Performing Labor Contracts in the Period of Covid – 19 Epidemic

The Covid-19 epidemic has seriously affected the development of the economy and society. The situation of businesses being spacing as well as suspension of production and service provision happens regularly in epidemic-affected localities, and that also seriously affects the life stability of employees. Because most enterprises’ financial situations get worse, so the businesses seem like they cannot guarantee income for employees. This is a force majeure and legal event, and the labor law has specific provisions to balance and ensure the interests of employees but also make the best support to enterprises.

Specifically, according to the provisions of Clause 3, Article 99 of the Labor Code 2019, specific instructions are provided in Official Dispatch No. 264/QHLĐTL-TL of Ministry of Labor – Invalids and Social affairs about paying salary (known as “ stoppage salary”) for employees during the shutdown period related to the Covid-19 epidemic on July 15, 2021; direct instructions for businesses and employees during the epidemic period, in case of having to suspend work due to an incident that is not the fault of the employer such as a dangerous disease, the employee and the employer agree on the salary according to the following regulations.

In case of having to suspend work for less than 14 working days, the agreed stoppage salary shall not be lower than the minimum wage.

In case of having to suspend work for more than 14 working days, the stoppage salary shall be agreed upon by both parties but must ensure that that salary in the first 14 days is not lower than the minimum wage.

Accordingly, the labor relationship is a civil relationship as well as ensuring the agreement between the parties, however, it is also necessary to pay attention to ensuring the life quality of the employee, thus stipulating the case of having to suspend work from under 14 days that the parties have the right to agree on a salary which is ensured not lower than the minimum wage; besides, in case of suspension for more than 14 days, this is undesirable in the labor relationship as the damage for the employee is not allowed to work as well as does not guarantee income, and this also for the employer that they are not able to guarantee the output of goods and services provided to the partner, as well as the normal operation of the business, etc. Therefore, the law allows the parties to agree on the stoppage salary in this case.

The epidemic is a force majeure. In the case of having to suspend work for too long as it is unable to judge the progress of the epidemic, to ensure the financial ability of the employer as well as the health and safety of employees, the parties may agree to suspend performing labor contract. The content specified at point h, Clause 1, Article 30 of the Labor Code 2019, allows the parties to agree to suspend the labor contract, therefore we can realize this is also an appropriate regulation in the current epidemic period. Currently, when suspended in performing a labor contract, the employee is not entitled to salary and other rights and benefits as agreed in the labor contract. However, the employee and the employer may have another agreement on employee benefits.

According to Article 31 of the Labor Code 2019, within 15 days after ending the suspension period of the labor contract, the employee must be present at the workplace as well as the employer must accept the employee’s return to resume work under the signed labor contract in case of the valid labor contract, unless otherwise agreed by the parties. Accordingly, the employee and the employer must fully agree on the contents related to the suspension of the labor contract, to avoid issues and disputes arising after ending the suspension period of the performing labor contract.

In addition, Point c, Clause 1, Article 36 of the Labor Law 2019 stipulates that the employer has the right to unilaterally terminate a labor contract in case of natural disaster, fire, dangerous epidemic, enemy sabotage or migration, relocation, or downsizing of production and business under the request of the competent state agency, and the employer has sought all remedies but can’t help reducing personnel. Therefore, in the situation of dangerous epidemics, termination of the labor contract with termination grounds is considered a non – illegal act of unilaterally terminating the labor contract.

However, the grounds for termination because of the dangerous epidemic that the employer has tried all measures to overcome but can’t help reducing the personnel are only necessary conditions that the employer needs to comply with, besides, Employers need to comply with the procedure for unilateral termination of labor contracts in terms of the notice period, as well as done allowances to employees when unilaterally terminating labor contracts according to regulations in law.

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Renew expired visas for foreigners during the Covid-19 period

Visa is a certificate issued by a competent Vietnamese state agency, allowing foreigners to enter Vietnam for immigration for a certain period of time depending on specific case. To be granted a visa, a foreigner must meet the conditions specified in the Law on Entry, Exit, Transit and Residence of Foreigners in Vietnam 2014, such as: having a passport or valid international travel document, being invited or sponsored by agencies, organizations and individuals in Vietnam unless otherwise provided for by law and not in the cases where entry is not allowed. In some special cases, to be granted a visa, foreigners will have to present documents proving the purpose of entry. When the visa is about to expire, foreigners can apply for a new visa for immigration into Vietnam.

