RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/VNM/3/Add.2
20 August 1998
(98-3273)
Working Party on the
Accession of VietnamOriginal:  English
ACCESSION OF VIETNAM
Questions and Replies to the Memorandum
on the Foreign Trade Regime
(Document WT/ACC/VNM/2)
Addendum
The Government of the Socialist Republic of Vietnam has submitted replies to questions
raised concerning the Trade-Related Intellectual Property Regime and Trade-Related Services
Regime, with the request that they be circulated to the members of the Working Party.  The questions
and replies are reproduced hereunder.  Question numbers refer to document WT/ACC/VNM/3.
_______________WT/ACC/VNM/3/Add.2
Page 2
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General
(a) Intellectual property policy
Question 493How will Vietnam enforce the provisions of the WTO TRIPS Agreement?Answer
Vietnam has scheduled legislative enactment of the necessary amendments and supplements
to its domestic legal regime for the protection of intellectual property rights so as to meet all
requirements of the TRIPS Agreement by the year 2000.
Question 494
Please identify and describe all provisions of the Vietnamese intellectual property regime that
do not conform with the requirements of the TRIPS Agreement and steps that Vietnam will take
to bring the provisions into conformity with TRIPS requirements.?
Answer
The following elements of the prevailing intellectual property regime of Vietnam may not
fully conform with the requirements of the TRIPS Agreement:
- National treatment: for the establishment, mainte nance of industrial property rights and for the
registration of copyright, fees and service charges applicable to foreigners are higher than that
to the Vietnamese;
- Copyright and related rights:  There are no specific provisions on the protection of computer
programs or compilations of data; there are no provisions on: the term  of  performerprotection, the right to the fixation and communications to the public of broadcasts, the rental
right in phonogram, the right to communication to the public of performance of dramatic,
dramatic-musical and musical works; there are limitations and exceptions of rights to the
performance of published dramatic, dramatic-musical and musical works and to the recording
of published musical works; the copyright in works of unidentifiable authors belongs to theState.
- Trademarks:  The scope of protection is narrow;- Geographical indications:  Not adequately protected;- Patents:  There are neither special provisions on application for micro-organism patents,
examination thereof nor provisions on micro-organism deposit; not all final administrative
decisions on patent revocation or cancellation can be appealed to the courts;
- Plant varieties:  Ineffectively protected;
- Layout designs of integrated circuits:  Not yet protected;WT/ACC/VNM/3/Add.2
Page 3
- Undisclosed information:  Not yet protected;
- Enforcement:  There are no special provisions on procedures and remedies against
infringement of intellectual property rights.
Vietnam has scheduled the legislative enactment of the necessary amendments and
supplements to its domestic legal regime for the protection of intellectual property rights so as to meet
all requirements of the TRIPS Agreement by the year 2000.
Question 495
In several instances, the Government of Vietnam states that before a right is granted, public
examination takes place. Could the Government of Vietnam describe the functioning of this
procedure? What can be raised during such examination?
Answer
Under the Decree No. 63/CP, the regime of public  examination that applied to industrial design
applications in the past has been replaced by mandatory substantive examination in combination with
the public examination, applying to industrial design applications as well as to invention and utility
solution applications. All duly filed invention, utility solution and industrial design applications are
published in the Official Gazette of Industrial Property. During the substantive examination of theapplications, any third party  may submit opinions on the question of whether or not a Protection Title
should be granted. The opposing parties shall express their arguments and present documents to
substantiate the arguments. Third parties' opinions are a source of information supporting the
substantive examination.
(b) Responsible agencies for policy formulation and  implementation
Question 496Please describe the respective  roles of the General Customs Department, the Market Control
Organizations under the Ministry of Trade, and the Economic Police under the Ministry of
Interior in enforcing intellectual property righ ts. What is the procedure for foreign owners of
intellectual property rights to request an investig ation of alleged violations of their rights from
each of these enforcement bodies?
Answer
The roles of the specific enforcement bodies are as follows:
- the General Department of Customs is responsible for the State management of customs
activities. Customs forces are responsible for controlling borders in order to prevent and deal
with infringement of intellectual property rights in export and import activities;
- the Market Control Organizations under the Ministry of Trade are responsible for controlling
the market in order to prevent and deal with infringement of intellectual property rights in
production, trade and service within the domestic market;
- the Economic Police under the Ministry of  Police are responsible for preventing and handling
infringement of intellectual property rights in all business activities.WT/ACC/VNM/3/Add.2
Page 4
There remains a lack of  provisions on specific procedures for intellectual property owners in
general, and for foreign owners in particular, to request an investigation of alleged violations from
those enforcement bodies. Regulations on administrative procedures against violations in the field of
industrial property, which include provisions on acts deemed to be administrative violations in the
field of industrial property, respective remedies and procedures of dealing with the violations, arebeing made  by the Ministry of Science, Technology and Environment in collaboration with relevant
agencies to submit to the Government in 1998.
The legal basis for those enforcement bodies to deal with administrative violations is the
Ordinance on the Handling of Administrative Viol ations pursuant to the Presidential Legal Order
No. 41-L/CTN of 19 July 1995, which includes prov isions on jurisdiction over administrative
violations. Vietnamese as well as foreign intellectual property owners can request the competentauthorities to take action, in accordance with general procedures applying to all administrative
violations, against infringement of their rights.
Question 497
Do the People's Committee of all levels have concurrent authority with the Central Government
for management of intellectual property, or is the authority delegated from the Central
Government? Does the authority of the People's Committee include enforcement?
Answer
The People's Committees at the provincial level are entrusted by the Central Government with
the management of intellectual property activities within the locality. (Section 63(3) of Decree
No. 63/CP stipulates such authority in industri al property activities, including co-operation with
enforcement bodies in protecting industrial property rights and dealing with violations againstindustrial property laws).  People's Committees at all levels have authority over administrative
violations according to the Ordinance on th e Handling of Administrative Violations, 1995.
Question 498
Will implementation of the TRIPS or accession to the Berne Convention on copyright protection
require Vietnam to amend either the intellectual property chapters of the 1995 Civil Code, orimplementing laws and regulations? If so, please describe the process by which the amendments
will be made. Please describe the process, if any, that would allow foreign investors to express
their views and the amount of time that will be needed to enact the necessary amendments?
Answer
The implementation of the TRIPS Agreement and the accession to the Berne Convention for
the Protection of Literary and Artistic Works will require Vietnam to amend certain provisions on
intellectual property rights in regulations implementing the 1995 Civil Code.
The amendment process is as follows: Administrative authorities in the relevant fields  (the
Ministry of Science, Technology and Environment, the Ministry of Culture and Information, the
Ministry of Trade, etc.) and judicial authorities will make proposals  for amendment, that shall be
carried out by the authorities having promulgated the regulations in question.
Anyone, including foreign investors, may express their views on the proposed amendments to the
above-mentioned authorities. The time required to  enact the necessary amendments may extend to the
year 2000.WT/ACC/VNM/3/Add.2
Page 5
(c) Membership of international intellectual property conventions and of regional or
bilateral agreements
Question 499
We note that Vietnam is a member of the WIPO Paris Convention for the Protection of
Industrial Property, but has not yet acceded to the Berne Convention for the Protection of
Literary and Artistic Works. When will Vietnam accede to the Berne Convention for the
Protection of Literary and Artistic Works, or  implement the substantive provisions of that
Convention in its domestic legislation, so that copyright protection will no longer be dependent
on publishing/registration in Vietnam?
Answer
Vietnam is taking necessary steps to accede to the Berne Convention for the Protection of
Literary and Artistic Works. However, under Vietnam's current laws and regulations, copyright
protection is not dependent on registration.
Question 500
Will Vietnam accede to the Berne Convention for the Protection of Literary and Artistic Works
and the Geneva Phonogram Convention prior to WTO accession?
Does Vietnam intend to adhere to international co nventions other than those listed in document
WT/ACC/VNM/2? If so, please name them and give a time-frame for possible adherence?
Answer
Vietnam has not yet taken into consideration the adherence to international treaties on
Intellectual Property Rights other than the WTO TRIPS Agreement and the Berne Convention for the
Protection of  Literary and Artistic Works.
Question 501
What changes in the Copyright Law would have to be made to meet the requirements of the
Geneva Phonogram Convention?
Answer
Vietnam has not yet taken into consideration the adherence to the Geneva Phonogram
Convention because it is not ready enough to do so and because the TRIPS Agreement does not
require accession to this Convention.
2. Substantive Standards of Protection, Including Procedures for Acquisition and
Maintenance of Intellectual Property Rights
(a) Copyright and related rightsQuestion 502What is the scope of compulsory licensing for co pyrightable works?  Under what conditions can
compulsory licences be granted?WT/ACC/VNM/3/Add.2
Page 6
Answer
Compulsory licences may be granted in respect of the works which have been published and
disseminated.
Forms of use under compulsory licences: performance, recording, production of television and
radio programmes.
The users are not required to get permission from the owner. However, they are required to
pay remuneration, and maintain the integrity of the works.
Question 503
How are sound recordings and data base compilations protected by the Copyrights Law? Are
computer programs protected as literary works within the meaning of the Berne Convention?
Answer
Sound recordings are protected under provisions on neighbouring rights. The producer has the
following rights:
- exclusive rights to reproduction and distribution;
- rights to profits obtained from the use of his product.
The protection term is 50 years counted from the date of  the first publication.Database is protected as computer software, which is in turn protected as written works, i.e.
literary works within the meaning of the Berne Convention.
Question 504
Please describe the Copyright Law provisions relating to rental rights for computer programs
and cinematographic works. What works are subj ect to the requirement that authors and their
successors in title may authorize or prohibit the commercial rental of originals or copies of their
works?
Answer
In Vietnam there are currently no specific regulations on protection of computer software,
including computer programs. However, the rental of computer programs or cinematographic works
is, as an act of exploitation or use of works, subject to the owner's permission and payment of
remuneration.
Question 505
Please describe the copyright enforcement process and remedies available under both Civil and
Criminal Law. What is the average duration of time from the filing of a copyright infringement
complaint until final resolution of the litigation?
Answer
Those whose rights and interests are infringed can take the case to Civil or Criminal Court,
depending on the nature and degree of violation.WT/ACC/VNM/3/Add.2
Page 7
Under civil procedures, the court is entitled to request the infringer to stop the infringing act,
apologize, correct and compensate any losses.
Under criminal procedures, the infringer may be fined and/or imprisoned.So far, only a few cases of copyright infringement have been brought to court. Therefore, it is
too early to give a representative estimate of the average duration of time from the filing of a
copyright infringement complaint until final resolution of the litigation.
Question 506 
In the description of the protected works, Vietna m refers to "other works prescribed by law".
Could the Government of Vietnam give some examples of such works?
Answer
"Other works prescribed by laws" are those kinds of works which do not fall under
paragraphs (a) to (o) of Article 747.1 of the Civil Code. This is an open provision simplifying
legislation activities. In the future, there may appear new kinds of works which need to be protected
under copyright law. Then Vietnam would promulga te sub-law regulations to make such kinds of
works protectable, without necessity to amend the Civil Code.
(b) Trademarks including services marks
Question 507
Please identify the changes that need to be made to the Trademark Law in order to satisfy
TRIPS requirements. When will these changes be made?
Answer
To comply with the requirements of the TRIPS Agreement, the following trademark provisions
need to be changed:
Section 53(1) of Decree No. 63/CP defines the acts of trademark infringement as follows:
"A person other than the owner of an industrial property object, committing one of the using acts
as provided for in Article 805 of the Civil Code and as detailed in Section 34 of this Decree,within the term of protection, and without permissi on of the owner or without a right of prior use
as provided for in Section 50 of this Decree, shall be considered as having committed an act of
infringement of an industrial property right, unless one of the exceptions mentioned in
Sections 51, 52 of this Decree applies".
Therefore, the scope of trademark protection is narrower than the requirement of the
TRIPS Agreement (paragraph 1, Article 16).
The extension of the scope of trademark protection is expected to be made by a Decree on the
handling of administrative violations in the field of industrial property, which is scheduled to beenacted in 1998.WT/ACC/VNM/3/Add.2
Page 8
Question 508
Does the assignment of a trademark need to be recorded? What rights are lost if an assignment
is not recorded?
Answer
Under Section 42 of Decree No. 63/CP, any contra ct of assignment of a trademark right must be
registered with the National Office of Industrial Property.  Under Section 37(3) of Decree No. 63/CP,
the assignee becomes the trademark owner on the contract registration date.
 If an assignment contract is not registered, it  is invalid. The trademark right, however, remains
the property of the assignor.
Question 509
Could the Government of Vietnam explain what are the exceptions to granting a trademark?On what ground may the State Authority refuse to register a trademark (not granting a
certificate for registration of trademark)?
Answer
Any sign that does not meet the protection requirements for trademarks as provided for under
Section 6 of the Decree No. 63/CP will not be accepted for registration:
"Section 6:  Trademarks1. In accordance with the Article 785 of the Civil Code, a sign used as a trademark shall be
considered distinctive, if it adequately meets the following requirements:
(a) it has been created from one or several original elements that are easily  recognized, or from
several elements combined to form an original set that is easily recognized, with the exception
of signs provided for in (2) of this Section;
(b) it is not identical with, or confusingly similar to, another person's trademark protected in
Vietnam, including trademarks protected in accordance with international agreements of
which Vietnam is a member;
(c) it is not identical with, or confusingly similar to, trademarks described in the applications for
Protection Titles filed with the competent authority and bearing earlier priority dates,
including trademark applications filed in accordance with international agreements of whichVietnam is a member;
(d) it is not identical with, or confusingly similar to, another person's trademark the validity of
which has expired or has been terminated within the last 5 years, except where the validity
was terminated only on the basis of non-use of the trademark in accordance with
Section 28(2)(c) of this Decree;
(e) it is not identical with, or confusingly similar to, another person's trademark recognized as a
well-known trademark in accordance with Article 6bis of the Paris Convention or another
person's widely used and recognized trademark;
(f) it is not identical with, or confusingly similar to, trade names or appellations of origin being
protected;
(g) it is not identical with an industrial design being protected or applied for bearing an earlier
priority date;
(h) it is not identical with an image or a charac ter subject to another person's copyright except by
permission of the copyright owner.WT/ACC/VNM/3/Add.2
Page 9
2. The following signs shall not be protected by the State as trademarks:
(a) signs without distinctive characteristics, such as simple shapes and geometric shapes, figures,
letters or wordings that cannot be pronounced as words; foreign letters of uncommonlanguages, except for such signs that have been widely used and recognized;
(b) signs, symbols, pictures or common names in any language of goods that have been widely
and often used, or are common  knowledge;
(c) signs indicating time, place, method of manufacture, type, quantity, quality, property,
composition, purpose, value of a descriptive character in relation to the goods, services or the
origin thereof;
(d) signs liable to mislead, confuse or deceive consumers as to the origin, functional parameters,
purpose, quality or value of the goods or services;
(e) signs identical with or similar to quality marks, control marks, warranty marks etc. of
Vietnam, foreign countries or international organizations;
(f) signs, names (including photos, names, pseu donyms, pennames, etc.), pictures or symbols
identical with, or confusingly similar to, the image of national flags, national emblems,national leaders or heroes, distinguished persons, geographical names, organizations of
Vietnam or foreign countries, unless  permitted by the  competent  authorities or persons."
Question 510
Could the Government of Vietnam define the cont ents of the term "unjustifiable reason" for
failure of use of a trademark?
Answer
"Unjustifiable reasons" for failure of use of a trademark are construed to include objective
circumstances such as natural disasters, wars,  government restrictions on use, etc.
Question 511
Is registration of a mark sufficient to notify po tential infringers of the owner's exclusive rights?
Does the rights holder need to provide actual notice to an infringer in order to establish
liability?
Answer
All trademark registrations are published in the Official Gazette of Industrial Property and
therefore the establishment of ownership of a trademark is deemed to be publicly announced.  An
infringer is liable regardless of whether or not he has been provided with actual notice of the existence
of the trademark ownership. However, such actual notices will probably induce the infringer to
voluntarily cease his infringing acts or else it will constitute evidence of intentionally infringing acts.
Question 512
What is the role of the State Authority in in fringement actions?  Does the State Authority
approve infringement actions or provide an opinion on them?
Answer
Regarding industrial property rights in general and trademark rights in particular, the National
Office of Industrial Property does not play the role of an enforcement body, but it is obliged toWT/ACC/VNM/3/Add.2
Page 10
cooperate with other government agencies and soci al organizations in taking actions to protect
industrial property rights, particularly in providing opinions for the relevant authorities to assist them
in making decisions with regard to the infringement.
Question 513
May adverse decisions by the State Authority be  appealed in a court of law? What State
Authority decisions may be appealed?  Please describe the appellate process?
Answer
In regard to trademarks,  the following decisions of the National Office of Industrial Property
may be appealed either to the Administrative Cour t or to the Ministry of Science, Technology and
Environment, provided that they have previously been appealed to the Director General of the
National Office of Industrial Property:
- decisions on an application for trademark registration;
- decisions on cancellation or invalidation of a trademark registration;
- decisions on approval or registration of a trad emark assignment or licensing contract; and
- decisions on renewal of a trademark registration.
The procedure in the Administrative Court is provided for in Article 30 of the 1996 Ordinance
On Procedures for Administrative Cases as follows:
"1. The appellant shall, within 30 days from the date of receipt of written response of  the very
person who has committed the appealed administrative action or issued the appealed administrative
decision, submit to the competent court an application for judgement.
2. In case proceedings are not initiated within the time limit stipulated in section 1 above, due to
factors beyond the control of the parties, the delay caused by such factors shall not be included in the
time limit.
3. An appeal application shall contain the following:
(a) date of application;
(b) the court addressed;
(c) name and address of the appellant and the defendant;
(d) nature of the appealed administrative decision or action;
(e) contents of the written response of  the person who has committed the appealed action or
issued the appealed decision to the first-instance appeal;
(f) undertaking not to appeal to the superior authority of the person who has committed the
appealed administrative action or issued the appealed administrative decision; and
(g) request for relief.
However, Vietnam does not yet have detailed regulations on procedures for the judgement of
administrative cases relating to the establishmen t, maintenance, cancellation and invalidation of
trademarks in particular and of industrial property rights in general. For the time being, the
promulgation of a circular guiding the judgement of administrative cases relating to industrial property
rights is being studied by the Supreme Court in collaboration with related authorities and it isscheduled to be completed by the year 2000.
4. An appeal application shall be signed by the appellant or his representative and accompanied
by documents substantiating the appellant's requests".WT/ACC/VNM/3/Add.2
Page 11
Question 514
Are there minimum or maximum limits on the size of penalties for trademark infringement?
Answer
Goods bearing a counterfeited trademark are deemed to be counterfeited goods. Under
Article 167 of the Criminal Code of the Socialist Republic of Vietnam dated 27 June 1985, as
amended, any person involved in producing, trading counterfeited goods is subject to penalties listed
in points 542, 543 and 544 of the Memorandum WT/ACC/VNM/2.
(c) Geographical indications, including appellations of origin
Question 515Are geographical origins protected in Vietnam?Could the Government of Vietnam explain agai nst what usage geographical indications are
protected?
Does the law of Vietnam contain any provisions on: additional protection for geographical
indications for wines and spirits, i.e. is protecti on also granted where the true origin of the good
is indicated or the geographical indication is us ed in translation or accompanied by expressions
such as "kind", "type", "style", "imitation" or the like?
Answer
Under Section 7(2) of Decree No. 63/CP, on ly geographical indications of a special kind,
namely appellations of origin are protectable; geographical indications other than appellations of
origin, even signs symbolising the origin country or locality of goods, are not protectable.
Under Section 34(3) of  Decree No. 63/CP, the fo llowing acts of using an appellation of origin
are prohibited if committed by  people other than the holder of a Certificate of the right to use theappellation of origin:
- applying a protected appellation of origin on goods  or their packaging, on service facilities or
transaction documents used in business activities;
- circulating, offering, advertising or storing for sale of goods bearing a protected appellation of
origin; and
- importing goods bearing a protected appellation of origin.
Geographical indications in general are, to a limited extent, protectable under regulations on
trademark protection: signs liable to mislead, confuse or deceive consumers as to the origin of thegoods or services are not protectable as a trademark (Section 6(2)(d) of Decree No. 63/CP).
Vietnamese laws have no provision on additional protection for wines and spirits. Provisions on
protection of appellations of origin apply generally to goods of all kinds, prohibiting "the illegal use of
an appellation of origin or signs confusingly similar thereto, including the case where the true originof the product or the appellation of origin is indicated or accompanied by wordings such as: "kind",
"type", "imitating", or similar words to that effect" (Section 47(1)(b) of  Decree No. 63/CP).WT/ACC/VNM/3/Add.2
Page 12
Question 516
How does Vietnam expect to protect geographical indications?When does Vietnam expect to implement Articles 22 to 24 of the WTO TRIPS Agreement?
In the documentation it is mentioned that at present a draft of detailed regulations on
procedures is being elaborated upon. Could the Government of Vietnam be more specific and
explain the contents? What is the time frame for such regulations?
What is the status of the regulations on procedures for and content of geographical indications?Answer
Geographical indications of a special kind, namely appellations of origin are protectable under
the prevailing law of Vietnam.
Substantive  provisions on the protection of appellations of origin are provided in detail in
Decree No. 63/CP, dated 24 October 1996, of the Government of Vietnam.  The procedure for
claiming the rights to use appellations of origin  is stipulated in Circul ar No. 3055/TT-SHCN, dated
31 July 1996, of the Ministry of Science, Technology and Environment.
The promulgation of supplemental laws and regulations on the protection of geographical
indications is being considered and scheduled to be completed by the year 2000.
(d) Industrial designs
Question 517Vietnam only protects industrial designs for a term of 10 years, as required by the TRIPS
Agreement. Will Vietnam amend the term of  protection for industrial designs prior to WTO
accession?
Answer
Vietnamese law stipulates that the maximum pr otection term of industrial designs is 15 years.
