HANOI UNIVERSITY
Faculty of Management & Tourism
-------------
BUSINESS LAW REFERENCE BOOK
Compiled by: Ms. Ho Thuy Hang LLM.
Constitution 2013
Enterprise Law 2020
Labor Code 2019
Civil Code 2015
Commercial Law 2005 (a.2017)
Intellectual Property Law 2005 (a.2009)
Bankruptcy Law 2014
Commercial Arbitration Law 2014
Civil Procedure Code 2015
Hanoi, 2021
HANOI UNIVERSITY
Faculty of Management & Tourism
-------------
BUSINESS LAW REFERENCE BOOK
Compiled by: Ms. Ho Thuy Hang LLM.
Constitution 2013
Enterprise Law 2020
Labor Code 2019
Civil Code 2015
Commercial Law 2005 (a.2017)
Intellectual Property Law 2005 (a.2009)
Bankruptcy Law 2014
Commercial Arbitration Law 2014
Civil Procedure Code 2015
Hanoi, 2021
CONSTITUTION OF THE SOCIALIST REPUBLIC OF VIETNAM
PREAMBLE
Throughout their millennia-old history, the Vietnamese People, working diligently and creatively and
fighting courageously to build and defend their country, have forged a tradition of patriotism, solidarity,
humanity, justice, resilience and indomitableness, and have created the civilisation and culture of Vietnam.
Since 1930, under the leadership of the Communist Party of Vietnam founded and trained by President Ho
Chi Minh, our People have waged a protracted struggle full of hardship and sacrifice for national
independence and freedom and for their own happiness. In the wake of the triumph of the August
Revolution, on September 2, 1945, President Ho Chi Minh read the Proclamation of Independence,
declaring the birth of the Democratic Republic of Vietnam, now the Socialist Republic of Vietnam. With
the will and strength of the entire nation and the assistance of friends around the world, our People have
gained great victories in the struggles to liberate the nation, reunify the country, defend the Fatherland and
fulfill international duties, and have recorded resounding achievements of historical significance in the
cause of renewing and building the country toward socialism.
Institutionalising the Platform for National Construction during the Period of Transition toward Socialism,
and perpetuating the 1946, 1959, 1980 and 1992 Constitutions, the Vietnamese People create, implement
and defend this Constitution to achieve the goal of a prosperous people and a strong, democratic, equitable
and civilised country.
Chapter I: THE POLITICAL REGIME
Article 1
The Socialist Republic of Vietnam is an independent and sovereign country enjoying unity and integrity of
territory, including the mainland, islands, seas and airspace.
Article 2
1. The State of the Socialist Republic of Vietnam is a socialist state ruled by law and of the People, by the
People and for the People.
2. The Socialist Republic of Vietnam is the country where the People are the masters; all the state power
belongs to the People and is based on the alliance of the working class, the peasantry and the intelligentsia.
3. The state power is unified and delegated to state agencies which coordinate with and control one another
in the exercise of the legislative, executive and judicial powers.
Article 3
The State shall guarantee and promote the People's right to mastery; recognise, respect, protect and
guarantee human rights and citizens' rights; and pursue the goal of a prosperous people and a strong,
democratic, equitable and civilised country, in which all people enjoy an abundant, free and happy life and
are given conditions for their comprehensive development.
Article 4
1. The Communist Party of Vietnam - the Vanguard of the working class, concurrently the vanguard of the
labouring people and Vietnamese nation, faithfully representing the interests of the working class,
labouring people and entire nation, and acting upon the Marxist-Leninist doctrine and Ho Chi Minh
Thought, is the force leading the State and society.
2. The Communist Party of Vietnam is closely associated with the People, shall serve the People, shall
submit to the supervision of the People, and is accountable to the People for its decisions. 3. Organisations
and members of the Communist Party of Vietnam shall operate within the framework of the Constitution
and law.
Article 5
1. The Socialist Republic of Vietnam is a unified nation of all ethnicities living together in the country of
Vietnam.
2. All the ethnicities are equal and unite with, respect and assist one another for mutual development; all
acts of discrimination against and division of the ethnicities are prohibited.
3. The national language is Vietnamese. Every ethnic group has the right to use its own spoken and written
language to preserve its own identity and to promote its fine customs, practices, traditions and culture.
4. The State shall implement a policy of comprehensive development and create the conditions for the
minority ethnicities to draw upon/further their internal strengths and develop together with the country.
Article 6
The People shall exercise the state power in the form of direct democracy and of representative democracy
through the National Assembly, People's Councils and other state agencies.
Article 7
1. The elections of deputies to the National Assembly and People's Councils must be conducted on the
principle of universal, equal, direct and secret suffrage.
2. A National Assembly deputy or a People's Council deputy may be removed from office by the voters or
the National Assembly or the People's Council, when he or she is no longer worthy of the confidence of the
People.
Article 8
1. The State shall be organised and operate in accordance with the Constitution and law, manage society by
the Constitution and law, and implement the principle of democratic centralism.
2. All state agencies, cadres, civil servants and public employees shall show respect for the People,
conscientiously serve the People, maintain close contact with the People, listen to their opinions and submit
to their supervision; resolutely combat corruption, waste, and all manifestations of bureaucracy, arrogance
and authoritarianism.
Article 9
1. The Vietnam Fatherland Front is a political alliance and a voluntary union of the political organisation,
socio-political organisations and social organisations, and prominent individuals representing their class,
social strata, ethnicity or religion and overseas Vietnamese.
The Vietnam Fatherland Front shall constitute the political base of the people's administration; represent
and protect the rights and lawful and legitimate interests of the People; rally and uphold the strength of the
great national unity, exercise democracy and promote social consensus; conduct social supervision and
criticism; and participate in the building of the Party and the State, and in people's external relations'
activities, thus contributing to national construction and defense.
2. The Trade Union of Vietnam, the Vietnam Peasants' Association, the Ho Chi Minh Communist Youth
Union, the Vietnam Women's Union and the Vietnam War Veterans' Association are socio-political
organisations established on a voluntary basis to represent and protect the rights and lawful and legitimate
interests of their members; and together with other member organisations of the Vietnam Fatherland Front
coordinate and unify action within the Front.
3. The Vietnam Fatherland Front, its member organisations and other social organisations shall operate
within the framework of the Constitution and law. The State shall create the conditions for the Vietnam
Fatherland Front, its member organisations and other social organisations to operate.
Article 10
The Trade Union of Vietnam is a socio-political organisation of the working class and labourers voluntarily
established to represent labourers, care for and protect the rights and lawful and legitimate interests of
labourers; participate in the state management and socio-economic management; participate in the
examination, inspection and supervision of the operations of state agencies, organisations, units and
enterprises regarding issues related to the rights and obligations of labourers; and mobilise labourers to
learn to improve their professional qualifications and skills, abide by law, and build and defend the
Fatherland.
Article 11
1. The Vietnamese Fatherland is sacred and inviolable.
2. All acts against independence, sovereignty, unity and territorial integrity, or against the construction and
defense, of the Fatherland must be severely punished.
Article 12
The Socialist Republic of Vietnam shall consistently implement its foreign policy of independence, selfreliance, peace, friendship, cooperation and development; multilateralisation and diversification of external
relations, proactive and active international integration and cooperation, on the basis of respect for each
other's independence, sovereignty and territorial integrity, non-interference in each other's internal affairs,
and equality and mutual benefit; abide by the Charter of the United Nations and treaties to which the
Socialist Republic of Vietnam is a contracting party; act as a friend, reliable partner and responsible
member of the international community for the sake of national interests, and contribute to the cause of
peace, national independence, democracy and social progress in the world.
Article 13
1. The national flag of the Socialist Republic of Vietnam is rectangular in shape, with its width equal to
two-thirds of its length; in the middle of a red background is a five-pointed gold star.
2. The national emblem of the Socialist Republic of Vietnam is circular in shape; in the middle of a red
background is a five-pointed gold star encircled by rice ears, below which is half a cogwheel and the
inscription "The Socialist Republic of Vietnam".
3. The national anthem of the Socialist Republic of Vietnam is the music and lyrics of the song "Tien quan
ca" (March to the Front song).
4. The National Day of the Socialist Republic of Vietnam is the day of the Proclamation of Independence,
the Second of September 1945.
5. The capital of the Socialist Republic of Vietnam is Hanoi.
Chapter II: HUMAN RIGHTS, FUNDAMENTAL RIGHTS AND OBLIGATIONS OF CITIZENS
Article 14
1. In the Socialist Republic of Vietnam, human rights and citizens' rights in the political, civil, economic,
cultural and social fields shall be recognised, respected, protected and guaranteed in accordance with the
Constitution and law.
2. Human rights and citizens' rights may not be limited unless prescribed by a law solely in case of
necessity for reasons of national defense, national security, social order and safety, social morality and
community well-being.
Article 15
1. Citizens' rights are inseparable from citizens' obligations.
2. Everyone is obliged to respect others' rights.
3. Citizens shall perform their obligations toward the State and society.
4. The exercise of human rights and citizens' rights may not infringe upon national interests and others'
rights and legitimate interests.
Article 16
1. All people are equal before law.
2. No one is subject to discriminatory treatment in political, civil, economic, cultural or social life.
Article 17
1. A citizen of the Socialist Republic of Vietnam is a person holding Vietnamese citizenship.
2. A Vietnamese citizen may not be expelled and delivered to another state.
3. Vietnamese citizens living abroad shall be protected by the State of the Socialist Republic of Vietnam.
Article 18
1. Overseas Vietnamese make up an inseparable part of the community of Vietnamese ethnicities.
2. The State of the Socialist Republic of Vietnam shall encourage and create the conditions for overseas
Vietnamese to preserve and promote the cultural identity of the Vietnamese nation, maintain close ties with
their families and native land, and contribute to the construction of their native land and the country.
Article 19
Everyone has the right to life. Human life is protected by law. No one may be deprived of life in
contravention of law.
Article 20
1. Everyone has the right to inviolability of his or her body and to the protection by law of his or her health,
honour and dignity; no one shall be subjected to torture, violence, coercion, corporal punishment or any
form of treatment harming his or her body and health or offending his or her honour and dignity.
2. No one may be arrested without a decision of a People's Court, or a decision or approval of a People's
Procuracy, except in case of a flagrant offense. The arrest, holding in custody, or detention, of a person
shall be prescribed by a law.
3. Everyone has the right to donate his or her tissues, organs or body in accordance with law. Medical,
pharmaceutical and scientific experiments, or any other form of experiments, on the human body must be
consented to by the human subject.
Article 21
1. Everyone has the right to inviolability of private life, personal secrets and family secrets; and has the
right to protect his or her honour and reputation. The security of information about private life, personal
secrets or family secrets shall be guaranteed by law.
2. Everyone has the right to privacy of correspondence, telephone conversations, telegrams and other forms
of private communication.
No one may illegally break into, control or seize another's correspondence, telephone conversations,
telegrams or other forms of private communication.
Article 22
1. Every citizen has the right to a legal residence.
2. Everyone has the right to inviolability of his or her home. No one may enter the home of another person
without his or her consent.
3. The search of homes shall be prescribed by a law.
Article 23
Citizens have the right to free movement and residence within the country, and the right to leave the
country and to return home from abroad. The exercise of those rights shall be prescribed by law.
Article 24
1. Everyone has the right to freedom of belief and religion, and has the right to follow any religion or to
follow no religion. All religions are equal before law.
2. The State shall respect and protect the freedom of belief and religion. 3. No one may violate the freedom
of belief and religion, nor may anyone take advantage of a belief or religion in order to violate the law.
Article 25
Citizens have the right to freedom of speech and freedom of the press, and have the right of access to
information, the right to assembly, the right to association, and the right to demonstrate. The exercise of
those rights shall be prescribed by law.
Article 26
1. Male and female citizens have equal rights in all fields. The State shall adopt policies to guarantee the
right to and opportunities for gender equality.
2. The State, society and family shall create the conditions for women to develop comprehensively and to
advance their role in society.
3. Gender discrimination is prohibited.
Article 27
Every citizen who reaches the age of eighteen has the right to vote. Every citizen who reaches the age of
twenty-one has the right to stand for election to the National Assembly or People's Councils. The exercise
of those rights shall be prescribed by a law.
Article 28
1. Citizens have the right to participate in the management of the State and management of society, and to
discuss and propose to state agencies issues about their base units, localities and the whole country.
2. The State shall create the conditions for citizens to participate in the management of the State and
society; and shall publicly and transparently receive and respond to the opinions and petitions of citizens.
Article 29
Citizens who reach the age of eighteen have the right to vote in referenda organised by the State.
Article 30
1. Everyone has the right to lodge complaints or denunciations about illegal acts of agencies, organisations
or individuals with competent agencies, organisations or persons.
2. Competent agencies, organisations or persons shall receive and resolve complaints and denunciations.
Those suffering damages have the right to material and mental compensation and restoration of honour in
accordance with law.
3. Taking revenge on complainants or denunciators, or abusing the right to complaint and denunciation to
slander or falsely accuse others, is prohibited.
Article 31
1. A person charged with a criminal offense shall be presumed innocent until proven guilty according to a
legally established procedure and the sentence of the court takes legal effect.
2. A person charged with a criminal offense shall be promptly tried in an impartial and public manner by a
court within a legally established time limit. In case of a closed trial in accordance with law, the verdict
must be publicly pronounced.
3. No one may be tried twice for the same offense.
4. A person who is arrested, held in custody, temporarily detained, charged with a criminal offence,
investigated, prosecuted or brought to trial has the right to defend himself or herself in person or choose a
defense counsel or another person to defend him or her.
5. A person who is illegally arrested, held in custody, temporarily detained, charged with a criminal
offence, investigated, prosecuted, brought to trial or subject to judgment enforcement has the right to
compensation for material and mental damages and restoration of honour. A person who violates the law in
respect of arrest, detention, holding in custody, laying of charges, investigation, prosecution, trial or
judgment enforcement, thereby causing damages to others, shall be punished in accordance with law.
Article 32
1. Everyone has the right to ownership of his or her lawful income, savings, housing, chattels, means of
production and capital contributions to enterprises or other economic entities.
2. The right to private ownership and the right to inheritance shall be protected by law.
3. In case of extreme necessity for national defense or security reasons or in the national interest, in a state
of emergency or in response to a natural disaster, the State may compulsorily purchase or requisition the
property of organisations or individuals and pay compensation at market price.
Article 33
Everyone has the right to freedom of enterprise in the sectors and trades that are not prohibited by law.
Article 34
Citizens have the right to social security.
Article 35
1. Citizens have the right to work and to choose their occupations, employment and workplaces.
2. Employees are guaranteed equal and safe working conditions; and have the right to wages and rest
periods.
3. Discriminatory treatment, forced labour or the employment of people below the minimum working age is
prohibited.
Article 36
1. Men and women have the right to marry and divorce. Marriage must adhere to the principles of
voluntariness, progressiveness, monogamy, equality and mutual respect between husband and wife.
2. The State shall protect marriage and the family, and protect the interests of mothers and children.
Article 37
1. Children shall be protected, cared for and educated by the State, family and society; children may
participate in child-related issues. Harassing, persecuting, maltreating, abandoning or abusing children,
exploiting child labour or other acts that violate children's rights are prohibited.
2. Young people shall be provided by the State, family and society with the conditions for learning,
working, entertaining themselves, and developing their physiques and minds, and be educated in morality,
national traditions and civic consciousness; and shall take the lead in the cause of creative labour and
national defense.
3. The elderly shall be respected and cared for by the State, family and society to promote their role in the
cause of national construction and defense.
Article 38
1. Everyone has the right to health protection and care, and to equality in the use of medical services, and
has the obligation to comply with regulations on the prevention of disease and medical examination or
treatment.
2. Acts threatening the life or health of other persons and the community are prohibited.
Article 39
Citizens have the right, as well as the obligation, to learn.
Article 40
Everyone has the right to conduct scientific or technological research, or literary or artistic creation, and to
enjoy the benefits brought about by those activities.
Article 41
Everyone has the right to enjoy and access cultural values, participate in cultural life, and use cultural
facilities.
Article 42
A citizen has the right to determine his or her ethnicity, use his or her mother tongue and choose his or her
language of communication.
Article 43
Everyone has the right to live in a clean environment and has the obligation to protect the environment.
Article 44
A citizen has the obligation to be loyal to the Fatherland. High treason is the most serious crime.
Article 45
1. It is the sacred duty and the noble right of citizens to defend their Fatherland.
2. A citizen shall perform military service and participate in building a national defense of all the people.
Article 46
A citizen has the obligation to obey the Constitution and law; participate in the safeguarding of national
security and social order and safety, and observe the rules of public life.
Article 47
Everyone has the obligation to pay taxes in accordance with the law.
Article 48
Foreigners residing in Vietnam shall abide by the Vietnamese Constitution and law; and have their lives,
property, rights and justifiable interests protected by Vietnamese law.
Article 49
Foreign nationals who are persecuted for taking part in the struggle for freedom and national independence,
for socialism, democracy and peace, or for engaging in scientific pursuits may be considered for granting of
asylum by the State of the Socialist Republic of Vietnam.
Chapter III: ECONOMY, SOCIAL AFFAIRS, CULTURE, EDUCATION, SCIENCE, TECHNOLOGY
AND ENVIRONMENT
Article 50
The Socialist Republic of Vietnam shall build an independent and self-reliant economy, bringing into full
play its internal strengths and international integration and cooperation, in close association with cultural
development, social progress and justice, environmental protection, and national industrialisation and
modernisation.
Article 51
1. The Vietnamese economy is a socialist-oriented market economy with varied forms of ownership and
economic sectors; the state economy plays the leading role.
2. All economic sectors are important components of the national economy. Entities in different economic
sectors are equal before law and shall cooperate and compete with one another in accordance with law.
3. The State shall encourage and create the conditions for businesspeople, enterprises or other individuals
or organisations to carry out investment, production or business activities; and develop economic branches
in a sustainable manner in order to contribute to national construction. The legal property of individuals and
organisations engaged in investment, production or business activities is protected by law and is not
subjected to nationalisation.
Article 52
The State shall develop and improve economic institutions, regulate the economy on the basis of respect for
market rules; delegate, devolve and decentralise the powers in the state management; promote regional
economic links, and ensure the unity of the national economy.
Article 53 Land, water resources, mineral resources, resources in the sea and airspace, other natural
resources, and property managed or invested in by the State are public property, owned by all the people,
and represented and uniformly managed by the State.
Article 54
1. Land is a special national resource and an important resource for national development, and is managed
in accordance with law.
2. The State shall allocate or lease land to, and recognise land use rights of, organisations and individuals.
Land users may transfer land use rights, exercise their rights, and perform their obligations in accordance
with law. Land use rights shall be protected by law.
3. The State may recover land currently used by organisations or individuals in case of extreme necessity
prescribed by a law for national defense or security purposes; or socio-economic development in the
national or public interest. Land recovery must be public and transparent, and compensation must be paid
in accordance with the law.
4. The State may requisition land in cases of extreme necessity prescribed by a law to perform national
defense and security tasks or during a state of war or a state of emergency, or in response to a natural
disaster.
Article 55
1. The state budget, national reserve, state financial funds and other public financial resources must be
uniformly managed by the State and shall be used in an efficient, fair, public, transparent and lawful
manner.
2. The state budget consists of the central budget and local budgets, in which the central budget plays the
leading role and ensures national spending needs. State budget revenues and expenditures must be
estimated and must be prescribed by a law.
3. The national monetary unit is the Vietnam dong. The State shall ensure the stabilisation of the national
currency value.
Article 56
Agencies, organisations and individuals shall practice thrift and combat waste, and prevent and fight
corruption in socio-economic activities and the state management.
Article 57
1. The State shall encourage and create the conditions for organisations and individuals to create jobs.
2. The State shall protect the rights and legitimate interests of employees and employers and create the
conditions for the establishment of progressive, harmonious and stable employment relations.
Article 58
1. The State and society shall make investments to further the protection of and care for the People's health,
implement the universal health insurance, and adopt policies to prioritise health care for ethnic minority
people and people living in mountainous areas, on islands, and in areas that have extremely difficult socioeconomic conditions.
2. The State, society and family are responsible for protecting and caring for the health of mothers and
children, and for family planning.
Article 59
1. The State and society shall honour, commend, reward, and implement preferential treatment policies to,
people who have rendered meritorious service to the country.
2. The State shall create equal opportunities for citizens to enjoy social welfare, develop the social security
system, and adopt policies to support elderly people, people with disabilities, poor people, and other
disadvantaged people.
3. The State shall adopt housing development policies and create the conditions for everyone to have his or
her own home.
Article 60
1. The State and society shall care for the creation and development of an advanced Vietnamese culture that
is deeply imbued with the national identity and has absorbed the cultural quintessence of humanity.
2. The State and society shall develop literature and the arts in order to meet the diverse and healthy
spiritual needs of the People; and develop the mass media to meet the People's demands for information
and to serve national construction and defense.
3. The State and society shall create an environment for building prosperous, progressive and happy
Vietnamese families, and developing Vietnamese people with good health, cultural qualities, patriotism, a
spirit of solidarity, a sense of mastery and civic responsibility.
Article 61 1. To develop education is a top national policy that aims to increase public intellectual
standards, develop human resources, and nurture talented people. 2. The State shall prioritise investment in,
and attract other investment sources for, education; care for pre-school education; and ensure free
compulsory primary education; gradually universalise secondary education; develop higher education and
vocational education; and implement reasonable scholarship and school fee policies.
3. The State shall prioritise the development of education in mountainous areas, on islands, in ethnic
minority areas, and in areas that have extremely difficult socio-economic conditions; prioritise the
employment and development of talented people; and create the conditions for people with disabilities and
poor people to receive education and vocational training.
Article 62
1. To develop science and technology is a top national policy, playing the key role in national socioeconomic development.
2. The State shall prioritise investment in, and encourage organisations and individuals to invest in,
research, development, transfer and effective application of scientific and technological achievements;
guarantee the right to conduct scientific and technological research; and protect intellectual property rights.
3. The State shall create the conditions for everyone to participate in, and to enjoy the benefits from,
scientific and technological activities.
Article 63
1. The State shall adopt environmental protection policies; manage and use natural resources in an efficient
and sustainable manner; conserve nature and biodiversity; and take the initiative in preventing and
controlling natural disasters and responding to climate change.
2. The State shall encourage all activities for environmental protection and the development and use of new
energy and renewable energy.
3. Organisations and individuals that cause environmental pollution, natural resource exhaustion or
biodiversity depletion shall be strictly punished and shall rectify and compensate for damage.
Chapter IV: DEFENSE OF THE FATHERLAND
Article 64
To defend the socialist Vietnamese Fatherland is the mission of all the people. The State shall consolidate
and strengthen national defense by all the people and the people's security, with the people's armed forces
as the core; and fully utilise the total strength of the country to defend firmly the Fatherland, thereby
contributing to protecting peace in the region and around the world.
All agencies, organisations and citizens shall fulfill their national defense and security tasks.
Article 65
The people's armed forces shall show absolute loyalty to the Fatherland, the People, the Party and the State;
protect the independence, sovereignty, unity and territorial integrity of the Fatherland, national security,
and social order and safety; safeguard the People, the Party, the State and the socialist regime; and join the
entire people in national construction and the performance of international duties.
Article 66
The State shall build a revolutionary People's Army that is regular, well-trained and gradually modernised,
which has an appropriate permanent force, a large and powerful reserve force, and a strong and extensive
self-defense and militia force, as the core for performing national defense tasks.
Article 67
The State shall build a revolutionary People's Public Security force that is regular, well-trained and
gradually modernised, as the core to safeguard national security, ensure social order and safety, and prevent
and fight crime.
Article 68
The State shall promote the People's patriotism and revolutionary heroism and educate the entire people in
national defense and security; build the national defense and security industry; ensure proper equipment for
the people's armed forces, and combine national defense and security with economic activities and vice
versa; implement policies regarding military families; ensure the material and spiritual lives of the officers,
soldiers, workers and employees consistent with the nature of the activities of the People's Army and
People's Public Security force; and build powerful people's armed forces and unceasingly strengthen their
national defense capability.
Chapter V: THE NATIONAL ASSEMBLY
Article 69
The National Assembly is the highest representative body of the People and the highest state power body of
the Socialist Republic of Vietnam. The National Assembly shall exercise constitutional and legislative
powers, decide on important issues for the country, and conduct the supreme oversight over the activities of
the State.
Article 70
The National Assembly has the following tasks and powers:
1. To make and amend the Constitution; to make and amend laws;
2. To exercise the power of supreme oversight over the observance of the Constitution, laws and
resolutions of the National Assembly; to review work reports of the President, Standing Committee of the
National Assembly, Government, Supreme People's Court, Supreme People's Procuracy, National Election
Council, State Audit Office, and other agencies established by the National Assembly;
3. To decide on the country's major goals, targets, policies and tasks for socio-economic development;
4. To decide on fundamental national financial and monetary policies; to introduce, change or abolish
taxes; to decide on the division of revenues and expenditures between the central and local budgets; to
decide on the safe limits for national, public and government debts; to decide on state budget estimates and
the allocation of the central budget; and to approve the final accounts of the state budget;
5. To decide on state policies on ethnicities and religion;
6. To regulate the organisation and operation of the National Assembly, President, Government, People's
Courts, People's Procuracies, National Election Council, State Audit Office, local administrations, and
other agencies established by the National Assembly;
7. To elect, relieve from duty or remove from office the President, Vice Presidents, Chairperson and Vice
Chairpersons of the National Assembly, members of the Standing Committee of the National Assembly,
Chairperson of the Ethnic Council, Chairpersons of the Committees of the National Assembly, Prime
Minister, Chief Justice of the Supreme People's Court, Procurator General of the Supreme People's
Procuracy, Chairperson of the National Election Council, State Auditor General, and heads of other
agencies established by the National Assembly; to approve proposals on the appointment, relief from duty
or dismissal of the Deputy Prime Ministers, Ministers or other members of the Government, and Judges of
the Supreme People's Court; and to approve the lists of members of the National Defense and Security
Council and the National Election Council. After being elected, the President, Chairperson of the National
Assembly, Prime Minister, and Chief Justice of the Supreme People's Court shall take an oath of loyalty to
the Fatherland, the People and the Constitution;
8. To conduct votes of confidence on persons holding positions elected or approved by the National
Assembly;
9. To decide on the establishment or abolition of ministries or ministerial-level agencies of the
Government; to establish, dissolve, consolidate, separate or adjust the administrative boundaries of,
provinces, centrally run cities and special administrative-economic units; or to establish or abolish other
agencies in accordance with the Constitution and law;
10. To annul documents of the President, Standing Committee of the National Assembly, Government,
Prime Minister, Supreme People's Court and Supreme People's Procuracy that contravene the Constitution,
laws or resolutions of the National Assembly;
11. To decide on a general amnesty;
12. To stipulate the titles and ranks in the people's armed forces, diplomatic titles and ranks, and other state
titles and ranks; to institute orders, medals, and state honourary titles;
13. To decide on issues of war and peace; to determine states of emergency and other special measures to
ensure national defense and security;
14. To decide on fundamental foreign policies; to ratify, or decide on the accession to, or withdrawal from,
treaties related to war, peace, national sovereignty or the membership of the Socialist Republic of Vietnam
in important international and regional organisations, treaties on human rights or fundamental rights and
obligations of citizens, and other treaties that are not consistent with the laws or resolutions of the National
Assembly; 15. To decide to hold referenda.
Article 71
1. The term of the National Assembly is five years.
2. Sixty days before the expiration of the term of the National Assembly, a new National Assembly must be
elected.
3. In special cases, the National Assembly may decide to shorten or extend its term, at the proposal of the
Standing Committee of the National Assembly, if at least two-thirds of the total number of the National
Assembly deputies vote for it. The extension of the term of the National Assembly must not exceed twelve
months, except in wartime.
Article 72
The Chairperson of the National Assembly shall preside over National Assembly sessions; authenticate by
his or her signature the Constitution, laws and resolutions of the National Assembly; lead the work of the
Standing Committee of the National Assembly; organise the conduct of the external relations of the
National Assembly; and maintain a relationship with National Assembly deputies. Vice Chairpersons of the
National Assembly shall assist the Chairperson in his or her work as assigned by the Chairperson.
Article 73
1. The Standing Committee of the National Assembly is the permanent body of the National Assembly.
2. The Standing Committee of the National Assembly is composed of the Chairperson, Vice Chairpersons
and members.
3. The number of members of the Standing Committee of the National Assembly shall be decided by the
National Assembly. A member of the Standing Committee of the National Assembly may not concurrently
be a member of the Government.
4. The Standing Committee of the National Assembly shall perform its tasks and exercise its powers until a
new Standing Committee is elected by the succeeding National Assembly.
Article 74
The Standing Committee of the National Assembly has the following tasks and powers:
1. To prepare, convene and preside over sessions of the National Assembly;
2. To enact ordinances on issues assigned to it by the National Assembly; to interpret the Constitution, laws
and ordinances;
3. To oversee the implementation of the Constitution, laws and resolutions of the National Assembly and
ordinances and resolutions of the Standing Committee of the National Assembly; to oversee the activities
of the Government, Supreme People's Court, Supreme People's Procuracy, State Audit Office, and other
agencies established by the National Assembly;
4. To suspend the implementation of documents of the Government, Prime Minister, Supreme People's
Court or Supreme People's Procuracy that contravene the Constitution, or laws or resolutions of the
National Assembly, and refer those documents to the National Assembly to decide on their annulment at
the next session; to annul documents of the Government, Prime Minister, Supreme People's Court or
Supreme People's Procuracy that contravene ordinances or resolutions of the Standing Committee of the
National Assembly;
5. To direct, harmonize and coordinate the activities of the Ethnic Council and the Committees of the
National Assembly; to guide and ensure the conditions for the work of National Assembly deputies;
6. To propose the National Assembly to elect, relieve from duty or remove from office the President,
Chairperson or Vice Chairpersons of the National Assembly, members of the Standing Committee of the
National Assembly, Chairperson of the Ethnic Council, Chairpersons of the Committees of the National
Assembly, Chairperson of the National Election Council, or State Auditor General;
7. To supervise and guide the work of the People's Councils; to annul resolutions of the People's Councils
of provinces or centrally run cities that contravene the Constitution, laws or documents of state agencies at
higher levels; to dissolve the People's Councils of provinces or centrally run cities in case they cause
serious damage to the interests of the People;
8. To decide on the establishment, dissolution, consolidation, separation, or adjustment of the boundaries
of, the administrative units under the provinces or centrally run cities;
9. To decide to declare a state of war in case the National Assembly cannot meet, and report it to the
National Assembly for decision at its next session;
10. To decide on general or partial mobilisation; to declare or cancel a state of emergency throughout the
country or in a particular locality;
11. To conduct the external relations of the National Assembly;
12. To approve proposals on the appointment or relief from duty of ambassadors extraordinary and
plenipotentiary of the Socialist Republic of Vietnam;
13. To organise referenda in pursuance to decisions of the National Assembly.
Article 75
1. The Ethnic Council is composed of the Chairperson, Vice Chairpersons and members. The Chairperson
of the Ethnic Council shall be elected by the National Assembly; Vice Chairpersons and members of the
Ethnic Council shall be approved by the Standing Committee of the National Assembly.
2. The Ethnic Council shall study and make proposals on ethnic issues to the National Assembly; exercise
the power of overseeing the implementation of policies on ethnic groups, programmes and plans for socioeconomic development in mountainous and ethnic minority areas.
3. The Chairperson of the Ethnic Council may be invited to attend Government meetings to discuss the
implementation of policies on ethnic groups. The Government shall consult the Ethnic Council before
promulgating regulations on the implementation of policies on ethnic groups.
4. The Ethnic Council has additional tasks and powers similar to those of the Committees of the National
Assembly set out in Clause 2, Article 76.
Article 76
1. A Committee of the National Assembly is composed of the Chairperson, Vice Chairpersons and
members. Chairpersons of the Committees shall be elected by the National Assembly; Vice Chairpersons
and members of the Committees shall be approved by the Standing Committee of the National Assembly.
2. The Committees of the National Assembly shall verify draft laws, proposals on laws, other drafts, and
reports as assigned by the National Assembly or the Standing Committee of the National Assembly;
exercise the oversight power within the scope of their powers and tasks prescribed by a law; and make
proposals on issues that fall within the scope of their activities.
3. The establishment or dissolution of the Committees shall be decided by the National Assembly.
Article 77
1. The Ethnic Council or the Committees of the National Assembly may request members of the
Government, Chief Justice of the Supreme People's Court, Procurator General of the Supreme People's
Procuracy, State Auditor General or concerned individuals to make reports, give explanations or provide
documents on necessary matters. The persons who receive requests shall respond.
2. State agencies shall study and respond to the proposals made by the Ethnic Council and the Committees
of the National Assembly.
Article 78
The National Assembly may, as necessary, establish an ad-hoc Committee to study and verify a certain
project or investigate a certain issue.
Article 79
1. A National Assembly deputy shall represent the will and aspirations of the People of his or her
constituency and of the whole country.
2. A National Assembly deputy shall maintain close ties with voters and submit to their supervision; collect
and truthfully convey their views and aspirations to the National Assembly and concerned agencies or
organisations; meet and report to the voters on his or her activities and activities of the National Assembly;
respond to the requests and petitions of voters; monitor and press for the settlement of complaints and
denunciations, and guide and assist in the exercise of the right to complaint or denunciation.
3. A National Assembly deputy shall inform the People of, and mobilise them to implement, the
Constitution and laws.
Article 80
1. National Assembly deputies have the right to raise questions to the President, Chairperson of the
National Assembly, Prime Minister, Ministers and other members of the Government, Chief Justice of the
Supreme People's Court, Procurator General of the Supreme People's Procuracy or State Auditor General.
2. The questioned persons shall present their answers before the National Assembly at a session of the
National Assembly or, when the National Assembly is in recess, at a meeting of the Standing Committee of
National Assembly; the National Assembly and the Standing Committee of the National Assembly may, as
necessary, allow the questioned persons to submit written answers.
3. National Assembly deputies have the right to request agencies, organisations or individuals to provide
information and documents related to the latter's tasks. The heads of agencies or organisations, or
individuals shall answer questions raised by deputies within the time limit prescribed by a law.
Article 81
No National Assembly deputy may be arrested, held in custody, detained or prosecuted without the consent
of the National Assembly or, when the National Assembly is in recess, without the consent of the Standing
Committee of the National Assembly. In the case a deputy is detained for a flagrant offense, the agency
holding the deputy in custody shall immediately report the case to the National Assembly or the Standing
Committee of the National Assembly for consideration and decision.
Article 82
1. National Assembly deputies shall fully perform their tasks; and have the right to participate as members
in the Ethnic Council or a Committee of the National Assembly.
2. The Standing Committee of the National Assembly, Prime Minister, Deputy Prime Ministers, Ministers,
Heads of ministerial-level agencies or other agencies of the State shall create the conditions for National
Assembly deputies to perform their tasks.
3. The State shall ensure funding for the activities of National Assembly deputies.
Article 83
1. The National Assembly shall hold sessions in public. The National Assembly may, when necessary and
at the request of the President, Standing Committee of the National Assembly, Prime Minister or at least
one-third of the total number of the National Assembly deputies, decide to conduct a closed session.
2. The National Assembly shall hold two sessions a year. The National Assembly shall hold an
extraordinary session when so requested by the President, Standing Committee of the National Assembly,
Prime Minister or at least one-third of the total number of the National Assembly deputies. The Standing
Committee of the National Assembly shall convene sessions of the National Assembly.
3. The first session of a newly elected National Assembly must be convened within sixty days from the date
of election of the National Assembly deputies; this session must be opened and presided over by the
Chairperson of the outgoing National Assembly until the new National Assembly elects its Chairperson.
Article 84
1. The President, Standing Committee of the National Assembly, Ethnic Council and Committees of the
National Assembly, Government, Supreme People's Court, Supreme People's Procuracy, State Audit
Office, Central Committee of the Vietnam Fatherland Front, and central bodies of the Front's member
organisations have the right to submit draft laws to the National Assembly or submit draft ordinances to the
Standing Committee of the National Assembly.
2. National Assembly deputies have the right to submit their proposals on laws and ordinances, or draft
laws and draft ordinances, to the National Assembly or the Standing Committee of the National Assembly.
Article 85
1. Laws and resolutions of the National Assembly must be voted for by more than half of the total number
of the National Assembly deputies; the making or amendment of the Constitution, decisions to shorten or
extend the term of the National Assembly or to remove from office one of its deputies must be voted for by
at least two-thirds of the total number of the National Assembly deputies.
Ordinances and resolutions of the Standing Committee of the National Assembly must be approved by
more than half of the total number of its members.
2. Laws and ordinances must be promulgated within fifteen days of their passage, unless the President
requests reconsideration of an ordinance.
Chapter VI: THE PRESIDENT
Article 86
The President is the Head of State and shall represent the Socialist Republic of Vietnam internally and
externally.
Article 87
The President shall be elected by the National Assembly from among its deputies. The President is
responsible, and shall report on his or her work, to the National Assembly. His or her term of office follows
the term of the National Assembly. At the expiration of the term of the National Assembly, the President
shall remain in office until a new President is elected by the succeeding National Assembly.
Article 88
The President has the following tasks and powers:
1. To promulgate the Constitution, laws and ordinances; to request the Standing Committee of the National
Assembly to reconsider its ordinances, within ten days of their passage; if those ordinances are still voted
for by the Standing Committee of the National Assembly and disapproved by the President, the President
shall refer the matter to the National Assembly for decision at its next session;
2. To propose to the National Assembly to elect, relieve from duty or remove from office the Vice
President or Prime Minister; and, based on resolutions of the National Assembly, to appoint, relieve from
duty or dismiss Deputy Prime Ministers, Ministers or other members of the Government;
3. To propose the National Assembly to elect, relieve from duty or remove from office the Chief Justice of
the Supreme People's Court or Procurator General of the Supreme People's Procuracy; and, based on
resolutions of the National Assembly, to appoint, relieve from duty or dismiss Judges of the Supreme
People's Court; to appoint, relieve from duty or dismiss Deputy Chief Justices of the Supreme People's
Court, Judges of other Courts or Deputy Procurators General or Procurators of the Supreme People's
Procuracy; to decide on a special amnesty; or, based on resolutions of the National Assembly, to proclaim a
general amnesty;
4. To decide on the award of orders, medals, state prizes or state honourary titles; to decide to permit
naturalization in Vietnam, renunciation of Vietnamese citizenship, restoration of Vietnamese citizenship or
deprivation of Vietnamese citizenship;
5. To assume command of the people's armed forces and hold the office of Chairperson of the National
Defense and Security Council; to decide on the award, promotion, demotion or deprivation of the ranks of
general, naval rear admiral, naval vice admiral and naval admiral; to appoint, relieve from duty or dismiss
the Chief of the General Staff or the Director of the Political General Department of the Vietnamese
People's Army; based on resolutions of the National Assembly or the Standing Committee of the National
Assembly, to promulgate or annul decisions to declare a state of war; based on resolutions of the Standing
Committee of the National Assembly, to issue an order on general mobilisation or partial mobilisation, to
declare or cancel a state of emergency; or, in case the Standing Committee of the National Assembly
cannot meet, to declare or cancel a state of emergency nationwide or in a particular locality;
6. To receive foreign ambassadors extraordinary and plenipotentiary; based on resolutions of the Standing
Committee of the National Assembly, to appoint, relieve from duty; decide to send or recall ambassadors
extraordinary and plenipotentiary of the Socialist Republic of Vietnam; to confer the ambassadorial title
and rank; to decide on the negotiation and conclusion of treaties in the name of the State; to submit to the
National Assembly for ratification of, or decision on the accession to, or withdrawal from, the treaties
specified in Clause 14, Article 70; to decide on the ratification of, accession to, or withdrawal from, other
treaties in the name of the State.
Article 89
1. The National Defense and Security Council is composed of the Chairperson, Vice Chairperson and
members. The list of members of the National Defense and Security Council shall be submitted by the
President to the National Assembly for approval. The National Defense and Security Council shall work on
a collegial basis and make its decisions by a vote of the majority.
2. The National Defense and Security Council shall propose the National Assembly or, when the National
Assembly cannot meet, the Standing Committee of the National Assembly to decide on a state of war;
mobilise all forces and capacity of the country to defend the Fatherland; perform special tasks and exercise
special powers assigned to and vested in it by the National Assembly in case of war; and decide on the
participation of the people's armed forces in peacekeeping operations in the region and around the world.
Article 90
The President may attend meetings of the Standing Committee of the National Assembly and meetings of
the Government. The President may request the Government to meet to discuss issues that he or she
considers necessary to fulfill his or her tasks or exercise his or her powers.
Article 91
The President shall issue orders and decisions for the performance of his or her tasks or the exercise of his
or her powers.
Article 92
The Vice President shall be elected by the National Assembly from among its deputies. The Vice President
shall assist the President in his or her work and may be delegated certain tasks by the President to perform
on behalf of the President.
Article 93
When the President is incapacitated from work over a long period of time, the Vice President shall succeed
as acting President. In case of vacancy of the Presidency, the Vice President shall serve as acting President
until a new President is elected by the National Assembly.
Chapter VII: THE GOVERNMENT
A rticle 94
The Government is the highest state administrative body of the Socialist Republic of Vietnam, shall
exercise executive power, and is the executive body of the National Assembly.
The Government is responsible to the National Assembly and shall report on its work to the National
Assembly, the Standing Committee of the National Assembly and the President.
Article 95
1. The Government is composed of the Prime Minister, Deputy Prime Ministers, Ministers, and Heads of
ministerial-level agencies.
The structure and number of members of the Government shall be decided by the National Assembly.
The Government shall work on a collegial basis and make its decisions by a vote of the majority.
2. The Prime Minister is the head of the Government and responsible to the National Assembly for the
work of the Government and assigned tasks; and shall report on the work of the Government and the Prime
Minister to the National Assembly, the Standing Committee of the National Assembly and the President.
3. Deputy Prime Ministers shall assist the Prime Minister in his or her work as assigned by the Prime
Minister, and are responsible to the Prime Minister for their assigned tasks. In the absence of the Prime
Minister, a Deputy Prime Minister delegated by the Prime Minister shall lead the work of the Government
on behalf of the Prime Minister.
4. Ministers and Heads of ministerial-level agencies are personally responsible to the Prime Minister,
Government and National Assembly for the sectors and fields under their charge and, together with other
members of Government, shall assume the collective responsibility for the work of the Government.
Article 96
The Government has the following tasks and powers:
1. To organise the implementation of the Constitution, laws and resolutions of the National Assembly,
ordinances and resolutions of the Standing Committee of the National Assembly, and orders and decisions
of the President;
2. To propose and formulate policies to be submitted to the National Assembly or the Standing Committee
of the National Assembly for decision or decide on policies according to its competence, for the
performance of its tasks and the exercise of its powers set out in this Article; to submit draft laws, draft
state budget estimates and other projects to the National Assembly; and to submit draft ordinances to the
Standing Committee of the National Assembly;
3. To perform the unified management of the economy, culture, social affairs, education, health, science,
technology, environment, information, communications, external relations, national defense, national
security, and social order and safety; to carry out orders on general mobilisation or partial mobilisation or
orders to proclaim a state of emergency, and take other necessary measures to defend the Fatherland and to
protect the People's lives and property;
4. To propose the National Assembly for decision the establishment or abolition of ministries or
ministerial-level agencies; the establishment, dissolution, consolidation, separation, or adjustment of the
administrative boundaries of, provinces, centrally run cities or special administrative-economic units; to
propose the Standing Committee of the National Assembly for decision the establishment, dissolution,
consolidation, separation or adjustment of the boundaries of, administrative units under the provinces and
centrally run cities;
5. To perform the unified management of the national administration system; to manage cadres, civil
servants, public employees, and the public service in state agencies; to organise inspection and control
work, the settlement of complaints and denunciations, and the fight against bureaucracy and corruption in
the state apparatus; to lead the work of the ministries, ministerial-level agencies, government-attached
agencies, and People's Committees at all levels; to guide and examine the People's Councils in their
implementation of the documents of state agencies at higher levels, to create the conditions for the People's
Councils to perform their tasks and exercise their powers which are prescribed by a law;
6. To protect the rights and interests of the State and society, human rights and citizens' rights; and to
ensure social order and safety;
7. To negotiate and conclude treaties in the name of the State, as authorized by the President; to decide on
the conclusion, accession to, ratification of, or withdrawal from, treaties in the name of the Government,
except for treaties to be submitted to the National Assembly for ratification as specified in Clause 14,
Article 70; to protect the interests of the State and the legitimate interests of Vietnamese organisations or
citizens in foreign countries;
8. To coordinate with the Central Committee of the Vietnam Fatherland Front and central bodies of the
socio-political organisations in the performance of the tasks and the exercise of the powers of the
Government.
Article 97
The term of the Government follows the term of the National Assembly. At the expiration of the term of
the National Assembly, the Government shall remain in office until a new Government is elected by the
succeeding National Assembly.
Article 98
The Prime Minister shall be elected by the National Assembly from among its deputies.
The Prime Minister has the following tasks and powers:
1. To lead the work of the Government; to lead the formulation of policies and organise the implementation
of laws;
2. To lead and take responsibility for the work of the state administration system from the central to the
local level, ensuring the consistency and continuity of the national administration system;
3. To submit to the National Assembly for approval proposals on the appointment, relief from duty or
dismissal of Deputy Prime Ministers, Ministers or other members of the Government; to appoint, relieve
from duty or dismiss Deputy Ministers or officials of equal rank of ministries or ministerial-level agencies;
to approve the election and relief from duty, and to decide on the transfer or dismissal of Chairpersons and
Vice Chairpersons of the People's Committees of provinces or centrally run cities;
4. To suspend the implementation of, or annul the documents, of Ministers, Heads of ministerial-level
agencies, People's Committees, Chairpersons of the People's Committees of provinces or centrally run
cities that contravene the Constitution, laws or documents of state agencies at higher levels; to suspend the
implementation of resolutions of the People's Councils of provinces or centrally run cities that contravene
the Constitution, laws or documents of state agencies at higher levels and, at the same time, to propose the
Standing Committee of the National Assembly to annul them;
5. To decide on and direct the negotiation of, and to direct the conclusion, and accession to, or ratification
of, treaties within the scope of the tasks and powers of the Government; to organise the implementation of
treaties to which the Socialist Republic of Vietnam is a contracting party;
6. To make reports to the People through the mass media on important issues falling within the competence
of the Government and the Prime Minister.
Article 99
1. Ministers and Heads of ministerial-level agencies are members of the Government, shall preside over
their ministries or ministerial-level agencies, and shall lead the work of their ministries or ministerial-level
agencies; shall perform the state management of the sectors and fields under their charge; and shall
organise and monitor nationwide the implementation of laws concerning their sectors and fields.
2. Ministers and Heads of ministerial-level agencies shall report on their work to the Government and
Prime Minister; and make reports to the People on important issues under their management.
Article 100
The Government, the Prime Minister, Ministers, and Heads of ministerial-level agencies shall promulgate
legal documents to perform their tasks and exercise their powers, review the implementation of those
documents, and deal with unlawful documents in accordance with law.
Article 101
The President of the Central Committee of the Vietnam Fatherland Front and heads of central bodies of
socio-political organisations may be invited to meetings of the Government that discuss relevant issues.
Chapter VIII: THE PEOPLE'S COURTS AND THE PEOPLE'S PROCURACIES
Article 102
1. The People's Courts are the judicial bodies of the Socialist Republic of Vietnam and exercise judicial
power.
2. The People's Courts include the Supreme People's Court and other Courts prescribed by a law.
3. The People's Courts have the duty to safeguard justice, human rights, citizens' rights, the socialist
regime, the interests of the State, and the rights and legitimate interests of organisations and individuals.
Article 103
1. Except in the case of trial by summary procedure, People's Assessors shall participate in first-instance
trials by the People's Courts.
2. During a trial, the Judges and Assessors are independent and shall obey only the law. Agencies,
organisations or individuals are prohibited from interfering in a trial by Judges and People's Assessors.
3. The People's Courts shall hold their hearings in public. In a special case which requires protection of
state secrets, conformity with the fine customs and traditions of the nation, protection of minors or
protection of private life and at the legitimate request of an involved party, the People's Court may hold a
closed hearing.
4. Except in the case of a trial by summary procedure, the People's Courts shall try cases on a collegial
basis and make decisions by a vote of the majority.
5. The adversarial principle shall be guaranteed in trials.
6. The first-instance and appellate hearing system shall be guaranteed.
7. The right of the accused or defendants to a defense, and the right of involved parties to protect their
legitimate interests, shall be guaranteed.
Article 104
1. The Supreme People's Court is the highest judicial body of the Socialist Republic of Vietnam.
2. The Supreme People's Court shall supervise the judicial work of other Courts, unless otherwise
prescribed by a law.
3. The Supreme People's Court shall make overall assessment of adjudicating practices, ensuring the
uniform application of law in trial.
Article 105
1. The term of office of the Chief Justice of the Supreme People's Court follows the term of the National
Assembly. The appointment, relief from duty, dismissal, and term of office of the Chief Justices of other
Courts shall be prescribed by a law.
2. The Chief Justice of the Supreme People's Court is responsible, and shall report on his or her work, to the
National Assembly. When the National Assembly is in recess, he or she is responsible, and shall report on
his or her work, to the Standing Committee of the National Assembly and the President. The reporting
regime applicable to the Chief Justices of other Courts shall be prescribed by a law.
3. The appointment, approval, relief from duty, dismissal, and term of office of Judges, and the election and
term of office of Assessors, shall be prescribed by a law.