In order to be issued a new visa, the foreigners need to prepare the following documents: application form for visa issuance; papers on the foreigners need to fully guarantee (if any); valid passport, other necessary proofs related to the purpose of entry and residence. After fully preparing the above documents, the foreigner shall submit the application at working offices of the Immigration Department – the Ministry of Public Security. The immigration officer receiving the dossier will check the dossier. If it is complete and valid, then he or she will receive the application and hand over the receipt, schedule a date to return the results. If the dossier is not valid, the dossier-receiving officer shall guide the submitter to supplement the dossier for completeness.

The result would be available within 05 days from the date of receipt of complete dossiers. The person who comes to receive the result shall present the receipt, identity card or passport to the officer to check and compare, pay the fee and sign for receipt.

However, during the period of complicated developments of the Covid-19 epidemic, the Prime Minister and leaders of the Ministry of Public Security issued instructions on the implementation of “automatic extension of temporary residence” for foreigners affected by the Covid-19 epidemic. Accordingly, foreigners entering under the visa exemption category, entering with an electronic visa or a tourist visa from March 1, 2020 until now, will continue to have their temporary residence extended until the end of August 31, 2021 and can leave the country within the above time limit without having to carry out procedures for extension of temporary residence.

In case a foreigner who entered the country before March 1, 2020 if he/she can prove that he is trapped due to Covid-19, being certified by the diplomatic mission or has a written confirmation from the competent authority of Vietnam about the isolation and treatment of Covid-19 or other force majeure reasons, is also considered to apply “automatic extension of temporary residence” until the end of August 31, 2021.

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How to Determine Penalty and Compensation for Damages from Breach of Commercial Contract?

 When drafting a contract, especially a commercial business contract, in addition to basic provisions such as the object, scope of the contract, value and payment method, rights and obligations of the parties, dispute settlement, information confidentiality, and the regulations on the penalty for a breach of the contract and damage compensation are also very important.

Penalty for a breach of the contract

Under the provisions of the Commercial Law 2005, penalty for a breach means that the breaching party must pay a sum of money to the aggrieved party due to the breach of the violating party if the parties agree in the contract on the fine for a breach. Thus, the penalty for a breach only arises when there is a breach of the contract by the violating party and the parties have agreed on the penalty.

The law gives the right to agree on sanctions for violations to contractual parties, but this freedom to negotiate is limited. Specifically, the parties are only allowed to agree to a maximum penalty of 8% of the breached contractual obligation value, except traders providing assessment services issue assessment certificates showing incorrect results caused by their unintentional faults, they must pay penalty therefor to customers. The penalty level shall be agreed upon by the parties but must not exceed ten times the assessment service charge. In fact, the dispute settlement agency also bases on the prescribed limit of the law to handle; therefore, even if the parties agree to a higher penalty for a breach, it is not applicable in practice.

Compensation for damage

Compensation for damage means a remedy whereby the breaching party pays compensation for the loss caused by a contract-breaching act to the aggrieved party. The basis for arising damages is a breach of the contract; there is material loss and act of breaching the contract is the direct cause of the loss. Difference from penalty for a breach, liability to compensate for damages caused by breaches of contract performance obligations arises even in cases where the parties do not have an agreement on this matter. Besides, the law does not provide any regulation to limit the amount of compensation; it is based on the actual damages that the aggrieved party can prove.

When participating in the transaction, if both types of sanctions are specified in the contract, they should clearly specify the basis for the amount of compensation for the damages and the penalty for violation.

In fact, there are many cases where the parties do not agree clearly or agree on the penalty but the amount of the penalty exceeds the prescribed level, the excess could be considered invalid. The parties should also note that there will be no agreement on late payment interest on the infringement penalty and the amount of compensation damages.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang, will help customers conveniently drafting contracts and assist in resolving contract disputes.

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How Foreign Entity Could Set-up Representative Office in Vietnam

A foreign business entity or a foreign trader is allowed to establish Representative Office in Vietnam according to the Commercial Law.

Representative office of a foreign business entity in Vietnam (referred as “Representative Office”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to survey markets and to undertake a number of commercial enhancement activities permitted by the law of Vietnam. Representative Office will need to apply and obtain the establishment license; and have a seal bearing the name of the representative office.