The initial term of protection is 5 years and is renewable for two consecutive terms of 5 years.
(Section 9(2)(c) of Decree No. 63/CP). Vietnam does not intend to make amendment to the said
provision as it meets the TRIPS requirement  of industrial design protection term.
Question 518
Could the Government of Vietnam explain in more detail the conditions under which the "prior
use right" is applied which leads to an exception from protection?
Answer
The right of prior users with regard to industrial designs as provided for in Article 801 of the
1995 Civil Code is to be understood as follows:
If before the filing date of an application for an industrial design patent, a natural or legal
person or another entity has used the industrial de sign independently from its owner, the former shall,
after the grant of the patent, have the right to continue such use while not being allowed to extend the
scope or volume of  use or transfer the right to other persons.WT/ACC/VNM/3/Add.2
Page 13
Question 519
How are the textile designs protected?
Answer
Textile industrial designs are protectable in the same manner as other industrial designs. There
are no special provisions for their protection.
(e) Patents
Question 520
Could the Government of Vietnam again explai n in detail the term "prior use right"?
Answer
The rights of prior users with regard to inventions as provided for in Article 801 of the Civil
Code is to be understood as follows:
If  before the filing date of an application for an invention patent, a natural or legal person or
another entity has used the invention independently fr om its owner, the former shall, after the grant of
the patent, have the right to continue such use while not being allowed to extend the scope or volume
of  use or transfer the right to other persons.
Question 521
Under what conditions is a compulsory licence granted?Answer
The conditions for granting of a compulsory licence as provided in Article 802 of Civil Code
are to be understood as follows:
"Upon request of persons having the need of using a protected invention, utility solution or
industrial design, the competent authority may issue a decision ordering its owner to grant, in return
for a remuneration, a licence in case the following conditions are met:
1. The owner fails to use the industrial property object or his use fails to satisfy the needs of
social economic development of the country;
2. The person having the need of use has tried to negotiate with the owner but failed to reach an
agreement on a contractual licence, even with a reasonable royalty offer; and
3. The use of the industrial property object aims at satisfaction of the need of national defence,
national security, human health and other urgent needs of the society."
Question 522
Vietnam's patent law does not cover micro-organisms. Micro-organisms and micro-biological
processes are not excludable from patent coverage under the TRIPS Agreement. Will Vietnam
amend its patent law provisions to provide coverage for these products and processes?WT/ACC/VNM/3/Add.2
Page 14
Answer
Micro-organisms and micro-bi ological processes are protectable under the prevailing
Vietnamese law as they do not fall under the list of the objects excluded from invention protection
under Section 4(4) of Decree No. 63/CP.
For the time being however, special regulations on micro-organism patent applications,
examination thereof or micro-organism deposit have not yet been enacted. The enactment of such
regulations and preparation of relevant technical facilities are under way and scheduled to be
completed by the year 2000.
Question 523
Does Vietnam's patent law cover pharmaceutical products and processes to manufacture
pharmaceutical products?
Answer
Pharmaceutical products and processes to manufacture pharmaceutical products are
protectable under the prevailing Vietnamese law as they do not fall under the list of the objects
excluded from invention protection unde r Section 4(4) of Decree No. 63/CP.
Question 524
Are there any restrictions on an  owner's ability to assign, transfer or licence patent rights?
Answer
Decree No. 63/CP provides restrictions on assignment/licensing of patent rights as follows:
- the assignor/licensor shall only effect assignment/licensing of his or her rights within the
scope and the term of protection. The assignor/licensor shall guarantee that the
assignment/licensing does not  infringe rights of a third party.  In the event of disputes over
the assignment/licensing, the assignor/licensor shall be responsible for settlement thereof(Section 38(1));
- if the patent right is of  joint-ownership, each of the co-owners shall be entitled to
assign/license his or her respective part of the right, on the condition that the other co-owners
also agree (Section 38(2));
- any assignment or licensing shall be executed in the form of a written contract
(Section 39(1));
- assignment or licence contracts of any of the following cases shall be subject to approval by
the Minister of Science, Technology and Environment:
- either party to the contract (either the assignor/licensor or the assignee/licensee) is an
entity wholly or partly owned by  the Government (Section 38(5)),
- the assignor/licensor is a Vietnamese natural or legal person or other entity and the
assignee/licensee is a foreign natural or legal person (Section 62(5));
- any assignment or licence contract shall be subject to registration  with the National Office of
Industrial Property (Section 42(1)).WT/ACC/VNM/3/Add.2
Page 15
Question 525
Please describe the patent law provisions relating to working requirements. Does importation
satisfy the working requirement?
Does the importation of a patented good fulfill the condition of "working a patent"?Answer
Under the Vietnamese law, there is no special provision on, or definition of, the obligation of
"working a patent" in the normal sense of “working it industrially”, (i.e. manufacture of a “patentedproduct" or "industrial application of a patented proce ss"), as it is interpreted in the "Guidance to the
Application of the Paris Convention for the Protec tion of Industrial Property" published by WIPO in
1991. The owner of a patented invention is under the obligation of "using" the invention, i.e. engaging
in one or more of the acts defined in Section 34(1) of  Decree No. 63/CP, as follows:
- producing the protected product;
- applying the protected process;
- exploiting the protected product;
- advertising, offering, putting into circulation, or stocking for sale the protected product or a
product manufactured by the protected process;
- importing the protected product or a product manufactured by the protected process.
Therefore, the importation of a protected product or a product manufactured by a protected
process also satisfies the requirement of "using" an invention.
Furthermore, in regard to non-voluntary lice nces, under Section 46(1) of Decree No. 63/CP,
the obligation of "using" an invention is only applied on certain  conditions:
"The owner of an invention, utility solution or industrial design having special impact on
national security or defense, or on the protection of public health or environment shall have
the obligation to use such invention, utility solution or industrial design in order to satisfy  the
needs of the nation and/or the society.
In the event the owner of  such invention, utilit y solution or industrial design has tried his or
her best, but failed to satisfy the needs of the nation and/or society, such owner shall have the
obligation to grant the licence on reasonable conditions to other people who are willing and
able to use the invention, utility solution or industrial design".
Question 526
How many applications are submitted annually? What is the average pendency period for an
application? How many patents have been issued to date? In what technological categories?
Answer
The annual numbers of patent applications and patent granted are shown in section V.6 below.
The number of invention patents granted to December 1997  is 421, classified into technologicalcategories (according to International Patent Classification) as follows:
A:112 B:81 C:85 D:12 E:28 F:18 G:29 H:56WT/ACC/VNM/3/Add.2
Page 16
Regarding invention applications, the time limit is 3 months for formality examination and
18 months for substantive examination (stipulated in Sections 13.8 and 16.3 of Circular
No. 3055/TT-SHCN).
Question 527
Can patent revocation decisions be appealed, as required by Article 32 of the TRIPS
Agreement?
Answer
The opportunity of appealing patent cancellation or invalidation decisions does not yet satisfy
the requirements of Article 32 of the TRIPS Agreement.  Under Sections 27(4), 28 and 29 of Decree
No. 63/CP, such decisions of the National Office of Industrial Property can only be appealed either to
the Administrative Court or to the Ministry of  Science Technology and Environment. The Science,
Technology and Environment Minister's decision on the merits of the case is final and conclusive, and
can not be further appealed to the Administrative Court.
Question 528
What is the size of Vietnam's Patent Office? Ho w long has the Patent Office been in operation?
Answer
The National Office of Industrial Property has a staff of 103 persons, out of whom 80 are
officials and 23 are support staff.
The National Office of Industrial Property's predecessor, the National Office of Inventions,
was established by Decree No. 123/HDBT, dated 29 July 1982 of the Council of Ministers (the
Government). The National Office of Industrial Property is organized and operating according to the
Charter promulgated by Decision No. 259/TCCB dated 8 June 1993 of the Ministry of Science,
Technology and Environment.
(f) Plant variety protection
Question 529What is the term of protection for creators of plant varieties?
On what legal basis are plant varieties protected? Please explain.?
Answer
The prevailing legal basis for the protection of plant varieties are contained in the following
instruments:
- Decree No. 31/CP on Innovations and Inventions;
- Inter-ministerial Circular No. 01/NN-KCM on the Remuneration to the Authors of Plant
Varieties and Animal Species;
- Decree No. 07/CP 1996 on the Management of Plant Varieties.WT/ACC/VNM/3/Add.2
Page 17
The requirements for protection of the author of a plant variety are as follows:
- the plant variety must be novel, stable, uniform and useful;
- the author shall file an application for a Plant Variety Author Certificate.
The authors of plant varieties are protected by the system of Plant Variety Author Certificates
with validity term of 15 years, counted from the date of filing applications for Certificates. Apart from
moral rights, the author of a protected plant variety has the right to remuneration paid by the users.
The exclusive right over the plant variety belongs to the Government.
The promulgation of laws and regulations on the protection of  plant varieties in compliance
with requirements of the TRIPS Agreement is being studied and scheduled to be completed by theyear 2000.
(g) Layout designs of integrated circuits
Question 530There are no explanations on sub-paragraph (g ) and future plans for legislative enactment?
Please describe the Vietnamese regime for protection of layout designs of integrated circuits,
and identify any provisions that are not compatible with TRIPS requirements. ?
Vietnam states that it is the process of estab lishing a protection system. Could Vietnam explain
how far this process has been developed.  What time-frame is envisaged?  What are the main
elements of such legislation?  Please explain.?
Answer
Vietnam does not yet have legislation on the protection of layout designs of integrated
circuits. The promulgation of relevant laws and regulations in order to comply with requirements of
the TRIPS Agreement is being studied and scheduled to be completed by the year 2000.
Question 531
Does Vietnam intend to accede to the Treaty on Intellectual Property in respect of Integrated
Circuits prior to WTO accession?
Answer
Vietnam has not yet considered the question of accession to the Treaty on Intellectual
Property in respect of Integrated Circuits.
(h) Requirements on undisclosed information, including trade secrets and test data
Question 532There are no explanations on sub-paragraph (h) and future plans for legislative enactment.
Vietnam states that it is in the process of establishing a protection system. Could Vietnamexplain how far this process has been developed.  What time-frame is envisaged?  What are the
main elements of such legislation?  Please explain.WT/ACC/VNM/3/Add.2
Page 18
The Memorandum does not appear to mention protection of undisclosed information, including
trade secrets and test data.  Please describe the Vietnamese regime for protection of undisclosed
information, including trade secrets and test data, and identify any provisions that are not
compatible with TRIPS requirements.
Does Vietnam have any laws governing trade secrets?
Answer
Vietnam does  not yet have legislation on the protection of undisclosed information, including
trade secrets and test data. The promulgation of relevant laws and regulations in order to comply with
requirements of the TRIPS Agreement is being studied and scheduled to be completed by theyear 2000.
(i) Any other categories of intellectual property
Question 533Does Vietnam protect any other categories of intellectual property?Answer
Utility solutions are not required to be protected under the TRIPS Agreement but are
protected in Vietnam. Under the prevailing laws and regulations, any technical solution that possesses
world-wide novelty and has industrial applicability in any  economic or social field is protectable by
an utility solution patent with a validity term of 10 years.
3. Measures to Control Abuse of Intellectual Property Rights
Question 534What is the status of the legislation designed to implement the anti-competitive practices of
provisions of Article 40 of the TRIPS Agreement?
Are there any restrictions on the licensing of inte llectual property, on either domestic or foreign
nationals?
Answer
Section 17.4 of Circular No. 3055/TT-SHCN stipulates restrictions on the contractual
licensing of industrial property between the right owners and the licensees (industrial property
licensing contracts), which apply to both the Vietnamese and foreigners, as follows:
"A licence contract shall not have clauses unreasonably restrictive to the licensee's rights,
especially restrictions not deriving from the licensor's rights over the licensed industrial
property object or not aiming at protection of such rights, such as:
- clauses, directly or indirectly, restricting the exportation of products manufactured
under the licence to the territories in which the licensor does not have theownership, or the exclusive right of importation, of the licensed industrial property
object;WT/ACC/VNM/3/Add.2
Page 19
- clauses compelling the trademark licensee to buy from the licensor, or the person
designated by him, all or a certain ratio of materials, accessories or equipment, etc.,
without aiming at the assurance of licensee's product quality;
- clauses prohibiting the licensee from making improvements to the licensed
industrial property object (except for trademark) ,or compelling the licensee to
freely license, or assign the right to apply for protection titles of, such
improvements;
- clauses prohibiting the licensee from contesting the licensor's ownership right, or
the right to grant the licence of, the licensed industrial object".
5. Legal Documents Related to Intellectual Property Rights
Question 535WT/ACC/VNM/2 contains a list of legislative measures related to the protection of intellectual
property in Vietnam. Could the Government of Vietnam provide these laws and regulations?
Please provide the Working Party with a translat ed copy of all intellectual property provisions
of the Civil Code 1995. Please provide translated copy of the decrees that guide the
implementation of the intellectual property provisions of the new Civil Code.
Answer
Among  those legal instruments on intellectual property rights which  are  listed in section  V.5
WT/ACC/VNM/2 many have been abolished and replaced by newly promulgated ones and someothers are scheduled to be replaced.
The Vietnamese prevailing system of legal instruments on intellectual property protection
consists of the following:
- the Civil Code 1995 (the Sixth Part);
- Decree No. 63/CP dated 24 October 1996 of the Government of Vietnam on Detailed
Regulations on Industrial Property;
- Circular No. 3055/TT-SHCN dated 31 December 1996 of the Ministry of Science,
Technology and Environment on Guiding the Implementation of the Provisions on the
Procedures for Establishing Industrial Property Rights, and a number of other procedures in
Decree No. 63/CP.
- Decree No.76/CP dated 29 November 1996 of th e Government of Vietnam on Guiding the
Implementation of the Provisions on Copyrights in the Civil Code;
- Circular No. 23 -TC/TCT dated 9 May 1997 of the Ministry of Finance on Industrial Property
Fees (replacing Part III in the Circular No. 99/TC-KHCNMT on Guiding Financial
Transactions in Innovation and Industrial Property Activities).
The unofficial English translation of the Civil Code (the Sixth Part) and Circular
No.23-TC/TCT are available in the Secretariat (Accessions Division, Room 1126) for consultation.WT/ACC/VNM/3/Add.2
Page 20
6. Statistical Data on Application For and Grant of Intellectual Property Rights
Question 536Please provide a summary of patents and trademark applications filed and granted for the past
three years?
Answer
Statistics of patent and trademark applications filed and granted:
Year Patents (for inventions) Trademarks
Applications Grants Applications Grants
1995 682 56 5,633 4,592
1996 1,008 62 5,441 3,931
1997 1,264 111 4,810 2,486
VI. TRADE-RELATED SERVICES REGIME
Question 26
Are services under any sort of price control? If so, please provide details of (a) the services
which are subject to price controls and (b) the form of the price control applied.
Answer
Please see also the answer to question 21 (WT/ACC/VNM/3), Annex 9
(WT/ACC/VNM/3/Add.1) and the existing regime on trade in services in the format of document
WT/ACC/5 ( WT/ACC/VNM/5).
In the following sub-sectors, price control measures can be summarized as below:
1. Insurance:
Pursuant to paragraph 8 Article I Decree No. 74/CP dated 14 June 1997 making amendments
to some provisions of the Decree No. 100/CP dated 18 December 1993 on insurance business, onlycompulsory insurance and personal insurance are subject to controls on premiums.
(a) Types of insurance subject to premium controls as of 31 December 1997 are:
(i) compulsory insurance:
- construction and instalment risk insurance, and
- public liability insurance of motor vehicle owners;
(ii) Personal insurance:
- life insurance, and
- voluntary health care insurance and accident insurance.WT/ACC/VNM/3/Add.2
Page 21
(b) Form of premium controls applied:
- the premium for compulsory insurance must c onform with a set premium or a premium range
set by the Ministry of Finance;
- the personal insurance premium must be registered with the Ministry of Finance before being
applied.
2. Accounting and auditing:
Accounting and auditing fees are presently determined by market forces. However, fee ranges
are about to be issued by the  Ministry of Finance to bring about uniform pricing practices.
3. Telecommunications services:
Telecommunications price setting and implementation are under State control.
4. Transport services:(a) Types of services subject to price control measures are as follows:- freight transport service by rail, sea, inland waterway and road;
- freight loading/unloading services for import-export cargoes at seaports;
- freight loading/unloading services at river ports;
- pilotage and tugging/towing services in assisting vessel entry and exit to/from ports; and- shipping agency services.
(b) Competence and forms of price control:- the Government Price Board sets standard transport tariffs on different modes of transport for
carriage of goods for which the tariff is paid out of the Government budget including transport
of important commodities for the mountainous areas, loading/unloading of import-export
cargo at ports and towing, pilotage and shipping agency services;
- the Ministry of Transport sets the transport tariff for oversized and overweight cargo;- the Vietnam Inland Waterways Administration sets standard tariffs or loading/unloading at
river ports and harbours;
- the People's Committees at the provincial level set the remaining types of tariffs and fees and
must register such charges with and get prior approval from the Government Price Board; and
- companies engaging in loading/unloading at sea ports are allowed to set their own tariffs for
domestic handling services but have to register such charges with and get prior approval from
the Government Price Board and the  Ministry of Transport.
5. Culture and information:
State controls are imposed on the prices of films, books and videotapes which are ordered or
financed by the State. The State also sets maximum prices for information supply services on the
Internet and training services.WT/ACC/VNM/3/Add.2
Page 22
6. Health services:
Health care services: A standard price range is set by the State for all State health care units.
Health services provided by private units are not subject to State price control. However, private units
must submit a justification for appropriate prices consistent with the quality of the service provided,for the Health Ministry's approval.
Medical equipment procurement and drug supply by public institutions must be executed by
tendering.
7. Construction:
- State price control covers construction and construction consulting services utilising State
capital.
- the forms and mechanisms of price control applied are as follows:
- the State determines the approximate expenditure paid for construction and
construction consulting services (the expenditure can take either the form of payment
in kind or in money or a certain percentage of the project value depending on the
nature of the service),
- organizations using funds from the State budget for construction and construction
consulting services must make a detailed estimated cost plan based on approximateexpenditures set by the State. The actual payment will be based on the approved
estimated cost plan if it is a sole source tender (appointment of tender). If the tender is
carried out, the plan must be submitted  for tender evaluation.
8. Industry-agriculture:(a) Industrial services subject to State price control are as follows:- commercial electricity supply: national and local electricity distribution systems funded by the
State supplying electricity to households for production or trading as well as domestic use for
payment in VND or in foreign currency;
- irrigation services funded by the State at the central or local government level. Services which
are not financed by the State are subject to arrangement by the concerned parties. However,
the State still maintains supervision over such arrangements;
- limits on the sale and purchase prices of items listed in the national reserve list are decided on
by the State.
(b) Form of price controls applied:
The State delegates authority for price controls as follows:
- the Government determines the price to be applied to commercial power supplies, hydraulic
works services fees in agriculture, gas supplies;WT/ACC/VNM/3/Add.2
Page 23
- the President of the Government Price Board is authorized to set maximum transport freight
rates by rail and sea for food carried and fertilizer in North – South carriage;
- ministries or government agencies bear responsibility for giving directions to their subordinate
enterprises in submitting price setting plans to  the Government Price Board for approval in
respect of goods and services under their jurisdiction;
- regarding products categorized as those under the Government's jurisdiction, the relevant
ministries submit price setting plans to the Government for approval after obtaining the
Government Price Board's appraisal;
- the President of the People's Committee at provincial level is entitled to set the price for
running water for both the city or industrial zones and must make a list of goods and services
to be subject to price controls. The list may not cover those prices already contained in
Government's list for price controls and must be delivered to the Government Price Board for
its approval.
9. Legal services:
Pursuant to Article 22, Decree No. 42/CP dated 8 July 1995 Promulgating the Regulation on
Legal Consultancy Practices of Foreign Law Firms in Vietnam, legal consultancy services provided
by foreign law firms in Vietnam are not subject to any price controls.
The Ordinance on Lawyers' Organization stipulates  that the fees paid to Vietnamese lawyers
are on a case-by-case basis:
- fees paid to lawyers working on criminal, civil, labour or marriage and family cases depend
on the complexity of the case and the time consumed for preparatory work before the courts;
- fees paid to lawyers providing consulting services are decided by contracting parties on the
basis of the nature, the workload or the duration of the contracts signed.
In accordance with the Ordinance on Lawyer Organization, the  Ministry of Justice and the
Ministry of Finance are to issue a inter-ministeria l circular governing Vietnamese lawyers' fees. Yet
there exists no such circular so far. In reality, lawyer associations themselves make the rules on the
fees and fix the fee ranges. The actual fees accordingly are at lawyers' and their clients' discretion.
Consulting services fees are determined on contractual basis between the law firms or legal
consulting offices and the customers. There is yet no legal provisions on the control of legal services
fees.
10. Banking:
Banking services subject to measures of price control are as follows:
- opening deferred Letter of Credit (L/C): the guarantee fee for opening L/C must not exceed
1 per cent per annum of the L/C value;
- deposit taking and lending: ceiling rates on short, medium and long term loans and overdue
interest rates are also controlled;WT/ACC/VNM/3/Add.2
Page 24
- foreign currency trading: the maximum spread between buying and selling rates is 0.1 per cent
for transfers and 0.5 per cent for cash transactions; and
- guarantees: maximum guarantee fee for loans is 1 per cent per annum of the amount being
guaranteed.
The State Bank sets regulation on the ceiling fees for both domestic and external payment
transactions.
As  a principle, the competent authority will revi ew controlled prices if the fluctuation in the
production cost of the goods and services concerned reaches 5-10 per cent or more or there is a change
in supply and demand.
Question 101
Please provide a schedule of the products subject to the special excise tax, including HS tariff
numbers, and the excise tax rates that are applied.  Please identify the "special services withhigh accumulation" that are subject to excise taxation.
Answer
The amended Law on Excise Tax (May 1998) includes certain categories of services such as
discotheques, massage, karaoke, golf, casino business, sale of lottery tickets, horse race and motor
racing betting. It will enter into effect at the same time as the proposed new VAT Law on1 January 1999.
