaration made under
paragraph (1), provided that the new Contracting State joins in such declaration
or makes a reciprocal unilateral declaration.
Article 95
Any State may declare at the time of the deposit of its instrument of
ratification, acceptance, approval or accession that it will not be bound by
subparagraph (1)(b) of article 1 of this Convention.
Article 96
A Contracting State whose legislation requires contracts of sale to be

concluded in or evidenced by writing may at any time make a declaration
in accordance with article 12 that any provision of article 11, article 29, or
Part II of this Convention, that allows a contract of sale or its modification
or termination by agreement or any offer, acceptance, or other indication of
intention to be made in any form other than in writing, does not apply where
any party has his place of business in that State.
Article 97
(1) Declarations made under this Convention at the time of signature

are subject to confirmation upon ratification, acceptance or approval.
(2) Declarations and confirmations of declarations are to be in writing

and be formally notified to the depositary.
(3) A declaration takes effect simultaneously with the entry into force
of this Convention in respect of the State concerned. However, a declaration
of which the depositary receives formal notification after such entry into force
takes effect on the first day of the month following the expiration of six months
after the date of its receipt by the depositary. Reciprocal unilateral declarations
under article 94 take effect on the first day of the month following the
expiration of six months after the receipt of the latest declaration by the
depositary.
(4) Any State which makes a declaration under this Convention may
withdraw it at any time by a formal notification in writing addressed to the
depositary. Such withdrawal is to take effect on the first day of the month
following the expiration of six months after the date of the receipt of the
notification by the depositary.
(5) A withdrawal of a declaration made under article 94 renders

inoperative, as from the date on which the withdrawal takes effect, any reciprocal
declaration made by another State under that article.
Article 98
No reservations are permitted except those expressly authorized in this

Convention.
Article 99
(1) This Convention enters into force, subject to the provisions of

p aragraph (6) of this article, on the first day of the month following the
expiration of twelve months after the date of deposit of the tenth instrument
of ratification, acceptance, approval or accession, including an instrument
which contains a declaration made under article 92.
(2) When a State ratifies, accepts, approves or accedes to this

onvention after the deposit of the tenth instrument of ratification, acceptance,
C
approval or accession, this Convention, with the exception of the Part
excluded, enters into force in respect of that State, subject to the provisions
of paragraph (6) of this article, on the first day of the month following the
expiration of twelve months after the date of the deposit of its instrument
of ratification, acceptance, approval or accession.
(3) A State which ratifies, accepts, approves or accedes to this

Convention and is a party to either or both the Convention relating to a
Uniform Law on the Formation of Contracts for the International Sale of
Goods done at The Hague on 1 July 1964 (1964 Hague Formation Convention)
and the Convention relating to a Uniform Law on the International Sale of
Goods done at The Hague on 1 July 1964 (1964 Hague Sales Convention)
shall at the same time denounce, as the case may be, either or both the 1964
Hague Sales Convention and the 1964 Hague Formation Convention by
notifying the Government of the Netherlands to that effect.
(4) A State party to the 1964 Hague Sales Convention which ratifies,
accepts, approves or accedes to the present Convention and declares or has
declared under article 92 that it will not be bound by Part II of this Convention
shall at the time of ratification, acceptance, approval or accession denounce the
1964 Hague Sales Convention by notifying the Government of the Netherlands
to that effect.
(5) A State party to the 1964 Hague Formation Convention which

ratifies, accepts, approves or accedes to the present Convention and declares
or has declared under article 92 that it will not be bound by Part III of this
Convention shall at the time of ratification, acceptance, approval or accession
denounce the 1964 Hague Formation Convention by notifying the Government
of the Netherlands to that effect.
(6) For the purpose of this article, ratifications, acceptances, approvals

and accessions in respect of this Convention by States parties to the 1964
Hague Formation Convention or to the 1964 Hague Sales Convention shall
not be effective until such denunciations as may be required on the part
of those States in respect of the latter two Conventions have themselves

become effective. The depositary of this Convention shall consult with the
Government of the Netherlands, as the depositary of the 1964 Conventions,
so as to ensure necessary coordination in this respect.
Article 100
(1) This Convention applies to the formation of a contract only

when the proposal for concluding the contract is made on or after the
date when the Convention enters into force in respect of the Contracting
States referred to in subparagraph (1)(a) or the Contracting State referred
to in subparagraph (1)(b) of article 1.
(2) This Convention applies only to contracts concluded on or after

the date when the Convention enters into force in respect of the Contracting
States referred to in subparagraph (1)(a) or the Contracting State referred
to in subparagraph (1)(b) of article 1.
Article 101
(1) A Contracting State may denounce this Convention, or Part II or

Part III of the Convention, by a formal notification in writing addressed to
the depositary.
(2) The denunciation takes effect on the first day of the month
f ollowing the expiration of twelve months after the notification is received
by the depositary. Where a longer period for the denunciation to take
effect is specified in the notification, the denunciation takes effect upon
the expiration of such longer period after the notification is received by
the depositary.
DONE at Vienna, this day of eleventh day of April, one thousand nine hundred
and eighty, in a single original, of which the Arabic, Chinese, English, French,
Russian and Spanish texts are equally authentic.
IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly

authorized by their respective Governments, have signed this Convention.
II. Explanatory Note by the UNCITRAL
Secretariat on the United Nations Convention
on Contracts for the International
Sale of Goods
This note has been prepared by the Secretariat of the United Nations
Commission on International Trade Law for informational purposes; it is
not an official commentary on the Convention.
Introduction
1. The United Nations Convention on Contracts for the International

Sale of Goods provides a uniform text of law for international sales of
goods. The Convention was prepared by the United Nations Commission
on International Trade Law (UNCITRAL) and adopted by a diplomatic
conference on 11 April 1980.
2. Preparation of a uniform law for the international sale of goods began

in 1930 at the International Institute for the Unification of Private Law
(UNIDROIT) in Rome. After a long interruption in the work as a result of
the Second World War, the draft was submitted to a diplomatic conference
in The Hague in 1964, which adopted two conventions, one on the international
sale of goods and the other on the formation of contracts for the international
sale of goods.
3. Almost immediately upon the adoption of the two conventions there

was widespread criticism of their provisions as reflecting primarily the legal
traditions and economic realities of continental Western Europe, which was
the region that had most actively contributed to their preparation. As a result,
one of the first tasks undertaken by UNCITRAL on its organization in 1968
was to enquire of States whether or not they intended to adhere to those
conventions and the reasons for their positions. In the light of the responses
received, UNCITRAL decided to study the two conventions to ascertain
which modifications might render them capable of wider acceptance by
countries of different legal, social and economic systems. The result of this
study was the adoption by diplomatic conference on 11 April 1980 of the
33
United Nations Convention on Contracts for the International Sale of Goods,

which combines the subject matter of the two prior conventions.
4. UNCITRAL’s success in preparing a Convention with wider acceptability

is evidenced by the fact that the original eleven States for which the
Convention came into force on 1 January 1988 included States from every
geographical region, every stage of economic development and every major
legal, social and economic system. The original eleven States were: Argentina,
China, Egypt, France, Hungary, Italy, Lesotho, Syria, United States, Yugoslavia
and Zambia.
5. As of 1 September 2010, 76 States are parties to the Convention. The

current updated status of the Convention is available on the UNCITRAL
website.1 Authoritative information on the status of the Convention, as well
as on related declarations, including with respect to territorial application and
succession of States, may be found on the United Nations Treaty Collection
on the Internet.2
6. The Convention is divided into four parts. Part One deals with the scope
of application of the Convention and the general provisions. Part Two
contains the rules governing the formation of contracts for the international
sale of goods. Part Three deals with the substantive rights and obligations
of buyer and seller arising from the contract. Part Four contains the final
clauses of the Convention concerning such matters as how and when it
comes into force, the reservations and declarations that are permitted and
the application of the Convention to international sales where both States
concerned have the same or similar law on the subject.
Part One. Scope of application and general provisions
A. Scope of application
7. The articles on scope of application indicate both what is covered by

the Convention and what is not covered. The Convention applies to contracts
of sale of goods between parties whose places of business are in different
States and either both of those States are Contracting States or the rules of
private international law lead to the law of a Contracting State. A few States
have availed themselves of the authorization in article 95 to declare that
they would apply the Convention only in the former and not in the latter of
these two situations. As the Convention becomes more widely adopted, the
1
www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG_status.html.
2
http://treaties.un.org/.
II. Explanatory Note 35
practical significance of such a declaration will diminish. Finally, the

onvention may also apply as the law applicable to the contract if so chosen
C
by the parties. In that case, the operation of the Convention will be subject
to any limits on contractual stipulations set by the otherwise applicable law.
8. The final clauses make two additional restrictions on the territorial scope
of application that will be relevant to a few States. One applies only if a
State is a party to another international agreement that contains provisions
concerning matters governed by this Convention; the other permits States that
have the same or similar domestic law of sales to declare that the Convention
does not apply between them.
9. Contracts of sale are distinguished from contracts for services in two

respects by article 3. A contract for the supply of goods to be manufactured
or produced is considered to be a sale unless the party who orders the goods
undertakes to supply a substantial part of the materials necessary for their
manufacture or production. When the preponderant part of the obligations
of the party who furnishes the goods consists in the supply of labour or
other services, the Convention does not apply.
10. The Convention contains a list of types of sales that are excluded from
the Convention, either because of the purpose of the sale (goods bought for
personal, family or household use), the nature of the sale (sale by auction,
on execution or otherwise by law) or the nature of the goods (stocks, shares,
investment securities, negotiable instruments, money, ships, vessels, hovercraft,
aircraft or electricity). In many States some or all of such sales are governed
by special rules reflecting their special nature.
11. Several articles make clear that the subject matter of the Convention is
restricted to formation of the contract and the rights and duties of the buyer
and seller arising from such a contract. In particular, the Convention is not
concerned with the validity of the contract, the effect which the contract
may have on the property in the goods sold or the liability of the seller for
death or personal injury caused by the goods to any person.
B. Party autonomy
12. The basic principle of contractual freedom in the international sale of

goods is recognized by the provision that permits the parties to exclude the
application of this Convention or derogate from or vary the effect of any of
its provisions. This exclusion will occur, for example, if parties choose the
law of a non-contracting State or the substantive domestic law of a contracting
State as the law applicable to the contract. Derogation from the Convention
will occur whenever a provision in the contract provides a different rule from
that found in the Convention.
C. Interpretation of the Convention
13. This Convention for the unification of the law governing the international
sale of goods will better fulfil its purpose if it is interpreted in a consistent
manner in all legal systems. Great care was taken in its preparation to make
it as clear and easy to understand as possible. Nevertheless, disputes will
arise as to its meaning and application. When this occurs, all parties,
including domestic courts and arbitral tribunals, are admonished to observe
its international character and to promote uniformity in its application and
the observance of good faith in international trade. In particular, when a
question concerning a matter governed by this Convention is not expressly
settled in it, the question is to be settled in conformity with the general
principles on which the Convention is based. Only in the absence of such
principles should the matter be settled in conformity with the law applicable
by virtue of the rules of private international law.
D. Interpretation of the contract; usages
14. The Convention contains provisions on the manner in which statements

and conduct of a party are to be interpreted in the context of the formation
of the contract or its implementation. Usages agreed to by the parties, practices
they have established between themselves and usages of which the parties
knew or ought to have known and which are widely known to, and regularly
observed by, parties to contracts of the type involved in the particular trade
concerned may all be binding on the parties to the contract of sale.
E. Form of the contract
15. The Convention does not subject the contract of sale to any requirement
as to form. In particular, article 11 provides that no written agreement is
necessary for the conclusion of the contract. However, if the contract is in
writing and it contains a provision requiring any modification or termination
by agreement to be in writing, article 29 provides that the contract may not
be otherwise modified or terminated by agreement. The only exception is
that a party may be precluded by his conduct from asserting such a provision
to the extent that the other person has relied on that conduct.
16. In order to accommodate those States whose legislation requires contracts

of sale to be concluded in or evidenced by writing, article 96 entitles those
States to declare that neither article 11 not the exception to article 29 applies
where any party to the contract has his place of business in that State.
Part Two. Formation of the contract
17. Part Two of the Convention deals with a number of questions that arise
in the formation of the contract by the exchange of an offer and an acceptance.
When the formation of the contract takes place in this manner, the contract
is concluded when the acceptance of the offer becomes effective.
18. In order for a proposal for concluding a contract to constitute an offer,

it must be addressed to one or more specific persons and it must be sufficiently
definite. For the proposal to be sufficiently definite, it must indicate the goods
and expressly or implicitly fix or make provisions for determining the quantity
and the price.
19. The Convention takes a middle position between the doctrine of the
r evocability of the offer until acceptance and its general irrevocability for some
period of time. The general rule is that an offer may be revoked. However, the
revocation must reach the offeree before he has dispatched an acceptance.
Moreover, an offer cannot be revoked if it indicates that it is irrevocable, which
it may do by stating a fixed time for acceptance or otherwise. Furthermore, an
offer may not be revoked if it was reasonable for the offeree to rely on the
offer as being irrevocable and the offeree has acted in reliance on the offer.
20. Acceptance of an offer may be made by means of a statement or other

conduct of the offeree indicating assent to the offer that is communicated
to the offeror. However, in some cases the acceptance may consist of
performing an act, such as dispatch of the goods or payment of the price.
Such an act would normally be effective as an acceptance the moment the
act was performed.
21. A frequent problem in contract formation, perhaps especially in regard

to contracts of sale of goods, arises out of a reply to an offer that purports
to be an acceptance but contains additional or different terms. Under the
Convention, if the additional or different terms do not materially alter the
terms of the offer, the reply constitutes an acceptance, unless the offeror
without undue delay objects to those terms. If he does not object, the terms
of the contract are the terms of the offer with the modifications contained
in the acceptance.
22. If the additional or different terms do materially alter the terms of the
contract, the reply constitutes a counter-offer that must in turn be accepted
for a contract to be concluded. Additional or different terms relating,

among other things, to the price, payment, quality and quantity of the goods,
place and time of delivery, extent of one party’s liability to the other or
settlement of disputes are considered to alter the terms of the offer
materially.
Part Three. Sale of goods
A. Obligations of the seller
23. The general obligations of the seller are to deliver the goods, hand
over any documents relating to them and transfer the property in the
goods, as required by the contract and this Convention. The Convention
provides supplementary rules for use in the absence of contractual agreement
as to when, where and how the seller must perform these obligations.
24. The Convention provides a number of rules that implement the seller’s
obligations in respect of the quality of the goods. In general, the seller must
deliver goods that are of the quantity, quality and description required by
the contract and that are contained or packaged in the manner required by
the contract. One set of rules of particular importance in international sales
of goods involves the seller’s obligation to deliver goods that are free from
any right or claim of a third party, including rights based on industrial
property or other intellectual property.
25. In connection with the seller’s obligations in regard to the quality of

the goods, the Convention contains provisions on the buyer’s obligation to
inspect the goods. He must give notice of any lack of conformity with the
contract within a reasonable time after he has discovered it or ought to have
discovered it, and at the latest two years from the date on which the goods
were actually handed over to the buyer, unless this time limit is inconsistent
with a contractual period of guarantee.
B. Obligations of the buyer
26. The general obligations of the buyer are to pay the price for the goods
and take delivery of them as required by the contract and the Convention.
The Convention provides supplementary rules for use in the absence of
contractual agreement as to how the price is to be determined and where
and when the buyer should perform his obligations to pay the price.
C. Remedies for breach of contract
27. The remedies of the buyer for breach of contract by the seller are set
forth in connection with the obligations of the seller and the remedies of
the seller are set forth in connection with the obligations of the buyer. This
makes it easier to use and understand the Convention.
28. The general pattern of remedies is the same in both cases. If all the
required conditions are fulfilled, the aggrieved party may require performance
of the other party’s obligations, claim damages or avoid the contract. The
buyer also has the right to reduce the price where the goods delivered do
not conform with the contract.
29. Among the more important limitations on the right of an aggrieved

party to claim a remedy is the concept of fundamental breach. For a breach
of contract to be fundamental, it must result in such detriment to the other
party as substantially to deprive him of what he is entitled to expect under
the contract, unless the result was neither foreseen by the party in breach
nor foreseeable by a reasonable person of the same kind in the same
circumstances. A buyer can require the delivery of substitute goods only if
the goods delivered were not in conformity with the contract and the lack
of conformity constituted a fundamental breach of contract. The existence
of a fundamental breach is one of the two circumstances that justifies a
declaration of avoidance of a contract by the aggrieved party; the other
circumstance being that, in the case of non-delivery of the goods by the
seller or non-payment of the price or failure to take delivery by the buyer,
the party in breach fails to perform within a reasonable period of time fixed
by the aggrieved party.
30. Other remedies may be restricted by special circumstances. For example,

if the goods do not conform with the contract, the buyer may require the seller
to remedy the lack of conformity by repair, unless this is unreasonable having
regard to all the circumstances. A party cannot recover damages that he could
have mitigated by taking the proper measures. A party may be exempted from
paying damages by virtue of an impediment beyond his control.
D. Passing of risk
31. Determining the exact moment when the risk of loss or damage to the
goods passes from the seller to the buyer is of great importance in contracts
for the international sale of goods. Parties may regulate the issue in their
contract either by an express provision or by the use of a trade term such
as, for example, an INCOTERM. The effect of the choice of such a term
would be to amend the corresponding provisions of the CISG accordingly.

