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Question :: I am a member of the Supervisory Commission (the Commission) of a public company which is unlisted and termed from 2007 to 2010. Until now, my term is still valid. In 2009, I was [not] invited to attend any meeting of the company’s Commission. Recently, I also did not attend the Commission’s meeting to produce the Commission’s Report for submission to the General Shareholder’s Meeting (the Meeting) year 2010 on April 9. I was informed that this Commission’s Report was built by the Commissions’ Director (the another member of the Commission also did not attend). I would like to ask you whether the operation of the Commission like that is legal or not? Is the Report mentioned above legal? What should I do to comply with the rights, duties and obligations of a Commission’s member?
Question :: I am a president of the Management Board (“the Board”) of a public company. As per regulations, the term of the Board, Supervisory Commission (“the Commission”) is five (5) years. Therefore, the first term of the Board, Commission is due on November 2010. However, in order to facilitate the voting of the Board, the Commission in the second term, the Board would like to submit the General Shareholder’s Meeting (“the Meeting”) with the latest on April 19, 2010 for renewal of the first term of the Board, the Commission until April 2011. So, the question is that is the renewal true or not? If the shareholders are not taken opinions directly at the Meeting, can the Board collect opinions indirectly from shareholders in writing? If the Meeting does not pass the renewal, how can the voting of the Board, the Commission be taken in compliance with laws?
Question :: Our company registers shares at the Securities Depository Central (SDC), but cannot deposit, of which my 10.000 shares. So, can I transfer directly 2.000 shares to my brother and compliment 2.000 shares to my wife?

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PART V

LABOR

Vietnamese labor law regulates the rights and obligations of the employer and the employees, and sets forth the principles and standards for management and usage of the labor. Labor relationship is considered to be of complex nature and the appropriately handling the relationship is considered a sensitive matter that may have impact on the employee, the employer and the society as a whole.

1.Recruitment:

An employer shall have the right to recruit laborers directly or through an employment agency. Before the recruitment, an employer must announce the demand for recruitment on public means of information and post up a notice at the head office pursuant to laws and regulations. A person seeking job has the right to directly approach or to register with an employment agency to find a suitable job and to prepare an application dossier for a job.

2.Labor contract

Except for certain cases in which a verbally agreed contract is accepted, a written labor contract is required for each employment situation. There are three kinds of labor contract: (i) an indefinite term labor contract in which the two parties do not determine the term and the time for termination of the contract; (ii) a definite term labor contract with a term from 12 (twelve) months to 36 (thirty-six) months; or (iii) a labor contract for a specific or seasonal job with a duration of less than 12 (twelve ) months. A labor contract must contain certain contents and can be amended, supplemented under applicable laws and regulations. Either party illegally terminating a labor contract must compensate for the other party. A standard form of employment contract printed by the Ministry of Labor, Invalids and Social Affairs can be used by the parties, or the parties may prepare their own, provided the compulsory terms and conditions are included.

3.Work permit

A foreigner working in Vietnam must have a work permit, unless such a person works in Vietnam for a period less than three (03) months or in specific cases regulated by laws and regulations. A foreigner who is an owner or a member of a limited company or a member of the Board of Management of a joint stock company or enter Vietnam for offering services may not be required to have a work permit. The Department of the Labor, Invalids and Social Affairs of the province where the employee works or where the employer registers its head office is vested the authority to issue a work permit. Each work permit has a maximum term of 36 months and may be renewed for the like-term. A work permit is given to a particular employee and may not be transferred in any circumstances.

4.Collective agreement

A collective labor agreement is a written agreement between the labor collective and the employer in respect of working conditions and utilization of labor, and the rights and obligations of both parties. The agreement shall be negotiated and signed by the representative of the labor collective and the employer. A collective agreement must contain main contents as required by applicable laws and must be registered at the competent authority on labor. A collective agreement shall be signed for a term of one to three years. When an enterprise signs a collective agreement for the first time, the duration of the collective agreement may be less than one year. A collective agreement shall become effective from the date it is agreed upon by both parties as recorded in the agreement, in the absence of such agreement on the effective date; the collective agreement shall become effective from the date of its signing. The parties are entitled to amend, supplement the collective agreement, if it has been implemented for a fixed period as regulated by applicable laws.

5.Internal labor regulation

An internal labor regulation is a company handbook or an internal company rule of an enterprise for the establishment of order within an enterprise, including regulations for governing the compliance with working hour, technology, and business and production management. Prior to issuing the internal labor regulation, an employer must consult the executive committee of the trade union of the enterprise. An internal labor regulation must contain main contents as required by applicable laws and must be registered at the competent authority on labor. It is compulsory to comply with the labor law, the collective agreement and the internal labor rule to deal with breach of labor rule of employee (if any).

6.Trade union

A trade union is an organization acting as the legal representative for the legitimate rights and benefits of the employees in an enterprise. When a trade union organization is lawfully established within an enterprise, the employer must recognize such organization and must create favorable conditions for trade union activities. In some cases, the employer must inform or get approval from the trade union of the enterprise if the trade union has been established before issuing decisions relating to the employees. Should the trade union disagree with decisions of the employer, the trade union is entitled to submit a petition to the competent authority on labor.