Question 162
Please provide the Working Party with a list of all areas under "sectoral management by
specific product and service".  Please identify all government ministries and offices which must
approve application for an enterprise to operate in each of these areas.
Answer
The Ministry of Planning and Investment is the Governmental Agency competent and
responsible for approval of the establishment and operation of all foreign enterprises in Vietnam.
Products under sectoral management are listed in Annex 3 (WT/ACC/VNM/3/Add.1).
1. General rules on investment  licensing:
(a) Establishment of State-owned enterprises:
The Prime Minister makes decisions on the establishment of large national corporations and
other State-owned enterprises with registered capital equivalent to that prescribed for Group A
projects.  Please see the answer to question 134 (WT/ACC/VNM/3) for further details.
Circular No. 08 BKH/DH issued by the Ministry of Planning and Investment of 11 June 1997
guiding the implementation of Decree No. 50/CP dated 28 August 1996 governs the establishment,
restructuring, dissolution and the bankruptcy of State-owned enterprises.  The Circular set out the
competence of ministers and presidents of administrative agencies at provincial level for theWT/ACC/VNM/3/Add.2
Page 25
establishment of independent State-owned enterprises that are not members of  national corporations
and whose capital is lower than that listed in Group A.
(b) Establishment of enterprises in other economic sectors:
The chairperson of the provincial administration makes decisions on the formation of
State-owned enterprises under the local authority's management and grants licences for the formation
of non-State-owned enterprises (i.e. joint stock companies, limited liability or private companies).
Cooperatives, individuals or groups must effect business registration with the district People's
Committee in accordance with Decree No. 66/HDBT.
(c) Establishment of foreign enterprises:
Investment licences (for joint-venture or wholly foreign-owned companies) are granted by the
Ministry of Planning and Investment under the authorization of Prime Minister. Being granted the said
licence, the foreign investor may start the enterprise operation at once without further application forbusiness licence, but proceed pursuance to the content of the investment licence. Certain qualification
or sectoral requirements in specific sector as below should be included in the application for an
investment licence.
2. Insurance:
An insurance enterprise must obtain two forms of licences with a view to legally operating
within Vietnamese territory:
- a qualification certificate issued by the Ministry of Finance (applicable to all insurance
enterprises and insurance brokers); and
- an investment licence (in the case of joint-ventures or wholly foreign-owned insurance
enterprises) issued by the Ministry of Planning and Investment under the authorization of
Prime Minister; or a decision on the formation (in the case of  State-owned insurance
enterprises) issued by the  Ministry of Planning and Investment or People's Committee of
cities under central control and provinces in accordance with the Company Law (in the case of
joint-stock insurance companies).
3. Accounting and auditing:
An accounting or auditing company will be allowed to do business in Vietnam if it obtains the
approval of the following authorities:
- the Ministry of Finance; and
- the relevant People's Committees of cities under central control or provinces where the
company is located. A licence granted by the Ministry of Planning and Investment is required
if it is a company with foreign-owned capital.
4. Tourism:(a) Pursuant to Decree No. 20/CP of 27 December 1992, General Department of Tourism, a
governmental agency, exercises State control over the following services countrywide:WT/ACC/VNM/3/Add.2
Page 26
- tourism promotion;
- tour travel;
- hotel business;
- tourist transport (in collaboration with the Ministry of Transport); and- tourism support services.
(b) The respective authorities issuing tourism licence are:- external tour travel: General Department of Tourism;
- internal tour travel: provincial or municipal People's Committee;
- hotel business: provincial or municipal People's Committee; and- tourist transport: the Ministry of Transport.
5. Transport:
The Ministry of Transport is a State management functioning body which oversees the
transportation industry (including rail, road, shipping and inland water way transport sub-sectors) at a
nation-wide level.
The registration procedures are as follows:
(a) Establishment of an enterprise:
- the Prime Minister shall decide on the establishment of State-owned, large national
corporations and other enterprises with registered capital equivalent to that prescribed for
Group A projects. (Please see the answer to question 134 (WT/ACC/VNM/3) for more
details);
- the Minister of Transport is authorized to decide on the establishment of State-owned
enterprises including public transport enterprises under its jurisdiction; transport business
companies may also be established at the request of other ministers or chairperson of
provincial People's Committees;
- the Chairperson of provincial administration shall decide on the establishment of State-owned
enterprises under their jurisdiction and are permitted to set up non-State enterprises (jointstock, limited liability and private companies) after having obtained a written approval from
the Ministry of Transport;
- the Minister of Planning and Investment or th e chairperson  shall issue an investment licence
to companies with foreign-owned capital after having obtained a written acceptance from theMinistry of Transport.
(b) Other licences to be obtained:- companies engaging in shipping agent service and vessels operating on specific route shall be
required to obtain a professional working licence issued by the Vietnam Maritime Bureau
(VINAMARINE); and
- companies involving in forwarding service of import-export cargo and other transport support
services shall be required to obtain approval from the Ministry of Transport.WT/ACC/VNM/3/Add.2
Page 27
6. Culture and information:
Fields requiring the approval of the Ministry of Culture and Information include: printing,
advertising, electronic games, film production, cinema, places of entertainment, cultural recreation,production of cultural items, book publication, film distribution and photographic services.
7. Health service:
The Ministry of Health executes sectoral management over and grants qualification
certificates to the following goods and services:
- goods: drugs, cosmetics, vaccines, immunological biological products, quality and hygiene of
foodstuffs,  medical equipment and pharmaceutical raw materials;
- health care services, production and distribution of pharmaceuticals.
The Ministry of Health provides approvals for the operation of an enterprise solely in respect
of the relevant health and medical requirements. The remaining requirements are carried out in
accordance with existing rules and regulations.
8. Construction:
The Ministry of Construction  grants licences to enterprises conducting:
- construction services (building, construction and installation); and- professional services such as architecture, technical consultancy, engineering services,
landscape architecture, urban planning and detailed industrial zone planning.
The Minister of Planning and Investment or th e chairperson of the provincial administration,
as the case of authorisation may be, grants investment licences to foreign-owned business after
consulting with the Ministry of Construction.
With regard to the periodical commercial presence to carry out a successful bid to a tendering,
the successful tender is required to apply for permit to carry out the tendered project at the Ministry ofConstruction.
9. Industry:
The Ministry of Industry exercises control over certain industrial services  as follows:
- electricity construction and installation services: licences are issued by the Ministry of
Industry  after consulting with   the Ministry of Construction;
- mine survey and exploration services: the licence is issued by the Ministry of Industry
(Geology and Mine Bureau under the Ministry of Industry processes the application
documentation).WT/ACC/VNM/3/Add.2
Page 28
10. Legal services:
The Ministry of Justice exercises control over the organization of lawyers and legal
consultancy practices, including legal consultancy services provided by foreign law firms in Vietnam.
The Ministry of Justice provides guidance on the procedure for the formation of lawyers'
association pursuant to the Ordinance on La wyers' Organizations and Decree No. 15/HDBT
Promulgating the Regulation on Lawyer Associations. The  Ministry of Justice supervises the
implementation of the Ordinance and the Regulation a nd provides professional training to lawyers or
undertakes other measures with a view to improving lawyers' qualifications.
Question 451
Why does the Government of Vietnam not ap ply the transparency requirements of the
Government Procurement Agreement to the acquisition of services and products for
consumption by governmental agencies?
Answer
At the current level of development where budget funds are allocated by government agencies
and localities in a piecemeal manner to governmental agencies and administrations at various levels,
Vietnam is not yet in a position to centrally administer all government procurement activities.
Currently, there exists certain main rules  in respect of government procurement of goods and
services meeting governmental agencies' needs. They are reflected in the State Budget Law, Decree
No. 43/CP publicising the Charter on Investment a nd Construction which provides main principles in
Government procurement.  When government procurement is conducted, an estimated cost plan must
be decided by the relevant authority.  Open tendering must be implemented, i.e. there should be no
limit on number of qualified tenders, in case of equipment of great value or of great quantity. TheGovernment will gradually bring the aforesaid principles into effect by standardising and further
defining specific procurement procedures for particular governmental agencies.
Question 537
Vietnam is asked to redraft this section of  the Memorandum, taking these comments and
specific questions posed below into account.
Answer
This comment has been noted. The existing regime on trade in services in the format of
WT/ACC/5 
(WT/ACC/VNM/5) supplements this section of the Memorandum.
1. General
Question 538How is foreign ownership regulated?WT/ACC/VNM/3/Add.2
Page 29
Answer
1. Enterprises with foreign-owned capital are categorised as a special group governed by the
Law on Foreign Investment in Vietnam of November 1996.
Please see the answer to question 539 and the answer to question 540 for further detailed
regulations on foreign ownership of capital, including material, real estate and working capital.
2. The remaining forms of enterprises are covered by the Civil Law of Vietnam.
Question 539
Is there a limit to percentage of foreign ownership and does that apply to all legal entities?
Answer
Pursuant to Article 8 of the Law on Foreign Inve stment in Vietnam, there exists no maximum
limit on capital amounts contributed by foreign partners but there exists a minimum limit on foreign
contributions being not lower than 30 per cent of the legal capital unless otherwise stipulated by the
Government. Article 18, Decree No. 12/CP dated 18 February 1997 Providing Regulations on Foreign
Investment in Vietnam stipulates that foreign capital  contributions shall not, in general, be less than
30 per cent of total legal capital.  However, in some cases foreign contributions may be as low as
20 per cent of legal capital depending on the area of business, technology, market, business
effectiveness and other social and economic benefits conferred by the project.
In tourism industry, foreign ownership in tour joint venture company is set at a maximum
limit of 49 per cent.
Please see also the answer to question 540 (paragraph 2) on telecom services, the answer to
question 121 on restrictions on foreign investments, the answer to question 541 (paragraph 3.2) on
restrictions on foreign owned capital and the answer  to question 589 on restriction applicable to joint
ventures in domestic transport.
Question 540
The government shall stipulate the maximum port ion of capital contribution by the foreign
partner in a joint-venture in some service supply businesses including post office and aviation.
Answer
Pursuant to the Law on Foreign Investment in Vietnam, no ceiling limit on foreign
contributions to a joint-venture is indicated. In  reality, when granting investment licences, the
authority may adjust the percentage of foreign part icipation consistently with existing directions and
policies.  In accordance with Article 18, Decree No. 12/CP dated 18 February 1997 Providing
Regulations on Foreign Investment in Vietnam, there is no maximum limit on foreign contributions
but there is a minimum limit (no less than 30 per cent of the legal capital of a joint-venture). The
following are exceptions:
- in the telecom sector, foreign services suppliers may come into business cooperation contract
with Vietnamese telecom businesses;WT/ACC/VNM/3/Add.2
Page 30
- in the tourism sector, the maximum possible capital owned by a foreign partner in a travel tour
joint-venture must not exceed 49 per cent of legal capital;
- in the air transport sector, foreign services suppliers may hold up to 40 per cent of legal
capital of a joint venture company;
- in the insurance sector, the corresponding limit of foreign participation to the legal capital is
set at 50 per cent;
- in the auditing and accounting sector the said limit is 70 per cent.
Please see also the existing regime on trade in services in the format of WT/ACC/5
(WT/ACC/VNM/5).
Please see also the answer to question 539 and the answer to question 121
(WT/ACC/VNM/3).
Question 541
Could Vietnam provide more detailed information about these restrictions; identify more
clearly the service supply businesses in question as well as percentages of foreign ownership
allowed?
Answer
The investment restrictions are stipulated in the Government Decree No. 10/1998/ND-CP
dated 23 January 1998 specifically for the services sectors as follows:
1. List of sectors in which investment will not be licensed:- projects which are prejudicial to the national security, defense or the public interest;- projects which are detrimental to  historical or cultural relics, rational customs or traditions of
Vietnam;
- projects which are prejudicial to the ecological environment; projects for treatment of toxic
waste imported from foreign countries to Vietnam; and
- projects for production of toxic chemicals or utilisation of toxic agents.2. List of services sectors in which licensing of investment is conditional:
- construction and operation of international telecommunications networks and local
telecommunications networks (under a business co-operation contract only);
- construction and operation of infrastructure facilities of industrial zones, export processing
zones and high-tech zones;
- construction business;WT/ACC/VNM/3/Add.2
Page 31
- airway, railway and sea transportation; public passenger transportation; construction of
sea-ports and air ports (BOT, BTO and BT projects shall be subject to separate regulations);
- travel tourism; and
- culture, sport and entertainment.
3. In addition, there are regulations in certain specific sectors, such as:3.1. Legal sector:- foreign law firms may be allowed to establish their branches in Vietnam solely for the purpose
of conducting legal consultancy on foreign and international law related to business and
investment. Direct Vietnamese  participation in the branch is not permitted;
- no foreign law firm may establish  more than two branches in Vietnam;
- the principal establishment of the foreign law fi rm abroad is fully responsible for the activities
of its branch in Vietnam.
3.2. Banking sector:
The proportion of foreign share capital in the charter capital of a Vietnamese credit institution
shall be as follows:
- share capital of a  single foreign legal entity or an individual: a maximum of 10 per cent; and- total share capital of foreign shareholders: a maximum of 30 per cent.
3.3. Some other services sectors:
Please also refer to the answer to question 540 on tourism and telecommunications.For more details, please see also the existing regime on trade in services in the format of
WT/ACC/5 
(WT/ACC/VNM/5).
Question 542
Will Vietnam bind its foreign investment regime, including the maximum capital ratio under the
WTO?
Answer
According to the Law on Foreign Investment in Vietnam, foreign investors can invest in the
form of 100 per cent foreign capital. However, this form is not always permitted in all sectors. The
investment restrictions are determined in  Decree No. 10/1998/ND-CP dated 23 January 1998.
Please refer to the answers to questions 121, 539, 540 and 541.WT/ACC/VNM/3/Add.2
Page 32
Question 543
(a) Is the list of services restricted for fore ign investment for national security and social
order reasons exhaustive?
(b) What restrictions apply?
Answer
Under Vietnamese law and regulations (Decree No. 10/1998/ND-CP dated 23 January 1998)
there is no specific list of the services sectors subject to conditional investment for reasons of national
security, defence or public order.
The current regulations simply provide that projects which are prejudicial to the national
security, defence or the public interest will not be licensed.
There are certain other service sectors with similar investment restrictions based on the above
reasons, such as:
1. Culture and information services:(a) Service sectors in which licensing of foreign investment is conditional:- printing, publishing, cinema construction and operation, art performance, advertising activities
and film production.
(b) Form of investment:  Foreign investment is permitted for a joint-venture or business
cooperation contract on a case-by-case basis.
2. Telecommunications:- foreign companies are not permitted to supply telecommunications services in Vietnam;
- foreign investment is allowed in the form of business cooperation contract only; and
- the Prime Minister's approval is required for every proposal for participation in this area.
Question 544
Is there non-discriminatory access for foreign investors to the licences mentioned?
Answer
Broadly speaking, there is differential treatment between national and foreign investors but
there is no different treatment among foreign investors.
Question 545
Please provide references for all existing legislation and documents relating to services,
particularly relating to foreign service provid ers, issued by legislative agencies and where they
have been published.WT/ACC/VNM/3/Add.2
Page 33
Answer
1.  Construction services:
(a) The following are the relevant legal documents in the construction and engineering services
sector:
- Decree No. 42/CP dated 16 July 1996 by the Government on Promulgation of Regulations on
Management in Construction and Investment;
- Decree No. 43/CP dated 16 July 1996 by the Government on Promulgation of Regulations on
Tendering;
- Circular No. 01 BXD/CSXD dated 15 April 1997 by the Ministry of Construction on
Management of Projects with Foreign Investment and The Foreign Construction Tenders in
Vietnam;
- Decree No. 07/CP dated 20 January 1995 by th e Government on Financial Conditions for
Labour Export to Foreign Countries;
- Decision No. 19/BXD-CSXD dated 10 June 1995 by the Ministry of Construction on
Regulations of Operation and Construction Consulting Business Registration;
- Decision No. 500/BXD-CSXD dated 18 September 1995 by the Ministry of Construction on
Regulations on Construction Business Registration and Professional Construction Certificate
Issuance.
(b) The following are the legal documents in the area of architectural services:
- Decision No. 91/BXD-CSXD dated 16 April 1993 by the Ministry of Construction on
Regulations of Professional Architect;
- Circular No. 18 BXD/CSXD dated 25 August  1993 by the Ministry of Construction on
Implementation of the Decision No. 91/BXD-DT.
2. Banking services:
- Decree No. 189-HDBT dated 15 June 1991 of the Council of Ministers Promulgating
Regulations on Foreign Bank Branches and Joint-Venture Banks Operating in Vietnam;
- Circular No. 178-NH-TT dated 5 October 1991 of  the State Bank of Vietnam providing
Guidelines for the Implementation of Regulations on Foreign Bank Branches and
Joint-Venture Banks Operating in Vietnam;
- Decision No. 300/QD-NH5 dated 13 November 1996 of the Governor of the State Bank of
Vietnam on Amendment to Scope of Operations of Foreign Bank Branches and Joint-Venture
Banks Operating in Vietnam;
- Circular No. 01-NH/TT dated 28 April 1995 of  the State Bank of Vietnam providing
Guidelines for the Implementation of Regulations on Establishment and Operation ofRepresentative Offices of Foreign Economic Or ganizations in Vietnam for Foreign Banks and
Credit Organizations;
- Decree No. 64/CP dated 9 October 1995 Promul gating Temporary Regulations on Operation
and Functions of the Finance Leasing Companies in Vietnam;
- Circular No. 03/TT-NH5 dated 9 February 1996 of the State Bank of Vietnam Providing
Guidelines on Implementation of Temporary Regulations on Operation and Functions of the
Finance Leasing Companies in Vietnam;
- Ordinance on the State Bank, Ordinance on banking, credit cooperatives and financial
companies publicised pursuance to the Legal Order No. 38/LCT/HDNN8 dated 24 May 1990
of the State Council of Vietnam.WT/ACC/VNM/3/Add.2
Page 34
3. Transport services:
- Maritime Code;
- Decree No. 40/CP dated 5 July 1996 by the Government on Domestic Water Transport Safety
and Order;
- Inter-ministerial circular No. 02/TTLB date d 12 April 1993 by the Government Price Board
and the Ministry of Transport on Management of  Fees, Transport Fees and Riverport Charges;
- Inter-ministerial circular No. 02/TTLB date d 27 January 1995 by the Government Pricing
Committee and the Ministry of Transport on Administration of Seaport Fees;
- Inter-ministerial circular No. 3/1998/TT LT-BVGCP-BGTVT dated 24 April 1998 on the
Administration of Railway Tariff;
- Inter-ministerial circular No. 04/LB-BVGCP-BGTVT dated 26 July 1995 on the
Administration of Tariff Motor Vehicle Transport;
- Decision No. 127/VGCP-CNTD.DV dated 28 Oct ober 1995 by the Government Price Board
on the Administration of Seaport Fees;
- Decision No. 1991 QD/VT dated 28 September 1992 by the Ministry of Transport on
Regulation of Transport Services;
- Decision No. 2188 QD/VT dated 23 October 1992 by the Ministry of Transport on
Regulations For Shipping Agen cy and Shipping Brokerage;
- Decision No. 2054 QD/PC dated 6 August 1996 by the Ministry of Transport on Foreign
Seagoing Ships Carrying Cargo, Passengers and Luggage Between Vietnam Seaports.
4. Culture and information services:- Publishing Law;
- Decree No. 48/CP on Films (cinematography);
- Decree No. 194/CP on Advertising in Vietnam;
- Circular No. 37 NHTT-TT dated 31 December 1994 providing Guidelines for Implementation
of Decree No. 194/CP on Advertising in Vietnam.
5. Telecommunications:- Decree No. 109/1997/CP dated 12 November 1997 by the Government on Post and
Telecommunications;
- Decree No. 21/CP dated 5 March 1997 by th e Government on Temporary Regulations on
Establishment and Management of INTERNET in Vietnam;
- Decision No. 110/TTg dated 22 February 1997 by the Government on Strategic Development
Programmes of Post and Telecommunications for the Period 1996-2000 ;
- Inter-ministerial circular No. 01/VGCP-TCBD /TTLT between the Government Price Board
and Department General of Post and Telecommunications on Management of Telephones andFacsimile Installation Charges;
- Decision No. 157 QD/KTKH dated 17 March 1997 on Promulgating Telephones and
Facsimile Installation Charges List by the Direct or General of the Department General of Post
and Telecommunications;
- Decision No. 679/1997/QD-TCBD dated 17 Ma rch 1997 by the Director General of the
Department General of Post and Telecomm unications on Promulgating Regulations on
INTERNET;
- Instruction No. 04/CSBD dated 2 April 1997 by the Director General of the Department
General of Post and Telecommunications on Prohibition of Callback Service in Vietnamese
Network.WT/ACC/VNM/3/Add.2
Page 35
6.  Services related to healthcare:
- Law on the Protection of the People's Health;
- Decree dated 13 October 1993 on Private Do ctor and Pharmacist Practice; and Decree
No. 06/CP dated 29 January 1994 on the implementation of the said Decree;
- Decree No. 23/HDBT dated 24 January 1991 by the Council of Ministers (now the
Government) publicising the Charter on Medicines;
- Circular No. 07/BYT-TT dated 30 April 1994 on the implementation of the Decree dated
13 October 1993 on Private Doctor and Pharmacist Practice;
- Decision No. 1203/BYT dated 11 July 1996 publicising Regulation on Medicines
Registration;
- Circular No. 01/BYT-TT dated 29 January1997 on the Registration for Import of Vaccination
and Biovaccination;
- Regulation on Foodstuff Quality publicised by the Decision No. 2481/BYT-QD dated
28 December 1996 and Regulation on Foodstuff Hygiene publicised by Decision
No. 2481/BYT-QD dated 28 December 1996 of the Minister of Public Health.