However, for the frequent case where the contract does not contain such a
provision, the Convention sets forth a complete set of rules.
32. The two special situations contemplated by the Convention are when the
contract of sale involves carriage of the goods and when the goods are sold
while in transit. In all other cases the risk passes to the buyer when he takes
over the goods or from the time when the goods are placed at his disposal
and he commits a breach of contract by failing to take delivery, whichever
comes first. In the frequent case when the contract relates to goods that are
not then identified, they must be identified to the contract before they can
be considered to be placed at the disposal of the buyer and the risk of their
loss can be considered to have passed to him.
E. Suspension of performance and anticipatory breach
33. The Convention contains special rules for the situation in which, prior
to the date on which performance is due, it becomes apparent that one of
the parties will not perform a substantial part of his obligations or will
commit a fundamental breach of contract. A distinction is drawn between
those cases in which the other party may suspend his own performance of
the contract but the contract remains in existence awaiting future events and
those cases in which he may declare the contract avoided.
F. Exemption from liability to pay damages
34. When a party fails to perform any of his obligations due to an

impediment beyond his control that he could not reasonably have been
expected to take into account at the time of the conclusion of the contract
and that he could not have avoided or overcome, he is exempted from the
consequences of his failure to perform, including the payment of damages.
This exemption may also apply if the failure is due to the failure of a third
person whom he has engaged to perform the whole or a part of the contract.
However, he is subject to any other remedy, including reduction of the price,
if the goods were defective in some way.
G. Preservation of the goods
35. The Convention imposes on both parties the duty to preserve any goods
in their possession belonging to the other party. Such a duty is of even greater
importance in an international sale of goods where the other party is from a
foreign country and may not have agents in the country where the goods are
located. Under certain circumstances the party in possession of the goods
may sell them, or may even be required to sell them. A party selling the
goods has the right to retain out of the proceeds of sale an amount equal to
the reasonable expenses of preserving the goods and of selling them and
must account to the other party for the balance.
Part Four. Final clauses
36. The final clauses contain the usual provisions relating to the Secretary-
General as depositary and providing that the Convention is subject to ratification,
acceptance or approval by those States that signed it by 30 September 1981,
that it is open to accession by all States that are not signatory States and that
the text is equally authentic in Arabic, Chinese, English, French, Russian and
Spanish.
37. The Convention permits a certain number of declarations. Those relative

to scope of application and the requirement as to a written contract have
been mentioned above. There is a special declaration for States that have
different systems of law governing contracts of sale in different parts of
their territory. Finally, a State may declare that it will not be bound by Part
II on formation of contracts or Part III on the rights and obligations of the
buyer and seller. This latter declaration was included as part of the decision
to combine into one convention the subject matter of the two 1964 Hague
Conventions.
Complementary texts
38. The United Nations Convention on Contracts for the International Sale
of Goods is complemented by the United Nations Convention on the
Limitation Period in the International Sale of Goods, 1974, as amended by
a Protocol in 1980 (the Limitation Convention). The Limitation Convention
establishes uniform rules governing the period of time within which a party
under a contract for the international sale of goods must commence legal
proceedings against another party to assert a claim arising from the contract
or relating to its breach, termination or validity. The amending Protocol of
1980 ensures that the scope of application of the Limitation Convention is
identical to the one of the United Nations Convention on Contracts for the
International Sale of Goods.
39. The United Nations Convention on Contracts for the International Sale of
Goods is also complemented, with respect to the use of electronic communications,
by the United Nations Convention on the Use of Electronic Communications in

International Contracts, 2005 (the Electronic Communications Convention). The
Electronic Communications Convention aims at facilitating the use of electronic
communications in international trade by assuring that contracts concluded and
other communications exchanged electronically are as valid and enforceable as
their traditional paper-based equivalents. The Electronic Communications Con-
vention may help to avoid misinterpretation of the CISG that might occur, for
example, when a State has lodged a declaration mandating the use of the traditional
written form for contracts for the international sale of goods. It may also promote
the understanding that the “communication” and/or “writing” under the CISG
should be construed so as to include electronic communications. The Electronic
Communications Convention is an enabling treaty whose effect is to remove
those formal obstacles by establishing the requirements for functional equivalence
between electronic and traditional written form.
Further information can be obtained from:

UNCITRAL Secretariat
P.O. Box 500
Vienna International Centre
1400 Vienna
Austria
Telephone: (+43-1) 26060-4060
Telefax: (+43-1) 26060-5813
E-mail: uncitral@uncitral.org
Internet: www.uncitral.org
USD 15
United Nations publication ISBN 978-92-1-133699-3
Printed in Austria
Sales No. E.10.V.14
*1056997*
V.10-56997—November 2010—650
The Hague-Visby Rules
The Hague Rules as Amended by the Brussels Protocol 1968
Article I
In these Rules the following words are employed, with the meanings set out below:
(a) 'Carrier' includes the owner or the charterer who enters into a contract of
carriage with a shipper.
(b) 'Contract of carriage' applies only to contracts of carriage covered by a bill
of lading or any similar document of title, in so far as such document relates to
the carriage of goods by sea, including any bill of lading or any similar
document as aforesaid issued under or pursuant to a charter party from the
moment at which such bill of lading or similar document of title regulates the
relations between a carrier and a holder of the same.
(c) 'Goods' includes goods, wares, merchandise, and articles of every kind
whatsoever except live animals and cargo which by the contract of carriage is
stated as being carried on deck and is so carried.
(d) 'Ship' means any vessel used for the carriage of goods by sea.
(e) 'Carriage of goods' covers the period from the time when the goods are
loaded on to the time they are discharged from the ship.
Article II
Subject to the provisions of Article VI, under every contract of carriage of goods by
sea the carrier, in relation to the loading, handling, stowage, carriage, custody, care
and discharge of such goods, shall be subject to the responsibilities and liabilities and
entitled to the rights and immunities hereinafter set forth.
Article III
1 . The carrier shall be bound before and at the beginning of the voyage to exercise
due diligence to:
(a) Make the ship seaworthy;

(b) Properly man, equip and supply the ship;
(c) Make the holds, refrigerating and cool chambers, and all other parts of the
ship in which goods are carried, fit and safe for their reception, carriage and
preservation.
2 . Subject to the provisions of Article IV, the carrier shall properly and carefully
load, handle, stow, carry, keep, care for, and discharge the goods carried.
3 . After receiving the goods into his charge the carrier or the master or agent of the
carrier shall, on demand of the shipper, issue to the shipper a bill of lading showing
among other things:
(a) The leading marks necessary for identification of the goods as the same are
furnished in writing by the shipper before the loading of such goods starts,
provided such marks are stamped or otherwise shown clearly upon the goods
if uncovered, or on the cases or coverings in which such goods are contained,
in such a manner as should ordinarily remain legible until the end of the
voyage.
(b) Either the number of packages or pieces, or the quantity, or weight, as the
case may be, as furnished in writing by the shipper.
(c) The apparent order and condition of the goods.
Provided that no carrier, master or agent of the carrier shall be bound to state or show
in the bill of lading any marks, number, quantity or weight which he has reasonable
ground for suspecting not accurately to represent the goods actually received, or
which he has had no reasonable means of checking.
4 . Such a bill of lading shall be prima facie evidence of the receipt by the carrier of
the goods as therein described in accordance with paragraph 3 (a), (b) and (c).
However, proof to the contrary shall not be admissible when the bill of lading has
been transferred to a third party acting in good faith.
5 . The shipper shall be deemed to have guaranteed to the carrier the accuracy at the
time of shipment of the marks, number, quantity and weight, as furnished by him, and
the shipper shall indemnify the carrier against all loss, damages and expenses arising
or resulting from inaccuracies in such particulars. The right of the carrier to such
indemnity shall in no way limit his responsibility and liability under the contract of
carriage to any person other than the shipper.
6 . Unless notice of loss or damage and the general nature of such loss or damage be
given in writing to the carrier or his agent at the port of discharge before or at the time
of the removal of the goods into the custody of the person entitled to delivery thereof
under the contract of carriage, or, if the loss or damage be not apparent, within three
days, such removal shall be prima facie evidence of the delivery by the carrier of the
goods as described in the bill of lading.
The notice in writing need not be given if the state of the goods has, at the time of
their receipt, been the subject of joint survey or inspection.
Subject to paragraph 6bis the carrier and the ship shall in any event be discharged
from all liability whatsoever in respect of the goods, unless suit is brought within one
year of their delivery or of the date when they should have been delivered. This
period, may however, be extended if the parties so agree after the cause of action has
arisen.
In the case of any actual or apprehended loss or damage the carrier and the receiver
shall give all reasonable facilities to each other for inspecting and tallying the goods.
6 bis. An action for indemnity against a third person may be brought even after the
expiration of the year provided for in the preceding paragraph if brought within the
time allowed by the law of the Court seized of the case. However, the time allowed
shall be not less than three months, commencing from the day when the person
bringing such action for indemnity has settled the claim or has been served with
process in the action against himself.
7 , After the goods are loaded the bill of lading to be issued by the carrier, master, or
agent of the carrier, to the shipper shall, if the shipper so demands be a 'shipped' bill
of lading, provided that if the shipper shall have previously taken up any document of
title to such goods, he shall surrender the same as against the issue of the 'shipped' bill
of lading, but at the option of the carrier such document of title may be noted at the
port of shipment by the carrier, master, or agent with the name or names of the ship or
ships upon which the goods have been shipped and the date or dates of shipment, and
when so noted, if it shows the particulars mentioned in paragraph 3 of Article III,
shall for the purpose of this article be deemed to constitute a 'shipped' bill of lading.
8 . Any clause, covenant, or agreement in a contract of carriage relieving the carrier or

the ship from liability for loss or damage to, or in connection with, goods arising from
negligence, fault, or failure in the duties and obligations provided in this article or
lessening such liability otherwise than as provided in these Rules, shall be null and
void and of no effect. A benefit of insurance in favour of the carrier or similar clause
shall be deemed to be a clause relieving the carrier from liability.
Article IV
1 . Neither the carrier nor the ship shall be liable for loss or damage arising or
resulting from unseaworthiness unless caused by want of due diligence on the part of
the carrier to make the ship seaworthy, and to secure that the ship is properly manned,
equipped and supplied, and to make the holds, refrigerating and cool chambers and all
other parts of the ship in which goods are carried fit and safe for their reception,
carriage and preservation in accordance with the provisions of paragraph 1 of Article
III. Whenever loss or damage has resulted from unseaworthiness the burden of
proving the exercise of due diligence shall be on the carrier or other person claiming
exemption under this article.
2 . Neither the carrier nor the ship shall be responsible for loss or damage arising or
resulting from:
(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the
carrier in the navigation or in the management of the ship.
(b) Fire, unless caused by the actual fault or privity of the carrier.
(c) Perils, dangers and accidents of the sea or other navigable waters.
(d) Act of God.
(e) Act of war.
(f) Act of public enemies.
(g) Arrest or restraint of princes, rulers or people, or seizure under legal
process.
(h) Quarantine restrictions.
(i) Act or omission of the shipper or owner of the goods, his agent or
representative.
(j) Strikes or lockouts or stoppage or restraint of labour from whatever cause,
whether partial or general.
(k) Riots and civil commotions.
(l) Saving or attempting to save life or property at sea.
(m) Wastage in bulk of weight or any other loss or damage arising from
inherent defect, quality or vice of the goods.
(n) Insufficiency of packing.
(o) Insufficiency or inadequacy of marks.
(p) Latent defects not discoverable by due diligence.
(q) Any other cause arising without the actual fault or privity of the carrier, or
without the fault or neglect of the agents or servants of the carrier, but the
burden of proof shall be on the person claiming the benefit of this exception to
show that neither the actual fault or privity of the carrier nor the fault or
neglect of the agents or servants of the carrier contributed to the loss or
damage.
3 . The shipper shall not be responsible for loss or damage sustained by the carrier or
the ship arising or resulting from any cause without the act, fault or neglect of the
shipper, his agents or his servants.
4 . Any deviation in saving or attempting to save life or property at sea or any

reasonable deviation shall not be deemed to be an infringement or breach of these
Rules or of the contract of carriage, and the carrier shall not be liable for any loss or
damage resulting therefrom.
5 (a) Unless the nature and value of such goods have been declared by the shipper
before shipment and inserted in the bill of lading, neither the carrier nor the ship shall
in any event be or become liable for any loss or damage to or in connection with the
goods in an amount exceeding the equivalent of 666.67 units of account per package
or unit or 2 units of account per kilo of gross weight of the goods lost or damaged,
whichever is the higher.
(b) The total amount recoverable shall be calculated by reference to the value of such
goods at the place and time at which the goods are discharged from the ship in
accordance with the contract or should have been so discharged.
The value of the goods shall be fixed according to the commodity exchange price, or,
if there be no such price, according to the current market price, or, if there be no
commodity exchange price or current market price, by reference to the normal value
of goods of the same kind and quality.
(c) Where a container, pallet or similar article of transport is used to consolidate

goods, the number of packages or units enumerated in the bill of lading as packed in
such article of transport shall be deemed the number of packages or units for the
purpose of this paragraph as far as these packages or units are concerned. Except as
aforesaid such article of transport shall be considered the package or unit.
(d) The unit of account mentioned in this Article is the special drawing right as
defined by the International Monetary Fund. The amounts mentioned in sub-
paragraph (a) of this paragraph shall be converted into national currency on the basis
of the value of that currency on a date to be determined by the law of the Court seized
of the case.
(e) Neither the carrier nor the ship shall be entitled to the benefit of the limitation of
liability provided for in this paragraph if it is proved that the damage resulted from an
act or omission of the carrier done with intent to cause damage, or recklessly and with
knowledge that damage would probably result.
(f) The declaration mentioned in sub-paragraph (a) of this paragraph, if embodied in

the bill of lading, shall be prima facie evidence, but shall not be binding or conclusive
on the carrier.
(g) By agreement between the carrier, master or agent of the carrier and the shipper
other maximum amounts than those mentioned in sub-paragraph (a) of this paragraph
may be fixed, provided that no maximum amount so fixed shall be less than the
appropriate maximum mentioned in that sub-paragraph.
(h) Neither the carrier nor the ship shall be responsible in any event for loss or
damage to, or in connection with, goods if the nature or value thereof has been
knowingly mis-stated by the shipper in the bill of lading.
6 . Goods of an inflammable, explosive or dangerous nature to the shipment whereof

the carrier, master or agent of the carrier has not consented with knowledge of their
nature and character, may at any time before discharge be landed at any place, or
destroyed or rendered innocuous by the carrier without compensation and the shipper
of such goods shall be liable for all damages and expenses directly or indirectly
arising out of or resulting from such shipment. If any such goods shipped with such
knowledge and consent shall become a danger to the ship or cargo, they may in like
manner be landed at any place, or destroyed or rendered innocuous by the carrier
without liability on the part of the carrier except to general average, if any.
Article IV bis
1 . The defences and limits of liability provided for in these Rules shall apply in any
action against the carrier in respect of loss or damage to goods covered by a contract
of carriage whether the action be founded in contract or in tort.
2 . If such an action is brought against a servant or agent of the carrier (such servant
or agent not being an independent contractor), such servant or agent shall be entitled
to avail himself of the defences and limits of liability which the carrier is entitled to
invoke under these Rules.
3 . The aggregate of the amounts recoverable from the carrier, and such servants and
agents, shall in no case exceed the limit provided for in these Rules.
4 . Nevertheless, a servant or agent of the carrier shall not be entitled to avail himself
of the provisions of this article, if it is proved that the damage resulted from an act or
omission of the servant or agent done with intent to cause damage or recklessly and
with knowledge that damage would probably result.
Article V
A carrier shall be at liberty to surrender in whole or in part all or any of his rights and
immunities or to increase any of his responsibilities and obligations under these
Rules, provided such surrender or increase shall be embodied in the bill of lading
issued to the shipper. The provisions of these Rules shall not be applicable to charter
parties, but if bills of lading are issued in the case of a ship under a charter party they
shall comply with the terms of these Rules. Nothing in these Rules shall be held to
prevent the insertion in a bill of lading of any lawful provision regarding general
average.
Article VI
Notwithstanding the provisions of the preceding articles, a carrier, master or agent of

the carrier and a shipper shall in regard to any particular goods be at liberty to enter
into any agreement in any terms as to the responsibility and liability of the carrier for
such goods, and as to the rights and immunities of the carrier in respect of such goods,
or his obligation as to seaworthiness, so far as this stipulation is not contrary to public
policy, or the care or diligence of his servants or agents in regard to the loading,
handling, stowage, carriage, custody, care and discharge of the goods carried by sea,
provided that in this case no bill of lading has been or shall be issued and that the
terms agreed shall be embodied in a receipt which shall be a non-negotiable document
and shall be marked as such.
An agreement so entered into shall have full legal effect.
Provided that this article shall not apply to ordinary commercial shipments made in
the ordinary course of trade, but only to other shipments where the character or
condition of the property to be carried or the circumstances, terms and conditions
under which the carriage is to be performed are such as reasonably to justify a special
agreement.
Article VII
Nothing herein contained shall prevent a carrier or a shipper from entering into any
agreement, stipulation, condition, reservation or exemption as to the responsibility
and liability of the carrier or the ship for the loss or damage to, or in connection with,
the custody and care and handling of goods prior to the loading on, and subsequent to
the discharge from, the ship on which the goods are carried by sea.
Article VIII
The provisions of these Rules shall not affect the rights and obligations of the carrier
under any statute for the time being in force relating to the limitation of the liability of
owners of sea-going vessels.
Article IX
These Rules shall not affect the provisions of any international Convention or national
law governing liability for nuclear damage.
Article X
The provisions of these Rules shall apply to every bill of lading relating to the
carriage of goods between ports in two different States if
(a) the bill of lading is issued in a contracting State, or