7.Labor disciplines

Labor disciplines are regulations governing compliance with time, technology, and business and production management in the form of internal labor regulation. (i) Warning; (ii) extension of the period for [the next] wage increase to no more than six months or transfer to another position with a lower wage for a maximum period of six months, or demoting; (iii) dismissal are 3 types of labor disciplines. When dealing with breaches of disciplines, except for a case of warning, a representative of the executive committee of the trade union of the enterprise (if established) must be present for participation and the employer must be able to prove the employee's fault. Dismissal shall only be applied as a means of penalty in the circumstances that the employee seriously breaches the labor disciplines, including: i) Committing an act of theft, embezzlement, disclosure of business or technology secrets, or other conduct which is seriously detrimental to the assets or well-being of the enterprise; ii) Re-committing an offence during the period when being applied with disciplinary action under form 2 (above mentioned); iii) Taking an aggregate of five (5) days off in one month or an aggregate of twenty (20) days off in one year without permission. After dismissing an employee, the employer must notify the office in charge of the provincial competent authority on labor.

8.Wage

A wage of an employee can be agreed by the two parties to the labor contract and must not be lower than the minimum wage as stipulated by the Government from time to time. In addition to the general minimum wage (that is used for calculating a wage level in salary scale, payroll, wage allowance, deducted amount for regimes that the employee is entitled to enjoy based on the minimum wage), the minimum wage is divided into the minimum wage based on various regions (areas) and kind of enterprises (with or without foreign invested capital). In 2009, the general minimum wage is VND650,000 per month; the minimum wage applicable to enterprises without foreign invested capital ranges from VND650,000 to VND800,000. The minimum wage applicable to enterprises with foreign invested capital ranges from VND920,000 to VND1,200,000. Minimum wages will continue to increase as per the roadmap issued by the government. An employer shall be entitled to determine a suitable method of payment of wages calculated by reference to time, or on the basis of a product produced or a completed piece of work, provided that before implementation, the employee is notified of and agree on such method. An enterprise is required to formalize a salary scale, payroll and wage fund for implementation of wage related regimes for the employees such as compulsory social insurance regime, health insurance regime and unemployment insurance regime.

9.Certain financial obligations of employer

a. Compulsory Social Insurance, Medical Insurance and Unemployment Insurance:

An employer is responsible to contribute to compulsory social insurance, medical insurance and unemployment insurance for the employees, under a certain rate of the wage of the employee that is used as a base for contribution of social insurance premium for the employee (the “Social Insurance Wage”). This wage is the wage including the personal income tax of the employee, allowances that the employee is enjoyed, however, excluding of harmful allowance and responsibility allowance. In case the wage is greater than twenty times of general minimum wage in force, the wage used as a base for contribution of social insurance premium for employees is twenty times of general minimum wage. Social insurance and medical insurance is required to be contributed for the employees who have the labor contracts with a term of 3 months or more. Accordingly, the employer must be liable for social insurance and medial insurance at respectively the rate of 15% which will scheduledly increase up to 18% as of 2010 and 4% of the wage. As for an employee who is a home worker, the employer must add the social insurance and medical insurance to the wage of the employee. As to the unemployment insurance, an employer who recruits 10 employees or more must contribute to the unemployment insurance for the employees who enter into the labor contracts with a term of 12 months or more. Accordingly, the employer must contribute for unemployment insurance with a rate of 1% of the Social Insurance Wage. In addition to that, the employer must withhold from the wage of the employees for contribution of social insurance, medical insurance and unemployment insurance of the employees under the rates that the employee must contribute. In details, the deducted amount is 5% of the Social Insurance Wage for social insurance, to be increased routinely up to 8% as of 2010, and 2% of that amount medical insurance and 1% of that amount unemployment insurance.

b. Severance Allowance and Allowance for Loss of Work:

A severance allowance: except for certain cases of dismissal permitted under applicable laws, where a labor contract of an employee who has been regularly employed in an enterprise or an organization for 12 months or more is terminated, the employer must pay such employee a severance allowance that is equal to the aggregate amount of half of one month's wages for each year of employment plus wage allowances (if any). An allowance for loss of work: where, as a result of organizational restructuring or technological changes, an employee who has been employed in an enterprise for a period of 12 months or more becomes unemployed, the employer must pay an allowance for loss of work equivalent to the aggregate amount of one month's wages for each year of employment, but no less than two months' wages. Employee who enjoys unemployment insurance will not be entitled to severance allowance and allowance of loss of work .

10.Labor dispute

A labor dispute is controversy between an employee and an employer regarding rights and benefits arising during the labor relationship (an individual labor dispute) or labor collective with an employer (a collective labor dispute). As regulated by the Labor Code of Vietnam, Vietnam court system plays a unique role of hearing labor disputes arising within Vietnam territory if either disputing party is a Vietnamese or a Vietnamese enterprise, regardless of whether a foreign jurisdiction is agreed to by the parties. During the resolution of a collective labor dispute, a labor collective is entitled to conduct a strike (a temporary and voluntary cessation of work organized by a labor collective) provided that conditions and procedures for such a strike has been followed. Any strike that does not comply with applicable laws on conditions, order and procedures are considered illegal.

PREFACE

PART I. INVESTMENT LEGISLATION IN VIETNAM

PART II. ROADMAP OF OPENING VIETNAM SERVICE MARKET UNDER WTO COMMITMENTS

PART III. MERGER AND ACQUISITION IN VIETNAM

PART IV. INTELLECTUAL PROPERTY LAW AND TECHNOLOGY TRANSFER

PART V. LABOR

PART VI. BANKRUPTCY OF ENTERPRISE

PART VII. COMPETITION

PART VIII. TAXATION

PART IX. THE LAW ON LAND, REAL ESTATE AND CONSTRUCTION

PART X. FINANCIAL SERVICES

PART XI. DISPUTE RESOLUTION

PART XII. IMMIGRATION ISSUES

INDEX 1. DOUBLE TAX AVOIDANCE AGREEMENT ENTERED BY VIETNAM

INDEX 2. DOUBLE TAX AVOIDANCE AGREEMENT ENTERED BY VIETNAM

INDEX 3. FINANCIAL SERVICE MARKET

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