Article 106
The judgments and decisions of the People's Courts which have taken legal effect must be respected by
agencies, organisations and individuals and must be strictly observed by the concerned agencies,
organisations or individuals.
Article 107
1. The People's Procuracies shall exercise the power to prosecute and supervise judicial activities.
2. The People's Procuracies include the Supreme People's Procuracy and other Procuracies as prescribed by
a law.
3. The People's Procuracies have the duty to safeguard the law, human rights, citizens' rights, the socialist
regime, the interests of the State, and the rights and legitimate interests of organisations and individuals,
thus contributing to ensuring the strict and unified observance of the law.
Article 108
1. The term of office of the Procurator General of the Supreme People's Procuracy follows the term of the
National Assembly. The appointment, relief from duty, dismissal, and term of office of the Chief
Procurators of other Procuracies and of Procurators shall be prescribed by a law.
2. The Procurator General of the Supreme People's Procuracy is responsible, and shall report on his or her
work, to the National Assembly. When the National Assembly is in recess, he or she is responsible, and
shall report on his or her work, to the Standing Committee of the National Assembly and the President. The
reporting regime applicable to the Chief Procurators of other Procuracies shall be prescribed by a law.
Article 109
1. The People's Procuracies shall be led by their Chief Procurators. The Chief Procurator of a People's
Procuracy is subject to the leadership of the Chief Procurator of the People's Procuracy at a higher level.
The Chief Procurators of Procuracies at lower levels are subject to the unified leadership of the Procurator
General of the Supreme People's Procuracy.
2. When exercising the power to prosecute or to supervise judicial activities, a Procurator shall abide by the
law and is subject to the direction by the Chief Procurator of the People's Procuracy.
Chapter IX: LOCAL ADMINISTRATION
Article 110
1. The administrative units of the Socialist Republic of Vietnam shall be defined as follows:
The country shall be divided into provinces and centrally run cities;
A province shall be divided into rural districts, towns, and provincial cities; a centrally run city shall be
divided into urban districts, rural districts, towns, and equivalent administrative units;
A rural district shall be divided into communes and townships; a town or provincial city shall be divided
into wards and communes; and an urban district shall be divided into wards.
Special administrative-economic units may be established by the National Assembly.
2. The establishment, dissolution, consolidation, separation or adjustment of the boundaries of, an
administrative unit must be consulted with local People and must comply with the process and procedures
prescribed by a law.
Article 111
1. Local administrations shall be organised in administrative units of the Socialist Republic of Vietnam.
2. Local administration levels composed of the People's Council and People's Committee shall be organised
consistent with the characteristics of the rural areas, urban areas, islands or special administrative-economic
units prescribed by a law.
Article 112
1. Local administrations shall organise and ensure implementation of the Constitution and law in their
localities; decide on local issues prescribed by a law; and submit to the examination and supervision by
state agencies at higher levels.
2. The tasks and powers of local administrations shall be determined on the basis of determining the powers
between state agencies at the central and local levels and for each level of local administration.
3. Local administrations may, as necessary, be assigned certain tasks of state agencies at higher levels,
along with the necessary means to ensure the performance of those tasks.
Article 113
1. The People's Council is the local state power body, representing the will, aspirations and right to mastery
of the local People, shall be elected by the local People, and is responsible to the local People and state
agencies at higher levels.
2. The People's Council shall decide on local issues as prescribed by a law; and supervise the observance of
the Constitution and law in its locality and the implementation of its own resolutions.
Article 114
1. The People's Committee at a local administration level, which shall be elected by the People's Council of
the same level, is the executive body of the respective People's Council and is the local state administrative
body, and is responsible to the People's Council and state administrative agencies at higher levels.
2. The People's Committee shall organise implementation of the Constitution and law in its locality and
implementation of the resolutions of the People's Council, and perform the tasks assigned to it by state
agencies at higher levels.
Article 115
1. A People's Council deputy shall represent the will and aspirations of local People; shall maintain close
ties with voters and be subject to their supervision, meet and report to voters on his or her own activities
and activities of the People's Council, respond to their requests and petitions; and consider and press for the
settlement of complaints and denunciations. A People's Council deputy has the task of mobilising the
People to implement the Constitution, law, policies of the State, and resolutions of the People's Council,
and encouraging the People to participate in the state management.
2. A People's Council deputy has the right to raise questions to the Chairperson or other members of the
People's Committee, Chief Justice of the People's Court, Chief Procurator of the People's Procuracy, and
Heads of the agencies of the People's Committee. The questioned persons shall present their answers before
the People's Council. A People's Council deputy has the right to make proposals to state agencies,
organisations, and units in the locality. The heads of those agencies, organisations or units shall receive the
deputy, then consider and resolve the issues raised in his or her proposals.
Article 116
1. The People's Council and the People's Committee shall report on the local situation to the Vietnam
Fatherland Front and mass organisations, listen to the opinions and proposals of those organisations for
strengthening the local administration and socio-economic development; and coordinate with the Vietnam
Fatherland Front and mass organisations in encouraging the People, together with the State, to perform
socio-economic, national defense and security tasks in the locality.
2. The President of the Vietnam Fatherland Front and heads of socio-political organisations in the locality
may be invited to sessions of the People's Council and to meetings of the People's Committee of the same
level that discuss relevant issues.
Chapter X: THE NATIONAL ELECTION COUNCIL, THE STATE AUDIT OFFICE
Article 117
1. The National Election Council shall be established by the National Assembly and has the task of
organizing the election of National Assembly deputies, and directing and guiding the election of deputies to
People's Councils at all levels.
2. The National Election Council is composed of the Chairperson, Vice Chairpersons and members.
3. The organisation and specific tasks and powers of the National Election Council and the number of its
members shall be prescribed by a law.
Article 118
1. The State Audit Office shall be established by the National Assembly, operate independently, abide only
by the law, and audit the management and use of public finance and assets.
2. The State Auditor General is the head of the State Audit Office and shall be elected by the National
Assembly. The term of office of the State Auditor General shall be prescribed by a law.
The State Auditor General is responsible, and shall report on audit results and his or her work, to the
National Assembly. When the National Assembly is in recess, he or she is responsible, and shall report on
his or her work, to the Standing Committee of the National Assembly.
3. The organisation and specific tasks and powers of the State Audit Office shall be prescribed by a law.
Chapter XI: EFFECTIVENESS OF THE CONSTITUTION AND AMENDMENT TO THE
CONSTITUTION
Article 119
1. The Constitution is the fundamental and supreme law of the Socialist Republic of Vietnam.
All other legal documents must conform to the Constitution.
All violations of the Constitution shall be dealt with.
2. The National Assembly and its agencies, the President, the Government, People's Courts, People's
Procuracies, other agencies of the State and all the People shall defend the Constitution.
The mechanism to defend the Constitution shall be prescribed by a law.
Article 120
1. The President, the Standing Committee of the National Assembly, the Government or at least one-third
of the total number of the National Assembly deputies have the right to propose the making of, or an
amendment to, the Constitution. The National Assembly shall decide on the making of, or amendment to,
the Constitution when at least two-thirds of the total number of the National Assembly deputies vote for it.
2. The National Assembly shall establish a Constitution Drafting Committee. The composition and number
of members, tasks and powers of the Constitution Drafting Committee shall be decided by the National
Assembly at the proposal of the Standing Committee of the National Assembly.
3. The Constitution Drafting Committee shall draft the Constitution, collect the opinions of the People on
the draft, and submit it to the National Assembly.
4. The Constitution shall be adopted when at least two-thirds of the total number of the National Assembly
deputies vote for it. The holding of a referendum on the Constitution shall be decided by the National
Assembly.
5. The time limit for the promulgation and effective date of the Constitution shall be decided by the
National Assembly.-VNA
This Constitution was approved by the National Assembly of the Socialist Republic of Vietnam, term XIII, at its sixth
session on 28 November 2013.
PRESIDENT OF THE NATIONAL ASSEMBLY
Nguyễn Sinh Hùng
NATIONAL ASSEMBLY
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SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No. 59/2020/QH14
Hanoi, June 17, 2020
LAW ON ENTERPRISES
Pursuant to the Constitution of the Socialist Republic of Vietnam;
The National Assembly promulgates the Law on Enterprises.
Chapter I
GENERAL PROVISIONS
Article 1. Scope
This Law provides for establishment, management, reorganization, dissolution and relevant
activities of enterprises, including limited liability companies, joint stock companies,
partnerships and sole proprietorships; groups of companies.
Article 2. Regulated entities
1. Enterprises.
2. Organizations and individuals relevant to establishment, management, reorganization,
dissolution and relevant activities of enterprises.
Article 3. Application of the Law on Enterprises and other laws
In case there are other laws that provide for establishment, management, reorganization,
dissolution and relevant activities of special enterprises, regulations of these laws shall apply.
Article 4. Definitions
For the purpose of this document, the terms below are construed as follows:
1. “copy” means a copy extracted from master register or a copy that has been certified by a
competent organization or compared to the original document.
2. “foreigner” means a person who has a foreign nationality according to his/her documents.
3. “shareholder” means the individual or organization that holds at least a share of a joint stock
company.
4. “founding shareholder” means a shareholder that holds at least an ordinary share and has
his/her signature in the list of shareholders that are also founder of the joint stock company.
5. “dividend” means a net profit on each share in cash or other assets.
6. A “company” can be a limited liability company, joint stock company or partnership.
7. A “limited liability company” can be a single-member limited liability company or multiplemember limited liability company.
8. “National Enterprise Registration Portal” means a web portal used for enterprise registration
and access and publishing of enterprise registration.
9. “national enterprise registration database” means the collection of nationwide enterprise
registration data.
10. “enterprise” means an organization that has a proper name, assets, premises, is established or
registered in accordance with law for business purposes.
11. A “state-owned enterprise” means an enterprise more than 50% charter capital or voting
shares of which is held by the State as prescribed in Article 88 of this Law.
12. A “Vietnamese enterprise” means an enterprise that is registered in accordance with
Vietnam’s law and has its headquarters located within Vietnam.
13. “mailing address” means the address registered as the headquarters of an organization; the
permanent residence, working place or another address of an individual that is registered as
mailing address with an enterprise.
14. “market value” of a stake or share means the price at which the stake or share is traded on the
market at the nearest time, the price agreed on by the buyer and the seller, or the price
determined by a valuation organization.
15. “Certificate of Enterprise Registration” means a physical or electronic document bearing
enterprise registration information provided for the enterprise by a business registration
authority.
16. “legal documents” of an individual include the ID card (old or new format), passport and
other legal personal identification documents.
17. “legal documents” of an enterprise include the Establishment Decision, Certificate of
Enterprise Registration and equivalent documents.
18. “capital contribution” means the contribution of capital as charter capital to establish a new
company or contribution of additional capital to an existing company.
19. “National Enterprise Registration Information System” includes the National Enterprise
Registration Portal, national enterprise registration database, relevant databases and technical
infrastructure.
20. “valid application” means an application that contains adequate documents specified in this
Law and all the documents are completed as prescribed by law.
21. “business” or “business operation” means continuous execution of one, some or all stages
including investment, manufacturing, sale or provision of services on the market for profit.
22. “relatives” of a person include: the spouse, biological parents, adoptive parents, parents-inlaws, biological children, adopted children, children-in-law, biological siblings, siblings-in-law
and biological siblings of the spouse.
23. “related person” means any individual or organization that has a direct or indirect
relationship with an enterprise in the following cases:
a) The parent company, its executive and legal representative, and the person who has the power
to designate the executive officer of the parent company;
b) The subsidiary company, its executive and legal representative;
c) Any individual, organization or group of individuals or organizations that can influence the
enterprise’s operation through ownership, acquisition of shares/stakes or making corporal
decisions;
d) The enterprise’s executive, legal representative, controllers;
dd) Spouses, biological parents, adoptive parents, parents-in-laws, biological children, adopted
children, children-in-law, biological siblings, siblings-in-law and biological siblings of spouses
of the executive officer, legal representative, controllers, members/partners and shareholders
holding the controlling stakes/shares;
e) Any individual that is the authorized representative of the companies or organizations
mentioned in Point a, b and c of this Clause;
g) Any enterprise in which an individual, company or organization mentioned in Points a, b, c, d,
dd and e of this Clause has the controlling interest.
24. “executive of an enterprise means the owner of a sole proprietorship, a general partner of a
partnership, chairperson or member of the Member/Partner Assembly, President of a company,
President or member of the Board of Directors, Director/General Director, or holder of another
managerial position prescribed in the company’s charter.
25. “founder” means the individual or organization that establishes or contributes capital to
establish an enterprise.
26. “foreign investor” means an individual or organization as defined by the Law on Investment.
27. “stake” means the total value of assets that a member/partner has contributed or promises to
contribute to a limited liability company/partnership. “holding” means the ratio of a
member/partner’s stake to the charter capital of the limited liability company/partnership.
28. “public products and services” are essential products and services of a country, area or
community, thus have to be maintained by the State for assurance of common interests or
defense and security, and the costs of provision of which under market mechanism are hardly
recoverable.
29. “member” or “partner” means the individual or organization that holds part or all of charter
capital of a limited liability company or partnership.
30. A “partner” of a partnership can be a general partner or limited partner.
31. “reorganization” of an enterprise means the full division, partial division, consolidation,
acquisition or conversion of an enterprise.
32. “foreign organization” means an organization established overseas under the foreign
country’s laws.
33. “voting capital” means the stake or share that endows the holder the right to vote on the
issues within the jurisdiction of the Board of Members or General Meeting of Shareholders.
34. “charter capital” means the total value of assets that have been contributed or promised by
the members/partners/owners when the limited liability company or partnership is established; or
the total of nominal values of the sold or subscribed shares when a joint stock company is
established.
Article 5. Protection of enterprises and their owners by the State
1. The State recognizes the long-term existence and development of the types of enterprises
prescribed in this Law; ensures equality of enterprises before the law regardless of their types of
business and economic sector; recognizes lawful profitability of business operation.
2. The State recognizes and protects the rights to ownership of assets, capital, income, other
lawful rights and interests of enterprises and their owners.
3. Lawful assets and capital of enterprises and their owners shall not be nationalized or
administratively confiscated. Unless strictly necessary, the State may purchase or requisition
assets of enterprises, in which case these enterprises shall be paid or reimbursed for in
accordance with regulations of law on purchase and requisitioning of assets and in a manner that
ensures the enterprises’ interests and non-discrimination among the types of business.
Article 6. Internal political organizations, socio-political organizations and employee
representative organizations of enterprises
1. The internal political organization, socio-political organization and employee representative
organization of an enterprise shall operate in accordance with the Constitution, the law and the
enterprise’s charter.
2. Enterprises shall respect and not obstruct the establishment of internal political organizations,
socio-political organizations and employee representative organizations; must not obstruct
participation of their employees in such organizations.
Article 7. Rights of enterprises
Every enterprise has the right to:
1. Freely engage in any business line that is not banned by law.
2. Freely run the business and choose a type of business organization; choose business lines, area
of operation and type of operation; change the scale of business and business lines.
3. Choose the method of mobilizing, distributing and using capital.
4. Freely find markets, customers and enter into contracts.
5. Export and import.
6. Hire employees in accordance with employment laws.
7. Apply technological advances to improve business efficiency; have intellectual property rights
protected in accordance with intellectual property laws.
8. Acquire, use, dispose of their assets.
9. Reject unlawful requests for provision of resources from other organizations and individuals.
10. File complaints and participate in proceedings as prescribed by law.
11. Other rights prescribed by law.
Article 8. Obligations of enterprises
1. Maintain the fulfillment of conditions for conducting restricted business lines and business
lines restricted to foreign investors (hereinafter referred to as “restricted business lines”)
prescribed by law throughout the course of business operation.
2. Apply for enterprise registration; register changes to enterprise registration information;
publish information about the establishment and operation of the enterprise; submit reports and
fulfill other obligations prescribed by this Law.
3. Take responsibility for the accuracy of information in the enterprise registration application
and reports; promptly rectify incorrect information if found.
4. Organize accounting works; pay taxes and fulfill other financial obligations prescribed by law.
5. Protect lawful rights and interests of employees as prescribed by law; do not discriminate
against or insult employees; do not mistreat or force employees to work; do not employ minors
against the law; enable employees to improve their vocational skills through training; buy social
insurance, unemployment insurance, health insurance and other insurance for employees as
prescribed by law.
6. Other obligations prescribed by law.
Article 9. Rights and obligations of enterprises providing public products and services
An enterprise providing public products and services shall:
1. Have the rights and obligations specified in Article 7, Article 8 and relevant regulations of this
Law.
2. Be reimbursed in accordance with bidding laws or collect payments as prescribed by
competent authorities.
3. Have appropriate time to provide products/services to recoup investment and make reasonable
profit.
4. Provide products/services with adequate quantity, good quality and on schedule at the prices
imposed by competent authorities.
5. Ensure fairness and convenience for customers.
6. Take legal responsibility for the quantity, quality, supply conditions and prices for their
products/services.
Article 10. Criteria, rights and obligations of social enterprises
1. A social enterprise shall:
a) Be registered in accordance with this Law;
b) Operate for the purposes of resolving social and environmental issues for public interests;
c) Use at least 51% of the annual post-tax profit for re-investment to achieved registered targets.
2. In addition to the rights and obligations of an enterprise prescribed in this Law, a social
enterprise also has the following rights and obligations:
a) The owner or executive of a social enterprise shall be enabled to obtain relevant licenses and
certificates prescribed by law;
b) A social enterprise may raise and receive donations from individuals, enterprises, nongovernmental organizations and other Vietnamese and foreign organizations to cover its
administrative expenses and operating costs;
c) Adhere to the objectives and fulfill the conditions specified in Point b and Point c Clause 1 of
this Article throughout its course of operation;
b) Do not use donations for purposes other than covering administrative expenses and operating
costs and resolving the social and environmental issues registered by the enterprise;
dd) When receiving donations and aids, submit annual reports on the enterprise’s operation to a
competent authority;
3. Inform the competent authority when an social or environmental objective is terminated or
profit is not used for re-investment in accordance with Point b and Point c Clause 1 of this
Article.
4. The State shall adopt policies to encourage and assist in development of social enterprises.
5. The Government shall elaborate this Article.
Article 11. Document retention
1. An enterprise, depending on its type of business, shall retain the following documents:
a) The charter, internal rules and regulations; the member/partner/shareholder register;
b) The certificate of Industrial property rights; the certificate of registration of product/service
quality; other licenses and certificates;
c) Documents proving the enterprise’s ownership of its assets;
d) Votes, vote counting records, minutes of meetings of the Board of Members/Partners, General
Meeting of Shareholders, Board of Directors; the enterprise’s decisions;
dd) The prospectus for offering or listing securities;
e) Reports of the Board of Controllers, verdicts of inspecting authorities and audit organizations;
g) Accounting books, accounting records and annual financial statements.
2. The documents mentioned in Clause 1 of this Article shall be retained at the enterprise’s
headquarters or another location specified in the enterprise’s charter for a period of time
prescribed by law.
Article 12. The enterprise’s legal representative
1. The enterprise’s legal representative is the person that, on behalf of the enterprise, exercises
and performs the rights and obligations derived from the enterprise’s transactions, acts as the
plaintiff, defendant or person with relevant interests and duties before in court, arbitration, and
performs other rights and obligations prescribed by law.
2. A limited liability company or joint stock company may have one or more than one legal
representative. The enterprise’s charter shall specify the quantity, position, rights and obligations
of its legal representatives. In case there are more than one legal representative, the charter shall
specify the rights and obligations of each of them. Otherwise, each of the legal representatives
shall fully representative the enterprise and take joint responsibility for any damage to the
enterprise as prescribed by civil laws and relevant laws.
3. An enterprise shall have at least one legal representative residing in Vietnam. Whenever this
representative leaves Vietnam, he/she has to authorize another Vietnamese resident, in writing,
to act as the legal representative, in which case the authorizing person is still responsible for the
authorized person’s performance.
4. In case the authorizing person has not returned to Vietnam when the letter of authorization
mentioned in (3) expires and does not have any further actions:
a) In case the enterprise is a sole proprietorship, the authorized person shall continue acting as
the enterprise’s legal representative until the authorizing person returns;
b) In case the enterprise is a limited liability company, joint stock company or partnership, the
authorized person shall continue acting as the enterprise’s legal representative until the
authorizing person returns or until the enterprise’s owner, Board of Members/Partners or Board
of Directors designates another legal representative.
5. In case the only legal representative of an enterprise she is not present in Vietnam for more
than 30 days without authorizing another person to act as the enterprise’s legal representative, or
is dead, missing, facing criminal prosecution, kept in temporary detention, serving an
imprisonment sentence, serving an administrative penalty in a correctional institution or
rehabilitation center, has limited legal capacity or is incapacitated, has difficulty controlling
his/her own behaviors, is banned by the court from holding certain positions or doing certain
works, the enterprise’s owner, Board of Members/Partners or Board of Directors shall appoint
another legal representative, except for the cases specified in Clause 6 of this Article.
6. In a two-member limited liability company, if the member who is the company’s legal
representative is dead, missing, facing criminal prosecution, kept in temporary detention,
serving an imprisonment sentence, serving an administrative penalty in a correctional institution
or rehabilitation center, making getaway; has limited legal capacity or is incapacitated, has
difficulty controlling his/her own behaviors, is banned by the court from holding certain
positions or doing certain works, the other member shall obviously assume the position of the
company’s legal representative until the Board of Members issues a new decision on the
company’s legal representative.
7. The court and other proceeding authorities are entitled to appoint the legal representative who
participates in proceedings as prescribed by law.
Article 13. Responsibilities of the enterprise’s legal representative
1. An enterprise’s legal representative shall:
a) Exercise and perform his/her rights and obligations in an honest and prudent manner to protect
the enterprise’s lawful interests;
b) Be loyal to the enterprise’s interests; not abuse his/her power and position or use the
enterprise’s information, secrets, business opportunities and assets for personal gain or serve any
other organization’s or individual’s interests;
c) Promptly and fully provide the enterprise with information about the enterprises that he/she or
his/her related person owns or has shares/stakes in as prescribed in this Law.
2. The enterprise’s representative shall be personally responsible for any damage to the
enterprise within the limits of responsibilities specified in Clause 1 of this Article.
Article 14. Authorized representatives of the owner/members/partners/shareholders that
are organizations
1. Authorized representatives of the owner/members/partners/shareholders that are organizations
shall be authorized in writing by the owner/members/partners/shareholders in accordance with
this Law.
2. Unless otherwise prescribed by the charter, the designation of the authorized representative
shall comply with the following regulations:
a) An organization that is a member of a multiple-member limited liability company and holds at
least 35% of charter capital may designate up to 03 authorized representatives;
b) An organization that is a shareholder of a joint stock company and holds at least 10% of
ordinary shares may designate up to 03 authorized representatives.
3. In case the owner/members/partners/shareholders designate more than one authorized
representative, the holding represented by each of them shall be specified. Otherwise, the total
holding shall be equally divided among the authorized representatives.
4. The document designating the authorized representative shall be informed to the company, be
effective on the date it is received by the company and contain the following information:
a) Names, enterprise identification (EID) numbers, headquarters addresses of the
owner/members/partners/shareholders;
b) Quantity of authorized representatives and their holdings;
c) Full name, mailing address, nationality, legal document number of each authorized
representative;
d) The beginning date and duration of authorization of each authorized representative;
dd) Full names and signatures of the legal representatives of the
owner/members/partners/shareholders and of the authorized representatives.
5. An authorized representative shall satisfy the following requirements:
a) The authorized representative is not an entity specified in Clause 2 Article 17 of this Law;
b) Members/partners/shareholders of state-owned enterprises prescribed in Point b Clause 1
Article 88 of this Law must not designate a relative of the executive and the person having the
power to designate the executive as representative of another company;
c) Other requirements specified in the company’s charter.
Article 15. Responsibilities of authorized representatives of the
owner/members/partners/shareholders that are organizations
1. Authorized representatives of the owner/members/partners/shareholders shall exercise and
perform their rights and obligations in accordance with this Law. All limits imposed by the
owner/members/partners/shareholders to the authorized representatives’ performance at the
Board of Members/Partners or General Meeting of Shareholders shall not apply to any third
party.
2. Authorized representatives have the responsibility to attend all meetings of the Board of
Members/Partners or General Meeting of Shareholders; exercise and perform the authorized
rights and obligations in an honest and prudent manner to protect lawful interest of the
owner/members/partners/shareholders that designated them.
3. Authorized representatives shall be responsible to the owner, members/partners/shareholders
for fulfillment of the responsibilities specified in this Article. The owner,
members/partners/shareholders that designate these authorized representatives shall be
responsible to third parties for performance of these authorized representative.
Article 16. Prohibited actions
1. Issuing or refusing to issue the Certificate of Enterprise registration against regulations of this
Law; requesting the founder to submit additional documents against regulations of this Law;
delaying, obstructing, harassing enterprise founders and business operation of enterprises.
2. Obstructing the enterprise’s owner, members/partners/shareholders from performing their
rights and obligations prescribed in this Law and the enterprise’s charter.
3. Doing business as an enterprise without applying for enterprise registration; carrying on
busines operation after the Certificate of Enterprise Registration has been revoked or while the
enterprise is being suspended.
4. Providing dishonest or incorrect information in the enterprise registration application or
application for changes to enterprise registration information.
5. Declaring false charter capital; failure to contribute adequate charter capital as registered;
deliberate contribution of assets with false value.
6. Engaging in banned business lines or business lines from which foreign investors are banned;
engaging in restricted business lines without fulfillment of conditions or failure to maintain
fulfillment of conditions during operation in restricted business lines.
7. Frauds, money laundering, terrorism financing.
Chapter II
ENTERPRISE ESTABLISHMENT
Article 17. The rights to establish, contribute capital, buy shares/stakes and manage
enterprises
1. Organizations and individuals have the right to establish and manage enterprises in Vietnam in
accordance with this Law, except for the cases specified in Clause 2 of this Article.
2. The following organizations and individuals do not have the right to establish and manage
enterprises in Vietnam:
a) State authorities, People’s armed forces using state-owned assets to establish enterprises to
serve their own interests;
b) Officials and public employees defined by the Law on Officials and the Law on Public
Employees;
c) Commissioned officers, non-commissioned officers, career military personnel, military
workers and public employees in agencies and units of Vietnam People’s Army; commissioned
officers, non-commissioned officers and police workers in police authorities and units, except for
those designated and authorized representatives to manage state-owned stakes in enterprises or to
manage state-owned enterprises;
d) Executive officers and managers of state-owned enterprises prescribed in Point a Clause 1
Article 88 of this Law, except those who are designated as authorized representatives to manage
state-owned stakes in other enterprises;
dd) Minors; people with limited legal capacity; incapacitated people; people having difficulties
controlling their behaviors; organizations that are not juridical persons;
e) People who are facing criminal prosecution, kept in temporary detention, serving an
imprisonment sentence, serving an administrative penalty in a correctional institution or
rehabilitation center, has limited legal capacity or is incapacitated, is not able to control his/her
own behaviors, is banned by the court from holding certain positions or doing certain works;
other cases prescribed by the Law on Bankruptcy and the Anti-corruption Law.
If requested by the business registration authority, the applicant shall submit the judicial records;
g) Juridical persons that are banned from business operation or banned from certain fields as
prescribed by the Criminal Code.
3. Organizations and individuals have the right to contribute capital, buy shares and stakes of
joint stock companies, limited liability companies and partnerships in accordance with this Law,
except:
a) State authorities, People’s armed forces contributing state-owned assets to enterprises to serve
their own interests;
b) The entities that are not allowed to contribute capital to enterprises prescribed by the Law on
Officials, the Law on Public Employees, and Anti-corruption Law.
4. The act of serving one’s own interests mentioned in Point a Clause 2 and Point a Clause 3 of
this Article means the use of incomes from business operation, capital contribution, acquisition
of shares/stakes for any of the following purposes:
a) Any kind of distribution to some or all of the persons specified in Point b and Point c Clause 2
of this Article;
b) Inclusion in the operating budget of the organization/unit against state budget laws;
c) Establishment or contribution to an internal fund of the organization/unit.
Article 18. Pre-registration contracts
1. The enterprise’s founder may sign contracts serving the establishment and operation of the
enterprise before and during the process of enterprise registration.
2. When the Certificate of Enterprise Registration is granted, the enterprise shall continue
exercising and performing the rights and obligations under the concluded contracts mentioned in
Clause 1 of this Article, and the parties shall transfer the rights and obligations in accordance
with the Civil Code, unless prescribed by the contracts.
3. IN case the Certificate of Enterprise Registration is not granted, the persons who conclude the
contracts mentioned in Clause 1 of this Article are responsible for their execution. Any other
participant in the establishment of the enterprise is also responsible for the execution of these
contracts.
Article 19. Application for registration of a sole proprietorship
1. The enterprise registration application form.
2. Copies of legal documents of the sole proprietorship’s owner.
Article 20. Application for registration of a partnership
1. The enterprise registration application form.
2. The company's charter.
3. The list of partners.
4. Copies of legal documents of the partners.
5. Copies of the Certificate of Investment Registration of foreign investors as prescribed by the
Law on Investment.
Article 21. Application for registration of a limited liability company
1. The enterprise registration application form.
2. The company's charter.
3. The list of members.
4. Copies of:
a) Legal documents of members who are individuals and legal representatives;
b) Legal documents of members that are organizations, documents about designation of
authorized representatives and their legal documents.
Legalized copies of legal documents of the members that are foreign organizations.
c) The Certificate of Investment Registration of foreign investors as prescribed by the Law on
Investment.
Article 22. Application for registration of a joint stock company
1. The enterprise registration application form.
2. The company's charter.
3. The list of founding shareholders; the list of shareholders that are foreign investors.
4. Copies of:
a) Legal documents of founding shareholders and shareholders that are foreign investors who are
individuals and legal representatives;
b) Legal documents of shareholders that are organizations, documents about designation of
authorized representatives; legal documents of authorized representatives of founding
shareholders and shareholders that are foreign organizations.
Legalized copies of legal documents of the members that are foreign organizations.
c) The Certificate of Investment Registration of foreign investors as prescribed by the Law on
Investment.
Article 23. Content of the enterprise registration application form
The following information shall be provided in the enterprise registration application form:
1. The enterprise’s name;
2. The enterprise’s headquarters, phone number, fax number, email address (if any);
3. The enterprise’s business lines;
4. The charter capital (or investment capital if the enterprise is a sole proprietorship);
5. Types of shares, face value of each type and total authorized shares of each type if the
enterprise is a joint stock company;
6. Tax registration information;
7. Expected quantity of employees;
8. Full name, signature, mailing address, nationality and legal documents of each partner (for
partnerships) or the owner (for sole proprietorships);
9. Full name, signature, mailing address, nationality and legal documents of the legal
representative (for limited liability companies and joint stock companies).
Article 24. The company's charter.
1. The company's charter includes the initial charter submitted upon enterprise registration and
revisions made during the operation.
2. Primary contents of the company's charter:
a) The company’s name, addresses of the headquarters, branches and representative offices (if
any);
b) The company’s business lines;
c) The charter capital; total quantity of shares, types of shares and face value of each type (for
joint stock companies);
d) Full name, mailing address, nationality of each partner (for partnerships), the owner and each
member (for limited liability companies) or the founding shareholders (for joint stock
companies). Stakes held by each member or partner (for limited liability companies and
partnerships) and values thereof. Quantity of shares, types of shares and value of each type held
by founding shareholders (for joint stock companies);
dd) Rights and obligations of the members or partners (for limited liability companies and
partnerships) or shareholders (for joint stock companies);
e) The organizational structure;
g) Quantity, titles, rights and obligations of each of the enterprise’s legal representatives;
h) Method for ratifying the company’s decisions; rules for settlement of internal disputes;
i) Basis and method for determination of salaries and bonuses of the executives and controllers;
k) Cases in which members/shareholders may request the company to repurchase their
stakes/shares (For limited liability companies/joint stock companies);
l) Rules for distribution of post-tax profits and settlement of business losses;
m) Cases of dissolution; procedures for dissolution and liquidation of the company’s assets;
m) Procedures for revising the company's charter.
3. The initial company's charter shall contain the full names and signatures of:
a) For partnerships, the partners;
b) For single-member limited liability companies, the owner that is an individual or the legal
representative of the owner that is an organization;
c) For multi-member limited liability companies, the members that are individuals or authorized
representatives of members that are organizations;
d) For joint stock companies, founding shareholders that are individuals and legal representatives
or authorized representatives of founding shareholders that are organizations.
4. The revised company's charter shall contain the full names and signatures of:
a) For partnerships, the President of the Partner Assembly;
b) For single-member limited liability companies, the owner or the owner’s legal representative;
c) For multi-member limited liability companies and joint stock companies, the legal
representative.
Article 25. List of members/partners of a limited liability company/partnership; list of
founding shareholders and foreign shareholders of a joint stock company
The List of members/partners of a limited liability company/partnership; the list of founding
shareholders and foreign shareholders of a joint stock company shall contain:
1. Full names, signatures, nationalities, mailing addresses of members/partners/founding
shareholders/foreign shareholders that are individuals;
2. Names, EID numbers, addresses of headquarters of members/partners/founding
shareholders/foreign shareholders that are organizations;
3. Full names, signatures, nationalities, mailing addresses or legal representatives or authorized
representatives of members/partners/founding shareholders/foreign shareholders that are
organizations;
4. Stakes and values thereof, holdings, types, quantities and values of assets contributed as
capital, capital contribution time of each member/partner (for limited liability companies and
partnerships); types and quantities of shares, holdings, types, quantities and values of assets
contributed as capital, capital contribution period of each founding shareholder and foreign
shareholder (for joint stock companies).
Article 26. Enterprise registration procedures
1. The enterprise’s founder or the authorized person shall apply for enterprise registration at the
business registration authority as follows:
a) Direct application at the business registration authority;
b) Submission of the application by post;
c) Online enterprise registration.
2. Online enterprise registration means the enterprise’s founder submitting the electronic
enterprise registration application to the National Enterprise Registration Portal. An electronic
enterprise registration application shall contain the information prescribed in this Law and has
the same legal value as a physical one.
3. Applicants may choose between digital signatures and business registration accounts for
online enterprise registration.
4. A business registration account means an account created by the National Enterprise
Registration Information System for an individual to apply for online enterprise registration. The
account holder is legally responsible for the obtainment and use of the account for online
enterprise registration.
5. Within 03 working days from the receipt of the application, the business registration authority
shall consider the validity of the application and decide whether to issue enterprise registration.
The business registration authority shall inform the applicant of necessary supplementation in
writing if the application is invalid or inform the applicant and provide explanation if the
application is rejected.
6. The Government shall provide detailed regulations on documentation and interconnected
procedures for enterprise registration.
Article 27. Issuance of the Certificate of Enterprise Registration
1. An enterprise will be granted the Certificate of Enterprise Registration when the following
conditions are fully satisfied:
a) The registered business lines are not banned;
b) The enterprise’s name is conformable with regulations of Articles 37, 38, 39 and 41 of this
Law;
c) The enterprise registration application is valid;
d) The enterprise registration fees are fully paid in accordance with regulations of law on fees
and charges.
2. In case a Certificate of Enterprise Registration is lost or damaged, it will be reissued at a fee
prescribed by law.
Article 28. Content of the Certificate of Enterprise Registration
A Certificate of Enterprise Registration shall contain the following information:
1. The enterprise’s name and EID number;
2. The enterprise’s headquarters address;
3. Full name, signature, mailing address, nationality and legal document number of the legal
representative (for limited liability companies and joint stock companies), each partner (for
partnerships), the owner (for sole proprietorships). Full name, mailing address, nationality and
legal document number of each member that is an individual; name, EID number and
headquarters address of each member that is an organization (for limited liability companies);
4. The charter capital (or investment capital if the enterprise is a sole proprietorship).
Article 29. Enterprise identification (EID) number
1. EID number is a serial number generated by the National Enterprise Registration Information
System, issued to the enterprise when it is created and written on the Certificate of Enterprise
Registration. Each enterprise shall have a sole EID number, which must not be issued to any
other enterprise.
2. The EID number shall be used for paying taxes, following administrative procedures,
exercising and performing other rights and obligations.
Article 30. Registering revisions to the Certificate of Enterprise Registration
1. Revisions to any of the information specified in Article 28 of this Law on the Certificate of
Enterprise Registration shall be registered by the enterprise with the business registration
authority.
2. An application for revision shall be submitted within 10 days from day on which the change
occurs.
3. Within 03 working days from the receipt of the application for revision, the business
registration authority shall consider the validity of the application and decide whether to issue a
new Certificate of Enterprise Registration. The business registration authority shall inform the
applicant of necessary supplementation in writing if the application is invalid or inform the
applicant and provide explanation if the application is rejected.
4. Procedures for registering revisions to the Certificate of Enterprise Registration under a court
decision or arbitration award:
a) The applicant shall submit the application for revision to the competent business registration
authority within 15 days from the effective date of the court decision or arbitration award. The
application shall include copies of the effective court decision or arbitration award;
b) Within 03 working days from the receipt of the application, the business registration authority
shall consider issuing a new Certificate of Enterprise Registration in accordance with the
effective court decision or arbitration award. The business registration authority shall inform the
applicant of necessary supplementation in writing if the application is invalid or inform the
applicant and provide explanation if the application is rejected.
5. The Government shall provide for documentation and procedures for registering revisions to
the Certificate of Enterprise Registration.
Article 31. Notification of changes to enterprise registration information
1. The enterprise shall notify the business registration authority of any change to:
a) The enterprise’s business lines;
b) The founding shareholders and foreign shareholders (for joint stock companies, except listed
companies);
c) Other content of the enterprise registration application.
2. The enterprise shall notify a change to enterprise registration information within 10 days from
its occurrence.
3. A joint stock company shall send a written notification to the business registration authority in
charge of the area where the company is headquartered within 10 days from the occurrence of
the change to foreign shareholders registered in the company’s shareholder register. Such a
notification shall contain:
a) The company’s name, EID number, headquarter address;
b) For foreign shareholders who transfer their shares: Names and headquarter addresses of
shareholders that are organizations; full names, nationalities, mailing addresses of shareholders
that are individuals; quantities and types of shares they are holding; quantities and types of
shares being transferred;
c) For foreign shareholders who receive shares: Names and headquarter addresses of
shareholders that are organizations; full names, nationalities, mailing addresses of shareholders
that are individuals; quantities and types of shares being received; their holdings;
d) Full names and signatures of the company’s legal representatives.
4. Within 03 working days from the receipt of the notification, the business registration authority
shall consider its validity and decide whether to accept the change. The business registration
authority shall inform the enterprise of necessary supplementation in writing if the application is
invalid or inform the applicant and provide explanation if the change is not acceptable.
5. Procedures for notifying changes to enterprise registration information under a court decision
or arbitration award:
a) The organization or individual that requests to make the change (the requester) shall send a
notification to the competent business registration authority within 10 days from the effective
date of the court decision or arbitration award. The notification shall include copies of the
effective court decision or arbitration award;
b) Within 03 working days from the receipt of the notification, the business registration authority
shall consider accepting the change in accordance with the effective court decision or arbitration
award. The business registration authority shall inform the applicant of necessary
supplementation in writing if the notification is invalid or inform the applicant and provide
explanation if the change is not acceptable.
Article 32. Publishing of enterprise registration information
1. After an enterprise is granted the Certificate of Enterprise Registration, it shall announce it on
the National Enterprise Registration Portal and pay the fee as prescribed by law. The
announcement shall include the content of the Certificate of Enterprise Registration and:
a) The enterprise’s business lines;
b) The list of founding shareholders and foreign shareholders (for joint stock companies).
2. Any change to enterprise registration information shall be announced on the National
Enterprise Registration Portal.
3. The information mentioned in Clause 1 and Clause 2 of this Article shall be published for 30
days.
Article 33. Provision of enterprise registration information
1. Organizations and individuals are entitled to request business registration authorities to
provide information on the National Enterprise Registration Information System and pay fees.
2. Business registration authorities shall fully and promptly provide information in accordance
with Clause 1 of this Article.
3. The Government shall elaborate this Article.
Article 34. Contributed assets
1. Contributed assets include VND, convertible foreign currencies, gold, land use right (LUR),
intellectual property rights, technologies, technical secrets, other assets that can be converted into
VND.
2. Only the individual or organization that has the lawful right to ownership or right to use the
asset mentioned in Clause 1 of this Article may contribute it as capital as prescribed by law.
Article 35. Transfer of ownership of contributed assets
1. Transfer of contributed assets by members of a limited liability company, partners of a
partnership, shareholders of a joint stock company shall comply with the following regulations:
a) For assets whose ownership have been registered and LURs, the capital contributor shall
follow procedures for transfer the ownership of such assets or the LUR to the company as
prescribed by law. This transfer is exempt from registration fee;
b) Contribution of assets whose ownership is not registered shall be recorded in writing unless
the contribution is made by wire transfer.
2. The record on transfer of contributed assets shall contain the following information:
a) The company’s name and headquarters address;
b) Full name, mailing address, legal document number of the contributor that is an individual;
legal document number of the contributor that is an organization;
c) Types and quantities of contributed assets; total value of contributed assets and the ratio of this
value to the company’s charter capital;
d) Date of transfer; signatures of the contributor or the contributor’s authorized representative
and the company’s legal representative.
3. The contribution is considered complete once the lawful ownership of the assets has been
transferred to the company.
4. Procedures for ownership transfer are exempt for assets serving business operation of the sole
proprietorship’s owner.
5. Payment for transfer of shares/stakes, receipt of dividends of remittance of profits by foreign
investors shall be carried out through accounts in accordance with foreign exchange laws, except
for payment in assets and cashless payment.
Article 36. Valuation of contributed assets
1. Contributed assets that are not VND, convertible foreign currencies or gold shall be valued by
members/partners/shareholders or a valuation organization and expressed as VND.
2. Assets contributed upon establishment of an enterprise shall be valued by
members/partners/founding shareholders by consensus or by a valuation organization. In the
latter case, the value of contributed assets must be accepted by more than 50% of the
members/partners/founding shareholders.
In case a contributed asset is valued at a value higher than its actual value at contribution time
(overvalued), the members/partners/founding shareholders shall jointly contribute an amount
equal to the difference and are jointly responsible for the damage caused by the overvaluation.
3. Assets contributed during the operation shall be valued by the owner or the Board of
Members/Partners (for limited liability companies and partnerships) or the Board of Directors
(for joint stock companies) and the contributor or by a valuation organization. In the latter case,
the value shall be accepted by the contributor and the owner, the Board of
Members/Partners/Directors.
In case a contributed asset is overvalued, the contributor, the owner and members of the Board of
Members/Partners/Director shall jointly contribute an amount equal to the difference and are
jointly responsible for the damage caused by the overvaluation.
Article 37. Names of enterprises
1. The Vietnamese name of an enterprise shall contain two elements in order:
a) The type of enterprise;
b) The proper name.
2. The type of enterprise shall be “công ty trách nhiệm hữu hạn” or “công ty TNHH” for limited
liability companies; “công ty cổ phần” or “công ty CP” for joint stock companies; “công ty hợp
danh” or “công ty HD” for partnerships; “doanh nghiệp tư nhân”, “DNTN” or “doanh nghiệp
TN” for sole proprietorships.
3. The proper name shall consist of letters in the Vietnamese alphabet, the letters F, J, Z, W,
numbers and symbols.
4. The enterprise’s name shall be displayed at the headquarters, branches, representative offices
and business locations of the enterprise and printed or written on transaction documents, records
and printed materials published by the enterprise.
5. Pursuant to regulations of this Article, Articles 38, 39 and 41 of this Law, the business
registration authority is entitled to refuse to register enterprise’s name.
Article 38. Prohibited acts of naming enterprises
1. Use of any name that is identical or confusingly similar to another enterprise’s name that is
registered in accordance with Article 41 of this Article.
2. Use of the name of a state authority, the People’s military unit, political organization, sociopolitical organization, socio-political-professional organization, social organization, socialprofessional organization as part or all of an enterprise’s name, unless it is accepted by that
authority, unit or organization.
3. Use of words or symbols that against the country’s history, culture, ethical values and good
traditions.
Article 39. Enterprise’s name in foreign language and abbreviated name
1. The enterprise’s name in a foreign language is the name translated from the Vietnamese name
into one of the Latin-based languages. The proper name of the enterprise’s may be kept
unchanged or translated into the foreign language.
2. In case an enterprise’s name is in a foreign language, the text size of the foreign name shall be
smaller than the Vietnamese name displayed at the enterprise’s headquarters, branches,
representative offices and business locations and on the enterprise’s transaction documents,
records and materials published by the enterprise.
3. The abbreviated name of an enterprise may be abbreviation of its Vietnamese name or foreign
language name.
Article 40. Names of branches, representative offices and business locations
1. The name of a branch, representative office or business location shall consist of letters in the
Vietnamese alphabet, the letters F, J, Z, W, numbers and symbols.
2. The name of a branch, representative office or business location shall consist the enterprise’s
name and the phrase “Chi nhánh”, “Văn phòng đại diện” or “Địa điểm kinh doanh” respectively.
3. The name of a branch, representative office or business location shall be displayed at the
branch, representative office or business location. The name of an enterprise’s branch or
representative office be smaller than the Vietnamese name of the enterprise on the transaction
documents, records and printed materials issued by the branch or representative office.
Article 41. Identical and confusingly similar names
1. Identical name means a Vietnamese name that is chosen by the applying enterprise and is
identical to the Vietnamese name of a registered enterprise.
2. A name is considered identical to a registered enterprise’s name in the following cases:
a) The Vietnamese name of the applying enterprise is pronounced similarly to a registered
enterprise’s name;
b) The abbreviated name of the applying enterprise is identical to the abbreviated name of a
registered enterprise;
c) The foreign language name of the applying enterprise is identical to the foreign language
name of a registered enterprise;
d) The proper name of the applying enterprise is only different from the proper name of a
registered enterprise by a natural number or a letter in the Vietnamese alphabet or any of the
letters F, J, Z, W that is written right after the proper name with or without a space;
dd) The proper name of the applying enterprise is only different from the proper name of an
registered enterprise of the same type by the word “và” (“and”) or the symbol “&”, ”, “.”, “,”,
“+”, “-”, “_”;
e) The proper name of the applying enterprise is only different from the proper name of an
registered enterprise of the same type by the word “tân” or “mới” (“new”) that is written right
before or after the proper name;
g) The proper name of the applying enterprise is only different from the proper name of an
registered enterprise of one of the phrases “miền Bắc” (“north”), “miền Nam” (“south”), “miền
Trung” (“central”), “miền Tây” (“west”), “miền Đông” (“east”);
h) The proper name of the applying enterprise is identical to that of a registered enterprise.
3. The cases specified in Points d, dd, e, g, h Clause 2 of this Article do not apply to subsidiary
companies of the registered company.
Article 42. The enterprise’s headquarters
The enterprise’s headquarters shall be located within Vietnam’s territory, is the enterprise’s
mailing address, has phone number, fax number and email address (if any).
Article 43. The enterprise’s seals
1. The enterprise’s seals can be physical or digital as prescribed by e-transaction laws.
2. The enterprise shall decide the type, quantity, design and content of its seal and the seals of its
branches, representative offices and other units.
3. The management and storage of seals shall comply with the company's charter or regulations
of the enterprise, branch, representative office or unit that owns the seal. Seals shall be used by
enterprises in transactions as prescribed by law.
Article 44. Branches, representative offices and business locations of an enterprise
1. A branch of an enterprise is its dependent unit which has some or all functions of the
enterprise, including authorized representative. The business lines of a branch shall match those
of the enterprise.
2. A representative office of an enterprise is its dependent unit which acts as the enterprise’s
authorized representative, represents and protect the enterprise’s interests. A representative office
shall not do business.
3. A business location of an enterprise is the place at which specific business operations are
carried out.
Article 45. Registration of branches and representative offices; notification of business
location
1. An enterprise may establish branches and representative offices in Vietnam and other
countries. An enterprise may have more than one branch and representative office in an
administrative division.
2. When establishing a domestic branch/representative office, the enterprise shall submit an
application for branch/representative office registration to the business registration authority in
charge of the area where the branch/representative office is established. Such an application shall
consist of:
a) The notice of establishment of the branch/representative office;
b) Copies of the Establishment Decision and minutes of the meeting on the establishment of the
enterprise’s branch/representative office, legal documents of the head of the
branch/representative office.
3. Within 03 working days from the receipt of the application, the business registration authority
shall consider the validity of the application and decide whether to issue a Certificate of
Branch/Representative Office Registration. The business registration authority shall inform the
applicant of necessary supplementation in writing if the application is not satisfactory or inform
the applicant and provide explanation if the application is rejected.
4. The enterprise shall apply for revision of the Certificate of Branch/Representative Office
Registration 10 days from the day on which a change occurs.
5. Within 10 days from the day on which the business location is decided, the enterprise shall
send a notice of business location establishment to the business registration authority.
6. The Government shall elaborate this Article.
Chapter III
LIMITED LIABILITY COMPANIES
Section 1. MULTI-MEMBER LIMITED LIABILITY COMPANIES
Article 46. Multi-member limited liability companies
1. A multiple-member limited liability company means an enterprise that has 02 – 50 members
that are organizations or individuals. A member’s liability for the enterprise’s debts and other
liabilities shall be equal to the amount of capital that member contributed to the enterprise,
except for the cases specified in Clause 4 Article 47 of this Law. The member’s stake
(contributed capital) may only be transferred in accordance with Articles 51, 52 and 53 of this
Law.