(b) the carriage is from a port in a contracting State, or
(c) the contract contained in or evidenced by the bill of lading provides that
these Rules or legislation of any State giving effect to them are to govern the
contract;
whatever may be the nationality of the ship, the carrier, the shipper, the consignee, or
any other interested person.
(The last two paragraphs of this Article are not reproduced. They require contracting
States to apply the Rules to bills of lading mentioned in the Article and authorise them
to apply the Rules to other bills of lading).
(Article 11 to 16 of the International Convention for the unification of certain rules of

law relating to bills of lading signed at Brussels on August 25, 1974 are not
reproduced. They deal with the coming into force of the Convention, procedure for
ratification, accession and denunciation and the right to call for a fresh conference to
consider amendments to the Rules contained in the Convention).
www.transportrecht.de – Hamburg Rules (Hamburg-Regeln)
Hamburg Rules
UNITED NATIONS CONVENTION ON THE CARRIAGE
OF GOODS BY SEA, 1978
Preamble
THE STATES PARTIES TO THIS CONVENTION,
HAVING RECOGNIZED the desirability of determining by agreement certain

rules relating to the carriage of goods by sea,
HAVE DECIDED to conclude a Convention for this purpose and have thereto
agreed as follows:
PART I
GENERAL PROVISIONS
Article 1
Definitions
In this Convention:
1. "Carrier" means any person by whom or in whose name a contract of

carriage of goods by sea has been concluded with a shipper.
2. "Actual carrier" means any person to whom the performance of the carriage
of the goods, or of part of the carriage, has been entrusted by the carrier, and
includes any other person to whom such performance has been entrusted.
3. "Shipper" means any person by whom or in whose name or on whose behalf

a contract of carriage of goods by sea has been concluded with a carrier, or
any person by whom or in whose name or on whose behalf the goods are
actually delivered to the carrier in relation to the contract of carriage by sea.
4. "Consignee" means the person entitled to take delivery of the goods.
5. "Goods" includes live animals; where the goods are consolidated in a

container, pallet or similar article of transport or where they are packed,
"goods" includes such article of transport or packaging if supplied by the
shipper.
6. "Contract of carriage by sea" means any contract whereby the carrier

undertakes against payment of freight to carry goods by sea from one port to
another; however, a contract which involves carriage by sea and also carriage
by some other means is deemed to be a contract of carriage by sea for the
purposes of this Convention only in so far as it relates to the carriage by sea.
7. "Bill of lading" means a document which evidences a contract of carriage by

sea and the taking over or loading of the goods by the carrier, and by which
the carrier undertakes to deliver the goods against surrender of the document.
A provision in the document that the goods are to be delivered to the order of
a named person, or to order, or to bearer, constitutes such an undertaking.
8. "Writing" includes, inter alia, telegram and telex.
1
Article 2
Scope of application
1. The provisions of this Convention are applicable to all contracts of carriage

by sea between two different States, if:
(a) the port of loading as provided for in the contract of carriage by sea is
located in a Contracting State, or
(b) the port of discharge as provided for in the contract of carriage by sea is
located in a Contracting State, or
(c) one of the optional ports of discharge provided for in the contract of
carriage by sea is the actual port of discharge and such port is located in a
Contracting State, or
(d) the bill of lading or other document evidencing the contract of carriage by
sea is issued in a Contracting State, or
(e) the bill of lading or other document evidencing the contract of carriage by
sea provides that the provisions of this Convention or the legislation of any
State giving effect to them are to govern the contract.
2. The provisions of this Convention are applicable without regard to the

nationality of the ship, the carrier, the actual carrier, the shipper, the
consignee or any other interested person.
3. The provisions of this Convention are not applicable to charter-parties.

However, where a bill of lading is issued pursuant to a charter-party, the
provisions of the Convention apply to such a bill of lading if it governs the
relation between the carrier and the holder of the bill of lading, not being the
charterer.
4. If a contract provides for future carriage of goods in a series of shipments

during an agreed period, the provisions of this Convention apply to each
shipment. However, where a shipment is made under a charter-party, the
provisions of paragraph 3 of this article apply.
Article 3
Interpretation of the Convention
In the interpretation and application of the provisions of this Convention regard

shall be had to its international character and to the need to promote
uniformity.
PART II
LIABILITY OF THE CARRIER
Article 4
Period of responsibility
1. The responsibility of the carrier for the goods under this Convention covers
the period during which the carrier is in charge of the goods at the port of
loading, during the carriage and at the port of discharge.
2
2. For the purpose of paragraph 1 of this article, the carrier is deemed to be in

charge of the goods
(a) from the time he has taken over the goods from:
(i) the shipper, or a person acting on his behalf; or
(ii) an authority or other third party to whom, pursuant to law or regulations

applicable at the port of loading, the goods must be handed over for shipment;
(b) until the time he has delivered the goods:
(i) by handing over the goods to the consignee; or
(ii) in cases where the consignee does not receive the goods from the carrier,
by placing them at the disposal of the consignee in accordance with the
contract or with the law or with the usage of the particular trade, applicable at
the port of discharge; or
(iii) by handing over the goods to an authority or other third party to whom,
pursuant to law or regulations applicable at the port of discharge, the goods
must be handed over.
3. In paragraphs 1 and 2 of this article, reference to the carrier or to the

consignee means, in addition to the carrier or the consignee, the servants or
agents, respectively of the carrier or the consignee.
Article 5
Basis of liability
1. The carrier is liable for loss resulting from loss of or damage to the goods,
as well as from delay in delivery, if the occurrence which caused the loss,
damage or delay took place while the goods were in his charge as defined in
article 4, unless the carrier proves that he, his servants or agents took all
measures that could reasonably be required to avoid the occurrence and its
consequences.
2. Delay in delivery occurs when the goods have not been delivered at the port
of discharge provided for in the contract of carriage by sea within the time
expressly agreed upon or, in the absence of such agreement, within the time
which it would be reasonable to require of a diligent carrier, having regard to
the circumstances of the case.
3. The person entitled to make a claim for the loss of goods may treat the
goods as lost if they have not been delivered as required by article 4 within 60
consecutive days following the expiry of the time for delivery according to
paragraph 2 of this article.
4. (a) The carrier is liable
(i) for loss of or damage to the goods or delay in delivery caused by fire, if the
claimant proves that the fire arose from fault or neglect on the part of the
carrier, his servants or agents;
(ii) for such loss, damage or delay in delivery which is proved by the claimant
to have resulted from the fault or neglect of the carrier, his servants or agents,
3
in taking all measures that could reasonably be required to put out the fire and
avoid or mitigate its consequences.
(b) In case of fire on board the ship affecting the goods, if the claimant or the
carrier so desires, a survey in accordance with shipping practices must be held
into the cause and circumstances of the fire, and a copy of the surveyor's
report shall be made available on demand to the carrier and the claimant.
5. With respect to live animals, the carrier is not liable for loss, damage or
delay in delivery resulting from any special risks inherent in that kind of
carriage. If the carrier proves that he has complied with any special
instructions given to him by the shipper respecting the animals and that, in the
circumstances of the case, the loss, damage or delay in delivery could be
attributed to such risks, it is presumed that the loss, damage or delay in
delivery was so caused, unless there is proof that all or a part of the loss,
damage or delay in delivery resulted from fault or neglect on the part of the
carrier, his servants or agents.
6. The carrier is not liable, except in general average, where loss, damage or
delay in delivery resulted from measures to save life or from reasonable
measures to save property at sea.
7. Where fault or neglect on the part of the carrier, his servants or agents
combines with another cause to produce loss, damage or delay in delivery the
carrier is liable only to the extent that the loss, damage or delay in delivery is
attributable to such fault or neglect, provided that the carrier proves the
amount of the loss, damage or delay in delivery not attributable thereto.
Article 6
Limits of liability
1. (a) The liability of the carrier for loss resulting from loss of or damage to
goods according to the provisions of article 5 is limited to an amount
equivalent to 835 units of account per package or other shipping unit or 2.5
units of account per kg of gross weight of the goods lost or damaged,
whichever is the higher.
(b) The liability of the carrier for delay in delivery according to the provisions of
article 5 is limited to an amount equivalent to two and a half times the freight
payable for the goods delayed, but not exceeding the total freight payable
under the contract of carriage of goods by sea.
(c) In no case shall the aggregate liability of the carrier, under both
subparagraphs (a) and (b) of this paragraph, exceed the limitation which would
be established under subparagraph (a) of this paragraph for total loss of the
goods with respect to which such liability was incurred.
2. For the purpose of calculating which amount is the higher in accordance with
paragraph 1(a) of this article, the following rules apply:
(a) Where a container, pallet or similar article of transport is used to

consolidate goods, the package or other shipping units enumerated in the bill
of lading, if issued, or otherwise in any other document evidencing the contract
of carriage by sea, as packed in such article of transport are deemed packages
4
or shipping units. Except as aforesaid the goods in such article of transport are
deemed one shipping unit.
(b) In cases where the article of transport itself has been lost or damaged, that
article of transport, if not owned or otherwise supplied by the carrier, is
considered one separate shipping unit.
3. Unit of account means the unit of account mentioned in article 26.
4. By agreement between the carrier and the shipper, limits of liability

exceeding those provided for in paragraph 1 may be fixed.
Article 7
Application to non-contractual claims
1. The defences and limits of liability provided for in this Convention apply in
any action against the carrier in respect of loss or damage to the goods
covered by the contract of carriage by sea, as well as of delay in delivery
whether the action is founded in contract, in tort or otherwise.
2. If such an action is brought against a servant or agent of the carrier, such

servant or agent, if he proves that he acted within the scope of his
employment, is entitled to avail himself of the defences and limits of liability
which the carrier is entitled to invoke under this Convention.
3. Except as provided in article 8, the aggregate of the amounts recoverable

from the carrier and from any persons referred to in paragraph 2 of this article
shall not exceed the limits of liability provided for in this Convention.
Article 8
Loss of right to limit responsibility
1. The carrier is not entitled to the benefit of the limitation of liability provided
for in article 6 if it is proved that the loss, damage or delay in delivery resulted
from an act or omission of the carrier done with the intent to cause such loss,
damage or delay, or recklessly and with knowledge that such loss, damage or
delay would probably result.
2. Notwithstanding the provisions of paragraph 2 of article 7, a servant or

agent of the carrier is not entitled to the benefit of the limitation of liability
provided for in article 6 if it is proved that the loss, damage or delay in delivery
resulted from an act or omission of such servant or agent, done with the intent
to cause such loss, damage or delay, or recklessly and with knowledge that
such loss, damage or delay would probably result.
Article 9
Deck cargo
1. The carrier is entitled to carry the goods on deck only if such carriage is in
accordance with an agreement with the shipper or with the usage of the
particular trade or is required by statutory rules or regulations.
2. If the carrier and the shipper have agreed that the goods shall or may be
carried on deck, the carrier must insert in the bill of lading or other document
5
evidencing the contract of carriage by sea a statement to that effect. In the

absence of such a statement the carrier has the burden of proving that an
agreement for carriage on deck has been entered into; however, the carrier is
not entitled to invoke such an agreement against a third party, including a
consignee, who has acquired the bill of lading in good faith.
3. Where the goods have been carried on deck contrary to the provisions of
paragraph 1 of this article or where the carrier may not under paragraph 2 of
this article invoke an agreement for carriage on deck, the carrier,
notwithstanding the provisions of paragraph 1 of article 5, is liable for loss of
or damage to the goods, as well as for delay in delivery, resulting solely from
the carriage on deck, and the extent of his liability is to be determined in
accordance with the provisions of article 6 or article 8 of this Convention, as
the case may be.
4. Carriage of goods on deck contrary to express agreement for carriage under

deck is deemed to be an act or omission of the carrier within the meaning of
article 8.
Article 10
Liability of the carrier and actual carrier
1. Where the performance of the carriage or part thereof has been entrusted to
an actual carrier, whether or not in pursuance of a liberty under the contract of
carriage by sea to do so, the carrier nevertheless remains responsible for the
entire carriage according to the provisions of this Convention. The carrier is
responsible, in relation to the carriage performed by the actual carrier, for the
acts and omissions of the actual carrier and of his servants and agents acting
within the scope of their employment.
2. All the provisions of this Convention governing the responsibility of the

carrier also apply to the responsibility of the actual carrier for the carriage
performed by him. The provisions of paragraphs 2 and 3 of article 7 and of
paragraph 2 of article 8 apply if an action is brought against a servant or agent
of the actual carrier.
3. Any special agreement under which the carrier assumes obligations not
imposed by this Convention or waives rights conferred by this Convention
affects the actual carrier only if agreed to by him expressly and in writing.
Whether or not the actual carrier has so agreed, the carrier nevertheless
remains bound by the obligations or waivers resulting from such special
agreement.
4. Where and to the extent that both the carrier and the actual carrier are
liable, their liability is joint and several.
5. The aggregate of the amounts recoverable from the carrier, the actual
carrier and their servants and agents shall not exceed the limits of liability
provided for in this Convention.
6. Nothing in this article shall prejudice any right of recourse as between the
carrier and the actual carrier.
Article 11
6
Through carriage
1. Notwithstanding the provisions of paragraph 1 of article 10, where a

contract of carriage by sea provides explicitly that a specified part of the
carriage covered by the said contract is to be performed by a named person
other than the carrier, the contract may also provide that the carrier is not
liable for loss, damage or delay in delivery caused by an occurrence which
takes place while the goods are in the charge of the actual carrier during such
part of the carriage. Nevertheless, any stipulation limiting or excluding such
liability is without effect if no judicial proceedings can be instituted against the
actual carrier in a court competent under paragraph 1 or 2 of article 21. The
burden of proving that any loss, damage or delay in delivery has been caused
by such an occurrence rests upon the carrier.
2. The actual carrier is responsible in accordance with the provisions of

paragraph 2 of article 10 for loss, damage or delay in delivery caused by an
occurrence which takes place while the goods are in his charge.
PART III
LIABILITY OF THE SHIPPER
Article 12
General rule
The shipper is not liable for loss sustained by the carrier or the actual carrier,
or for damage sustained by the ship, unless such loss or damage was caused
by the fault or neglect of the shipper, his servants or agents. Nor is any
servant or agent of the shipper liable for such loss or damage unless the loss
or damage was caused by fault or neglect on his part.
Article 13
Special rules on dangerous goods
1. The shipper must mark or label in a suitable manner dangerous goods as

dangerous.
2. Where the shipper hands over dangerous goods to the carrier or an actual
carrier, as the case may be, the shipper must inform him of the dangerous
character of the goods and, if necessary, of the precautions to be taken. If the
shipper fails to do so and such carrier or actual carrier does not otherwise have
knowledge of their dangerous character:
(a) the shipper is liable to the carrier and any actual carrier for the loss
resulting from the shipment of such goods, and
(b) the goods may at any time be unloaded, destroyed or rendered innocuous,
as the circumstances may require, without payment of compensation.
3. The provisions of paragraph 2 of this article may not be invoked by any

person if during the carriage he has taken the goods in his charge with
knowledge of their dangerous character.
4. If, in cases where the provisions of paragraph 2, subparagraph (b), of this

article do not apply or may not be invoked, dangerous goods become an actual
7
danger to life or property, they may be unloaded, destroyed or rendered

innocuous, as the circumstances may require, without payment of
compensation except where there is an obligation to contribute in general
average or where the carrier is liable in accordance with the provisions of
article 5.
PART IV
TRANSPORT DOCUMENTS
Article 14
Issue of bill of lading
1. When the carrier or the actual carrier takes the goods in his charge, the
carrier must, on demand of the shipper, issue to the shipper a bill of lading.
2. The bill of lading may be signed by a person having authority from the
carrier. A bill of lading signed by the master of the ship carrying the goods is
deemed to have been signed on behalf of the carrier.
3. The signature on the bill of lading may be in handwriting, printed in