7. Insurance, accounting and auditing:- Ordinance on Accounting and Statistics dated 20 May 1988;
- Law on Insurance and Law on Accounting and Auditing (will replace the Ordinance on
Accounting and Statistics) is being drafted and submitted for approval by the National
Assembly.
8. Services related to trade:- Decision No. 390-TTg dated 1 August 1994 by the Prime-Minister on Promulgating the
Regulations of Trade Fair and Exhibitions;
- Circular No. 05-TM/XN dated 25 February 1995 by Trade Ministry on Implementation of the
Regulations of Trade Fair and Exhibitions;
- Decision No. 25-CP dated 25 April 1996 on Commodity Agents;
- Decision No. 195-TTG dated 8 April. 1996 by the Prime-Minister on Duty Free Shops;
- Decision  No. 1172-TM/XNK dated 22 September 1994 by Trade Ministry on the Regulations
of Export-Import Authorisation Between the Domestic Legal Entities;
- Decision No. 381-TM/XNK dated 6 May 1996 by Trade Ministry on the Amendment on the
Regulations on Export-Import Authorisation Between the Domestic Legal Entities;
- Decree No. 82/CP on Representative Offices dated 2 August 1994;
- Regulations on Establishment and Operation of Representative Office of Foreign Economic
Organization in Vietnam dated 2 August 1994 (amended version);
- Decree No. 179/CP dated 2 November 1994 on the amendments of the Decree No. 82/CP on
Representative Offices dated 2 August 1994;
- Circular No. 03/CP dated 10 February 1995 on the implementation of the Decree No. 82/CP
on Representative Offices dated 2 August 1994;
- Decree No. 58/CP on Work Permits for Foreigners dated 3 October 1996.
Please refer to Annex 2 of document WT/ACC/VNM/3/Add.1.
9. Tourism:
- Decree No. 53/CP on the Organisation of  the General Department of Tourism;WT/ACC/VNM/3/Add.2
Page 36
- Decree No. 20/CP on the Functioning of the General Department of Tourism;.
- Regulation on Travel and Tourism Services dated 29 April 1995;
- Inter-ministerial Regulation dated 4 December 1995 on the Administration of the Transport of
Tourists by Land and by Waterway publicised by the Decision No. 2418-QD/LB of the
Ministry of Transport and the General Department of Tourism;
- Legal document No. 972/TCDL dated 25 August 1997 on joint venture in international tour
services.
10.  Pricing:
- Decision No. 137-HDBT dated 27 April 1992.
Question 546
According to paragraph IV.1(f)(ii) of the Memorandum (WT/ACC/VNM/2), the following items
require approval before importatio n: cultural, artistic, cinematography products, shows and
performances; and banking facilities.
Please describe the procedures required to obtain approval and any restrictions or prohibitions
that may apply to the provision of these services in Vietnam by a foreign entity. Do similar
procedures, restrictions or prohibitions apply to domestic providers of these services?
Answer
1. Culture and information services:
The items should be approved prior to importation: cultural, artistic or film products (see
paragraph IV of the Memorandum (WT/ACC/VNM/2).
(a) The licence issuing authority:
According to Government Decree No. 89 dated 15 December 1995, Article III, Paragraph 6,
the above-mentioned items are subject to export - import line ministerial  management (Ministry ofCulture and Information).
(b) Required procedures:
The export-import enterprise permitted by the Trade Ministry for exporting and/or importing
the above mentioned items must apply to the relevant cultural management authority before signing
contracts on import of these products.
The application file for import consists of:- an application for import of cultural products is submitted to the Ministry of Culture
and Information (at the central level) or to the Department of Culture and Information(at the local level). The details such as comm odity types, content, quantity, origin and
purpose of the proposed import must be provided;
- the export-import licence issued by the Trade Ministry (copy);
- the samples, catalogue or picture of imported products (depending on particular
product).WT/ACC/VNM/3/Add.2
Page 37
Upon receipt of the application, the Cultural Management Authority will consider the
legitimacy of the application and in case of approval, it will issue the permit for the importer to sign
the contract with the foreign supplier and to fulfil the contract.
(c) Limitations and prohibitions:
According to the existing laws and regulations of Vietnam, there are certain limitations and
prohibitions on imports of the following cultural, artistic and audio-visual products:
- limitations:
- an enterprise is allowed to import products which have been registered in the business
registration certificate and in the  export-import licence,
- Fafilm Vietnam (under the Ministry of Culture and Information) is the monopoly and
exclusive importer and distributor of cinema films into Vietnam,
- the Books and Newspapers Export-Import Company (Xunhasaba) under the Ministry
of Culture and Information is the monopoly and exclusive importer of books,
newspapers, magazines into Vietnam;
- prohibitions for import of cultural products which:
- are detrimental to national economy and security, the historical and cultural relics,
fine customs and tradition of Vietnam,
- are directed against the State of Vietnam, war propaganda or causing hatred among
the peoples and the countries,
- contain propaganda on the way of life of obscene conduct, hooliganism or offend fine
customs and traditions of the Vietnamese nation,
- contain information which is untruthful, distorted and slanderous or is damaging the
reputation of an organisation or citizen of Vietnam,
- contain advertisements for cigarettes and alcohol,- are illegal cultural products,- are imported for profit-making purpose without the necessary import permit and will
be confiscated.
All the cultural, artistic and film services supplied in Vietnam by foreign providers should be
conducted through the Vietnamese entities which are licensed to export-import the respective services.
These requirements are applied in the same manner to the Vietnamese legal entities. There are no
specific regulations applied to foreign service providers.
The above-mentioned limitations and prohibitions are regulations of the Government of
Vietnam and applicable to all domestic service providers. All breaches will be treated in accordance
with laws and regulations (Government Decree No.88 dated 14 December 1995).WT/ACC/VNM/3/Add.2
Page 38
2. Banking equipment:
The import of banking equipment into Vietnam must be conducted in accordance with the
existing regulations of the Trade Ministry. In the near future, the State Bank of Vietnam will issue
Regulations on Export-Import of Banking Equipment  which lists the items subject to importlicensing and the required procedures for such licences. Importation of banking equipment will have
to conform to this Regulation.
Question 547
The Memorandum refers (IV.2(a), paragraph 2) to the role of departments in the issuance of
business licences. Section VI.2(c) refers to a range of levels of authority - from District orProvincial People's Committees to Prime Mini ster in some cases - involved in the licensing
business.
Could Vietnam provide more detail - with particular regard to transparency and consistency,
market access, MFN and national treatmen t - on its business licensing/registration
arrangements as they affect foreign providers in  all relevant services sectors including financial
services.
Answer
1. General regulations on business licence issuance:
The existing regulations on business registration for all types of legal entities in all sectors are
as follows:
- State-owned enterprises (SOEs), joint-stock, limited liability and private companies are all
registered at the offices of the Departments of Planning and Investment of the provinces or the
cities in which their head offices are located;
- the cooperatives, individual households and business groups are registered at the People’s
Committee of the districts or communes (except cooperatives with special activities approved
by the Prime Minister are registered at the Provincial People’s Committees or the People’sCommittee of the cities under central control of the Government);
- after being licensed by the Ministry of Planning and Investment,  foreign invested businesses
are permitted to start business without the requirement to register the business at the
Department of Planning and Investment.
2. Banking services:
The grant of licences and business registration procedures for branches of foreign banks and
joint-venture banks and joint-venture and foreig n owned leasing companies operating in Vietnam
must comply with the following regulations:
(a) Application for Approval in Principle:
Applicants for setting up foreign bank branches, joint-venture banks, joint-venture and foreign
owned leasing companies  in Vietnam must submit to the State Bank of Vietnam an application file
for Approval in Principle.WT/ACC/VNM/3/Add.2
Page 39
Within 3 months from the date of receiving a complete application and relevant documents,
the State Bank of Vietnam will grant or refuse to grant an Approval in Principle.
The Approval in Principle will be valid for 12 months from the date of its issuance.
(b) For obtaining the operating licence:
Within the period of validity of Approval in Principle, applicants must complete the necessary
application documents for operating licence in accordance with guidelines of the State Bank of
Vietnam.
Within 3 months from the date of receiving the application for operating licence,  the State
Bank of Vietnam will consider whether to issue the operating licence.
(c) Business inauguration:
Within 6 months from the date of issuance of an operating licence by the State Bank of
Vietnam, foreign bank branches, joint-venture banks and financial leasing companies (foreign owned
and joint-venture) must complete all procedures concerning business registration at the competent
authority of provincial level and commence business operation.
Application files and procedures for an Approval in Principle and an operating licence:The application file for a written Approval in Principle must comprise the following:
- an application form for Approval in Principle (by filling the standard form);
- documents to be attached to the application:
- a copy of the operating licence of the foreign bank,
- the current charter of the foreign bank,
- a certificate issued by an authorized body pursuant to the laws of the country of
incorporation of the foreign bank permitting the foreign bank to open branches or to
enter into a joint-venture in Vietnam,
- a certificate issued by an authorised body pursuant to the laws of the country of
incorporation of the foreign bank stating the charter capital and the paid-up capital of
the foreign bank for the current financial year,
- the balance sheets, financial (profit and loss) statements, and the annual financial
reports of the foreign bank for the three years preceding the application,
- a plan for the bank's operations in Vietnam, which includes operational plan for the
first three years,
- a background summary outlining the process of incorporation of the foreign bank and
its development, certified by either the Central Bank or the Ministry of Finance of its
home country,
- a summary of the co-operation between the foreign bank and the Vietnamese bank(s)
and economic organisation(s),
- in the case of application to establish a joint-venture bank, in addition to the
documents referred to above, the joint-venture parties must submit to the State Bank a
draft joint-venture contract entered into between the Vietnamese bank and the foreign
bank,  and
- other documents as required by the State Bank.
The application file for an operating licence shall comprise the following:WT/ACC/VNM/3/Add.2
Page 40
- an application (in the standard form) for an operating licence for a foreign bank branch in
Vietnam signed by the chairperson of the board of management;
- an application (in the standard form) for an operating licence for a joint-venture bank signed
by a duly authorised representative of each joint-venture party; and
- a  power of attorney in favour of the signatory of the application forms;- documents attached to the application file for an operating licence must include the following:
- a list of foreign staff and the proposed number of Vietnamese employees working in
the foreign bank branch or joint-venture bank (by filling the standard form),
- curricula vitae of the manager of the foreign bank branch, the members of the board
of management and executive directors of the joint-venture bank (by filling the
standard forms),
- legal documents on the appointment(s) of the manager of the foreign bank branch,
members of the board of management and executive directors of the joint-venture
bank,  and
- other documents as it may be required by the State Bank;
- in respect of a joint-venture bank, in addition to the documents referred to above, the parties
to the joint-venture must submit to the State Bank the following documents:
- an official joint-venture contract which contains the following details:
- name, address, and nationality of the representative of each joint-venture party;
- name of the joint-venture bank,
- address of the head office,
- duration of the joint-venture,
- charter capital: proportion of capital contribution of each party in foreign or
Vietnamese currency, physical assets (if any) and schedule of capital contribution,
- the number of members of the board of management, the number  of staff, and the
proportion of staff appointed by each party,
- financial principles applicable in accounting, funds establishment  and use,
- proportion of profit and loss distribution to each joint-venture party,
- procedures for resolving disputes between parties in relation to the performance of the
joint-venture contract and procedures for eventual liquidation or dissolution of thejoint-venture,
- the choice of arbitration body and the governing law in event of dispute,
- obligations of each party with respect to the performance of the joint-venture contract,
- conditions for amendments of or additions to the joint-venture contract,
- conditions for the joint-venture contract to be effective, and- a draft charter of the joint-venture bank.
(e) Application for licence and registration procedures applied for leasing companies
(100 per cent foreign owned or joint venture) operating in Vietnam are stipulated as follows:
Application file for a written Approval in Principle:
- an application form for Approval in Principle (filling the standard form);
- documents to be attached to the application shall include:
- a draft charter of the leasing company (joint venture or 100 per cent foreign owned),
- a projection for the bank's operations in Vietnam, including its operational plan for
the first three years,WT/ACC/VNM/3/Add.2
Page 41
- a summary of the co-operation between the bank/company and  Vietnamese bank(s)/
economic organisation(s),
- an MOU with the intention to establish the leasing joint-venture (when applicable), a
draft contract  between Vietnamese party and foreign party (in the case of establishing
a joint-venture leasing company);
- other documents to be submitted by parties in the joint-venture include:
- legal documents related to its incorporation,
- the charter,
- a certificate issued by the competent body permitting the foreign bank, financial
company, leasing company and relevant organisations to establish a joint-venture or a100 per cent foreign owned leasing company in Vietnam,
- a certificate issued by the competent body stating the chartered capital and the paid-up
capital for the current financial year,
- balance sheets, financial (profit and loss) statements, and  annual operating reports for
the previous three years,
- a summary outlining the process of the incorporation of the company.
The State Bank Governor may require additi onal documents of concern, if necessary.
Application file for  operating licence:
- an application form for  Leasing Company's Operating Licence in Vietnam (joint-venture or
100 per cent foreign owned);
- a  power of attorney in favour of the signatory of the application form and related documents;
- documents attached to the application file for an operating licence must include the following:
- legal documents on the appointment(s) of members of the board of management,
controllers and executive directors of the leasing company (joint-venture or
100 per cent foreign owned),
- curricula vitae of each member of the board of management, controllers and executive
directors of the company (joint-venture or 100 per cent foreign owned) and their
qualifications,
- charter of the leasing company (joint-venture or  100 per cent foreign owned),
- the State Bank Governor may require additional documents, if necessary,
- in respect of a joint-venture leasing compan y, in addition to the documents referred to
above, the parties to the joint-venture must submit to the State Bank the joint-venture
contract which contains details such as name, locality, charter capital, financialprinciples, distribution of profits and losses, etc.).
The abovementioned documents shall be made in two originals, one in either of the three
languages English, French, or Russian, and one in Vietnamese. Copies of the original in the foreign
language must be certified by a public notary in the country of origin and copies of the Vietnameseversion must be certified by a public notary in Vietnam.
3. Insurance services:
Upon submission of an application to establish an trading insurance firm, the firm must
present documents justifying that it meet professional and economic requirements set by the Ministry
of Finance.WT/ACC/VNM/3/Add.2
Page 42
4. Accounting, auditing and book-keeping services:
All companies providing accounting, auditing and bookkeeping services must be approved in
writing by the Ministry of Finance.
5. Leasing services:
Licensing and registration procedures for foreign owned companies and joint-ventures
providing leasing services shall comply with:
(a) Section II (Conditions to be considered for granting business operation licences) under Decree
No. 64/CP dated 9 October 1995  Promulgating Temporary Regulations on Organisation andOperation of Leasing Services Companies in Vietnam;
(b) Section III (Documents and application procedures) under Circular No. 03/TT-NH5 dated
9 February 1996 issued by State Bank Guiding the Implementation of Temporary Regulations
on Organisation and Operation of Leasing Servi ces Companies in Vietnam which is available
in the Secretariat (Accessions Division, Room 1126) for consultation.
6. Post office and telecommunication services:
At present, post office and telecommunication services may not be provided by foreign
companies in Vietnam.
7. Health services:
To operate in Vietnam, in the application for an investment licence, foreign capital invested
companies dealing with medical consultation and trea tment and activities such as import-export, trade
and production of pharmaceutical, vaccine, immunised biological products and medical equipment are
requested to have a Certificate of Standards and Operating Conditions Conformance issued by
Ministry of Health.  This requirement is to ensure the following qualifications of foreign invested
entities operating medical consultation and treatment services:
- qualified executive managers, skilled staff  and sufficient investment capital;
- orthodox  and modern diagnostic, treatment and caring methods which can ensure the safety
of patients;
- adequate infrastructure, modern and updated facilities which can respond to the demand of
patients.
For more details, please see the attached existing regime on trade in services in the format of
WT/ACC/5 (WT/ACC/VNM/5).
8. Legal services:
The practices of foreign law firms in Vietnam shall be subject to specific laws, such as Decree
No. 42/CP dated 8 July 1995 promulgating the Regulations on Legal Consultancy Services
Provided by Foreign Law Firms in Vietna m and Circular No. 791-TT-LS-TVPL dated
8 September 1995 issued by the Ministry of Justice which is available in the Secretariat
(Accessions Division, Room 1126) for consultation.
At present, application procedures to establish branches of foreign law firms are applied
uniformly in Vietnam.WT/ACC/VNM/3/Add.2
Page 43
Application procedures to establish branches of foreign law firms in Vietnam must be
completed as follows:
- the two sets of documents must be submitted to the Ministry of Justice.  Each of them must
include the following documents:
- an application to establish a branch of foreign law firm in Vietnam must be signed by
the leader of the foreign law firms,
- a copy of the charter or documents necessary to evidence the legal establishment and
operation of the foreign law firm,
- a profile of the operations of the foreign law firm,
- reports on the financial position of the foreign law firm for the previous two years,- a list of the foreign lawyers to be employed in the branch, summaries of their
professional and personal records, and copies of their practising certificates,
- the power of attorney authorising the foreign lawyers to manage and operate the
branch,
- the operational plan for the branch,- the list of foreign clients carrying on business and investment activities in Vietnam.
Within sixty (60) days from the date of due receipt of the application, the Ministry of Justice
shall consider the application and make a decision as to whether to issue a licence or to refuse the
application.
A licence shall take effect as of the date of signing.Within sixty (60) days from the date of issuance of a licence, the branch of the foreign law
firm must register its practice at the Department of Justice of the province or city under central controlin which its head office is located.
Upon registration, the branch of the foreign law firm must present its licence to establish the
branch and a copy of office rental contract.
Within fifteen (15) days from the date of receipt of complete and proper documentation the
Department of Justice must complete registration procedures and issue a certificate of registration ofpractice to the branch.
The branch of the foreign law firm shall only be permitted to operate as of the date of
registration of practice.
Within fifteen (15 ) days from the date of registration of practice, the branch of the foreign
law firm must announce the establishment of its branch in five (5) consecutive issues of a newspaper
in Vietnam.
Please see the existing regime in the format of WT/ACC/5 (WT/ACC/VNM/5) for the details
of national treatment and MFN applied in the fields of services.
9. Tourism services:
There is no difference in the procedures of registration and business licensing applied for
foreign suppliers and domestic suppliers in the field of tourism. Those procedures have been improved
towards simplification and facilitation.WT/ACC/VNM/3/Add.2
Page 44
Question 548
VI.2(b) refers to "prosecution, arbitration and/or administration procedures concerning
administrative decision on trade and services".
Could Vietnam provide some detail regarding the administrative sanctions applied by
authorities such as : Chairpersons of People's Committees; inspectors from the State, ministries
and government agencies; and taxation and customs offices?
Answer
1. Forms of fines and penalties:
The forms of fines and penalties applied in the case of administrative contravention stipulated
in the Ordinance dated 6 July 1995 are as follows (Article 11):
(a) For each contravention, the individual and/or organisation committed shall be subject to the
following forms of penalties:
- warning;
- financial penalties.
(b) Pursuant to the nature and seriousness of the contravention, individual and/or organisation
committed  is also subject to additional penalties as follows:
- withdrawal of licences;
- confiscation of exhibits and means used at the time of and for the contravention.
(c) Apart from the above-mentioned fines provided in section 1 and 2 of this Article, any
individuals or organisations which have committed administrative contravention may
additionally be subject to one or several forms of penalty as follows:
- an obligation to restore damages to the position existing before the contravention was
committed or to cancel the project that was illegally implemented;
- an obligation to apply measures to remedy the environmental pollution, and disease caused by
the contravention;
- an obligation to compensate for the damages caused by administrative contravention in the
amount of VND 1,000,000;
- an obligation to destroy items harmful to human health or the national culture.- imposition of fines and penalties for the administrative contravention is stipulated in the legal
documents governing administrative fines and penalties.
2. The People's Committees at all levels have the following power to deal with administrative
contravention:
(a) the Chairperson of the People's Committees of small towns and villages have the power to
(Article 26):
- impose  warning fines;
- impose fines of up to VND 200,000;
- confiscate all exhibits and means used relating to the administrative contravention up to
VND 500,000;WT/ACC/VNM/3/Add.2
Page 45
- make decisions to impose obligations to compensate for damages of up to VND 500,000
caused by administrative contravention;
- request for restoration of damages to the position existing before the contravention was
committed;
- terminate operations that result in environmental pollution, spread of disease and noise; or- destroy items harmful to human health.
(b) the Chairperson of the People's Committees of districts and towns under provincial authorities
have the power to (Article 27):
- impose warning fines;
- impose fines of up to VND 10,000,000;- make decisions to impose additional penalties (w ithdrawal of licences, confiscation of exhibits
and means used for contravention) and measures provided in paragraph 3, Article 11
(mentioned above) except for the power to withdraw licences granted by the higher level
bodies.  In this case, the Chairperson of People's Committees of towns, districts will make
decision to stop the contravention and send the proposal for licence withdrawal to thecompetent governmental bodies.
(c) the Chairperson of People's Committees of cities and provinces under central control have the
power to (Article 28):
- impose  warning fines;
- impose fines of up to VND 100,000,000;
- make decisions to impose additional fines and measures stated in paragraph 3, Article 11 of
this Ordinance, except for the power to withdraw licences granted by higher level bodies.  In
this case, the Chairperson of the People's Committees of cities or provinces will makedecision to stop the contravention and send a proposal for fines and penalties to competent
governmental bodies (for example, medical line inspectors, financial inspectors, banking
inspectors, etc.).
(d) a line inspector, in the exercise of his official duties has the power to:- impose warning fines;
- impose fines of up to VND 200,000; or
- confiscate all exhibits and means used relating to the administrative contravention up to
VND 500,000 and may impose the measures provided for in paragraph 3 of Article 11
(mentioned above).
(e) the head of line Department of Inspection has the power to:
- impose warning penalties;
- impose penalties of up to VND 10,000,000; and
- withdraw licences granted by bodies under its control; impose other measures stated in
paragraphs 2 and 3 of Article 11 of this Ordinance.