2. A multiple-member limited liability company has the status of a juridical person from the day
on which the Certificate of Enterprise Registration is issued.
3. Multiple-member limited liability companies must not issue shares except for equitization.
4. Multiple-member limited liability companies may issue bonds in accordance with this Law
and relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of
this Law.
Article 47. Capital contribution to establish the company and issuance of the certificate of
capital contribution
1. The initially registered charter capital of a multiple-member limited liability company is the
total capital contributed or promised by the members and shall be written in company's charter.
2. The members shall contribute sufficient and correct assets as promised when applying for
enterprise registration within 90 days from the issuance date of the Certificate of Enterprise
Registration, excluding the time needed to transport or import the contributed assets and for
completing ownership transfer procedures. During this period, the members shall have rights
and obligations that are proportional to their promised contribution. The members may only
contribute assets that are different from the promised ones if the change is approved by more
than 50% of the remaining members.
3. In case a member fails to contribute or fully contribute capital as promised by the expiration of
the period mentioned in Clause 2 of this Article:
a) The member that has not contributed capital at all is obviously no longer a member of the
company;
b) The member that has not fully contributed capital will have the rights that are proportional to
the contributed capital;
c) The right to contribute the missing capital will be sold under a resolution or decision of the
Board of Members.
4. In the cases mentioned in Clause 3 of this Article, the company shall register the change in
charter capital and the members’ holdings within 30 days from the deadline for contributing
capital specified in Clause 2 of this Article. The members who fail to contribute or fully
contribute capital shall be responsible for the financial obligations incurred by the company
during the period before the company registers the change in charter capital and the members’
holdings in proportion to their promised contributions.
5. In the cases specified in Clause 2 of this Article, the capital contributor will become the
company’s member from the day on which capital is fully contributed and information about the
capital contributor prescribed Points b, c, dd Clause 2 Article 48 of this Law has been fully
recorded in the member register. On that day, the company shall issue the capital contribution
certificate to the member.
6. The capital contribution certificate shall contain the following information:
a) The company’s name, EID number, headquarter address;
b) The company’s charter capital;
c) Full name, signature, mailing address, nationality and legal document number if the member is
an individual; EID number or legal document number, headquarters address if the member is an
organization;
d) The capital contributed and the member’s holding;
dd) The number and date of issuance of the certificate of capital contribution;
e) Full names and signatures of the company’s legal representatives.
7. In case the Certificate of Enterprise Registration is lost or damaged, the member will be
reissued with another certificate following the procedures specified in the company's charter.
Article 48. Member register
1. The company shall make a member register upon issuance of the Certificate of Enterprise
Registration. The member register can be physical or electronic and shall contain information
about the members’ holdings.
2. A member register shall contain the following information:
a) The company’s name, EID number, headquarter address;
b) Full name, signature, mailing address, nationality and legal document numbers of members
that are individuals; names, EID numbers or legal document numbers and headquarters addresses
of members that are organizations;
c) Stakes, holdings, contribution time, types of contributed assets, quantity and value of each
type of contributed assets of each member;
d) Signatures of members that are individuals and of legal representatives of members that are
organizations;
dd) The number and date of issuance of the certificate of capital contribution of each member.
3. The company shall update changes to members in the member register as requested by
relevant members in accordance with company's charter.
4. The member register shall be retained at the company’s headquarters.
Article 49. Rights of members of the Board of Members
1. A member of the Board of Members has the rights to:
a) Participate in meetings of the Board of Members; discuss, propose, vote on the issues within
the jurisdiction of the Board of Members;
b) Have a number of votes that are proportional to the member’s holding, except for the cases
specified in Clause 2 Article 47 of this Law;
c) Receive profit in proportion to the member’s holding after the company has fully paid taxes
and fulfilled other financial obligations prescribed by law;
d) Receive part of the remaining assets in proportion to the member’s holding when the company
is dissolved or goes bankrupt;
dd) Be given priority to contribute more capital when the company increases its charter capital;
e) Transfer, give away or otherwise dispose of the member’s own stake in accordance with
regulations of law and the company's charter;
g) File lawsuits in their own name of in the company’s name against the President of the Board
of Members, the Director/General Director, other executives, legal representatives in accordance
with Article 72 of this Law;
h) Other rights prescribed by this Law and the company's charter.
2. In addition to the rights specified in Clause 1 of this Article, a group of members that hold at
least 10% of the charter capital (or a smaller ratio prescribed by the company's charter or in the
cases specified in Clause 3 of this Article) also has the rights to:
a) Demand meetings of the Board of Members be convened to resolve issues within its
jurisdiction;
b) Inspect, access logbooks and monitor transactions, accounting books and annual financial
statements;
c) Inspect, access, make photocopies of the member register, meeting minutes, resolutions
Decree decisions of the Board of Members and other documents of the company;
d) Request the Court to invalidate the resolution or decision of the Board of Members within 90
days from the end of its meeting if the meeting procedures or contents of the resolution or
decision are not fully followed or contradict regulations of this Law and the company's charter.
3. In case a member holds more than 90% of the charter capital and the company's charter does
not provide for any smaller ratio as prescribed in Clause 2 of this Article, the group of remaining
members obviously have the rights specified in Clause 2 of this Article.
Article 50. Obligations of members of the Board of Members
1. Fully and punctually contribute capital as promised; take on a liability for the company’s debts
and liabilities which is equal to the contributed capital, except for the cases specified in Clause 2
and Clause 4 Article 47 of this Law.
2. Do not withdraw capital from the company in any shape or form; except for the cases
specified in Articles 51, 52, 53 and 68 of this Law.
3. Comply with the company's charter.
4. Implement the resolutions and decisions of the Board of Members.
5. Take personal responsibility when performing the following actions in the name of the
company:
a) Violations of law;
b) Business operations or transactions that do not serve the company’s interests and cause
damage to others;
c) Pay debts before they are due while the company is facing financial risks.
6. Other obligations prescribed by law.
Article 51. Repurchase of stakes
1. A member is entitled to request the company to repurchase that member’s stake if that
member has voted against a resolution or decision of the Board of Members on the following
issues:
a) Amendments to regulations of the company's charter on rights and obligations of members
and the Board of Members;
b) Reorganization of the company;
c) Other issues prescribed by the company's charter.
2. A written request for stake repurchase shall be sent to the company within 15 days from the
day on which the resolution or decision mentioned in Clause 1 of this Article is ratified.
3. Within 15 days from the day on which the request mentioned in Clause 1 of this Article is
received, the company shall repurchase that member’s stake at market value or at a value
determined in accordance with the company's charter, unless another value is agreed upon by
both parties. The payment shall only be made if the company is still able to pay its debts and
other liabilities afterwards.
4. In case the company is not able to pay for the repurchase of the stake as requested, the
member is entitled to sell the stake to another member or a non-member.
Article 52. Transfer of stakes
1. Except for the cases specified in Clause 4 Article 51, Clause 6 and Clause 7 Article 53 of this
Law, a member of a multiple-member limited liability company is entitled to transfer part or all
of their stake to another person as follows:
a) Offer the stake to other members in proportion to their holdings under the same conditions;
b) Transfer the stake under the same conditions as those applied to other members mentioned in
Point a of this Clause to a non-member if the other members do not purchase or fully purchase
the stake within 30 days from the first day of offering.
2. The transferor still has the rights and obligations to the company in proportion to the stake
until information about the buyer mentioned in Point b, c and dd Clause 2 Article 48 of this Law
is fully recorded in the member register.
3. In case only one member remains after transfer or change of the members’ stakes, the
company shall be converted into a single-member limited liability company and apply for change
of enterprise registration information within 15 days from the day on which the transfer is
complete.
Article 53. Settlement of stakes in some special cases
1. In case of the death of a member that is an individual, his/her heir at law or designated by a
will shall become a member of the company.
2. In case a member that is an individual is declared missing by the Court, his/her rights and
obligations shall be performed through his/her asset manager as prescribed by civil laws.
3. In case a member that is an individual is incapacitated, has limited legal capacity or has
difficulty controlling his/her behaviors, his/her rights and obligations shall be performed through
his/her representative.
4. A member’s stake shall be transferred or repurchased by the company in accordance with
Article 51 and Article 52 of this Law in the following cases:
a) The member’s heir does not wish to become a member;
b) The beneficiary mentioned in Clause 6 of this Article is not accepted as a member by the
Board of Members;
c) The member that is an organization is dissolved or goes bankrupt.
5. In case a member that is an individual dies without an heir or the heir refuses the inheritance
or is disinherited, the stake shall be settled in accordance with civil laws.
6. In case a member gives away part or all of his/her stake to another person, the beneficiary will
become a member of the company in the following cases:
a) If the beneficiary is a lawful heir as prescribed by the Civil Code, he/she is obviously a
member of the company;
b) If the beneficiary is not a lawful hair mentioned in Point a of this Clause, he/she will only
become a member if it is accepted by the Board of Members.
7. In case a member uses that member’s stake to pay debt, the beneficiary may:
b) become a member of the company if it is accepted by the Board of Members;
b) Offer and sell the stake in accordance with Article 52 of this Law.
8. In case a member that is an individual is being kept in temporary detention, serving an
imprisonment sentence, serving an administrative penalty in a correctional institution or
rehabilitation center, he/she shall authorize another person to perform some or all of his/her
rights and obligations to the company.
9. A member that is an individual and is banned by the court to do certain jobs must not do those
jobs at the company; A member that is a juridical person and is banned by the court from certain
business lines must suspend or stop business operation in those business lines.
Article 54. Organizational structure
1. A multiple-member limited liability company shall have a Board of Members, President of the
Board of Members, Director/General Director.
2. A state-owned multiple-member limited liability company prescribed in Point b Clause 1
Article 88 of this Law and each subsidiary company of a state-owned enterprise prescribed in
Clause 1 Article 88 of this Law shall have a Board of Controllers. The establishment of the
Board of Controllers in other companies shall be decided by themselves.
3. A company shall have at least one legal representative who holds the title of President of the
Board of Members, Director/General Director. Unless otherwise prescribed by the company's
charter, the President of the Board of Members shall be the company’s legal representative.
Article 55. The Board of Members
1. The Board of Members is the supreme governing body of the company, consists of all
members that are individuals and authorized representatives of members that are organizations.
The company's charter shall specify the frequency of meetings of the Board of Members but at
least one meeting shall be held per year.
2. The Board of Members has the following rights and obligations:
a) Decide the company’s annual business plan and development strategy;
b) Decide increase or decrease in charter capital, time and method for raising more capital;
issuance of bonds;
c) Decide investments in the company’s development projects; solutions for market
development, marketing and technology transfer;
d) Approve contracts for borrowing, lending, sale of assets and other contracts prescribed by the
company's charter whose value are at least 50% of the total assets written in the latest financial
statement (or a smaller ratio or value specified in the company's charter);
dd) Elect, dismiss the President of the Board of Members; designate, dismiss, sign and terminate
contracts with the Director/General Director, chief accountant, controllers and other executives
specified in the company's charter;
e) Decide the salaries, remunerations, bonuses and other benefits of the President of the Board of
Members, Director/General Director, chief accountant, controllers and other executives specified
in the company's charter;
g) Ratify annual financial statements, plans for use and distribution of profits or settlement of
losses;
h) Decide the company’s organizational structure;
i) Decide establishment of subsidiary companies, branches and representative offices;
k) Revise the company's charter;
l) Decide reorganization of the company;
m) Decide dissolution or file bankruptcy of the company;
n) Other rights and obligations prescribed by Law and the company's charter.
Article 56. President of the Board of Members
1. The Board of Members shall elect a member as the President, who may concurrently hold the
position of Director/General Director of the company.
2. The President of the Board of Members has the following rights and obligations:
a) Plan the activities of the Board of Members;
b) Draw up agenda and prepare documents for meetings or surveys of the Board of Members;
c) Convene and chair meetings of the Board of Members or organize surveys of the Board of
Members;
d) Supervise or organize supervision of the implementation of resolutions and decisions of the
Board of Members;
dd) Sign resolutions and decisions of the Board of Members on its behalf;
e) Other rights and obligations prescribed by Law and the company's charter.
3. The term of office of the President of the Board of Members shall be specified in the
company's charter bust must not exceed 05 years and has no term limit.
4. In case the President of the Board of Members is not present or not able to perform his tasks,
he/she shall authorize another member in writing to perform the rights and obligations of the
President of the Board of Members in accordance with the company's charter. In case no member
is authorized or the President is dead, missing, detained, serving an imprisonment sentence,
serving an administrative penalty in a correctional institution or rehabilitation center, making a
getaway; has limited legal capacity or is incapacitated, has difficulty controlling his/her behavior,
is prohibited by the court from holding certain positions or doing certain works, one of the Board
of Members shall convene a meeting with the remaining members to elect one of them as the
interim President under the majority rule until a new decision is issued by the Board of
Members.
Article 57. Convening meetings of the Board of Members
1. Meetings of the Board of Members shall be convened by the President of the Board of
Members or at the request of the member or group of members prescribed in Clause 2 and
Clause 3 Article 49 of this Law. In case the President of the Board of Members does not convene
a meeting as requested by the aforementioned member of group of members within 15 days from
the day on which the request is received, the member of group of members may convene the
meeting themselves. Reasonable costs of convening and conducting meetings of the Board of
Members shall be reimbursed by the company.
2. The President of the Board of Members or the person that convenes the meeting shall draw up
the meeting agenda and prepare meting document; convene and chair the meeting. Members are
entitled to propose additional contents to the meeting agenda in writing. Such a written proposal
shall contain the following information:
a) Full name, signature, mailing address, nationality and legal document number if the member is
an individual; EID number or legal document number and headquarters address if the member is
an organization; full name and signature of the proposing member or the proposing member’s
authorized representative;
b) The member’s holding, number and date of issuance of the certificate of capital contribution;
c) The proposed contents;
d) Reasons for proposal.
3. The President of the Board of Members or the person that convenes the meeting shall accept a
proposal that contains adequate information as prescribed in Clause 2 of this Article and is sent
to the company’s headquarters at least 01 working day before the meeting date. In case a
proposal is put forward right before the beginning of the meeting, it may be accepted if it is
accepted the majority of the participants.
4. Invitations to a meeting of the Board of Members can be sent physically, by phone, fax,
electronically or by other methods prescribed by the company's charter to each member of the
Board of Members. The invitation shall specify the time, location and agenda of the meeting.
5. The meeting agenda and documents shall be sent to members before the meeting date.
Documents about revisions of the company's charter, ratification of the company’s development
strategy, annual financial statements, reorganization or dissolution shall be sent to the members
at least 07 working days before the meeting date. The deadlines for sending other documents
shall be specified in the company's charter.
6. Unless otherwise prescribed by the company's charter, a request to convene a meeting of the
Board of Members mentioned in Clause 1 of this Article shall be made in writing and contain the
following information:
a) Full name, signature, mailing address, nationality and legal document numbers of members
that are individuals; names, EID numbers or legal document numbers and headquarters addresses
of members that are organizations; each member’s holding, number and issuance date of each
member’s capital contribution certificate;
b) Reasons for convening the meeting and issues that need resolving;
c) The draft agenda;
d) Full names and signatures of the requesting members or their authorized representatives.
7. In case the request does not contain adequate information as prescribed in Clause 6 of this
Article, the President of the Board of Members shall send a written rejection to the requesting
member(s) within 07 working days from the day on which the request is received. If the request
is valid, the President of the Board of Members shall convene the meeting within 15 days from
the day on which the request is received.
8. In case the President of the Board of Members fails to convene the meeting as prescribed in
Clause 7 of this Article, he/she shall be personally responsible for the damage incurred by the
company and relevant members.
Article 58. Conditions and procedures for conducting meetings of the Board of Members
1. The meeting shall be conducted when it is participated by a number of members that hold at
least 65% of charter capital; a specific ratio shall be specified in the company's charter.
2. In case the conditions for conducting a meeting specified in Clause 1 of this Article are not
fulfilled and the company's charter does not provide for this situation otherwise:
a) The invitation to the second meeting shall be sent within 15 days from the first meeting date.
The second meeting shall be when it is participated by a number of shareholders that hold at least
50% of charter capital;
b) In case the conditions for conducting the second meeting prescribed in Point a of this Clause
are not fulfilled, the invitation to the third meeting shall be sent within 10 days from the second
meeting date. The third meeting shall be conducted regardless of the number of charter capital
held by the participants.
3. Members and their authorized representatives shall participate in and vote at meetings of the
Board of Members. The procedures for conducting meetings of the Board of Members and
voting methods shall be specified in the company's charter.
4. In case the duration of a meeting is longer than expected, it may be extended but must not
exceed 30 days from its opening date.
Article 59. Resolutions and decisions of the Board of Members
1. The Board of Members shall ratify its resolution and decisions by voting at the meeting,
questionnaire survey or another method specified in the company's charter.
2. Unless otherwise prescribed by the company's charter, a decision on one of the following
issues shall be voted on at the meeting:
a) Revisions to the company's charter;
b) Orientation for development of the company;
c) Election, dismissal of the President of the Board of Members; designation, dismissal of the
Director/General Director;
d) Ratification of the annual financial statement;
dd) Reorganization or dissolution of the company.
3. Unless otherwise prescribed by the company's charter, a resolution or decision of the Board of
Members will be ratified at the meeting if:
a) It is voted for by a number of participants that hold at least 65% of the total stakes of all
participants, except the case in Point b of this Clause;
b) It is a resolution or decision to sell assets whose value is at least 50% of the total assets written
in the latest financial statement (or a smaller ratio or value specified in the company's charter), a
resolution or decision on revisions to the company's charter, reorganization or dissolution of the
company, and is voted for by a number of participants that hold at least 75% of the total stakes of
all participants.
4. It will be considered that a member participates in and votes at the meeting of the Board of
Members in the following cases:
a) The member directly participates in and votes at the meeting;
b) The member authorizes another person to participate in and vote at the meeting;
c) The member participates and votes online or through other electronic methods;
d) The member sends the votes to the meeting by post, fax or email.
5. In case of questionnaire survey, a resolution or decision will be ratified when it is voted for by
a number of members that hold at least 65% of charter capital (a specific ratio shall be specified
in the company's charter).
Article 60. Minutes of meetings of the Board of Members
1. Minutes of every meeting the Board of Members shall be taken. Audio recording or electronic
forms are optional.
2. The minutes shall be ratified right before the meeting ends and contain the following
information:
a) Time, location, purposes and agenda of the meeting;
b) Full names, holdings, numbers and dates of issues of capital contribution certificates of
participating members and their authorized representatives; full name, stakes, numbers and dates
of issues of capital contribution certificates of non-participating members and their authorized
representatives;
c) The issues that are discussed and voted on; summaries of the members’ comments on each
issue;
d) Quantities of valid votes, invalid votes, affirmative votes, negative votes and abstentions on
each issue;
dd) Ratified decisions and corresponding ratio of affirmative votes;
e) Full names, signatures and comments of participants who disagree with the ratification of the
minutes (if any);
g) Full names, signatures of the minute taker and the chair of the meeting, except the case in
Clause 3 of this Article.
3. In case the chair and the minute taker refuse to sign the minutes, they will be effective if they
are signed by the other members of the Board of Members and contain all information prescribed
in Points a, b, c, d, dd and e Clause 2 of this Article. The minutes shall clearly state the reasons
why the chair and the minute taker refuse to sign them. The persons who sign the minutes are
jointly responsible for the accuracy and truthfulness of the minutes.
Article 61. Procedures for ratification of resolutions and decisions of the Board of Members
by questionnaire survey
Unless otherwise prescribed by the company's charter, a questionnaire survey on ratification of
resolutions or decisions of the Board of Members shall be carried out as follows:
1. The President of the Board of Members shall decide to carry out a questionnaire survey on
ratification of resolutions and decisions within its jurisdiction;
2. The President of the Board of Members organize the drafting and sending of reports on the
issues, the resolution or decision and questionnaires to members of the Board of Members;
3. A questionnaire shall contain:
a) The company’s name, EID number, headquarter address;
b) Full name, signature, mailing address, nationality and legal document numbers of individuals;
the members’ holdings;
c) The issue that needs voting, options including affirmative, negative and abstentions;
d) The deadline for submission of the answered questionnaire;
dd) Full name and signature of the President of the Board of Members;
4. An answered questionnaire that contains adequate information, bears the member’s signature
and sent to the company by the deadline is considered valid. The President of the Board of
Members organize the vote counting, preparation of a report and notification of the vote counting
result to the members within 07 working days from the deadline for submission of answered
questionnaires. The report on vote counting result has the same value as the minutes the meeting
of the Board of Members and shall contain the following information:
a) The survey issue and purposes;
b) Full names, holdings, numbers and dates of issue of capital contribution certificates of
members that submitted their answered questionnaires; and their authorized representatives; Full
names, holdings, numbers and dates of issue of capital contribution certificates of members
whose questionnaires are not submitted or invalid;
c) The issues that are voted on; summaries of the members’ comments on each issue (if any);
d) The numbers of valid, invalid, unsubmitted questionnaires; numbers of valid questionnaires
that contain affirmative votes negative votes and abstentions on each issue;
dd) The ratified resolutions and/or decisions and corresponding ratio of affirmative votes;
e) Full names and signatures of the vote counters and the President of the Board of Members,
who are jointly responsible for the legitimacy, accuracy and truthfulness of the vote counting
report.
Article 62. Effect of resolutions and decisions of the Board of Members
1. Unless otherwise prescribed by the company's charter, a resolution or decision of the Board of
Members shall take effect from the day on which it is ratified on one the effective date specified
therein.
2. A resolution or decision that is ratified with 100% of total charter capital shall be lawful and
effective even if the procedures for ratification of such resolution or decision are not followed.
3. In case a member or group of members requests the court or an arbitral tribunal to invalidate a
ratified resolution or decision, it will remain effective as prescribed in Clause 1 of this Article
until the court or an arbitral tribunal issues a decision to invalidate it, except for the cases in
which temporary emergency measures have to be implemented under decision of a competent
authority.
Article 63. The Director/General Director
1. The Director/General Director is the person who manages the company’s everyday busines
operation and is responsible to the Board of Members for his/her performance.
2. The Director/General Director has the following rights and obligations:
a) Organize the implementation of resolutions and decisions of the Board of Members;
b) Decide everyday operating issues of the company;
c) Organize implementation of the company’s busines plans and investment plans;
d) Issue the company’s rules and regulations unless otherwise prescribed by the company's
charter;
dd) Designate, dismiss the company’s executives, except those within jurisdiction of the Board
of Members;
e) Enter into contracts on behalf of the company, except those within jurisdiction of the President
of the Board of Members;
g) Propose the company’s organizational structure;
g) Submit annual financial statements to the Board of Members;
i) Propose plans for use and distribution of profits or settlement of business losses;
k) Recruit employees;
l) Other rights and obligations specified in the company's charter, resolution and decisions of the
Board of Members, and his/her employment contract.
Article 64. Requirements for holding the position of Director/General Director
A person may hold the position of Director/General Director if he/she:
1. Is not in one of the persons specified in Clause 2 Article 17 of this Law.
2. Has professional qualifications and experience of busines administration and satisfies other
conditions specified in the company's charter.
3. If the company is a state-owned enterprise prescribed in Point b Clause 1 Article 88 of this
Law or a subsidiary company of a state-owned enterprise prescribed in Clause 1 Article 88 of
this Law, is not a relative of the executives and controllers of the company and the parent
company, of the representative of enterprise’s investment or state investment in the company and
the parent company.
Article 65. Controllers and the Board of Controllers
1. The Board of Controllers shall have 1 – 5 Controllers. The term of office of a controller shall
not exceed 05 years and without term limit. In case the Board of Controllers only has 01
controller, he/she shall be the Chief Controller and shall satisfy corresponding conditions.
2. The Chief Controller and Controllers shall satisfy the requirements specified in Clause 2
Article 168 and Article 169 of this Law.
3. Rights, obligations, responsibilities, dismissal and works of Controllers and the Board of
Controllers are specified in Articles 106, 170, 171, 172, 173 and 174 of this Law.
4. The Government shall elaborate this Article.
Article 66. Salaries, remunerations, bonuses and other benefits of the President of the
Board of Members, Director/General Director and other executives
1. The company shall pay salaries, remunerations, bonuses and provide other benefits for the
President of the Board of Members, the Director/General Director and other executives
according to the company’s business performance.
2. Salaries, remunerations, bonuses and other benefits for the President of the Board of Members,
the Director/General Director and other executives shall be recorded as operating costs in
accordance with regulations of law on corporate income tax and relevant laws and placed in a
separate section in the company’s annual financial statements.
Article 67. Contracts and transactions subject to approval by the Board of Members
1. Contracts and transactions between the company and the following entities are subject to
approval by the Board of Members:
a) Members and their authorized representatives, the Director/General Director, the company’s
legal representative;
b) Related persons of the persons mentioned in Point a of this Clause;
c) Executives of the parent company and the person having the power to designate them;
d) Related persons of the persons mentioned in Point c of this Clause.
2. The person who concludes a contract or carries on a transaction on behalf of the company
shall send a notification to members of the Board of Members and the Controllers of the related
entities and interests of such contract or transaction together with the draft contract or description
of the transaction. Unless otherwise prescribed by company's charter, the Board of Members
shall decide whether to approve or disapprove the contract or transaction within 15 days from the
day on which the notification is received and follow the instructions in Clause 3 Article 59 of
this Law. Members of the Board of Members who are related to the parties to the contract or
transaction must not vote.
3. A contract or transaction shall be invalidated under a court decision and handled as prescribed
by law when it is concluded or carried out against regulations of Clause 1 and Clause 2 of this
Article. The person who concludes the contract or carries out the transaction, related members
and their related persons shall pay compensation for any damage caused and return the benefits
generated by such contract or transaction to the company.
Article 68. Increasing, decreasing charter capital
1. A company may increase its charter capital in the following cases:
a) Increase in the members’ capital contribution;
b) Receipt of capital contribution from new members.
2. In case of increase in the members’ capital contribution, the increase will be distributed among
the members in proportion to their holdings in the company. Members may transfer their right to
contribute capital to other persons in accordance with Article 52 of this Law. In case a member
does not contribute or fully contribute that member’s share of additional capital as distributed,
the remainder shall be divided among other members in proportion to their holdings in the
company unless otherwise agreed by the members.
3. A company may decrease its charter capital in the following cases:
a) The company returns part of the contributed capital to the members in proportion to their
holdings in the company after the company has operated for at least 02 consecutive years from
the enterprise registration date and the company is able to fully pay its debts and other liabilities
after the return of capital;
b) The company repurchases the members’ stakes as prescribed in Article 51 of this Law;
c) Charter capital is not fully and punctually contributed by the members as prescribed in Article
47 of this Law.
4. In the case specified in Point c Clause 3 of this Article, within 10 days from the day on which
the increase or decrease in charter capital is complete, the company shall send a written
notification to the business registration authority. Such a notification shall contain the following
information:
a) The company’s name, EID number, headquarter address;
b) The charter capital, the increase or decrease;
c) Time and method of increase or decrease;
d) Full names and signatures of the company’s legal representatives.
5. The notification mentioned in Clause 4 of this Article shall be enclosed with the resolution or
decision and the minutes of the meeting of the Board of Members and, in case of charter capital
decrease specified in Point a and Point b Clause 3 of this Article, the latest financial statement.
6. The business registration authority shall update information about the increase or decrease in
charter capital within 03 working days from the day on which the notification is received.
Article 69. Conditions for profit distribution
A company’s profit may only be distributed to its members after its tax liabilities and other
financial obligations have been fulfilled as prescribed by law and it is able to fully pay its due
debts and other liabilities after profit is distributed.
Article 70. Recovery of returned capital or distributed profit
In case part of contributed capital is returned against the regulations of Clause 3 Article 68 of
this Law or profit is distributed to members against regulations of Article 69 of this Law, the
members shall return the money or assets they received from the company and are jointly
responsible for the company’s debts and liabilities in proportion to the amount or assets that have
not been returned until they are fully returned.
Article 71. Responsibilities of the President of the Board of Members, the Director/General
Director, other executives, legal representatives and Controllers
1. The President of the Board of Members, the Director/General Director, other executives, legal
representatives and Controllers have the following responsibilities:
a) Exercise and perform their rights and obligations in an honest and prudent manner to protect
the enterprise’s lawful interests;
b) Be loyal to the enterprise’s interests; do not abuse their power and position or use the
enterprise’s information, secrets, business opportunities and assets for personal gain or serve any
other organization’s or individual’s interests;
c) Promptly and fully notify the company of the enterprises that they own or have shares/stakes
or that their related persons own, jointly own or have separate controlling shares/stakes.
d) Other responsibilities prescribed by law.
2. The Director/General Director shall not have a pay rise or bonus when the company is not able
to pay its due debts.
3. The notification mentioned in Point c Clause 1 of this Article shall be made in writing and
contain the following information:
a) Names, EID numbers, headquarters addresses of the enterprises they own or have
shares/stakes in; the holdings and time of owning or holding the shares/stakes;
b) Names, EID numbers, headquarters addresses of the enterprises their related persons own,
jointly own or have separate controlling shares/stakes.
4. The notification mentioned in Clause 3 of this Article shall be sent within 05 working days
from the day on which the event or change occurs. The company shall compile a list of the
entities mentioned in Clause 3 of this Article, their contracts and transactions with the company.
This list shall be kept at the company’s headquarters. Members, executives, Controllers and their
authorized representatives are entitled to see, copy part or all of the information specified in
Clause 3 of this Article during office hours following the procedures specified in the company's
charter.
Article 72. Filing lawsuits against executives
1. Members may, in their own names or in the company’s name, file lawsuits against the
President of the Board of Members, Director/General Director, legal representatives and other
executives in the following cases:
a) They violate regulations of Article 71 of this Law;
b) They fail to comply with or fully and punctually perform their rights and obligations as
prescribed by law, the company's charter, resolution or decision of the Board of Members;
c) Other cases prescribed by law and the company's charter.
2. Lawsuits shall be filed in accordance with civil proceedings laws.
3. Proceedings costs in case the lawsuit is filed on behalf of the company shall be recorded as the
company’s expense unless the lawsuit is rejected.
Article 73. Disclosure of information
State-owned multiple-member limited liability companies prescribed in Point b Clause 1 Article
88 of this Law shall disclose information in accordance with Points a, d, dd, g Clause 1 Article
109 and Article 110 of this Law.
Section 2. SINGLE -MEMBER LIMITED LIABILITY COMPANIES
Article 74. SINGLE -MEMBER LIMITED LIABILITY COMPANIES
1. A single-member limited liability company is an enterprise owned by a single organization or
individual ((hereinafter referred to as “owner”). The owner’s liability for the company’s debts
and other liabilities shall be equal to the company’s charter capital.
2. A single-member limited liability company has the status of a juridical person from the day on
which the Certificate of Enterprise Registration is issued.
3. A single-member limited liability company must not issue shares except for equitization.
4. Single-member limited liability companies may issue bonds in accordance with this Law and
relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of this
Law.
Article 75. Contributing capital to establish the company
1. The initially registered charter capital of a single-member limited liability company is the total
assets promised by the owner and shall be written in company's charter.
2. The owner shall contribute adequate and correct assets as promised when applying for
enterprise registration within 90 days from the issuance date of the Certificate of Enterprise
Registration. The time needed to transport or import the contributed assets and for completing
ownership transfer procedures will be added to this 90-day period. During this period, the owner
shall have rights and obligations that are proportional to the promised capital.
3. In the charter capital is not fully contributed by the deadline specified in Clause 2 of this
Article, the owner shall register the contributed capital as charter capital within 30 days from the
deadline, in which case the owner shall be responsible for the financial obligations incurred by
the company during the period before the change in charter capital is registered in proportion to
the promised capital.
4. The owner’s liability for the company’s financial obligations and the damage caused by the
failure to contribute or to fully and punctually contribute charter capital prescribed by this Article
shall be equal to all of the owner’s assets.
Article 76. Rights of the owner
1. The owner that is an organization has the rights to:
a) Draw up and revise the company's charter;
b) Decide the company’s annual business plan and development strategy;
c) Decide the company’s organizational structure; designate, dismiss the company’s executives
and controllers;
d) Decide the company’s investment projects?
dd) Decide solutions for market development, marketing and technology;
e) Approve contracts for borrowing, lending, sale of assets and other contracts prescribed by the
company's charter whose value are at least 50% of the total assets written in the latest financial
statement (or a smaller ratio or value specified in the company's charter);
g) Ratify the company’s annual financial statements;
h) Decide increase or decrease in the company’s charter capital, transfer part or all of the
company’s charter capital to another organization or individual; decide issuance of bonds;
i) Decide establishment of subsidiary companies and contribution of capital to other companies;
k) Organize the supervision and assessment of the company’s performance;
l) Decide the use of profits after the company’s tax liabilities and other financial obligations have
been fulfilled;
m) Decide the company’s reorganization, dissolution or file bankruptcy;
n) Recover all assets of the company after the dissolution or bankruptcy process is complete;
o) Other rights prescribed by this Law and the company's charter.
2. The owner that is an individual has the rights specified in Points a, h, l, m, n and o Clause 1 of
this Article; the right to decide investment, business operation and the company’s administration,
unless otherwise prescribed by the company's charter.
Article 77. Obligations of the owner
1. Contribute charter capital fully and punctually.
2. Comply with the company's charter.
3. Separate the company’s assets and the owner’s assets. The owner that is an individual shall
separate expenses of himself/herself and his/her family and those of the company’s President, or
General Director.
4. Comply with regulations of law on contracts and relevant laws while making purchases, sales,
borrowing, lending, leasing, entering into contracts and conducting other transactions between
the company and the company’s owner.
5. The company’s owner may only withdraw capital by transfer part or all of the charter capital
to another organization or individual. If the capital is withdrawn otherwise, the owner and
relevant organizations and individuals shall be jointly responsible for the company’s debts and
other liabilities.
6. The owner must not withdraw profit when the company is unable to fully pay its debts and
liabilities when they are due.
7. Other obligations prescribed by Law and the company's charter.
Article 78. Exercising the owner’s rights in special cases
1. In case the owner transfers or gives away part of the charter capital to one or some
organizations and individuals or the company admits a new member, the company shall be
converted accordingly and register the change in enterprise registration information within 10
days from the date of completion of the transfer or giveaway or admission of the new member.
2. In case the owner that is an individual is being kept in temporary detention, serving an
imprisonment sentence, serving an administrative penalty in a correctional institution or
rehabilitation center, he/she shall authorize another person to perform some or all of the owner’s
rights and obligations.
3. In case the owner dies, his/her legal heir or designated heir shall be the owner or member of
the company. The company shall be converted accordingly and register the change of enterprise
registration information within 10 days from the day on which the inheritance is settled. In case
there is no heir or the heir rejects the inheritance or is disinherited, the owner’s stake shall be
handled in accordance with civil laws.
4. In case the owner is missing, his/her stake shall be handled in accordance with civil laws.
5. In case owner is incapacitated, has limited legal capacity or has difficulty controlling his/her
behaviors, his/her rights and obligations shall be performed through his/her representative.
6. In case the owner is an organization and is dissolved or goes bankrupt, the person that receives
the owner’s stake shall become the owner or member of the company. The company shall be
converted accordingly and apply for change in enterprise registration information within 10 days
from the day on which the transfer is complete.
7. In case the owner is an individual and is banned by the court to do certain jobs, or the owner is
a commercial juridical person and is banned by the court to do business in the same business
lines as those of the enterprise, the owner must stop doing the job or suspend business in these
business lines under the court decision.
Article 79. Organizational structure of a single-member limited liability company owned by
an organization
1. A single-member limited liability company owned by an organization shall apply one of the
two models below:
a) A company with a President and the Director/General Director;
b) A company with a Board of Members and the Director/General Director.
2. In case the company’s owner is a state-owned enterprise prescribed in Clause 1 Article 88 of
this Law, a Board of Controllers shall be established. The establishment of a Board of
Controllers in other cases shall be decided by the company. The organizational structure,
working regulations, standards, requirements, dismissal, rights, duties and responsibilities of the
Board of Controllers and Controllers are specified in Article 65 of this Article.
3. The company shall have at least one legal representative who holds the title of President of the
Board of Members, the company’s President or Director/General Director. Unless otherwise
prescribed by the company's charter, the President of the company or President of the Board of
Members shall be the company’s legal representative.
4. Unless otherwise prescribed by the company's charter, organizational structure, functions,
rights and duties of the Board of Members, the company’s President, the Director/General
Director shall comply with this Law.
Article 80. The Board of Members
1. The Board of Members shall have 03 – 07 members. The members shall be designated and
dismissed by the owner with a 5-year term of office. The Board of Members shall perform the
owner’s rights and obligations in the owner’s name; perform the company’s rights and
obligations in the company’s name, except the rights and obligations of the Director/General
Director; take responsibility to the law and the owner for their performance as prescribed by the
company's charter, this Law and relevant laws.
2. Rights, obligations and working regulations of the Board of Members shall comply with the
company's charter, this Law and relevant laws.
3. The President of the Board of Members shall be designated by the owner or elected by
members of the Board of Members under the majority rule following the procedures specified in
the company's charter. Unless otherwise prescribed by the company's charter, the term of office,
rights and obligations of the President of the Board of Members shall comply with Article 56 and
relevant regulations of this Law.
4. Meetings of the Board of Members shall be convened in accordance with Article 57 of this
Law.
5. A meeting of the Board of Members shall be conducted when it is participated in by at least
two thirds of the members. Unless otherwise prescribed by the company's charter, each member
shall have one vote with equal value. The Board of Members may ratify its resolutions and
decisions by questionnaire survey.
6. A resolution or decision of the Board of Members will be ratified when it is voted for by more
than 50% of the participating members or by a number of participating members that hold more
than 50% of the total votes. Revisions to the company's charter, reorganization of the company,
transfer of all or part of the company’s charter capital must be voted for by than 75% of the
participating members or by a number of participating members that hold more than 75% of the
total votes. A resolution or decision of the Board of Members takes effect from the day on which
it is ratified or on the effective date written therein unless otherwise prescribed by the company's
charter.
7. Minutes of every meeting the Board of Members shall be taken in accordance with Clause 2
Article 60 of this Law. Audio recording and other electronic forms are optional.
Article 81. The company’s President
1. The company’s President shall be designated by the company’s owner, perform the owner’s
rights and obligations in the owner’s name; perform the company’s rights and obligations in the
company’s name, except the rights and obligations of the Director/General Director; take
responsibility to the law and the owner for his/her performance as prescribed by the company's
charter, this Law and relevant laws.
2. Rights, obligations and working regulations of the company’s President shall comply with the
company's charter, this Law and relevant laws.
3. A decision of the company’s President on performance of his/her rights and obligations shall
be effective from the day on which it is approved by the owner unless otherwise prescribed by
the company's charter.
Article 82. The Director/General Director
1. The Board of Members or the company’s President shall designate or hire the
Director/General Director within a term of office not exceeding 05 years to manage the
company’s everyday business. The Director/General Director shall be responsible for the law
and the Board of Members or the company’s President for his/her performance. The President of
the Board of Members, another member of the Board of Members or the company’s President
may concurrently hold the position of Director/General Director unless otherwise prescribed by
law or the company's charter.
2. The Director/General Director has the following rights and obligations:
a) Organize the implementation of resolutions and decisions of the Board of Members or the
company’s President;
b) Decide everyday operating issues of the company;
c) Organize implementation of the company’s busines plans and investment plans;
d) Issue the company’s rules and regulations;
dd) Designate, dismiss the company’s executives, except those within jurisdiction of the Board
of Members;
e) Enter into contracts in the company’s name, except those within jurisdiction of the President
of the Board of Members or the company’s President;
g) Propose the company’s organizational structure;
h) Submit annual financial statements to the Board of Members or the company’s President;
i) Propose plans for use of profits or settlement of business losses;
k) Recruit employees;
l) Other rights and obligations specified in the company's charter and the employment contract.
3. To hold the position of Director/General Director, a person shall satisfy the following
requirements:
a) He/she is not one of the persons specified in Clause 2 Article 17 of this Law;
b) He/she has professional qualifications and experience of busines administration and satisfies
other conditions specified in the company's charter.
Article 83. Responsibilities of members of the Board of Members, the company’s President,
the Director/General Director, other executives and Controllers
1. Comply with regulations of law, the company's charter, decisions of the company’s owner in
performance of their rights and obligations.
2. Perform their rights and obligations in an honest and prudent manner to serve the best and
lawful interests of the company and its owner.
3. Be loyal to the interests of the company and its owner; do not abuse their power and position
or use the enterprise’s information, secrets, business opportunities and assets for personal gain or
serve any other organization’s or individual’s interests.
4. Promptly and fully notify the company of the enterprises that they own or have shares/stakes
or that their related persons own, jointly own or have separate controlling shares/stakes. The
notifications shall be retained at the company’s headquarters.
5. Other responsibilities prescribed by this Law and the company's charter.
Article 84. Salaries, bonuses and other benefits of the company’s executives and
Controllers
1. The company’s executives and Controllers shall receive salaries, bonuses and other benefits
according to the company’s business performance.
2. The company’s owner shall decide the salaries, bonuses and other benefits of members of the
Board of Members, the company’s President and Controllers. Salaries , bonuses and other
benefits of the company’s executives and Controllers shall be recorded as the company’s
expenses in accordance with regulations of law on corporate income tax and relevant laws and
shall be placed in a separate section in the company’s annual financial statements.
3. The Controllers’ the salaries, bonuses and other benefits may be directly paid by the
company’s owner as prescribed by the company's charter.
Article 85. Organizational structure of a single-member limited liability company owned by
an individual
1. A single-member limited liability company owned by an individual shall have a President and
a Director/General Director.
2. A company’s owner shall be the President who may concurrently hold the position of
Director/General Director or hire another person as the Director/General Director.
3. Rights and obligations of the Director/General Director shall be specified in the company's
charter and the employment contract.
Article 86. Contracts and transactions between the company and related persons
1. Unless otherwise prescribed by the company's charter, contracts and transactions between a
single-member limited liability company owned by an organization and the following persons
are subject to approval by the Board of Members or the company’s President, Director/General
Director and Controllers:
a) The owner of the company and the owner’s related persons;
b) Members of the Board of Members, the company’s President, Director/General Director and
Controllers;
c) Related persons of the persons mentioned in Point b of this Clause;
d) Executives of the company’s owner, the person having the power to designate these
executives;
dd) Related persons of the persons mentioned in Point d of this Clause.
2. The person who concludes a contract or carries on a transaction in the company’s name shall
send a notification to the Board of Members or the company’s President, Director/General
Director and Controllers of the related persons and interests; the notification shall be enclosed
with the draft contract or summary of the transaction.
3. Unless otherwise prescribed by the company's charter, members of the Board of Members or
the company’s President, Director/General Director and Controllers shall decide whether to
approve the contract or transaction within 10 days from the receipt of the notification under
majority rule. Each person shall have one vote; related persons of the parties shall not vote.
4. A contract or transaction mentioned in Clause 1 of this Article shall only be approved if the
following conditions are fully satisfied:
a) The parties to the contract or transaction are independent legal entities with separate rights,
obligations, assets and interests;
b) The prices applied to the contract or transactions are market prices at the time the contract is
concluded or the time the transaction is conducted;
c) The company’s owner fulfills the obligations specified in Clause 4 Article 77 of this Law.
5. A contract or transaction shall be invalidated under a court decision and handled as prescribed
by law if it is concluded or carried out against regulations of Clauses 1, 2, 3 and 4 of this Article.
The person who concludes the contract or carries out the transaction and related persons of the
parties shall jointly pay compensation for any damage caused and return the benefits generated
by such contract or transaction to the company.
6. Every contract and transaction between a single-member limited liability company owned by
an individual and the company’s owner or related persons of the owner shall be recorded in
separate documents of the company.
Article 87. Increasing, decreasing charter capital
1. A single-member limited liability company may increase its charter capital when its owner
contributes capital or raises capital from other persons. The owner shall decide on the specific
increase and the method.
2. In case of raising capital from other persons, the company shall be converted into a multiplemember limited liability company or joint stock company. To be specific:
a) In case of conversion into a multiple-member limited liability company, a notification of
change in enterprise registration information shall be submitted within 10 days from the day on
which the change in charter capital is complete;
b) In case of conversion into a joint stock company, follow the instructions in Article 202 of this
Law;
3. A single-member limited liability company may decrease its charter capital in the following
cases:
a) Part of the contributed capital is returned to the company’s owner after the company has
operated for at least 02 consecutive years from the enterprise registration date and the company
is able to fully pay its debts and other liabilities after the return of capital;
b) Charter capital is not fully and punctually contributed by the owner as prescribed in Article 75
of this Law.
Chapter IV
STATE-OWNED ENTERPRISES
Article 88. State-owned enterprises
1. State-owned enterprises shall be limited liability companies or joint stock companies,
including:
a) Wholly state-owned enterprises (100% of charter capital of which is held by the State)
b) Partially state-owned enterprises (over 50% of charter capital or voting shares is held by the
State, except the enterprises specified in Point a Clause 1 of this Article).
2. Wholly state-owned enterprises specified in Point a Clause 1 of this Article include:
a) Single-member limited liability companies 100% of charter capital of which is held by the
State that are parent companies of state-owned corporations or parent companies in groups of
parent company – subsidiary companies;
b) Independent single-member limited liability companies 100% of charter capital of which is
held by the State.
3. Partially state-owned specified in Point b Clause 1 of this Article include:
a) Multiple-member limited liability companies and joint stock companies over 50% of charter
capital or voting shares of which is held by the State that are parent companies of state-owned
corporations or parent companies in groups of parent company – subsidiary companies;
b) Independent multiple-member limited liability companies and joint stock companies over 50%
of charter capital or voting shares of which is held by the State.
4. The Government shall elaborate this Article.
Article 89. Application of regulations on state-owned enterprises
1. Wholly state-owned enterprises specified in Point a Clause 1 Article 88 of this Article shall be
organized as single-member limited liability companies in accordance with this Chapter and
relevant regulations of this Law. In case of discrepancies between regulations of this Law, the
regulations of this Chapter shall prevail.
2. Partially state-owned enterprises specified in Point b Clause 1 Article 88 of this Article shall
be organized as multiple-member limited liability companies in accordance with Section 1 of
Chapter III or as joint stock companies in accordance with Chapter V of this Law.
Article 90. Organizational structure
The state ownership representative body shall decide whether to apply one of the two models
below to organize the state-owned enterprise as a single-member limited liability company:
1. A company with a President, Director/General Director and Board of Controllers;
2. A company with a Board of Members, Director/General Director and Board of Controllers.
Article 91. The Board of Members
1. The Board of Members shall perform the company’s rights and obligations in the company’s
name as prescribed by this Law and relevant laws.
2. The Board of Members shall consist of up to 07 members including a President. Members of
the Board of Members shall be designated, dismissed, rewarded and disciplined by the state
ownership representative body.
3. The term of office of the President and other members of the Board of Members shall not
exceed 05 years. A member of Board of Members may be designated again for not more than 02
terms in the same company unless he/she has worked for the company for more than 15
consecutive years before the first designation.
Article 92. Rights and obligations of the Board of Members
1. The Board of Members shall, in the name of the company, perform the rights and obligations
of the owner, shareholders/members of other companies owned by the company or whose
shares/stakes are owned by the company.
2. The Board of Members has the following rights and obligations:
a) Decide the matters prescribed in the Law on Management and use of State Investment in
Enterprises;
b) Decide establishment, reorganization, dissolution of the company’s branches, representative
offices and dependent units;
c) Decide the company’s annual business plan, policies on market development, marketing and
technology;
d) Organize internal audits and decide establishment of the company’s internal audit unit;
dd) Other rights and obligations prescribed by the company's charter, this Law and relevant laws.
Article 93. Requirements to be satisfied by members of the Board of Members
To become a member of the Board of Members, a person shall satisfy the following
requirements:
1. He/she is not one of the persons specified in Clause 2 Article 17 of this Law.
2. He/she has professional qualifications and experience of busines administration or experience
of the company’s business lines.
3. He/she is not a relative of the head or deputies of the state ownership representative body; any
of the members of the Board of members, the Director/General Director, the Deputy
Director/General Director, the chief accountant or Controllers of the company.
4. He/she is not an executive of the member enterprise.
5. A member of the Board of Members other than the President may concurrently hold the
position of Director/General Director of the company or another company that is not a member
enterprise under a decision of the state ownership representative body.
6. He/she has never been discharged from the position of President of the Board of Members,
member of Board of Members, the company’s President, Director/General Director, Deputy
Director/General Director of a state-owned enterprise.
7. He/she satisfies other requirements specified in the company’s charter.
Article 94. Dismissal, discharge of members of the Board of Members
1. The President or another member of the Board of Members shall be dismissed in the following
cases:
a) He/she does not fully satisfy the requirements specified in Article 93 of this Law;
b) He/she hands in the resignation and is accepted in writing by the state ownership
representative body;
c) A reassignment or retirement decision is issued;
d) He/she is not capable of or qualified for the given tasks;
dd) He/she is not healthy or reputable enough to hold the position.
2. The President or another member of the Board of Members shall be discharge from duty in the
following cases:
a) The company fails to achieve the annual targets; fails to conserve and develop investment
capital as required by the state ownership representative body without an excuse that is objective
or accepted by the state ownership representative body;
b) He/she is convicted by the Court under an effective judgment or decision;
c) He/she fails to perform her duties in an honest manner or abuses his/her power and position or
uses the company’s assets for personal gain or serve any other organization’s or individual’s
interests; fails to truthfully report the company’s finance and business performance.
3. Within 60 days from the issuance date of the decision to dismiss or discharge the President or
member of the Board of Members, the state ownership representative body shall designate
another person as President or member.