facsimile, perforated, stamped, in symbols, or made by an other mechanical or
electronic means, if not inconsistent with the law of the country where the bill
of lading is issued.
Article 15
Contents of bill of lading
1. The bill of lading must include, inter alia, the following particulars:
(a) the general nature of the goods, the leading marks necessary for
identification of the goods, an express statement, if applicable, as to the
dangerous character of the goods, the number of packages or pieces, and the
weight of the goods or their quantity otherwise expressed, all such particulars
as furnished by the shipper;
(b) the apparent condition of the goods;
(c) the name and principal place of business of the carrier;
(d) the name of the shipper;
(e) the consignee if named by the shipper;
(f) the port of loading under the contract of carriage by sea and the date on
which the goods were taken over by the carrier at the port of loading;
(g) the port of discharge under the contract of carriage by sea;
(h) the number of originals of the bill of lading, if more than one;
(i) the place of issuance of the bill of lading;
(j) the signature of the carrier or a person acting on his behalf;
(k) the freight to the extent payable by the consignee or other indication that
freight is payable by him;
8
(l) the statement referred to in paragraph 3 of article 23;
(m) the statement, if applicable, that the goods shall or may be carried on
deck;
(n) the date or the period of delivery of the goods at the port of discharge if
expressly agreed upon between the parties; and
(o) any increased limit or limits of liability where agreed in accordance with
paragraph 4 of article 6.
2. After the goods have been loaded on board, if the shipper so demands, the
carrier must issue to the shipper a "shipped" bill of lading which, in addition to
the particulars required under paragraph 1 of this article, must state that the
goods are on board a named ship or ships, and the date or dates of loading. If
the carrier has previously issued to the shipper a bill of lading or other
document of title with resect to any of such goods, on request of the carrier,
the shipper must surrender such document in exchange for a "shipped" bill of
lading. The carrier may amend any previously issued document in order to
meet the shipper's demand for a "shipped" bill of lading if, as amended, such
document includes all the information required to be contained in a "shipped"
bill of lading.
3. The absence in the bill of lading of one or more particulars referred to in this
article does not affect the legal character of the document as a bill of lading
provided that it nevertheless meets the requirements set out in paragraph 7 of
article 1.
Article 16
Bills of lading: reservations and evidentiary effect
1. If the bill of lading contains particulars concerning the general nature,

leading marks, number of packages or pieces, weight or quantity of the goods
which the carrier or other person issuing the bill of lading on his behalf knows
or has reasonable grounds to suspect do not accurately represent the goods
actually taken over or, where a "shipped" bill of lading is issued, loaded, or if
he had no reasonable means of checking such particulars, the carrier or such
other person must insert in the bill of lading a reservation specifying these
inaccuracies, grounds of suspicion or the absence of reasonable means of
checking.
2. If the carrier or other person issuing the bill of lading on his behalf fails to
note on the bill of lading the apparent condition of the goods, he is deemed to
have noted on the bill of lading that the goods were in apparent good
condition.
3. Except for particulars in respect of which and to the extent to which a

reservation permitted under paragraph 1 of this article has been entered:
(a) the bill of lading is prima facie evidence of the taking over or, where a
"shipped" bill of lading is issued, loading, by the carrier of the goods as
described in the bill of lading; and
9
(b) proof to the contrary by the carrier is not admissible if the bill of lading has
been transferred to a third party, including a consignee, who in good faith has
acted in reliance on the description of the goods therein.
4. A bill of lading which does not, as provided in paragraph 1, subparagraph

(k) of article 15, set forth the freight or otherwise indicate that freight is
payable by the consignee or does not set forth demurrage incurred at the port
of loading payable by the consignee, is prima facie evidence that no freight or
such demurrage is payable by him. However, proof to the contrary by the
carrier is not admissible when the bill of lading has been transferred to a third
party, including a consignee, who in good faith has acted in reliance on the
absence in the bill of lading of any such indication.
Article 17
Guarantees by the shipper
1. The shipper is deemed to have guaranteed to the carrier the accuracy of

particulars relating to the general nature of the goods, their marks, number,
weight and quantity as furnished by him for insertion in the bill of lading. The
shipper must indemnify the carrier against the loss resulting from inaccuracies
in such particulars. The shipper remains liable even if the bill of lading has
been transferred by him. The right of the carrier to such indemnity in no way
limits his liability under the contract of carriage by sea to any person other
than the shipper.
2. Any letter of guarantee or agreement by which the shipper undertakes to

indemnify the carrier against loss resulting from the issuance of the bill of
lading by the carrier, or by a person acting on his behalf, without entering a
reservation relating to particulars furnished by the shipper for insertion in the
bill of lading, or to the apparent condition of the goods, is void and of no effect
as against any third party, including a consignee, to whom the bill of lading has
been transferred.
3. Such letter of guarantee or agreement is valid as against the shipper unless

the carrier or the person acting on his behalf, by omitting the reservation
referred to in paragraph 2 of this article, intends to defraud a third party,
including a consignee, who acts in reliance on the description of the goods in
the bill of lading. In the latter case, if the reservation omitted relates to
particulars furnished by the shipper for insertion in the bill of lading, the carrier
has no right of indemnity from the shipper pursuant to paragraph 1 of this
article.
4. In the case of intended fraud referred to in paragraph 3 of this article the

carrier is liable, without the benefit of the limitation of liability provided for in
this Convention, for the loss incurred by a third party, including a consignee,
because he has acted in reliance on the description of the goods in the bill of
lading.
Article 18
Documents other than bills of lading
Where a carrier issues a document other than a bill of lading to evidence the
receipt of the goods to be carried, such a document is prima facie evidence of
10
the conclusion of the contract of carriage by sea and the taking over by the
carrier of the goods as therein described.
PART V
CLAIMS AND ACTIONS
Article 19
Notice of loss, damage or delay
1. Unless notice of loss or damage, specifying the general nature of such loss
or damage, is given in writing by the consignee to the carrier not later than the
working day after the day when the goods were handed over to the consignee,
such handing over is prima facie evidence of the delivery by the carrier of the
goods as described in the document of transport or, if no such document has
been issued, in good condition.
2. Where the loss or damage is not apparent, the provisions of paragraph 1 of

this article apply correspondingly if notice in writing is not given within 15
consecutive days after the day when the goods were handed over to the
consignee.
3. If the state of the goods at the time they were handed over to the
consignee has been the subject of a joint survey or inspection by the parties,
notice in writing need not be given of loss or damage ascertained during such
survey or inspection.
4. In the case of any actual or apprehended loss or damage the carrier and the
consignee must give all reasonable facilities to each other for inspecting and
tallying the goods.
5. No compensation shall be payable for loss resulting from delay in delivery

unless a notice has been given in writing to the carrier within 60 consecutive
days after the day when the goods were handed over to the consignee.
6. If the goods have been delivered by an actual carrier, any notice given
under this article to him shall have the same effect as if it had been given to
the carrier, and any notice given to the carrier shall have effect as if given to
such actual carrier.
7. Unless notice of loss or damage, specifying the general nature of the loss or
damage, is given in writing by the carrier or actual carrier to the shipper not
later than 90 consecutive days after the occurrence of such loss or damage or
after the delivery of the goods in accordance with paragraph 2 of article 4,
whichever is later, the failure to give such notice is prima facie evidence that
the carrier or the actual carrier has sustained no loss or damage due to the
fault or neglect of the shipper, his servants or agents.
8. For the purpose of this article, notice given to a person acting on the
carrier's or the actual carrier's behalf, including the master or the officer in
charge of the ship, or to a person acting on the shipper's behalf is deemed to
have been given to the carrier, to the actual carrier or to the shipper,
respectively.
Article 20
11
Limitation of actions
1. Any action relating to carriage of goods under this Convention is time-

barred if judicial or arbitral proceedings have not been instituted within a
period of two years.
2. The limitation period commences on the day on which the carrier has
delivered the goods or part thereof or, in cases where no goods have been
delivered, on the last day on which the goods should have been delivered.
3. The day on which the limitation period commences is not included in the
period.
4. The person against whom a claim is made may at any time during the
running of the limitation period extend that period by a declaration in writing to
the claimant. This period may be further extended by another declaration or
declarations.
5. An action for indemnity by a person held liable may be instituted even after
the expiration of the limitation period provided for in the preceding paragraphs
if instituted within the time allowed by the law of the State where proceedings
are instituted. However, the time allowed shall not be less than 90 days
commencing from the day when the person instituting such action for
indemnity has settled the claim or has been served with process in the action
against himself.
Article 21
Jurisdiction
1. In judicial proceedings relating to carriage of goods under this Convention

the plaintiff, at his option, may institute an action in a court which, according
to the law of the State where the court is situated, is competent and within the
jurisdiction of which is situated one of the following places:
(a) the principal place of business or, in the absence thereof, the habitual
residence of the defendant; or
(b) the place where the contract was made provided that the defendant has
there a place of business, branch or agency through which the contract was
made; or
(c) the port of loading or the port of discharge; or
(d) any additional place designated for that purpose in the contract of carriage
by sea.
2. (a) Notwithstanding the preceding provisions of this article, an action may

be instituted in the courts of any port or place in a Contracting State at which
the carrying vessel or any other vessel of the same ownership may have been
arrested in accordance with applicable rules of the law of that State and of
international law. However, in such a case, at the petition of the defendant, the
claimant must remove the action, at his choice, to one of the jurisdictions
referred to in paragraph 1 of this article for the determination of the claim, but
before such removal the defendant must furnish security sufficient to ensure
12
payment of any judgement that may subsequently be awarded to the claimant

in the action.
(b) All questions relating to the sufficiency or otherwise of the security shall be
determined by the court of the port or place of the arrest.
3. No judicial proceedings relating to carriage of goods under this Convention

may be instituted in a place not specified in paragraph 1 or 2 of this article.
The provisions of this paragraph do not constitute an obstacle to the
jurisdiction of the Contracting States for provisional or protective measures.
4. (a) Where an action has been instituted in a court competent under

paragraph 1 or 2 of this article or where judgement has been delivered by such
a court, no new action may be started between the same parties on the same
grounds unless the judgement of the court before which the first action was
instituted is not enforceable in the country in which the new proceedings are
instituted;
(b) for the purpose of this article the institution of measures with a view to
obtaining enforcement of a judgement is not to be considered as the starting of
a new action;
(c) for the purpose of this article, the removal of an action to a different court
within the same country, or to a court in another country, in accordance with
paragraph 2(a) of this article, is not to be considered as the starting of a new
action.
5. Notwithstanding the provisions of the preceding paragraphs, an agreement

made by the parties, after a claim under the contract of carriage by sea has
arisen, which designates the place where the claimant may institute an action,
is effective.
Article 22
Arbitration
1. Subject to the provisions of this article, parties may provide by agreement

evidenced in writing that any dispute that may arise relating to carriage of
goods under this Convention shall be referred to arbitration.
2. Where a charter-party contains a provision that disputes arising thereunder

shall be referred to arbitration and a bill of lading issued pursuant to the
charter-party does not contain a special annotation providing that such
provision shall be binding upon the holder of the bill of lading, the carrier may
not invoke such provision as against a holder having acquired the bill of lading
in good faith.
3. The arbitration proceedings shall, at the option of the claimant, be instituted

at one of the following places:
(a) a place in a State within whose territory is situated:
(i) the principal place of business of the defendant or, in the absence thereof,
the habitual residence of the defendant; or
13
(ii) the place where the contract was made, provided that the defendant has
there a place of business, branch or agency through which the contract was
made; or
(iii) the port of loading or the port of discharge; or
(b) any place designated for that purpose in the arbitration clause or
agreement.
4. The arbitrator or arbitration tribunal shall apply the rules of this Convention.
5. The provisions of paragraphs 3 and 4 of this article are deemed to be part of

every arbitration clause or agreement, and any term of such clause or
agreement which is inconsistent therewith is null and void.
6. Nothing in this article affects the validity of an agreement relating to

arbitration made by the parties after the claim under the contract of carriage
by sea has arisen.
PART VI
SUPPLEMENTARY PROVISIONS
Article 23
Contractual stipulations
1. Any stipulation in a contract of carriage by sea, in a bill of lading, or in any

other document evidencing the contract of carriage by sea is null and void to
the extent that it derogates, directly or indirectly, from the provisions of this
Convention. The nullity of such a stipulation does not affect the validity of the
other provisions of the contract or document of which it forms a part. A clause
assigning benefit of insurance of the goods in favour of the carrier, or any
similar clause, is null and void.
2. Notwithstanding the provisions of paragraph 1 of this article, a carrier may

increase his responsibilities and obligations under this Convention.
3. Where a bill of lading or any other document evidencing the contract of

carriage by sea is issued, it must contain a statement that the carriage is
subject to the provisions of this Convention which nullify any stipulation
derogating therefrom to the detriment of the shipper or the consignee.
4. Where the claimant in respect of the goods has incurred loss as a result of a
stipulation which is null and void by virtue of the present article, or as a result
of the omission of the statement referred to in paragraph 3 of this article, the
carrier must pay compensation to the extent required in order to give the
claimant compensation in accordance with the provisions of this Convention for
any loss of or damage to the goods as well as for delay in delivery. The carrier
must, in addition, pay compensation for costs incurred by the claimant for the
purpose of exercising his right, provided that costs incurred in the action where
the foregoing provision is invoked are to be determined in accordance with the
law of the State where proceedings are instituted.
Article 24
General average
14
1. Nothing in this Convention shall prevent the application of provisions in the

contract of carriage by sea or national law regarding the adjustment of general
average.
2. With the exception of article 20, the provisions of this Convention relating to
the liability of the carrier for loss of or damage to the goods also determine
whether the consignee may refuse contribution in general average and the
liability of the carrier to indemnify the consignee in respect of any such
contribution made or any salvage paid.
Article 25
Other conventions
1. This Convention does not modify the rights or duties of the carrier, the
actual carrier and their servants and agents, provided for in international
conventions or national law relating to the limitation of liability of owners of
seagoing ships.
2. The provisions of articles 21 and 22 of this Convention do not prevent the

application of the mandatory provisions of any other multilateral convention
already in force at the date of this Convention [March 31, 1978] relating to
matters dealt with in the said articles, provided that the dispute arises
exclusively between parties having their principal place of business in States
members of such other convention. However, this paragraph does not affect
the application of paragraph 4 of article 22 of this Convention.
3. No liability shall arise under the provisions of this Convention for damage
caused by a nuclear incident if the operator of a nuclear installation is liable for
such damage:
(a) under either the Paris Convention of 29 July 1960 on Third Party Liability in
the Field of Nuclear Energy as amended by the Additional Protocol of 28
January 1964 or the Vienna Convention of 21 May 1963 on Civil Liability for
Nuclear Damage, or
(b) by virtue of national law governing the liability for such damage, provided
that such law is in all respects as favourable to persons who may suffer
damage as either the Paris or Vienna Conventions.
4. No liability shall arise under the provisions of this Convention for any loss of
or damage to or delay in delivery of luggage for which the carrier is responsible
under any international convention or national law relating to the carriage of
passengers and their luggage by sea.
5. Nothing contained in this Convention prevents a Contracting State from

applying any other international convention which is already in force at the
date of this Convention and which applies mandatorily to contracts of carriage
of goods primarily by a mode of transport other than transport by sea. This
provision also applies to any subsequent revision or amendment of such
international convention.
Article 26
Unit of account
15
1. The unit of account referred to in article 6 of this Convention is the Special

Drawing Right as defined by the International Monetary Fund. The amounts
mentioned in article 6 are to be converted into the national currency of a State
according to the value of such currency at the date of judgement or the date
agreed upon by the parties. The value of a national currency, in terms of the
Special Drawing Right, of a Contracting State which is a member of the
International Monetary Fund is to be calculated in accordance with the method
of valuation applied by the International Monetary Fund in effect at the date in
question for its operations and transactions. The value of a national currency in
terms of the Special Drawing Right of a Contracting State which is not a
member of the International Monetary Fund is to be calculated in a manner
determined by that State.
2. Nevertheless, those States which are not members of the International