(g) the head of the Line Ministry's Inspection Body has the power to:- impose warning penalties;
- impose penalties of up to VND 20,000,000; or
- withdraw licence granted by bodies under its control; impose other measures stated in
paragraphs 2 and 3 of Article 11 of this Ordinance.WT/ACC/VNM/3/Add.2
Page 46
3. The Customs bodies  have power to impos e  the following penalties (Article 30):
(a) the Chiefs of Customs Teams have the power to impose the following penalties:- warning penalties; and
- penalties of up to VND 200,000.
(b) the Chiefs of Province's Customs Inspection Teams, Chiefs of Frontier Passage Customs
Teams have power to impose the following penalties:
- warning penalties; and
- penalties of up to VND 2,000,000; or- confiscation of all exhibits and means used for the contravention up to VND 20,000,000.
(c) Directors of Province's Customs Bodies have  the power to impose the following penalties:
- warning penalties;
- penalties of up to VND 2,000,000; or
- withdrawal of licences under their control; confiscation all exhibits and means used relating to
the administrative contravention and destruction of items harmful to human health or harmful
cultural products.
Decree No. 16/CP dated 20 March 1996 of the Government provides Procedures on
Administrative Penalties for Customs Breaches in which it is stated that customs officers have power
to impose the following penalties (Articles 16,17):
Article 16:Chief of Customs Professional Teams can impose the following penalties:
- warning penalties;
- penalties of up to VND 200,000.
Chief of Frontier Passage Customs, Chief of Inspection Teams of Customs Department of
provinces or cities, Chief of Inspection Team s under Anti-smuggling Inspection Department of
General Department of Customs have the power to impose the following penalties:
- warning penalties;
- penalties of up to VND 20,000,000;- confiscate all exhibits and means used  for and directly related to the breach costing up to
VND 20,000,000.
Head of provincial department of customs directly under central customs authorities shall
have power to impose the following penalties:
- warning penalties;
- penalties of up to VND 20,000,000;
- confiscate all exhibits and means used for and directly related to the contravention and
destruction of items harmful to human health and harmful culture products;
- withdraw import-export licence as stipulated in the Decree.WT/ACC/VNM/3/Add.2
Page 47
Article 17:
- In respect of administrative breaches subject to a fine exceeding VND 20,000,000, Head of
Customs Department of cities or provinces shall forward the file  together with exhibits or
means used for the breach to People's Committees of the cities or provinces under centralauthorities dealing with offenders for fines and penalties' decision. At the same time Head of
Customs Department of cities or provinces must notify the Head of General Customs
Department about this case;
- local customs office of area where contraventi on of customs regulations occurs (in land or in
special economic zones of Vietnam) has the power to impose fines and penalties pursuant to
its competence as stipulated in the Decree;
- in national border points where there are not customs offices, the head of frontier army units
located in that area have power to determine the forms of fines imposed to the administrative
breaches as stipulated in the Article 8 of this Decree;
- economic police, market control organisations while discovering illegal imported, transit,
temporary admission and re-exported goods consumed in Vietnamese market have power to
impose fines and penalties as stipulated in the sub-clauses (a), (b), (d), (e), of paragraph 3,
Article 12 of this Decree, fines may range from VND 5,000,000 to 10,000,000 based on the
seriousness of contravention.
4. The powers of the tax office to impose fines:(a) Article 32:
Tax officers shall have the power to impose:
- warning fines;
- fines of up to VND 100,000.
Head of tax offices shall have the power to impose:
- warning fines;
- fines of up to VND 200,000.
The head of a district level tax office shall have the power to impose:
- warning fines;
- fines of up to VND 2,000,000;
- confiscation of all exhibits and means used for the breach cost up to VND10,000,000.
The head of a municipal or provincial level tax office shall have the power to impose:
- warning fines;
- fines of up to VND 20,000,000;
- confiscation of  all exhibits and means used for the contravention.WT/ACC/VNM/3/Add.2
Page 48
(b) Decree No. 22/CP dated 17 April 1996 of the Government on administrative penalties in
taxation offences stipulated as follows (Article 17):
The tax officer in the course of carrying out his official duties shall have the power to issue a
warning or to impose a fine of up to VND 100,000 in respect of administrative offences in relation totaxation within the locality for which he is responsible for management.
The head of the local tax office or tax team shall have the power to issue a warning or to
impose a fine of up to VND 200,000 in respect of administrative offences in relation to taxation within
the locality for which he is responsible for management.
The head of a district level tax office shall have the power to:
- issue a warning or impose a fine of up to VND 2,000,000 in respect of administrative offences
in relation to taxation as stipulated in Articles 2, 4 and 5 of this Decree within the locality for
which he is responsible for management;
- impose a fine equivalent to the amount of tax evaded with respect to false declarations or tax
evasions as stipulated in Article 3 of this Decree;
- confiscate any physical evidence of or means used for administrative offences in relation to
taxation having a value of up to VND 10,000,000 in accordance with the stipulations inArticle 6 of this Decree.
The head of a municipal or provincial level tax office shall have the power to:
- issue a warning or impose a fine of up to VND 20,000,000 in respect of administrative
offences in relation to taxation as stipulated in  Articles 2, 4 and 5 of this Decree within the
locality for which he is responsible for management;
- impose a fine equivalent to up to three times the amount of tax evaded in the case of false
declarations or tax evasions as stipulated in Article 3 of this Decree, and in particular, up to
five times the amount of tax evaded in the case of import or export duties;
- confiscate the physical evidence of or means used for administrative offences in relation to
taxation.
The head of a district, municipal or provincial level tax office shall have the power to issue a
penalty decision in respect of any breach stipulated in paragraph 2 of Article 4 of this Decree.
5. Administrative penalties in relation to legal consultancy practices as stipulated in the
Regulations issued with Decree No. 42-CP dated 8 July 1995:
(a) Article 39:
Any foreign organisation or individual illegally providing legal consultancy services in any
way in Vietnam shall be subject to a fine of up to  twenty thousand (20,000) United States' Dollars and
shall be compelled to cease carrying on such activities; if the breach is committed again, a fine of
twice the previous amount shall be imposed, all benefits illegally earned from the provision of thelegal consultancy services shall be confisca ted, and all activities shall be terminated.WT/ACC/VNM/3/Add.2
Page 49
(b) Article 40:
Any branch of a foreign law firm which breaches the provisions of these Regulations shall,
depending on the seriousness of the breach, be dealt with as follows:
- in cases where legal consultancy services are provided without registration of the practice, a
fine of ten thousand (10,000) United States' Dollars shall be imposed;
- in cases where legal consultancy services are provided in a field not specified in the licence, a
fine of seven thousand (7,000) United States' Dollars shall be imposed; if the breach is
committed again, temporary suspension or withdrawal of the licence shall be applied;
- in cases where there is a failure to comply with the decisions of an authorised State inspection
or investigation, a fine of five thousand (5,000) United States' Dollars shall be imposed; if a
second breach is committed, a fine of twice the previous amount shall be imposed in addition
to temporary suspension of business; if a third breach is committed, withdrawal of the licence
will occur;
- in cases where there is a breach of other provisions of these Regulations, a fine of between
two thousand (2,000) United States' Dollars and five thousand (5,000) United States' Dollars
shall be imposed; if a second breach is committed, a fine of twice the previous amount shall
be imposed.
(c) Article 41:
Any foreign lawyer who breaches any provision of these Regulations shall, depending on the
seriousness of the breach, be subject to a fine of up to five thousand (5,000) United States' Dollars andshall be suspended temporarily from practising or prohibited from providing legal consultancy
services in Vietnam.
(d) Article 42:
The Ministry of Justice shall have the power to deal with breaches as follows:
- to suspend temporarily the operations of branches of foreign law firms or to suspend foreign
lawyers from practising;
- to withdraw the licences of branches of foreign law firms or to prohibit foreign lawyers from
practising;
- to impose a fine of five thousand (5,000) or more United States' Dollars.
(e) Article 43:
People's Committees of provinces and cities under  central control shall have the power to
impose fines of up to five thousand (5,000) United States dollars for breaches of these Regulations.
Note:  Decree No. 42/CP dated 8 July 1995 is being reviewed for amendments and/or addendum.
Question 549
Section VI.2(c) refers to minimum registered capital requirements, professional qualification
requirements for registration of licensing services supplier, a prohibition on foreign
representative office conducting business operations in Vietnam, and staff recruitment and bank
account restrictions on representative offices in some cases.WT/ACC/VNM/3/Add.2
Page 50
(a) Could Vietnam supply more detail on all th ese requirements on restrictions relating the
information specifically to each service sector?
(b) Could Vietnam provide an update on its po licy to regulate the establishment of branches
of foreign companies?
Answer
1. Regulations on establishment of foreign representative office:
Decree No. 82-CP dated 2 August 1994 issued by the Government of the Socialist Republic of
Vietnam and Regulations on Establishment and Operation of Representative Office of ForeignEconomic Organization in Vietnam, stipulate the detailed requirements for establishment of
representative offices of foreign economic organizations.
(a) A foreign economic organization shall be considered for the issue of a licence to establish a
representative office if it satisfies the following conditions:
- it is established in accordance with the laws of its own country;
- it has been operating for at least five years; and
- it has feasible investment or commercial projects with Vietnamese parties the implementation
of which will assist the economic and commercial development of Vietnam.
For a foreign economic organization which applies for the establishment of a representative
office to implement an investment project with a capital value of
ten (10) million United States' Dollars or more, or to facilitate the implementation of contracts relating
to the import of goods produced or processed in Vietnam, there is an entitlement to a reduction of theconditions stipulated in sub-clause 2 of this Article and priority with respect to the issue of a licence.
(b) The scope of activities of a representative office of a foreign economic organization in
Vietnam may include the following:
- formulation of projects or programmes relating to economic, scientific, and technical
co-operation with Vietnamese parties;
- supervision and control of the implementation of economic, commercial, scientific, and
technical contracts signed with authorized Vietnamese businesses in accordance with the law
of Vietnam;
- being not permitted to operate business directly, provide services, or collect money in any
form in Vietnam; being not permitted to sign economic or commercial contracts with
Vietnamese businesses if they do not have the legal authority from the proprietor or the
managing director of the foreign economic organization concerned.
The "Regulations on the Establishment and Activities of Representative Offices of Foreign
Economic Organizations in Vietnam" does not limit th e employment or number of staffs (foreign or
Vietnamese) working at the representative office.
Representative offices are allowed to open a current account (in foreign currency or
Vietnamese currency originating from foreign currency) at a bank which is established and operated incompliance with Vietnamese law, in order to pay administrative costs; the representative office must
not use this account for business purposes, profit-making service activities or as an intermediary
account (to deposit Vietnamese Dong into the account for conversion into foreign currencies for the
purpose of transfer abroad or payment for commodities bought in Vietnam).WT/ACC/VNM/3/Add.2
Page 51
2. Regulations on the establishment of foreign branches in Vietnam:
The Commercial Law which was passed by Legislature IX of the National Assembly of the
Socialist Republic of Vietnam at its 11th session on 10 May 1997 and came into effect on1 January 1998 regulates the establishment of branches of foreign companies in Vietnam as follows:
"A branch in Vietnam of a foreign business entity is an affiliated entity of that foreign
business entity, which is established and conducts the business in Vietnam after approval by
the Vietnamese Government".
(a) Branches of foreign business entities in Vietnam have the right to:- conduct commercial activities as stipulated in their licences;
- rent offices and residential houses and lease or purchase necessary equipment and facilities
required for the operations of branches;
- employ Vietnamese and foreigners to work fo r the branches in accordance with the law of
Vietnam;
- carry out transactions and enter into commercia l contracts in Vietnam in accordance with the
scope of operations specified in their licences;
- open accounts in Vietnamese Dong and foreign currency at banks which are licensed to
operate in Vietnam;
- import necessary facilities for their operations and pay duties in accordance with the law of
Vietnam;
- transfer profits abroad in accordance with the Law of Vietnam; and
- have seals bearing the names of the branches in accordance with the Law of Vietnam.
(b) Branches of foreign business entities in Vietnam are obliged to:
- comply with the Law of Vietnam;
- register, declare and pay tax, fees and charges in accordance with the Law of Vietnam;
- adopt the accounting systems stipulated by the Law of Vietnam; where it is necessary to adopt
a different commonly used accounting system, the approval of the Ministry of Finance must
be obtained; and
- report on their operations in accordance with the Law of Vietnam.
At present, the Vietnamese Government is considering establishing the detailed regulations
guiding the implementation of the Commercial Law in respect to branches of foreign merchants in
Vietnam.
Please see also the existing regime on trade in services in the format of WT/ACC/5
(WT/ACC/VNM/5).
Question 550
Does Vietnam plan to liberalize inland transportation?Answer
The Vietnamese Government encourages both domestic and foreign investment in the
domestic transport sector.WT/ACC/VNM/3/Add.2
Page 52
Foreign investors may invest in inland transport with certain limitations.  However, a plan for
liberalization of this sector is not yet developed.
Please see also the existing regime on trade in services in the format of WT/ACC/5
(WT/ACC/VNM/5).
Question 551
The Memorandum (WT/ACC/VNM/2) does not specifically address professional services in
detail. Regulation reforms under way in Vietnam are welcome but we would like to know
whether Vietnam plans to review the following areas, about which we have concerns. Could
Vietnam provide information on the reforms under way of planned for each if these areas?
- accounting and auditing standards;
- the inability of foreign accounting firms to solely audit joint-venture companies
(although they are permitted to audit 100 per cent foreign companies);
- the imposition of an 8 per cent withholding tax on foreign accounting firms;- the inability of foreign lawyers to practice international and third-country law;
- the lack of clear legislation and legal infrastructure in relation to foreign direct
investment;
- the lack of recognition of qualifications for engineers and architects and their inability to
sign off on drawings;
- the inability to establish a branch office of foreign-owned professional firm;
- the initial start-up costs of establishing in Vietnam which can not amount to
US$ 1-2 million;
- difficulty in obtaining local bank finance.
Answer
1. At present, Vietnam is studying developing and issuing the Vietnam National Auditing
Standards based on the Vietnamese laws and the well-recognized international standards.  From 1999
on, Vietnam will start enacting the Vietnam National Accounting Standards.
2 The Law on Foreign Investment in Vietnam does not limit foreign auditing companies to
operate within  joint-ventures or 100 per cent fo reign capital companies.  Only foreign auditing
companies having permits to legally operate in Vietnam are allowed to audit in foreign capital
enterprises in Vietnam.
3. Auditing companies which are allowed to operate in Vietnam in compliance with the Law on
Foreign Investment in Vietnam must pay the following duties:
- profit tax of 20 per cent;
- the tax on profit remittances with the following rates:
- 5 per cent in cases where the legal capital of foreign enterprise is more than
US$10 million,
- 7 per cent in cases where the legal capital of foreign enterprise is from US$5 to
10 million, and
- 10 per cent in cases where the legal capital of foreign enterprise is less than
US$5 million.
4. According to the regulations and laws of Vietnam, foreign lawyers of branches of foreign law
firms will be permitted to advise on foreign laws and international law in the fields of business,WT/ACC/VNM/3/Add.2
Page 53
investment and commerce only; and are not permitted to advise on Vietnamese laws or to participate
in the capacity of legal counsel or representative of any client in any proceedings before the courts of
Vietnam.
In business activities, branches of foreign law firms in Vietnam are permitted to sign
co-operation contracts for each case with Vietnamese law consultancy companies to implement advice
on Vietnamese law.
5. In the process of economic transition, the legal system has not avoided error in some cases but
in implementation, Vietnam will draw on past experience to amend, supplement and improve the
quality of legal documents.  With regard to the Law on Foreign Investment in Vietnam, Vietnam has
twice amended this Law in 1990 and 1992 before it was replaced by a new Law on ForeignInvestment in Vietnam in 1996.  Transparency, facilitation, simplification of procedures are great
concerns of the Government.
For any matter related to foreign capital investment projects which are not regulated by
Vietnamese law, Vietnam permits the application of international practice and custom.
6. Architectural designs for construction projects must be approved by Government authorities.
Such designs may be drawn up by any architect or professional company but must satisfy all
requirements of  the Vietnam Construction Standard System.
7. The Commercial Law which came into effect on 1 January 1998 allows foreign companies to
open their commercial branches in Vietnam. Regulatory documents guiding the implementation of the
Commercial Law are now under preparation.
8. At present, there is no regulation which limits initial start-up capital to more than
US$1-2 millions.  However, the current accounting regime regulates specifically the costs to be
considered as establishment cost.
Question 552
Could Vietnam explain the regulations in supply of professional services (such as accounting,
legal, engineering and architecture) to governmental agencies?
Answer
1. Architecture services:
A foreigner willing to undertake professional architectural designs for construction projects
must be a resident in Vietnam. Project architectural plans drawn up  by a foreigner must be examined
by at least one Vietnamese architect in chief  to en sure the conformity of the plan with regulations and
standards of construction in Vietnam.
Foreign tenderers for supplying consultancy and design services must make application for a
permission for each construction project in Vietnam after gaining award of contract or being selected
for contract implementation.
2. Legal services:
There is no specific regulation on the supply of legal consultancy services of Vietnamese and
foreign companies;  "Clients" of Vietnamese lawyers organizations and branches of foreign law firms
may include Vietnamese government bodies.WT/ACC/VNM/3/Add.2
Page 54
In practice, these organizations have been supplying consultancy services to Vietnamese
Government bodies.
2.  Policies Affecting Trade in Services
(a) Government departments, agencies, professional associations or other bodies with
authority or a role relevant to the conduct of service activities
Question 553What is the scope of legal services that is allowe d for a foreign lawyer?  What is the limitation of
his/her activities as a foreign lawyer?
Answer
Foreign lawyers who are employees of branches of foreign law firms are permitted to advise
on foreign laws and international law in the fields of business, investment and commerce only but are
not permitted to engage in the following:
- provision of legal advice on the laws of Vietnam which include:
- explanation and interpretation of provisions of the laws of Vietnam,
- provision of legal opinions on the application of the laws of Vietnam,
- formulation of contracts and other documents to which the laws of Vietnam are
applied,
- other forms of legal advice on the laws of Vietnam, or- participation in the capacity of legal counsel or representative of any client in any
proceedings before the courts of Vietnam.
At present, two legal documents directly regulate legal consultancy service practices in
Vietnam of foreign law firms in general and foreign lawyers in particular.  Those are Decree
No. 42/CP dated 8 July 1995 issued by the Government Promulgating Regulations on Foreign Law
Firms' Practices in Vietnam  and Circular No. 791 LB TT/LS-TVPL by the Ministry of Justice dated8 September 1995 Providing the Guidelines for the Implementation of the Regulations on Foreign
Law Firms' Practices in Vietnam.
According to these legal documents, lawyers of foreign law firms practising in Vietnam must
satisfy the following conditions:
1. having provided legal consultancy services for five or more years in a foreign law firm;
2. being not subject to criminal prosecution, presently serving a sentence, or having a current
criminal conviction; and
3. being of goodwill towards the State of Vietnam.
If a foreign lawyer meets all the above requirements, he is able to practice as a legal
consultant in Vietnam at a branch of foreign law firm.
Question 554
Section VI.2(a), paragraph 4 (WT/ACC/VNM/2) refers to Appendix 6 (the list of legal
documents applying to trade in services).  What  are the names of the legal documents relating to
trade and investment in telecommunications?WT/ACC/VNM/3/Add.2
Page 55
Answer
Please see the answer to question 545 and Annex 2 of document WT/ACC/VNM/3/Add.1.
Question 555
What kinds of telecommunication services are foreign companies permitted to provide in
Vietnam?
Answer
Foreign companies are not permitted to provide telecommunication services in Vietnam.
Question 556
What are the licensing processes regarding telecommunications services?
Answer
As foreign companies are not permitted to provide telecommunication services in Vietnam,
licensing procedures do not currently exist.
Question 557
Are there limits to the level of foreign ownership of telecommunications services?Answer
Please see the answers to questions 538, 539, 540, and 556.
As mentioned above, foreigners are not permitted to provide or engage in telecommunication
services in Vietnam.
Question 558
Please provide references for all existing policies on service activities, particularly relating to
foreign service providers, which have been set out by relevant line ministries and where they
have been published.
Answer
Please see Annex 2 (WT/ACC/VNM/3/Add.1)  and the answer to question 545.
Question 559
Do the provincial People's Committees have concurrent authority with the Central Government
for the management of services activities, or is the authority delegated from the Central
Government?
Answer
The Government is the supreme legal enforcement (executive) body.WT/ACC/VNM/3/Add.2
Page 56
Local governments administer all activities within localities authorised or delegated by the
Central Government.  Local bodies specifically implement all decisions by the Central Government
but must not contravene decisions by the Central Government.  They must also strictly comply with
directions and administrative guidance by the Central Government.
Please refer to the answer to question 173 (WT/ACC/VNM/3).
According to the rules for approval for project documents, if a development project falls
within the jurisdiction of the Central Government, it must be approved in principle by the local
government.  An opinion of the local government on its conformity with the general plan of the area
having such project and the amount of the land rental rate to be applied must be provided before
submitting the proposal to the Central Government.
(c) Provisions, including those in intern ational agreements, concerning qualification
requirements and procedures, technical standards and licensing and/or registration
requirements for the supply of  services
Question 560
For each of the past three years, how many foreign companies or individuals applied for
registration or licensing for supply of services and the number of such requests that were
approved. For each of the past three years, ho w many foreign companies or individuals applied
to establish a representative office or to conduct business operations in Vietnam, and the
number of such applications that were approved?