Article 95. President of the Board of Members
1. The President of the Board of Members shall be designated by the state ownership
representative body as prescribed by law and must not concurrently hold the position of
Director/General Director of the company or another enterprise.
2. The President of the Board of Members has the following rights and obligations:
a) Plan quarterly and annual activities of the Board of Members;
b) Draw up agenda and prepare documents for meetings or surveys of the Board of Members;
c) Convene and chair meetings of the Board of Members or organize surveys of the Board of
Members;
d) Organize the implementation of decisions of the state ownership representative body and
resolutions of the Board of Members;
dd) Supervise, organize the supervision and evaluation of the achievement of strategic targets
and the company’s business performance, performance of the Director/General Director;
e) Organize the disclosure of the company’s information as prescribed by law; take responsibility
for the adequacy, punctuality, accuracy and systematic organization of the disclosed information.
3. In addition to the cases specified in Article 94 of this Law, the President of the Board of
Members may be dismissed or discharged if he/she fails to perform the rights and obligations
specified in Clause 2 of this Article.
Article 96. Rights and obligations of members of the Board of Members
1. Participate in meetings of the Board of Members; discuss, propose, vote on the issues within
the jurisdiction of the Board of Members;
2. Inspect, access, extract logbooks; monitor contracts, transactions, accounting books, financial
statements, minutes of meetings of the Board of Members and other documents of the company;
3. Other rights and obligations prescribed by the company's charter, this Law and relevant laws.
Article 97. Responsibilities of President and other members of the Board of Members
1. Comply with the company's charter, decisions of the company’s owner and regulations of law.
2. Exercise and perform their rights and obligations in an honest and prudent manner to protect
the lawful interests of the company and the State.
3. b) Be loyal to the interests of the company and the State; do not abuse their power and position
or use the enterprise’s information, secrets, business opportunities and assets for personal gain or
serve any other organization’s or individual’s interests;
4. c) Promptly and fully notify the company of the enterprises that they own or have
shares/stakes or that their related persons own, jointly own or have separate controlling
shares/stakes. These notifications shall be retained at the company’s headquarters.
5. Implement resolutions of the Board of Members.
6. Take personal responsibility when performing the following actions:
a) Take advantage of the company’s name to violate the law;
b) Do business or conduct transactions that do not serve the company’s interests and cause
damage to other organizations and individuals;
c) Pay debts before they are due while the company is facing financial risks.
7. The member who discovers another member’s violation shall send a written notification to the
state ownership representative body, request the violator to stop the violation and implement
remedial measures.
Article 98. Working regulations, conditions and procedures for conducting meetings of the
Board of Members
1. The Board of Members shall work as a collective. At least one meeting shall be held in a
quarter to consider and decide the matters within its jurisdiction. For matters that do not require
discussion, the Board of Members may carry out a questionnaire survey as prescribed by the
company's charter. Ad hoc meetings may be convened to resolve urgent issues at the request of
the state ownership representative body, the President of the Board of Members, more than 50%
of the members of the Board of Members or the Director/General Director.
2. The President of the Board of Members or the person authorized by the President of the Board
of Members shall draw up the meeting agenda and prepare meeting document; convene and chair
the meeting. Members of the Board of Members are entitled to propose additional contents to the
meeting agenda in writing. The meeting documents and agenda shall be sent to the members of
the Board of Members and invited participants at least 03 working days before the meeting date.
Meeting documents relevant to proposed revisions to the company's charter, orientation for
development of the company, ratification of the annual financial statement, reorganization or
dissolution of the company shall be sent to the members at least 05 working days before the
meeting date.
3. Invitations to the meeting can be sent physically, by phone, fax, electronically or by other
methods prescribed by the company's charter to each member of the Board of Members and
invited participants. The invitation shall specify the time, location and agenda of the meeting.
Online meetings may be carried out where necessary.
4. A meeting of the Board of Members shall be conducted when it is participated in by at least
two thirds of the members. A resolution of the Board of Members shall be ratified when it is
voted for by more than half of the participating members. In case of equality of votes, the option
that is voted for by the President of the Board of Members or the person authorized by the
President to chair the meeting shall prevail. Members of Board of Members who have dissenting
opinions may submit their proposals to the state ownership representative body.
5. In case of questionnaire survey, a resolution of the Board of Members shall be ratified when it
is voted for by more than half of the members. A resolution may be ratified by using multiple
copies of the same document if each copy bears at least one signature of the members of Board
of Members.
6. The Board of Members may invite representatives of relevant organizations to participate in
the meeting to discuss specific matters in the agenda. The invited participants may comment but
must not vote. Their comments shall be fully written in the minutes.
7. The discussion, comments, voting result and resolutions ratified by the Board of Members
shall be written in the minutes. The chair and the secretary of the meeting shall be jointly
responsible for the accuracy of the minutes. The minutes shall be ratified before the meeting
comes to an end and contain the following information:
a) The meeting time, location, purposes and agenda; list of participating members; discussed and
voted matters; summaries of comments made by the members and invited participants on each
matter;
b) The number of affirmative votes, negative votes and abstentions (if permitted);
c) Ratified decisions;
d) Full names and signatures of the participating members.
8. Members of the Board of Directors are entitled to request the Director/General Director,
Deputy Director/Deputy General Director, chief accountant, executives of the company and
subsidiary companies 100% of charter capital of which is held by the company, representatives
of the company’s investment in other enterprises to provide information and documents about
the company’s finance and business performance in accordance with regulations of the Board of
Members or resolution of the Board of Members. The requested person shall provide accurate
information and documents, unless otherwise decided by the Board of Members.
9. The Board of Members may employ the company’s management and assistance apparatus in
performance of their duties.
10. Operating costs of the Board of Members, their salaries and allowances shall be recorded as
the company’s administrative expenses.
11. Where necessary, the Board of Members may discuss with domestic and foreign counsels
before making important decisions under its jurisdiction. The counseling cost shall be specified
in the company’s financial management regulations.
12. A resolution of the Board of Members shall take effect on the ratification date or the effective
date written therein, unless it is subject to approval by the state ownership representative body.
Article 99. The company’s President
1. The company’s President shall be designated by the state ownership representative body as
prescribed by law and has up to 02 terms of office of up to 05 years each, unless he/she has
worked for the company for more than 15 consecutive years before the first designation. The
requirements, dismissal of the company’s President shall comply with Article 93 and Article 94
of this Law.
2. The company’s President shall perform the rights and obligations of the state ownership
representative at the company in accordance with the Law on Management and use of State
Investment in Enterprises; other rights, obligations and responsibilities prescribed in Article 92
and Article 97 of this Law.
3. The Presidents’ salaries and allowances shall be recorded as the company’s administrative
expenses.
4. The company’s President shall employ the company’s administration and assistance apparatus
to perform his/her rights and obligations. Where necessary, the company’s President may discuss
with domestic and foreign counsels before making important decisions under his/her jurisdiction.
The counseling costs shall be specified in the company’s financial management regulations.
5. The decisions within the President’s jurisdiction mentioned in Clause 2 of this Article shall be
made in writing and bear the President’s signature, even if the President concurrently holds the
position of Director/General Director.
6. A President’s decision takes effect from the day on which it is signed or on the effective date
written therein, unless it is subject to approval by the state ownership representative body.
7. In case the President is not present in Vietnam for more than 30 days, he/she shall authorize
another person in writing to perform some of his/her rights and obligations. A written
notification of the authorization shall be sent to the state ownership representative body. Other
cases of authorization shall comply with the company’s rules and regulations.
Article 100. The Director/General Director and Deputy Directors/General Directors
1. The Director/General Director shall be designated or hired by the Board of Members or the
company’s President under a personnel plan approved by the state ownership representative
body.
2. The Director/General Director shall manage the company’s everyday business and has the
following rights and obligations:
a) Organize the implementation of the company’s busines plans and investment plans and
evaluation thereof;
b) Organize the implementation of resolutions and decisions of the Board of Members,
company’s President and state ownership representative body and evaluation thereof;
c) Decide everyday matters of the company;
d) Issue the company’s rules and regulations after they are approved by the Board of Members or
company’s President;
dd) Designate, hire, dismiss, terminate employment contracts with the company’s executives,
except those within jurisdiction of the Board of Members or the company’s President;
e) Enter into contracts and carry out transactions in the company’s name, except those within
jurisdiction of the President of the Board of Members or the company’s President;
g) Prepare and submit quarterly and annual reports on achievement of business targets and
financial statements to the Board of Members or the company’s President;
h) Propose the distribution and use of post-tax profits and other financial obligations of the
company;
i) Recruit employees;
k) Propose the plan for the company’s reorganization;
l) Other rights and obligations prescribed by law and the company's charter.
3. The company may have one or several Deputy Directors/General Directors. The designation
and quantity of Deputy Directors/General Directors shall be specified in the company's charter.
Rights and obligations of Deputy Directors/General Directors shall be specified in the company's
charter and their employment contracts.
Article 101. Requirements to be satisfied by the Director/General Director
1. He/she is not one of the persons specified in Clause 2 Article 17 of this Law.
2. He/she has professional qualifications and experience of busines administration or in the
company’s business lines.
3. He/she is not a relative of the head or deputies of the state ownership representative body; any
of the members of the Board of members, the company’s President; any of the Deputy
Directors/General Directors, the chief accountant or Controllers of the company.
4. He/she has never been dismissed from the position of President of the Board of Members,
member of the Board of Members, the company’s President, Director/General Director, Deputy
Director/General Director of the company or another state-owned enterprise.
5. He/she is not holding the position of Director/General Director of another enterprise.
6. He/she satisfies other requirements specified in the company’s charter.
Article 102. Dismissal, discharge of the Director/General Director, other executives and the
chief accountant
1. The Director/General Director shall be dismissed from office in the following cases:
a) He/she no longer fully satisfies the requirements specified in Article 101 of this Law;
b) He/she hands in the resignation.
2. The Director/General Director shall be discharged from duty in the following cases:
a) The enterprise’s capital is not conserved as prescribed by law;
b) The enterprise fails to achieve its annual targets;
c) The enterprise violates the law;
d) The Director/General Director is not qualified for or capable of developing the enterprise’s
new busines plan and development strategy;
dd) The Director/General Director fails to perform his/her rights and obligations prescribed in
Article 97 and Article 100 of this Law;
e) Other cases prescribed by the company's charter.
3. Within 60 days from the issuance date of the decision on dismissal or discharge, the Board of
Members or the company shall recruit or designate a person to hold the position.
4. The company's charter shall provide for cases of dismissal and discharge of Deputy
Directors/General Directors, other executives and the chief accountant.
Article 103. Controllers and the Board of Controllers
1. The state ownership representative body shall decide the establishment of a Board of
Controllers, which has 01 – 05 Controllers including a Chief Controller. The term of office of a
Controller shall not exceed 05 years. A Controller must not be designated more than 02
consecutive terms. In case the Board of Controllers has only 01 Controller, he/she shall be the
Chief Controller and has to satisfy corresponding requirements.
2. An individual may concurrently hold the position of Chief Controller or Controller of up to 04
state-owned enterprises.
3. A Controller or Chief Controller shall satisfy the following requirements:
a) He/she has a bachelor’s degree or higher in economics, finance, accounting, audit, law,
business administration or a major that is relevant to the enterprise’s business operation and at
least 03 years’ experience (05 years for Chief Controller);
b) He/she is not executive of the company or any other enterprise; not a Controller of enterprises
other than state-owned enterprises; not a company’s employee.
c) He/she is not a relative of the head or deputies of the state ownership representative body; any
of the members of the Board of members, the Director/General Director, any of the Deputy
Directors/General Directors, the chief accountant or any other Controllers of the company;
d) He/she satisfies other requirements specified in the company’s charter.
4. The Government shall elaborate this Article.
Article 104. Obligations of the Board of Controllers
1. The Board of Controllers has the following obligations:
a) Supervise the implementation of the company’s business plans and development strategy;
b) Supervise and evaluate the company’s business performance and finance;
c) Supervise and evaluate the performance of the Board of Members and its members, the
company’s President and Director/General Director;
d) Supervise and evaluate the compliance to the company’s internal audit, risk management,
reporting regulations and other rules and regulations;
dd) Supervise the legitimacy, systematic organization and honesty of accounting tasks,
accounting records, financial statements, their annexes and relevant documents;
e) Supervise the company’s contracts and transactions with relevant parties;
g) Supervise execution of major projects; sales and purchases; other large-scale contracts and
transactions; unusual contracts and transactions of the company;
h) Prepare and send evaluation reports and proposals of the matters specified in Points a, b, c, d,
dd, e and g of this Clause to the state ownership representative body and the Board of Members;
i) Perform other obligations demanded by the state ownership representative body, prescribed by
the company's charter.
2. The state ownership representative body shall decide and pay the Controllers’ salaries,
bonuses and other benefits.
3. The Government shall elaborate this Article.
Article 105. Rights the Board of Controllers
The Board of Controllers has the rights to:
1. Participate in meetings of the Board of Members, official and unofficial discussions between
the state ownership representative body with the Board of Members; question the Board of
Members, its members, the company’s President and the Director/General Director about the
plans, projects, development programs and other decisions in management and administration of
the company.
2. Examine accounting books, reports, contracts, transactions and other documents of the
company; inspect the management and administration by the Board of Members and its
members, the company’s President and Director/General Director where necessary or at the
request of the state ownership representative body.
3. Request the Board of Members and its members, the company’s President and
Director/General Director, Deputy Directors/Deputy General Directors, chief accountant and
other executives to submit reports or provide information about the company’s management,
investment and business operation.
4. Request the company’s executives to submit reports on the subsidiary companies’ finance and
business performance if they are necessary for performance of their duties prescribed by law and
the company's charter.
5. Request the state ownership representative body to establish an audit unit which will advise
and assist the Board of Controllers in performance of its rights and obligations.
6. Other rights and obligations prescribed by the company's charter.
Article 106. Working regulations of the Board of Controllers
1. The Chief Controller shall prepare monthly, quarterly and annual working plans of the Board
of Controllers; assign specific tasks to each Controller.
2. Controllers shall perform their assign tasks independently; propose other tasks where
necessary.
3. The Board of Controllers shall hold a meeting at least once a month to evaluate and approve
the monthly operation reports before they are submitted to the state ownership representative
body; discuss and approve operation plans of the next month.
4. A decision of the Board of Controllers will be ratified when it is voted for by the majority of
the participating members. Dissenting opinions shall be fully and accurately recorded and
reported to the state ownership representative body.
Article 107. Responsibilities of Controllers
1. Comply with regulations of law, the company's charter, decisions of the state ownership
representative body and the code of ethics in performance of their rights and obligations.
2. Exercise and perform their rights and obligations in an honest and prudent manner to protect
the lawful interests of the State, the company the parties.
3. Be loyal to the interests of the company and the State; do not abuse their power and position or
use the enterprise’s information, secrets, business opportunities and assets for personal gain or
serve any other organization’s or individual’s interests;
4. The Controller that violates the regulations of this Article and causes damage to the company
shall be personally or jointly pay compensation, be held liable to disciplinary actions,
administrative penalties or criminal prosecution depending on the nature and severity of the
violation and have to return the incomes and benefits earned from the violation.
5. Send a notification to the state ownership representative body of violations committed by
another Controller and request the violator to stop the violation and implement remedial
measures.
6. Request the violator to stop the violation and implement remedial measures, and notify to the
state ownership representative body, other Controllers and relevant individuals in the following
cases:
a) A member of the Board of Members, the company’s President, the Director/General Director
or another executive violates or is going to violate regulations on their rights and obligations
b) Violations against the law, the company's charter or the company’s rules and violations are
discovered.
7. Other responsibilities prescribed by this Law and the company's charter.
Article 108. Dismissal and discharge of Controllers and the Chief Controller
1. The Chief Controller or a Controller shall be dismissed in the following cases:
a) He/she no longer fully satisfies the requirements specified in Article 103 of this Law;
b) He/she hands in the resignation and is accepted by the state ownership representative body;
c) He/she is reassigned by the state ownership representative body or another competent
authority;
d) Other cases prescribed by the company's charter.
2. The Chief Controller or a Controller shall be discharged from duty in the following cases:
a) He/she fails to perform his/her duties for 03 consecutive months, except in force majeure
events;
b) He/she fails to perform his/her duties for 01 year;
c) He/she commits multiple, serious violations against the rights and obligations of a Controller
or the Chief Controller prescribed by this Law and the company’s charter;
d) Other cases prescribed by the company's charter.
Article 109. Periodic disclosure of information
1. The information shall be periodically posted on the websites of the company and the state
ownership representative body:
a) Basic information about the company and the company's charter;
b) Overall targets and specific targets in the annual business plan;
c) The annual financial statement audited by an independent audit organization within 150 days
after the end of the fiscal year and its summary (including the financial statement of the parent
company and the consolidated financial statement (if any);
d) The mid-year financial statement audited by an independent audit organization and its
summary (including the financial statement of the parent company and the consolidated financial
statement (if any); these documents must be disclosed before July 31;
dd) Reports on implementation of annual business plans;
e) Reports on performance of public duties that are assigned or bid for (if any) and other social
responsibilities;
g) The report on the company’s management and organizational structure.
2. g) The report on the company’s management and organizational structure shall contain the
following information:
a) Information about the state ownership representative body, its head and deputies;
b) Information about the company’s executives, their qualifications and experience, managerial
position previously held, how they are designated, their managerial tasks; their salaries, bonuses,
benefits and payment method, their related persons and interests;
c) Relevant decisions of the state ownership representative body; resolutions and decisions of the
Board of Members of the company’s President;
d) Information about the Board of Controllers, Controllers and their activities;
dd) Verdicts of inspecting authorities (if any) and reports of the Controllers and the Board of
Controllers;
e) Information about the company’s related persons; contracts and transactions between the
company and its related persons;
g) Other information prescribed by the company’s charter.
3. Information shall be fully, accurately and punctually disclosed as prescribed by law.
4. Information shall be disclosed by the legal representative or the person authorized to disclose
information. The legal representative shall be responsible for the adequacy, punctuality and
accuracy of the information disclosed.
5. The Government shall elaborate this Article.
Article 110. Irregular disclosure of information
1. Information shall be posted the company’s website and printed matters (if any) and displayed
at the company’s headquarters and business locations within 36 hours from the occurrence of any
of the following events:
a) The company’s account is frozen or unfrozen;
b) All or part of the company’s business activities are suspended; the certificate of enterprise
registration, establishment license, establishment and operation license, operation license or
another license relevant to the company’s operation is revoked;
c) The certificate of enterprise registration, establishment license, establishment and operation
license, operation license or another license relevant to the company’s operation is revised;
d) There is a change of members of the Board of Members, the company’s President,
Director/General Director, Deputy Directors/General Directors, chief accountant, accounting –
finance department manager, Controllers or Chief Controller;
dd) An executive of the company is disciplined or charged under a decision; the court issues a
decision that involves an executive of the company;
e) An inspecting authority or tax authority announces a verdict on the enterprise’s violations of
law;
g) There is a decision that the independent audit organization is changed or not permitted to audit
the financial statement;
h) There is a decision on establishment, dissolution, consolidation, acquisition or conversion of a
subsidiary company, branch or representative office; investment in, decrease or withdrawal of
investment in other companies.
2. The Government shall elaborate this Article.
Chapter V
JOINT STOCK COMPANIES
Article 111. Joint stock companies
1. A joint stock company is an enterprise in which:
a) The charter capital is divided into units of equal value called shares;
b) Shareholders can be organizations and individuals; the minimum number of shareholders is
03; there is no limit on the maximum number of shareholders;
a) A shareholder’s liability for the company’s debts and liabilities is equal to the amount of
capital contributed to the company by the shareholder;
d) Shareholders may transfer their shares to other persons except for the cases specified in
Clause 3 Article 120 and Clause 1 Article 127 of this Law.
2. A joint stock company has the status of a juridical person from the day on which the
Certificate of Enterprise Registration is issued.
3. A joint stock company may issue shares, bonds and other kinds of securities.
Article 112. Capital of a joint stock company
1. A joint stock company’s charter capital is the total face value of the shares sold. The initially
registered charter capital of a joint stock company is the total face value of subscribed shares and
shall be written in the company's charter.
2. Sold shares are authorized shares that have been fully paid for the shareholders. Upon
registration of a joint stock company, sold shares are the total number of subscribed shares.
3. Authorized shares are the total number of shares that are offered by the General Meeting of
Shareholders (GMS) to raise capital. The number of authorized shares of a joint stock company
upon its registration is the total number of shares that will be offered by the company to raise
capital, including subscribed shares and unsubscribed shares.
4. Unsold shares are authorized shares that have not been paid for. Upon registration of a joint
stock company, unsold shares are the total number of unsubscribed shares.
5. A joint stock company may decrease its charter capital in the following cases:
a) The decrease is decided by the GMS, in which case the company will return part of the
contributed capital to the shareholders in proportion to their holdings if the company has
operated for at least 02 consecutive years from the enterprise registration date and is able to fully
pay its debts and other liabilities after the return of capital;
b) The company repurchases the sold shares in accordance with Article 132 and Article 133 of
this Law;
c) Charter capital is not fully and punctually contributed by the shareholders as prescribed in
Article 113 of this Law.
Article 113. Paying for subscribed shares upon enterprise registration
1. Shareholders shall fully pay for the subscribed shares within 90 days from issuance date of the
Certificate of Enterprise Registration unless shorter time limit is specified by the company's
charter or the shares registration contract. In case of capital contribution by assets, the time
needed to transport or import the contributed assets and for completing ownership transfer
procedures shall be added to this time limit. The Board of Directors shall supervise the
shareholders fully and punctually paying for the subscribed shares.
2. During the period from the issuance date of the Certificate of Enterprise Registration to the
deadline for paying for the subscribed shares mentioned in Clause 1 of this Article, the number
votes of shareholders shall be proportional to their subscribed shares unless otherwise prescribed
by the company's charter.
3. In case a shareholder fails to pay or to fully pay for the subscribed shares by the deadline
specified in Clause of this Article:
a) The shareholder that fails to pay for the subscribed shares is no longer a shareholder of the
company and must not transfer the right to purchase the shares to another person;
b) The shareholder that only pays for part of the subscribed shares will be entitled to a number of
votes, dividends and benefits that are proportional to the paid shares and must not transfer the
right to purchase the unpaid shares to another person;
c) The shares that are not paid for shall be considered unsold shares and may be sold by the
Board of Directors;
d) Within 30 days from the deadline for paying for the subscribed shares mentioned in Clause 1
of this Article, the company shall register the change in charter capital, which shall be equal to
the total face values of paid shares unless the unpaid shares are sold out during this period; and
register the change of founding shareholders.
4. The shareholders that do not pay or fully pay for their subscribed shares shall be held liable for
the company’s financial obligations that incur before the day on which the company register the
change in charter capital as prescribed in Point d Clause 3 of this Article in proportion to the
amount of their subscribed shares. Members of the Board of Directors and the legal
representative shall be jointly responsible for the damage caused by the failure to comply with or
fully comply with regulations of Clause 1 and Point d Clause 3 of this Article.
5. Except for the cases in Clause 2 of this Article, a capital contributor will become the
company’s shareholder from the day on which the shareholder’s shares are fully paid for and the
shareholder’s information specified in Points b, c, d and dd Clause 2 Article 122 of this Law is
recorded in the shareholder register.
Article 114. Types of shares
1. A joint stock company shall have ordinary shares, which are held by ordinary shareholders.
2. In addition to ordinary shares, a joint stock company may have preference shares, which are
held by preference shareholders. Preference shares include:
a) Participating preference shares;
b) Redeemable preference shares;
c) Super-voting shares;
d) Other types of preference shares prescribed by the company's charter and securities laws.
3. The persons that may purchase participating preference shares, redeemable preference shares
and other preference shares shall be specified in the company's charter or decided by the GMS.
4. Every share of the same type will confer upon the holder equal rights, obligations and interest.
5. Ordinary shares cannot not be converted into preference shares. preference shares may be
converted into ordinary shares under a resolution of the GMS.
6. Ordinary shares used as underlying assets to issue non-voting depository receipts are called
underlying ordinary shares. Non-voting depository receipts have interest and obligations
proportional to the underlying ordinary shares, except voting rights.
7. The Government shall provide for non-voting depository receipts.
Article 115. Rights of ordinary shareholders
1. Ordinary shareholders have the right to:
a) Participate in and make comments at the General Meeting of Shareholders; exercise the right
to vote directly or through authorized representatives or another method prescribed by law or the
company's charter. Each ordinary share equals one vote;
b) Receives dividends at the rate decided by the GMS;
c) Be given priority to buy additional shares in proportion to their holding of ordinary shares in
the company;
d) Transfer their shares to other persons except for the cases specified in Clause 3 Article 120
and Clause 1 Article 127 of this Law and relevant laws;
dd) Access names and addresses on the list of voting shareholders; request rectification of
incorrect information about themselves;
e) Access, extract, make copies of the company's charter, minutes and resolutions of the GMS;
g) Receive part of the remaining assets in proportion to their holdings in the company when the
company is dissolved or goes bankrupt.
2. The shareholder or group of shareholders that holds at least 5% of the ordinary shares (or a
smaller ratio specified in the company's charter) shall have the rights to:
a) Access, extract the minutes of meetings, resolutions and decisions of the Board of Directors,
mid-year and annual financial statements, reports of the Board of Controllers, contracts and
transactions subject to approval by the Board of Directors and other documents except those that
involve the company’s business secrets;
b) Demand that a GMS be convened in the cases specified in Clause 3 of this Article;
c) Request the Board of Controllers to investigate into specific matters relevant to the company’s
administration where necessary. The request shall be made in writing and contain the full names,
mailing addresses, nationalities, legal document numbers of shareholders that are individuals;
names, EID numbers or legal document numbers, headquarters addresses of shareholders that are
organizations; quantities of shares and time of shares registration of each shareholder, total
quantity of shares of the group and their holdings in the company; the matter that needs
investigating and the purposes of investigation;
dd) Other rights prescribed by this Law and the company's charter.
3. The shareholder or group of shareholders specified in Clause 2 of this Article is entitled to
demand a GMS be convened in the following cases:
a) The Board of Directors seriously violates the shareholders’ rights, obligations of executives or
issues decisions ultra vires;
b) Other cases prescribed by the company's charter.
4. A request mentioned in Clause 3 of this Article shall be made in writing and contain the full
names, mailing addresses, nationalities, legal document numbers of shareholders that are
individuals; names, EID numbers or legal document numbers, headquarters addresses of
shareholders that are organizations; quantities of shares and time of shares registration of each
shareholder, total quantity of shares of the group and their holdings in the company; the reasons
for convening the GMS. The request shall be enclosed with documentary evidence of the
violations committed by the Board of Directors or the decision issued ultra vires.
5. Unless otherwise prescribed by the company's charter, the shareholder or group of
shareholders that holds at least 10% of the ordinary shares (or a smaller ratio specified in the
company's charter) is entitled to nominate candidates for the Board of Directors and the Board of
Controllers as follows:
a) The ordinary shareholders shall hold a meeting to nominate candidates for the Board of
Directors and the Board of Controllers and inform the participating shareholders before the
opening of the GMS;
b) The number of candidates depends on the quantity of members of the Board of Directors and
the Board of Controllers and shall be decided by the GMS. In case the number of candidates
nominated is smaller than the permissible number, the remaining candidates shall be nominated
by the Board of Directors, the Board of Controllers and other shareholders.
6. Other rights prescribed by this Law and the company's charter.
Article 116. Super-voting shares and rights of their holders
1. Super-voting shares are ordinary shares that have more votes than other ordinary shares. The
number of votes of a preferred voting share shall be specified in the company's charter. Only
organizations authorized by the Government and founding shareholders may hold super-voting
shares. The super-voting powers of founding shareholders shall be effective for 03 years from
the issuance date of the Certificate of Enterprise Registration. The right to vote and voting
preference period of super-voting shares held by organizations authorized by the Government
shall be specified in the company's charter. After this period expires, super-voting shares shall
become ordinary shares.
2. Holders of super-voting shares have the rights to:
a) Vote on the matters under the jurisdiction of the GMS with the number of votes specified in
Clause 1 of this Article;
b) Other rights of ordinary shareholders, except the cases specified in Clause 3 of this Article.
3. Holders of super-voting shares must not transfer these shares to other persons unless it is
demanded by an effective court judgment or decision or transferred in accordance with
inheritance laws.
4. The Government shall elaborate this Article.
Article 117. Participating preference shares and rights of their holders
1. Participating preference shares are shares that provide their holders with higher dividends than
those of ordinary shares or with stable annual dividend. Annual dividend includes fixed dividend
and extra dividend. Fix dividends do not depend on the company’s business performance. Fix
dividend and method for determination of extra dividend shall be written on the certificates of
participating preference shares.
2. Holders of participating preference shares have the rights to:
a) Receive the dividend prescribed in Clause 1 of this Article;
b) Receive part of the company’s remaining assets in proportion to their holdings in case the
company is dissolved or goes bankrupt after the company’s debts and redeemable preference
shares are fully paid;
c) Other rights of ordinary shareholders, except the cases specified in Clause 3 of this Article;
3. Holders of participating preference shares do not have the right to vote, participate in the
GMS, nominate candidates for the Board of Directors and the Board of Controllers, except the
cases specified in Clause 6 Article 148 of this Law.
Article 118. Redeemable preference shares and rights of their holders
1. Redeemable preference shares are shares that will be redeemed by the company at the request
of their holders or under the conditions written in the certificates of redeemable preference shares
and the company's charter.
2. Holders of redeemable preference shares have all of the rights of ordinary shareholders, except
the cases specified in Clause 3 of this Article.
3. Holders of redeemable preference shares do not have the right to vote, participate in the GMS,
nominate candidates for the Board of Directors and the Board of Controllers, except the cases
specified in Clause 5 Article 114 and Clause 6 Article 148 of this Law.
Article 119. Obligations of shareholders
1. Fully and punctually pay for their subscribed shares.
2. Do not withdraw contributed capital in the form of ordinary shares in any shape or form,
unless the shares are purchased by the company or other persons. The shareholder that withdraws
all or part of the share capital against regulations of this Clause and persons with related interests
in the company shall have a liability for the company’s debts and other liabilities which is equal
to the value of the shares withdrawn and the damage caused by this action.
3. Comply with the company's charter, rules and regulations.
4. Comply with resolutions and decisions of the Board of Directors and the GMS.
5. Protect the confidentiality of information provided by the company in accordance with the
company's charter and the law; only use the provided information to perform and protect their
lawful rights and interests; do not spread or share information provided by the company to any
other organization or individual.
6. Other obligations prescribed by Law and the company's charter.
Article 120. Ordinary shares of founding shareholders
1. A new joint stock company shall have at least 03 founding shareholders. A joint stock
company converted from a state-owned enterprise or limited liability company or after division,
consolidation, acquisition of another joint stock company is not required to have founding
shareholders. Instead, the company's charter in the enterprise registration application shall
contain signatures of the company’s legal representatives or ordinary shareholders.
2. The founding shareholders shall subscribe for at least 20% of the total authorized ordinary
shares upon enterprise registration.
3. Within 03 years from the issuance date of the Certificate of Enterprise Registration, the
ordinary shares of founding shareholders may be transferred to other founding shareholders and
may only be transferred to a person that is not a founding shareholder if the transfer is accepted
by the GMS. In this case, the transferor does not have the right to vote on this transfer.
4. The limitations specified in Clause 3 of this Article do not apply to the following ordinary
shares:
a) Additional shares acquired by founding shareholders after the enterprise is registered;
b) Shares that have been transferred to other persons that are not founding shareholders.
Article 121. Share certificate
1. A share certificate is a certificate issued by a joint stock company, a book entry or electronic
data that certifies the ownership of one or a number of shares of the company. A share certificate
shall contain the following information:
a) The company’s name, EID number, headquarter address;
b) Quantity and type of shares;
c) The face value of each share and total face value of the number of shares written therein;
d) Full name, signature, mailing address, nationality and legal document number if the
shareholder is an individual; names, EID numbers or legal document number and headquarters
address if the shareholder is an organization;
dd) Signatures of the company’s legal representatives;
e) Registration number on the company’s shareholder register and issuance date of the share
certificate;
g) Other information specified in Articles 116, 117 and 118 of this Law for certificates of
preference shares.
2. Errors in a share certificate do not affect rights and interests of its holder. The company’s legal
representative shall be responsible for the damage caused by such errors.
3. In case a share certificate is lost or damaged, it will be reissued at the request of its holder. The
request shall contain:
a) Information about the lost or damaged certificate;
b) The commitment to take responsibility for disputes caused by its reissuance.
Article 122. Shareholder register
1. A joint stock company shall make and retain the shareholder register from the issuance date of
the Certificate of Enterprise Registration. The shareholder register can be physical or electronic
documents and contain information about the shareholders’ ownership of shares.
2. A shareholder register shall contain the following information:
a) The company’s name and headquarters address;
b) Total number of authorized shares, types of authorized shares and quantity of each type;
c) Total number of sold shares of each type and value of share capital contributed;
d) Full names, signatures, mailing addresses, nationalities and legal document numbers of
shareholders that are individuals; names, EID numbers or legal document numbers and
headquarters addresses of shareholders that are organizations;
dd) Quantity of each type of shares of each shareholder, date of share registration.
3. The shareholder register shall be retained at the company’s headquarters or another
organization that is licensed to retain shareholder registers. Shareholders are entitled to inspect,
access, extract names and addresses of the company’s shareholders from the shareholder register.
4. In case a shareholder’s mailing address is changed, a notification shall be promptly sent to the
company in order to update the shareholder register. The company is not responsible if a
shareholder cannot be contacted due to the failure to notify the change of that shareholder’s
mailing address.
5. The company shall update changes of shareholders in the shareholder register as requested by
relevant shareholders in accordance with company's charter.
Article 123. Offering shares
1. Offering shares means the company’s increase in charter capital by increasing the quantity of
shares, types of authorized shares.
2. Shares may be offered as follows:
a) Offering shares to existing shareholders;
b) Private placement of shares;
c) Public offering of shares.
3. Public offering of shares, offering of shares of public companies and other organization shall
be carried out in accordance with securities laws.
4. The company shall register the change in charter capital within 10 days from the day on which
the shares offering is complete.
Article 124. Offering of shares to existing shareholders
1. Offering of shares to existing shareholders is an event in which the company increases the
quantity and types of authorized and sell all of these shares to all shareholders in proportion to
their holdings in the company.
2. The offering of shares to existing shareholders by a non-public joint stock company shall be
carried out as follows:
a) The company shall send a written notification by express mail to the shareholders’ mailing
addresses written in the shareholder register at least 15 days before the deadline for subscribing
for shares;
b) The notification shall contain the full name, signature, mailing address, nationality and legal
document number if the shareholder is an individual; names, EID numbers or legal document
number and headquarters address if the shareholder is an organization; the shareholder’s current
shares and holding; the total quantity of shares offered and the number of shareholders having
the right to buy them; the offered price; deadline for subscribing; full name and signature of the
company’s legal representative. The notification shall be enclosed with the share subscription
form issued by the company. If the share subscription form is not sent to the company by the
deadline, it will be considered that the shareholder has renounced the right to buy shares;
c) Shareholders may transfer their right to buy shares to other persons.
3. If the offered shares are undersubscribed, the Board of Directors is entitled to sell the
remaining number of authorized shares to the company’s shareholders and other persons under
conditions that are not more favorable than those offered to the shareholders, unless otherwise
accepted by the GMS or prescribed by securities laws.
4. Shares are considered soled when they are fully paid for and information about the buyer
specified in Clause 2 Article 122 of this Law is fully recorded in the shareholder register. From
that time, the buyer is a shareholder of the company.
5. After the shares are fully paid for, the company shall issue and deliver the share certificate to
the buyer. In case a share certificate is not delivered, information about the shareholder specified
in Clause 2 Article 122 of this law shall be recorded in the shareholder register to certify the
shareholder’s owner of shares.
Article 125. Private placement of shares
1. The private placement of shares of a non-public joint stock company shall satisfy the
following conditions:
a) The offering is not made through mass media;
b) Shares are offered to fewer than 100 investors, not including professional securities investors
or only offered to professional securities investors.
2. The private placement of shares of a non-public joint stock company shall be carried out as
follows:
a) The company shall issue a decision on private placement of shares in accordance with this
Law;
b) The company’s shareholders exercise their rights to buy shares in accordance with Clause 2
Article 124 of this Law, except consolidation and acquisition of companies;
c) In case the shares are not completely bought by the shareholders and the persons that receive
the rights to buy shares, the remaining number of shares shall be offered by private placement
under conditions that are not more favorable than those offered to the shareholders, unless
otherwise accepted by the GMS.
3. Foreign investors that buy shares offered in accordance with this Article shall complete the
procedures for purchasing shares specified in the Law on Investment.
Article 126. Selling shares
The Board of Directors shall decide the time, method and prices for selling shares. The selling
prices must not be lower than their market values or latest book values, except:
1. Shares that are sold for the first time to persons other than founding shareholders;
2. Shareholders that are sold to all shareholders according to their holdings in the company;
3. Shares that are sold to brokers or guarantors, in which case the discount or discount rate must
be approved by the GMS unless otherwise prescribed by the company's charter;
4. Other cases in which the discount rates are specified in the company's charter or resolution of
the GMS.
Article 127. Transfer of shares
1. Shares may be transferred freely except the cases specified in Clause 3 Article 120 of this Law
and other cases of restriction specified in the company's charter. The restrictions on transfer of
shares specified in the company's charter are only applicable if they are written in the certificates
of the shares subject to restriction.
2. The transfer shall be made into a contract or carried out on the securities market. In case of
transfer under a contract, the documents shall bear the signatures of the transferor and the
transferee or their authorized representatives. In case shares are transferred on the securities
market, the transfer procedures prescribed by securities laws shall apply.
3. In case of the death of a shareholder that is an individual, his/her heir at law or designated by a
will shall become a shareholder of the company.
4. In case a shareholder that is an individual dies without an heir or the heir refuses the
inheritance or is disinherited, his/her shares shall be settled in accordance with civil laws.
5. A shareholder may donate all or part of their shares to other organizations and individuals; use
the shares to pay debts. The organization or individual that receives the donation or debt payment
will become a shareholder of the company.
6. The organizations and individuals that receive shares in the cases specified in this Article will
only become shareholders when the information specified in Clause 2 Article 122 of this Law is
fully recorded in the shareholder register.
7. The company shall register the changes of shareholders in the shareholder register as
requested by relevant shareholders within 24 hours after the request is received.
Article 128. Private placement of bonds
1. The joint stock company that is not a public company may make sell bonds using private
placement in accordance with this Law and relevant laws. Private placement of bonds by public
companies and other organizations, and public offering of bonds shall comply with securities
laws.
2. Private placement of bonds by a joint stock company that is not a public company means the
offering of bonds without mass media to fewer than 100 investors, excluding professional
securities investors, that satisfy the following conditions:
a) Strategic investors for privately placed convertible bonds and bonds attached to warrants;
b) Professional securities investors for privately placed convertible bonds, warrant-linked bonds
and other kinds of privately placed bonds.
3. A joint stock company that is not a public company must satisfy the following conditions to
make private placement of bonds:
a) The company’s has fully paid the principal and interest of the bonds that are offered and due
or fully paid due debts over the last 03 years before the offering (if any), except offering of
bonds to creditors that are pre-selected finance organizations;
b) The company has the audited financial statement of the year preceding the year of offering;
c) The liquidity ratios and prudential ratios are maintained;
d) Other conditions prescribed by relevant laws.
Article 129. Procedures for making private placement of bonds and transfer of privately
placed bonds
1. The company shall decide the plan for private placement of bonds in accordance with this
Law;
2. The company shall disclose information to the investors before each placement and send a
notification to the stock exchange at least 01 day before the intended date of offering.
3. The company shall disclose information about the result of the offering to the investors before
each placement and send a notification to the stock exchange within 10 days from the completion
date of the offering.
4. Privately placed bonds may be transferred among eligible investors specified in Clause 2
Article 128 of this Law, except transfer under an effective court decision or arbitration award or
inheritance as prescribed by law.
5. Pursuant to this Law and the Law on Securities, the Government shall provide for the types of
bonds, procedures for private placement of bonds; information disclosure; international issuance
of bonds.
Article 130. Deciding private placement of bonds
1. The company shall decide the private placement of bonds as follows:
a) The GMS shall decide the types and total value of bonds and time of offering of convertible
bonds and warrant-linked bonds. A voting shall be carried out in accordance with Article 148 of
this Law;
b) Unless otherwise prescribed by the company's charter and except the cases specified in Point a
of this Clause, the Board of Directors is entitled to decide the types and total value of bonds and
time of offering and shall submit a report to the nearest GMS. The report shall be enclosed with
documents about the offering.
2. The company shall register the change in charter capital within 10 days from the day on which
the bonds are converted into shares.
Article 131. Buying shares and bonds
Shares and bonds of a joint stock company may be bought in VND, convertible foreign
currencies, gold, land use right (LUR), intellectual property rights, technologies, technical
secrets, other assets specified in the company's charter and shall be paid in a lump sum.
Article 132. Share repurchase at shareholders’ request
1. The shareholders that have voted against the resolution on reorganization of the company or
change of shareholders’ rights and obligations in the company's charter are entitled to request the
company to repurchase their shares. The request shall be made in writing and specify the
shareholder’s name and address, quantity of shares of each type, offered prices, reasons for
requesting the repurchase. The request shall be sent to the company within 10 days from the day
on which the previously mentioned resolution is ratified by the GMS.
2. The company shall repurchase shares at the request of its shareholders in accordance with
Clause 1 of this Article at market prices or at the prices calculated in accordance with the rules in
the company's charter within 90 days from the receipt of the request. In case an agreement on the
prices cannot be reached, the parties may hire a valuation organization to determine the price.
The company shall introduce at least 03 valuation organizations for the shareholders to make the
final decision.
Article 133. Share repurchase under the company’s decision
The company is entitled to repurchase up to 30% the total ordinary shares, all or part of the
participating preference shares that have been sold. To be specific:
1. The Board of Directors is entitled to decide repurchase of up to 10% of the total shares of each
type which are sold within 12 months. Other cases of share repurchase shall be decided by the
GMS;
2. The Board of Directors is entitled to impose the repurchase price. The repurchase price for
ordinary shares must not exceed their market price at the time, except the cases specified in
Clause 3 of this Article. Repurchase prices of other types of shares must not be lower than their
market prices unless otherwise prescribed by the company's charter or agreed upon by the
company and relevant shareholders;
3. The company may repurchase shares of each shareholder in proportion to their holding in the
company as follows:
a) The notification on the company’s decision to repurchase shares shall be sent by express mail
to all shareholders within 30 days from its ratification date. The notification shall contain the
company’s name and headquarters address, total number and types of shares repurchased,
repurchase prices or pricing rules; procedures and deadline for paying, procedures and deadline
for shareholders to sell their shares to the company;
b) The shareholders that agree to sell back their shares to the company shall send a written
agreement to the company by express mail within 30 days from the notification date. The
agreement shall contain the full name, mailing address, nationality, legal document number if the
shareholder is an individual; name, EID number or legal document number, headquarters address
if the shareholder is an organization; the quantity of shares being held, quantity of shares to be
sold; method of payment, signature of the shareholder or the shareholder’s legal representative.
The company only buys back the shares within this time limit.
Article 134. Conditions for payment and settlement of repurchased shares
1. The company may only make the payment for the shares repurchased in accordance with
Article 132 and Article 133 of this Law if it is still able to fully pay its debts and other liabilities
after the shares are fully paid for.
2. The shares repurchased in accordance with Article 132 and Article 133 of this Law shall be
considered unsold shares according to Clause 4 Article 112 of this Law. The company shall
register the charter capital decreases, which is equal to the total face value of repurchased shares,
within 10 days from the date of completion of payment for the shares unless otherwise
prescribed by securities laws.
3. The share certificates of the repurchased shares shall be destroyed right after the shares are
fully paid for. The President of the Board of Directors and the Director/General Director shall be
jointly responsible for the damage caused by the failure to or delay in destroying the share
certificates.
4. After all of the repurchased shares are fully paid for, if the total assets in the company’s
accounting books is reduced by more than 10%, the company shall send a notification to all of its
creditors within 15 days from the payment date.
Article 135. Paying dividends
1. Dividends of preference shares shall be paid under the conditions applied thereto.
2. Dividends of ordinary shares shall be determined according to the realized net profit and the
dividend payment from the company’s retained earnings. The joint stock company may only pay
dividend of ordinary shares when the following conditions are fully satisfied:
a) The company has fully its tax liabilities and other liabilities as prescribed by law;
b) The company’s funds are contributed to and the previous losses are made up for as prescribed
by law and the company's charter;
c) After dividends are fully paid, the company is still able to fully pay its debts and other
liabilities when they are due.
3. Dividends can be paid in cash, the company’s shares or other assets specified in the company's
charter. If dividends are paid in cash, it shall be VND and using the methods of payment
prescribed by law.
4. Dividends shall be fully paid within 06 months form the ending date of the annual GMS. The
Board of Directors shall compile a list of shareholders that receive dividends, dividend of each
share, time and method of payment at least 30 days before each payment of dividends. The
notification of dividend payment shall be sent by express mail to the shareholders’ registered
addresses at least 15 days before the dividend payment date. Such a notification shall contain the
following information:
a) The company’s name and headquarters address;
b) Full name, mailing address, nationality and legal document number if the shareholder is an
individual;
c) Name, EID number or legal document number and headquarters address if the shareholder is
an organization;
d) Quantity of each type of shares; dividend of each share and the total dividends receivable by
the shareholder;
dd) Time and method of dividend payment;
e) Full names and signatures of the company’s legal representatives and the President of the
Board of Directors.
5. In case a shareholder transfers their shares during the period from the date of compilation of
the list of shareholders to the dividend payment date, the transferor will receive the dividend.
6. In case dividends are paid in shares, the company is not required to follow the procedures for
offering shares prescribed in Articles 123, 124 and 125 of this Law and is only required to
register the charter capital increase, which is equal to the total face value of shares paid as
dividends, within 10 days from the completion date of dividend payment.
Article 136. Return of payments for repurchased shares or dividends
In case repurchased shares are paid for against the regulations of Clause 1 Article 134 of this
Law or dividends are paid against regulations of Article 135 of this Law, the shareholder shall
return the money or assets received. Otherwise, all members of the Board of Directors shall have
a joint liability for the company’s debts and liabilities which is equal to the value of unrecovered
money or assets.
Article 137. Organizational structure of a joint stock company
1. Unless otherwise prescribed by securities laws, a joint stock company may choose one of the
following models:
a) A joint stock company with the GMS, Board of Directors, Board of Controllers and
Director/General Director. If the joint stock company has fewer than 11 shareholders and the
shareholders that are organizations hold less than 50% of the company’s total shares, a Board of
Controllers is not mandatory;
b) A joint stock company with the GMS, Board of Directors and Director/General Director. In
this case, at least 20% of the members of the Board of Directors shall be independent members
and there has to be an audit committee affiliated to the Board of Directors. The organizational
structure, functions and duties of the audit committee shall be specified in the company's charter
or the audit committee’s operating regulations promulgated by the Board of Directors.
2. If the company has only one legal representative, the President of the Board of Directors or the
Director/General Director shall be the legal representative. The President of the Board of
Directors shall be the company’s legal representative unless otherwise prescribed by the
company's charter. If the company has more than one legal representative, the President of the
Board of Directors and the Director/General Director shall be the company’s legal
representatives.
Article 138. Rights and obligations of the GMS
1. The GMS shall consist of all voting shareholders and is the supreme body of a joint stock
company.
2. The GMS has the following rights and obligations:
a) Ratify the orientation for development of the company;
b) Decide the types of authorized shares and quantity of each type; decide the annual dividends
of each type of shares;
c) Elect, dismiss members of the Board of Directors and Controllers;
d) Decide investment in or sale of assets that are worth at least 35% of the total assets written in
the latest financial statement, unless another ratio or value is specified in the company's charter;
dd) Decide revisions to the company’s charter;
e) Ratify annual financial statements;
g) Decide repurchase of more than 10% of total sold shares of each type;
h) Take actions against violations committed by members of the Board of Directors and
Controllers that cause damage the company and its shareholders;
i) Decide reorganization or dissolution of the company;
k) Decide the budget or total salaries, bonuses and other benefits of the Board of Directors and
the Board of Controllers;
l) Approve the rules and regulations of the company, the Board of Directors and the Board of
Controllers;
m) Approve the list of independent audit companies; choose independent audit companies carry
out audit of the company; dismiss independent audits where necessary;
n) Other rights and obligations prescribed by Law and the company's charter.
Article 139. General Meetings of Shareholders
1. General Meetings of Shareholders (GMS) shall be convened annually and whenever
necessary. The meeting location is the place where the chair attends and shall be within
Vietnam’s territory.
2. The annual GMS shall be convened within 04 months from the end of the fiscal year. Unless
otherwise prescribed by the company's charter, the Board of Directors shall decide deferral of the
annual GMS where necessary by up to 06 months from the end of the fiscal year.
3. The following issues shall be discussed and ratified at the annual GMS:
a) The company’s annual business plan;
b) The annual financial statement;
c) The report of the Board of Directors on its performance and that of its members;
d) The report of the Board of Controllers on the company’s business performance, performance
of the Board of Directors, the Director/General Director;
dd) The report of the Board of Controllers on its performance and that of the controllers;
e) Dividend of each type of shares;
g) Other issues within its jurisdiction.
