The Socialist Republic of Vietnam or her short name “Vietnam” is a country in Southeast Asia, that borders the Gulf of Thailand, Gulf of Tonkin and the East Sea, alongside China, Laos and Cambodia. Vietnam has an ever-increasing open and growing economy and was ranked the 36th-largest in the world in terms of gross domestic product (GDP) and the 26th in terms of the purchasing power parity (PPP) in 2022. Over the past thirty years, Vietnam has been shifting its economic policies and thanks to it, Vietnam’s economy has enjoyed fairly rapid economic growth.

Vietnamese scholars argue that the history of Vietnam began in the mists of time with a legendary line of Kings called the Hung. These kings reigned before written records existed and it wasn’t until Chinese imperial authorities expanded their rule to the area of present-day northern Vietnam that the history of what would eventually become what we now know as the country of Vietnam truly began.

The National Assembly is the highest representative body of the Vietnamese people and the highest state power body of the Socialist Republic of Vietnam. The National Assembly exercises constitutional and legislative powers, decides on important issues for the country, and conducts supreme oversight over the activities of the State. The National Assembly has about 500 members, representing 63 cities and provinces in Vietnam, elected by popular vote to serve a five-year term.

The politics of the Socialist Republic of Vietnam are defined by a single-party socialist republic framework, where the President of Vietnam is the head of State and the Prime Minister of Vietnam is the head of government, in a one-party system led by the Communist Party.

The Vietnamese court system includes the Supreme People’s Court, the Superior People’s Court (introduced by the Law on Organization of People’s Court of 2014), the Provincial People’s Courts in cities and provinces, and the District People’s Courts.

Vietnam follows the civil law tradition so its sources of law traditionally comprised only written legislation commonly referred to as legal instruments. These are laws and regulations enacted by legislative making bodies which are binding on citizens and enforceable by the State. Until recently, court judgments are normally not officially considered a source of law as judges do not have the power to interpret the law and court judgments are not binding in subsequent cases.

Vietnam has embarked on a vast program to reform its legal and regulatory framework for investment to make it consistent with a market economy. A number of reforms were undertaken as prerequisite conditions for Vietnam’s formal accession to the WTO. Recent improvements in the legal and regulatory framework have affected numerous areas, including taxation, intellectual property, trade, price controls, accounting and foreign exchange controls. As far as foreign investors are concerned, a fundamental shift occurred in 2005, when Vietnam adopted a new Law on Investment (the “2005 Investment Law”) and Law on Enterprises (the “2005 Enterprise Law”).

The banking and financial system in Vietnam is made of various credit and financial institutions, including banks, non-bank credit institutions, microfinance institutions and people’s credit funds. Non-banking credit institutions include finance companies, finance-leasing companies and other non-banking credit institutions. The scope and contents of permitted activities of each credit institution are subject to the form of the credit institution and specified in the license granted to it.

Vietnamese capital markets are divided into two categories: the primary market, where newly issued securities are traded, and the secondary market, where securities are traded subsequent to the sale in the primary market.

In Vietnam, land belongs to the people and is managed by the Government. Private ownership over land is not permitted. Organizations and individuals only have land use rights (“LUR”) which include the rights to transfer, exchange, lease, donate, mortgage, contribute as capital, etc. Depending on the type of a land plot (e.g., agricultural, commercial or residential land) and its financial condition (e.g., is given by the local government on a free-of-charge basis, payment of rents on an annual or lumpsum basis, or land use fee, etc.), a land user may exercise those rights over his/her/its land plot and the attached asset or over its asset only.

In comparison to some other countries in the region, Vietnamese employees seem to be better protected under Vietnam’s labour laws and regulations. Vietnamese labour law is mandatory in the way that an employer and employee may not agree on terms that are less favourable to the employee than the conditions set out in labour legislation. On the contrary, they may agree on terms that are more favourable to the employee. The primary legislation governing employment in Vietnam is the labour code with the current one is the Labour Code of 2019 (“Labour Code”).

Vietnam has embarked on a process to harmonize taxation for both domestic and foreign companies and individuals. It has also initiated a number of institutional and administrative reforms in order to improve the administration of taxation. Below is the list of taxes and duties that foreign companies or individuals are generally subject to in Vietnam.

Vietnam has been a member of the World Intellectual Property Organization (“WIPO”) since 1976. It is a contracting party to a certain number of WIPO-related treaties or conventions, including the Bern, Brussels and Paris Conventions, the Madrid Agreement and the Patent Cooperation Treaty. The legal and regulatory framework for intellectual property rights (“IPRs”) of Vietnam was overhauled and greatly improved during its preparation for WTO accession. Most importantly, Vietnam adopted the first Law on Intellectual Property in 2005 (as initially amended in 2009). The adoption of the Law on Intellectual Property was necessary to make Vietnam compliant with the WTO’s TRIPS agreement, to which Vietnam is a party. It was also needed for Vietnam to fulfill its commitments under the bilateral trade agreement with the US.

With its large population, Vietnam is a potential market which offers great opportunities for foreign investors in the health sector. However, in comparison with finance, securities and real estate, the health sector remains less lively in the panorama of foreign investment in Vietnam.

Dispute settlement by Vietnamese courts is popular among Vietnamese people for their civil cases. One of the reasons is the low court fees. The other reasons include their habits and arbitration proceedings are only available for commercial disputes. However, before selecting Vietnamese courts, the parties should take into account the potential time-consuming process for court proceedings. Although the proceeding laws set time limits for courts to settle a dispute (for example, two to four months for first instance proceedings), the possibility of a prolonged process, a lengthy appeal and court reviews make court proceedings in Vietnam a time consuming process. In practice, some disputes have been held for hearing and review for a period of several years.