Setting up a Representative Office is less complicated than setting up company in Vietnam. The Vietnam Department of Trade will be approving the establishment of Representative Office in Vietnam while Vietnam Ministry of Planning and Investment will be the State agency that coordinate the setting up a company in Vietnam. The time duration to establish a Representative Office is shorter than to establish a company. There are fewer conditions to meet than conditions in setting up company in Vietnam. The main difference between a Representative Office and a company in Vietnam is that the Representative Office could not directly conduct profit making activities.

Rights of the Representative Office:

-To operate strictly in accordance with the purposes, scope and duration stated in the license for establishment of such representative office;

-To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the Representative Office;

To recruit Vietnamese and foreign employees to work for the Representative Office in accordance with the law of Vietnam;

-To open accounts in foreign currency and in Vietnamese Dong sourced from foreign currency at banks which are licensed to operate in Vietnam, and to use such accounts solely for the operation of the Representative Office.

Obligation of the Representative Office:

-Not to directly conduct profit making activities in Vietnam;

-Not to enter into commercial contracts of the foreign business entity or to amend or supplement such contracts already signed except where the head of the Representative Office has a valid power of attorney from the foreign business entity;

-To pay taxes, fees and charges and to discharge other financial obligations in accordance with the law of Vietnam;

-To report on the operation of the Representative Office in accordance with the law of Vietnam

A foreign company which has effectiveness business activities will be allowed to open the Representative Office in Vietnam if this company has real demand to open the market in Vietnam and meet conditions as below:

-Being a business entity or trader recognized by the law of the country or the territory (hereinafter referred to collectively as the country) where it has been lawfully established or made its business registration;

-Having been operating for at least one year after its lawful establishment or business registration in its country.

The issuing period will be within 20 working-days after the date of submitting the full valid documents as requested.

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Change of Headquarter of Da Nang Immigration Department

As of August 2018, according to the project for rearranging the administrative function of the Government and the Ministry of Public Security, Immigration Department of Da Nang has been merged into Immigration Department of Hanoi. Therefore, the procedures related to entry, exit of Vietnamese citizens and foreigners such as issuing visa, exempting visa, temporary residence card, permanent residence in Da Nang shall be implemented in Immigration Department of Hanoi.

Relating to the dossier and procedures carried out at the Immigration Department of Da Nang such as issuing passport, temporary residence card, permanent residence, the application shall be submitted to Immigration Department of Da Nang. Thereafter, this agency shall transfer such dossier to Immigration Department of Hanoi for approval. Finally, the results shall be returned to Da Nang.

For most of immigration procedures which used to be implemented in Immigration Department of Da Nang, such as issuing visa, the applicant shall submit dossier directly to Immigration Department of Hanoi. The change could possibly add up processing time, and inconvenience if there is requirement for re-submission, amendment and supplement.

ANT Lawyers law firm offer offices in both Hanoi and Da nang, there fore could facilitate the process for individuals and businesses to register entry, residence permit in Da Nang for the smooth experience, to assist foreigners entering Vietnam doing business, setting up company and making investment.

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How Foreign Entity Could Set-up a Branch Office in Vietnam

A foreign business entity or a foreign trader is allowed to set up a branch in Vietnam to conduct business activities.

Having the right to conduct business activities and make profit are how a branch differs from a representative office in Vietnam. A branch depends on the foreign business entity that set-up the branch while a foreign owned company set-up in Vietnam exists by itself. The Vietnam Department of Industry and Trade will be approving the establishment of a branch in Vietnam while Vietnam Ministry of Planning and Investment will be the State agency that coordinate the setting up a company in Vietnam.

In particular, the branch of a foreign business entity in Vietnam (referred to as the “Branch”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to enter into contracts in Vietnam and conduct activities being the purchase and sale of goods and other commercial activities consistent with its licence for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

The Branch will need to apply and obtain the establishment license; and have a seal bearing the name of the Branch.

1. Rights of the Branch

-To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the branch.

-To recruit Vietnamese and foreign employees to work for the branch in accordance with the law of Vietnam.

-To enter into contracts in Vietnam in accordance with the activities stated in the license for establishment of such branch and in accordance with the Vietnam Law.

-To open Vietnamese dong and foreign currency accounts at banks which are licensed to operate in Vietnam.

-To remit profits abroad in accordance with the law of Vietnam.

-To have a seal bearing the name of the branch in accordance with the law of Vietnam.