Article 140. Convening GMS
1. Board of Directors shall convene annual and ad hoc GMS. An ad hoc GMS shall be convened
in the following cases:
a) The meeting is necessary for the company’s interests;
b) The quantity of remaining members of the Board of Directors and Board of Controllers is
smaller than the minimum quantity prescribed by law;
c) The meeting is requested by the shareholder or group of shareholders mentioned in Clause 2
Article 115 of this Law;
d) The meeting is requested by the Board of Controllers;
dd) Other cases prescribed by law and the company's charter.
2. Unless otherwise prescribed by the company's charter, the Board of Directors shall convene
the GMS within 30 days from the date of occurrence of the event mentioned in Point b Clause 1
of this Article or the day on which the request for holding the meeting mentioned in Point c and
Point d Clause 1 of this Article is received. If the Board of Directors fails to convene such GMS,
the President and members of the Board of Directors shall pay compensation for the damage
incurred by the company.
3. In case the Board of Directors fails to convene a GMS as prescribed in Clause 2 of this
Article, the Board of Controllers shall convene a GMS within the next 30 days in accordance
with regulations of this Law. If the Board of Controllers fails to convene the GMS, it shall pay
compensation for the damage incurred by the company
4. In case the Board of Controllers fails to convene a GMS as prescribed in Clause 3 of this
Article, the shareholder or group of shareholders prescribed in Clause 2 Article 115 of this Law
may convene the GMS on behalf of the company in accordance with this Law.
5. The person who convenes the GMS shall:
a) Prepare a list of shareholders entitled to participate in the GMS;
b) Provide information and settle complaints relevant to the aforementioned list;
c) Draw up the meeting agenda;
d) Prepare documents for the meeting;
dd) Draft the resolution of the GMS according to the meeting agenda; prepare a list and detailed
information about the candidates for members of the Board of Directors and Controllers (in case
of election);
e) Determine the meeting time and location;
g) Send the invitation to each and every shareholder on the list mentioned in (a);
h) Perform other tasks serving the meeting.
6. The cost of convening and conduct the GMS as prescribed in Clauses 2, 3 and 4 of this Article
shall be reimbursed by the company.
Article 141. List of shareholders entitled to participate in the GMS
1. The list of shareholders entitled to participate in the GMS shall be compiled according to the
company’s shareholder register numbers. The list shall be compiled not more than 10 days
before dan on which the invitations to participate in the GMS are sent if a shorter period is not
specified in the company's charter.
2. The list shall contain full names, mailing addresses, nationalities, legal document numbers of
shareholders that are individuals; names, EID numbers or legal document numbers, headquarters
addresses of shareholders that are organizations; quantities of shares of each type and each
shareholder registration date and number of each shareholder.
3. Shareholders are entitled to access and make copies of names and mailing addresses of
shareholders on the list; request correction of errors or addition of information about themselves
on the list. The company’s executives shall promptly provide information in the shareholder
register, revise and add information as requested by the shareholders; pay compensation for
damage caused by the failure to provide or to accurately and promptly provide shareholder
registration numbers as requested. The procedures for requesting provision of information in the
shareholder register shall be specified in the company's charter.
Article 142. Agenda of the GMS
1. The person who convenes the GMS shall prepare the agenda.
2. The shareholder or group of shareholders specified in Clause 2 Article 115 of this Law is
entitled to propose additional issues to the GMS agenda. The proposal shall be made in writing
and sent to the company at least 03 working days before the opening date unless another period
is specified in the company's charter. The proposal shall contain the names of shareholders and
the proposed issues.
3. In case the proposal mentioned in Clause 2 of this Article is rejected by the person who
convenes the GMS, a written response and explanation must be provided at least 02 days before
the opening day. A proposal may only be rejected in the following cases:
a) The proposal is sent against the regulations of Clause 2 of this Article;
b) The issue exceeds the jurisdiction of the GMS;
c) Other cases prescribed by the company's charter.
4. The person who convenes the GMS shall include the issues proposed in accordance with
Clause 2 of this Article in the draft agenda, except in the cases specified in Clause 3 of this
Article. The issues will be included in the official agenda if their inclusion is accepted by the
GMS.
Article 143. Invitations to the GMS
1. The person who convenes the GMS shall send invitations to all shareholders on the list of
shareholders entitled to participate in the GMS at least 21 days before the opening day unless an
earlier time is specified in the company's charter. The invitation shall contain the participant’s
name, headquarters/mailing address, EID number, time and location of the meeting and other
requirements.
2. Invitations shall be sent to mailing addresses of the shareholders and posted on the company’s
website. If necessary, the invitation may be published on a local or central daily newspaper as
prescribed by the company's charter.
3. An invitation shall be sent together with:
a) The meeting agenda, meeting documents and the draft resolution on each issue in the agenda;
b) The votes.
4. The invitation and meeting documents mentioned in Clause 3 of this Article may be uploaded
on the company’s website (if any) instead of sending physical invitations and documents. In this
case, the invitation shall contain instructions on how to download the documents.
Article 144. Exercising the right to attend the GMS
1. Shareholders and representatives of shareholders that are organizations may directly
participate in the GMS or authorize one or some other organizations and individuals to
participate the GMS, or participate in the GMS in one of the forms specified in Clause 3 of this
Article.
2. The authorization of participants in the GMS shall be made in writing. The authorization letter
shall be made in accordance with civil laws and specify the name of the authorized participant,
the quantity of shares authorized. The authorized participant shall present the authorization letter
before entering the meeting room.
3. It will be considered that a shareholder attends and votes at the GMS in the following cases:
a) The shareholder directly participates in and votes at the GMS;
b) The shareholder authorizes another organization or individual to participate in and vote at the
meeting;
c) The shareholder participates and votes online or through other electronic methods;
d) The shareholder sends the votes to the GMS by post, fax or email;
dd) The shareholder sends the votes by other means specified in the company's charter.
Article 145. Conditions for conducting the GMS
1. The GMS shall be conducted when it is participated by a number of shareholders that
represent more than 50% of the votes; the specific ratio shall be specified in the company's
charter.
2. In case the conditions for conducting the meeting prescribed in Clause 1 of this Article are not
fulfilled, the second invitation shall be sent within 30 days from the first meeting date unless
otherwise prescribed by the company's charter. The second GMS shall be conducted when it is
participated by a number of shareholders that represent at least 33% of the votes; the specific
ratio shall be specified in the company's charter.
3. In case the conditions for conducting the second meeting prescribed in Clause 2 of this Article
are not fulfilled, the third invitation shall be sent within 20 days from the second meeting date
unless otherwise prescribed by the company's charter. The third GMS shall be conducted
regardless of the number of votes represented by the participants.
4. Only the GMS has the right to change the agenda enclosed with the invitation prescribed in
Article 142 of this Law.
Article 146. Meeting and voting protocols
Unless otherwise prescribed by the company's charter, the following meeting and voting protocol
shall be followed:
1. The shareholders that participate in the GMS shall be registered before the meeting is declared
open;
2. Election of the chair, secretary and election board:
a) The President of the Board of Directors shall assume the role or the chair or authorize a
member of Board of Directors to chair the GMS if it is convened by the Board of Directors. In
case the chair is not present or is temporarily unable to work, the remaining members of the
Board of Directors shall elect one of them as the chair under the majority rule. In case a chair
cannot be elected, the chief of the Board of Controllers shall preside over the election of the
GMS chair, in which case the person that receives the most votes will be the chair;
b) Except for the cases specified in Point a of this Clause, the person that signs the decision to
convene the GMS shall preside over the election of the chair by the GMS, in which case the
person that receives the most votes will be the chair;
c) The chair shall designate one or some persons as the secretary(ies) of the GMS;
d) The GMS shall elect one or some people as the election board as requested by the chair;
3. The meeting agenda shall be ratified by the GMS during the opening session. The agenda shall
specify the duration of each issue therein;
4. The chair is entitled to implement necessary and reasonable measures to maintain order during
the meeting and adhere to the ratified agenda and serve the majority of the participants;
5. The GMS shall discuss and vote on each issue on the agenda. Votes include affirmative votes,
negative votes and abstentions. The voting result shall be announced by the chair before the
meeting ends unless otherwise prescribed by the company's charter;
6. Shareholders and authorized participants that arrive at the meeting after it is declared open will
be registered and has the right to vote after registration. In this case, previous voting result shall
remain unchanged;
7. The person who convenes or chair the GMS has the rights to:
a) Request all participants to facilitate inspection and other lawful and reasonable security
measures;
b) Request a competent authority to maintain order during the meeting; expel those who do not
comply with the chair’s instructions, deliberately disrupt order, obstruct the meeting progress or
disobey security requirements;
8. The chair is entitled to postpone the GMS that has a sufficient number of participants for up to
03 working days from the initial opening day or change the meeting location in the following
cases:
a) The current meeting location does not have enough seats for all participants;
b) Communication devices at the current meeting location are not adequate for all participant to
discuss and vote;
c) One or some participants disrupt the meeting and thus threaten the fairness and legality of the
meeting;
9. In case the chair postpones or suspends the GMS against Clause 8 of this Article, the GMS
shall elect another participant to chair the meeting until the end; all resolutions ratified at the
meeting shall be effective.
Article 147. Methods for ratifying resolutions of the GMS
1. The GMS shall decide ratification of resolutions by voting or questionnaire survey.
2. Unless otherwise prescribed by the company's charter, resolutions of the GMS on the
following issues shall be voted on at the meeting:
a) Revisions to the company's charter;
b) Orientation for development of the company;
c) Types of shares and quantity of each type;
d) Election and dismissal or members of the Board of Directors and the Board of Controllers;
dd) Investment or sale of assets that are worth at least 35% of the total assets written in the latest
financial statement, unless another ratio or value is specified in the company's charter;
e) Ratification of the annual financial statement;
g) Reorganization or dissolution of the company.
Article 148. Conditions for ratification of resolutions of the GMS
1. A resolution on one of the following issues will be ratified if it is voted for by a number of
shareholders that represent at least 65% (a specific ratio shall be specified in the company's
charter) of votes of all participants, except for the cases specified in Clauses 3, 4 and 6 of this
Article:
a) Types of shares and quantity of each type;
b) Change of the company’s business lines;
c) Change of the company’s organizational structure;
d) Investment or sale of assets that are worth at least 35% of the total assets written in the latest
financial statement, unless another ratio or value is specified in the company's charter;
dd) Reorganization or dissolution of the company.
e) Other issues specified in the company's charter.
2. A resolution will be ratified when it is voted for by a number of shareholders that hold more
than 50% (a specific ratio shall be specified in the company's charter) of the votes of all
participants, except for the cases specified in Clauses 1, 3 , 4 and 6 of this Article.
3. Unless otherwise prescribed by the company's charter, the election of members of the Board of
Directors and the Board of Controllers shall be cumulative voting, which means a shareholder
will a number of votes that is proportional to that shareholder’s holding multiplied by (x) the
number of members of the Board of Directors or the Board of Controllers and a shareholder may
use all or part of the votes for one or some candidates. Successful candidates shall be chosen
according to the votes they receive in descending order until the number of members of the
Board of Directors or the Board of Controllers reaches the minimum number specified in the
company's charter. In case 02 or more candidates receive the same number of votes for the last
member of the Board of Directors or the Board of Controllers, these candidates will undergo an
additional election or be chosen according to the criteria specified in the election regulations or
company's charter.
4. In case of questionnaire survey, a resolution will be ratified when it is voted for by a number
of shareholders that hold more than 50% (a specific ratio shall be specified in the company's
charter) of the votes of all voting shareholders.
5. A resolution of the GMS shall be notified to the shareholders having the right to participate in
the GMS within 15 days from the day on which it is ratified or uploaded onto the company’s
website (if any).
6. A resolution on adverse changes to rights and obligations of preference shareholders may only
be ratified if it is voted for by a number of preference shareholders that participate in the meeting
and hold at least 75% of the same kind of preference shares. In case of questionnaire survey, it
needs to be approved by a number of preference shareholders that holding at least 75% of the
same kind of preference shares.
Article 149. Power and method for ratifying resolutions of the GMS by questionnaire
survey
Unless otherwise prescribed by the company's charter, a questionnaire survey on ratification of
resolution of the GMS shall be carried out as follows:
1. The Board of Directors is entitled to carry out questionnaire survey to ratify a resolution of the
GMS when it is considered necessary for the company’s interests, except for the cases specified
in Clause 2 Article 147 of this Law;
2. The Board of Directors shall prepare the questionnaires, the draft resolution and explaining
documents; send it to all voting shareholders at least 10 days before the deadline for submission
of the questionnaires unless a longer period is specified in the company's charter. The list of
shareholders to receive the questionnaires shall be compiled in accordance with Clause 1 and
Clause 2 Article 141 of this Law. Questionnaires and documents shall be sent in accordance with
Article 143 of this Law;
3. A questionnaire shall contain:
a) The company’s name, EID number, headquarter address;
b) Purposes of the survey;
c) If the shareholder is an individual: full name, mailing address, nationality, legal document
number; If the shareholder is an organization: name, EID number or legal document number of
the organization or full name, mailing address, nationality, legal document number of the
organization’s representative; quantity of each type of shares and number of votes of the
shareholder;
d) The issues that need voting;
dd) The options including affirmative, negative, abstention;
e) Deadline for submission of the answered questionnaire;
g) Full name and signature of the President of the Board of Directors;
4. Shareholders may send answered questionnaires to the company by post, fax or email as
follows:
a) An answered questionnaire sent by post shall bear the signature of the shareholder (if the
shareholder is an individual) or the shareholder’s authorized representative or legal
representative (if the shareholder is an organization), be placed in a closed envelope which must
not be opened before vote counting time;
b) An answered questionnaire sent by fax or email shall be kept confidential until the vote
counting time;
c) Answered questionnaires that are submitted after the deadline or opened before vote counting
time (for those sent by post) or revealed (for those sent by fax or email) shall be considered
invalid. Questionnaires that are not submitted shall not be counted as votes;
5. The Board of Directors shall organize vote counting and issue a vote counting record in the
presence of the Board of Controllers or the shareholders that are not holding any managerial
position in the company. The vote counting record shall have the following information:
a) The company’s name, EID number, headquarter address;
b) Purposes and the issue that needs voting;
c) Quantities of voters, votes casted, valid votes and invalid votes, voting method and a list of
voters;
d) Quantities of affirmative votes, negative votes and abstentions on each issue;
dd) Ratified decisions and corresponding ratio of affirmative votes;
e) Full names and signatures of the President of the Board of Directors, vote counting
supervisors and vote counters.
The members of the Board of Directors, vote counters and vote counting supervisor are jointly
responsible for the accuracy and honesty of the vote counting record; for the damage caused the
decisions that are ratified due to inaccurate or dishonest vote counting;
6. The vote counting record and the resolution shall be sent to all shareholders within 15 days
from the date of vote counting completion or uploaded on the company’s website (if any);
7. Answered questionnaires, the vote counting record, the ratified resolution and relevant
documents enclosed with the answered questionnaires shall be retained at the company’s
headquarters;
8. An resolution that is ratified through questionnaire survey has the same value as those ratified
at the GMS.
Article 150. Minutes of the GMS
1. The minutes of the GMS shall be in Vietnamese language (audio recordings and electronic
files are optional), may be translated into foreign languages, and shall contain the following
information:
a) The company’s name, EID number, headquarter address;
b) Time and location of the GMS;
c) The meeting agenda;
d) Full names of the chair and secretary;
dd) Summary of developments of the meeting, comments at the GMS on each issue on the
agenda.
e) Quantities of shareholders and votes casted by shareholders that participated in the meeting,
the list of subscribed shareholders and shareholders’ representatives that participated in the
meeting and their votes;
g) Number of affirmative votes on each issue, voting method, numbers of valid votes, invalid
votes, affirmative votes, negative votes and abstentions, their ratios to total number of votes of
all participants;
h) Ratified decisions and corresponding ratio of affirmative votes;
i) Full names of the chair and secretary.
In case the chair and the secretary refuse to sign the minutes, they will be effective if they are
signed by the other members of the Board of Directors and contain all information prescribed in
this Clause. The minutes shall clearly state the reasons why the chair and the secretary refuse to
sign them.
2. The minutes of the GMS shall be completed and ratified before the meeting ends.
3. The chair and secretary or other persons who sign the minutes are joint responsible for its
accuracy and truthfulness.
4. The Vietnamese and foreign language copies of the minutes have the same legal value. In case
of any discrepancy between them, the Vietnamese copy shall prevail.
5. The minutes of the GMS shall be sent to all shareholders within 15 days from the ending date
of the meeting; the vote counting record may be uploaded to the company’s website.
6. The minutes of the GMS, the list of registered participants, the ratified resolutions and
documents enclosed with the invitations shall be retained at the company’s headquarters.
Article 151. Requesting invalidation of a resolution of the GMS
Within 90 days from the receipt of the resolution or minutes of the GMS or the vote counting
record, the shareholder or group of shareholders mentioned in Clause 2 Article 115 of this Law is
entitled to request the court or an arbitral tribunal to consider invalidating the resolution in part
or in full in the following cases:
1. The procedures for convening the GMS and issuing decisions prescribed in this Law and the
company's charter are not followed, except for the cases specified in Clause 2 Article 152 of this
Law;
2. The contents of the resolution violations the law or the company's charter.
Article 152. Effect of the resolution of the GMS
1. The resolution of the GMS takes effect from the day on which it is ratified or on the effective
date specified therein.
2. A resolution that is ratified by 100% of the voting shares shall be lawful and effective even if
the procedures for convening the meeting and issuing such resolution prescribed in this Law and
the company's charter are not followed;
3. In case a shareholder or group of shareholders requests the court or an arbitral tribunal to
consider invalidating the resolution as prescribed in Article 151 of this Law, the resolution shall
remain effective until the effective date of the decision on invalidation of such resolution, except
for the cases in which temporary emergency measures are implemented under a decision of a
competent authority.
Article 153. The Board of Directors
1. The Board of Directors is the managerial body of the company and has the right to make
decisions on behalf of the company, perform rights and obligations of the company, except the
rights and obligations of the GMS.
2. The Board of Directors has the following rights and obligations:
a) Decide the company’s medium-term development strategies and annual business plans;
b) Propose the types of authorized shares and quantity of each type;
c) Decide sale of certain types of unsold authorized shares; decide other methods of raising
capital;
d) Decide selling prices for the company’s shares and bonds;
dd) Decide repurchase of shares as prescribed in Clause 1 and Clause 2 Article 133 of this Law;
e) Decide the investment plan and investment projects within its jurisdictions and limitations
prescribed by law;
g) Decide solutions for market development, marketing and technology;
h) Approve sale contracts, purchase contracts, borrowing contracts, lending contracts, other
contracts and transactions that are worth at least 35% of the total assets written in the latest
financial statement, unless another ratio or value is specified in the company's charter; contracts
and transactions within the jurisdiction of the GMS as prescribed in Point d Clause 2 Article 138,
Clause 1 and Clause 3 Article 167 of this Law.
i) Elect, dismiss the President of the Board of Directors; designate, dismiss, enter into and
terminate contracts with the Director/General Director and other key executives specified in the
company's charter; decide salaries, remunerations, bonuses and other benefits of these
executives; designate authorized representatives to participate in the Board of Members or GMS
of another company; decide their remunerations and other benefits;
k) Supervise the Director/General Director and other executives managing the company’s
everyday business;
l) Decide the company’s organizational structure, rules and regulations; establishment of
subsidiary companies, branches and representative offices; contribution of capital to and
purchase of shares of other enterprises;
m) Approve the agenda and documents of the GMS; convene the GMS or carry out surveys for
the GMS to ratify its resolutions;
n) Submit annual financial statements to the GMS;
o) Propose the dividends; decide the time and procedures for paying dividends or settling
business losses;
p) Propose reorganization or dissolution of the bankruptcy; file bankruptcy of the company;
q) Other rights and obligations prescribed by Law and the company's charter.
3. The Board of Directors shall ratify its resolution and decisions by voting at the meeting,
questionnaire survey or another method specified in the company's charter. Each member of the
Board of Directors shall have one vote.
4. In case a resolution or decision is ratified by the Board of Directors against regulations of law
or a resolution of the GMS or the company’s charter and causes damage to the company, the
members that vote for the ratification of such resolution or decision shall be jointly responsible
for it and pay compensation for the company; the members that vote against such resolution or
decision shall not be held responsible. In this case, the company’s shareholders are entitled to
request the court to suspend or invalidate the resolution or decision.
Article 154. Term of office and quantity of members of the Board of Directors
1. The Board of Directors shall have 03 – 11 members. The specific quantity of members shall
be prescribed by the company's charter.
2. The term of office of a member of the Board of Directors shall not exceed 05 years without
term limit. An individual may only be elected independent member of the Board of Directors of
a company for up to 02 continuous terms.
3. In case the term of office of all members of the Board of Directors ends at the same time, they
shall remain members of the Board of Directors until new members are elected and take over
their jobs unless otherwise prescribed by company's charter.
4. The company's charter shall specify the quantity, rights, obligations of independent members
of the Board of Directors; method for organizing and coordinating their activities.
Article 155. Organizational structure and requirements to be fulfilled by members of the
Board of Directors
1. To be a member of the Board of Directors, a person shall satisfy the following requirements:
a) He/she is not one of the persons specified in Clause 2 Article 17 of this Law;
b) He/she has professional qualifications and experience of busines administration in the
company’s busines lines; a member is not necessarily a shareholder of the company, unless
otherwise prescribed by the company's charter;
c) A person may hold the position of member of the Board of Directors of more than one
company;
d) A member of the Board of Directors of a state-owned enterprise prescribed in Point b Clause 1
Article 88 of this Law and subsidiary companies of a state-owned enterprise prescribed in Clause
1 Article 88 of this Law must not be a relative of the Director/General Director or any other
executive of the company, of the executive or the person having the power to designate the
executive of the parent company.
2. Unless otherwise prescribed by securities laws, an independent member of the Board of
Directors prescribed in Point b Clause 1 Article 137 of this Law shall satisfy the following
requirements:
a) He/she is not working for the company or its parent company or subsidiary company; did not
worked for the company or its parent company or subsidiary company within the last 03 years or
longer;
b) He/she is not receiving a salary from the company, except the allowances to which members
of the Board of Directors are entitled as per regulations;
C) His/her spouse, biological parents, adoptive parents, biological children, adopted children and
siblings are not major shareholders of the company, executives of the company or its subsidiary
companies;
d) He/she is not directly or indirectly holding 1% of the company’s voting shares or more;
dd) He/she did not hold the position of member of the Board of Directors or the Board of
Controllers of the company within the last 05 years or longer unless he/she was designated in 02
consecutive terms.
3. An independent member of the Board of Directors shall notify the Board of Directors if he/she
no longer satisfies the requirements specified in Clause 2 of this Article and is obviously no
longer an independent member from the day on which a condition is not satisfied. The Board of
Directors shall the disqualification if this member at the nearest GMS or convene the GMS to
elect a new independent member within 06 months from the day on which the notification is
received from the member.
Article 156. The President of the Board of Directors
1. The Board of Directors shall elect one of its members President of the Board of Directors;
dismiss its President.
2. The President of the Board of Directors of a public company or a joint stock company
prescribed in Point b Clause 1 Article 88 of this Law must not concurrently hold the position of
Director/General Director.
3. The President of the Board of Directors has the following rights and obligations:
a) Plan the activities of the Board of Directors;
b) Draw up agenda and prepare documents for meetings of the Board of Directors; convene and
chair the meetings;
c) Organize the ratification of resolutions and decisions of the Board of Directors;
d) Supervise the implementation of resolutions and decisions of the Board of Directors;
dd) Chair the GMS;
e) Other rights and obligations prescribed by Law and the company's charter.
4. In case the President of the Board of Directors is not present or not able to perform his tasks,
he/she shall authorize another member in writing to perform the rights and obligations of the
President of the Board of Directors in accordance with the company's charter. In case no member
is authorized or the President is dead, missing, detained, serving an imprisonment sentence,
serving an administrative penalty in a correctional institution or rehabilitation center, making a
getaway; has limited legal capacity or is incapacitated, has difficulty controlling his/her behavior,
is prohibited by the court from holding certain positions or doing certain works, one of the Board
of Directors shall convene a meeting with the remaining members to elect one of them as the
interim President under the majority rule until a new decision is issued by the Board of Directors.
5. Where necessary, the Board of Directors may designate the company’s secretary, who will
have the following rights and obligations:
a) Assist in convening the GMS and meetings of the Board of Directors; takes minutes of the
meetings;
b) Assists members of the Board of Directors in performing their rights and obligations;
c) Assists the Board of Directors in applying and implementing the business administration rules;
d) Assist the company in development of shareholder relationship, protection of lawful rights and
interests of shareholders; fulfillment of the obligation to provide and disclose information and
administrative procedures;
dd) Other rights and obligations prescribed by the company's charter.
Article 157. Meetings of the Board of Directors
1. The President of the Board of Directors shall be elected during the first meeting of the Board
of Directors within 07 working days from the election of that Board of Directors. This meeting
shall be convened and chaired by the member that received the highest number of votes. In case
more than one member received the same highest number of votes, one of them will be elected
by the members under majority rule to convene the meeting of the Board of Directors.
2. Meetings of the Board of Directors shall be held at least quarterly and on an ad hoc basis.
3. The President of Board of Directors shall convene a meeting of the Board of Directors in the
following cases:
a) It is requested by the Board of Controllers or independent members of the Board of Directors;
b) It is requested by the Director or General Director and at least 05 other executives;
c) It is requested by at least 02 members of the Board of Directors;
d) Other cases specified in the charter.
4. The request mentioned in Clause 3 of this Article shall be made in writing and specify the
issues that need discussing and deciding within the jurisdiction of the Board of Directors.
5. The President of the Board of Directors shall convene the meeting within 07 working days
from the day on which the request mentioned in Clause 3 of this Article is received. Otherwise,
he/she shall be responsible for the damage to the company and the requesting person is entitled
to convene the meeting of the Board of Directors.
6. The President of the Board of Directors or the person that convenes the meeting shall send the
invitations at least 03 working days before the meeting day unless otherwise prescribed by the
company's charter. The invitation shall specify the meeting time, location, agenda, issues to be
discussed. The invitation shall be enclosed with meeting documents and votes.
The invitations can be sent physically, by phone, fax, electronically or by other methods
prescribed by the company's charter to the registered mailing address of each member of the
Board of Directors.
7. The President of the Board of Directors or the person that convenes the meeting shall send the
same invitations and documents to the Controllers.
The Controllers are entitled to participate in meetings of the Board of Directors and discuss but
must not vote.
8. A meeting of the Board of Directors shall be conducted when it is participated in by at least
three fourths (3/4) of the members. In case a meeting cannot be conducted due to inadequate
number of participants, the second meeting shall be convened within 07 days from the first
meeting date unless a shorter period is prescribed by the company's charter. The second meeting
shall be conducted when it is participated in by more than 50% of the members.
9. It will be considered that a member participates in and votes at the meeting of the Board of
Directors in the following cases:
a) He/she directly participates in and votes at the meeting;
b) He/she authorizes another person to participate in and vote at the meeting as prescribed in
Clause 11 of this Article;
c) He/she participates in the meeting and votes online or through other electronic methods;
d) He/she sends his/her vote to the meeting by post, fax or email;
dd) He/she sends the votes by other means specified in the company's charter.
10. A vote is sent by post shall be put in a closed envelope and be delivered to the President of
the Board of Directors at least 01 hour before the opening time. Votes shall only be open in the
presence of all participants.
11. The members shall participate in all meetings of the Board of Directors and may authorize
other persons to participate in and vote at the meeting if accepted by the majority of the Board of
Directors.
12. Unless a higher ratio is prescribed by the company's charter, a resolution or decision of the
Board of Directors shall be ratified if it is voted for by the majority of the participants. In case of
equality of votes, the option that is voted for by the President of the Board of Directors shall
prevail.
Article 158. Minutes of meetings of the Board of Directors
1. The minutes of all meetings of the Board of Directors shall be taken. Audio recordings and
other electronic forms are optional. The minutes shall be written in Vietnamese language, may be
translated into foreign languages, and shall contain the following information:
a) The company’s name, EID number, headquarter address;
b) Time and location of the meeting;
c) Purposes and agenda of the meeting;
d) Full names of participating members and the persons authorized to participate in the meeting
and how they participate; full names of non-participating members and their excuses;
dd) The issues to be discussed and voted on at the meeting;
e) Summary of comments of each participating member in chronological order;
g) Voting result, the members that cast affirmative votes, negative votes and abstentions;
h) Ratified decisions and corresponding ratio of affirmative votes;
i) Full names, signatures of the chair and the minute taker, except the case in Clause 2 of this
Article.
2. In case the chair and the minute take refuse to sign the minutes, they will be effective if they
are signed by all of the other members of the Board of Directors and contain all the information
prescribed in Points a, b, c, d, đ, e, g and h Clause 1 of this Article.
3. The chair, the minute take and the persons who sign the minutes shall be responsible for its
accuracy and truthfulness.
4. The minutes and meeting documents shall be retained at the company’s headquarters.
5. The Vietnamese and foreign language copies of the minutes have the same legal value. In case
of any discrepancy between them, the Vietnamese copy shall prevail.
Article 159. Rights to information of members of the Board of Members
1. Members of the Board of Directors are entitled to request the Director/General Director,
Deputy Director/Deputy General Director and other executives of the company to provide
information and documents about the finance and business performance of the company and its
units.
2. The requested executives shall provide information and documents fully and accurately as
requested by the members. The procedures for requesting and providing information shall be
specified in the company's charter.
Article 160. Dismissal, replacement and addition of members of the Board of Directors
1. The GMS shall dismiss a member of the Board of Directors from office in the following cases:
a) He/she does not fully satisfy the requirements specified in Article 155 of this Law;
b) He/she hands in a resignation and is accepted;
c) Other cases prescribed by the company's charter.
2. The GMS shall dismiss a member of the Board of Directors in the following cases:
a) He/she fails to participate in activities of the Board of Directors for 06 consecutive months,
except in force majeure events;
b) Other cases prescribed by the company's charter.
3. Where necessary, the GMS shall replace members of the Board of Directors; dismiss members
of the Board of Directors in cases other than those specified in Clause 1 and Clause 2 of this
Article.
4. The Board of Directors shall convene the GMS to elect additional members of Board of
Directors in the following cases:
a) The number of members of the Board of Directors decreases by more than one third of the
number specified in the company's charter. The Board of Directors shall convene the GMS
within 60 days from that day;
b) The number of independent members of the Board of Directors falls below the minimum
number specified in Point b Clause 1 Article 137 of this Law;
c) Except the cases specified in Point a and Point b of this Clause, the nearest GMS shall elect
new members to replace the dismissed members.
Article 161. Audit committee
1. The audit committee is a specialized body of the Board of Directors and has at least 02
members. The Chairperson of the audit committee shall be an independent member of the Board
of Directors. Other members of the audit committee shall be non-executive members of the
Board of Directors.
2. The audit committee shall ratify its decisions by voting at meetings, questionnaire survey or
another method specified in the company's charter or the audit committee’s operating
regulations. Each member of the audit committee has one vote. Unless a higher ratio is
prescribed by the company's charter or the audit committee’s operating regulations, a decision of
the audit committee shall be ratified if it is voted for by the majority of the participating
members. In case of equality of votes, the option that is voted for by the Chairperson shall
prevail.
3. The audit committee has the following rights and obligations:
a) Inspect the accuracy of the company’s financial statements and make official announcements
about the company’s finance;
b) review the internal control and risk management system;
c) Review transactions with related persons subject to approval by the Board of Directors or the
GMS; offer recommendations on these transactions;
d) Supervise the company’s internal audit unit;
dd) Propose independent audit company, payment, terms and conditions in the contract with the
audit company to the Board of Directors before it is submitted to the annual GMS.
e) Monitor and evaluate the independence and objectivity of the audit company and effectiveness
of the audit, especially when the company uses non-audit services of the audit company;
g) Supervise the company’s compliance with law, requests of the authorities and the company’s
rules and regulations.
Article 162. The Director/General Director
1. The Board of Directors shall designate one of its members or hire a person as the
Director/General Director.
2. The Director/General Director shall manage the company’s everyday busines operation, is
supervised by and responsible to the Board of Directors Members and the law for his/her
performance.
The term of office of the Director/General Director shall not exceed 05 years without term limit.
3. The Director/General Director has the following rights and obligations:
a) Decide everyday operating issues of the company that are outside the jurisdiction of the Board
of Directors;
b) Organize the implementation of resolutions and decisions of the Board of Directors;
c) Organize implementation of the company’s busines plans and investment plans;
d) Propose the company’s organizational structure, rules and regulations;
dd) Designate, dismiss the company’s executives, except those under jurisdiction of the Board of
Directors;
e) Decide salaries and other benefits of the company’s employees, including the executives
designated by the Director/General Director;
g) Recruit employees;
h) Propose plans distribution of dividends or settlement of business losses;
i) Other rights and obligations specified by law, the company's charter, resolutions and decisions
of the Board of Directors.
4. The Director/General Director shall manage the company’s everyday business in accordance
with law, the company’s charter, his/her employment contract with the company, resolutions and
decisions of the Board of Directors. Otherwise, the Director/General Director shall be legally
responsible for and pay damages to the company.
5. The Director/General Director of a public company or state-owned enterprise prescribed in
Point b Clause 1 Article 88 of this Law or a subsidiary company of a state-owned enterprise
prescribed in Clause 1 Article 88 of this Law shall satisfy the following requirements:
a) He/she is not one of the persons specified in Clause 2 Article 17 of this Law;
b) He/she is not a relative of any of the executives, controllers of the company and the parent
company; the representatives of state investments and the enterprise’ investment in the company
and the parent company;
c) He/she has professional qualifications and experience of busines administration.
Article 163. Salaries, remunerations, bonuses and other benefits of members of the Board
of Directors and the Director/General Director
1. The company is entitled to pay salaries and bonuses to members of the Board of Directors, the
Director/General Director and other executives according to the company’s business
performance.
2. Unless otherwise prescribed by the company's charter, the salaries, bonuses and other benefits
of the members of the Board of Directors and the Director/General Director shall be paid as
follows:
a) Members of the Board of Directors shall receive salaries and bonuses. The salary is based on
the number of days necessary to fulfill the member’s duties and the daily pay. The Board of
Directors shall estimate the salary of each member by consensus. The total salaries and bonuses
of the Board of Directors shall be decided by the annual GMS;
b) Members of the Board of Directors shall have the costs of food, stay, travel and other
reasonable costs reimbursed if their duties are fulfilled;
c) The Director/General Director’s salary and bonuses shall be decided by the Board of
Directors.
3. Salaries of members of the Board of Directors, the Director/General Director and other
executives shall be recorded as the company’s expenses in accordance with regulations of law on
corporate income tax in a separate section of the company’s consolidated financial statement and
shall be reported at the annual GMS.
Article 164. Disclosure of related interests
Unless more stringent requirements are prescribed by the company's charter, the company's
benefits and related persons shall be disclosed as follows:
1. The company shall compile a list of its related persons in accordance with Clause 23 Article 4
of this Law, their contracts and transactions with the company;
2. Members of the Board of Directors, Controllers, Director/General Director and other
executives of the company shall declare their related interests, including the following
information:
a) Names, enterprise ID numbers, headquarters addresses and business lines of the enterprises
they own or have shares/stakes in; the holdings and time of owning or holding the shares/stakes;
b) Names, EID numbers, headquarters addresses, business lines of the enterprises their related
persons own, jointly own or have separate controlling shares/stakes that are worth more than
10% of charter capital;.
3. The information specified in Clause 2 of this Article shall be declared within 07 working days
from the day on which the related interests are brought about; any revision shall be notified to
the company within 07 working days from its date of occurrence;
4. The list mentioned in Clause 1 an declaration 2 of this Article shall be retained, disclosed,
accessed, extracted and copied as follows:
a) The company shall announce the list of related persons and interests at the annual GMS;
b) The list shall be retained at the company’s headquarters; part or all of the list may be retained
at the company’s branches where necessary;
c) Shareholders and their authorized representative, members of the Board of Directors, the
Board of Controllers, Director/General Director and other executives are entitled to access,
extract and make copies of the list;
d) The company shall enable the persons specified in Point c of this Clause to access, extract and
make copies of the list and must not obstruct them in the process. Procedures for accessing,
extracting and copying the list shall be specified in the company's charter;
5. When members of the Board of Directors and the Director/General Director do business
within the company’s business lines in their own names or others’ names, they shall explain the
nature and contents of such business to the Board of Directors and the Board of Controllers, and
may only proceed if it is accepted by the majority of the remaining members of the Board of
Directors. Otherwise, all incomes from such business will belong to the company.
Article 165. Responsibilities of the company’s executives
1. Members of the Board of Directors, the Director/General Director and other executives have
the following responsibilities:
a) Perform their rights and obligations in accordance with this Law, relevant laws, the company's
charter and resolution of the GMS;
b) Perform their rights and obligations in an honest and prudent manner to serve the best and
lawful interests of the company;
c) Be loyal to the company’s interests; do not abuse their power and position or use the
enterprise’s information, secrets, business opportunities and assets for personal gain or serve any
other organization’s or individual’s interests;
d) Promptly and fully provide the company with the information specified in Clause 2 Article
164 of this Law;
dd) Other responsibilities prescribed by this Law and the company's charter.
2. The member of the Board of Directors, Director/General Director or executive that violates
Clause 1 of this Article shall be personally or jointly responsible for the loss, return the benefits
received and pay damages to the company and the third parties.
Article 166. Rights to file lawsuits against the Board of Directors and the Director/General
Director
1. A shareholder or group of shareholders that holds at least 01% of the total ordinary shares
may, in their own names or in the company’s name, file lawsuit against a member of the Board
of Members or the Director/General Director if the member or Director/General Director to
claim the interest or damages:
a) fails to fulfill the executive’s duties prescribed in Article 165 of this Law;
b) fails to comply with or fully and punctually perform their rights and obligations as prescribed
by law, the company's charter, resolution or decision of the Board of Directors;
c) abuses his/her power and position or uses the enterprise’s information, secrets, business
opportunities and assets for personal gain or serve any other organization’s or individual’s
interests;
d) Other cases prescribed by law and the company's charter.
2. Lawsuits shall be filed in accordance with civil proceedings laws. Proceedings costs in case
the lawsuit is filed on behalf of the company shall be recorded as the company’s expense unless
the lawsuit is rejected.
3. The shareholder or group of shareholders mentioned in this Article is entitled to access and
extract necessary information under decision of the court or arbitral tribunal before or during the
proceedings.
Article 167. Approving contracts and transactions between the company and related
persons
1. The GMS or Board of Directors shall approve contracts and transactions between the company
and the following related persons:
a) Shareholders and authorized representatives of shareholders that are organizations holding
more than 10% of the company’s total ordinary shares and their related persons;
b) Members of the Board of Directors, the Director/General Director and their related persons;
c) Enterprises that must be declared by members of the Board of Directors, Controllers,
Director/General Director and other executives as prescribed in Clause 2 Article 164 of this Law.
2. The Board of Directors shall approve the contracts and transactions that are mentioned in
Clause 1 of this Article and are worth less than 35% of the company’s total assets according to
the latest financial statement (or a smaller ratio or value specified in the company's charter). In
this case, the person that signs the contract or conducts the transaction on behalf of the company
shall send a notification to the members of the Board of Directors and Controllers of the related
persons together with the draft contract or transaction summary. The Board of Directors shall
decide whether to approve the contract or transaction within 15 days from the day on which the
notification is received unless a different deadline is specified in the company's charter. Members
of the Board of Directors that are related to the parties to the contract or transaction must not
vote.
3. The GMS shall approve the following contracts and transactions:
a) Contracts and transactions other than those specified in Clause 2 of this Article;
b) Contracts and transactions that involve borrowing, lending, selling assets that are worth more
than 10% of the company’s total assets according to the latest financial statement between the
company and shareholders that hold at least 51% of the total voting shares or their related
persons.
4. If a contract or transaction specified in Clause 3 of this Article is approved, the person who
concludes the contract or conducts the transaction on behalf of the company shall send a
notification to the Board of Directors and Controllers of the entities related to such contract or
transaction together with the draft contract or summary of the transaction. The Board of
Directors shall submit the draft contract or explain the contract or transaction at the GMS or
carry out a questionnaire survey. In this case, shareholders that are related to the parties to the
contract or transaction must not vote. The contract or transaction shall be approved in accordance
with Clause 1 and Clause 4 Article 148 of this Law, unless otherwise prescribed by the
company's charter.
5. A contract or transaction shall be invalidated under a court decision and handled as prescribed
by law when it is concluded or carried out against regulations of this Article. The person who
concludes the contract or carries out the transaction, the related shareholders, members of the
Board of Directors, Director/General shall pay compensation for any damage caused and return
the benefits generated by such contract or transaction to the company.
6. The company shall disclose related contracts and transactions in accordance with relevant
laws.
Article 168. Board of Controllers
1. The Board of Controllers shall have 3 - 5 Controllers. The term of office of a Controller shall
not exceed 05 years without term limit.
2. The Chief Controller shall be elected by the Board of Controllers among the Controllers. The
Chief Controller shall be elected and dismissed under the majority rule. Rights and obligations of
the Chief Controller shall be specified in the company's charter. More than half of the
Controllers shall have permanent residences in Vietnam. The Chief Controller shall have a
bachelor’s degree in economics, finance, accounting, audit, law, business administration or a
major that is relevant to the enterprise’s business operation, unless higher standards are
prescribed in the company's charter.
3. In case the term of office of all Controllers expires before an election can be carried out, the
existing Controllers shall keep performing until Controllers are elected and take over the job.
Article 169. Requirements to be satisfied by Controllers
1. A Controller shall satisfy the following standards and requirements:
a) He/she is not in one of the persons specified in Clause 2 Article 17 of this Law;
b) His/her major is economics, finance, accounting, audit, law, business administration or a
major that is relevant to the enterprise’s business operation;
c) He/she is not a relative of any of the members of the Board of Directors, Director/General
Director and other executives;
d) He/she is not the company’s executive, is not necessarily a shareholder or employee of the
company unless otherwise prescribed by the company's charter;
dd) Other standards and requirements are satisfied as prescribed by law and the company's
charter.
2. In addition to the standards and requirements specified in Clause 1 of this Article, Controllers
of a public company or state-owned enterprise prescribed in Point b Clause 1 Article 88 of this
Law must not be relatives of the executives of the company and the parent company; of the
representative of enterprise’s investment or state investment in the company and the parent
company.
Article 170. Rights and obligations of the Board of Controllers
1. Supervise the Board of Directors and the Director/General Director managing the company.
2. Inspect the rationality, legitimacy, truthfulness and prudency in business administration;
systematic organization, uniformity and appropriateness of accounting works, statistics and
preparation of financial statements.
3. Validate the adequacy, legitimacy and truthfulness of the income statements, annual and
biannual financial statements, reports on performance of the Board of Directors; submit
validation reports at the annual GMS. Review contracts and transactions with related persons
subject to approval by the Board of Directors or the GMS and offer recommendations.
4. Review, inspect and evaluate the effectiveness of the internal control, internal audit, risk
management and early warning systems of the company.
5. Inspect accounting books, accounting records, other documents of the company, the
company’s administration where necessary, under resolutions of the GMS or at the request of the
shareholder or group of shareholders specified in Clause 2 Article 115 of this Law.
6. When requested by the shareholder or group of shareholders specified in Clause 2 Article 115
of this Law, the Board of Controllers shall carry out an inspection within 07 working days from
the day on which the request is received. Within 15 days after the end of the inspection, the
Board of Controllers shall submit a report to the Board of Directors or the requesting shareholder
or group of shareholders. The inspection must not obstruct normal operation of the Board of
Directors or interrupt the company’s business operation.
7. Propose changes or improvements to the company’s organizational structure and
administration to the Board of Directors or the GMS.
8. Promptly submit a written notification to the Board of Directors whenever a member of the
Board of Directors, the Director/General Director is found to be violating Article 165 of this law,
request the violator to stop the violations and implement remedial measures.
9. Participate in and discuss at the GMS, meetings of the Board of Directors and other meetings
of the company.
10. Employ independent counsels and internal audit unit of the company to perform their tasks.
11. The Board of Controllers may discuss with the Board of Directors before submitting reports
and proposals to the GMS.
12. Other rights and obligations prescribed by this Law, the company's charter and resolution of
the GMS.
Article 171. Rights to information of the Board of Controllers
1. Documents and information shall be sent to Controllers in the same manner as those being
sent to members of the Board of Directors, including:
a) Meeting invitations, questionnaires and enclosed documents;
b) Resolutions, decisions and minutes of meetings of the Board of Directors and the GMS;
c) Reports of the Director/General Director to the Board of Directors or other documents issued
by the company.
2. Controllers are entitled to access the company’s documents at the headquarters, branches and
other locations; enter the executives’ and employees’ workplace during working hours.
3. The Board of Directors, members of the Board of Directors, the Director/General Director and
other executives shall fully and promptly provide information and documents about the
company’s administration as requested by Controllers or the Board of Controllers.
Article 172. Salaries, bonuses and other benefits of Controllers
Unless otherwise prescribed by the company's charter, the salaries, bonuses and other benefits of
Controllers shall be paid as follows:
1. Controllers’ salaries, bonuses, other benefits and operating budget shall be decided by the
GMS;
2. Reasonable costs of food, stay, travel, independent counseling services of Controllers shall be
reimbursed. The total salaries and costs must not exceed the annual operating budget of the
Board of Controllers which has been approved by the GMS, unless otherwise prescribed by the
GMS;
3. Salaries and operating costs of the Board of Controllers shall be recorded as the company’s
expenses in accordance with regulations of law on corporate income tax and relevant laws and
placed in a separate section in the company’s annual financial statements.
Article 173. Responsibilities of Controllers
1. Comply with regulations of law, the company's charter, resolutions of the GMS and code of
ethics in performance of their rights and obligations.
2. Perform their rights and obligations in an honest and prudent manner to serve the best and
lawful interests of the company.
3. Be loyal to the company’s interests; do not abuse their power and position or use the
enterprise’s information, secrets, business opportunities and assets for personal gain or serve any
other organization’s or individual’s interests.
4. Other obligations prescribed by Law and the company's charter.
5. The Controller that violates Clauses 1, 2, 3 or 4 of this Article and causes damage to the
company or another person shall be personally or jointly responsible for the damage and return
the benefits earned from the violation to the company
6. Send a written notification to the Board of Controllers of violations committed by another
Controller and request the violator to stop the violation and implement remedial measures.
Article 174. Dismissal of Controllers
1. The GMS shall dismiss a Controller from office in the following cases:
a) He/she does not fully satisfy the standards and requirements specified in Article 169 of this
Law;
b) He/she hands in a resignation and is accepted;
c) Other cases specified in the charter.
2. The GMS shall dismiss a Controller in the following cases:
a) He/she fails to perform his/her duties;
b) He/she fails to perform his/her rights and obligations for 06 consecutive months, except in
force majeure events;
c) He/she commits multiple, serious violations of Controller’s duties prescribed by this Law and
the charter;
d) Other cases specified in resolutions of the GMS.
Article 175. Submission of annual reports
1. At the end of the fiscal year, the Board of Directors shall submit the following documents to
the GMS:
a) The company’s income statement;
b) The financial statement;
c) The report on the company’s administration and management;
d) The validation report of the Board of Controllers.
2. If the annual financial statement of a joint stock company has to be audited as prescribed by
law, it shall be audited before submission to the GMS for ratification.
3. The documents specified in Points a, b and c Clause 1 of this Article shall be submitted to the
Board of Controllers for validation at least 30 days before the opening date of the GMS unless
otherwise prescribed by company's charter.
4. The documents specified in Clauses 1, 2 and 3 of this Article, the validation report of the
Board of Controllers and the audit report shall be retained at the company’s headquarters at least
10 days before the opening date of the GMS unless a longer period is prescribed by company's
charter. Shareholders who have been holding the company’s shares continuously for at least 01
may examine the documents mentioned in this Article themselves or with their lawyers,
accountants or auditors.
Article 176. Disclosure of information
1. A joint stock company shall send its ratified annual financial statements to competent
authorities prescribed by accounting laws and relevant laws.
2. The following information of a joint stock company shall be published on its website:
a) The company's charter;
b) Curriculum vitae (CV), qualifications, professional experience of members of the Board of
Directors, Controllers, Director/General Director of the company;
d) Annual financial statements ratified by the GMS;
d) Annual reports on performance of the Board of Directors and the Board of Controllers.
3. An unlisted joint stock company shall send a notification to the business registration authority
in charge of the area where the company’s headquarters is situated within 03 working days from
the occurrence of the change in full name, nationality, passport number, mailing address,
quantity and types of shares of a foreign shareholder; name, EID number, headquarters address,
quantity and types of shares of a shareholder that is a foreign organization and full name,
nationality, passport number, mailing address of that organization’s authorized representative.
4. Public companies shall disclose information in accordance with securities laws. Joint stock
companies specified in Point b Clause 1 Article 88 shall disclose information in accordance with
Points a, c, dd and g Clause 1 Article 109 and Article 110 of this Law.
Chapter VI
PARTNERSHIPS
Article 177. Partnerships
1. A partnership is an enterprise in which:
a) There are least 02 partners that are joint owners of the company and do business under the
same name ((hereinafter referred to as “general partner”). There can be limited partners in
addition to general partners;
b) A general partner shall be an individual whose liability for the company’s obligations is equal
to all of his/her assets;
c) A limited partner can be an organization or an individual whose liability for the company’s
debts is equal to the promised capital contribution.
2. A partnership has the status of a juridical person from the day on which the Certificate of
Enterprise Registration is issued.