Monetary Fund and whose law does not permit the application of the provisions
of paragraph 1 of this article may, at the time of signature, or at the time of
ratification, acceptance, approval or accession or at any time thereafter,
declare that the limits of liability provided for in this Convention to be applied
in their territories shall be fixed as:
12,500 monetary units per package or other shipping unit or 37.5 monetary
units per kilogramme of gross weight of the goods.
3. The monetary unit referred to in paragraph 2 of this article corresponds to

sixty-five and a half milligrammes of gold of millesimal fineness nine hundred.
The conversion of the amounts referred to in paragraph 2 into the national
currency is to be made according to the law of the State concerned.
4. The calculation mentioned in the last sentence of paragraph 1 and the

conversion mentioned in paragraph 3 of this article is to be made in such a
manner as to express in the national currency of the Contracting State as far
as possible the same real value for the amounts in article 6 as is expressed
there in units of account. Contracting States must communicate to the
depositary the manner of calculation pursuant to paragraph 1 of this article, or
the result of the conversion mentioned in paragraph 3 of this article, as the
case may be, at the time of signature or when depositing their instruments of
ratification, acceptance, approval or accession, or when availing themselves of
the option provided for in paragraph 2 of this article and whenever there is a
change in the manner of such calculation or in the result of such conversion.
PART VII
FINAL CLAUSES
Article 27
Depositary
The Secretary General of the United Nations is hereby designated as the

depositary of this Convention.
Article 28
Signature, ratification, acceptance, approval, accession
1. This Convention is open for signature by all States until 30 April 1979 at the
Headquarters of the United Nations, New York.
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2. This Convention is subject to ratification, acceptance or approval by the

signatory States.
3. After 30 April 1979, this Convention will be open for accession by all States
which are not signatory States.
4. Instruments of ratification, acceptance, approval and accession are to be

deposited with the Secretary-General of the United Nations.
Article 29
Reservations
No reservations may be made to this Convention.
Article 30
Entry into force
1. This Convention enters into force on the first day of the month following the
expiration of one year from the date of deposit of the 20th instrument of
ratification, acceptance, approval or accession.
2. For each State which becomes a Contracting State to this Convention after
the date of deposit of the 20th instrument of ratification, acceptance approval
or accession, this Convention enters into force on the first day of the month
following the expiration of one year after the deposit of the appropriate
instrument on behalf of that State.
3. Each Contracting State shall apply the provisions of this Convention to

contracts of carriage by sea concluded on or after the date of the entry into
force of this Convention in respect of that State.
Article 31
Denunciation of other conventions
1. Upon becoming a Contracting State to this Convention, any State party to

the International Convention for the Unification of Certain Rules relating to Bills
of Lading signed at Brussels on 25 August 1924 (1924 Convention) must notify
the Government of Belgium as the depositary of the 1924 Convention of its
denunciation of the said Convention with a declaration that the denunciation is
to take effect as from the date when this Convention enters into force in
respect of that State.
2. Upon the entry into force of this Convention under paragraph 1 of article 30,
the depositary of this Convention must notify the Government of Belgium as
the depositary of the 1924 Convention of the date of such entry into force, and
of the names of the Contracting States in respect of which the Convention has
entered into force.
3. The provisions of paragraphs 1 and 2 of this article apply correspondingly in

respect of States parties to the Protocol signed on 23 February 1968 to amend
the International Convention for the Unification of Certain Rules relating to Bills
of Lading signed at Brussels on 25 August 1924.
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4. Notwithstanding article 2 of this Convention, for the purposes of paragraph

1 of this article, a Contracting State may, if it deems it desirable, defer the
denunciation of the 1924 Convention and of the 1924 Convention as modified
by the 1968 Protocol for a maximum period of five years from the entry into
force of this Convention. It will then notify the Government of Belgium of its
intention. During this transitory period, it must apply to the Contracting States
this Convention to the exclusion of any other one.
Article 32
Revision and amendment
1. At the request of not less than one-third of the Contracting States to this
Convention, the depositary shall convene a conference of the Contracting
States for revising or amending it.
2. Any instrument of ratification, acceptance, approval or accession deposited

after the entry into force of an amendment to this Convention, is deemed to
apply to the Convention as amended.
Article 33
Revision of the limitation amounts and unit of account or monetary unit
1. Notwithstanding the provisions of article 32, a conference only for the

purpose of altering the amount specified in article 6 and paragraph 2 of article
26, or of substituting either or both of the units defined in paragraphs 1 and 3
of article 26 by other units is to be convened by the depositary in accordance
with paragraph 2 of this article. An alteration of the amounts shall be made
only because of a significant change in their real value.
2. A revision conference is to be convened by the depositary when not less

than one-fourth of the Contracting States so request.
3. Any decision by the conference must be taken by a two-thirds majority of

the participating States. The amendment is communicated by the depositary to
all the Contracting States for acceptance and to all the States signatories of the
Convention for information.
4. Any amendment adopted enters into force on the first day of the month
following one year after its acceptance by two-thirds of the Contracting States.
Acceptance is to be effected by the deposit of a formal instrument to that
effect, with the depositary.
5. After entry into force of an amendment a Contracting State which has

accepted the amendment is entitled to apply the Convention as amended in its
relations with Contracting States which have not within six months after the
adoption of the amendment notified the depositary that they are not bound by
the amendment.
6. Any instrument of ratification, acceptance, approval or accession deposited

after the entry into force of an amendment to this Convention, is deemed to
apply to the Convention as amended.
Article 34
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Denunciation
1. A Contracting State may denounce this Convention at any time by means of

a notification in writing addressed to the depositary.
2. The denunciation takes effect on the first day of the month following the
expiration of one year after the notification is received by the depositary.
Where a longer period is specified in the notification, the denunciation takes
effect upon the expiration of such longer period after the notification is
received by the depositary.
DONE at Hamburg, this thirty-first day of March one thousand nine hundred
and seventy-eight, in a single original, of which the Arabic, Chinese, English,
French, Russian and Spanish texts are equally authentic.
IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly

authorized by their respective Governments, have signed the present
Convention.
COMMON UNDERSTANDING ADOPTED BY THE UNITED NATIONS

CONFERENCE ON THE CARRIAGE OF GOODS BY SEA
It is the common understanding that the liability of the carrier under this
Convention is based on the principle of presumed fault or neglect. This means
that, as a rule, the burden of proof rests on the carrier but, with respect to
certain cases, the provisions of the Convention modify this rule.
19
THE PRESIDENT
Order No. 12/2010/L-CTN of June 28, 2010, on the promulgation of law
THE PRESIDENT OF THE SOCIALIST REPUBLIC OF VIETNAM
Pursuant to Articles 103 and 106 of the 1992 Constitution of the Socialist
Republic of Vietnam, which was amended and supplemented under Resolution
No. 51/2001/QH10 of December 25, 2001, of the Xth National Assembly, the
10th session;
Pursuant to Article 91 of the Law on Organization of the National Assembly,
Pursuant to Article 57 of the Law on Promulgation of Legal Documents,
PROMULGATES:
the Law on Commercial Arbitration,
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which was passed on June 17, 2010, by the XIIth National Assembly of the
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Socialist Republic of Vietnam at its 7th session.
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NGUYEN MINH TRIET
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President of the Socialist Republic of Vietnam
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Law On Commercial Arbitration
(54/2010/QH12)
Pursuant to 1992 Constitution of the Socialist Republic of Vietnam, which was
amended and supplemented under Resolution No. 51/2001/QH10;
The National Assembly promulgates the Law on Commercial Arbitration.
Chapter 1
GENERAL PROVISIONS
Article 1. Scope of regulation
This Law provides for the jurisdiction of commercial arbitration, forms of

arbitration, arbitration institutions and arbitrators; arbitration order and
procedures; rights, obligations and responsibilities of parties in arbitral
proceedings; courts’ jurisdiction over arbitral activities; organization and
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operation of foreign arbitrations in Vietnam, and enforcement of arbitral
awards.
Article 2. Arbitration's jurisdiction to settle disputes
1. Disputes among parties which arise from commercial activities.
2. Disputes among parties at least one of whom conducts commercial

activities.
3. Other disputes among parties which are stipulated by law to be settled by

arbitration.
Article 3. Interpretation of terms
In this Law, the terms below are construed as follows:
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1. Commercial arbitration means a mode of dispute settlement agreed by the
parties and to be conducted under this Law.
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2. Arbitration agreement means an agreement between the parties to settle by
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arbitration a dispute which may arise or has arisen.
3. Disputing parties means Vietnamese and foreign individuals, agencies or

organizations that participate in arbitral proceedings in the capacity as
plaintiffs and defendants.
4. Dispute involving foreign elements means a dispute arising in commercial

relationships or other legal relationships involving foreign elements as defined
in the Civil Code.
5. Arbitrator means a person selected by the parties or designated by an

arbitration center or a court to settle a dispute under this Law.
6. Institutional arbitration means a form of dispute settlement at an arbitration

center under this Law and rules of proceedings of such arbitration center.
7. Ad hoc arbitration means a form of dispute settlement under this Law and
the order and procedures agreed by the parties.
8. Venue for dispute settlement means a place in which an arbitration council

settles disputes which is selected as agreed by the parties or as decided by the
arbitration council if the parties have no such agreement. If a venue for dispute
settlement is within the Vietnamese territory, the award must be regarded as
having been pronounced in Vietnam regardless of the place in which the
arbitration council holds a meeting to issue such award.
9. Arbitral decision means a decision of the arbitration council issued during

the process of dispute settlement.
10. Arbitral award means a decision of the arbitration council settling the
entire dispute and terminating the arbitral proceedings.
11. Foreign arbitration means an arbitration formed under a foreign law on

arbitration and selected as agreed by the parties to settle a dispute outside or
within the Vietnamese territory.
12. Foreign arbitral award means an award pronounced by a foreign

arbitration outside or within the Vietnamese territory which is selected as
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agreed by the parties to settle their disputes.
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Article 4. Principles of dispute settlement by arbitration
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1. Arbitrators must respect the parties agreement if such agreement neither
breaches prohibitions nor contravenes social ethics.
2. Arbitrators must be independent, objective and impartial and shall observe

law.
3. Disputing parties are equal in their rights and obligations. The arbitration
council shall create conditions for disputing parties to exercise their rights and
fulfill their obligations.
4. Dispute settlement by arbitration shall be conducted in private, unless

otherwise agreed by the parties.
5. Arbitral awards are final.
Article 5. Conditions for dispute settlement by arbitration
1. A dispute shall be settled by arbitration if the parties have an arbitration

agreement. An arbitration agreement may be made either before or after a
dispute arises.

2. When one of the parties being an individual to an arbitration agreement dies
or loses his/her act capacity, such arbitration agreement remains valid for
his/her heir or representative at law. unless otherwise agreed by the parties.
3. When one of the parties being an institution to an arbitration agreement has

to terminate its operation, goes bankrupt, or is dissolved, consolidated,
merged, divided, split up or reorganized, such arbitration agreement remains
valid for an institution that takes over the rights and obligations of the
institution to such arbitration agreement, unless otherwise agreed by the
parties.
Article 6. Courts' refusal to accept cases in which there is an arbitration

agreement
In case the disputing parties have reached an arbitration agreement but one
party initiates a lawsuit at a court, the court shall refuse to accept the case,
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unless the arbitration agreement is invalid or unrealizable.
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Article 7. Identification of courts which have competence over arbitral
activities
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1. In case the parties have agreed to select a specific court, the competent court
is the selected court.
2. In case the parties have no agreement to select a court, the court's

competence shall be determined as follows:
a/ For the designation of arbitrators to form an ad hoc arbitration council, the

competent court is the court in the place in which the defendant resides if the
defendant is an individual or the place in which the defendant has its head
office if the defendant is an institution. If there arc many defendants, the
competent court is the court in the place in which one of these defendants
resides or has its head office.
If the defendant resides or has its head office in a foreign country, the
competent court is the court in the place in which the plaintiff resides or has its
head office;
b/ For the change of an arbitrator of an ad hoc arbitration council, the

competent court is the court in the place in which the arbitration council settles
the dispute:

c/ For a request to settle a complaint about the arbitration council's decision
that the arbitration agreement was invalid or unrealizable or about the
arbitration council's jurisdiction, the competent court is the court in the place
in which the arbitration council issued such decision;
d/ For a request for the court to collect evidence, the competent court is the
court in the place in which exists evidence to be collected;
e/ For a request for the court to apply interim urgent measures, the competent
court is the court in the place in which such measures need to be applied;
f/ For summoning a witness, the competent court is the court in the place in
which the witness resides;
g/ For a request to cancel an arbitral award or register an ad hoc arbitral award,

the competent court is the court in the place in which the arbitration council
pronounced such arbitral award.
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3. Courts with competence over arbitral activities specified in Clauses 1 and 2
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of this Article are people's courts of provinces or centrally run cities.
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Article 8. Identification of judgment enforcement agencies competent to
enforce arbitral awards or decisions of arbitration councils on the
application of interim urgent measures
1. Civil judgment enforcement agencies competent to enforce arbitral awards

are civil judgment enforcement agencies of provinces or centrally run cities in
which arbitration councils issue the awards.
2. Civil judgment enforcement agencies competent to enforce decisions of

arbitration councils on the application of interim urgent measures are civil
judgment enforcement agencies of provinces or centrally run cities in which
the interim urgent measures need to be applied.
Article 9. Negotiation and conciliation during arbitral proceedings
During arbitral proceedings, the parties may freely negotiate and agree with
each other on the settlement of their dispute or request an arbitration council to
conduct conciliation for the parties to reach agreement on the settlement of
their dispute.

Article 10. Language
1. For disputes involving no foreign element, the language to be used in

arbitral proceedings is Vietnamese, except disputes to which at least one party
is a foreign-invested enterprise. When a disputing party cannot use
Vietnamese, it may use an interpreter.
2. For disputes involving foreign elements or disputes to which at least one

party is a foreign-invested enterprise, the parties shall reach agreement on the
language to be used in arbitral proceedings. If they have no such agreement,
the arbitration council shall decide on the language to be used in arbitral
proceedings.
Article 11. Venues for dispute settlement by arbitration
1. The parties may reach agreement on venues for dispute settlement. If no

agreement is made, the arbitration council shall decide on such venue. A
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venue for dispute settlement may be within or outside the Vietnamese
territory.
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2. Unless otherwise agreed by the parties, the arbitration council may hold a
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meeting at a venue regarded as appropriate for its members to exchange
opinions, for taking witnesses' statements, consulting experts or for assessing
goods, assets or other documents.
Article 12. Sending of notices and order of sending
Unless otherwise agreed by the parties or provided by the arbitration center's

rules of proceedings, the mode and order of sending notices in arbitral
proceedings arc specified as follows:
1. Each party's written explanations, correspondence papers and other

documents shall be sent to the arbitration center or arbitration council in
sufficient copies so that every member of the arbitration council and the other
party has one copy, and one copy is preserved at the arbitration center;
2. Notices and documents to be sent by the arbitration center or arbitration

council to the parties shall be sent to the addresses or to their representatives at
the correct addresses notified by the parties;

3. Notices and documents may be sent by the arbitration center or arbitration
council directly, in registered or ordinary mails, by fax. telex, telegram, email,
or other modes which acknowledge such sending;
4. Notices and documents sent by the arbitration center or arbitration council

will be regarded as having been received on the date the parties or their
representatives receive them or if such notices and documents have been sent
under Clause 2 of this Article:
5. The time limit for receiving notices and documents shall be counted from
the date following the date such notices and documents are regarded as having
been received. If the following date falls on a holiday or day off under
regulations of the country or territory in which the notices and documents have
been received. this time limit shall be counted from the subsequent first
working day. If the last day of this time limit falls on a holiday or day off
under regulations of such country or territory, the time of expiration is the end
of the subsequent first working day.
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Article 13. Loss of the right to protest
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A party that detects to have a violation of this Law or the arbitration
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agreement but continues to conduct arbitral proceedings and does not protest
the violation within the time limit set by this Law will lose its right to protest
at the arbitration or court.
Article 14. Applicable laws for dispute settlement
1. For a dispute involving no foreign element, the arbitration council shall

apply Vietnamese law for settling the dispute.
2. For a dispute involving foreign elements. the arbitration council shall apply
the law selected by the parties. If the parties have no agreement on the
applicable law, the arbitration council shall decide to apply a law it sees the
most appropriate.
3. When the Vietnamese law or law selected by the parties contains no specific
provisions concerning the dispute, the arbitration council may apply
international practices for settling the dispute, provided such application or
consequence of such application does not contravene the fundamental
principles of Vietnamese law.

Article 15. State management of arbitration
1. State management of arbitration covers:
a/ Promulgating, and guiding the implementation of, legal documents on

arbitration;
b/ Granting and revoking establishment licenses and operation registration

papers of arbitration centers; or branches and representative offices of foreign
arbitration institutions in Vietnam;
c/ Announcing lists of arbitrators of arbitration institutions operating in

Vietnam;
d/ Propagating and disseminating the arbitration law; entering into

international cooperation on arbitration; and guiding the training and
retraining of arbitrators:
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c/ Examining, inspecting, and handling violations of the arbitration law;
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f/ Settling complaints and denunciations related to the activities specified at
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Points b, c. d and e of this Clause.
2. The Government shall perform the unified state management of arbitration.
3. The Ministry of Justice shall take responsibility before the Government for
performing the state management of arbitration.
4. Provincial-level Justice Departments shall assist the Ministry of Justice in

performing several tasks under the Government's regulations and this Law.
Chapter II
ARBITRATION AGREEMENTS
Article 16. Forms of arbitration agreement
1. An arbitration agreement may be made in the form of an arbitral clause in a

contract or in the form of a separate agreement.
2. An arbitration agreement must be in writing. The following forms of

agreement may also be regarded as written form:
a/ Agreement made through communication between the parties by telegram,
fax, telex, email or other forms provided for by law;
b/ Agreement made through exchange of written information between the

parties;
c/ Agreement recorded in writing by a lawyer, notary public or competent

institution at the request of the parties:
d/ In their transactions, the parties make reference to a document such as a

contract, document, company charter or other similar documents which
contains an arbitration agreement;
e/ Agreement made through exchange of petitions and self-defense statements

which reflect the existence of an agreement proposed by a party and not
denied by the other party.
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Article 17. Consumer right to select dispute settlement modes
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For disputes between goods or service providers and customers, though an
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provision drafted by goods or service providers, consumers may select
arbitration or a court to settle these disputes. Goods or service providers may
initiate lawsuits at arbitration only if so consented by consumers.
Article 18. Invalid arbitration agreements
1. Disputes arise in the domains falling beyond the arbitration's jurisdiction

defined in Article 2 of this Law.
2. The arbitration agreement maker has no competence defined by law.
3. The arbitration agreement maker has no civil act capacity under the Civil
Code.
4. The form of the arbitration agreement is incompliant with Article 16 of this

Law.
5. A party is deceived, intimidated or compelled in the course of making the

arbitration agreement and requests a declaration that such arbitration
agreement is invalid.