Answer
1. Investment project licences in three previous years:
(US$1,000)
1995 1996 10 months in 1997
Projects in service area applying for
investment permitsNumber 57 41  20
Invested capital 1586 4462 270
Number of permits granted Number 62 30 23
Invested capital 2667 4025 600
2. Number of permits for establishment of foreign representative offices granted in three
previous years:
Total Services
1995 493 140
1996 427 87
1997 335 69
Question 561
For each of the past three years, please provid e the number of foreign companies or individuals,
broken down by service sector, that received pr eferential tax or tariff treatment not available to
domestic companies or individuals.WT/ACC/VNM/3/Add.2
Page 57
Answer
Foreign investors are granted the following preferential treatment:
Profit tax: enterprises with foreign-owned capital and foreign parties to business co-operation
contracts shall be subject to profits tax at a rate of less than 25 per cent on the profits earned (the rates
of 10, 15, 20 per cent may be applied) excluding petroleum, scarce resources exploitation, insurance
services and auditing services sectors;  Meanwhile, domestic investors may be subject to profit tax at a
rate of 25, 35 and 45 per cent depending on the industries.  In addition, foreign investors may be
granted profit tax exemptions for a maximum of 4 years and a reduction of 50 per cent income tax for
a maximum of the 4 following years.  Certain specially encouraged projects may be granted a profittax exemption for a maximum of 8 years.
- Imports duty exemptions are available in respect of the following items:
- equipment, machinery for the purpose of forming the fixed assets of an enterprise or
fixed assets for implementation of a business co-operation contract,
- specialized means of transportation which are used in an industrial assembly imported
into Vietnam for the purpose of forming the fixed assets of an enterprise with
foreign-owned capital, or forming the fi xed assets for the implementation of a
business co-operation contract and imported means of transportation used to transport
workers (24 or more seat vehicles; water transport vehicles),
- accessories, components, spare-parts, moulds, contrivance, sub-components attached
to equipment and machinery, specialized means of transportation and above transportdevices,
- materials imported for implementing BOT, BTO, BT projects, and- plant seeds, animal breeds, specialized medicinal plants are allowed to be imported
for implementing agriculture, forestry, fishery projects.
Decree No. 10-C/P dated 23 January 1998 allo ws one-time import duty exemption for
equipment imported by joint-ventures in the fields of hotels, office, apartments for rent, business
centers, technical services, supermarkets, golf courses, tourism, sports and recreational areas, clinics,
training, culture, finance, banking, insurance, auditing and consultancy services.
The above preferential treatment is available to all foreign investors.
Question 562
We regret any inconvenience caused by asking for a resubmission of services information, but
the submission of a response to WT/ACC/5 would greatly simplify and expedite the Working
Party review of the services regime. Please submit a response in the new format.
Answer
Please refer to the existing regime on trade in services in the format of WT/ACC/5
(WT/ACC/VNM/5).WT/ACC/VNM/3/Add.2
Page 58
Question 563
Under the present regulations of Vietnam, foreign companies are not allowed to conduct
business operations in Vietnam but they are allowed to sign and conclude contracts under
authorizations from parent companies. The rep resentative offices are also allowed for the
purpose of liaison market research and business facilitation.
Please describe the business operations that representational offices of foreign companies are
not permitted to conduct.
Answer
1. General regulations:
The establishment of representative offices of foreign companies in Vietnam is subject to the
Commercial Law and Decree No. 82-CP dated 2 Augu st 1994 issued by the Government providing
Regulations on the Establishment and Operation of Representative Offices of Foreign EconomicOrganizations in Vietnam:
- a representative office of a foreign economic organization is not permitted to operate business
directly, provide services, or collect money in any form in Vietnam.  The head of the
representative office and the employees of such office are not permitted to sign economic orcommercial contracts with Vietnamese businesses if they do not have the legal authority from
the proprietor of their firm or the managing director of the foreign economic organization;
- a representative office of a foreign economic organization in Vietnam shall not be granted any
immunity or privilege to which diplomatic representative bodies, foreign consulates andrepresentative offices of international organizations in Vietnam are entitled (Article 18,
Chapter III);
- a representative office is not allowed to conduct any business for profit (production or trading
of goods, or services), to sublet its office or residential premises, or to represent other
companies in Vietnam.
No provision in the Regulations on Establishment and Operation of Representative Offices of
Foreign Economic Organizations in Vietnam limits the recruitment or number of staffs (foreign or
Vietnamese) working at representative offices.
A representative office is permitted to establish a specific bank account (in foreign currency
or in Vietnamese currency which has a foreign source) at a bank which is established and operated in
accordance with the laws of Vietnam for the purposes of payment of administrative costs; this account
may not be used for the purpose of conducting business or providing services for profit, or as an
intermediary account (to deposit Vietnamese Dong into the account for conversion into foreign
currencies for the purpose of transfer abroad  or payment for commodities bought in Vietnam).
2. Health services:- a representative office is not allowed to conduct any business for profit, and
- not permitted to engage in sale of medicine.WT/ACC/VNM/3/Add.2
Page 59
3. Banking services:
Under Circular No. 01/NH-TT of the State Bank of Vietnam dated 28 April 1995, guidelines
are provided for implementing the regulations on establishment and operation of representative offices
of foreign economic organizations in Vietnam with regard to foreign banks and credit organizations.The scope of activities of representative offices is stipulated as follows:
- being not allowed to conduct business or provide any profit making services in any form in
Vietnam;
- being not allowed to sign economic contracts with Vietnamese economic organizations unless
they are legally authorized in writing by a competent person of the credit organization.  This
authorization must be reported and one copy of such authorization must be presented to theState Bank (certified by a notary public of its country of origin) for the purpose of
supervision.
Please refer to the answer to question 549.
Question 564
What is the status of the promulgation of a regulation on establishment of branches of foreign
companies in Vietnam?  What experimental step s have been taken, or are contemplated, with
respect to the licensing of a few branches now already operating in Vietnam?
Answer
The establishment of a branch of a foreign company in Vietnam is regulated in the
Commercial Law and the guidance for implementa tion is contained in other legal documents.
The Vietnamese Government has passed regulations on establishment of bank branches,
branches of foreign law firms and foreign auditing companies. Please see Annex 2
(WT/ACC/VNM/3/Add.1).
At present, there are certain branches in the above sectors which have been permitted to
establish and operate.
1. Legal services:
The legal documents currently regulating legal consulting activities of foreign law firms in
Vietnam include:
- Decree No. 42-CP dated 8 July 1995 by the Government providing Regulations on Practices
of Legal Consultancy Services of  Foreign Law Firms in Vietnam;
- Circular No. 791-TT/LSTVPL dated 8 August 1995 of the Ministry of Justice which provides
Guidelines for the Implementation  of  Regulations on Practices of Legal Consultancy
Services of  Foreign Law Firms in Vietnam. Foreign law firms must satisfy the following
requirements:
- to have a good reputation in legal consultancy services supply,
- to have goodwill toward the Vietnamese State,
- to have a business plan and binding commitments to fulfil obligations under the Laws
of Vietnam, and
- to have necessary materials for carrying on operations.WT/ACC/VNM/3/Add.2
Page 60
2. Banking services:
(a) At  the end of 1997, the State Bank of Vietnam had granted banking licences for 24 foreign
bank branches from 12 countries and territories.
(b) Under Circular No. 178/NH-TT of the State Bank  of Vietnam dated 5 October 1991 providing
Guidelines for the Implementation of Regulations on Foreign Bank Branches and Joint-
Venture Banks Operating in Vietnam, the scope of activities is stipulated as follows:
- the scope and activities of operation of a foreign bank branch or a joint-venture bank in
Vietnam are to be contained in the operating licence issued by the State Bank;
- a foreign bank branch or a joint-venture bank shall only be permitted to conduct the banking
transactions in foreign currencies and Vietnamese Dong which are stipulated in the operating
licence issued by the State Bank;
- during its operations, where there are requirements to expand its scope and activities, a
foreign bank branch or a joint-venture bank may apply to the State Bank for consideration and
approval of these additional activities;
- where there is a need for funds in Vietnamese Dong for the purpose of carrying on its
business, a foreign bank branch or a joint-venture bank may sell its foreign currency to the
State Bank, Commercial Bank or the domestic foreign exchange centres for Vietnamese Dong
as authorized by the State Bank;
- a foreign bank branch or a joint-venture bank shall be permitted to mobilize capital in
Vietnamese currency in accordance with the level and scope stipulated in the operating
licence issued by the State Bank.
Please refer also to the answer to question 549.
(d) Provisions governing the existence and opera tion of monopolies or exclusive service
suppliers
Question 565Please provide a translated copy of Decision No. 339/TTg, dated 4 August 1994 by Prime
Minister.
Answer
A translated copy will be supplied in the near future.
Question 566
Could Vietnam provide us with more detailed information on its import service sectors? Which
services are currently provided by monopolies?WT/ACC/VNM/3/Add.2
Page 61
Answer
Monopoly services are as follows:
1. Telecommunication services:  these services are supplied exclusively by State controlled
companies.
2. Transport services:  railway transport services are supplied so far by the State monopoly.3. Information and cultural services:- Fafilm Vietnam which is under Ministry of Culture and Information is the exclusive importer
and distributor of cinema films into Vietnam;
- books and newspapers import/export company (XUNHASABA) which is under Ministry of
Culture and Information is the exclusive importer of books, newspapers and magazines into
Vietnam.
In most of other services sectors, there exists participation by business from all sectors,
including foreign enterprises in accordance with the Law on Foreign Investment in Vietnam and other
applicable regulations.
Please refer also to the answer to question 567.
Question 567
Are there plans for reform or privatization of service sectors?
Answer
Vietnam is currently undergoing economic reform, including reform of the service sectors.
Privatisation of State-run enterprises involving in the service sectors is taking place within the
framework of the Government’s equitisation plan which is proceeding in a cautious manner, initiallyon an experimental basis and later on a sectoral and regional basis.  Such caution is dictated by the
need to ensure social and political stability during the process of economic reform.
Currently, the State only has monopoly or major roles in important service sectors such as  the
post office, telecommunications, air transportation, rail and sea transport, external financial andbanking services, electricity and water-supply, import and export of cultural products and
broadcasting.  Remaining service sectors are witnessing increased participation by private sector
suppliers.
Question 568
Does Vietnam have updated figures for the degree of privatization of service sectors?
Answer
Apart from the monopoly services mentioned above in the answer to questions 566 and 567,
enterprises under different forms of ownership are treated in an equal manner.  In many industries,private sector suppliers are major suppliers.  For example, in the area of inland domesticWT/ACC/VNM/3/Add.2
Page 62
transportation, the private sector dominates activity.  In the tourism sector, while statistics are not
complete, the hotel and restaurant sector is controlled by private sector interests in a proportion of 60
and 80 per cent, respectively.
The equitisation programme under which private interests may purchase shares in State-run
enterprises, has proceeded relatively slowly.  The Vietnamese Government has enacted Degree
No. 44/CP dated 29 June 1998 on transfer State-run enterprises to share companies to promote more
rapid equitisation of this sector.
Question 569
The Vietnamese Government shall grant priorities and privileges to domestic enterprises in
fields such as inland domestic transportation, broadcasting, television, maintenance and repair
of equipment for broadcasting and television operation, consultancy on Vietnamese laws, and
water and electricity supply.
(a) Does Vietnam have any plans to allow competition in any parts of service sectors which
currently are under government monopoly?
(b) What are the areas where privatization an d/or foreign competition is not allowed?
Answer
The Government of Vietnam does not plan to maintain monopolies in the national economy in
general and in the services sector in particular.  In sectors not subject to government monopoly where
competition is promoted, private investment is encouraged, provided that it does not interfere with
national security.  The inland domestic transportation sector is a clear example of a sector with a high
level of private sector activity.  Electricity and water supply were formerly State monopoly sectors but
certain foreign companies have recently been allowed to engage in build-operate-transfer operations.In the telecommunications sector, business cooperation contracts have been implemented with private
sector interests.
1. The equitization programme:
State-run enterprises are classified into two separate groups: public interest enterprises and
profit-oriented enterprises.  The first group will not be equitised immediately because the nature of theeconomic activity is not conducive to a high rate of return and in many cases, requires continuing
government subsidisation.  Equitisation has primarily taken place in the second group.  The
Vietnamese Government has permitted service sectors such as air transportation, sea transportation,
electricity and water supply which are currently monopolized by the Government to enter
joint-ventures with foreign economic operators in accordance with prevailing legislation and nationalpolicy.
2. Sectors where privatisation is prohibited:- reforestation and forest protection;
- exploitation of precious and rare minerals;
- production and sale of explosives, poisons and poisonous chemicals;- production and supply of addictive medicines;
- manufacture and repair of weapons, ammunition, equipment of national defense and certain
enterprises operating in the national defense sector in strategic areas;WT/ACC/VNM/3/Add.2
Page 63
- national electricity transmission grid;
- airports and large seaports;
- development of irrigation projects;
- commercial banking;
- insurance;- broadcasting, television, telecommunications and the national postal network;
- water supply in large cities;
- export-import and trade in certain strategic materials and commodities;
- printing of currency and certain valuable documents; and
- printing and publication services.
3. External competition:
Periodically, pursuant to its national development objectives and orientation, the Vietnamese
Government publishes a list of sectors which will enjo y investment incentives as well as those that are
closed to foreign participation.
(a) Transportation services:
Under current regulations, the Vietnamese Government is granting priorities, preferences to
the development of domestic companies operating in inland transportation in the sea, road, inland
water and rail sectors, ship agency, maritime brokerage. However both public and private enterprises
may compete freely in these areas.  Many transportation enterprises, under both public and private
ownership with foreign competition, are in operation, particularly in the area of exports-importstransportation.
The Vietnamese Government does not currently allow foreign ships to engage in domestic
transportation.  Joint-ventures with 51 per cent or more Vietnamese share are permitted to operate in
this sector.  Vietnamese enterprises held  monopoly in transportation agency services.
(b) Information-culture services:
The following fields are closed to both privatisation and foreign competition:  printing,
publishing and press. Radio and television broadcasting are reserved to the State and thus neither
privatisation nor foreign competition is allowed in these sectors.  However, foreign and domestic
private interests are permitted to engage in the supply, repair and maintenance of radio and televisionbroadcasting equipment.
(c) Investment:
The Vietnamese Government has enacted Decree No. 07/1688/ND-CP dated 15 January 1998
which provides detailed regulations pursuant to the Law on Internal Investment Encouragement, as
amended, and provides certain priorities and privileges to domestic companies in certain specified
fields.
(d) Telecommunications services:
Currently, there are three State-controlled companies in Vietnam providing
telecommunication services and no competition from private or foreign enterprises in this sector.
Foreign participation via business cooperation contracts (BCC) are permitted while joint-ventures areWT/ACC/VNM/3/Add.2
Page 64
not permitted. In the area of mobile telephone networks, there is only one company which has entered
a BCC with a foreign partner.
(e) Electricity and water supply services:
In the water supply and sewage sector, foreign participation is not per se prohibited although
foreign investors must comply with applicable provincial development plans as well as other
provisions of Vietnamese legislation.
In the electricity supply sector, foreign investors may participate in joint-ventures,
wholly-owned subsidiaries or under Build-Operate-Transfer contracts. However foreign investors
would also have to comply with the relevant  provisions of the Law on Foreign Investment.
(f) Legal consultancy:
Pursuant to Decree No. 42/CP dated 8 July 1995 dealing with the legal status of foreign law
organizations in Vietnam, foreign lawyers may only provide consultancy services in the area offoreign and international legislation in the fields of trade, investment and commerce but are prohibited
from providing advice in respect of Vietnamese legislation or to represent clients before the
Vietnamese courts.
4. The following fields are closed to foreign participation:- projects involving matters of national security, of defence or of public interest;
- projects that threaten Vietnamese cultural or historical relics and traditional customs;
- projects damaging the environment or involving the dumping of toxic waste from outside
Vietnam; and
- projects producing poisonous chemicals or employing toxic materials that are prohibited
under international agreements.
Question 570
Is there any modality of intervention in setting prices for monopolistic goods and services like
electricity, postage and telecommunication charges ?
In these specific areas, does Vietnam have plans to  change the supplier' status to allowing other
suppliers in any of the services mentioned  above?
Answer
Pricing of telecommunication services is under State control.
The Vietnamese Government currently has no plans to provide for additional foreign
participation in these sectors, apart from the existing regime of business cooperation contracts.
See also the answer to question 569.WT/ACC/VNM/3/Add.2
Page 65
Question 571
Could Vietnam clarify the Government's rules on the establishment of foreign companies - is it
the case that foreign service-suppliers are perm itted only to open representative offices, not
subsidiaries, and that establishment of foreign companies in Vietnam can take place onlythrough joint-ventures with Vietnamese companies?
Answer
1. The establishment in Vietnam of companies as foreign direct investments can take either of
two different forms:  joint-ventures or companies with 100 per cent foreign capital.  The trend in
recent years has been for such investment to take the form of 100 per cent foreign-owned companies.
2. The Commercial Law of May 1997 contains regulations  on permission for foreign companies
to establish branches in Vietnam.  The Government is to pass additional specific instructions in this
field.  Foreign service suppliers may open representative offices in those areas permitted by
Vietnamese law. However representative offices of foreign economic organizations, includinginsurance and auditing firms, may not carry out profit-making activities.
3. Foreign service providers may be granted investment licences for direct investments in
Vietnam in the service of high technology or services sectors where there is no existing domestic
capacity.
(a) Postal and telecommunications services:
Foreign participation is only permitted in the form of business cooperation contracts.
Joint-ventures are not permitted.
(b) Financial services:
At the present time, banks and credit organisations as well as financial leasing companies may
open representative offices or joint-ventures with Vietnamese partners or branches in Vietnam with
the permission of the State Bank.  Foreign insurance companies may carry out insurance operations
and foreign auditing firms may engage in auditing activities  in any of the form of joint-ventures, of
100 per cent foreign-owned company or of branches, not necessary through only joint venture with
domestic companies.
Accounting and auditing services: Up to now, be sides 5 existing 100 per cent foreign-owned
auditing companies are operating, Vietnam has not allowed to set up a  new foreign auditing company.
After the year 2000, depending on the development, the number of auditing companies can be
reviewed.
(c) Tourism:
In recent years, several joint-venture companies with foreign partners in the fields of hotel,
tourist transport and entertainment have been set up.
Please refer to Vietnam's existing regime of trade in services in the format of WT/ACC/5
(WT/ACC/VNM/5).WT/ACC/VNM/3/Add.2
Page 66
(d) Construction:
At present, foreign services suppliers in the construction sector are allowed to establish
representative offices in accordance with provisions of Vietnam Legislation but  not allowed to set up
branches in Vietnam.
The establishment of companies supplying construction and professional services can only be
implemented through joint-venture companies with Vietnamese partners. In certain special cases, the
Government may allow a 100 per cent foreign invested capital company to be set up.
Question 572
As mentioned in the text, qualifications requirements for registration or licensing vary
according to types of business.  Could Vietnam confirm that domestic and foreign companies
are required to meet the same requirements?
Answer
In general, there are certain differences in offering licences to foreign and domestic
enterprises. The specific requirements for selected industries are as follows:
1. Insurance:
Basically, conditions for giving qualification certificates and for doing insurance business
between foreign and domestic enterprises are all equal.  However, foreigners participating in insurance
enterprises, insurance joint-ventures, 100 per cent foreign invested capital enterprises or foreign
insurance branches must be legally operated organisations and in good financial status in their country
of origin. In addition to this, minimum legal capital requirement for insurance enterprises with
100 per cent foreign invested capital or foreign in surance branches are also higher than those of
domestic or joint-venture insurance companies.
Only application of foreign insurance compan y  who has representative office in operation in
Vietnam for not less than 3 years or may be taken into consideration for the  grant of qualification
certificate for doing insurance business.
2. Accounting, auditing:
The procedures for registration and setting up of an accounting and auditing company are
same for foreign and domestic companies.
The difference in procedures is the level of authority who grants operating licence.Domestic companies will be granted operating licence by the local People’s Committee where
the company registered.
Foreign company will be granted operating licence by the Ministry of Planning and
Investment.
Please refer to the answer to question 162.WT/ACC/VNM/3/Add.2
Page 67
Question 573
What is the present status of the labour legisl ation which will increase the flexibility of the
labour market in Vietnam?
Answer
The Labour Code approved by the National Assembly on 23 June 1994 and came into force
on 1 January 1995 regulates labour relations between employers and employees as well as
social-related matters.
The Labour Code protects working rights, intere sts and other rights of labourers.  Everyone
has the right to freely choose their work or occupation and to be trained as apprentices and to improve
their professional qualification without distinction of sex or nationality social classes or religions.
These provisions are intended to facilitate the development and improve the quality of labour
resources.  The Labour Code also protects the legitimate rights and interests of employers.
An employer is free to hire employees and assign jobs according to the business needs and has
the right to choose the method of remuneration, awarding, punishment and discipline in accordance
with the provisions of the Labour Code.  The State creates the mechanism through which users of
labour can put forth their recommendations to the State organs on labour-related issues.
In additions to provisions relating to rights and benefits accrued to employers and employees,
the Labour Code also defines the obligations of em ployers and employees with a view to ensuring a
healthy labour market.
The Labour Code contains provisions which encourage people to create jobs for themselves or
encourage businesses to create jobs through investing in production, creating large-scale employment.
The legal framework of the Labour Code provides a level-playing field for all economic
sectors and aims at facilitating economic development.  The Labour Code also separates function of
State management of labour from function of labour  management of businesses.  It confirms the
autonomy of businesses with regards to labour issues.
The Labour Code prescribes the legal environment for parties to equally negotiate and sign
individual and collective labour contracts with appropriate terms and conditions in relation to hiring,remuneration, etc.  It also sets out a flexible, appropriate labour dispute settlement mechanism to
protect the legitimate rights and interests of bot h employees and employers aiming at ensuring a
stable, harmonised labour relationship and open labour market.
The Job-centre system set up in most cities and provinces is a bridge between the supply and
demand of labour, and between employers and employees.
Question 574
Could Vietnam explain in detail the rules conc erning temporary residence and work permits for
foreigners?WT/ACC/VNM/3/Add.2
Page 68
Answer
(a) In cases where foreigners enter Vietnam with visa-exempted passports of the country which
has signed an agreement on visa exemption with the Vietnamese Government, a temporary
residence permit will be issued by the Government authority at an immigration check-pointfor a period which is in conformity with that mentioned in the Agreement and with
immigration purposes.