3. A partnership must not issue any kind of securities.
Article 178. Capital contribution and issuance of the capital contribution certificate
1. General partners and limited partners shall contribute capital fully and punctually as promised.
2. A general partner who fails to contribute capital fully and punctually as promised and thus
causes damage to the company shall pay compensation.
3. In case a limited partner fails to contribute capital fully and punctually as promised, the
uncontributed capital shall be considered that partner’s debt to the company, in which case the
limited partner can be excluded from the company under a decision of the Board of Partners.
4. When capital is fully contributed, the partner shall be granted the capital contribution
certificate, which shall contain the following information:
a) The company’s name, EID number, headquarter address;
b) The company’s charter capital;
c) Full name, signature, mailing address, nationality and legal document number if the partner is
an individual; EID number or legal document number, headquarters address if the partner is an
organization; type of partner;
d) The value of capital contributed and types of contributed assets;
dd) The number and date of issuance of the certificate of capital contribution;
e) Rights and obligations of the certificate holder;
g) Full names and signatures of the certificate holder and the company’s general partners.
5. In case the capital contribution certificate is lost or damaged, the partner will be reissued with
another certificate by the company.
Article 179. A partnership’s assets
A partnership’s assets include:
1. Assets that are contributed by the partners and have been transferred to the company;
2. Assets created under the partnership’s name;
3. Assets obtained from business activities performed by general partners on behalf of the
company and from business activities of the partnership performed by general partners in their
own names;
4. Other assets prescribed by law.
Article 180. Limitations of general partners
1. A general partner must not be the owner of a sole proprietorship, must not be a general partner
of another partnership unless it is accepted by the other general partners.
2. A general partner must not, in their own names or others’ names, do business in the same
busines lines as those of the partnership for personal gain or to serve the interests of another
organization or individual.
3. A general partner must not transfer part or all of his/her stake in the company to another
organization or individual unless it is accepted by the other general partners.
Article 181. Rights and obligations of general partners
1. A general partner has the rights to:
a) Participate in meetings, discuss and vote on the partnership’s issues; each general partner shall
have one vote or a specific number of votes specified in the partnership’s charter;
b) Do business in the partnership’s business lines on its behalf; negotiate and enter into contracts,
transactions or agreements under conditions that the partner believes to be most beneficial to the
partnership;
c) Use the partnership’s assets to do business in its business lines. In case a general partner
advances money to do business on behalf of the partnership, he/she is entitled to request the
partnership to reimburse the principal and interest thereon at market rate;
d) Request the partnership to pay compensation for damage that is not on account of that partner.
dd) Request the partnership and other general partners to provide information about the
partnership’s business performance; inspect the partnership’s assets, account records and other
documents where necessary;
e) Receive distributed profits in proportion to his/her stake or as agreed;
g) Receive the remaining assets in proportion to his/her stake upon the partnership’s dissolution
or bankruptcy unless another ratio is specified in the charter;
h) When a general partner dies, his/her hair shall receive a value of assets minus the partner’s
debts and other liabilities. The heir may become a general partner if accepted by the Board of
Partners;
i) Other rights prescribed by this Law and the company's charter.
2. A general partner has the following obligations:
a) Manage and do business in an honest and prudent manner to ensure the partnership’s lawful
and best interests;
b) Manage and do business in accordance with law, the charter, resolutions and decisions of the
Board of Partners; pay compensation for the damage caused by his/her violations of these;
c) Do not use the partnership’s assets for personal gain or to serve the interests of any other
organization or individual;
d) Return to the partnership the money or assets that he/she received when doing business in
his/her own name, in the partnership’s or another person’s name and has not returned to the
partnership and pay for any damage caused by this action;
dd) Jointly pay the partnership’s remaining debts (if any) after all of the partnership’s assets are
used to pay them;
e) Incur the loss that is proportional to his/her stake or as agreed in the charter in case the
partnership makes a loss;
g) Submit monthly written reports on his/her performance to the partnership; provide information
on his/her performance for other partners on request;
h) Other obligations prescribed by Law and the charter.
Article 182. The Board of Partners
1. The Board of Partners consists of all partners and shall elect a partner as the President of the
Board of Partners, who may concurrently hold the position of Director/General Director of the
partnership unless otherwise prescribed by the charter.
2. A general partner is entitled to request a meeting of the Board of Partners to discuss and
decide its business. The requesting partner shall prepare the meeting documents and agenda.
3. The Board of Partners is entitled to decide all business activities of the partnership. Unless
otherwise prescribed by the charter, the following issues are subject to approval by at least three
fourths (3/4) of the general partners:
a) Orientation for development of the partnership;
b) Revisions to the charter;
c) Admission of new partners;
d) Permission for withdrawal or exclusion of a partner;
dd) Investment in projects;
e) Taking of loans and other methods for raising capital; granting a loan that is worth at least
50% of the partnership’s charter capital, unless a higher rate is prescribed by the charter;
g) Purchase or sale of assets that whose value is equal to or greater than the partnership’s charter
capital, unless a higher value is prescribed by the charter;
h) Ratification of the annual financial statement, total distributable profit and distributed profit of
each partner;
i) Dissolution or bankruptcy of the company.
4. Other issues that are not mentioned in Clause 3 of this will be ratified if approved by at least
two thirds (2/3) of the general partners; a specific ratio shall be specified in the charter.
5. The rights to vote of limited partners shall comply with this Law and the charter.
Article 183. Convening meetings of the Board of Partners
1. The President of the Board of Partners may convene a meeting whenever it is necessary or at
the request of a general partner. In case the President does not convene a meeting as requested by
a general partner, that general partner may convene the meeting himself/herself.
2. Invitations to a meeting of the Board of Partner can be sent physically, by phone, fax,
electronically or by other methods prescribed by the charter. The invitation shall specify the
time, location and agenda and purposes of the meeting, and the name of the partner that requests
the meeting.
Documents serving the process of deciding the issues specified in Clause 3 Article 182 of this
Law shall be sent to all partners before the opening of the meeting. The deadline shall be
specified in the charter.
3. The President of the Board of Partners or the partner that requests the meeting shall chair the
meeting. Minutes of the meeting shall be taken and contain the following information:
a) The partnership’s name, EID number, headquarter address;
b) Time and location of the meeting;
c) Purposes and agenda of the meeting;
d) Full names of the chair and participants;
dd) Comments of the participants;
e) Ratified resolutions and decisions, quantity of partners that cast affirmative votes, negative
votes and abstentions; summaries of such resolutions and decisions;
g) Full names and signatures of the participants.
Article 184. Business administration of partnerships
1. General partners are the partnership’s legal representative and shall administer its everyday
business. A limitation to general partners is only applied to a third party when it is known by the
third party.
2. General partners shall assume different managerial positions in the partnership under
agreement.
When some or all general partners perform certain business activities together, it will be decided
under the majority rule.
A general partner’s activities beyond the scope of operation of the partnership are not
responsibility of the partnership unless they are accepted by the other partners.
3. A partnership may open one or some bank accounts. The Board of Partners authorize certain
partners to deposit and withdraw money from such account.
4. The President of the Board of Partners, the Director/General Director has the following rights
and obligations:
a) Manager the partnership’s everyday business as general partners;
b) Convene and organize meetings of the Board of Partners; sign resolutions and decisions of the
Board of Partners;
c) Assign tasks and coordinate operation of general partners;
d) Organize and fully retain accounting records, invoices and other documents of the partnership
as prescribed by law;
d) Represent the company in civil proceedings, as the plaintiff, defendant, person with relevant
interests and duties in front of the court or arbitral tribunal; represent the company in
performance of other rights and obligations prescribed by law;
e) Other obligations specified in the charter.
Article 185. Termination of general partners
1. A general partner status will be terminated if he/she:
a) voluntarily withdraws capital from the partnership;
b) is dead, missing or incapacitated; has limited legal capacity; has difficulty controlling his/her
own behaviors;
c) is excluded from the partnership;
d) is serving an imprisonment sentence or banned by the court from doing certain jobs;
dd) In other cases specified in the charter.
2. A general partner is entitled to withdraw capital from the partnership if it is accepted by the
Board of Partners. In this case, the withdrawing partner shall make a written notification at least
06 months before the withdrawal date and may only withdraw capital at the end of the fiscal year
after the financial statement of the same year has been ratified.
3. A general partner will be excluded from the partnership if he/she:
a) is not able to contribute capital or fails to contribute capital as promised after a second notice
is made by the company;
b) violates the regulations of Article 180 of this Law;
c) fails to do business in an honest and prudent manner or has inappropriate actions causing
serious damage to the interest of the partnership and other partners; or
d) fails to fulfill a general partner’s obligations.
4. In case of termination due to a partner’s being incapacitated or having limited legal capacity or
having difficulty controlling his/her behaviors, his/her stake shall be fairly returned.
5. For 02 years from the date of termination in the cases specified in Points a, c, d and dd Clause
1 of this Article, the partner still jointly has a liability for the company’s debts that occur before
the termination date which is equal to his/her total assets.
6. After termination of a general partner whose name is used as part of or the whole partnership’s
name, that general partner or his/her hair or legal representative is entitled to request the
partnership to stop using that name.
Article 186. Admission of new partners
1. A partnership may admit new general partners and limited partners; the admission of a new
partner is subject to approval by the Board of Partners.
2. The new general partner or limited partner shall fully contribute capital as promised within 15
days from the day on which the admission is approved unless a different time limit is decided by
the Board of Partners.
3. The new general partner has a joint liability for the company’s debts and liabilities which is
equal to his/her total assets, unless otherwise agreed upon by the new partner and the other
partners.
Article 187. Rights and obligations of limited partners
1. Limited partners have the rights to:
a) Participate in meetings, discuss and vote at the meetings of the Board of Partners on revisions
to the charter, changes in rights and obligations of limited partners, reorganization and
dissolution of the company and other contents of the charter directly affecting their rights and
obligations;
b) Receive distributed profits in proportion to their holdings;
c) Be provided with the partnership’s annual financial statements; request the President of the
Board of Partners and general partners to fully and accurately provide information about the
partnership’s business performance; examine accounting books, records, transactions and other
documents of the company;
d) Transfer their stakes to other persons;
dd) Do business within the partnership’s business lines in their own names in other persons’
names;
e) Leave as inheritance, give away, pledge or otherwise dispose of their stakes in accordance
with regulations of law and the charter. In case a limited partner dies, his/her heir shall be a new
limited partner;
g) Receive part of the partnership’s remaining assets in proportion to their holdings in case the
partnership is dissolved or goes bankrupt;
h) Other rights prescribed by Law and the company's charter.
2. Limited partners have the obligations to:
a) Take on a liability for the partnership’s debts and other liabilities which is equal to their
promised capital contribution;
b) Do not participate in administration of the partnership; do not do business in the partnership’s
name;
c) Comply with the partnership’s charter, resolutions and decisions of the Board of Partners;
d) Other obligations prescribed by Law and the partnership’s charter.
Chapter VII
SOLE PROPRIETORSHIPS
Article 188. Sole proprietorships
1. A sole proprietorship is an enterprise owned by a single individual whose liability for its entire
operation is equal to his/her total assets.
2. A sole proprietorship must not issue any kind of securities.
3. An individual may only establish one sole proprietorship. The owner of a sole proprietorship
must not concurrently own a household business or hold the position of general partner of a
partnership.
4. A sole proprietorship must not contribute capital upon establishment or purchase shares or
stakes of partnerships, limited liability companies or joint stock companies.
Article 189. Capital of sole proprietorships
1. The capital of a sole proprietorship shall be registered by its owner. The sole proprietorship’s
owner shall register the accurate amounts of capital in VND, convertible currencies, gold and
other assets, types and quantities of assets.
2. All the capital, including loans and leased assets serving the sole proprietorship’s operation,
shall be fully recorded in its accounting books and financial statements as prescribed by law.
3. During its operation, the sole proprietorship’s owner is entitled to increase or decrease its
capital. The increases and decreases in capital shall be fully recorded in accounting books. In
case the capital is decreased below the registered capital, the decrease may only be made after it
has been registered with the business registration authority.
Article 190. Administration of sole proprietorships
1. The sole proprietorship’s owner has total authority to decide all of its business activities, use
of post-tax profit and fulfillment of other financial obligations as prescribed by law.
2. The owner may directly or hire another person to hold the position of Director/General
Director. In case of an hired Director/General Director, the owner is still responsible for every
business activity of the enterprise.
3. The sole proprietorship’s owner is its legal representative who will represent it during civil
proceedings, as the plaintiff, defendant or person with relevant interests and duties before the
court and arbitral tribunals, and in performance of other rights and obligations prescribed by law.
Article 191. Leasing out a sole proprietorship
The sole proprietorship’s owner is entitled to lease out the entire sole proprietorship, provided a
written notification and certified true copies of the lease contract are submitted to the business
registration authority and tax authority within 03 working days from the effective date of the
contract. During the lease term, the sole proprietorship’s owner is still legally responsible as its
owner. The rights and obligations of the owner and the lessee to the sole proprietorship’s
business operation shall be specified in the lease contract.
Article 192. Selling a sole proprietorship
1. The sole proprietorship’s owner is entitled to sell it to another organization or individual.
2. After selling the sole proprietorship, the owner is still responsible for its debts and liabilities
that occur before the date of transfer, unless otherwise agreed upon by the owner, the buyer and
the creditors.
3. The sole proprietorship’s owner and the buyer shall comply with labor laws.
4. The buyer of the sole proprietorship shall register the change of owner in accordance with this
Law.
Article 193. Exercising the owner’s rights in special cases
1. In case the sole proprietorship’s owner is detained, serving an imprisonment sentence, serving
an administrative penalty in a correctional institution or rehabilitation center, he/she shall
authorize another person to perform his/her rights and obligations.
2. In case the owner dies, this/her hair or one of the legal heirs or designated heirs shall be the
owner under an agreement among the heirs. In case such an agreement cannot be reached, the
sole proprietorship shall be converted into a company or dissolved.
3. In case of the owner dies without an heir or the heir refuses the inheritance or is disinherited,
the owner’s assets shall be handled in accordance with civil laws.
4. In case owner is incapacitated, has limited legal capacity or has difficulty controlling his/her
behaviors, his/her rights and obligations shall be performed through his/her representative.
5. In case the sole proprietorship’s owner is banned by the court to do certain jobs in the
enterprise’s business lines, the owner shall suspend or stop doing business in the relevant
business lines shall be suspended or stopped or transfer the sole proprietorship to another
organization or individual.
Chapter VIII
GROUP OF COMPANIES
Article 194. Business groups and corporations
1. A business group or corporation is a group of companies that are interrelated by ownership of
shares/stakes or otherwise associated. A business group or corporation is not an enterprise, is not
a juridical person and registration of its establishment under this Law is not required.
2. A business group or corporation has a parent company, subsidiary companies and other
member companies. They have the same rights and obligations of as those of independent
enterprises as prescribed by law.
Article 195. Parent company and subsidiary companies
1. A company is considered parent company of another company if:
a) It holds more than 50% of charter capital or total ordinary shares of the latter;
b) It has the right to directly or indirectly designate most or all of the members of the Board of
Directors and Director/General Director of the latter; or
c) It has the right to decide revisions to the latter’s charter.
2. A subsidiary company must not contribute capital to or purchase shares of the parent
company. Subsidiary companies of the same parent company must not contribute capital to or
purchase shares of each other to establish cross ownership.
3. Subsidiary companies of the same parent company with at least 65% state capital must not
contribute capital to or purchase shares of other enterprises or to establish new enterprises as
prescribed by this Law.
4. The Government shall elaborate Clause 2 and Clause 3 of this Article.
Article 196. Rights, obligations and responsibilities of the parent company to its subsidiary
companies
1. Depending on the type of the subsidiary company, the parent company shall perform its rights
and obligations as its member, owner or shareholder in accordance with corresponding
regulations of this Law and relevant laws.
2. All contracts, transactions and relationships between the parent company and the subsidiary
company shall be established and executed independently and equally under conditions applied
to independent legal entities.
3. In case the parent company makes intervention beyond the power of the owner, member or
shareholder and forces the subsidiary company to operate against its ordinary business practice
or do non-profit activities without paying compensation in the relevant fiscal year and thus
causes damage to the subsidiary company, the parent company shall be responsible for such
damage.
4. The executive of the parent company shall be responsible for its intervention mentioned in
Clause 3 of this Article and shall be jointly responsible for the damage caused together with the
parent company.
5. In case the parent company fails to pay damages as prescribed in Clause 3 of this Article, the
creditor, member or shareholder that holds at least 01% of the subsidiary company’s charter
capital is entitled to, in their own names or in the subsidiary company’s name, request the parent
company to pay damages.
6. In case the intervention mentioned in Clause 3 of this Article is beneficial to another
subsidiary company of the same parent company, that subsidiary company and the parent
company shall jointly provide the benefit for the subsidiary company that suffers damage.
Article 197. Financial statements of the parent company and subsidiary companies
1. At the end of the fiscal year, in addition to the reports and documents prescribed by law, the
parent company shall prepare the following reports:
a) The consolidated financial statement of the parent company prescribed by accounting laws.
b) The consolidated annual income statement of the parent company and subsidiary companies;
c) The consolidated report on administration of the parent company and subsidiary companies.
2. Whenever requested by the parent company’s legal representative, the subsidiary company’s
legal representative shall provide reports, documents and information that are necessary for
preparation of the consolidated financial statements and other consolidated reports of the parent
company and subsidiary companies.
3. The person responsible for preparing the parent company’s reports shall use the reports
mentioned in Clause 2 of this Article to prepare the consolidated financial statements and other
consolidated reports if the reports prepared and submitted by the subsidiary companies are not
suspected to contain incorrect or fraudulent information.
4. The person responsible for preparing the report mentioned in Clause 1 of this Article must not
prepare and submit the report if the subsidiary companies’ financial statements are not fully
received. In case the parent company’s executive is not able to obtain necessary reports,
documents and information after all necessary measures within his/her power have been taken,
he/she shall prepare and submit the consolidated financial statement and other consolidated
reports with or without information from the subsidiary company. Explanation shall be provided
to avoid confusion or misunderstanding.
5. Annual financial statements, reports, consolidated financial statements and consolidated
reports of the parent company and subsidiary companies shall be retained at the parent
company’s headquarters. Their copies shall be retained at the parent company’s branches in
Vietnam.
6. In addition to the reports and documents prescribed by law, the subsidiary companies shall
prepare reports on purchases, sales and other transactions with the parent company.
Chapter IX
REORGANIZATION, DISSOLUTION AND BANKRUPTCY OF ENTERPRISES
Article 198. Full division
1. Full division is the situation in which a limited liability company or joint stock company (the
divided company) divides its assets, rights, obligations, members/shareholders to establish two
new companies or more.
2. Full division procedures:
a) The Board of Members, the owner or General Meeting of Shareholders of the divided
company shall ratify the resolution or decision on fully division of the company in accordance
with this Law and the company's charter. The resolution or decision shall contain the name and
headquarters address of the divided company; names of the new companies; rules and procedures
for division of the company’s assets; employment plan; method for division; time limit and
procedures for transfer of shares/stakes to the divided company to the new companies; rules for
settlement of the divided company’s obligations; division time. This resolution or decision shall
be sent to all creditors and employees within 15 days from its issuance date or ratification date;
b) The members, owner or shareholders of each new company shall ratify its charter, elect or
designate the President of the Board of Members, President of the company, Board of Directors,
the Director/General Director and apply for enterprise registration in accordance with this Law.
The enterprise registration application of the new company shall be enclosed with the full
division resolution/decision mentioned in Point a of this Clause.
3. The quantity of members or shareholders, their holdings of shares/stakes and charter capital of
the new company shall be written according to the full division resolution/decision.
4. The divided company shall cease to exist after the new companies are granted the Certificate
of Enterprise Registration. The new companies shall be jointly responsible for unpaid debts,
unfulfilled liabilities, employment contracts and other obligations of the divided company or
reach an agreement with the divided company’s creditors, clients and employees that one of the
new companies will fulfill these obligations. The new companies obviously inherit all rights,
obligations and lawful interests of the divided company under the full division
resolution/decision.
5. The business registration authority shall update the status of the divided company in the
national enterprise registration database when issuing the Certificate of Enterprise Registration to
the new companies. In case a new company is headquartered outside the province in which the
divided company is headquartered, the business registration authority of the province in which
the divided company is headquartered shall make the update.
Article 199. Partial division
1. A limited liability company or joint stock company may be partially divided by transfer part of
the divided company’s assets, rights, obligations, members/shareholders to one or some new
limited liability companies or joint stock companies without ceasing the existence of the divided
company.
2. The divided company shall register the change in charter capital, quantity of
members/shareholders in proportion to the decrease in the stakes/shares and quantity of
members/shareholders and apply for registration of the new companies.
3. Partial division procedures:
a) The Board of Members, the owner or General Meeting of Shareholders of the divided
company shall ratify the resolution or decision on fully division of the company in accordance
with this Law and the company's charter. The resolution or decision on partial division of the
company shall contain the name and headquarters address of the divided company; name of each
new company; employment plan; method for division; values of assets, rights and obligations
transferred from the divided company to the new company/companies; division time. This
resolution or decision shall be sent to all creditors and employees within 15 days from its
issuance date or ratification date;
b) The members, owner or shareholders of each new company shall ratify its charter, elect or
designate the President of the Board of Members, President of the company, Board of Directors,
the Director/General Director and apply for enterprise registration in accordance with this Law.
4. After applying for registration, the divided company and the new company/companies shall be
jointly responsible for unpaid debts, employment contracts and other obligations of the divided
company or unless otherwise agreed upon by the divided company, the new
company/companies, the divided company’s creditors, clients and employees. The new
company/companies obviously inherit all rights, obligations and lawful interests that are
transferred under the partial division resolution/decision.
Article 200. Consolidation of companies
1. Two or more companies (consolidating companies) may be consolidated into a new company
(consolidated company), after which the consolidating companies shall cease to exist.
2. Consolidation procedures:
a) The consolidating companies shall prepare the consolidation contract and charter of the
consolidated company. The contract shall contain the names and addresses of the consolidating
companies; name and address of the consolidated company; procedures and conditions for
consolidation; employment plan; deadline and conditions for transfer of assets, shares/stakes,
bonds of the consolidating companies to the consolidated company; consolidation time;
b) The members, owners or shareholders of the consolidating companies shall ratify the
consolidation contract, the consolidated company’s charter, elect or designate the President of
the Board of Members, President of the company, Board of Directors, the Director/General
Director of the consolidated company and apply for registration of the consolidated company in
accordance with this Law. The consolidation contract shall be sent to the creditors and
employees within 15 days from the day on which it is ratified.
3. The consolidating companies shall comply with regulations Competition Law on consolidation
of companies.
4. After the consolidated company is registered, the consolidating companies shall cease to exist.
The consolidated company shall inherit the lawful rights and interests, liabilities, unpaid debts,
employment contracts and other obligations of the consolidating companies under the
consolidation contract.
5. The business registration authority shall update the status of the consolidating companies to
the national enterprise registration database when issuing the Certificate of Enterprise
Registration to the consolidated company. In case the consolidating companies are headquartered
outside the province in which the consolidated company is headquartered, the business
registration authority of the province in which the consolidated company is headquartered shall
make the update.
Article 201. Acquisition of companies
1. One or some companies (acquired companies) may be acquired by another company
(acquiring company) by transfer all of the acquired company’s assets, rights, obligations and
lawful interests to the acquiring company, after which the acquired company shall cease to exist.
2. Acquisition procedures:
a) The acquiring company and acquired company shall prepare the acquisition contract and draft
the charter of the acquiring company. The contract shall contain the name and address of the
acquiring company; name and address of the acquired company; procedures and conditions for
acquisition; employment plan; method, procedures, deadline and conditions for transfer of assets,
shares/stakes, bonds of the acquired company to the acquiring company; acquisition time;
b) The members, owners or shareholders of the companies shall ratify the acquisition contract
and the acquiring company’s charter and apply for registration of the acquiring company in
accordance with this Law. The acquisition contract shall be sent to the creditors and employees
within 15 days from the day on which it is ratified;
c) After the acquiring company is registered, the acquired companies shall cease to exist. The
acquiring company shall inherit the lawful rights and interests, liabilities, unpaid debts,
employment contracts and other obligations of the acquired company under the acquisition
contract.
3. The companies shall comply with regulations Competition Law on consolidation of companies
during the acquisition process.
4. The business registration authority shall update the status of the acquired company to the
national enterprise registration database and revise the Certificate of Enterprise Registration of
the acquiring company. In case the acquired company is headquartered outside the province in
which the acquiring company is headquartered, the business registration authority of the
province in which the acquiring company is headquartered shall request the business registration
authority of the province in which the acquired company is headquartered to make the update.
Article 202. Conversion of a limited liability company into a joint stock company
1. The conversion of a state-owned enterprise into a joint stock company shall comply with
relevant laws.
2. A limited liability company can be converted into a joint stock company:
a) without raising additional capital from other organizations and individuals or selling stakes;
b) by raising additional capital from other organizations and individuals;
c) by selling all or part of the stakes to one or some organizations and individuals; or
d) combining the methods specified in Points a, b and c of this Clause and other methods.
3. The conversion shall be registered with the business registration authority within 10 days from
the day on which the conversion is complete. Within 03 working days from the receipt of the
application for conversion, the business registration authority shall reissue the Certificate of
Enterprise Registration and update the company’s status to the national enterprise registration
database.
4. The joint stock company obviously inherits all lawful rights and interests, debts including tax
debts, employment contract and other obligations of the limited liability company.
Article 203. Conversion of a joint stock company into a single-member limited liability
company
1. A joint stock company can be converted into a single-member limited liability company as
follows:
a) A shareholder receives all shares of the other shareholders;
b) A organization or individual other than a shareholder receives all shares of all shareholders;
c) Only 01 shareholder remains in the company.
2. The transfer or receipt of shares specified in Clause 1 of this Article shall be made at market
value or a value determined by asset-based method or discounted cash flow method or another
method.
3. Within 15 days from the occurrence of any of the events specified in Clause 1 of this Article,
an application for conversion shall be submitted to the business registration authority where the
enterprise is registered. Within 03 working days from the receipt of the application, the business
registration authority shall issue the Certificate of Enterprise Registration and update the
company’s status to the national enterprise registration database.
4. The limited liability company obviously inherits all lawful rights and interests, debts including
tax debts, employment contract and other obligations of the joint stock company.
Article 204. Conversion of a joint stock company into a multiple-member limited liability
company
1. A joint stock company can be converted into a multiple-member limited liability:
a) without raising additional capital or selling stakes;
b) by raising additional capital from other organizations and individuals;
c) by transfer all or part of the shares to other organizations and individuals;
d) when only 02 shareholders remain in the company; or
dd) combining the methods specified in Points a, b and c of this Clause and other methods.
2. The conversion shall be registered with the business registration authority within 10 days from
the day on which the conversion is complete. Within 03 working days from the receipt of the
application for conversion, the business registration authority shall issue the Certificate of
Enterprise Registration and update the company’s status to the national enterprise registration
database.
3. The limited liability company obviously inherits all lawful rights and interests, debts including
tax debts, employment contract and other obligations of the joint stock company.
Article 205. Conversion of a sole proprietorship into a limited liability company, joint stock
company or partnership
1. The owner of a sole proprietorship may convert it into a limited liability company, joint stock
company or partnership if the following conditions are fully satisfied:
a) The sole proprietorship satisfies the conditions specified in Clause 1 Article 27 of this Law;
b) The owner makes a written commitment to take personal responsibility for all unpaid debts
and pay them when they are due with all of his/her assets;
c) The owner has a written agreement with the parties of ongoing contracts that the new
company will take over and continue executing these contracts.
d) The owner shas a written commitment or agreement with other limited partners to continue
hiring the existing employees of the sole proprietorship.
2. Within 03 working days from the receipt of the application, the business registration authority
shall consider issuing the Certificate of Enterprise Registration if the conditions specified in
Clause 1 of this Article are fully satisfied and update the enterprise’s status to the national
enterprise registration database.
3. The new company obviously inherits all rights and obligations of the sole proprietorship from
the issuance date of the Certificate of Enterprise Registration. The owner of the sole
proprietorship shall be personally responsible for all debts that are incurred before this day with
all of his/her assets.
Article 206. Business suspension and termination
1. An enterprise shall send a written notification to the business registration authority at least 03
working days before the suspension or resumption date.
2. The business registration authority and competent authorities are entitled to request an
enterprise to suspend or terminate its business operation in the following cases:
a) The enterprise does not fully satisfy the conditions for doing business in restricted business
lines must suspend or terminate business operation in the corresponding business lines.
b) Relevant authorities request the suspension in accordance with regulations of law on tax
administration, environment and relevant laws;
c) Operation in one or some business lines have to be suspended or terminated under a court
decision.
3. During the suspension period, the enterprise shall fully pay the unpaid taxes, social insurance,
health insurance, unemployment insurance premiums and fulfill contracts with its clients and
employees, unless otherwise agreed by the enterprise, creditors, clients and employees.
4. The Government shall elaborate the procedures for cooperation between the business
registration authority and other competent authorities mentioned in Clause 2 of this Article.
Article 207. Cases of and conditions for dissolution of enterprises
1. An enterprise shall be dissolved in the following cases:
a) The operating period specified in the company's charter expires without an extension decision;
b) The enterprise is dissolved under a resolution or decision of the owner (for sole
proprietorships), the Board of Partners (for partnerships), the Board of Members and the owner
(for limited liability companies) or the GMS (for joint stock companies);
c) The enterprise fails to maintain the adequate number of members prescribed in this Law for 06
consecutive months without converting into another type of business;
d) The Certificate of Enterprise Registration is revoked, unless otherwise prescribed by the Law
on Tax administration.
2. An enterprise may only be dissolved after all of its debts and liabilities are fully paid and it is
not involved in any dispute at the court or arbitration. Relevant executives and the enterprise
mentioned in Point d Clause 1 of this Article are jointly responsible for the enterprise’s debts.
Article 208. Dissolution procedures
Enterprise dissolution in the cases specified in Points a, b and c Clause 1 Article 207 of this Law
shall be carried out as follows:
1. A resolution or decision on the dissolution is issued. Such a resolution or decision shall
contain the following information:
a) The enterprise’s name and headquarters address;
b) Reasons for dissolution;
c) Time limit and procedures for finalization of contracts and payment of the enterprise’s debts;
d) Plan for settlement of obligations under employment contracts;
dd) Full name and signature of the owner of the sole proprietorship, the company’s owner, the
President of the Board of Members, the President of the Board of Directors;
2. The owner of the sole proprietorship, the Board of Members or the owner, the Board of
Directors directly organizes the liquidation of the enterprise’s assets, unless the company's
charter requires establishment of a separate liquidation organization;
3. Within 07 working days from the ratification date, the resolution or decision on dissolution
and the minutes of the meeting shall be sent to the business registration authority, tax authority
and the enterprise’s employees. The resolution or decision shall be posted on the National
Enterprise Registration Portal, displayed at the enterprise’s headquarters, branches and
representative offices.
In case the enterprise still has unpaid debts, the resolution or decision and the debt payment plan
shall be sent to the creditors and persons with related rights, obligations and interest. The debt
payment plan shall contain the creditors’ names, debts, repayment time, location and method;
method and time limit for settling creditors’ complaints;
4. The business registration authority shall post a notification that an enterprise is undergoing
dissolution, the dissolution resolution or decision and debt payment plan (if any) on the National
Enterprise Registration Portal right after the resolution or decision is received (if any);
5. An enterprise’s debts shall be paid in the following order of priority:
a) Unpaid salaries, severance pay, social insurance, health insurance, unemployment insurance
premiums and other benefits of employees under the collective bargaining agreement and
concluded employment contracts;
b) Tax debts;
c) Other debts;
6. After the dissolution costs and debts have been fully paid, the remainder shall be divided
among the owner, members/partners, shareholders in proportion to their stakes/shares;
7. The enterprise’s legal representative shall submit the application for dissolution to the business
registration authority within 05 working days from the day on which the enterprise’s debts are
fully paid;
8. After 180 days from the receipt of the dissolution resolution or decision mentioned in Clause 3
of this Article without further comments from the enterprise or written objections from relevant
parties, or within 05 working days from the receipt of the application for dissolution, the
business registration authority shall update the enterprise’s status on the national enterprise
registration database;
9. The Government shall elaborate the procedures for enterprise dissolution.
Article 209. Dissolution upon revocation of the Certificate of Enterprise Registration or
under court decision
Procedures for dissolution of an enterprise upon revocation of the Certificate of Enterprise
Registration or under court decision:
1. The business registration authority shall post on the National Enterprise Registration Portal a
notification that an enterprise is undergoing dissolution on the same day on which the decision to
revoke the Certificate of Enterprise Registration is issued or right after the court decision on the
enterprise’s dissolution is received. The notification shall be enclosed with the effective
revocation decision or the court decision.
2. Within 10 days from the receipt of the effective decision, the enterprise shall convene a
meeting to dissolve the enterprise. The dissolution resolution or decision and copies of the
effective decision shall be sent to the business registration authority, tax authority and the
enterprise’s employees and displayed at the enterprise’s headquarters, branches and
representative offices. The dissolution resolution or decision, if required by law, shall be
published in at least 03 issues of 01 printed newspaper or electronic newspaper.
In case the enterprise still has unpaid debts, the resolution or decision and the debt payment plan
shall be sent to the creditors and persons with related rights, obligations and interest. The debt
payment plan shall contain the creditors’ names, debts, repayment time, location and method;
method and time limit for settling creditors’ complaints;
3. The enterprise’s debts shall be paid in accordance with Clause 5 Article 208 of this Law;
4. The enterprise’s legal representative shall submit the application for dissolution to the business
registration authority within 05 working days from the day on which the enterprise’s debts are
fully paid;
5. After 180 days from the notification date mentioned in Clause 1 of this Article without further
comments from the enterprise or written objections from relevant parties, or within 05 working
days from the receipt of the application for dissolution, the business registration authority shall
update the enterprise’s status on the national enterprise registration database;
6. Relevant executives of company shall be personal responsible for any damage caused by their
failure to comply with this Article.
Article 210. Application for dissolution
1. An application for dissolution of an enterprise shall consist of:
a) The notification of the enterprise’s dissolution;
b) The report on liquidation of the enterprise’s assets; list of creditors and paid debts, including
tax debts, social insurance, health insurance, unemployment insurance of employees after the
dissolution decision is issued (if any).
2. Members of the Board of Directors (for joint stock companies), members of the Board of
Members (for limited liability companies), the owner (for sole proprietorships), the
Director/General Director, general partners and legal representatives shall be responsible for the
accuracy and truthfulness of the application.
3. In case the application contains inaccurate or false information, the persons specified in Clause
2 of this Article shall jointly provide the outstanding employees’ benefits, taxes and other debts
and bear personal responsibility for the consequences that occur within 05 years from the day on
which the application is submitted to the business registration authority.
Article 211. Actions prohibited from the issuance date of the dissolution decision
1. From the issuance date of the dissolution decision, the enterprise and its executives are
prohibited from the following actions:
a) Concealing, disguising assets;
b) Denying or reducing the creditors’ claims to the debts;
c) Convert unsecured debts into debts secured with the enterprise’s assets;
d) Concluding new contracts, except for dissolving the enterprise;
dd) Pledging, donating, leasing out assets;
e) Terminating effective contracts;
g) Raising capital in any shape or form.
2. The persons who commit the violations mentioned in Clause 1of this Article, depending on
their nature and seriousness, will be held liable to administrative penalties or criminal
prosecution and pay damages.
Article 212. Revocation of the Certificate of Enterprise Registration
1. An enterprise’s Certificate of Enterprise Registration shall be revoked in the following cases:
a) The enterprise registration application contains fraudulent information;
b) The enterprise is established by persons banned from establishing enterprises specified in
Clause 2 Article 17 of this Law;
c) The enterprise is suspended for 01 year without notifying the business registration authority
and the tax authority;
d) The enterprise fails to send reports in accordance with Point c Clause 1 Article 216 of this
Law to the business registration authority within 06 months from the deadline or from the receipt
of a written request;
dd) Other cases under decision of the court or request of competent authorities as prescribed by
law.
2. The Government shall elaborate the procedures for revoking the Certificate of Enterprise
Registration.
Article 213. Shutting down branches, representative offices and business locations
1. Shutdown of branches, representative offices, business locations of an enterprise shall be
decided by the enterprise or under a decision to revoke the certificate of branch/representative
office registration issued by a competent authority.
2. The enterprise’s legal representative and the head of the branch/representative office that is
shut down shall be jointly responsible for the accuracy and truthfulness of the application for
shutdown of the branch/representative office/business location.
3. The enterprise whose branch is shut down shall execute the contracts and pay the debts,
including tax debts, of the branch and continue employing or fully provide lawful benefits for the
branch’s employees as prescribed by law.
4. The Government shall elaborate this Article.
Article 214. Bankruptcy of enterprises
Bankruptcy laws shall apply to bankruptcy of enterprises.
Chapter X
IMPLEMENTATION CLAUSES
Article 215. Responsibilities of various authorities
1. The Government shall ensure uniform state management of enterprises.
2. Ministries and ministerial agencies shall be responsible to the Government for performance of
their tasks relevant to state management of enterprises.
3. The People’s Committees of provinces shall perform state management of enterprises in their
provinces.
4. Ministries, ministerial agencies, relevant agencies and the People’s Committees of provinces,
within the scope of their duties and entitlements, shall establish connection and share the
following information with the national enterprise registration database:
a) Information about business licenses, certificates of eligibility, practicing certificates,
certificates or written approval for business conditions and administrative penalty imposition
decisions;
b) information about enterprises’ operation and tax payment from tax reports; enterprises’
financial statements;
c) Cooperate and share information about enterprises’ operation to improve effectiveness of state
management.
5. The Government shall elaborate this Article.
Article 216. Business registration authorities
1. Business registration authorities have the following duties and entitlements:
a) Process enterprise registration apps and issue the Certificate of Enterprise Registration as
prescribed by law;
c) Participate in development and management of the National Enterprise Registration
Information System; disclose and provide information for state agencies and other organizations
and individuals on request as prescribed by law;
c) Request enterprises to submit reports on their compliance to this Law where necessary;
supervise enterprises submitting reports;
d) Carry out inspection and supervision of enterprises according to their enterprise registration
applications or request competent authorities to do so;
dd) Take responsibility for validity of enterprise registration applications; deny responsibility for
enterprises’ violations committed before and after applying for enterprise registration;
e) Deal with violations against regulations of law on enterprise registration; revoke the
Certificate of Enterprise Registration and request enterprises to file for dissolution in accordance
with this Law;
g) Other duties and entitlements by this Law and relevant laws.
2. The Government shall provide for organization of the systems of business registration
authorities.
Article 217. Implementation clauses
1. This Law comes into force from January 01, 2021.
2. The Law on Enterprises No. 68/2014/QH13 ceases to have effect from the effective date of
this Law.
3. The phrase “doanh nghiệp nhà nước” (“state-owned enterprises”) shall be replaced with
“doanh nghiệp do Nhà nước nắm giữ 100% vốn điều lệ” (“wholly state-owned enterprises”) in
Point m Clause 1 Article 35 and Point k Clause 1 Article 37 of the Law on State Budget No.
83/2015/QH13; Point a Clause 3 Article 23 of the Law on Irrigation No. 08/2017/QH14,
amended by the Law No. 35/2018/QH14; Point b Clause 2 Article 74 of the Civil Proceedings
Code No. 92/2015/QH13, amended by the Law No. 45/2019/QH14; Point a Clause 2 Article 43
of the Law on Management and Use of Weapons, Explosives and Combat Gears No.
14/2017/QH14, amended by the Law No. 50/2019/QH14; Article 19 of the Law on Denunciation
No. 25/2018/QH14; Articles 3, 20, 30, 34, 39 and 61 of the Anti-corruption Law No.
36/2018/QH14.
4. The Government shall provide for registration and operation of household businesses.
5. Pursuant to this Law, the Government shall provide for management and operation of stateowned enterprises that operates in the field of defense or both defense and business.
Article 218. Transition clauses
1. Companies whose shares or stakes are not obtained by the State before July 01, 2015 are not
required to implement the regulations of Clause 2 Article 195 of this Law but must not increase
their cross-ownership ratios.
2. Enterprises’ executives, Controllers and authorized representatives who do not fully satisfy the
requirements specified in Point b Clause 5 Article 14, Clause 3 Article 64, Clause 3 Article 93,
Clause 3 Article 101, Points a, b, and c Clause 3 Article 103, Point d Clause 1 Article 155, Point
b Clause 5 Article 162 or Clause 2 Article 169 of this Law may continue working until the end of
their terms of office.
This Law is ratified by the 14th National Assembly of the Socialist Republic of Vietnam during
its 9th session on June 17, 2020.
PRESIDENT OF THE NATIONAL
ASSEMBLY
Nguyen Thi Kim Ngan
------------------------------------------------------------------------------------------------------
This translation is made by LawSoft and for reference purposes only. Its copyright is owned by
LawSoft and protected under Clause 2, Article 14 of the Law on Intellectual Property.Your
comments are always welcomed
THE NATIONAL ASSEMBLY
------No. 45/2019/QH14
SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
--------------Hanoi, November 20, 2019
LABOR CODE
Pursuant to the Constitution of Socialist Republic of Vietnam;
The National Assembly promulgates the Labor Code.
Chapter I
GENERAL PROVISIONS
Article 1. Scope
The Labor Code sets forth labor standards; rights, obligations and responsibilities of employees, employers, internal
representative organizations of employees, representative organizations of employers in labor relations and other
relations directly related to labor relations; and state management of labor.
Article 2. Regulated entities
1. Employees, trainees, apprentices and other workers without labor relations.
2. Employers.
3. Foreign employees who work in Vietnam.
4. Other organizations and individuals directly related to labor relations.
Article 3. Definitions
For the purposes of this document, the terms below shall be construed as follows:
1. “employee” means a person who works for an employee under an agreement, is paid, managed and supervised by
the employer.
The legal working age is 15, except for the cases specified in Section 1 Chapter XI of this Labor Code.
2. “employer” means an enterprise, agency, organization, cooperative, household or individual who employs other
people under agreements. An employee that is an individual shall have full legal capacity.
3. “representative organization of employees” means an internal organization voluntarily established by employees of
an employer which protects the employees’ legitimate rights and interests in labor relations through collective
bargaining or other methods prescribed by labor laws. Representative organizations of employees include internal
trade unions and internal employee organizations.
4. Representative organization of employers means a lawfully established organization which represents and protects
the employers’ legitimate rights and interests in labor relations.
5. “labor relation” means a social relation which arises in respect of the employment and salary payment between an
employee and an employer, their representative organizations and competent authorities. Labor relations include
individual labor relation and collective labor relation.
6. “worker without labor relations” means a person who works without an employment contract.
7. “forced labor” means to the use force or threat to use force or a similar practice to force a person to work against
his/her will.
8. “labor discrimination” means discrimination on the grounds of race, skin color, nationality, ethnicity, gender, age,
pregnancy, marital status, religion, opinion, disability, family responsibility, HIV infection, establishment of or
participation in trade union or internal employee organization in a manner that affects the equality of opportunity of
employment.
Positive discrimination on the grounds of professional requirements, the sustainment and employment protection for
vulnerable employees will not be considered discrimination.
9. “sexual harassment” in the workplace means any sexual act of a person against another person in the workplace
against the latter’s will. “workplace” means the location when an employee works under agreement or as assigned by
the employer.
Article 4. State policies on labor
1. Guarantee the legitimate rights and interests of employees and workers without labor relations; encourage
agreements providing employees with conditions more favorable than those provided by the labor laws.
2. Guarantee the legitimate rights and interests of employers, to ensure lawful, democratic, fair and civilized labor
management, and to promote corporate social responsibility.
3. Facilitate job creation, self-employment and occupational training and learning to improve employability; laborintensive businesses; application of certain regulations in this Labor code to workers without labor relations.
4. Adopt policies on the development and distribution of human resources; improve productivity; provide basic and
advanced occupational training, occupational skill development; assist in sustainment and change of jobs; offer
incentives for skilled employees in order to meet the requirements of national industrialization and modernization.
5. Adopt policies on labor market development and diversify types of linkage between labor supply and demand.
6. Promote dialogues, collective bargaining and establishment of harmonious, stable and progressive labor relations
between employees and employers.
7. Ensure gender equality; introduce labor and social policies aimed to protect female, disabled, elderly and minor
employees.
Article 5. Rights and obligations of employees
1. An employee has the rights to:
a) work; freely choose an occupation, workplace or occupation; participate in basic and advanced occupational
training; develop professional skills; suffer no discrimination, forced labor and sexual harassment in the workplace;
b) receive a salary commensurate with his/her occupational skills on the basis of an agreement with the employer; be
provided with personal protective equipment and work in an occupationally safe and healthy environment; take
statutory sick leaves, annual paid leaves and receive collective welfare benefits;
c) establish, join an representative organization of employees, occupational associations and other organizations in
accordance with law; request and participate in dialogues with the employer, implementation of democracy
regulations and collective bargaining with the employer; receive consultancy at the workplace to protect his/her
legitimate rights and interests; participate in management activities according to the employer’s regulations;
d) refuse to work if he/she finds that the work directly threatens his/her life or health;
dd) unilaterally terminate the employment contract;
e) go on strike;
g) exercise other rights prescribed by law.
2. An employee has the obligations to:
a) implement the employment contract, collective bargaining agreement and other lawful agreements;
c) obey internal labor regulations, the lawful management, administration and supervision by the employer;
c) implement regulations of laws on labor, employments, vocational education, social insurance, health insurance,
unemployment insurance, occupational safety and health.
Article 6. Rights and obligations of employers
1. An employer has the rights to:
a) recruit, arrange and manage and supervise employees; give commendation and take actions against violations of
internal labor regulations;
b) establish, join and operate in employer representative organization, occupational associations and other
organizations in accordance with law;
c) request the representative organization of employees to negotiate the conclusion of the collective bargaining
agreement; participate in settlement of labor disputes and strikes; discuss with the representative organization of
employees about issues related to labor relations and improvement of the material and spiritual lives of employees;
d) temporarily close the workplace;
dd) exercise other rights prescribed by law.
2. An employer has the obligations to:
a) implement the employment contracts, collective bargaining agreement and other lawful agreements with
employees; respect the honor and dignity of employees;
b) establish a mechanism for and hold dialogue with the employees and the representative organization of
employees; implement the regulations on grassroots-level democracy;
c) Provide basic training and advanced training in order to help employees improve their professional skills or change
their occupations;
d) implement regulations of laws on labor, employments, vocational education, social insurance, health insurance,
unemployment insurance, occupational safety and health; develop and implement solutions against sexual
harassment in the workplace;
dd) Participate in development of the national occupational standards, assessment and recognition of employees’
professional skills.
Article 7. Development of labor relations
1. Labor relations are established through dialogue and negotiation on principles of voluntariness, good faith,
equality, cooperation and mutual respect of each other’s the lawful rights and interests.
2. Employers, employer representative organizations, employees and representative organizations of employees
shall develop progressive, harmonious and stable labor relations with the assistance of competent authorities.
3. The trade union shall cooperate with competent authorities in assisting the development of progressive,
harmonious and stable labor relations; supervising implementation of labor laws; protecting the legitimate rights and
interests of employees.
4. Vietnam Chamber of Commerce and Industry, Vietnam Cooperative Association and other employer
representative organizations that are lawfully established shall represent, protect the lawful rights and interests of
employers, and participate in development of progressive, harmonious and stable labor relations.
Article 8. Forbidden actions
1. Labor discrimination.
2. Maltreatment of employees, forced labor.
3. Sexual harassment in the workplace.
4. Taking advantage of occupational training or apprenticeships to exploit the trainees or apprentices, or persuade or
force them to act against the law.
5. Employing untrained people or people without occupational training certificates to do the jobs or works that have to
be done by trained workers or holders of occupational training certificates.
6. Persuading, inciting, promising advertising or otherwise tricking employees into human trafficking, exploitation of
labor or forced labor; taking advantage of employment brokerage or guest worker program to commit violations
against the law.
7. Illegal employment of minors.
Chapter II
EMPLOYMENTS, RECRUITMENT AND EMPLOYEE MANAGEMENT
Article 9. Employments and creation of employments
1. Employment is any income-generating laboring activity that is not prohibited by law.
2. The State, employers and the society have the responsibility to create employment and guarantee that every
person, who has the work capacity, has access to employment opportunities.
Article 10. Right to work of employees
1. An employee shall have the right to choose his employment, employer in any location that is not prohibited by law.
2. An employee may directly contact an employer or through an employment service provider in order to find a job
that meets his/her expectation, capacity, occupational qualifications and health.
Article 11. Employment plan
1. Employers have the right to recruit employees directly or through employment agencies or dispatching agencies.
2. Employees shall not pay any employment cost.
Article 12. Responsibility of an employer for employee management
1. Prepare, update, manage, use the physical or electronic employee book and present it to the competent authority
whenever requested.
2. Declare the employment status within 30 days from the date of commencement of operation, and report
periodically on changes of employees during operation to the local labor authority under the People’s Committee of
the province (hereinafter referred to as “provincial labor authority") and to the social security authority.
3. The Government shall elaborate this Article.
Chapter III
EMPLOYMENT CONTRACT
Section 1. CONCLUSINO OF AN EMPLOYMENT CONTRACT
Article 13. Employment contract
1. An employment 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.
A document with a different name is also considered an employment contract if it contains the agreement on the paid
job, salary, management and supervision of a party.