6. The arbitration agreement breaches prohibitions specified by law.
Article 19. Independence of arbitration agreement
An arbitration agreement is entirely independent from the contract. Any

modification, extension, cancellation, invalidation or nonperformance of the
contract will not invalidate the arbitration agreement.
Chapter III
ARBITRATORS
Article 20. Criteria of arbitrators
1. A person who satisfies all the following criteria may act as arbitrator:
a/ Having the full civil act capacity under the Civil Code;
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b/ Possessing a university degree and having at least 5 years* work experience
in the trained discipline:
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c/ In special cases, an expert who has high professional qualifications and
much practical experience, though not satisfying the requirement specified at
Point b of this Clause, may also be selected as arbitrator.
2. Persons who satisfy all the conditions specified in Clause 1 of this Article
but fall into either of the following cases may not act as arbitrators:
a/ Incumbent judges, procurators, investigators, enforcement officers or civil

servants of peoples courts, peoples procuracies, investigative agencies or
judgment enforcement agencies:
b/ The accused, defendants, persons serving criminal sentences or having

served the sentences but having their criminal records not yet remitted.
3. Arbitration centers may set criteria for their arbitrators which are higher
than those specified in Clause 1 of this Article.
Article 21. Rights and obligations of arbitrators
1. To accept or refuse to settle disputes.

2. To be independent in dispute settlement.
3. To refuse to provide dispute-related information.
4. To enjoy remuneration.
5. To keep secret the circumstances of disputes they settle, unless they have to
provide information to competent state agencies under law.
6. To ensure impartial, fast and prompt settlement of disputes.
7. To adhere to the rules of professional ethics.
Article 22. The arbitration association
The arbitration association is a socio-professional organization of arbitrators

and arbitration centers nationwide. The establishment and operation of the
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arbitration association comply with the law on professional associations.
Chapter IV
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ARBITRATION CENTERS
Article 23. Functions of arbitration centers Arbitration centers have the

function to organize and coordinate the settlement of disputes by institutional
arbitration and assist arbitrators in administrative, office and other affairs
during arbitral proceedings.
Article 24. Conditions and procedures for the establishment of arbitration

centers
1. An arbitration center may be established when at least 5 founding members

being Vietnamese citizens who satisfy all the criteria of arbitrators specified in
Article 20 of this Law request such establishment and this center is granted an
establishment license by the Minister of Justice.
2. A dossier of request for establishment of an arbitration center comprises:
a/ A written request;
b/ Draft charter of the arbitration center, made according to a form issued by

the Ministry of Justice:
c/ List of founding members and enclosed papers evidencing their eligibility
under Article 20 of this Law.
3. Within 30 days after receiving a complete and valid dossier, the Minister of
Justice shall grant an arbitration center establishment license and approve the
arbitration center's charter. In case of refusal, he/she shall issue a written reply
clearly stating the reason.
Article 25. Registration of the operation of arbitration centers
Within 30 days after receiving its establishment license, an arbitration center

shall register its operation at the provincial-level Justice Department of the
locality in which it has its head office. Past this time limit, if the arbitration
center fails to register its operation, its license will no longer be valid.
The provincial-level Justice Department shall grant an operation registration

paper for an arbitration center within 15 days after receiving a written request
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for registration.
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Article 26. Announcement of the establishment of arbitration centers
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1. Within 30 days after obtaining its operation registration paper, an arbitration
center shall publish in 3 consecutive issues of a central daily or a local daily of
the locality in which it registers its operation the following principal details:
a/ Name and address of its head office;
b/ Its operations;
c/ Serial number of the operation registration paper, issuer and date of

issuance;
d/ Time of commencing its operation.
2. An arbitration center shall post up at its head office the details specified in
Clause 1 of this Article and the list of its arbitrators.
Article 27. Legal entity status and structure of arbitration centers
1. Arbitration centers have the legal entity status and their own seals and bank
accounts.

2. Arbitration centers operate for not-for-profit purposes.
3. Arbitration centers may set up their branches and representative offices at

home and abroad.
4. An arbitration center has the Executive Board and Secretariat. The structure
and apparatus of an arbitration center shall be prescribed in its charter.
The Executive Board of an arbitration center is composed of the chairman,

vice chairman (chairmen) and may also include a secretary general appointed
by the chairman. The chairman is an arbitrator.
5. An arbitration center has a list of arbitrators.
Article 28. Rights and obligations of arbitration centers
1. To draft their charter and rules of proceedings which must be in accordance

with this Law.
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2. To set out criteria for arbitrators and processes of selection and listing
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arbitrators and deleting names of arbitrators from their lists of arbitrators.
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3. To send their lists of arbitrators and modifications to these lists to the
Ministry of Justice for announcement.
4. To designate arbitrators for forming arbitration councils in the cases

specified in this Law.
5. To provide arbitration services, conduct conciliation and apply other modes

of settling commercial disputes under law.
6. To provide administrative, office and other services for dispute settlement.
7. To collect arbitration charges and other lawful amounts related to arbitral

operations.
8. To pay remuneration and other expenses to arbitrators.
9. To train arbitrators for raising their dispute settlement qualifications and

skills.

10. To annually report on their operation to provincial-level Justice
Departments of localities in which they register their operation.
11. To preserve dossiers and provide copies of arbitral decisions at the request
of disputing parties or competent state agencies.
Article 29. Termination of the operation of arbitration centers
1. An arbitration center shall terminate its operation:
a/ In the cases specified in its charter;
b/ Upon revocation of its establishment license or operation registration paper.
2. The Government shall detail cases subject to revocation of establishment

licenses or operation registration papers and the order and procedures for
terminating the operation of arbitration centers.
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INITIATION OF LAWSUITS
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Article 30. Petitions and enclosed documents
1. When a dispute is settled at an arbitration center, the plaintiff shall file a

petition with the arbitration center. When a dispute is settled by ad hoc
arbitration, the plaintiff shall make a petition and send it to the defendant.
2. A petition contains:
a/ Date of its making;
b/ Names and addresses of the parties; names and addresses of witnesses, if

any;
c/ Summary of the circumstances of the dispute:
d/ Grounds and evidence for initiating the lawsuit, if any:
e/ Specific requirements of the plaintiff and the value of the dispute:

f/ Name and address of the person whom the plaintiff selects as arbitrator or
requests to be designated as arbitrator.
3. Enclosed with the petition shall be the arbitration agreement and the
originals or copies of relevant documents.
Article 31. Time of commencing arbitral proceedings
1. When a dispute is settled by an arbitration center, unless otherwise agreed

by the parties, the time of commencing arbitral proceedings is the time the
arbitration center receives the plaintiff's petition.
2. When a dispute is settled by ad hoc arbitration, unless otherwise agreed by

the parties, the time of commencing arbitral proceedings is the time the
defendant receives the plaintiff's petition.
Article 32. Notification of petitions

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enclosed documents and arbitration charge receipt, the arbitration center shall
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send to the defendant copies of the petition and documents specified in Clause
3. Article 30 of this Law.
Article 33. Statute of limitations for initiating a lawsuit for dispute

settlement by arbitration
Unless otherwise provided by discrete laws, the statute of limitations

according to arbitral procedures is 2 years from the time of infringement of
lawful rights and interests.
Article 34. Arbitration charge
1. Arbitration charge is a revenue from the provision of services for dispute

settlement by arbitration. The arbitration charge covers:
a/ Remuneration and travel and other expenses for arbitrators:
b/ Charge for expert consultation and other assistance at the request of the
arbitration council: c/Administrative charge;

d/ Charge for designation of the arbitration centers ad hoc arbitrators at the
request of the disputing parties:
e/ Charge for use of other services provided by the arbitration center.
2. The arbitration charge shall be set by the arbitration center. When a dispute
is settled by ad hoc arbitration, the arbitration charge shall be set by the
arbitration council.
3. The losing party shall bear the arbitration charge, unless otherwise agreed
by the parties or provided by the rules of arbitral proceedings or allocated by
the arbitration council.
Article 35. Self-defense statements and the sending thereof
1. A self-defense statement contains:
a/ Date of making;
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b/ Name and address of the defendant;
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c/ Grounds and evidence, if any. for self-defense;
d/ Name and address of the person whom the defendant selects as arbitrator or
requests for designation as arbitrator.
2. For a dispute to be settled at an arbitration center, unless otherwise agreed

by the parties or provided by the arbitration center's rules of proceedings,
within 30 days after receiving a petition and enclosed documents, the
defendant shall send to the arbitration center a self-defense statement. At the
request of one party or all parties, this time limit may be extended by the
arbitration center based on the particular circumstances of the case.
3. For a dispute to be settled by ad hoc arbitration, unless otherwise agreed by

the parties, within 30 days after receiving the plaintiff's petition and enclosed
documents, the defendant shall send to the plaintiff and arbitrator the self-
defense statement and name and address of the person whom the defendant
selects as arbitrator.
4. When the defendant assumes that the dispute falls beyond the jurisdiction of
arbitration, or there is no arbitration agreement, or the arbitration agreement is

invalid or unrealizable, the defendant shall clearly indicate such in the self-
defense statement.
5. If the defendant fails to submit the self-defense statement under Clauses 2

and 3 of this Article, the dispute settlement will still proceed.
Article 36. Defendants' counter-claims
1. The defendant may counter-claim the plaintiff on matters related to their

dispute.
2. The defendant's counter-claim shall be sent to the arbitration center. When a

dispute is settled by ad hoc arbitration, such counter-claim shall be sent to the
arbitration council and plaintiff. The counter-claim shall be submitted
simultaneously with a self-defense statement.
3. Within 30 days after receiving a counter claim, the plaintiff shall send the
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self-defense statement to the arbitration center. When a dispute is settled by ad
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hoc arbitration, the plaintiff shall send the self-defense statement to the
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arbitration council and defendant.
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4. The arbitration council that settles the plaintiff's petition shall settle a
counter-claim according to the order and procedures for settling plaintiffs'
petitions under this Law.
Article 37. Withdrawal of petitions or counter-claims; modification and

supplementation of petitions, counter-claims or self-defense statements
1. Before the arbitration council makes an arbitral award, the parties may
withdraw their petition or counter-claim.
2. In the course of arbitral proceedings, the parties may modify and

supplement their petition, counter-claim or self-defense statement. The
arbitration council has the right to reject such modification and
supplementation if seeing that it may be abused to obstruct or delay the
making of an arbitral award or falls beyond the scope of the arbitration
agreement applicable to the dispute.
Article 38. Negotiation in arbitral proceedings

From the lime of commencing arbitral proceedings, the parties may
themselves negotiate and agree to terminate the dispute settlement.
When the parties agree to terminate the dispute settlement, they may request
chairman of the arbitration center to issue a decision suspending the dispute
settlement.
Chapter VI
ARBITRATION COUNCIL
Article 39. Composition of an arbitration council
1. An arbitration council may be composed of one or more arbitrators as

agreed by the parties.
2. When the parties fail to reach agreement on the number of arbitrators, an
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arbitration council shall be composed of three arbitrators.
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Article 40. Formation of an arbitration council at an arbitration center
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Unless otherwise agreed by the parties or provided by the arbitration center's
rules of proceedings, the formation of an arbitration council is specified as
follows:
1. Within 30 days after receiving a petition and request for selecting an

arbitrator sent by the arbitration center, the defendant shall select an arbitrator
and notify such to the arbitration center or request the arbitration center's
chairman to designate an arbitrator; otherwise, within 7 days after the
expiration of the time limit specified in this Clause, the arbitration center's
chairman shall designate an arbitrator for the defendant;
2. For a dispute involving many defendants, within 30 days after receiving a

petition sent by the arbitration center, the defendants shall agree to select an
arbitrator or to request designation of an arbitrator. If the defendants cannot
select an arbitrator, within 7 days after the expiration of the time limit
specified in this Clause, the arbitration center's chairman shall designate an
arbitrator for the defendants;
3. Within 15 days after being selected by the parties or designated by the

arbitration center's chairman, the arbitrators shall elect another arbitrator as the

chairman of the arbitration council. Past this time limit, if this election cannot
take place, within 7 days the arbitration center's chairman shall designate the
chairman of the arbitration council:
4. When the parties agree that their dispute shall be settled by a sole arbitrator
but fail to select such arbitrator within 30 days after the defendant receives a
petition, the arbitration center's chairman shall, at the request of one party or
all parties and within 15 days after receiving such request, designate a sole
arbitrator.
Article 41. Formation of ad hoc arbitration councils
Unless otherwise agreed by the parties, the formation of an ad hoc arbitration

council is specified as follows:
1. Within 30 days after receiving the plaintiff's petition, the defendant shall
select an arbitrator and notify the selection to the plaintiff. Past this lime limit,
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if the defendant fails to notify the plaintiff of the name of the selected
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arbitrator and the parties do not otherwise agree on designation of an
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arbitrator, the plaintiff may request a competent court to designate an
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arbitrator for the defendant;
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2. For a dispute involving many defendants, these defendants shall agree to
select an arbitrator within 30 days after receiving the plaintiff's petition and
enclosed documents. Past this time limit, if the defendants cannot select an
arbitrator and the parties do not otherwise agree on designation of an
arbitrator, one party or all parties may request a competent court to designate
an arbitrator for the defendants;
3. Within 15 days after being selected by the parties or designated by the

court, the arbitrators shall elect another arbitrator as the chairman of the
arbitration council. When the arbitration council's chairman cannot be elected
and the parties do not otherwise agree, they may request a competent court to
designate the chairman of the arbitration council;
4. When the parties agree that their dispute shall be settled by a sole arbitrator
but fail to select such arbitrator within 30 days after the defendant receives a
petition, if the parties do not agree to request an arbitration center to designate
an arbitrator, the competent court shall, at the request of one party or all
parties, designate a sole arbitrator.

5. Within 7 days after receiving the parties' request under Clause 1, 2, 3 or 4 of
this Article, the president of the competent court shall assign a judge to
designate an arbitrator and notify such to the parties.
Article 42. Change of arbitrators
1, An arbitrator shall refuse to settle a dispute and the parties may request
change of an arbitrator to settle the dispute in the following cases:
a/ The arbitrator is a relative or representative of one party:
b/ The arbitrator has an interest related to the dispute;
c/ There is a clear ground to conclude that the arbitrator is neither impartial

nor objective;
d/ The arbitrator was a conciliator, representative or lawyer of one party before
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the dispute is brought to arbitration for settlement. unless such is consented in
writing by the parties.
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2. After being selected or designated, the arbitrator shall notify in writing the
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arbitration center or arbitration council and parties of the circumstances which
may affect his/her objectivity or impartiality.
3. For a dispute to be settled at an arbitration center, pending the formation of

an arbitration council, the arbitration center's chairman shall decide on the
change of an arbitrator. If the arbitration council has been formed, such change
shall be decided by other members of the arbitration council. When these
members cannot make decision or if the arbitrators or the sole arbitrator
refuse(s) to settle the dispute, the arbitration center's chairman shall decide on
change of the arbitrator.
4. For a dispute to be settled by an ad hoc arbitration council, change of an

arbitrator shall be decided by other members of the arbitration council. When
these members cannot make decision or if the arbitrators or the sole arbitrator
refuse(s) to settle the dispute, within 15 days after receiving a request from the
arbitrator(s) and one disputing party or all disputing parties, the president of
the competent court shall assign a judge to decide on change of the arbitrator.
5. The decision of the arbitration center's chairman or court in the cases

specified in Clauses 3 and 4 of this Article is final.