-To conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

2. Requested conditions for establishment the Branch in Vietnam

A foreign company which has effectiveness business activities will be allowed to open the Branch in Vietnam if this company has real demand to open the market in Vietnam and meet some conditions as below:

-Being a trader recognized by the law of the country where it has been lawfully established or made its business registration;

-Having been operating for at least five years after its lawful establishment or business registration.

3. Issuance the Certificate of Branch:

The issuance of the Certificate of Branch will be implemented by the Department of Industry and Trade Department after the foreign company meets all of conditions as Vietnam legal requirements.

The issuing period will be within 20 working-days after the date of submitting the full valid documents as requested.

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Open for Private Investment in Vietnam Railways

The revised Railway Law has just been passed by the National Assembly will create attraction for investors to set up company in Vietnam to invest in infrastructure and railway projects.

The revised Railway Law has just been passed by the National Assembly and is expected to come into force on July 1st 2018 with many preferential mechanisms that will create attraction for investors to invest in infrastructure and railway projects.

Up to now, Lotte E&C (Korea) is the most zealous foreign investor in the Yen Vien – Lao Cai Railway Upgrading Project and the project to build railway connecting Lao Cai – Ha Khau in the form of PPP. Previously, in mid-February 2017, a preliminary study including investment plan, capital size and project repayment capacity was submitted by the Korean investor to the Ministry of Transport. In addition to the proposal to apply the form of build – lease – transfer (BLT), Lotte also wants to receive some incentives during the implementation of the project.

It is known that with the type of BLT contract, Lotte will invest capital to build infrastructure. Upon completion, the investor is entitled to provide services on the basis of operating that facility in a determined period of 20 years. The competent state agency shall hire the service and pay to the investor, when expired, the investor shall return the facility to the competent State authority for management and use.

Moreover, the Railway Law (amended) has added a number of provisions, which are considered to be the great drive for the railway sector. Specifically, the rail transport business is defined as the industry that is entitled to investment incentives; Organizations and individuals engaged in railway activities shall be entitled to incentives and supports such as free land use fees for land area for infrastructure construction, the highest incentives level for enterprise income tax rate, enjoy the most preferential credit policy; applying the pricing mechanism for the mode of leasing or transferring the right to exploit railway infrastructure.

These regulations will create breakthroughs in investment resources, attracting businesses to concentrate resources on railway development, in fact many countries have similar policies.

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Vietnam Sets to Develop E-commerce and Target 55% of the Population to Shop Online

On May 15, 2020, the Prime Minister issued Decision No. 645/QD-TTg approving the National Master Plan on e-commerce development in the 2021-2025 period aiming to develop e-commerce business area through changing in policy, creating favourable environment, increasing government spending, and attracting investors participating and setting up business in developing e-commerce in Vietnam to transform the economy toward industry 4.0.

Specifically, the Vietnam Prime Ministers set the following goals to be achieved by 2025: 55% of the population participate in online shopping, the average purchase value is 600 USD/person/year; e-commerce revenue increases by 25%/year, reaching 35 billion USD, accounting for 10% of the total retail sales of goods and revenue of consumer services nationwide; non-cash payment in e-commerce reached 50%, of which payments made through intermediary payment service providers accounted for 80%; the average cost for delivery and final order completion accounts for 10% of the product cost in e-commerce; 70% of purchases on e-commerce applications have e-invoices.

Regarding e-commerce applications in enterprises: 80% of e-commerce websites have integrated online ordering function; 50% of small and medium enterprises conduct business activities on e-commerce trading floor, including social network with function of e-commerce trading floor; 40% of businesses participate in e-commerce activities on mobile applications; 70% of electricity, water, telecommunications and communication service providers deploy electronic contracts with consumers.

To accomplish the above objectives, the Prime Minister proposed specific groups of solutions, including: perfecting mechanisms and policies to meet the needs of e-commerce development in the context of technology revolution 4.0; improving the management and organization of e-commerce activities, online dispute resolution (ODR), fighting against commercial frauds, intellectual property violations.