2. Before recruiting an employee, the employer shall enter into an employment contract with such employee.
Article 14. Forms of employment contract
1. An employment contract shall be concluded in writing and made into two copies, one of which will be kept by the
employee, the other by the employer, except for the case specified in Clause 2 of this Article.
An employment contract in the form of electronic data conformable with electronic transaction laws shall have the
same value as that of a physical contract.
2. Both parties may conclude an oral contract with a term of less than 01 month, except for the cases specified in
Clause 2 Article 18, Point a Clause 1 Article 145 and Clause 1 Article 162 of this Labor Code.
Article 15. Principles for conclusion of an employment contract
1. Voluntariness, equality, good faith, cooperation and honesty.
2. Freedom to enter into an employment contract which is not contrary to the law, the collective bargaining agreement
and social ethics.
Article 16. Obligations to provide information before conclusion of an employment contract
1. The employer shall provide the employee with truthful information about the job, workplace, working conditions,
working hours, rest periods, occupational safety and health, wage, forms of wage payment, social insurance, health
insurance, unemployment insurance, regulations on business secret, technological know-how, and other issues
directly related to the conclusion of the employment contract if requested by the employee.
2. The employee shall provide the employer with truthful information about his/her full name, date of birth, gender,
residence, educational level, occupational skills and qualifications, health conditions and other issues directly related
to the conclusion of the employment contract which are requested by the employer.
Article 17. Prohibited acts by employers during conclusion and performance of employment contracts
1. Keeping the employee’s original identity documents, diplomas and certificates.
2. Requesting the employee to make a deposit in cash or property as security for his/her performance of the
employment contract.
3. Forcing the employee to keep performing the employment contract to pay debt to the employer.
Article 18. Competence to conclude employment contracts
1. Employees may directly conclude their employment contracts, except for the cases specified in Clause 2 of this
Article.
2. In respect of seasonal works or certain jobs which have a duration of less than 12 months, a group of employees
aged 18 or older may authorized the representative of the group to conclude the employment contract, in which case
such employment contract shall be effective as if it was separately concluded by each of the employees.
The employment contract concluded by the said representative must be enclosed with a list clearly stating the full
names, ages, genders, residences and signatures of all employees concerned.
3. The person who concludes the employment contract on the employer’s side shall be:
a) The legal representative of the enterprise or an authorized person as prescribed by law;
b) The head of the organization that is a juridical person, or an authorized person as prescribed by law;
c) The representative of the household, artels or an organization that is not a juridical person, or an authorized person
as prescribed by law;
d) The individual who directly hires the employee.
4. The person who concludes the employment contract on the employee’s side shall be:
a) The employee himself/herself if he/she is 18 or older;
b) The employee aged 15 to under 18 with a written consensus by his/her legal representative;
c) The employee aged under 15 and his/her legal representative;
d) The employee lawfully authorized by the group of employees to conclude the employment contract.
5. The person who is authorized to conclude the employment contract must not authorize another person to conclude
the employment contract.
Article 19. Entering into multiple employment contracts
1. An employee may enter into employment contracts with more than one employer, provided that he/she fully
performs all terms and conditions contained in the concluded contracts.
2. Where an employee enters into employment contracts with more than one employer, his/her participation in social
insurance, health insurance and unemployment insurance schemes shall comply with regulations of law on social
insurance, health insurance, unemployment insurance, occupational safety and health.
Article 20. Types of employment contracts
1. An employment contract shall be concluded in one of the following types:
a) An indefinite-term employment contract is a contract in which the two parties neither fix the term nor the time of
termination of the contract;
b) A fixed-term employment contract is a contract in which the two parties fix the term of the contract for a duration of
up to 36 months from the date of its conclusion.
2. If an employee keeps working when an employment contract mentioned in Point b Clause 1 of this Article expires:
a) Within 30 days from the expiration date of the employment contract, both parties shall conclude a new employment
contract. Before such a new employment contract is concluded, the parties’ rights, obligations and interests specified
in the old employment contract shall remain effective;
b) If a new employment contract is not concluded after the 30-day period, the existing employment contract
mentioned in Point b Clause 1 of this Article shall become an employment contract of indefinite term;
c) The parties may enter into 01 more fixed-term employment contract. If the employee keeps working upon
expiration of this second fixed-term employment contract, the third employment contract shall be of indefinite term,
except for employment contracts with directors of state-invested enterprises and the cases specified in Clause 1
Article 149, Clause 2 Article 151 and Clause 4 Article 177 of this Labor Code.
Article 21. Contents of employment contracts
1. An employment contract shall have the following major contents:
a) The employer’s name, address; full name and position of the person who concludes the contract on the employer’s
side;
b) Full name, date of birth, gender, residence, identity card number or passport number of the person who concludes
the contract on the employee’s side;
c) The job and workplace;
d) Duration of the employment contract;
dd) Job- or position-based salary, form of salary payment, due date for payment of salary, allowances and other
additional payments;
e) Regimes for promotion and pay rise;
g) Working hours, rest periods;
h) Personal protective equipment for the employee;
i) Social insurance, health insurance and unemployment insurance;
k) Basic training and advanced training, occupational skill development.
2. If the employees’ job is directly related to the business secret, technological know-how as prescribed by law, the
employer has the rights to sign a written agreement with the employee on the content and duration of the protection
of the business secret, technology know-how, and on the benefit and the compensation obligation in case of violation
by the employee.
3. If the employee works in agriculture, forestry, fishery, or salt production, both parties may exclude some of the
aforementioned contents and negotiate additional agreements on settlement in the case when the contract execution
is affected by natural disaster, fire or weather.
4. The contents of the employment contract with an employee who is recruited to work as the director of a stateinvested enterprise shall be stipulated by the Government.
5. The Minister of Labor, War Invalids and Social Affairs elaborate Clauses 1, 2 and 3 of this Article.
Article 22. Annexes to employment contract
1. An annex to an employment contract is an integral part of the employment contract and is as binding as the
employment contract.
2. An annex to an employment contract may elaborate or amend certain contents of the employment contract and
must not change the duration of the employment contract.
Where an annex to an employment contract elaborates the employment contract in a manner that leads to a different
interpretation of the employment contract, the contents of the employment contract shall prevail.
Where an annex amends certain contents of the employment contract, it should clearly states the amendments or
additions, and the date on which they take effect.
Article 23. Effect of employment contract
An employment contract takes effect as of the date on which the contract is concluded by the parties, unless
otherwise agreed by both parties or prescribed by law.
Article 24. Probation
1. An employer and an employee may include the contents of the probation in the employment contract or enter into a
separate probation contract.
2. The probation contract must include the probation period and the contents specified in Points a, b, c, dd, g and h
Clause 1 Article 21 of this Code.
3. Probation is not allowed if the employee works under an employment contract with a duration of less than 01
month.
Article 25. Probationary period
The probationary period shall be negotiated by the parties on the basis of the nature and complexity of the job. Only
one probationary period is allowed for a job and the probation shall not exceed:
1. 180 days for the position of enterprise executive prescribed by the Law on Enterprises, the Law on management
and use of state investment in enterprises;
2. 60 days for positions that require a junior college degree or above;
3. 30 days for positions that require a secondary vocational certificate, professional secondary school; positions of or
for technicians, and skilled employees;
4. 06 working days for other jobs.
Article 26. Probationary salary
The probationary salary shall be negotiated by both parties and shall not be lower than 85% of the offered salary.
Article 27. Termination of probationary period
1. Upon the expiry of the probationary period, the employer shall inform the employee of the probation result.
If the result is satisfactory, the employer shall keep implementing the concluded employment contract, if there is one,
or conclude the employment contract.
If the result is not satisfactory, the employer may terminate the concluded employment contract or the probation
contract.
2. During the probationary period, either party has the right to terminate the concluded probation contract or
employment contract without prior notice and compensation obligation.
Section 2. PERFORMANCE OF EMPLOYMENT CONTRACT
Article 28. Performance of works under an employment contract
The works under an employment contract shall be performed by the employee who directly enters into the contract.
The workplace shall be consistent with that indicated in the employment contract, unless otherwise agreed upon by
both parties.
Article 29. Reassignment of an employee against the employment contract
1. In the event of sudden difficulties such as natural disasters, fire, major epidemics, implementation of preventive
and remedial measures for occupational accidents or diseases, electricity and water supply failures, or for reasons of
business and production demands, the employer may temporarily assign an employee to perform a work which is not
prescribed in the employment contract for an accumulated period of up to 60 working days within 01 year, unless
otherwise agreed in writing by the employee.
The employer shall specify in the internal labor regulations the cases in which the employer may temporary reassign
employees against the employment contracts.
2. In case of temporarily reassignment of an employee specified in Clause 1 of this Article, the employer shall inform
the employee at least 03 working days in advance, specify the reassignment period and only assign works that are
suitable for the employee’s health and gender.
3. The reassigned employee will receive the salary of the new work. If the new salary is lower than the previous
salary, the previous salary shall be maintained for 30 working days. The new salary shall be at least 85% of the
previous salary and not smaller than the minimum wages.
4. In case the employee refuses to be reassigned for more than 60 working days in 01 year and has to suspend the
employment, he/she shall receive the suspension pay from the employer in accordance with Article 99 of this Labor
Code.
Article 30. Suspension of an employment contract
1. Cases of suspension of an employment contract:
a) The employee is conscripted into the army or militia;
b) The employee is held in custody or detention in accordance with the criminal procedure law;
c) The employee is sent to a reformatory school, drug rehabilitation center or correctional facility;
d) The female employee is pregnant as specified in Article 138 of this Code;
dd) The employee is designated as the executive of a wholly state-owned single-member limited liability company;
e) The employee is authorized to representative the state investment in another enterprise;
g) The employee is authorized to represent the enterprise’s investment in another enterprise;
h) Other circumstances as agreed by both parties.
2. During the suspension of the employment contract, the employee shall not receive the salary and benefits
specified in the employment contract, unless otherwise agreed by both parties or prescribed by law.
Article 31. Reinstatement of employees upon expiry of the temporary suspension of the employment contract
Within 15 days from the expiry of the suspension period of the employment contract, the employee shall be present at
the workplace and the employer shall reinstate the employee under the employment contract if it is still unexpired,
unless otherwise agreed by both parties or prescribed by law.
Article 32. Part-time employments
1. A part-time employee is an employee who works for less than the usual daily, weekly or monthly working hours as
prescribed by labor laws, the collective bargaining agreement internal labor regulations.
2. An employee may negotiate part-time employment with the employer when enter into an employment contract.
3. The part-time employee shall be entitled to receive salary, equal rights and obligations as a full-time employee;
equal opportunity and treatment, and to a safe and hygienic working environment.
Article 33. Revisions to employment contracts
1. During the performance of an employment contract, any party who wishes to revise the employment contract shall
notify the other party of the revisions at least 03 working days in advance.
2. In case where an agreement is reached between the parties, the revisions shall be made by signing an annex to
the employment contract or signing a new employment contract.
3. In case the two parties fail to reach an agreement on the revisions, they shall continue to perform the existing
employment contract.
Section 3. TERMINATION OF EMPLOYMENT CONTRACTS
Article 34. Cases of termination of an employment contract
1. The employment contract expires, except for the case specified in Clause 4 Article 177 of this Code.
2. The tasks stated in the employment contract have been completed.
3. Both parties agree to terminate the employment contract.
4. The employee is sentenced to imprisonment without being eligible for suspension or release as prescribed in
Clause 5 Article 328 of the Criminal Procedure Code, capital punishment or is prohibited from performing the work
stated in the employment contract by an effective verdict or judgment of the court.
5. The foreign employee working in Vietnam is expelled by an effective verdict or judgment of the court or a decision
of a competent authority.
6. The employee dies; is declared by the court as a legally incapacitated person, missing or dead.
7. The employer that is a natural person dies; is declared by the court as a legally incapacitated person, missing or
dead. The employer that is not a natural person ceases to operate, or a business registration authority affiliated to the
People’s Committee of the province (hereinafter referred to as “provincial business registration authority”) issues a
notice that the employer does not have a legal representative or a person authorized to exercise the legal
representative’s rights and obligations.
8. The employee is dismissed for disciplinary reasons.
9. The employee unilaterally terminates the employment contract in accordance with Article 35 of this Code.
10. The employer unilaterally terminates the employment contract in accordance with Article 36 of this Code.
11. The employer allows the employee to resigns in accordance with Article 42 and Article 43 of this Code.
12. The work permit or a foreign employee expires according to Article 156 of this Labor Code.
13. The employee fails to perform his/her tasks during the probationary period under the employment contract or
gives up the probation.
Article 35. The right of an employee to unilaterally terminates the employment contract
1. An employee shall have the right to unilaterally terminate the employment contract, provided he/she notices the
employee in advance:
a) at least 45 days in case of an indefinite-term employment contract;
b) at least 30 days in case of an employment contract with a fixed term of 12 – 36 months;
c) at least 03 working days in case of an employment contract with a fixed term of under 12 months;
d) The notice period in certain fields and jobs shall be specified by the government.
2. An employee is shall have the right to unilaterally terminate the employment contract without prior notice if he/she:
a) is not assigned to the work or workplace or not provided with the working conditions as agreed in the employment
contract, except for the cases specified in Article 29 of this Labor Code;
b) is not paid adequately or on schedule, except for the case specified in Clause 4 Article 97 of this Code.
c) is maltreated, assaulted, physically or verbally insulted by the employer in a manner that affects the employee’s
health, dignity or honor; is forced to work against his/her will;
d) is sexually harassed in the workplace;
dd) is pregnant and has to stop working in accordance with Clause 1 Article 138 of this Labor Code.
e) reaches the retirement age specified in Article 169 of this Labor Code, unless otherwise agreed by the parties; or
g) finds that the employer fails to provide truthful information in accordance with Clause 1 Article 16 of this Labor
Code in a manner that affects the performance of the employment contract.
Article 36. The right of an employer to unilaterally terminates the employment contract
1. An employer shall have the right to unilaterally terminate an employment contract in one of the following
circumstances:
a) The employee repeatedly fails to perform his/her work according to the criteria for assessment of employees’
fulfillment of duties established by the employer. The criteria for assessment of employees’ fulfillment of duties shall
be established by the employer with consideration taken of opinions offered by the representative organization of
employees (if any);
b) The employee is sick or has an accident and remains unable to work after having received treatment for a period
of 12 consecutive months in the case of an indefinite-term employment contract, for 06 consecutive months in the
case of an employment contract with a fixed term of 12 – 36 months, or more than half the duration of the contract in
case of an employment contract with a fixed term of less than 12 months.
Upon recovery, the employer may consider concluding another employment contract with the employee;
c) In the event of a natural disaster, fire, major epidemic, hostility, relocation or downsizing requested by a competent
authority, the employer has to lay off employees after all possibilities have been exhausted;
d) The employee is not present at the workplace after the time limit specified in Article 31 of this Labor Code;
dd) The employee reaches the retirement age specified in Article 169 of this Labor Code, unless otherwise agreed by
the parties;
e) The employee quits his/her fails to go to work without acceptable excuses for at least 05 consecutive working
days;
g) The employee fails to provide truthful information during the conclusion of the employment contract in accordance
with Clause 2 Article 16 of this Labor Code in a manner that affects the recruitment.
2. When unilaterally terminating the employment contract in any of the cases specified in Point a, b, c, dd and g
Clause 1 of this Article, the employer shall inform the employer in advance:
a) at least 45 days in case of an indefinite-term employment contract;
b) at least 30 days in case of an employment contract with a fixed term of 12 – 36 months;
c) at least 03 working days in the case of an employment contract with a fixed term of less than 12 months and in the
cases stipulated in Point b Clause 1 of this Article;
d) The notice period in certain fields and jobs shall be specified by the government.
3. When unilaterally terminating the employment contract in the cases mentioned in Point d and Point e Clause 1 of
this Article, the employer is not required to inform the employee in advance.
Article 37. Cases in which an employer is prohibited from unilaterally terminating an employment contract
1. The employee is suffering from an illness or work accident, occupational disease and is being treated or nursed
under the decision of a competent health institution, except for the cases stipulated in Point b Clause 1 Article 36 of
this Labor Code.
2. The employee is on annual leave, personal leave, or any other types of leave permitted by the employer.
3. The employee is pregnant, on maternal leave or raising a child under 12 months of age.
Article 38. Withdrawal of unilateral termination of employment contracts
Either party may withdraw the unilateral termination of an employment contract at any time prior to the expiry of the
notice period by a written notification, provided that the withdrawal is agreed by the other party.
Article 39. Illegal unilateral termination of employment contracts
The unilateral termination of an employment contract will be illegal if it does not comply with regulations of Article 35,
36 and 37 of this Labor Code.
Article 40. Illegal unilateral termination of the employment contract insurance the employee
The employee who illegally unilaterally terminates his/her employment contract shall:
1. Not receive the severance allowance.
2. Pay the employer a compensation that is worth his/her half a month’s salary plus (+) an amount equal to his/her
salary for the remaining notice period from the termination date.
3. The employee shall reimburse the employer with the training costs in accordance with Article 62 of this Code.
Article 41. Illegal unilateral termination of the employment contract by the employer
1. The employer that illegally unilaterally terminates an employment contract with an employee shall reinstate the
employee in accordance with the original employment contract, and pay the salary, social insurance, health insurance
and unemployment insurance premiums for the period during which the employee was not allowed to work, plus at
least 02 months’ salary specified in the employment contract.
After the reinstatement, the employee must return the severance allowance or redundancy allowance (if any) to the
employer.
Where there is no longer a vacancy for the position or work as agreed in the employment contract and the employee
still wishes to work, the employer shall negotiate revisions to the employment contract.
Where the employer fails to comply with the provisions on notice period in Clause 2 Article 36 of this Labor Code, the
employer shall pay a compensation that is worth the employee’s salary for the remaining notice period from the
termination date.
2. In case the employee does not wish to return to work, in addition to the compensation prescribed in Clause 1 of
this Article, the employer shall pay a severance allowance in accordance with Article 46 of this Code in order to
terminate the employment contract.
3. Where the employer does not wish to reinstate the employee and the employee agrees, in addition to the
compensation mentioned in Clause 1 of this Article and the severance allowance mentioned in Article 46 of this Labor
Code, both parties shall negotiate an additional compensation which shall be at least 2 months’ salary under the
employment contract in order to terminate the employment contract.
Article 42. Obligations of the employer in case of changes in structure, technology or changes due to
economic reasons
1. Changes in structure and technology include:
a) Changes in the organizational structure, personnel rearrangement;
b) Changes in processes, technology, equipment associated with the employer’s business lines;
c) Changes in products or product structure.
2. Changes due to economic reasons include:
a) Economic crisis or economic depression;
b) Changes in law and state policies upon restructuring of the economy or implementation of international
commitments.
3. If the change affects the employment of a large number of employees, the employer shall develop and implement a
labor utilization plan prescribed in Article 44 of this Labor Code. In case of new vacancies, priority shall be given to
retraining of the existing employees for continued employment.
4. If a change due to economic reasons threatens to cause a large number of employees to lose their jobs, the
employer shall develop and implement a labor utilization plan as prescribed in Article 44 of this Code.
5. In case the employer is unable to create provide employment and has to resort to dismissing employees, the
employer shall pay them redundancy allowances in accordance with Article 47 of this Labor Code.
6. The dismissal of employees in the cases mentioned in this Article shall only be implemented after a discussion with
the representative organization of employees (if any) and after giving prior notice of 30 days to the People’s
Committee of the province and the employees.
Article 43. Obligations of the employer in case of full division, partial division, consolidation, merger of the
enterprise; sale, lease, conversion of the enterprise; transfer of the right to ownership or right to enjoyment
of assets of the enterprise or cooperative
1. In case the full division, partial division, consolidation, merger of the enterprise; sale, lease, conversion of the
enterprise; transfer of the right to ownership or right to enjoyment of assets of the enterprise or cooperative affects
the employment of a large number of employees, the employer shall develop a labor utilization plan as prescribed in
Article 44 of this Labor Code.
2. The current employer and the next employer shall implement the adopted labour utilization plan.
3. The laid off employees will receive redundancy allowances in accordance with Article 47 of this Code.
Article 44. Labor utilization plan
1. A labor utilization plan shall have the following contents:
a) The names and number of employees to be retained, employees to be retrained for further employment, and
employees to be working on part-time basis;
b) The names and number of employees to retire;
c) The names and number of employees whose employment contracts have to be terminated;
d) Rights and obligations of the employer, employee and relevant parties regarding implementation of the labor
utilization plan;
dd) The measure and financial sources to implement the plan.
2. During development of the labor utilization plan, the employer shall discuss with the representative organization of
employees (if any). The labor utilization plan shall be made available to the employees within 15 days from the day
on which it is adopted.
Article 45. Noticing termination of employment contracts
1. The employer shall send a written notice to the employee of the termination of his/her employment contract, except
for the cases specified in Clauses 4, 5, 6, 7, 8 Article 34 of this Labor Code.
2. In case an employer that is not a natural person shuts down business operation, the date of termination of the
employment contract is the same date of the notice of business shutdown.
In case the provincial business registration authority issues a notice that the employer does not have a legal
representative or a person authorized to exercise the legal representative’s rights and obligations according to Clause
7 Article 34 of this Labor Code, the date of termination of the employment contract is the same date of the notice.
Article 46. Severance allowance
1. In case an employment contract is terminated as prescribed in Clauses 1, 2, 3, 4, 6, 7, 9 and 10, Article 34 of this
Code, the employer is responsible for paying severance allowance to the employee who has worked on a regular
basis for a period of at least 12 months. Each year of work will be worth half a month’s salary, except for the cases in
which the employee is entitled to receive retirement pension as prescribed by social insurance laws, and the cases
specified in Point e Clause 1 Article 36 of this Labor Code.
2. The qualified period of work as the basis for calculation of severance allowance shall be the total period during
which the employee actually worked for the employer minus the period over which the employee participated in the
unemployment insurance in accordance with unemployment insurance laws and the period for which severance
allowance or redundancy allowance has been paid by the employer.
3. The salary as the basis for calculation of severance allowance shall be the average salary of the last 06 months
under the employment contract before the termination.
4. The Government shall elaborate this Article.
Article 47. Redundancy allowance
1. Where an employment contract is terminated according to Clause 11 Article 34 of this Labor Code and the
employee has worked on a regular basis for the employer for at least 12 months, the employer shall pay a
redundancy allowance to the employee. Each year of work will be worth 01 month’s salary and the total redundancy
allowance shall not be smaller than 02 month’s salary.
2. The qualified period of work as the basis for calculation of redundancy allowance shall be the total period during
which the employee actually worked for the employer minus the period over which the employee participated in the
unemployment insurance in accordance with unemployment insurance laws and the period for which severance
allowance or redundancy allowance has been paid by the employer.
3. The salary as the basis for the calculation of redundancy allowance shall be the average salary of the last 06
months under the employment contract before the termination.
4. The Government shall elaborate this Article.
Article 48. Responsibilities of the parties upon termination of an employment contract
1. Within 14 working days following the termination of an employment contract, both parties shall settle all payments
in respect of the rights and interests of each party. In the following cases, such period may be extended, but shall not
exceed 30 days:
a) Shutdown of business operation of the employer that is not a natural person;
b) Changes in the organizational structure, technology or changes due to economic reasons;
c) Full division, partial division, consolidation, merger of the enterprise; sale, lease, conversion of the enterprise;
transfer of the right to ownership or right to enjoyment of assets of the enterprise or cooperative;
d) Natural disasters, fire, hostility or major epidemics.
2. Priority shall be given to payment of the employees’ salaries, social insurance, health insurance, unemployment
insurance, severance allowance and other benefits under the collective bargaining agreement and employment
contracts in case of shutdown, dissolution or bankruptcy of an enterprise or cooperative.
3. The employer has the responsibility to:
a) Complete the procedures for verification of duration of participation in social insurance and unemployment
insurance, return them and original copies of the employee’s other documents (if any);
b) Provide copies of the documents relevant to the employee’s work if requested by the employee. The employer
shall pay the cost of copying and sending the documents.
Section 4. INVALID EMPLOYMENT CONTRACT
Article 49. Invalid employment contracts
1. An employment contract shall be completely invalid in the following cases:
a) The entire contents of the employment contract are illegal;
b) A person concludes the employment contract ultra vires or against the rules for employment contract conclusion
specified in Clause 1 Article 15 of this Labor Code;
c) The work described in the employment contract is prohibited by law;
2. An employment contract shall be partially invalid when part of its contents is illegal but does not affect its remaining
contents.
Article 50. Competence to invalidate employment contracts
People’s Courts shall be entitled to invalidate employment contracts.
Article 51. Settlements upon invalidation of an employment contract
1. Where an employment contract is declared as partially invalid, it shall be dealt with as follows:
a) The rights, obligations and benefits of the parties shall be settled in accordance with the collective bargaining
agreement (or provisions of the law if there is no collective bargaining agreement);
b) The parties shall revise the invalidated part of the employment contract in accordance with the collective
bargaining agreement or labor laws.
2. In case an employment contract is completely invalidated, the rights, obligations and interests of the employee
shall be settled in accordance with law. In case an employment contract is concluded ultra vires, another contract
shall be concluded.
3. The Government shall elaborate this Article.
Section 5. LABOR DISPATCH
Article 52. Labor dispatch
1. Labor dispatch is an arrangement in which an employee enters into an employment contract with a dispatching
agency, which subsequently dispatches the employee to work for another employer while maintaining labor relations
with the dispatching agency with which the employment contract is concluded.
2. Labor dispatch is a conditional business, requires the labor dispatch license and applies only to certain types of
work.
Article 53. Labor dispatch rules
1. The maximum duration of labor dispatch is 12 months.
2. The client enterprise may employ a dispatched employee in the following cases:
a) The employment is necessary for the sharp increase in labor demand over a limited period of time;
b) The dispatched employee is meant to replace another employee who is taking maternal leave, has an occupational
accident or occupational disease or has to fulfill his/her citizen’s duties;
c) The work requires highly skilled workers.
3. The client enterprise may not employ a dispatched employee in the following cases:
a) The dispatched employee is meant to replace another employee during a strike or settlement of labor disputes;
b) There is no agreement with the dispatching agency on responsibility for compensation for the dispatched
employee’s occupational accidents and occupational diseases;
c) The dispatched employee is meant to replace another employee who is dismissed due to changes in
organizational structure, technology, economic reasons, full division, partial division, consolidation or merger of the
enterprise.
4. The client enterprise must not dispatch a dispatched employee to another employer; must not employ an employee
dispatched by an enterprise that does not have the labor dispatch license.
Article 54. Dispatching agencies
1. A dispatching agency shall pay a deposit and obtain labor dispatch license.
2. The Government shall provide for the issuance of labor dispatch licenses, making deposit, the types of work that
allow dispatched labor.
Article 55. Labor dispatch contracts
1. The dispatching agency and the client enterprise shall conclude a written labor dispatch contract, which is made
into 02 copies, each of which shall be kept by a party.
2. A labor dispatch contract shall have the following major contents:
a) The work location, the vacancy which will be filled by the dispatched employee, detailed description of the work,
and detailed requirements for the dispatched employee;
b) The labor dispatch duration; the starting date of the dispatch period;
c) Working hours, rest periods, occupational safety and health at the workplace;
d) Responsibility for compensation in case of occupational accidents and occupational diseases;
dd) Obligations of each party to the dispatched employee.
3. The labor dispatch contract shall not include any agreement on the rights and benefits of employee which are less
favorable than those stipulated in the concluded employment contract between the employee and the dispatching
agency.
Article 56. Rights and obligations of the dispatching agency
Apart from the rights and obligations specified in Article 6 of this Labor Code, the dispatching agency also has the
following rights and obligations:
1. Provide a dispatched employee who meets the requirements of the client enterprise and the employment contract
signed with the employee;
2. Inform the dispatched employee of the contents of the labor dispatch contract;
3. Provide the client enterprise with the curriculum vitae of the dispatched employee, and his/her requirements.
4. Pay the dispatched employee a salary that is not lower than that of a directly hired employee of the client
enterprise who has equal qualifications and performs the same or equal work;
5. Keep records of the number of dispatched employees, the client enterprise, submit periodic reports to the
provincial labor authority.
6. Take disciplinary measures against the dispatched employee in cases where the client enterprise returns the
employee for violations against labor regulations.
Article 57. Rights and obligations of the client enterprise
1. Inform and guide the dispatched employee to understand its internal labor regulations and other regulations.
2. Do not discriminate between the dispatched employee and its directly hired employees in respect of the working
conditions.
3. Reach an agreement with the dispatched employee on night work and overtime work in accordance with this Labor
Code.
4. The client enterprise may negotiate with the dispatched employee and the dispatch enterprise on official
employment of the dispatched employee while the employment contract between the dispatch employee and the
dispatch enterprise is still unexpired.
5. Return the dispatched employee who does not meet the agreed conditions or violates the work regulations to the
dispatch enterprise.
6. Provide evidence of violations against work regulations by the dispatched employee to the dispatching agency for
disciplinary measures.
Article 58. Rights and obligations of the dispatched employee
Apart from the rights and obligations specified in Article 5 of this Labor Code, the dispatched employee also has the
following rights and obligations:
1. Perform the work in accordance with the employment contract with the dispatching agency;
2. Obey internal labor regulations, lawful management, administration and supervision by the client enterprise;
3. Receive a salary which is not lower than that of a directly hired employee of the client enterprise who has equal
qualifications and performs the same or equal work;
4. File a complaint with the dispatch enterprise in case the client enterprise violates agreements in the labor dispatch
contract.
5. Negotiate termination of the employment contract with the dispatching agency in order to conclude an employment
contract with the client enterprise.
Chapter IV
OCCUPATIONAL TRAINING
Article 59. Basic and advanced occupational training
1. Workers are entitled to have vocational training; participate in national assessment and recognition of occupational
skills, develop occupational skills that are suitable for their desires and abilities.
2. The State encourages eligible employers to provide basic and advanced occupational training for their employees
and other employees by:
a) Establishing occupational training centers or classes at the workplace in order to train, retrain and develop
occupational skills of the employees; cooperating with vocational education institutions in providing occupational
training at basic, intermediate and college level, and other occupational training programs as per regulations;
b) Carrying out vocational assessments; participating in the occupational training council; forecasting labor demand
and develop the occupational standards; organizing the assessment and recognition of occupational skills;
developing professional capacity of employees.
Article 60. Responsibilities of employers for provision of basic and advanced occupational training and
occupational skill development
1. Employers shall develop annual basic and advanced occupation training and occupational skill development plans
for their employees and allocate budget for implementation thereof; provide training for employees before reassigning
them.
2. Employers shall submit annual reports on results of the basic and advanced occupational training and occupational
skill development they provide to the provincial labor authority.
Article 61. Trainees and apprentices
1. Trainees are employees who are recruited and trained by the employer at the work place in order to work for the
employer. The traineeship duration varies according to the level of training as prescribed by the Law on Vocational
education.
2. Apprentices are employees who are recruited and instructed to practice doing their work by the employer in order
to work for the employer. The maximum duration of apprenticeship is 03 months.
3. An employer who recruits trainees or apprentices in order to employ them is not required to register such training
activity, shall not charge fees for such training, and shall sign traineeship or apprenticeship contracts in accordance
with the Law on Vocational education.
4. Every trainee and apprentice shall be at least 14 years of age and healthy enough for the traineeship or
apprenticeship. Trainees and apprentices of the occupations on the list of laborious, toxic and dangerous occupations
or the list of highly laborious, toxic and dangerous occupations promulgated by the Minister of Labor, War Invalids
and Social Affairs shall be at least 18 years of age, except for arts and sports.
5. During the traineeship or apprenticeship period, if an apprentice or trainee directly performs or participates in
performance of the work, he/she shall be paid a salary at a rate agreed by both parties.
6. Upon the expiry of the apprenticeship or traineeship period, both parties must enter into an employment contract if
the conditions stipulated in this Labor Code are satisfied.
Article 62. Occupational training contract between an employer and an employee, and occupational training
costs
1. Both parties must enter into an occupational training contract in case the employee is provided with advanced
training or retraining at home or abroad funded by the employer or sponsorship from the employer’s partner.
The occupational training contract shall be made into 02 copies, each of which shall be kept by a party.
2. A vocational training contract shall have the following major contents:
a) The occupation in which training is provided;
b) Location, time of training and salary for the training period;
c) The work commitment period after training;
d) The training costs and responsibility for reimbursement thereof;
dd) Responsibilities of the employer;
e) Responsibilities of the employee.
3. Training costs include those specified in valid documents on payments for trainers, training materials, training
locations, equipment, practice materials, other supportive expenses for the learner, the salary, social insurance,
health insurance and unemployment insurance premiums paid for the learner during the training period. In case the
employee receives the training overseas, the training costs also include the travelling and living expenses during the
training period.
Chapter V
DIALOGUE AT WORKPLACE, COLLECTIVE BARGAINING, COLLECTIVE
BARGAINING AGREEMENTS
Section 1. DIALOGUE AT WORKPLACE
Article 63. Organization of dialogue at the workplace
1. Dialogue at the workplace means the sharing of information, discussion between the employer and employees or
representative organization of employees regarding the issues relevant to the rights and interests of the parties at the
work place in order to strengthen the understanding, cooperation and work out mutually beneficial solutions.
2. Dialogue at the workplace shall be held by the employer:
a) at least once a year;
b) whenever requested by one or both party;
c) in any of the events specified in Point a Clause 1 Article 36, Articles 42, 44, 93, 104, 118 and Clause 1 Article 128
of this Labor Code.
3. Employers, employees and representative organizations of employees are encouraged to hold dialogues in
occasions other than those specified in Clause 2 of this Article.
4. The Government shall provide for organization of dialogue and implementation of democracy regulations at the
workplace.
Article 64. Contents of dialogue at the workplace
1. Mandatory contents are specified in Point c Clause 2 Article 63 of this Labor Code.
2. Apart from the mandatory contents mentioned in Clause 1 of this Article, the parties may include one or some of
the following issues in the dialogue:
a) Business performance of the employer;
b) Performance of the employment contracts, collective bargaining agreement, internal labor regulations, other
commitments and agreements at the workplace;
c) Working conditions;
d) Requests of employees and representative organization of employees to the employer;
dd) Requests of employer to the employees and the representative organization of employees;
e) Other issues of concern to either or both parties.
Section 2. COLLECTIVE BARGAINING
Article 65. Collective bargaining
Collective bargaining is a process of negotiation between a party that consists of one or several representative
organization of employees and another party that consists of one or several employers or employer representative in
order to regulate working conditions, relationship between the parties and develop progressive, harmonious and
stable labor relations.
Article 66. Principles of collective bargaining
Collective bargaining shall be carried out on the principles of voluntariness, good faith, equality, cooperativeness,
openness to the public and transparency.
Article 67. Issues for collective bargaining
The parties may include one or some of the following issues in the collective bargaining:
1. Salary, bonus, allowances, pay rise, means and other benefits;
2. Labor rates, working hours, rest periods, overtime work, rest breaks at work;
3. Employment security for the workers;
4. Occupational safety and health; implementation of the internal labor regulations;
5. Conditions and equipment of the representative organization of employees; the relationship between the employer
and the representative organization of employees;
6. Mechanism and methods for prevention and settlement of labor disputes;
7. Assurance of gender equality, maternity protection, annual leaves; actions against violence and sexual harassment
in the workplace;
8. Other issues of concern to either or both parties.
Article 68. The right to request collective bargaining of the internal representative organization of employees
1. The representative organization of employees has the right to request collective bargaining whenever it reaches
the minimum number of members as prescribed by the Government.
2. In case an enterprise has more than one internal representative organization of employees that satisfies the
requirements in Clause 1 of this Article, the one that has the most members will have the right to request the
collective bargaining. Other representative organizations of employees may participate in the collective bargaining if
agreed by the requesting organization.
3. If none of the employees‘ representative organizations of an enterprise satisfies the requirements in Clause 1 of
this Article, they may request collective bargaining if their total number of members reaches the minimum number
specified in Clause 1 of this Article.
4. The Government shall provide for settlement of disputes among the parties over the right to request collective
bargaining.
Article 69. Representatives of the parties to the collective bargaining
1. The number of representatives of each party participating in the collective bargaining shall be agreed by the two
parties.
2. The participants of each party in the collective bargaining shall be decided by the party.
In case more than one representative organization of employees participate in the collective bargaining as prescribed
in Clause 2 Article 68 of this Labor Code, they may negotiate the number of representatives of each organization.
In the case specified in Clause 3 Article 68 of this Labor Code, the number of representatives of each organization
shall be negotiated by the organizations. If an agreement cannot be reached, each organization shall decide the
number of its representative based on the ratio of its members to the total number of members.
3. Each party to the collective bargaining may invite representatives from its superior organization and this has to be
accepted by the other parties. The representatives of each party to the collective bargaining must not exceed the
agreed quantity mentioned in Clause 1 of this Article, unless otherwise agreed by the other parties.
Article 70. Collective bargaining procedures
1. Whenever collective bargaining is requested by a representative organization of employees in accordance with
Article 68 of this Labor Code, the requested party must not refuse to hold the collective bargaining.
Within 07 working days from the day on which the request and the agenda are received, the parties shall agree upon
the location and starting time for the bargaining.
The employer shall prepare time, location and other conditions for holding collective bargaining meetings?.
The collective bargaining must be held within 30 days from the day on which the request is received.
2. The duration of a collective bargaining must not exceed 90 days from its starting day, unless otherwise agreed by
the parties.
The employees’ representatives shall be fully paid for the time spent participating in the collective bargaining
meetings. The time a member of the representative organization of employees spends participating in the collective
bargaining meetings shall not be included in the time specified in Clause 2 Article 176 of this Labor Code.
3. During the course of collective bargaining, if the employee’s party requests the employer’s party to provide
information on the business performance and other information relevant to the collective bargaining issues, with the
exception of business secrets, technological know-how of the employer, such information must be provided within 10
days from the day on which such request is received.
4. Other representative organizations of employees may discuss with the employees about the contents, methods
and results of the collective bargaining.
The representative organization of employees may decide the time, location and method of discussion or survey as
long as it does not affect the enterprise’s normal business operation.
The employer must not obstruct or interfere with the discussion or survey held by the representative organization of
employees.
5. Minutes of the bargaining meeting must be taken and it must specify the issues which have been agreed upon by
the parties and issues that remain controversial. The minutes shall bear the signatures of the parties and the record
maker. The representative organization of employees shall make the minutes of the collective bargaining available to
all employees.
Article 71. Failed collective bargaining
1. A collective bargaining is considered failed in any of the following circumstances:
a) A party refuses to participate in the collective bargaining or the collective bargaining is not held within the time limit
specified in Clause 1 Article 70 of this Labor Code;
b) An agreement cannot be reached within the time limit specified in Clause 2 Article 70 of this Labor Code;
c) The parties declare that the collective bargaining has failed before expiration of the time limit specified in Clause 2
Article 70 of this Labor Code.
2. In case the bargaining fails, the parties may initiate labor dispute settlement procedures as prescribed in this Labor
Code. During the labor dispute settlement, the representative organization of employees must not call a strike.
Article 72. Sectoral collective bargaining, multi-enterprise collective bargaining
1. The principles and contents of sectoral collective bargaining and multi-enterprise collective bargaining shall comply
with Article 66 and Article 67 of this Labor Code.
2. The procedures for holding sectoral collective bargaining and multi-enterprise collective bargaining shall be
negotiated by the parties, including collective bargaining via a collective bargaining council specified in Article 73 of
this Labor Code.
3. In case of a sectoral collective bargaining, the representatives shall be the sectoral trade union and sectoral
employer representative organizations.
In case of a multi-enterprise collective bargaining, the representatives shall be decided by the parties.
Article 73. Multi-enterprise collective bargaining via a collective bargaining council
1. By consensus, the parties to a multi-enterprise collective bargaining may request the People’s Committee of the
province where they are headquartered (or a province they choose if they are headquartered in different provinces) to
establish a collective bargaining council.
2. Upon receipt of the said request, the People’s Committee of the province shall issue a decision to establish a
collective bargaining council. A collective bargaining council consists of:
a) A chairperson who is chosen by the parties and has the responsibility to operate the council and assist in the
process of collective bargaining.
b) Representatives appointed by each party. The number of representatives of each party who participate in the
council shall be agreed upon by the parties;
c) Representatives of the People’s Committee of the province.
3. The collective bargaining council shall hold the collective bargaining at the request of the parties and shall be
dismissed when a multi-enterprise collective bargaining agreement is concluded or when the dismissal is agreed
upon by the parties.
4. The Minister of Labor, War Invalids and Social Affairs shall provide for the functions, duties and operation of
collective bargaining councils.
Article 74. Responsibilities of the People’s Committees of provinces in collective bargaining
1. Provide training in collective bargaining skills for the parties to the collective bargaining.
2. Provide information and data about the economy, society, labor market and labor relation in order to facilitate the
process of collective bargaining.
3. Assist the parties in reaching an agreement during the collective bargaining on its own initiative or when requested
by the parties. If no request is made by the parties, the assistance shall only be provided if it is accepted by the
parties.
4. Establish a collective bargaining council when requested by parties to the multi-enterprise collective bargaining in
accordance with Article 73 of this Labor Code.
Section 3. COLLECTIVE BARGAINING AGREEMENTS
Article 75. Collective bargaining agreements
1. A collective bargaining agreement means an agreement that is reached through a collective bargaining and
concluded in writing by the parties.
Collective bargaining agreements include enterprise-level collective bargaining agreements, sectoral collective
bargaining agreements, multi-enterprise collective bargaining agreements and other types of collective bargaining
agreements.
2. The contents of a collective bargaining agreement must be contrary to the law, and should provide for the terms
and conditions that are more favorable to the employees than those provided by law.
Article 76. Survey and conclusion of collective bargaining agreements
1. Before an enterprise-level collective bargaining agreement is concluded, its draft must be made available for
comment by all employees of the enterprise. An enterprise-level collective bargaining agreement shall only be
concluded if it is voted for by more than 50% of the enterprise’s employees.
2. A sectoral collective bargaining agreement shall be available for comment by all members of the management
boards of the representative organizations of employees of the enterprises participating in the bargaining. A sectoral
collective bargaining agreement shall only be concluded if it is voted for by more than 50% of the voters.
A multi-enterprise collective bargaining agreement shall be available for comment by all employees of the enterprises
participating in the bargaining or members of management boards of the representative organizations of employees
thereof. Only an enterprise more than 50% of employees of which vote for the multi-enterprise collective bargaining
agreement may participate in its conclusion.
3. The time and location for casting votes on a draft collective bargaining agreement shall be decided by the
representative organization of employees as long as it does not affect the participating enterprises’ normal business
operation. The employers must not obstruct or interfere with process of voting on the draft agreement by the
representative organizations of employees.
4. A collective bargaining agreement shall be concluded by legal representatives of the parties.
In case a multi-enterprise collective bargaining agreement is negotiated via a collective bargaining council, it shall be
concluded by the chairperson of the council and legal representatives of the parties.
5. A copy of the collective bargaining agreement shall be sent to every party and the provincial labor authority in
accordance with Article 77 of this Labor Code.
In case of a sectoral or multi-enterprise collective bargaining agreement, each employer and representative
organization of employees of the participating enterprises shall receive 01 copy.
6. After a collective bargaining agreement is concluded, the employer must make publicly available to their
employees.
7. The Government shall elaborate this Article.
Article 77. Sending the collective bargaining agreement
Within 10 days from the day on which a collective bargaining agreement is concluded, the employer shall send 01
copy to the provincial labor authority in the same province where the enterprise is headquartered.
Article 78. Effective date and effective period of collective bargaining agreements
1. The effective date of a collective bargaining agreement shall be agreed upon by the parties and specified in the
agreement itself. In case the parties do not agree upon an effective date, the collective bargaining agreement shall be
effective on its conclusion date.
An effective collective bargaining agreement shall be upheld by the parties.
2. An enterprise-level effective collective bargaining agreement shall be binding on the employer and all employees of
the enterprise. An effective sectoral or multi-level collective bargaining agreement shall be binding on all employers
and employees of the participating enterprises.
3. The effective period of a collective bargaining agreement shall 01 – 03 years. The specific effective period shall be
agreed upon by the parties and specified in the collective bargaining agreement. The parties may agree upon various
effective periods for different parts of a collective bargaining agreement.
Article 79. Implementation of enterprise-level collective bargaining agreements
1. The employer and the employees, including new employees who are employed after the collective bargaining
agreement has come into effect, shall be responsible for the full implementation of the effective collective bargaining
agreement.
2. Where the rights, responsibilities and interests of the parties stipulated in the employment contract which were
concluded before the effective date of the collective bargaining agreement are less favorable than those of respective
provisions provided in the collective bargaining agreement, the provisions of the collective bargaining agreement shall
prevail. Internal labor regulations of the employer which are not conformable with the collective bargaining agreement
shall be revised accordingly. Provisions of the collective bargaining agreement shall apply until such revisions are
made.
3. Where a party considers that the other party does not perform fully or violates the provisions of the collective
bargaining agreement, the former has the right to request the latter to fully comply with the agreement, and both
parties must jointly settle the issue. In case of failure to settle the issue, either party has the right to request
settlement of the collective labor dispute in accordance with the law.
Article 80. Implementation of an enterprise-level collective bargaining agreement upon full division, partial
division, consolidation, merger of the enterprise; sale, lease, conversion of the enterprise; transfer of the
right to ownership or right to enjoyment of assets of the enterprise
1. Upon full division, partial division, consolidation, merger of the enterprise; sale, lease, conversion of the enterprise;
transfer of the right to ownership or right to enjoyment of assets of an enterprise, the succeeding employer and
representative organization of employees mentioned in Article 68 of this Labor Code shall consider revising the
existing enterprise-level collective bargaining agreement or concluding a new one, In consideration of the labor
utilization plan.
2. In case a collective bargaining agreement expires because the employer ceases its operation, the rights and
interests of the employees shall be settled in accordance with the law.
Article 81. Relationship between enterprise-level collective bargaining agreements, sectoral collective
bargaining agreements and multi-enterprise collective bargaining agreements
1. In case an enterprise-level collective bargaining agreement, multi-enterprise collective bargaining agreement and
sectoral collective bargaining agreement provide for employees’ rights, obligations and interests differently, the most
favorable provisions shall apply.
2. An enterprise which is subject to the governance of a sectoral collective bargaining agreement or multi-enterprise
collective bargaining agreement but have not established enterprise-level collective bargaining agreements may
establish an enterprise-level collective bargaining agreement with more favorable terms and conditions for employees
than those stipulated in the sectoral collective bargaining agreement or multi-enterprise collective bargaining
agreement.
3. Enterprises that have not participated in any sectoral collective bargaining agreement or multi-enterprise collective
bargaining agreement are encouraged to adopt more favorable provisions of a sectoral collective bargaining
agreement or multi-enterprise collective bargaining agreement.
Article 82. Revisions of collective bargaining agreements
1. A collective bargaining agreement may only be by the parties through collective bargaining on a voluntary basis.
The process of revising a collective bargaining agreement shall be the same as that of the negotiation and conclusion
of a collective bargaining agreement.
2. In case a change in law results in the collective bargaining agreement being unsuitable with the new law, the
parties must revise the collective bargaining agreement accordingly within 15 days from the date on which the new
legal provisions come into effect. During the process of revising the collective bargaining agreement, the rights and
interests of the employees will be ensured in accordance with the law.
Article 83. Expiry of collective bargaining agreements
Within 90 days prior to the expiry date of a collective bargaining agreement, the parties may negotiate extension of
the collective bargaining agreement or conclusion of a new collective bargaining agreement. In case the parties agree
on an extension, a survey shall be carried out in accordance with Article 76 of this Labor Code.
Where the collective bargaining agreement expires while the negotiation process is still on-going, it shall continue to
be effective for a maximum duration of 90 days from the expiry date, unless otherwise agreed by the parties.
Article 84. Extension of scope of sectoral collective bargaining agreements or multi-enterprise collective
bargaining agreements
1. When a sectoral collective bargaining agreement or multi-enterprise collective bargaining agreement applies to
more than 75% of employees or more than 75% of enterprises in the same field or sector in an industrial park,
economic zone, export-processing zone or hi-tech zone, the employers or representative organizations of employees
therein shall request a competent authority to issue a decision to extend the scope of part or all of the collective
bargaining agreement to other enterprises in the same field or sector in that industrial park, economic zone, exportprocessing zone or hi-tech zone.
2. The Government shall elaborate Clause 1 of this Article; the procedures and competence to decide the scope of
collective bargaining agreements mentioned in Clause 1 of this Article.
Article 85. Joining and withdrawing from a sectoral collective bargaining agreements or multi-enterprise
collective bargaining agreement
1. An enterprise may join a sectoral or multi-level collective bargaining agreement when it is agreed by all employers
and representative organizations of employees of the participating enterprises, except for the cases specified in
Clause 1 Article 84 of this Labor Code.
2. An enterprise that is a member of a sectoral or multi-level collective bargaining agreement may withdraw from it
when the withdrawal is agreed by all employers and representative organizations of employees of the participating
enterprises, unless it is facing business difficulties.
3. The Government shall elaborate this Article.
Article 86. Invalid collective bargaining agreements
1. A collective bargaining agreement shall be partially invalid if one or some of its contents are contrary to the law.
2. A collective bargaining agreement shall be entirely invalid in any of the following circumstances:
a) The entire contents of the collective bargaining agreement are illegal;
b) The collective bargaining agreement was concluded by a person without due competence;
c) The procedures for negotiation and conclusion of the collective bargaining agreement were not followed.