6. When the arbitrator cannot continue participating in the settlement of a
dispute due to force majeure circumstances or objective obstacles or is
changed, the selection or designation of a new arbitrator comply with the order
and procedures specified in this Law.
7. After consulting the parties, the newly formed arbitration council may re-
consider the matters presented at the former arbitration council's previous
dispute settlement meetings.
Article 43. Consideration of invalid or unrealizable arbitration

agreements, jurisdiction of an arbitration council
1. Before considering the circumstances of a dispute, the arbitration council

shall consider the validity of the arbitration agreement and whether such
agreement can be realized, and consider its jurisdiction. If the dispute falls
within its jurisdiction, the arbitration council shall settle it under this Law. If
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the dispute falls beyond its jurisdiction or the arbitration agreement is invalid
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or unrealizable, the arbitration council shall decide to terminate the dispute
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settlement and immediately notify the parties thereof.
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2. In the course of dispute settlement, if detecting that the arbitration council
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acts ultra vires, the parties may lodge a complaint with the arbitration council.
The arbitration council shall consider and decide on this issue.
3. When the parties agree to have their dispute settled by a specific arbitration
center, but such center has terminated its operation without any other
arbitration institution succeeding it. the parties may agree to select another
arbitration center: otherwise, they may bring their dispute to court for
settlement.
4. When the parties agree to select an ad hoc arbitrator but at the time their
dispute arises, the arbitrator cannot conduct the settlement of the dispute due
to force majeure circumstances or objectives obstacles, the parties may agree
to select another arbitrator in replacement; otherwise, they may bring their
dispute to court for settlement.
5. When the parties have an arbitration agreement but fail to indicate the form
of arbitration or cannot identify a specific arbitration institution, if a dispute
arises, the parties shall agree again on the form of arbitration or a specific
arbitration institution to settle the dispute. If no agreement can be reached, the

form of arbitration or an arbitration institution to settle the dispute shall be
selected at the plaintiff's request.
Article 44. Complaints and settlement of complaints about an arbitration

council's decision on the non-existence, invalidation or unrealizableness of
an arbitration agreement, and jurisdiction of the arbitration council
1. If disagreeing with any decision of the arbitration council specified in

Article 43 of this Law. within 5 working days after receiving this decision, the
parties may file a request with a competent court to re-consider such decision.
The complainant shall concurrently notify such complaint to the arbitration
council.
2. A complaint must contain:
a/ Date of making;
b/ Name and address of the complainant;

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c/ Details of the request.
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3. A complaint shall be enclosed with copies of the petition, arbitration
agreement and arbitration council's decision. Enclosed papers in a foreign
language shall be translated into Vietnamese and their translations be legally
certified.
4. Within 5 working days after receiving a complaint, the president of the

competent court shall assign a judge to consider and settle the complaint.
Within 10 working days after being assigned, such judge shall consider the
complaint and make a decision. The court's decision is final.
5. While the court is processing the complaint, the arbitration council may
continue the dispute settlement.
6. When the court decides that the dispute falls beyond the arbitration council's
jurisdiction, or there is no arbitration agreement or the arbitration agreement is
invalid or unrealizable, the arbitration council shall decide to terminate the
dispute settlement. Unless otherwise agreed by the parties, they may bring the
dispute to a court within the statute of limitations specified by law. The period
from the date the plaintiff initiates a lawsuit at arbitration to the date the court

decides to accept the dispute is not included in the statute of limitations for
initiating a lawsuit.
Article 45. The arbitration council's jurisdiction to verify matters
In the course of dispute settlement, an arbitration council may meet or

exchange with one party in the presence of the other party in appropriate forms
to clarify matters related to the dispute. The arbitration council may itself or at
the request of one party or all parties study a matter from a third person in the
presence of the parties or after notifying such to the parties.
Article 46. The arbitration council's jurisdiction to collect evidence
1. The parties have the right and obligation to provide evidence to the
arbitration council to prove matters related to their dispute.
2. At the request of one party or all parties, the arbitration council may request
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witnesses to provide information and documents relating to the dispute
settlement.
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3. The arbitration council may itself or at the request of one party or all parties
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request an appraisal and valuation of assets in the dispute as a basis for settling
the dispute. Appraisal and valuation expenses shall be advanced by the
appraisal and valuation requester or allocated by the arbitration council.
4. The arbitration council may itself or at the request of one party or all parties
consult experts. Expert expenses shall be advanced by the consultation
requester or allocated by the arbitration council.
5. If the arbitration council, one party or all parties have applied necessary
measures to collect evidence but cannot itself/themselves collect evidence,
they may propose in writing the competent court to request agencies,
organizations and individuals to provide legible, audible or visible documents
or other objects related to the dispute. Such a proposal must clearly indicate
the circumstances of the dispute, evidence to be collected, reasons for the
failure to collect evidence, names and addresses of agencies, organizations and
individuals that manage and preserve such evidence.
6. Within 7 working days after receiving a proposal for evidence collection,

the president of the competent court shall assign a judge to consider and deal
with this proposal. Within 5 working days after being assigned, such judge

shall request in writing agencies, organizations and individuals that are
managing and preserving evidence to provide it for the court and send such
proposal to the same-level procuracy for the latter to perform its functions and
tasks under law.
Agencies, organizations and individuals that are managing and preserving the
evidence shall fully and promptly provide such evidence at the court's request
within 15 days after receiving the request.
Within 5 working days after receiving the evidence provided by agencies,

organizations and individuals, the court shall notify such to the arbitration
council and requester for delivery and receipt of evidence.
Past this time limit, if agencies, organizations and individuals fail to provide
the evidence as requested, the court shall immediately notify such to the
arbitration council and requester and. at the same time, request in writing
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competent agencies or organizations to handle the failure under law.
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Article 47. The arbitration council's jurisdiction to summon witnesses
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1. At the request of one party or all parties and when necessary, the arbitration
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council may request witnesses to appear at meetings to settle the dispute.
Witness expenses shall be borne by the requester for such summon or
allocated by the arbitration council.
2. If a witness, though having been properly summoned by the arbitration

council, fails to attend the meeting without a plausible reason and his/her
absence obstructs the dispute settlement, the arbitration council shall request
in writing the competent court to decide to summon the witness to attend the
arbitration council's meeting. Such request must clearly indicate the
circumstances of the dispute; name and address of the witness; reason for
summoning; and time and place for the witness to attend the meeting.
3. Within 7 working days after receiving the arbitration council's written

request to summon the witness, the president of the competent court shall
assign a judge to consider and deal with such request. Within 5 working days
after being assigned, such judge shall issue a decision to summon the witness.
A witness-summoning decision must clearly indicate the name of the

arbitration council requesting such summoning; circumstances of the dispute;

name and address of the witness; and time and place for the witness lo attend
the meeting.
The court shall immediately send this decision to the arbitration council, the
witness, and concurrently lo the same-level procuracy for the latter to perform
its functions and tasks under law.
The witness shall strictly observe the court's decision.
Witness expenses comply with Clause 1 of this Article.
Chapter VII
INTERIM URGENT MEASURES
Article 48. Right to request application of interim urgent measures
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1. The disputing parties may request the arbitration council or a court to apply

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interim urgent measures under this Law and relevant laws, unless otherwise
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2. A request for a court to apply interim urgent measures shall not be regarded
as rejection to the arbitration agreement or waiver of the right to dispute
settlement by arbitration.
Article 49. The arbitration council's competence to apply interim urgent

measures
1. At the request of one of the parties, the arbitration council may apply one or
more interim urgent measures to the disputing parties.
2. Interim urgent measures include:
a/ Prohibiting any change in the status of assets under dispute;
b/ Prohibiting or forcing any disputing party to commit one or more certain

acts to prevent acts which adversely affect the process of arbitral proceedings;
c/ Distraining assets under dispute;
d/ Requesting preservation, storage, sale or disposal of any asset of one

disputing party or all disputing parties;
e/ Requesting temporary money payment between the parties;
f/ Prohibiting transfer of the rights to assets under dispute.
3. During the dispute settlement, if one party has requested a court to apply
one or more interim urgent measures specified in Clause 2 of this Article but
later requests the arbitration council to apply such measures, the arbitration
council shall refuse such application.
4. Before applying interim urgent measures, the arbitration council may force
the party that requests such application to perform the financial security
obligation.
5. The arbitration council which applies other interim urgent measures or those
in excess of the requester's request for application of interim urgent measures,
thus causing damage to the requester, the party to which these measures are
applied or a third person, the damage sufferer may sue for compensation under
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the civil procedure law.
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Article 50. Procedures for the arbitration council to apply interim urgent
measures
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1. The requester for application of interim urgent measures shall send a written
request to the arbitration council.
2. A written request for application of interim urgent measures must contain:
a/ Date of making:
b/ Name and address of the requester;
c/ Name and address of the party to whom/ which interim urgent measures are
to be applied:
d/ Summary of the circumstances of the dispute;
e/ Reason for the application of interim urgent measures;
f/ Interim urgent measures to be applied and specific requirements.
In addition to the request, the requester shall provide the arbitration council
with evidence to prove the necessity to apply such interim urgent measures.
3. As decided by the arbitration council, the requester shall deposit a sum of
money, precious metal, gemstone or valuable papers of a value set by the
arbitration council equivalent to the amount of the loss which could be caused
by improper application of interim urgent measures in order to protect the
requester's interests. Such a sum of money, precious metal, gemstone or
valuable papers shall be deposited in a blocked account at a bank decided by
the arbitration council.
4. Within 3 working days after receiving a request, immediately after the

requester has provided the security specified in Clause 3 of this Article, the
arbitration council shall consider and decide to apply interim urgent measures.
In case of refusal, the arbitration council shall issue a written notice clearly
stating the reason to the requester.
5. The enforcement of the arbitration council's decision to apply interim urgent

measures complies with the law on enforcement of civil judgments.
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Article 51. The arbitration council's jurisdiction and procedures for
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changing. supplementing or canceling interim urgent measures
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1. At the request of one party, the arbitration council may change, supplement
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or cancel interim urgent measures at any lime during the dispute settlement.
2. Procedures for changing or supplementing interim urgent measures comply

with Article 50 of this Law.
3. The arbitration council may cancel the applied interim urgent measures in
the following cases:
a/ The requester for application of interim urgent measures requests

cancellation of such measures;
b/ The party subject to the enforcement of the decision to apply interim urgent
measures has handed over its assets or another person has implemented the
obligation security measure towards the requester;
c/ The obligation of the obliged party terminates under law.
4. Procedures for canceling interim urgent measures are specified as follows:

a/ The requester files a request for such cancellation with the arbitration
council;
b/ The arbitration council considers and decides to cancel interim urgent

measures and considers and decides to allow the requester to receive back the
security assets specified in Clause 3, Article 50 of this Law. unless the
requester has to compensate for a wrongful request causing damage to the
party to which interim urgent measures are applied, or to a third person.
A decision to cancel interim urgent measures shall immediately be sent to the

disputing parties and the civil judgment enforcement agency.
Article 52. Responsibilities of requesters for application of interim urgent

measures
A requester for application of interim urgent measures shall take responsibility

for his/her request. He/she shall compensate for his/her wrongful request
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causing damage to the other party or a third person.
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Article 53. The court's jurisdiction, order and procedures for applying,
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changing or canceling interim urgent measures
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1. After filing a petition, if its lawful rights and interests arc infringed or in a
direct danger of infringement, the filing party may file a request with a
competent court to apply one or more interim urgent measures.
2. Within 3 working days after receiving such request, the president of the
competent court shall assign a judge to consider and deal with the request.
Within 3 working days after being assigned, such judge shall consider and
decide to apply or not to apply interim urgent measures. The judge shall
decide to apply interim urgent measures immediately after the requester takes
the security measure. In case of refusal, the judge shall issue a written notice
clearly stating the reason to the requester.
3. A party may request a court to change, supplement or cancel interim urgent

measures. The assignment of a judge to consider and deal with such request
complies with Clause 2 of this Article.
4. The order and procedures for applying, changing, adding or canceling a

court's interim urgent measures and inspecting law observance during the
application of these measures comply with the Civil Procedure Code.

5. During the dispute settlement, if one party has requested the arbitration
council to apply one or several interim urgent measures but later requests in
writing a court to apply these measures, the court shall refuse such request and
return the request. unless such request falls beyond the arbitration council's
jurisdiction.
Chapter VIII
DISPUTE SETTLEMENT MEETINGS
Article 54. Preparation for dispute settlement meetings
1. Unless otherwise agreed by the parties or provided by the arbitration

center's rules of proceedings, the arbitration council shall decide on the time
and venue for holding dispute settlement meetings.
2. Unless otherwise agreed by the parties or provided by the arbitration

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center's rules of proceedings, summons to a meeting shall be sent to the parties
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at least 30 days before the meeting starts.
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Article 55. Composition and procedures of a dispute settlement meeting
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1. A dispute settlement meeting shall be held in private, unless otherwise
2. The parties may personally, or authorize their representatives to. attend

dispute settlement meetings and may invite witnesses and persons to protect
their lawful rights and interests.
3. When agreed by the parties, the arbitration council may allow others to
attend dispute settlement meetings.
4. The order and procedures for holding dispute settlement meetings shall be
specified in the arbitration center's rules of arbitral proceedings or agreed by
the parties in case of ad hoc arbitration.
Article 56. Absence of the parties
1. The plaintiff who has properly been summoned to attend a dispute

settlement meeting but is absent without a plausible reason or leaves the
meeting without the arbitration council's approval will be regarded as having

withdrawn his/her petition. In this case, the arbitration council shall proceed
with the dispute settlement if the plaintiff so requests or files a counter-claim.
2. In case the defendant who has properly been summoned to attend a dispute
settlement meeting but is absent without a plausible reason or leaves the
meeting without the arbitration councils approval, the arbitration council shall
still proceed with the dispute settlement based on available documents and
evidence.
3. At the request of the parties, the arbitration council may base itself on the
dossiers to hold a dispute settlement meeting without the parties' presence.
Article 57. Postponement of a dispute settlement meeting
When having a plausible reason, one party or all parties may request the
arbitration council to postpone a dispute settlement meeting. Such a request
must be made in writing clearly stating the reason and enclosed with evidence
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and shall be sent to the arbitration council at least 7 working days before a
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meeting starts. If the arbitration council receives no request within this time
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limit, the postponement requester shall bear all expenses, if any. The
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arbitration council shall consider and decide to accept or not to accept a
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meeting postponement request and promptly notify such to the parties.
The arbitration council shall decide on the postponement duration.
Article 58. Conciliation and recognition of successful conciliation
At the request of the parties, the arbitration council shall conduct conciliation
for the parties to reach agreement on the settlement of their dispute. If such an
agreement can be reached, the arbitration council shall make a record of
successful conciliation and have it signed by the parties and certified by the
arbitrators. The arbitration council shall issue a decision recognizing the
parties" agreement. This decision is final and as valid as an arbitral award.
Article 59. Termination of dispute settlement
1. Settlement of a dispute shall be terminated in the following cases:
a/ The individual plaintiff or defendant is dead without any heir of his/her

rights and obligations:

b/ The institutional plaintiff or defendant has terminated its operation, gone
bankrupt, or has been dissolved, consolidated, merged, divided, split up or
reorganized without any agency or institution taking over its rights and
obligations;
c/ The plaintiff withdraws his/her petition or is regarded as having withdrawn

his/her petition under Clause 1. Article 56 of this Law. unless the defendant
requests the settlement of the dispute to be continued;
d/ The parties agree to terminate the dispute settlement:
e/ A court has decided that the dispute falls beyond the arbitration council's
jurisdiction, or there is no arbitration agreement, or the arbitration agreement
is invalid or unrealizable under Clause 6, Article 44 of this Law.
2. The arbitration council shall issue a decision terminating the dispute

settlement. If the arbitration council has not yet been formed, the arbitration
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center's chairman shall issue such decision.
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3. When receiving a decision terminating the dispute settlement, the parties
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may not sue to request the arbitration to re-settle the dispute if there is no
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change in the plaintiff, defendant and legal relationships related to the dispute,
except the cases specified at Point c and e. Clause 1 of this Article.
Chapter IX
ARBITRAL AWARDS
Article 60. Principles of issuance of awards
1. The arbitration council shall issue an arbitral award on the basis of majority
vote.
2. In case a majority vote cannot be obtained, an arbitral award shall be issued

based on the opinion of the arbitration council's chairman.
Article 61. Contents, form and validity of an arbitral award
1. An arbitral award must be in writing and contain the following principal

details:
a/ Date and place of issuance;

b/ Names and addresses of the plaintiff and defendant;
c/ Name and address of the arbitrator;
d/ Summary of the circumstances of the petition and matters under dispute;
e/ Grounds for issuing the award, unless the parties agree that it is unnecessary
to indicate these grounds;
f/ Results of the dispute settlement;
g/ Time limit for enforcement of the award;
h/ Allocation of arbitration and other relevant expenses;
i/ The arbitrator's signature.
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2. When the arbitrator fails to sign the arbitral award, the arbitration council's
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chairman shall indicate such failure in the arbitral award and clearly state the
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reason. In this case, the arbitral award remains effective.
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3. An arbitral award shall be issued right at a meeting or within 30 days after
the end of the last meeting.
4. An arbitral award shall be sent to the parties immediately after the date of
its issuance. The parties may request the arbitration center or ad hoc arbitration
council to issue copies of the arbitral award.
5. An arbitral award is final and takes effect on the date of its signing.
Article 62. Registration of ad hoc arbitration's awards
1. At the request of one disputing party or all disputing parties, an award of ad