The Prime Minister’s policy shows the role of e-commerce in the present era. E-commerce is one of the pioneering areas of the digital economy, where the advanced technologies of the Industrial Revolution 4.0 are widely applied to increase the efficiency of the business cycle, contribute to modernizing the distribution system, improve the competitiveness of enterprises, promote the development of the domestic market and export. Besides, identifying the overall goal when developing e-commerce in Vietnam is support and promote the widespread use of e-commerce in businesses and the community; to bridge the gap between major cities and localities on the level of e-commerce development; to build a healthy, competitive and sustainable e-commerce market; to expand consumption markets for Vietnamese goods at home and abroad through e-commerce applications; to promote cross-border e-commerce and transactions; to become a country with a developed e-commerce market among the top 3 countries in Southeast Asia.

This is an opportunity for domestic and foreign investors in the field of e-commerce as well as an auxiliary service for e-commerce to promote business and investment activities in Vietnam through establishment of companies providing services.

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How to Determine Labour Relationship under Labour Code 2019?

During Covid pandemic, many companies face economic challenges that need to reduce the high paid workers’ cost. There are situations which dispute arisen and the employee started to realize that the contract he or she signs with the company he or she spends eight hours each day, follows instructions of work from supervisors, and receives monthly payment at the end of the month, seems to be a consulting contract on the face instead. Is this a consulting contract or a labour contract? It is suggested the disputants engage the dispute lawyers to help resolve the potential conflict or help provide legal opinions if a labor relationship is established or not.

A labour contract is essentially a civil transaction, whereby the employer and the employee enter into it on the basis of voluntarily, equality, goodwill, cooperation and honesty. According to the provisions of the Vietnam Labor Code 2019, “a labor contract is an agreement between an employee and an employer on a paid job, salary, working conditions, and the rights and obligations of each party in the labor relations”. In addition, the agreements which are not under the name of a labor contract but have content showing paid employment, salary and the management, administration and supervision of one party are considered as labor contracts.

An employee is allowed to enter into many labor contracts, but the employee must ensure compliance with signed contracts, this provision creates conditions allowing employees to use their full working capacity and have additional sources of income.

Contents of the labor contract must contain information about the employer and employee; Specific information about the job and workplace; Duration of the employment contract; Job- or position-based salary, form of salary payment, due date for payment of salary, allowances and other additional payments; Regimes for promotion and pay rise; Working hours, rest periods; Personal protective equipment for the employee; Social insurance, health insurance and unemployment insurance; Basic training and advanced training, occupational skill development, these are basic but very important contents that employees need to pay attention to negotiating closely and fully to ensure the interests of employees in the process of contract performance. Besides, depending on the job and job position, the employer and the employee can agree in writing on issues related to information confidentiality, however, the employer needs to pay attention to building an appropriate system of internal labor documents to ensure the practical and effective application of information confidentiality.

Regarding the probationary contract, Labor Code 2019 allows employees and employers to agree on the content of the probationary period in the labor contract itself or sign a separate probationary contract. The agreement on the content of the probationary period in the labor contract will cause some insurance obligations to the insurance agency, therefore, the employer and the employee need to carefully search relevant legal provisions in order to negotiate and agree on the contents of the labor contract to ensure compliance with the law and the rights and obligations of both parties.

In addition, in case the employee and the employer wish to amend, supplement or replace the agreed contents in the labor contract, the two parties sign an addendum to the labor contract to amend the respective contents. However, if the term of the labor contract is changed, the parties must agree to terminate the old labor contract and enter into a new labor contract. The labor contract appendix is ​​an integral part of the labor contract and has the same effect as the labor contract.

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How Foreigners Could Obtain Residence in Vietnam Through Investment Scheme?

Foreigners could reside in Viet Nam under permanent residence or temporary residence status. In particular, foreign investors establishing or contributing capital to companies operating in Vietnam are subject to have temporary residence cards.

A Temporary Residence Card is the required document for the foreigners to legally stay temporarily in Viet Nam and the maximum term of a card is 05 years. The following will explain how Temporary Residence Card can be obtained in Vietnam through investment.

What are conditions for foreign investors to be granted temporary residence card?

Foreigners whom are granted a visa with a DT sign will be considered for a temporary residence card. The foreigners will need to apply for work permit exemption from authorities in Vietnam. The passport of foreigners has a minimum term of 13 months. Documents proving that foreigners contribute capital to, or invest in, enterprises in Vietnam for instance business registration certificates, investment registration certificates will be required. The foreigners will also need to provide clean criminal record card.

What required documents to be prepared for application for temporary residence card?