(b) In cases where foreigners without visa-exempted passports:- at presentation of passports or other passport-substitution papers, foreigners who enter
Vietnam will be granted a temporary residence permit by the Vietnamese Governmentauthority at the immigration check-point.  The duration of residence which is provided for in
the entry permit issued by the Immigration and Migration Control Department of the Ministry
of Police can not exceed 12 months pursuant to provisions set forth in paragraph 2(c) of
Article 9 of Decree No. 04/CP dated 18 January 1993 of the Government;
- foreign temporary resident in Vietnam wishing to extend residence permit or to change
registered purpose of residence (including expired or valid residence permit) must apply for
the permission from to the Immigration and Migration Control Department or the Immigration
and Migration Control Division of Provincial Police Department where they reside.  A letter
of invitation from a Vietnamese host organization may be required;
- in cases where a residence permit has expired without extension or is cancelled, foreigners
must depart from Vietnam despite their still valid migration-immigration visa;
- foreigners entering Vietnam to work or study for a long time (from 6 months upwards)
including: staff of branches, representative offices, foreign organisations, members of
Management Boards, Boards of Directors and regular staff of investment projects, co-
ordinators of international projects, long term lecturers at Vietnamese universities and
students are granted certificates of residence valid for not more than 12 months which may be
extended in accordance with the duration of  investment licences, studying period or work
contracts.
In cases where immigration visas of foreigners living in Vietnam expire, they do not need to
apply for visa extensions if the duration of their certificates of residence have been extended.
(c) Foreigners working in enterprises and organisations in Vietnam must have a licence granted
by the Ministry of Labour, Invalids and Social Affairs.
Question 575
Are these regulations all in the form of  laws  or do different ministries apply the law with
Decrees?
Answer
The rules concerning entry, residence and travel of foreigners are stipulated in both laws and
subordinate legislation namely: Ordinances, Decrees, Decisions of Minister, Ministerial Circulars, etc.WT/ACC/VNM/3/Add.2
Page 69
Question 576
The Memorandum states that foreign investment projects are subject to the regulation on
minimum wages, and in general, the minimum wages are higher than legal levels applied to
Vietnamese enterprises.
(a) Is there a requirement to employ Vietnamese citizens?(b) Are there any limitations for foreigners that may be employed in service sectors?
Answer
Article 25 of the Law on Foreign Investment in Vietnam stipulates that enterprises with
foreign-owned capital and parties to a business co-operation contract are entitled to recruit and employ
labour in accordance with their business requirements with preference being given to Vietnamese
citizens. Foreigners may only be recruited for jobs which require a level of technical and management
expertise which Vietnamese persons can not meet. Training of Vietnamese citizens as replacementsmust be undertaken.
Limitations in service sectors are described in the existing regime on trade in services in the
format of WT/ACC/5 (WT/ACC/VNM/5).
Question 577
Representative offices have for certain cases re strictive regulations on staff recruitment and
banking account of these offices.
(a) Could Vietnam specify these cases?
Answer
1 General regulations:
Recruitment of foreign staff by representative offices is subject to approval by the Ministry of
Trade.  For areas in which experienced and qualified Vietnamese are not available, there are no
restrictions on the number of foreign staff.
A representative office shall register with the People's Committee of the province or city in
which it is located with respect to foreigners coming  to Vietnam to work for such representative office
(both foreigners and Vietnamese nationals residing abroad) in accordance with the number stipulated
in the licence; and the employees recruited in Vietnam (including both Vietnamese citizens andforeigners residing in Vietnam) in accordance with the Labour Code of Vietnam.
A representative office is permitted to establish a payment bank account (in foreign currency
or in Vietnamese currency which has a foreign source) at a bank which is established and operated in
accordance with the laws of Vietnam for the purposes of payment of administrative costs; this account
may not be used for the purpose of conducting business or providing profit making services, or as an
intermediary account (to deposit Vietnamese Dong into the account for conversion into foreigncurrencies for the purpose of transfer abroad  or payment for commodities bought in Vietnam).
See also the answer to question 549.WT/ACC/VNM/3/Add.2
Page 70
Question 578
Could Vietnam provide specific information on its current situation vis-à-vis market access to
the different modes of transport and transport auxiliary services?
Answer
Market access to the different modes of transport and transport auxiliary services is subject to
provisions of the Law on Foreign Investment in Vietnam, decrees guiding implementation of this Law
and other regulations issued by Ministry of Transport, namely:
- foreign service providers are entitled to invest in sea, rail, road and inland waterway transport
services in form of joint-venture or business cooperation contract with a Vietnamese
enterprise (Decree No. 10/1998-ND-CP dated 23 January 1998);
- sea transport:  Foreign ships and boats shall be allowed to carry domestic goods in exceptional
cases upon approval by the Minister of Transport.
Vietnam gives preference to domestic enterprises for inland transportation as follows:
- inland waterway transportation:  Foreign ships and boats shall be allowed to carry goods
and/or passengers only upon approval by the Minister of Transport;
- ship chartering and maritime brokerage:  Forwarding and supporting services are currently
given to domestic enterprises;
- road transportation:  Currently no priorities are granted to domestic enterprises under
government regulations.  However, during evolution of foreign invested projects, suchpriorities may be given to domestic enterprises on a case-by-case basis;
- rail transportation:  Currently, all rail transport enterprises are State-owned enterprises.
Foreign invested projects may be considered on a case-by-case basis.
The above mentioned legislation may be modified in the future.  Vietnam is planning to
formulate Law on Road Transportation, Law on Inland waterways and Law on Railways.
Question 579
(a) Could Vietnam explain the current situ ation in each of the major sectors and
professional and business services - e.g. legal services, architectural services, accountingand auditing services, engineering services and medical services.
(b) Are foreign service suppliers in this areas permitted to enter the market in Vietnam ?
(c) What rules govern access to the market?(d) Are certain sectors reserved solely for Vietnamese nationals?WT/ACC/VNM/3/Add.2
Page 71
Answer
1. Legal services:
(a) a foreign law firm satisfying the following conditions are allowed to set up branches to
provide legal consultancy services in Vietnam:
- to have access a cluster of foreign clients carrying on business or investment activities in
Vietnam;
- to have a good reputation in providing legal consultancy services;
- to be of goodwill towards the State of Vietnam;
- to prepare a feasible operational plan and undertake to fulfil its obligations pursuant to the
regulations and laws of Vietnam; and
- possess physical establishment and facilities necessary for its operations.
Each foreign law firm may establish up to two branches in Vietnam.  Foreign law firms are
responsible for all operations of their branches in Vietnam.
The period of operation of each branch of a foreign law firm shall be five years, commencing
from the date of signing of the licence and renewable for a period of not exceeding  three years for one
exemption.
(b) Lawyers of a foreign law firm practising in  Vietnam must satisfy the following conditions:
- previous experience in providing legal consultancy services for five or more years in a foreign
law firm;
- not be subject to criminal prosecution, serving a sentence, or have a current criminal
conviction;
- be of goodwill towards the State of Vietnam.
Foreign lawyers of branches of foreign law firms are permitted to advise on foreign laws and
international law in the fields of business, investment and commerce only; and shall not be permitted
to advise on Vietnamese laws or to participate in the capacity of legal counsel or representative of any
client in any proceedings before the courts of Vietnam.
Branches of foreign law firms are permitted to enter into co-operation contracts with
Vietnamese legal consulting organizations on a case-by-case basis for legal advice on the laws of
Vietnam. Consultancy services on Vietnamese la ws must be provided by Vietnamese lawyers.
2. Medical services:
Foreign investments in the Vietnamese medical market are encouraged with no limitations. In
certain fields, for the purpose of promotion of domestic enterprises, foreign investors are subject to the
following regulations:
- diagnosis and medical treatment:  Foreign invest ment is allowed in the form of joint-venture
or 100 per cent foreign-owned capital.  Vietnam encourages projects of modern treatment
equipment, advanced technology, high expertis e  and discourage medical services without any
investing in medical bases and equipment.WT/ACC/VNM/3/Add.2
Page 72
3. Accounting and auditing services:
Foreign investors are, by law and in practice, given access to the Vietnamese market in the
form of 100 per cent foreign-owned enterprises or joint-ventures.
The applicable laws and legal documents are:  Law on Companies, Law on Foreign
Investment in Vietnam, Decree No. 07/CP of th e Government, Circular No. 22 dated 19 March 1994
of the Ministry of Finance.
In the field of auditing, there is no discrimination between Vietnamese and foreigners in term
of right of establishment, but different provisions are set.
4. Engineering services:
- the Circular No. 01/BXD-CSXD dated 15 April 1997 of the Ministry of Construction contains
provisions regarding the amount of annual turnover, commercial presence of foreign entities
and regulates market access conditions of foreign construction and engineering companies inVietnam;
- foreign engineering consulting firms are not allowed to provide services in relation to
topography, geological exploration and meteorol ogical and hydrographical surveys, except
required by the Vietnamese side;
- foreign engineering consulting firms are not allowed to provide services in relation to
technical surveys for design of urban and rural plans or sectoral master plans.
Other details relating to existing market access conditions will be provided in the format of
document WT/ACC/5 (WT/ACC/VNM/5) and the coming schedule of commitments.
Question 580
Are there sector-specific limits to the amount s of foreign investment for transport sectors?
Answer
Pursuant to Decree No. 10/CP, foreign invest ment in aviation, railway, maritime transport,
public  transport, port and air terminal building (except for BOT, BTO, BT projects which are under
specific regulations) are made in the form of joint-venture only.
Foreign investment in the transport sectors must also abide by the foreign investment
regulations of Vietnam.  Currently, it is provided that the foreign capital share in a joint-venture mustnot be less than 30 per cent of the total legal capital of the joint-venture.
For sea transport joint-ventures which wish to provide inland water transport, agent and
forwarding services and ship chandelling, the maximum limit on foreign capital in the legal capital is
49 per cent.
Please see also the answer to question 578.WT/ACC/VNM/3/Add.2
Page 73
Question 581
Do foreign suppliers receive national treatment in the transportation sector?Answer
No.  Foreign suppliers do not receive national treatment in the transport-sector.
Please see also the answer to question 578.
Question 582
People sharing the same profession are allowed to set up social organisations and operate under
its charter and programmes.  These organisations are given recognition by the State and
allowed to operate in conformity with laws and the Constitution.  Vietnam Lawyers' Bar
Association, Solicitors' Association, Vietnam Traditional Therapy and Medicine Association,
and Vietnam Journalists'  Association, etc. are examples.
(a) Is the recognition based on law and what is the procedure to be applied?
(b) Is the same procedure applicable to all pr ofessional services provided by foreigners?
(c) Is the procedure same for all different nationalities?
(d) Can foreigners join these Vietnamese associations?
Answer
1. The establishment and operation of social organizations (societies, clubs, associations, etc.) of
Vietnam are subject to the following legal provisions:
- Article 69 of the Constitution: "Citizens have the freedom to speech, press; have the right to
be informed, to assemble, to establish associations and to demonstrate in accordance with the
provisions of the law";
- Law No. 102-SL/L-004 of the Pr esident of the Democratic Republic of Vietnam dated
20 May 1957 on the Establishment of Associations;
- Decree No. 258-TTg of the Prime Minister dated 14 June 1957 contains the detailed
provisions for the implementation of Law No. 102-SL/L-004 dated 20 May 1957.
Pursuant to the Constitution and the Law on the Establishment of Associations, the State of
Vietnam has promulgated a number of legal docume nts regulating the organization and operation of
professional associations, e.g. the Ordinance on Legal Organizations which sets the procedures for theestablishment of Lawyers' Bar Associations in the provinces and cities under the Central Government,
and the Decree No. 08/1998/ND-CP dated 22 Janua ry 1998 of Government on Promulgating the
Regulation on Establishing the Foreign Association of Foreign Enterprises in Vietnam.
Question 583
Can foreign lawyers be full members of the Vietnam Lawyers' Bar Association?WT/ACC/VNM/3/Add.2
Page 74
Answer
At present, in Vietnam there are Lawyers' Bar Associations and the Vietnam Association of
Law-Practitioners. Lawyers' Bar Associations are pr ofessional organizations  of Vietnamese lawyers,
established in provinces and cities under the Central Government. Lawyers' Bar Associations arelaw-practising organization of Vietnamese lawyers.
The Vietnam Association of Law-Practitioners  is a nation-wide social and professional
organization comprised of all Vietnamese citizens who have been practising legal-related work in
Vietnam. The Vietnam Association of Law-Practitioners has branches in provinces, districts and at
Central Government bodies.
Members of the Lawyers' Bar Associations and the Vietnam Association of Law-Practitioners
must be Vietnamese citizens.
In Vietnam, there has not been an lawyers' bar association on a nation-wide basis. However,
Vietnam is drafting amendments to the Ordinance on Lawyers which includes provisions allowingpractising lawyers to establish professional associations in provinces and cities under the Central
Government.
Please see also the answer to question 582.
Question 584
Do foreign suppliers receive national treatment in the area of financial services?
Answer
Foreign suppliers of financial services are not accorded national treatment.
Question 585
Are there sector-specific limits to the amount s of foreign investment for financial services
sector?
Answer
The Law on Foreign Investment in Vietnam does not set limits to the amount of foreign
investment for financial service sector. However, restrictions on granting of licences may be applied
depending on the situation during the period concerned.
Question 586
Could Vietnam describe any laws, regulations or practices which limit the ability of foreign
and/or non-resident financial service providers to establish and/or to provide different financial
services?WT/ACC/VNM/3/Add.2
Page 75
Answer
These laws and regulations are referred to in the answer to question 545 and Annex 2
(WT/ACC/VNM/3/Add.1).
Under the current laws of Vietnam, foreigners and/or non-residents of Vietnam can only
establish commercial presence and/or provide insurance services through the following forms:
joint-venture, 100 per cent foreign-owned and branches of foreign insurance companies. The
application for establishment of joint-venture, 100 per cent foreign-owned and branches of foreign
insurance companies are approved on a case-by-case basis with due consideration to the level of
development of the Vietnamese insurance market.
In order to establish commercial presence and/or provide insurance services in Vietnam,
foreigners and/or non-residents of Vietnam are required to obtain the investment licence and a
certificate certifying that all criteria and conditio ns for operating an insurance business are satisfied in
accordance with the laws.
In respect of re-insurance services and insurance-brokerage services, foreigners and/or
non-residents of Vietnam may supply services dire ctly to Vietnamese insurance companies without
necessarily being commercially established in Vietnam.
Please see also the answer to question 484 and 485.
Question 587
Could Vietnam explain more about public transport sector services including rail transport?Answer
Public transport service sector includes the following services which are under the following
administration bodies:
- the Ministry of Transport is a Government agency which exercises State management over
activities relating to road, railway, inland waterway and maritime transportation. These are
sectors which serve public transport needs of the society;
- the Vietnam Road-Transport Department (VRTD) is an agency under the  Ministry of
Transport and is responsible for administering road transport;
- the Vietnam Inland Waterway Department (VIWD) is an agency under the  Ministry of
Transport and is responsible for  administering inland water transport;
- the Vietnam Maritime Transport Department (VMTD) is an agency under the  Ministry of
Transport and is responsible for administering maritime transport;
- the Vietnam Railway Union (VRU) is a busine ss unit under the Ministry of Transport and is
responsible for administering certain specialized activities;
- Public transport service sectors serve public transport needs of the society, including land,
railway, inland water, marine and air transport. The Ministry of Transport only exercises State
management over four areas: land, inland water, marine and railway transportation. By law,WT/ACC/VNM/3/Add.2
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all sectors of the economy are permitted to participate in all public transportation services. The
form of business enterprises which are currently operating in public transport include:
State-owned, joint-stock and limited liability companies, as well as co-operatives and
individuals. Foreign investors may also be accorded access to the public transport sector in
accordance with prevailing laws on foreign investment.
Question 588
What rules govern establishm ent in the road transport?
Answer
The rules governing establishment of enterprises in the road transport sector depend on the
form of ownership of the enterprise upon which relevant laws and regulations will be applied.  These
are contained in the following legislation:
- Law on State-Owned Enterprises;
- Law on Companies;
- Law on Private Enterprises;
- Law on Co-operatives;
- Law on Foreign Investment of Vietnam and Conditions on professional practice.
Question 589
Are foreign companies permitted to establish subs idiaries or invest in the transport sector?
Answer
Foreign companies are permitted to establish 100  per cent foreign-owned enterprise to provide
land and inland water transport service once approved by the Ministry of Transport.  Before the
Ministry of Planning and Investment considers such applications for the licence, the project must be
evaluated by the Ministry of Transport with consideration given to the consistency of the project with
the master plan, development needs, social and economic effects.
Pledging not to engage in domestic transportation is conditional before evaluating the
investment project and granting the investment licence for foreign companies that establishessubsidiary with 100 per cent foreign owned capital in Vietnam operating in the transport sector.
Foreign companies are allowed to establish branches (with 100 per cent foreign-owned
capital); invest in joint-venture enterprises; enter into a contractual business cooperation venture, or
invest in the form of BOT, BTO and BT in transport sector  in accordance with the prevailing laws ofVietnam.
Joint venture enterprises in maritime transportation whose foreign capital contribution is less
than 49 per cent of legal capital can participate in the areas of domestic transportation of goods,
shipping agency, import-export freight forwarding, and shipping chandelling.
Inland waterways transportation: foreign owned ships and boats are permitted to participate in
transportation of goods and passengers on Vietnam domestic routes only after receiving approval from
the Minister of Transport.WT/ACC/VNM/3/Add.2
Page 77
Please see also the answers to question 578 and 580.
Question 590
International payments for transactions of serv ices and other businesses must be made through
banks licensed by the State Bank for dealing with foreign exchange.
(a) Could Vietnam provide us the procedure to be used when applying for licence from the
State Bank?
(b) Does the same procedure apply for all foreig n banks  as compared to Vietnamese banks?
Answer
The procedures governing the grant of operating licences to foreign banks are implemented
under the Government Guidelines on Regulation of Branch of Foreign Banks and Joint-Venture Banks
which are operating in Vietnam promulgated in  conjunction with Decree No. 189/HDBT dated
15 June 1991 and Circular No. 178-NH/TT of the State Bank of Vietnam dated 15 October 1991
which provide further guidelines for the implementation of this Regulation.  The necessary forms and
procedures to apply for operating licences are provided in the Decree  and the Circular and are widely
available in legal texts on Vietnamese Banking Law.  Before applying for an operating licence,
foreign banks must complete procedures to obtain Approval in Principle because the State Bank must
review the current situation and legal status of the parent bank to determine whether in principle a
particular foreign bank may open a branch in Vietnam.
Under prevailing regulations of the State Bank of Vietnam, international payments for
services transactions and other businesses must be made through banks licensed by the State Bank for
dealing in foreign exchange.
Please see also the answer to question 547.
Question 591
What are the limits on the amount of fore ign currency revenues which individuals and
organizations are permitted to deposit in their own accounts at authorized banks? How is the
price determined for the sale of foreign curren cy deposits in excess of the allowable limits?
Answer
Decision of Prime Minister No. 396/TTg dated 4 August 1994 sets the limits on the amount of
foreign currency revenues which individuals and organizations are permitted to keep in their owndeposits accounts at authorized banks.  However, in reality such regulations have not been enforced by
the State Bank against any enterprise.  All foreign currency transactions between enterprises and
banks are effected using the business exchange rate announced publicly by commercial banks at the
time of the transaction.
Question 592
Please describe the rules applicable to the remittance of profits out of Vietnam, in foreign
currency, by foreign service providers.WT/ACC/VNM/3/Add.2
Page 78
Answer
Foreign service providers have the right to rem it profits out of Vietnam in accordance with the
Law on Foreign Investment in Vietnam.  A copy is available in the Secretariat (Accessions Division,
Room 1126) for consultation.
Please see also the answers to questions 149 and 150 in WT/ACC/VNM/3.
Question 593
How does the State Bank determine which banks or other institutions shall have access to the
foreign exchange market? Are foreign banks perm itted to trade on the inter-bank market? Are
any non-bank financial institutions permitted to trade foreign currency on the inter-bank
market? What are the limits, if any, on the size  of allowable foreign exchange transactions?
Answer
The establishment of a foreign exchange inter-bank market is intended to create an organized
market for foreign exchange trading among commercial banks authorized to deal in foreign exchange.
The State Bank of Vietnam (the Central Bank) acts as an organiser and market regulator by
intervening in the market to implement the m onetary and exchange policy of the Government.
Eligible participants in the market are those foreign exchange authorized credit institutions
which have good internal information systems connected to the State Bank of Vietnam and whichhave submitted an application for membership. They include:
- State-owned commercial banks;
- bank for Investment and Development;
- joint-stock commercial banks;- foreign bank branches operating in Vietnam; and
- joint-venture banks between Vietnamese and foreign partners operating in Vietnam.
That means non-financial and non-banking institutions are not permitted to participate in such
an inter-bank foreign exchange market.
The present number of participants in the foreign exchange inter-bank market is 58, of which
one is a joint-stock finance company.
The minimum volume for a foreign exchange transaction on the inter-bank market is
US$50,000 or equivalent.
Question 594
Trade related services policies :  (i) paragraph 5 on page 66 says that registration of some kinds
of services requires approvals from Prime Minister.  Could Vietnam explain what are the
requirement for the approvals?
Answer
Foreign investment enterprises are subject to the Law on Foreign Investment in Vietnam.
Pursuant to previous provisions of the law, foreig n investment enterprises were restricted in certainWT/ACC/VNM/3/Add.2
Page 79
trade service sectors such as buying goods for re-export, importing and exporting on assignment for
other enterprises, processing for re-export, and re-selling materials to other enterprises for the purpose
of export.  These sectors were mainly reserved to the domestic enterprises.  Under the effective
provisions of Decree No. 10/1998 ND-CP dated 23 January 1998 of the Government on Measures for
Encouragement and Guarantee of Foreign Direct Investment in Vietnam and the DecisionNo. 0321/1998/QD-BTM dated 14 March 1998 promulgatin g guidelines for the implementation of the
above Decree, foreign investment enterprises are given the same rights as domestic enterprises in the
above sectors.