hoc arbitration shall be registered at the court in the place in which the
arbitration council issued the award before requesting a competent civil
judgment enforcement agency to organize enforcement of such award.
Registration or non-registration of an arbitral award does not affect the
contents and legal validity of the award.
2. Within 1 year after an arbitral award is issued, the party requesting

registration of an award of ad hoc arbitration shall file an application for such

registration to the competent court defined in Clause 1 of this Article, enclosed
with originals or true copies of the following documents:
a/ Arbitral award issued by the ad hoc arbitration council:
b/ Minutes of the ad hoc arbitration council's dispute settlement meeting, if

any;
c/ Original or certified copy of the arbitration agreement.
The requester shall take responsibility for the truthfulness of the documents
sent to the court.
3. Within 5 working days after receiving an application for award registration,

the court president shall assign a judge to consider such application. Within 10
days after being assigned, such judge shall examine the truthfulness of the
documents enclosed with the application and make registration. If identifying
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that the arbitral award is untrue, the judge shall refuse to make registration,
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return the application and enclosed documents and immediately notify such to
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the requester clearly slating the reason. Within 3 working days after receiving
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the court's notice, the requester may lodge a complaint with the court president
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about the refusal to make registration. Within 3 working days after receiving
the complaint, the court president shall consider and issue a decision settling
the complaint. The court president's dispute settlement decision is final.
4. Contents of registration of an arbitral award:
a/ Time and place of registration;
b/ Name of the court making registration;
c/ Name and address of the requester for registration;
d/ The registered award; e/ Signature of the competent person and seal of the
court.
Article 63. Correction and explanation of awards; additional awards
1. Within 30 days after receiving an award, unless otherwise agreed by the

parties, a party may request the arbitration council to correct obvious spelling
errors or erroneous or incorrectly calculated data in the award but shall

immediately notify the other party thereof. If the arbitration council considers
this request reasonable, it shall correct the errors within 30 days after receiving
the request.
2. Within 30 days after receiving an award, unless otherwise agreed by the

parties, a party may request the arbitration council to explain details of the
award but shall immediately notify the other party thereof. If the arbitration
council considers this request reasonable, it shall give an explanation within
30 days after receiving the request. Such explanation constitutes part of the
award.
3. Within 30 days after issuing an award, the arbitration council may on its
own initiative correct errors specified in Clause 1 of this Article and shall
immediately notify such to the parties.
4. Unless otherwise agreed by the parties, within 30 days after receiving an
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award, a party may request the arbitration council to issue an additional award
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for the requirements presented in the course of proceedings but not recorded in
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the award and shall immediately notify such to the other party. If the
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arbitration council considers such request reasonable, it shall issue an
additional award within 45 days after receiving the request.
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5. When necessary, the arbitration council may extend the time limits for
correction or explanation of awards or issuance of additional awards specified
in Clauses I. 2 and 4 of this Article.
Article 64. Preservation of dossiers
1. An arbitration center shall preserve dossiers of disputes it has accepted.

Dossiers of disputes settled by ad hoc arbitration shall be preserved by the
parties or arbitrators.
2. Arbitration dossiers shall be preserved for 5 years after the issuance of the
arbitral award or decision terminating the dispute settlement by arbitration.
Chapter X
ENFORCEMENT OF ARBITRAL AWARDS
Article 65. Voluntary compliance with arbitral awards

The State encourages the parties to voluntarily comply with arbitral awards.
Article 66. Right to request compliance with arbitral awards
1. Past the lime limit for complying with an arbitral award, if the party to
comply with the award fails to voluntarily comply with it and docs not request
cancellation of the award under Article 69 of this Law. the party in favor of
whom/which the arbitral award is issued may request in writing the competent
civil judgment enforcement agency to enforce the award.
2. For ad hoc arbitration's awards, the creditor may request in writing the
competent civil judgment enforcement agency to enforce the award after it is
registered under Article 62 of this Law.
Article 67. Enforcement of arbitral awards
Arbitral awards shall be enforced under the law on enforcement of civil

judgments.
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Chapter XI
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CANCELLATION OF ARBITRAL AWARDS
Article 68. Grounds for cancellation of arbitral awards
1. The court shall consider the cancellation of an arbitral award at the request
of one of the parties.
2. An arbitral award shall be cancelled in any of the following cases:
a/ There is no arbitration agreement or the arbitration agreement is invalid;
b/ The arbitration council's composition or procedures of arbitral proceedings

is/arc incompliant with the parties' agreement or this Law:
c/ The dispute falls beyond the arbitration council's jurisdiction: when an

arbitral award contains the details falling beyond the arbitration council's
jurisdiction, such details shall be cancelled:
d/ The evidence provided by the parties on which the arbitration council bases
to issue the award is counterfeit: an arbitrator receives money, assets or other

material benefits from one disputing party, thus affecting the objectivity and
impartiality of the award;
e/ The award contravenes the fundamental principles of Vietnamese law.
3. When the court considers request for cancellation of an arbitral award, the
burden of proof shall be determined as follows:
a/ The requester for cancellation of an arbitral award in any of the cases

specified at Points a, b. c and d. Clause 2 of this Article has the burden lo
prove that the arbitration council has issued the award falling into any of these
cases;
b/ For a request to cancel an arbitral award on the ground specified at Point e.

Clause 2 of this Article, the court shall itself collect and verify evidence in
order to decide to cancel or not to cancel the arbitral award.
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Article 69. Right to request cancellation of arbitral awards
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1. Within 30 days after receiving an arbitral award, if a party has sufficient
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grounds for evidencing that the arbitration council has issued the award falling
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into any of the cases specified in Clause 2, Article 68 of this Law. it may file a
request with the competent court for cancellation of such award. Such request
must be enclosed with documents and evidence proving that such request is
grounded and lawful.
2. When a request is lodged beyond the set time limit due to force majeure
circumstances, the period in which such circumstances exist will not be
included in the time limit for requesting cancellation of an arbitral award.
Article 70. Written requests for cancellation of arbitral awards
1. A written request for cancellation of an arbitral award must contain:
a/ Dale of making;
b/ Name and address of the requester:
c/ Request and grounds for cancellation of the award.
2. A written request must be enclosed with the following papers:

a/ Original or certified copy of the arbitral award;
b/ Original or certified copy of the arbitration agreement.
Enclosed papers in a foreign language shall be translated into Vietnamese and

such translations shall be legally certified.
Article 71. Examination by courts of written requests for cancellation of

arbitral awards
1. After accepting a written request for cancellation of an arbitral award, the

competent court shall immediately notify such to the arbitration center or
arbitrators of the ad hoc arbitration council, the disputing parties and the
procuracy of the same level.
2. Within 7 working days after accepting a written request, the court president
shall designate an examination council which is composed of three judges,
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including one to act as the chair as assigned by the court president.
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Within 30 days after being designated, the examination council shall hold a
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meeting to examine the written request for cancellation of an arbitral award.
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The court shall, within 7 working days before opening the meeting, transfer
the dossier to the procuracy of the same level for study before attending this
meeting. Upon the expiration of this lime limit, the procuracy shall return the
dossier to the court for opening a meeting to examine the written request.
3. A meeting shall be conducted in the presence of the disputing parties and

their lawyers, if any. and a procurator of the procuracy of the same level. If
one of the parties is absent or has been properly summoned but is absent
without a plausible reason or leaves the meeting without the council's consent,
the council shall still examine the written request.
4. When examining the written request, the council shall base itself on Article
68 of this Law and enclosed documents to consider and make decision: it will
not review the dispute already settled by the arbitration council. After
examining the written request and enclosed documents and hearing opinions
of the summoned persons, if any. and after the procurator presents the
procuracy's opinions, the council shall discuss and make decision by majority
vote.

5. The examination council may decide to cancel or not to cancel an arbitral
award. When the requester withdraws the request or has been properly
summoned but is absent without a plausible reason or leaves the meeting
without the council's consent, the council shall decide to terminate the
examination of such request.
6. Within 5 working days after issuing a decision, the court shall send it to the
parties, the arbitration center or ad hoc arbitrator and the procuracy of the
same level.
7. At the request of one of the parties and when appropriate, the examination
council may suspend the examination and processing of a request for not more
than 60 days in order to facilitate the arbitration council in correcting errors of
the arbitral proceedings in its viewpoint in order to remove the grounds for
canceling the arbitral award. The arbitration council shall notify the court of
such correction. If the arbitration council fails to correct errors in the
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proceedings, the examination council shall continue examining the written
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request.
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8. If the examination council issues a decision canceling the arbitral award, the
parties may reach new agreement to bring their dispute to arbitration or any of
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them may initiate a lawsuit at court. If the examination council does not cancel
the arbitral award, such award shall be enforced.
9. In all cases, the time for dispute settlement at arbitration and for carrying
out procedures to cancel an arbitral award at court will not be included in the
statute of limitations for initiating a lawsuit.
10. The courts decision is final and effective for enforcement.
Article 72. Court fees related to arbitration
Fees for requesting a court to designate an arbitrator or apply interim urgent

measures, requesting cancellation of arbitral awards or registering arbitral
awards, and other fees comply with the law on legal costs and court fees.
Chapter XII
ORGANIZATION AND OPERATION OF FOREIGN ARBITRATIONS

IN VIETNAM

Article 73. Conditions for foreign arbitration institutions to operate in
Vietnam
Foreign arbitration institutions which are lawfully established and operating

overseas and respect the Constitution and laws of the Socialist Republic of
Vietnam may operate in Vietnam under this Law.
Article 74. Forms of operation of foreign arbitration institutions in

Vietnam
Foreign arbitration institutions may operate in Vietnam as:
1. Branch of the foreign arbitration institution (below referred to as branch):

or.
2. Representative office of the foreign arbitration institution (below referred to

as representative office).
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Article 75. Branches
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1. Branch is a dependent unit of a foreign arbitration institution and may be
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established and carry out arbitration activities in Vietnam under this Law.
2. Foreign arbitration institutions and their branches shall take responsibility

before Vietnamese law for the operation of these branches.
3. A foreign arbitration institution shall appoint an arbitrator to act as head of

its branch. This head is an authorized representative of the foreign arbitration
institution in Vietnam.
Article 76. Rights and obligations of branches
1. To rent working offices, hire and purchase facilities and tools necessary for
the operation of the branches.
2. To recruit Vietnamese and foreign employees under Vietnamese law.
3. To open Vietnam-dong and foreign-currency accounts at banks licensed to

operate in Vietnam for their operation.
4. To remit their incomes abroad under Vietnamese law.

5. To have a seal bearing the name of the branch under Vietnamese law.
6. To designate arbitrators for forming arbitration councils as authorized by

the foreign arbitration institution.
7. To provide arbitration services, conduct conciliation and apply other modes

of settling commercial disputes under law.
8. To provide administrative, clerical and other services for dispute settlement

of foreign arbitration councils.
9. To collect arbitration charges and other lawful amounts.
10. To pay remuneration to arbitrators.
11. To organize retraining courses for arbitrators to raise their dispute

settlement qualifications and skills.
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12. To preserve dossiers and provide copies of arbitral decisions at the request
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of the disputing parties or competent Vietnamese state agencies.
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13. To operate in the domains stated in their establishment licenses or
operation registration papers.
14. To observe Vietnamese law concerning their operation.

Departments of localities in which they are registered for operation.
Article 77. Representative offices
1. Representative office is a dependent unit of a foreign arbitration institution

and may be established and seek and promote arbitration operation
opportunities in Vietnam under this Law.
2. Foreign arbitration institutions shall take responsibility before Vietnamese

law for the operation of their representative offices.
Article 78. Rights and obligations of representative offices
1. To seek and promote arbitration operation opportunities of their arbitration

institutions in Vietnam.
2. To rent working offices and hire and purchase facilities and tools necessary
for their operation.
3. To recruit Vietnamese and foreign employees under Vietnamese law.
4. To open foreign-currency and Vietnam-dong accounts at banks licensed to

operate in Vietnam and use these accounts only for their operation.
5. To have a seal bearing the name of the representative office under

Vietnamese law.
6. To operate for the purposes, scope and duration stated in their establishment
licenses.
7. To refrain from carrying out arbitration operations in Vietnam.
8. To conduct only arbitration operation promotion and advertising activities

under Vietnamese law.
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9. To observe Vietnamese laws concerning their operation.
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Departments of localities in which they are registered for operation.
Article 79. Operation of branches and representative offices
The establishment, registration, operation, and termination of the operation of

branches and representative offices comply with Vietnamese law and treaties
to which the Socialist Republic of Vietnam is a contracting party. The
Government shall detail procedures for the establishment, registration, and
termination of operation of branches and representative offices.
Chapter XIII
IMPLEMENTATION PROVISIONS
Article 80. Application of the Law to arbitration centers established

before the effective date of this Law
Arbitration centers established before the effective date of this Law are not
required to carry out procedures for re-establishment. Arbitration centers shall
modify their charters and rules of arbitral proceedings to comply with this Law
within 12 months after it takes effect. Past this time limit, arbitration centers
that fail to modify their charters or rules will have their establishment licenses
revoked and shall terminate their operation.
Article 81. Effect
1. This Law takes effect on January 1, 2011.
2. Ordinance No. 03/2003/PL-UBTVQH11 on Commercial Arbitration ceases

to be effective on the effective date of this Law.
3. Arbitration agreements concluded before the effective date of this Law shall
be implemented under regulations effective at the time of their conclusion.
Article 82. Implementation detailing and guidance
The Government, the Supreme People's Court and the Supreme People's
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Procuracy shall, within the ambit of their tasks and powers, detail and guide
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the Law's articles and clauses assigned to them; and guide other necessary
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contents of this Law to meet state management requirements.
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This Law was passed on June 17, 2010, by the XIIth National Assembly of the
Socialist Republic of Vietnam at its 7th session
CHAIRMAN OF THE NATIONAL ASSEMBLY
NGUYEN PHU TRONG

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FOREIGN TRADE UNIVERSITY - HCMC CAMPUS

DEPARTMENT OF ECONOMICS AND LAW

PART II: LEGAL

GENERAL PROVISIONS ....................................................................................................... 1

ESTABLISHMENT OF ENTERPRISES .............................................................................. 11

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com i

LIMITED LIABILITY COMPANIES ...................................................................................... 25

Limited Liability Companies with Two or More Members .................................................................................. 25

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com ii

One Member Limited Liability Companies............................................................................................................... 42

State Owned Enterprises ............................................................................................................................................... 50

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com iv

CHAPTER 6......................................................................................................................... 109

CHAPTER 7......................................................................................................................... 116

PRIVATE ENTERPRISES .................................................................................................. 116

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com v

CHAPTER 8......................................................................................................................... 118

CORPORATE GROUPS..................................................................................................... 118

CHAPTER 9......................................................................................................................... 120

RE-ORGANIZATION, DISSOLUTION AND BANKRUPTCY OF ENTERPRISES......... 120

CHAPTER 10....................................................................................................................... 131

IMPLEMENTING PROVISIONS......................................................................................... 131

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com vi

[Ha Noi, 17 June 2020]

Pursuant to the Constitution of the Socialist Republic of Vietnam;

The National Assembly promulgates the Law on Enterprises.

Article 1 Governing scope

Article 2 Applicable entities

2. Agencies, organizations and individuals involved in the establishment, organization of management,

Article 3 Application of Law on Enterprises and other laws

Article 4 Interpretation of terms

In this Law, the f ollowing terms are construed as follows:

3. Shareholder means an individual or organization holding at least one share of a shareholding

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com 1

12. Vietnamese enterprise means an enterprise established or registered f or establishment in

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com 2

(c) An individual or organization, or a group of individuals or o rganizations wit h t he abilit y t o

(d) A manager of the enterprise, the legal representative, and an inspector;

24. Manager of an enterprise means a manager of a private enterprise o r a manager of a c ompany ,

25. Founder of an enterprise means an individual or organization establishing or contributing c apital t o

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com 3

Article 5 State guarantees 5 for enterprises and owners of enterprises

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com 4

1. Political organizations, socio-political organizations and organizations representing employees at t he

Article 7 Rights of enterprises

3. To select f orms and methods of raising, allocating and utilizing capital.

4. To f reely seek markets and customers and sign contracts.

5. To conduct import and export business.

8. To possess, use and dispose of assets of the enterprise.

10. To lodge complaints or participate in legal proceedings in accordance with law.

11. Other rights as stipulated by law.

Article 8 Obligations of enterprises

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com 5

6. Other obligations stipulated by law.

3. To be guaranteed an appropriate period for supply of products or provision of s ervices in o rder t o

5. To ensure that equitable and favourable conditions are applicable to customers.

Article 10 Criteria applicable to and rights and obligations of social enterprises

1. A social enterprise must satisfy the following criteria:

(a) It is registered for establishment in accordance with this Law;

© Allens - Vietnam Laws Online Database on www.vietnamlaws.com 6

5. The Government shall provide detailed regulations on this article.

Article 11 Document retention regime of enterprises

(c) Documents and papers certifying ownership of assets of the company;