Luat Viet

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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 VII

COMPETITION

The 2004 Competitive Law has been issued to govern practices in restraint of competition, unfair competitive practices as well as set forth the measures dealing with breaches of the laws on competition. Practices in restraint of competition include practices being agreements in restraint of competition, abuse of dominant market position, abuse of monopoly position and economic concentration. Lawful competition practices of entities and individuals are protected in Vietnam. Competition must be undertaken on the principles of honesty, non-infringement of the interests of the State, the public interest and the legitimate rights and interests of enterprises and consumers.

1.Restraint of competition

Practices in restraint of competition means practices of enterprises which reduce, distort or hinder competition in the market, including practices being agreements in restraint of competition, abuse of dominant market position, abuse of monopoly position and economic concentration. Entities and individuals doing business in Vietnam in breach of prohibited practices in restraint of competition shall be imposed a high fine up to 10% of the total turnover of the violators in the same fiscal year. Additional penalties may also apply to such entity or individual, for instance, withdrawal of business registration certificate or remedy measures such as restructure of an enterprise, compulsory re-sale of the relevant part of an enterprise which was acquired, division or separation of enterprises which are merged or consolidated.

a. Agreements in restraint of competition

Agreements in restraint of competition are (i) agreements either directly or indirectly fixing the price of goods and services; (ii) agreements to share consumer markets or sources of supply of goods and services; (iii) agreements to restrain or control the quantity or volume of goods and services produced, purchased or sold; (iv) agreements to restrain technical or technological developments or to restrain investment; (v) agreements to impose on other enterprises conditions for signing contracts for the purchase and sale of goods and services or to force other enterprises to accept obligations which are not related in a direct way to the subject matter of the contract; (vi) agreements which prevent, impede or do not allow other enterprises to participate in the market or to develop business; (vii) agreements which exclude from the market other enterprises which are not parties to the agreement; (viii) collusion in order for one or more parties to win a tender for supply of goods and services.

b. Market domination or monopoly position

An enterprise shall be deemed to be in a monopoly position if there are no enterprises competing in the goods and services in which such enterprise conducts business in the relevant market. An enterprise shall be deemed to be in a dominant market position if such enterprise has a market share of 30% or more in the relevant market, or is capable of substantially restraining competition; and a group of enterprises shall be deemed to be in a dominant market position if they have a market share of 50% or more in the relevant market. Entities and individuals in dominant market position or monopoly position are banned from carrying out certain activities which are described in the Law on competition and which may result in restraint of competition and harms to other market players.

c. Economic concentration

Economic concentration means enterprises operating in the same area or in relevant areas shall conduct merger, consolidation, acquisition of enterprises or joint venture between enterprises in order to form a newly-established enterprise capable of competing to change the competitive market structure. Enterprises shall be banned from an economic concentration when their combined market share is more than 50% in the relevant market unless where exempted or where new enterprise formed under the economic concentration is of middle or small size.

2. Unfair competition

Unfair competitive practices means competitive practices by an enterprise during the business process which are contrary to general standards of business ethics and which cause or may cause damage to the interests of the State and to the legitimate rights and interests of other enterprises or of consumers. Entities and individuals doing business in Vietnam are not permitted to conduct unfair competitive practices as stipulated in the Competition Law and the Intellectual Property Law.

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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