Except for enterprises established pursuant to the Decision No. 90/TTg dated 7 March 1994
(on the re-organization of State-owned enterprises) and Decision No. 91/TTg dated 7 March 1994 (on
the pilot programme to establish the business corporations), prior approval of the Prime Minister isrequired for enterprises operating in the following fields:
- infrastructure construction of industrial zones and export processing zones; BOT, BTO and
BT enterprises;
- enterprises with legal capital of more than US$40 million operating in: electricity, mining,
petroleum, metallurgy, cement, chemicals, seaports, airports, cultural and tourist resorts and
real estate business;
- marine and air transport;
- post and telecommunications;
- culture, publishing, press, radio, television, training, scientific research, health care;
- insurance, finance, auditing;
- security, national defence; and- projects which use more than 5 hectares of urban land or more than 50 hectares of other land.
Question 595
Paragraph 3 on page 67 says "However, there are limits on the available amount of foreign
currencies". Is the limit consistent with Articles 11 (Payment and Transfers) and 12 (Restriction
to Safeguard the Balance of Payments) of GATS?
Answer
There are limits on the available amount of foreign currencies in organizations' accounts but
such limits are not inconsistent with Articles  XI and XII of GATS, as organizations making
international payments have the right to purchase fo reign currencies at banks for their requirements.
(d) Provisions governing the existence and opera tion of monopolies or exclusive service
suppliers
Question 596
VI.2(d) describes regulations applying to international payments.  We would like to be informed
in more detail of the limit on foreign currency permitted in bank accounts of individuals or
organizations receiving international payments , and the rules governing the manner in which
"exceeding amounts must be sold to bank and credit instructions".  Could Vietnam provide
information on the  "specific regulations" applicable to international payments to the maritimeindustry, aviation, postal services, insurance, foreign-invested enterprises. and "some particular
economic establishment authorized by Prime Minister"?WT/ACC/VNM/3/Add.2
Page 80
Answer
Please see the answers to questions 582 and 583.
Question 597
Pages 65-66 imply that foreign involvement in services is limited to joint-ventures or
representative offices. (The latter are unable to conduct business operations.)  Can Vietnam
provide details, on a sectoral basis of restrictions which apply on the form of foreign
participation in services?
Answer
In Vietnam, the service industry has been considered to be underdeveloped and unable to
compete with foreign services and service providers.  At present, a number of restrictions listed below
are still maintained:
1. Telecommunications:
Only BCC and representative office forms are allowed.
2. Tourism:
Foreign service suppliers are allowed to operate in the tourism sector only in the forms of
joint-venture and representative offices.
Existing restrictions include:
- travel joint-venture agencies: the foreign shar e in the joint-venture capital can not be than
more 49 per cent;
- the legal capital of the joint-venture must not be lower than US$1 million;
- the joint-ventures are allowed to operate inbound tourism only; and
- tourist guides must be Vietnamese nationals.
3. Culture and  information:
Foreign service suppliers operate in the fields mentioned in the answer to question 162 only in
the forms of BCC or joint-ventures.
The joint-venture form is prescribed for the fo llowing sectors: printing, packaging, marking,
word  processing, recreation centers and cinema construction.
The BCC form is prescribed for the advertising sector.
Apart from the specific forms mentioned above, foreign partners may be allowed to
participate in other forms of investment, depending on the particular sector and the project.
4. Legal:
Foreign law firms satisfying conditions stipulated by Vietnamese laws are able to open their
branches in Vietnam to provide legal consultancy services.  Under existing regulations, a branch is theWT/ACC/VNM/3/Add.2
Page 81
sole form for foreign law firms to operate in Vi etnam for the purpose of providing legal services.
Each foreign law firm can not open more than two branches.
Foreign law firms are responsible for the activities of their branches in Vietnam.
Branches of foreign law firm are  only entitled to operate in the fields specified in the licence
for establishment of the branches in Vietnam.
Please refer to the answers to questions 571, 579 and 586.
Question 598
Section VI.2(d) describes regulations applying to international payments. We would like to be
informed in more detail of the limit on fo reign currency permitted in bank accounts of
individuals or organizations receiving intern ational payments, and the rules governing the
manner in which "exceeding amounts must be so ld to bank and credit instructions". Could
Vietnam provide information on the "specific regulations" applicable to international paymentsto the maritime industry, aviation, postal services , insurance, foreign-invested enterprises. and
"some particular economic establishment authorized by Prime Minister"?
Answer
Since the issuance of Decision of the Prime Minister No. 396/TTg on amending and
supplementing a number of provisions on foreign exchange control dated 4 May 1994, the State Bankof Vietnam has not applied any measures requiring organisations to sell the exceeding amounts of
foreign currencies in their accounts to banks and credit institutions.
An uniformed regulation of international paymen t is applied to enterprises in the maritime
industry, aviation, post office, telecommunications, insurance, foreign-invested enterprises,  businessestablishments authorised by the Prime Minister and all other Vietnamese businesses.. On request,
they are also allowed by the State Bank of Vietnam to open offshore accounts.
Enterprises in the maritime industry, aviation, post office, insurance, Vietnamese businesses
established abroad for production and sales are permitted to transfer revenues in foreign currencies to
their offshore account.
Enterprises registered in Vietnam with foreign owned capital are permitted by the State Bank
of Vietnam to open offshore accounts solely for the purpose of receiving foreign loans.
(f) Provisions relating to international tran sfers and payment for current transactions of
services
Question 599With respect to investment related measures including acquisition of land, and access to and use
of public services (paragraph 2 on page 63, WT/ACC/VNM/2) are not there any cross-sectoral
measures which are stipulated under the Article 28(c) of GATS, not consistent with the national
treatment principle? (for example, with respect to access to and use of land,telecommunications, etc., discriminatory measures against foreign suppliers "double price"
under which higher prices are set for foreign suppliers, etc.  Further, are the contents of Annex
on Telecommunications 5(b) -(f) to be ensured?WT/ACC/VNM/3/Add.2
Page 82
Answer
Currently, foreign investment in Vietnam is not accorded national treatment.
1. Telecommunications:
In general, the regulations concerned are in co mpliance with national treatment principles and
the annexes on telecommunication of the GATS sections 5(b)-(f) except for the difference in price and
fees for certain services between foreign and Vietnamese users.
2. Investment:
Land is the property of the State and is subject to the exclusive administration by the State.
Therefore, no one has right to sell or buy land. Domestic and foreign individuals and organizations are
granted only the land use right or land lease, not ownership of land. According to the existing Law on
Land, there are differences in land-use rights between foreign investors and domestic individuals andorganizations (Foreign investors only have the right to lease land under contract terms and may not
use land-use rights as capital contribution).
The prices of certain services such as air transport and telecommunications are applied
differently to foreigners and Vietnamese citizens. Competent Government agencies will consider the
possibility of introducing same prices for Vietnamese and foreign consumers.
Question 600
Paragraph 4 of section 3 on page 67 (WT/ACC/VNM/2) says that foreign companies with
investment projects shall be considered to be licen sed on approval by line ministries.  What are
the requirements for the approval?
Answer
Foreign investors applying for investment licences must send application documents to the
Ministry of Planning and Investment or Provincial People's Committee being authorised by the
government to grant the licence.  Upon receiving the documents, the authority in charge of granting
the investment licence will circulate the application to Ministries concerned for consideration, but notforeign investors.  The criteria to be considered are:
- the status of the legal person, investor and its financial situation;
- the consistency of the project with the policy and development plans of the government;
- the consistency with the Vietnamese laws of the contractual commitments and the charter of
the project;
- the form of investment;
- the share and value of capital contribution and timetable for the capital contribution;
- the financial sources for the project;
- technology plan, machinery and equipment;
- the plan of localization (if any);
- the material and machinery importing plan and the distribution plan;- the waste treatment and environmental protection plan;
- the location, architecture and construction of the project;
- the employment plan; andWT/ACC/VNM/3/Add.2
Page 83
- the implementation process.
(i) Provisions concerning any form of aid, grant, domestic subsidy, tax incentive or
promotion scheme affecting trade in services
Question 601
Section VI.2(g) refers to incentives policies, such as import duty reduction and exemption and
tax holidays, for certain non-lucrative and infant service industries. At present, these incentives
are applied for trade in goods.
Could Vietnam advise whether such measures apply to any companies which are or may be
foreign-owned or joint-venture? If so, what criteria are used to decide which industries receive
such incentives? Are the incentives allocate d on an MFN and national treatment basis?
Answer
Newly-formed establishments in production and service areas that investment has been
encouraged may enjoy turnover tax reduction, or profit tax exemption for the initial years of the
investment. The specific period of tax reduction or exemption has been provided for in the Law on
Foreign Investment in Vietnam, Law on Domestic Investment Promotion, the Law on Profit Tax and
the Law on Turnover Tax.
This preferential treatment is not applied to all enterprises (both foreign and domestic)
operating in the trade, restaurant and catering service sector.
MFN and national treatment have been explained in detail in the Schedule of Commitments
and the other Appendices.
3. Market Access and National Treatment
Question 602Could Vietnam elaborate on the existing market access limits on the provision of services, since
it states that these do not exist "in principle"?
Answer
The restrictions on market access in the service sector vary from sector to sector and from
mode of supply to mode of supply. These restrictions, both de jure and de factor, have been fully
reflected in the existing service regime (WT/ACC/VNM/5) and offers to be made in the Schedule ofCommitments.
Hereunder are certain main features of the regime:
1. Import-export services:
According to the recent regulations, only enterprises with import-export licence are allowed to
conduct import-export transactions directly.  In case of those enterprises not qualified to be granted
import-export licences, they are obliged to entrust their import-export operations an enterprise
possessing such a licence to conduct import-export transactions for them.  Enterprises that have goodsWT/ACC/VNM/3/Add.2
Page 84
to be exported are allowed to export directly even if they do not have import-export licence granted by
the Ministry of Trade.
Since February 1998, the trading right in export of domestic and foreign enterprises has been
enlarged.
2. Culture and information services:
In the process of opening the domestic market, specific regulations concerning market access
and cooperation with foreigners are likely to be changed.
In the culture and information sector, foreign investment projects have been approved on a
case-by-case basis based on the form of investment, the share of capital contribution and the scope of
activities.
3. Banking services:
Foreign banks, credit organizations and leasing companies may have access to the Vietnamese
financial and banking market in the forms of representative offices, joint-ventures with Vietnamese
partners, foreign bank branches or wholly foreign owned leasing companies, subject to approval by
the State Bank of Vietnam.
4. Insurance services:
In the insurance service sector, there are restrictions only on commercial presence and the
legal capital of each type of commercial presence to provide insurance services to the Vietnamese
market. Please refer to the existing regime on trade in services in the format of WT/ACC/5
(WT/ACC/VNM/5).
5. Auditing-accounting services:
Please see the answer to question 571 and the existing regime on trade in service in the format
of W/ACC/5 (WT/ACC/VNM/5).
6. Transportation services:
Please refer to the answers to questions 572 and 578.
7. Telecommunications services:
Please refer to the answer to question 597.
8. Tourism services:
Please refer to the exiting regime on trade in services in the format of WT/ACC/5
(WT/ACC/VNM/5).
Please refer to the answer to question 597.WT/ACC/VNM/3/Add.2
Page 85
9. Healthcare services:
Please refer to the answer to question 579.
10. Construction services:
Foreign organizations may be considered for the grant of a permit to provide construction
services and related professional services on a case-by-case basis after winning a contract award, or
being selected as stipulated by the current regulations on tendering of Vietnam. However, the selected
service suppliers must enter into a partnership with at least one Vietnamese legal entity capable of
implementing the contract.  Please refer to the answer to question 162.
11. Industry services:
There are restrictions in certain sub-sectors, for example, in electricity supply including
production and distribution of electricity. Construction of  new independent power generation
facilities must be approved by the Government. The construction of  new power generation facilitiesin the form of "Build - Operate - Transfer" (BOT) project  must have the approval in respect of
specific terms and conditions, e.g. price charged to users and the geographical areas where electricity
is supplied.
Gold exploration and exploitation must be approved by the Government.
12. Legal services:
According to Decree No. 42/CP dated 8 July 1995 by the Government on Regulations on
Legal Consultancy Practices of Foreign Law Firms in Vietnam, branches are the sole permitted form
of business for foreign law firms in Vietnam.
Lawyers of a foreign law firm practising in Vietnam must satisfy the following conditions:
- previous experience in providing legal consultancy services for five or more years in a foreign
law firm;
- not be subject to criminal prosecution, serving a sentence, or have a current criminal
conviction;
- be of goodwill towards the State of Vietnam.
Foreign lawyers of branches of foreign law firms are permitted to advise on foreign laws and
international laws in the fields of business, investment and commerce only; and shall not be permitted
to advise on Vietnamese laws or to participate in th e capacity of legal counsel or representative of any
client in any proceedings before the courts of Vietnam.
However, branches of foreign law firms are permitted to enter into co-operation contracts with
Vietnamese legal consulting organizations on a case-by-case basis for legal advice on the laws of
Vietnam. Consultancy services on Vietnamese la ws must be provided by Vietnamese lawyers.
13. Banking services:
The scope and type of services provided by foreign banks and foreign-domestic joint-venture
banks in Vietnam is provided for in the licence granted by the State Bank of Vietnam.WT/ACC/VNM/3/Add.2
Page 86
Question 603
Priorities and privileges are granted to domestic enterprises in areas such as inland
transportation, broadcasting and consultancy on Vietnamese laws.
(a) Are foreign companies excluded from entering the market in these sectors?
(b) Is there a change to be exp ected in the present situation?
Answer
In the field of broadcasting and legal consultancy on Vietnamese law, domestic enterprises are
presently accorded certain privileges.  Cultural, publishing, broadcasting and cinematography projectsneed the approval of the Prime Minister.
The issuance of licence for inland transportation relies on planned and existing public
transportation network in each local area.
1. Transportation services:
Priorities are granted to domestic enterprises in area of freight inland  transportation by sea
and inland waterway. Foreign enterprises that wish to engage in land, sea or freight inland waterway
transportation require the approval of the Ministry of Transport  (pursuant to Article 9 of the Maritime
Code, Decision No. 2788/QD-CP dated 17 May 1995 of  the Minister of Transport and Article 25 of
Decree No. 40/CP dated 5 July 1996.
This policy will not be changed for the time being.Domestic enterprises are also granted privileges to operate as shipping agent, marine brokers
pursuant to Decision No. 2188/QD-VT dated 23 Oc tober 1992; and other services incidental to
transport services pursuant to Decision No. 1991/ QD-VT  dated 28 September 1992 of the Minister of
Transport.
There is no specific legislation granting preferential rights of participation to domestic
enterprises in the inland transportation sector but when foreign enterprises apply for an investment
licence to engage in activities in this sector, th e Ministry of Transport will request that certain
conditions be inserted in the licence to ensure continuing opportunities for domestic enterprises in linewith national planning priorities and the current economic situation within the sector.
2. Legal consultancy:(a) Under existing regulations, only Vietnamese lawyers may provide advice on Vietnamese law
and appear in the capacity of legal counsel for clients before the Vietnamese courts.
When receiving requests from clients, the foreign law firms must sign contracts with
Vietnamese legal consultancy organisations in order to provide advice on Vietnamese law.
Vietnamese lawyers will then provide the required advice on Vietnamese law to the clients. Results of
the consultancy on Vietnamese law shall be provided in writing and signed by Vietnamese lawyers
and must be certified by the Vietnamese legal consultancy organizations.  Thus branches of foreignlaw firms are not absolutely prevented from Vietnamese market access.  In reality, foreign law firms
can receive requests to advise on Vietnamese law from clients.  However, they must forward such
requests to Vietnamese lawyers who have signed cooperation contracts with the branches.WT/ACC/VNM/3/Add.2
Page 87
(b) In future, Vietnam will envisage to perm it foreign law firms in Vietnam to employ
Vietnamese lawyers for their offices. Vietnamese law organizations also have the right to
employ foreign lawyers. In addition, Vietnam will consider the possibility of permitting
citizens from other countries who meet all requirements and conditions provided by law to berecognized as the Vietnamese lawyers to practice Vietnamese legal consultancy.
Question 604
As we understand the Memorandum (WT/ACC/VNM/2), Vietnam is providing better treatment
to ASEAN Members and others as provided for in bilateral agreements.
(a) Please confirm where or not this is the case.
(b) Could Vietnam elaborate on the coverage of these agreements?
(c) Which are the 'other' countries?
(d) Is Vietnam intended to take exemptions to the MFN principle for these agreements?
Answer
(a) Yes.  Please refer to the answer to question 608.
(b) Current coverage is effected through agreements on trade, finance and services.
(c) The exemptions for regional and bilateral agreements will be explained in the material
provided on the existing regime on services in the format of WT/ACC/5 (WT/ACC/VNM/5)
and the coming schedule of commitment.
1. Transportation:
Preferential treatment has been granted to ASEAN countries on the basis of bilateral
agreements.
2. Industry:
Preferential treatment under the AFTA will be granted to ASEAN countries on reciprocal
basis.  In the industrial sector, preferential trea tment will be extended to enterprises joining the
ASEAN Industrial Cooperation agreement (AICO).
3. Legal consultancy:
According to the regulations on legal consultancy practices of foreign law firms in Vietnam,
all foreign law firms, including those from ASEAN must be treated on the same basis.  All foreign law
firms regardless nationalities must be licensed to set up branches in Vietnam if they satisfy allrequirements.
Vietnam is currently engaged in negotiations with other ASEAN countries under the ASEAN
framework agreement on trade in services.  The intention is to provide preferential treatment to legal
service providers from other ASEAN countries on reciprocal basis.  Details of this proposed treatment
will be provided as soon as it is agreed on.WT/ACC/VNM/3/Add.2
Page 88
Question 605
According to the Memorandum (WT/ACC/VNM/2), priorities and privileges are granted to
domestic enterprises in the areas of inland tran sportation, broadcasting, television, maintenance
and repair of equipment for broadcasting and television operation, consultancy on Vietnameselaw and water and electricity supply.
For each of the above service sectors, please desc ribe the nature of the priorities or privileges
granted to domestic enterprises.
Answer
Privileges are not granted to all State-owned enterprises.  Public service enterprises are given
priorities.
The State renders priorities to the following sectors:
- the provision of public transportation in industrial and urban areas;
- the generation of electricity and supply to national networks; and
- the provision of essential services needed for cultural and social development.
1. Transportation services:
For further details, please refer to the answer to question 603.
2.  Culture and information services:
The Vietnamese Government is maintaining its monopoly in the field of  broadcasting.
Question 606
Does the Government of Vietnam grant priorities and privileges to domest ic enterprises in the
provision of services in any other sectors?  If so, please identify the sector and describe the
nature of the priorities or privileges granted to domestic enterprises.
Answer
Please refer to  the existing regime on trade in services in the format of WT/ACC/5
(WT/ACC/VNM/5).
According to existing legislation (Article 3 of the Law on Foreign Investment in Vietnam), the
Vietnamese Government will not license projects in areas that are deemed to be detrimental to
national defense and security, historical patrimony, Vietnamese culture, tradition and custom or the
ecological environment.  Please refer to the answ er to the question 597 for a description of further
restrictions on foreign investment in Vietnam.
The Government grants preferential treatment for the establishment of enterprises and to
enterprises operating in remote, mountainous and underdeveloped areas to narrow the gap indevelopment. Priority is accorded to development of infrastructure and the Vietnamese Government
will also provide development support to other economic sectors that are unable to develop or unlikely
to receive investment from the business community.WT/ACC/VNM/3/Add.2
Page 89
The Vietnamese Government will provide preferential treatment to sectors that are targeted
for development under the Law on Encouragement of Domestic Investment and will implement
policies to protect domestic enterprises in accordance with tariff reduction policies to enable them to
gradually integrate in to international market.
Foreign investment is encouraged under specific provisions of the Law on Foreign Investment
in Vietnam.
1. Culture and information services:
State owned enterprises operating in the field of publishing and film production are provided
with  subsidies for particular products on case by case basis.
2. Banking services:
As a general rule, foreign enterprises are treated in the same way as domestic enterprises in
the area of banking services.  There are, however, differences in treatment in terms of regulation on
deposits and lending in Vietnamese currency between foreign and domestic banking operations.
Question 607
According to the Memorandum (WT/ACC/VNM/2), foreign companies with foreign projects
shall be considered to be licensed on approval by line ministries.
What is meant by the above statement? does this  mean that foreign companies seeking to invest
in service projects need to obtain licences from line ministries rather than from the Ministry of
Planning and Investment? Does each line ministry have regulations which state the criteria for
granting and rejecting licences for service project s? Do foreign companies seeking to invest in
service projects also need to obtain approval from local administration?
Answer
With the exception of banking projects which are licensed by the State Bank of Vietnam, all
projects in the service sector are licensed by the Ministry of Planning and Investment or the duly
authorised People’s Committees, boards of management of industrial zones or export processingzones.
The Ministry of Planning and Investment or authorized agencies will consult with line
ministries or People’s Committees in the locality where the project is located before issuing the
investment licence.
Investment licences also serve as business licences in the services sector.
Question 608
Does Vietnam provide most-favoured-nation an d/or national treatment to ASEAN member
countries for all services? Please identify any services for which ASEAN members do not receive
most-favoured-nation treatment or national treatment in Vietnam's market.WT/ACC/VNM/3/Add.2
Page 90
Answer
Under ASEAN framework agreement on servic es, ASEAN countries promise to offer
preferential treatment to each other in the following fields:  telecommunications, construction,
maritime services, air transport, finance, tourism and business services.
So far in the ASEAN framework, Vietnam has offered the Schedule of Commitments in some
sub-sectors of telecommunications and tourism services.  However, Vietnam has not yet offered to
grant national treatment to other ASEAN countries.
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