1. 01 Document requesting temporary residence card of guarantor ( form NA6 for agencies, organizations; form NA7 for individuals)

2. 01 Information form for a temporary resident card (form NA8)

3. 02 photos (image size 2×3 cm);

4. 01 Copy of passport and a valid visa (bring an original for comparison);

5. 01 Notice of use of the seal of the enterprise.

6. 01 Document introducing seal, signature of the authorized person of the organization (form NA16)

7. 01 Copy of legal documents of organizations to prove purpose to be granted temporary residence card, such as: investment registration certificate, business registration certificate.

How long it takes to apply for temporary residence card?

After 5 working days since receiving sufficient documents, state agencies will consider and issue temporary residence cards.

What are procedures to apply for temporary residence card?

Step 1: Prepare documents as prescribed by law.

Step 2: Submit application file

The officer receiving the application will check the legality and the content of the file. If the application is complete and valid, the officer receives the application and prints a receipt for the submitter.

Step 3: Return results

What state authorities to apply for temporary residence card?

Immigration Management Department of province or cities where the investment is registered.

Some difficulties when carrying out the procedure:

Everyone can apply for a temporary residence card by themselves, but not all cases are eligible for a temporary residence card. When applying for a temporary residence card, have some difficulties like: the visa is not for right purposes; foreigners don’t understand the required documents, procedures for applying for temporary residence card so that you don’t know how to write the declaration of temporary residence card; have confusion about the declaration form used for individuals and agencies, organizations…. For result, application file is invalid and will be returned. You will have to go to implementing agencies many times to complete application file, which is costly, laborious, time-consuming but not yet available. Therefore, foreigners need the assistance of a reputable law firm to carry out the procedure effectively to be granted temporary residence card.

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Why the Investors to Choose a Reputable Enterprise for Cooperation?

Profitable investment is the legitimate aim of every investor. However, to be able to make an overall assessment of an enterprise that investors can trust is really a difficult choice. Especially for foreign investors who do not have much experience in the Vietnam market whom wish to enter Vietnam market for making investment through M&A. It is very important for the foreign investors to undertake the research for the reputation of the company and each shareholders being corporate or individual, obtain public information of the company, and key personnel under take brief due diligence to access potential risks for cooperation.

According to the data reported as of March 20, 2021 by the Foreign Investment Department (Ministry of Planning and Investment), the total foreign investment capital registered for new, adjusted and contributed capital, purchased shares of investors foreign investment amounted to 10.13 billion USD, an increase of 18.5% over the same period in 2020. This data shows that the demand of foreign investors to invest in Vietnam is still gradually increasing. So, how can foreign investors choose businesses to invest with peace of mind?

In addition to choosing an enterprise with an appropriate industry and intended investment capital, the fact that that enterprise has reputable name, capability, and experience in the market in the business field is a criterion that investors should consider and can be trusted. Moreover, investors should take the time to learn information from official sources by looking up the company’s name, grasping basic information such as: owner’s name, representative, capital status, influential individual being shareholders,… and compare such to the company’s website to know if the company provides full information, images, updates on the company’s operations regularly, accurately or are not.

Many cases of “virtual” businesses taking advantage of investment needs and the lack of information about the Vietnam market have taken advantage of and defrauded foreign investors. On the other hand, the enterprise will be the one to make decisions that directly affect the investment results of the investor; therefore, the foreign investors should understand, consider and choose a reputable and safe enterprise entirely to invest capital.

In addition, what is the name and influence of that enterprise in the investment field? What is experience and enterprise performance in recent years? It is also the actual evidence that proves the capability of that enterprise. An important note for investors is that in addition to information about enterprise achievements, negative information about the company such as violations in business practice, errors in service provision, etc. causing disputes, compensation with customers is less public information and difficult to find.

In many cases, investors do not have a thorough understanding of their partners, but only decide based on virtual commitments, the display of capability beyond the capabilities of the business. From there, putting your investment capital on a risky way lead to potential unnecessary disputes with the target enterprise.

Furthermore, understanding the Vietnamese legal regulations on rights and obligations for foreign investors, although not related to the selection of enterprises to invest in, is also necessary information for investors to have projection of the problems that may arise during the process of participating in investing in the business.

After all, what investors are looking for are “clean” enterprises that have the capability to grow quickly but at the same time must be able to maintain stability and develop sustainably. However, every business environment has certain potential risks and it is the job of foreign investors to always be alert and learn exactly the information of enterprises to minimize risks potential.

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