Article 87. Competence to declare a collective bargaining agreement invalid
People’s Courts shall be entitled to declare a collective bargaining agreement as invalid.
Article 88. Handling of invalid collective bargaining agreements
When a collective bargaining agreement is declared invalid, the rights, obligations and interests of parties specified in
the invalid parts shall be handled in accordance with the provisions of the law and other lawful agreements as
provided in the employment contract.
Article 89. Costs for negotiation and conclusion of collective bargaining agreements
The costs of negotiation, conclusion revision, sending and announcement of the collective bargaining agreement
shall be paid by the employer.
Chapter VI
SALARIES
Article 90. Salaries
1. A salary is an amount the employer pays the employee under an agreement for a work performed by the latter.
Salary equals (=) base salary plus (+) allowances and other additional amounts.
2. The base salary must not fall below the statutory minimum wages.
3. Employers shall pay salaries fairly without discrimination against genders of employees who perform equal works.
Article 91. Statutory minimum wages
1. Statutory minimum wages are minimum wages of workers who do the simplest jobs in normal working conditions
that are sufficient to support themselves and their families, and appropriate for socio-economic development.
2. Statutory minimum wages per month or per hour vary according to regions.
3. Statutory minimum wages shall be adjusted according to minimum living standards of workers and their families;
the relation between statutory minimum wages and usual salaries; consumer price index, economy growth rate; labor
supply and demand, productivity and financial capacity of enterprises.
4. The Government shall elaborate this Article; decide and announce the statutory minimum wages on the basis of
proposals of National Salary Council.
Article 92. National Salary Council
1. National Salary Council is an agency that provides counseling for the Government regarding statutory minimum
wages and salary-related issues.
2. The Prime Minister shall establish the National Salary Council, whose members are representatives of the Ministry
of Labor, War Invalids and Social Affairs, Vietnam General Confederation of Labor, some central employer
representative organizations and independent experts.
3. The Government shall provide for functions, tasks and organizational structure of National Salary Council.
Article 93. Establishment of pay scales, payrolls and labor productivity norms
1. Every employer shall establish their worn pay scale, payroll and labor productivity norms as the basis for
recruitment and use of labor, negotiation and payment of salaries.
2. The labor rate shall be an average value that is achievable to most employees without having to extend their
normal working hours, and must be experimented before officially introduced.
3. The employer shall consult with the representative organization of employees (if any) during establishment of the
pay scale, payroll and labor productivity norms.
The pay scale, payroll and labor productivity norms shall be publicly posted at the workplace before they are
implemented.
Article 94. Salary payment rules
1. Employers shall directly, fully and punctually pay salaries to their employees. In the cases where an employee is
not able to directly receive his/her salary, the employer may pay it through a person legally authorized by the
employee.
2. Employers must not restrict or interfere their employees’ spending of their salaries; must not force their employees
to spend their salaries on goods or services of the employers or any particular providers decided by the employers.
Article 95. Salary payment
1. The employer shall pay the employee on the basis of the agreed salary, productivity and work quality.
2. The salary written in the employment contract and the salary paid in reality shall be VND, unless the employee is a
foreigner working in Vietnam.
3. Every time salary is paid, the employer shall provide the employee with a note specifying the salary, overtime pay,
nightshift pay and deductions (if any).
Article 96. Salary payment forms
1. The employer and employee shall reach an agreement on whether the salary is time-based, product-based (piece
rate) or a fixed amount.
2. Salary shall be paid in cash or transferred to the employee’s personal bank account.
In case of bank transfer, the employer shall pay the costs of account opening and transfer.
3. The Government shall elaborate this Article.
Article 97. Salary payment time
1. An employer who receives an hourly, daily or weekly salary shall be paid after every working hour, day or week
respectively, or shall receive a sum within not more than 15 days as agreed by both parties.
2. An employee who receives a monthly or bi-weekly salary shall be paid after every month or every two weeks
respectively. The payment time shall be periodic and agreed upon by both parties.
3. An employee who receives a piece rate or a fixed amount shall be paid as agreed by both parties. In case a task
cannot be completed within one month, the employee shall receive a monthly advance payment based on the amount
of work done in the month.
4. In case of a force majeure event in which the employer is unable to pay the employee on schedule after all
remedial measures have been implemented, the salary shall be paid within 30 days. In case a salary is paid at least
15 days behind schedule, the employer shall pay the employee a compensation that is worth at least the interest on
the amount paid behind schedule at the latest 1-month interest rate quoted by the bank at which the employee’s
salary account is opened.
Article 98. Overtime pay, night work pay
1. An employee who works overtime will be paid an amount based on the piece rate or actual salary as follows:
a) On normal days: at least 150%;
b) On weekly days off: at least 200%;
c) During public holidays, paid leave, at least 300%, not including the daily salary during the public holidays or paid
leave for employees receiving daily salaries.
2. An employee who works at night will be paid an additional amount of at least 30% of the normal salary.
3. An employee who works overtime at night will be paid, in addition to the salary specified in Clause 1 and Clause 2
of this Article, an amount of at least 20% of the day work salary of a normal day, weekend or public holiday.
4. The Government shall elaborate this Article.
Article 99. Suspension pay
In case of a suspension of work, the employee shall receive a suspension pay as follows:
1. If the suspension is at the employer’s fault, the employee shall be paid the full salary under the employment
contract;
2. If the suspension is at the employee’s fault, the employee shall not receive the salary. If this leads to suspension of
work of other employees in the same unit, they shall be paid an amount not smaller than the statutory minimum
wages;
3. In case the suspension is caused by an electricity or water supply issue that is not at the employer’s fault, or by a
natural disaster, fire, major epidemic, hostility, relocation requested by a competent authority, or for economic
reasons, both parties shall negotiate the salary as follows:
a) If the suspension does not exceed 14 working days, the salary shall not fall below the statutory minimum wages;
b) If the suspension is longer than 14 working days, the salary shall be negotiated by both parties and the salary for
the first 14 days must not fall below the statutory minimum wages.
Article 100. Salary payment through the contractor’s foreman
1. Where a contractor’s foreman or equivalent intermediary is employed, the employer who is the principal owner
must maintain a list of the names and addresses of such persons accompanied by a list of their employees, and must
ensure that their activities comply with the law on salary payment and occupational safety and health.
2. In case the contractor’s foreman or equivalent intermediary fails to pay or pays insufficient wages to the employees
and does not ensure other rights and interests of the employees, the employer who is the principal owner shall be
responsible for salary payment and for ensuring the rights and interests of the employees.
In this case, the employer who is the principal owner has the rights to request compensation from the contractor’s
foreman or equivalent intermediary, or to request the competent authority to resolve the dispute in accordance with
the provisions of the law.
Article 101. Salary advances
1. An employee may receive an interest-free salary advance in accordance with conditions agreed on by the two
parties.
2. The employer must make the advance payment to the employee for the number of days the employee temporarily
leaves his/her work in order to perform duties of citizens for a period of 01 week or longer, but the advance shall not
exceed 01 month’s salary. The employee must reimburse the advance.
An employee who is conscripted in accordance with the Law on Conscription may not receive salary advance.
3. When taking annual leave, an employee shall receive an advance payment of at least salary for the entitled days of
leave.
Article 102. Salary deductions
1. An employer shall have the right to deduct from an employee’s salary only for the compensation for the damage to
the employer’s equipment and assets in accordance with Article 129 of this Labor Code.
2. The employee has the right to be aware of the reasons for the deduction.
3. Any monthly deduction shall not exceed 30% of the net monthly salary of the employee, after the payment of
compulsory social insurance, health insurance, unemployment insurance premiums and personal income tax.
Article 103. Pay rise
Pay rises including increases in salary, pay grades, allowance, benefits and other types of incentives for an employee
shall be agreed on in the employment contract or the collective bargaining agreement, or stipulated in the regulations
of the employer.
Article 104. Bonuses
1. A bonus means an amount of money, a piece of property or item that is provided by an employer for his/her
employees on the basis of the business performance or the employees’ performance.
2. A bonus regulation shall be decided and publicly announced at the workplace by the employer after consultation
with the representative organization of employees (if any).
Chapter VII
WORKING HOURS, REST PERIODS
Section 1. WORKING HOURS
Article 105. Normal working hours
1. Normal working hours shall not exceed 08 hours per day or 48 hours per week.
2. An employer has the right to determine the daily or weekly working hours and inform the employees accordingly.
The daily working hours shall not exceed 10 hours per day and not exceed 48 hours per week where a weekly basis
is applied.
The State encourages employers to apply 40-hour workweeks.
3. Employers shall limit the time of exposure to harmful elements in accordance with relevant National Technical
Regulations and laws.
Article 106. Working hours at night
Working hours at night is the period from 22 pm to 06 am.
Article 107. Overtime work
1. Overtime work is the duration of work performed at any other time than during normal working hours, as indicated
in the law, collective bargaining agreement or internal labor regulations of an employer.
2. An employer has the right to request an employee to work overtime when all of the following conditions are met:
a) The employee agrees to work overtime;
b) The number of overtime working hours of the employee does not exceed 50% of the normal working hours in 01
day; in case of weekly work, the total normal working hours plus overtime working hours shall not exceed 12 hours in
01 day, and 40 hours in 01 month;
c) The total overtime working hours do not exceed 200 hours in 01 year, except for the cases specified in Clause 3 of
this Article.
3. An employer must not request an employee to work overtime exceeding 300 hours in 01 year in the following
fields, works, jobs and cases:
a) Manufacture, processing of textile, garment, footwear, electric, electronic products, processing of agricultural,
forestry, aquaculture products, salt production;
b) Generation and supply of electricity, telecommunications, refinery operation; water supply and drainage;
c) Works that require highly skilled workers that are not available on the labor market at the time;
d) Urgent works that cannot be delayed due to seasonal reasons or availability of materials or products, or due to
unexpected causes, bad weather, natural disasters, fire, hostility, shortage of power or raw materials, or technical
issue of the production line;
dd) Other cases prescribed by the Government.
4. When organizing overtime work as prescribed in Clause 3 of this Article, the employer shall send a written
notification to the provincial labor authority.
5. The Government shall elaborate this Article.
Article 108. Overtime working in special cases
In the following cases, an employer has the right to request any employee to work overtime on any day without limits
on the overtime hours as prescribed in Article 107 of this Labor Code and the employee must not decline:
1. Execution of a conscription order for the purpose of national security or national defense as prescribed by law;
2. Performance of tasks necessary to protect human life or property of certain organizations or individuals in the
prevention and recovery of natural disasters, fires, epidemics and disasters, unless those tasks threaten the
employees’ health or life as prescribed by occupational safety and health laws.
Section 2. REST PERIODS
Article 109. Rest breaks during working hours
1. An employee who works for at least 06 hours per day under Article 105 of this Code shall be given a rest break of
at least 30 consecutive minutes. In case of night work, the rest break shall be at least 45 consecutive minutes.
If a shift lasts at least 06 consecutive hours, the rest break will be included in the working hour.
2. In addition to the rest break prescribed in Clause 1 of this Article, the employer shall determine other short breaks
and specify that in the internal labor regulations.
Article 110. Breaks between shifts
An employee who performs shift work is entitled to a break of at least 12 hours before beginning another shift.
Article 111. Weekly breaks
1. Each week an employee is entitled to a break of at least 24 consecutive hours. Where it is impossible for the
employee to have a weekly day off due to the work cycle, the employer has the responsibility to ensure that on
average the employee has at least 04 days off per month.
2. The employer has the right to determine and schedule the weekly breaks either on Sunday or for another fixed day
in a week, which must be recorded in the internal labor regulations.
3. In case a public holiday falls on an employee’s weekly break coincide with a public holiday as prescribed in Clause
1 Article 112 of this Labor Code, he/she will have compensatory time-off on the next working days.
Article 112. Public holidays
1. Employees shall be entitled to fully paid days off on the following public holidays:
st
a) Gregorian Calendar New Year Holiday: 01 day (the 1 of January of the Gregorian calendar);
b) Lunar New Year Holidays: 05 days;
th
c) Victory Day: 01 day (the 30 of April of the Gregorian calendar);
st
d) International Labor Day: 01 day (the 1 of May of the Gregorian calendar);
nd
dd) National Day: 02 days (the 2 of September of the Gregorian calendar and the previous or next day);
th
e) Hung Kings Commemoration Day: 01 day (the 10 of the third month of the Lunar calendar).
2. Foreign employees in Vietnam are entitled to 01 traditional public holiday and 01 National Day of their country, in
addition to the public holidays stipulated in Clause 1 of this Article.
3. The Prime Minister shall decide the specific public holidays mentioned in Point b and Point dd Clause 1 of this
Article on an annual basis.
Article 113. Annual leave
1. Any employee who has been working for an employer for 12 months is entitled to fully-paid annual leave, which is
stipulated in his/her employment contract as follows:
a) 12 working days for employees who work in normal working conditions;
b) 14 working days for employees that are minors, the disabled, employees who do laborious, toxic or dangerous
works;
c) 16 working days for employees who do highly laborious, toxic or dangerous works.
2. An employee who has been working for an employer for less than 12 months will have a number of paid leave
days proportional to the number of working months.
3. An employee who, due to employment termination or job loss or other reasons, has not taken or not entirely taken
up his/her annual leave shall be paid in compensation for the untaken leave days.
4. The employer has the responsibility to regulate the timetable for annual leaves after consultation with the
employees and must give prior notice to the employees. An employee may reach an agreement with the employer on
taking annual leave in instalments or combining annual leave over a maximum period of up to 03 years.
5. When an employee takes his/her annual leave before salary payment is due, he/she may receive an advance in
accordance with Clause 3 Article 101 of this Labor Code.
6. When taking annual leave, should the employee travel by road, rail, water and the travel days, the traveling time in
excess to 02 days will be added to the annual leave days, and this policy shall only be granted once for an annual
leave in a year.
7. The Government shall elaborate this Article.
Article 114. Increased annual leave by work seniority
The annual leave of an employee as prescribed in Clause 1 Article 113 of this Code shall increase by 01 day for
every 05 years of employment with the same employer.
Article 115. Personal leave, unpaid leave
1. An employee is entitled to take a fully paid personal leave in the following circumstances, at long at is notified to
the employer in advance:
a) Marriage: 03 days;
b) Marriage of his/her biological child or adopted child: 01 day;
c) Death of his/her biological or adoptive parent; death of his/her spouse’s biological or adoptive parent; death of
spouse, biological or adopted child: 03 days.
2. An employee is entitled to take 01 day of unpaid leave and must inform the employer in the case of the death of
his/her grandparent or biological sibling; marriage of his/her parent or natural sibling.
3. The employee may negotiate with his/her employer on taking unpaid leave other than the leave stipulated in
Clause 1 and Clause 2 of this Article.
Section 3. WORKING HOURS AND REST PERIODS FOR EMPLOYEES WHO PERFORM WORK OF SPECIAL
NATURE
Article 116. Working hours and rest periods for employees who perform work of special nature
In accordance with Article 109 of this Labor Code, relevant ministries and the Ministry of Labor, Invalids and Social
Affairs shall discuss and agree upon working hours and rest periods special work in the areas of road, rail, water or
air transportation; oil and gas exploration and extraction at sea; offshore work; in the fields of arts; use of radiation
and nuclear engineering; application of high-frequency waves; information technology; research and application of
technology; industrial design; diver’s work, work in mines; seasonal production work and processing of goods by
order; and work that requires for 24/24 hours on duty, other works of special nature defined by the Government.
Chapter VIII
LABOR DISCIPLINE AND MATERIAL RESPONSIBILITY
Section 1. LABOR DISCIPLINE
Article 117. Labor discipline
Labor discipline comprises provisions in the internal labor regulations on the compliance in respect of time,
technology, production and business management that are imposed by the employer and prescribed by law.
Article 118. Internal labor regulations
1. Every employer shall issue their own internal labor regulations. An employer that has at least 10 employees shall
have written internal labor regulations.
2. The contents of the internal labor regulations shall not be contrary to labor laws or to relevant legal provisions. The
internal labor regulations shall include the following key contents:
a) Working hours and rest periods;
b) Order at the workplace;
c) Occupational safety and health;
d) Actions against sexual harassment in the workplace;
dd) Protection of the assets and technological and business secrets and intellectual property of the employer;
e) Cases in which reassignment of employees are permitted;
g) Violations against labor regulations and disciplinary measures;
h) Material responsibility;
i) The person having the competence to take disciplinary measures.
3. Before issuing or revising the internal labor regulations, the employer shall consult the employee representative
organization (if any).
4. Employees must be notified of the internal labor regulations, and the major contents must be displayed at the
workplace where they are necessary.
5. The Government shall elaborate this Article.
Article 119. Registration of internal labor regulations
1. An employer that has at least 10 employees shall register the internal labor regulations at the labor authority of the
province where business registration is applied for.
2. Within 10 days from the date of issuance of the internal labor regulations, the employer must submit the application
for registration of the internal labor regulations.
3. If any of the contents of the internal labor regulations is found contrary to the law, within 07 working days from the
date of receipt of the application, the provincial labor authority shall notify and instruct the employer to revise it and
re-submit the application.
4. An employer whose branches, units or business locations in different provinces shall send the registered internal
labor regulations to the labor authority of those provinces.
5. The provincial labor authority may authorize a district-level labor authority to process an application for registration
of internal labor regulations in accordance with this Article.
Article 120. Application for registration of internal labor regulations
An application for registration of internal labor regulations shall consist of:
1. The application form;
2. A copy of the internal labor regulations;
3. Comments of the representative organization of employees (if any);
4. Documents of the employer that are relevant to labor discipline and material responsibility (if any).
Article 121. Effect of internal labor regulations
The internal labor regulations shall start to have effect after 15 days from the day on which the satisfactory application
is received by a competent authority as prescribed in Article 119 of this Labor Code.
The effect of the written internal labor regulations issued by an employee that has fewer than 10 employees shall be
decided by the employer.
Article 122. Principles and procedures for taking disciplinary measures at work
1. Disciplinary measures against an employee shall be taken in accordance with the following regulations:
a) The employer is able to prove the employee’s fault;
b) The process is participated in by the representative organization of employees to which the employee is a
member;
c) The employee is physically present and has the right to defend him/herself, request a lawyer or the representative
organization of employees to defend him/her; if the employee is under 15 years of age, his/her parent or a legal
representative must be present;
d) The disciplinary process is recorded in writing.
2. It is prohibited to impose more than one disciplinary measure for one violation of internal labor regulations.
3. Where an employee commits multiple violations of internal labor regulations, he/she shall be subjected to the
heaviest disciplinary measure for the most serious violation.
4. No disciplinary measure shall be taken against an employee during the period when:
a) The employee is taking leave on account of illness or convalescence; or on other types of leave with the
employer’s consent;
b) The employee is being held under temporary custody or detention;
c) The employee is waiting for verification and conclusion of the competent agency for acts of violations, stipulated in
Clause 1 and Clause 2 Article 125 of this Labor Code;
d) The employee is pregnant, on maternal leave or raising a child under 12 months of age.
5. No disciplinary measure shall be taken against an employee who commits a violation of internal labor regulations
while suffering from the mental illness or another disease which causes the loss of consciousness ability or the loss
of his/her behavior control.
6. The Government shall provide for the principles and procedures for taking disciplinary measures at work.
Article 123. Time limit for taking disciplinary measures at work
1. The time limit for taking disciplinary measures against a violation is 06 months from the date of the occurrence of
the violation. The time limit for dealing with violations directly relating to finance, assets and disclosure of
technological or business secrets shall be 12 months.
2. In case the time limit stipulated in this Article has expired or is shorter than 60 days when the period stipulated in
Clause 4 Article 122 of this Labor Code expires, the former may be extended for up to 60 more days.
3. The employer shall issue a disciplinary decision within the period specified in Clause 1 and Clause 2 of this Article.
Article 124. Disciplinary measures
1. Reprimand.
2. Deferment of pay rise for up to 6 months.
3. Demotion.
4. Dismissal.
Article 125. Dismissal for disciplinary reasons
An employer may dismiss an employee for disciplinary reasons in the following circumstances:
1. The employee commits an act of theft, embezzlement, gambling, deliberate infliction of injuries or uses drug at the
workplace;
2. The employee discloses technological or business secrets or infringing the intellectual property rights of the
employer, or commits acts which are seriously detrimental or posing seriously detrimental threat to the assets or
interests of the employer, or commits sexual harassment in the workplace against the internal labor regulations;
3. The employee repeats a violation which was disciplined by deferment of pay rise or demotion and has not been
absolved. A repeated violation means a violation which was disciplined and is repeated before it is absolved in
accordance with Article 126 of this Code.
4. The employee fails to go to work for a total period of 05 days in 30 days, or for a total period of 20 days in 365 days
from the first day he/she fails to go to work without acceptable excuses.
Justified reasons include natural disasters, fires; the employee or his/her family member suffers from illness with a
certification by a competent health facility; and other reasons as stipulated in the internal labor regulations.
Article 126. Absolution of violations, reduction in the duration of disciplinary measures
1. An employee who commits a violation that is disciplined by reprimand, deferment of pay rise or demotion will have
the previous violation absolved after 03 months, 06 months or 03 years respectively from the day on which the
disciplinary measure is imposed if he/she does not commits any violation against internal labor regulations.
2. Where an employee who is disciplined by deferment of wage increase has completed half of the duration of the
disciplinary measure and has demonstrated improvement, the employer may consider a remission.
Article 127. Forbidden actions when imposing disciplinary measures in the workplace
1. Harming the employee's health, life, honor or dignity.
2. Applying monetary fines or deducting the employee’s salary wage.
3. Imposing a disciplinary measure against an employee for a violation which is not stipulated in the internal labor
regulations or employment contract or labor laws.
Article 128. Work suspension
1. An employer has the right to suspend an employee from work if the violation is of a complicated nature and where
the continued presence of the employee at the workplace is deemed to cause difficulties for the investigation. An
employee shall only be suspended from work after consultation with the representative organization of employees to
which the employee is a member.
2. The work suspension shall not exceed 15 days, or 90 days in special circumstances. During the suspension, the
employee shall receive an advance of 50% of his/her salary entitled prior to the suspension.
Upon the expiry of the work suspension period, the employer shall reinstate the employee.
3. Where the employee is disciplined, he/she shall not be required to return the advanced salary.
4. Where the employee is not disciplined, the employer shall pay the full salary for the work suspension period.
Section 2. MATERIAL RESPONSIBILITY
Article 129. Compensation for damage
1. An employee who causes damage to equipment or otherwise damages the employer’s assets shall have to pay
compensation in accordance with labor laws or the employer’s internal labor regulations.
In case the damage caused by an employee is not serious, not deliberate and is worth less than 10 months’ regionbased minimum wage announced by the Government, the employee shall have to pay a compensation of not more
than his/her 03 months’ salary, which shall be monthly deducted from his/her salary in accordance with Clause 3
Article 102 of this Code.
2. An employee who loses the employer’s equipment or assets, or consumes the materials beyond the set limits shall
pay a compensation for damage in full or in part at the market price or as stipulated in the internal labor regulations or
the responsibility contract (if any). In case this is caused by a natural disaster, fire, war, major epidemic, calamity, or
another force majeure event which is unforeseeable and insurmountable, and all necessary measures and
possibilities for avoidance have been taken, the compensation shall not required.
Article 130. Determination of compensation
1. Consideration and decision on the level of compensation for damage shall be based on the nature of the offence,
the actual extent of damage, the situation of the offender or the offender’s family, and financial capacity of the
employee.
2. The Government shall provide for procedures and time limits for claiming damages.
Article 131. Complaints on labor disciplinary regulations and material responsibility
If the employee who is disciplined, suspended from work, or required to pay compensation is not satisfied with the
decision, he/she has the right to file a complaint to the employer or a competent authority as prescribed by law, or
request settlement of the labor dispute in accordance with the procedures stipulated by law.
The Government shall elaborate this Article.
Chapter IX
OCCUPATIONAL SAFETY AND HEALTH
Article 132. Compliance with the law on occupational safety and health
Employers, employees, organizations and individuals involved in labor and business operation shall comply with the
regulations of the law on occupational safety and health.
Article 133. Occupational safety and health program
1. The Government shall decide on development of the National Programme on Occupational Safety and Health.
2. The People’s Committee of every province shall submit a provincial occupational safety and health program to the
People’s Council of the same province for inclusion to the socio-economic development plan.
Article 134. Ensuring occupational safety and health at the workplace
1. Employers shall fully implement the measures for ensuring occupational safety and health at the workplace.
2. Employees shall comply with rules and procedures for occupational safety and health, regulations of law, obtain
knowledge and skills on assurance of occupational safety and health at the work place.
Chapter X
PROVISIONS APPLICABLE TO FEMALE EMPLOYEES AND ASSURANCE OF
GENDER EQUALITY
Article 135. State policies
1. Equality between male and female employees shall be ensured; necessary measures for ensuring gender equality
and prevention of sexual harassment in the workplace shall be implemented.
2. Employers are encouraged to enable both male and female employees to work regularly, and to widely apply the
systems of flexible working hours, part-time work, or outwork.
3. Necessary measures shall be implemented to create employment opportunities, improve working conditions,
develop occupational skills, provide healthcare, and strengthen the material and spiritual welfare of female
employees in order to assist them in developing effectively their vocational capacities and harmoniously combine
their working lives with their family lives.
4. Tax reductions shall be granted to employers who employ a large numbers of female employees in accordance
with the tax laws.
5. The State shall develop plans and measures to open day care facilities and kindergartens in areas where a large
number of female employees are employed; develop various forms of training to enable female employees to acquire
additional occupational skills that are suitable to their physical and physiological characteristics and their motherhood
roles.
6. The Government shall elaborate this Article.
Article 136. Responsibilities of the employer
1. Ensure gender equality and implementation of measures to promote gender equality in recruitment, job
assignment, training, working hours and rest periods, salaries and other policies.
2. Consult with female employees or their representatives when taking decisions which affect their rights and
interests.
3. Provide appropriate bathrooms and toilets at the workplace for female employees.
4. Assist in building day care facilities and kindergartens, or cover a part of the childcare expenses incurred by
employees.
Article 137. Maternity protection
1. An employer must not require a female employee to work at night, work overtime or go on a long distance working
trip in the following circumstances:
a) The employee reaches her seventh month of pregnancy; or her sixth month of pregnancy when working in upland,
remote, border and island areas;
b) The employee is raising a child under 12 months of age, unless otherwise agreed by her.
2. Whenever an employer is informed of the pregnancy of an female employee who is doing a laborious, toxic or
dangerous work, a highly laborious, toxic or dangerous work or any work that might negatively affect her maternity,
the employer shall assign her to a less laborious or safer work, or reduce the working hours by 01 hour per day
without reducing her salary, rights or benefits until her child reaches 12 months of age.
3. The employer must not dismiss an employee or unilaterally terminate the employment contract with an employee
due to his/her marriage, pregnancy, maternity leave, or nursing a child under 12 months of age, except for cases
where the employer that is a natural person dies or is declared incapacitated, missing or dead by the court, or the
employer that is not a natural person ceases its business operation, declared by a provincial business registration
authority that it does not have a legal representative or a person authorized to perform the legal representative’s
rights and obligations.
Upon expiration of the employment contract with female employee who is pregnant or nursing a child under 12
months of age, conclusion of a new employment contract shall be given priority.
4. During her menstruation period, a female employee shall be entitled to a 30 minute break in every working day; a
female employee nursing a child under 12 months of age shall be entitled to 60 minutes breaks in every working day
with full salary as stipulated in the employment contract.
Article 138. The right of pregnant female employees to unilaterally terminate or suspend their employment
contracts
1. Where a female employee is pregnant and obtains a confirmation from a competent health facility which states that
if she continues to work, it may adversely affect her pregnancy, she shall have the right to unilaterally terminate or
suspend the employment contract.
In case of unilateral termination or suspension of the employment contract, a notification enclosed with the
aforementioned confirmation from the health facility shall be submitted to the employer.
2. In case of suspension of the employment contract, the suspension period shall be agreed by the employer and the
employee and must not be shorter than the period specified by the health facility. If the rest period is not specified by
the health facility, both parties shall negotiate the suspension period.
Article 139. Maternity leave
1. A female employee is entitled to 06 months of prenatal and postnatal leave; the prenatal leave period shall not
exceed 02 months.
In case of a multiple birth, the leave shall be extended by 01 month for each child, counting from the second child.
2. During maternity leave, the female employee is entitled to maternity benefits as prescribed by social insurance
laws.
3. After the maternity leave stipulated in Clause 1 of this Article expires, if so demanded, the female employee may
be granted an additional unpaid leave under terms agreed upon with the employer.
4. The female employee may return to work before the expiry of her statutory maternity leave stipulated in Clause 1 of
this Article after she has taken at least 04 months of leave, provided she has obtained a confirmation from a
competent health facility that the early resumption of work does not adversely affect her health, the employer receives
a prior notice of the early resumption and agrees to the early resumption. In this case, besides the salary of the
working days, which is paid by the employer, the female employee shall continue to receive the maternity allowance
in accordance with social insurance laws.
5. A male employee whose wife gives birth, an employee who adopts a child under 06 months of age, a female
employee who becomes a surrogate mother shall be entitled to maternity leave in accordance with social insurance
laws.
Article 140. Employment security for employees after maternity
An employee shall be reinstated to his/her previous work when he/she returns to work after the maternity leave
prescribed in Clauses 1, 3 and 5 Article 139 of this Labor Code without any reduction in his/her salary, rights and
benefits before the leave. In case the previous work is no longer available, the employer must assign another work to
the employee with a salary not lower than the salary he/she received prior to the maternity leave.
Article 141. Allowances for during period of care for sick children, pregnancy and implementation of
contraceptive methods
When an employee takes leave to take care of a sick child aged under 07, have prenatal care check-up, due to
miscarriage, abortion, stillbirth, therapeutic abortion, implementation of contraceptive methods or sterilization, the
employee shall receive allowance for the leave period in accordance with social insurance laws.
Article 142. Jobs and works that are harmful to child-bearing and parenting functions
1. The Minister of Labor, War Invalids and Social Affairs shall promulgate the list of jobs and works that are harmful to
child-bearing and parenting functions.
2. Employers must provide adequate information to their employees on the hazards and requirements of the works to
before the employees make their decisions; ensure occupational safety and health of the employees when assign
them any of the works on the list mentioned in Clause 1 of this Article.
Chapter XI
EXCLUSIVE PROVISIONS CONCERNING MINOR EMPLOYEES AND CERTAIN
TYPES OF EMPLOYEES
Section 1. MINOR EMPLOYEES
Article 143. Minor employees
1. A minor employee is an employee under 18 years of age.
2. A person aged 15 to under 18 must not be assigned any of the works or to any of the workplaces mentioned in
Article 147 of this Labor Code.
3. A person aged 13 to under 15 may only do the light works on the list promulgated by the Minister of Labor, War
Invalids and Social Affairs.
4. A person under 13 may only do the works specified in Clause 3 Article 145 of this Labor Code.
Article 144. Rules for employment of minors
1. Minor employees may only do works that are suitable for their health in order to ensure their physical health,
mental health and personality development.
2. The employer who has minor employees has the responsibility to take care of their work, health and education in
the course of their employment.
3. When an employer hires a minor employee, the employer must have the consent of his/her parent or guardian;
prepare a separate record which writes in full of his/her name, date of birth, the work assigned, results of periodical
health check-ups, and shall be presented at the request of the competent authority.
4. Employers shall enable minor employees to have educational and vocational training.
Article 167. Employment of employees under 15
1. When employing a person under 15, the employer shall:
a) Conclude a written contract with the employee and his/her legal representative;
b) Arrange the working hours so as not to affect the employee’s study hours;
c) Obtain the health certificate from a competent health facility which certifies that the employee’s health is suitable
for the work assigned, and provide periodic health check-up for the employee at least once every 06 months;
d) Ensure that the working conditions, occupational safety and health are suitable for the employee’s age;
2. An employer is only entitled to assign employees aged 13 to under 15 to do the light works specified in Clause 3
Article 143 of this Labor Code.
3. Employers must not hire people under 13 to do works other than sports and arts, provided they do not affect their
development of their physical health, mental health and personality, and the employment is accepted by the
provincial labor authority.
4. The Minister of Labor, War Invalids and Social Affairs shall elaborate this Article.
Article 146. Working hours of minors employees
1. The working hours of minor employees under 15 shall not exceed 04 hours per day and 20 hours per week.
Employers must not request minor employees to work overtime or at night.
2. The working hours of employees aged 15 to under 18 shall not exceed 08 hours per day and 40 hours per week.
Employees aged 15 to under 18 may work overtime or at night in certain works and jobs listed by the Minister of
Labor, War Invalids and Social Affairs.
Article 147. Prohibited works and workplaces for employees aged 15 to under 18
1. A person aged 15 to under 18 must not be assigned to the following works:
a) Carrying and lifting of heavy things which are beyond his/her the physical capacity;
b) Production, sale of alcohol, tobacco and neuro-stimulants and other narcotic substances;
c) Production, use or transport of chemicals, gas or explosives;
d) Maintaining equipment or machinery;
dd) Demolition;
e) Melting, blowing, casting, rolling, pressing, welding metals;
g) Marine diving, offshore fishing;
h) Other works that are harmful to the development of his/her physical health, mental health or personality.
2. A person aged 15 to under 18 must not be assigned to the following locations:
a) Underwater, underground, in caves, in tunnels;
b) Construction sites;
c) Slaughter houses;
d) Casinos, bars, discotheques, karaoke rooms, hotels, hostels, saunas, massage rooms; lottery agents, gaming
centers;
dd) Any other workplace that is harmful to the development of his/her physical health, mental health or personality.
3. The Ministry of Labor- Invalids and Social Affairs shall promulgate the lists mentioned in Point h Clause 1 and Point
dd Clause 2 of this Article.
Section 2. ELDERLY EMPLOYEES
Article 148. Elderly employees
1. An elderly employee is a person who continues working after the age stipulated in Clause 2 Article 169 of this
Labor Code.
2. Elderly employees are entitled to negotiate with their employer on reduction of reduce their daily working hours or
to work on a part-time basis.
3. Employers are encouraged by the State to assign works that are suitable for elderly employees in order to uphold
their right to work and ensure efficient utilization of human resources.
Article 149. Employment of elderly people
1. When an elderly person is employed, both parties may agree on conclusion of multiple fixed-term employment
contracts.
2. In case a person who is receiving retirement pension under the Law on Social Insurance enters into a new
employment contract, he/she shall receive salary and other benefits prescribed by law and the employment contract
in addition to the benefits to which they are entitled under the pension scheme.
3. Employer must not assign elderly employees to do laborious, toxic or dangerous works, or highly laborious, toxic or
dangerous works that are harmful to their health, unless safety is ensured.
4. Employers are responsible for taking care of the health of elderly employees at the workplace.
Section 3. VIETNAMESE EMPLOYEES WORKING OVERSEAS, EMPLOYEES OF FOREIGN ORGANIZATIONS
AND INDIVIDUALS IN VIETNAM AND FOREIGN EMPLOYEES WORKING IN VIETNAM
Article 150. Vietnamese employees working overseas, employees of foreign organizations and individuals in
Vietnam
1. The State shall encourage enterprises, agencies, organizations, and individuals to seek and expand the labor
market for Vietnamese employees to work overseas.
Vietnamese employees working overseas must comply with the law of Vietnam and the law of the host country
except where an international convention to which Socialist Republic of Vietnam is a signatory contains different
provisions.
2. Vietnamese citizens working in foreign organizations in Vietnam, in industrial zones, economic zones, exportprocessing zones, hi-tech zones, or working for individuals who are foreign citizens in Vietnam shall comply with the
law of Vietnam and shall be protected by law.
3. The Government shall provide for the recruitment and management of Vietnamese employees working for foreign
entities in Vietnam.
Article 151. Requirements for foreigners to work in Vietnam.
1. A foreign employee means a person who has a foreign nationality and:
a) is at last 18 years of age and has full legal capacity;
b) has qualifications, occupational skills, practical experience and adequate health as prescribed by the Minister of
Health;
c) is not serving a sentence; does not have an unspent conviction; is not undergoing criminal prosecution under
his/her home country’s law or Vietnam’s law;
d) has a work permit granted by a competent authority of Vietnam, except in the cases stipulated in Article 154 of this
Labor Code.
2. The duration of a foreign employee’s employment contract must not exceed that of the work permit. When a
foreign employee in Vietnam is recruited, both parties may negotiate conclusion of multiple fixed-term labor contracts.
3. Foreign employees working in Vietnam shall comply with and shall be protected by the labor law of Vietnam,
unless otherwise prescribed by treaties to which Vietnam is a signatory.
Article 152. Requirements for employment of foreigners in Vietnam.
1. Enterprises, organizations, individuals and contractors shall only employ foreigners to hold positions of managers,
executive directors, specialists and technical workers the professional requirements for which cannot be met by
Vietnamese workers.
2. Recruitment of foreign employees in Vietnam shall be explained and subject to written approval by competent
authorities.
3. Before recruiting foreign employees in Vietnam, a contractor shall list the positions, necessary qualifications, skills,
experience and employment period of the contract, and obtain a written approval from a competent authority.
Article 153. Responsibilities of employers and foreign employees
1. Foreign employees shall present their work permits whenever requested by competent authorities.
2. Any foreign employee working in Vietnam without a work permit shall be deported or forced to leave Vietnam in
accordance with immigration laws.
3. An employer who hires a foreign employee without a work permit shall be liable to penalties as regulated by the
law.
Article 154. Work permit exemption for foreign employees in Vietnam
A foreign employee is not required to have the work permit if he/she:
1. Is the owner or capital contributor of a limited liability company with a capital contribution value conformable with
regulations of the Government.
2. Is the Chairperson or a member of the Board of Directors of a joint-stock company a capital contribution value
conformable with regulations of the Government.
3. Is the manager of a representative office, project or the person in charge of the operation of an international
organizations or a foreign non-governmental organization in Vietnam.
4. Enters Vietnam for a period of less than 03 months to do marketing of a service.
5. Enters Vietnam for a period of less than 03 months to a resolve complicated technical or technological issue which
(i) affects or threatens to affect business operation and (ii) cannot be resolved by Vietnamese experts or any other
foreign experts currently in Vietnam.
6. Is a foreign lawyer who has been granted a lawyer’s practising certificate in Vietnam in accordance with the Law on
Lawyers.
7. In one of the cases specified in an international treaty to which the Socialist Republic of Vietnam is a signatory.
8. Gets married with a Vietnamese citizen and wishes to reside in Vietnam.
9. Other circumstances specified by the Government.
Article 155. Duration of work permit
The maximum duration of a work permit is 02 years. A work permit may be extended once for up to 02 more years.
Article 156. Cases in which a work permit is invalid
1. The work permit expires.
2. The employment contract is terminated.
3. The contents of the employment contract are inconsistent with the contents of the work permit granted.
4. The work performed is not conformable with the contents of the work permit granted.
5. The contract that is the basis for issuance of the work permit expires or is terminated.
6. The foreign party issues a written notice which terminates the dispatch of the foreign employee to Vietnam.
7. The Vietnamese party or foreign organization that hires the foreign employee ceases its operation.
8. The work permit is revoked.
Article 157. Issuance, re-issuance and revocation of work permits; notice of rejection of work permit
issuance
The Government shall specify the conditions and procedures for issuing, re-issuing, revoking the work permit and
issuance of the notice of rejection of work permit issuance.
Section 4. DISABLED EMPLOYEES
Article 158. State policies on disabled employees
The State shall protect the rights to work and to self-employment of disabled people; adopt policies to encourage and
provide incentives for employers to create work for and to employ disabled people in accordance with regulations of
law on People with Disabilities.
Article 159. Employment of disabled people
1. Employers shall provide reasonable accommodation with respect to working conditions, working tools, and
occupational safety and health measures that are suitable for disabled employees and organize periodic health
check-up for disabled employees.
2. Employers must consult with disabled employees before deciding on matters of relevance to the rights and
interests of disabled employees.
Article 160. Prohibited acts regarding employment of disabled people
1. Assign employees with work capacity reduction of at least 51%, serious or very serious disabilities to work
overtime or work at night, unless otherwise agreed by the employees/
2. Assign disabled employees to laborious, toxic or dangerous works on the list promulgated by the Minister of Labor,
War Invalids and Social Affairs without their consent after they are properly informed of the works.
Section 5. DOMESTIC WORKERS
Article 161. Domestic workers
1. A domestic worker is a worker who regularly carries out domestic work for one or more than one households.
Domestic work includes cooking, housekeeping, babysitting, nursing, caring for elders, driving, gardening, and other
work for a household which is not related to commercial activities.
2. The Government shall provide for employment of domestic workers.
Article 162. Employment contracts with domestic workers
1. The employer shall enter into a written employment contract with the domestic worker.
2. The duration of the employment contract for the domestic worker is negotiated by both parties. Either party has
the right to terminate the employment contract at any time provided that an advance notice of 15 days is given.
3. The employment contract shall specify the salary payment method, period, working hours, accommodation.
Article 163. Obligations of the employer
1. Fully implement the agreement as indicated in the employment contract.
2. Pay the domestic worker an amount of his/her social insurance and health insurance premiums in accordance with
the law for the domestic worker to manage insurance by themselves.
3. Respect the domestic worker’s honor and dignity.
4. Provide clean and hygienic accommodation and dining place for the domestic worker, where there is such an
agreement.
5. Create opportunities for the domestic worker to participate in educational and occupational training.
6. Cover the cost of the travel expenses for the domestic worker to return to their place of residence at the end of
his/her service, except in cases where the domestic worker terminates the employment contract before its expiry
date.
Article 164. Obligations of the domestic worker
1. Fully implement the agreement as indicated in the employment contract.
2. Pay compensation in accordance with the agreement or in accordance with the law in cases of loss of or damage
to the employer’s assets and property.
3. Promptly notify the employer about risks of accident, dangers to health, life and property of the employer’s family
and himself/herself.
4. Report to the competent authority if the employer commits acts of mistreating, sexual harassment, extracting
forced labor or any other acts against the law.
Article 165. Prohibited acts by the employer
1. Mistreating, sexually harassing, extracting forced labor, and using force or violence against the domestic worker.
2. Assigning works to the domestic worker against the employment contract.
3. Keeping personal papers of the domestic worker.
Section 6. OTHER TYPES OF WORKERS
Article 166. Workers in the fields of arts, sports, maritime, air transport
Workers in the fields of arts, sports, maritime, air transport shall have appropriate basic and advanced training,
occupational skill development training, employment contracts, salaries, bonuses; working hours, rest periods,
occupational safety and health as prescribed by the Government.
Article 167. Working at home
An employee may negotiate with his/her employer to perform certain works at home.
Chapter XII
SOCIAL INSURANCE, HEALTH INSURANCE AND UNEMPLOYMENT INSURANCE
Article 168. Participation in social insurance, health insurance and unemployment insurance
1. Employers and employees shall participate in compulsory social insurance, compulsory health insurance and
unemployment insurance and enjoy the benefits in accordance with provisions of the law on social insurance, health
insurance and unemployment insurance.
Employers and employees are encouraged to obtain other kinds of insurance for employees.
2. The employer shall not be required to pay salary for an employee when the employee is on leave and receiving
social insurance benefits, unless otherwise agreed by both parties.
3. Where an employee is not covered by compulsory social insurance, compulsory health insurance or
unemployment insurance, the employer shall, in addition to and at the same time with salary payment, pay the
employee an amount equal to the compulsory social insurance, compulsory health insurance, unemployment
insurance premiums payable by the employer in accordance with regulations of law on social insurance, health
insurance and unemployment insurance.
Article 169. Retirement ages
1. An employee who has paid social insurance for an adequate period of time as prescribed by social insurance laws
shall receive retirement pension when he/she reaches the retirement age.
2. Retirement ages of employees in normal working conditions shall be gradually increased to 62 for males by 2028
and 60 for females in 2035.
From 2021, the retirement ages of employees in normal working conditions shall be 60 yeas 03 months for males and
55 years 04 months for females, and shall increase by 03 months for males and 04 months for females after every
year.
3. The retirement ages of employees who suffer from work capacity reduction; doing laborious, toxic or dangerous
works; working in highly disadvantaged areas may be younger by up to 05 years than the retirement ages specified in
Clause 2 of this Article, unless otherwise prescribed by law.
4. Retirement ages of skilled employees and employees in certain special cases may be older by up to 05 years than
the retirement ages specified in Clause 2 of this Article, unless otherwise prescribed by law.
5. The Government shall elaborate this Article.
Chapter XIII
REPRESENTATIVE ORGANIZATIONS OF EMPLOYEES
Article 170. The right to establish, join and participate in representative organizations of employees
1. Every employee has the right to establish, join and participate in activities of trade union in accordance with the
Trade Union Law.
2. Employees of enterprises are entitled to establish, join and participate in activities of internal employee
organizations in accordance with Articles 172, 173 and 174 of this Labor Code.
3. The representative organizations of employers mentioned in Clause 1 and Clause 2 of this Article shall have equal
rights and obligations in protection of the legitimate rights and interests of employees in labor relations.
Article 171. Internal trade unions in Vietnam’s trade union system
1. Internal trade unions in Vietnam’s trade union system shall be established in organizations, units and enterprises.
2. The establishment, dissolution, organization and operation of internal trade unions shall comply with the Trade
Union Law.
Article 172. Establishment, participation and operation of internal employee organizations
1. The internal employee organization in an enterprise shall be established after registration is granted by a
competent authority. The organizational structure and operation of internal employee organizations shall comply with
the Constitution, law and internal regulations, adhere to the principles of autonomy, democracy and transparency.
2. Registration of an internal employee organization shall be cancelled if it acts against its objectives and principles
as prescribed in Point b Clause 1 Article 174 of this Labor Code, or the organization is undergoing division,
amalgamation, merger, or the enterprise is undergoing dissolution or bankruptcy.
3. When an internal employee organization wishes to join the trade union, the Trade Union Law shall apply
4. The Government shall provide for documents and procedures for registration; the competence to grant and cancel
registration, state management of finance and assets of internal employee organizations; division, amalgamation,
merger, dissolution thereof; the right to association of employees in enterprises.
Article 173. Management board and members of internal employee organizations
1. When applying for registration, the number of members the internal employee organization that are employees of
the enterprise shall reach the minimum number prescribed by the Government.
2. The management board shall be elected by members of the internal employee organization. Members of the
management board shall be Vietnamese employees of the enterprise who are not serving a sentence, do not have an
unspent conviction and are not undergoing criminal prosecution for breach of national security, violations against
freedom and democracy, infringement of ownership defined in Criminal Code.
Article 174. Charter of internal employee organization
1. The charter of an internal employee organization shall contain:
a) Name, address and logo (if any) of the organization;
b) The objectives of protecting the lawful rights and interests of the members in labor relations in the enterprise;
cooperating with the employer in resolving issues relevant to the rights, obligations and interest of the employer and
employees; develop progressive, harmonious and stable labor relation;
c) Requirements and procedures for joining and leaving the organization.
The internal employee organization of an enterprise shall not simultaneously have members that are ordinary
employees and members that participate in the process of making decisions relevant to working conditions,
recruitment, labor discipline, employment contract termination or employee reassignment;
d) Organizational structure, tenure and representative of the organization;
dd) Rules for organization and operation;
e) Methods for ratifying decisions of the organization.
The following issues shall be voted by the members under the majority rule: ratification, revisions of the organization’s
charter; election, dismissal of the chief and members of the management board of the organization; division,
consolidation, merger, renaming, dissolution, association of the organization; joining the trade union.
g) Membership fees, sources of assets and finance, and the management thereof.
Revenues and expenses of the internal employee organization shall be monitored, archived and made available to its
members.
h) Members’ proposals and responses thereto.
2. The Government shall elaborate this Article.
Article 175. Prohibited acts by the employer regarding the establishment, operation of and participation in
representative organizations of employees
1. Any act of discrimination against employees or members of the management board of the representative
organization of employees due to the establishment, operation or participation in the representative organization of
employees, including:
a) Requesting a person to participate, not to participate or to leave the representative organization of employees in
order to be recruited, have the employment contract signed or renewed;
b) Disciplining or unilaterally terminating an employment contract; refuses to conclude or renew an employment
contract; reassigning an employee;
c) Discrimination by salary, working hours, other rights and obligations in the labor relation;
d) Obstructing, disrupting or otherwise impairing the operation of the representative organization of employees.
2. Interfering, influencing the establishment, election, planning and operation of the representative organization of
employees, including financial support or other economic measures aimed to neutralize or weaken the functions of
the representative organization of employees, or discriminate between the representative organizations of
employees.
Article 176. Rights of members of the management board of a representative organization of employees
1. Members of the management board of a representative organization of employees have the rights to:
a) Approach employees at the workplace during the performance of the organization’s duties, provided it does not
affect the employer’s normal operation.
b) Approach the employer to perform the duties of the employees’ representative organization;
c) Be fully paid by the employer for performance of the duties of the representative organization of employees during
the working time in accordance with Clause 2 and Clause 3 of this Article;
d) Other guarantees in labor relation and performance of the representative’s duties as prescribed by law.
2. The Government shall specify the minimum period of time the employer has to allow all members of the
management board of the representative organization of employees to perform its duties according to the number of
its members.
3. The representative organization of employees and the employer may negotiate the extra time and how the
management board uses the working time to perform their duties in a practical manner.
Article 177. Obligations of the employer to the representative organization of employees
1. Do not obstruct the employees from lawfully establishing, joining and participate in activities of the representative
organization of employees.
2. Recognize and respect the rights of the lawfully established representative organization of employees.
3. Enter into a written agreement with the management board of the representative organization of employees when
unilaterally terminating the employment contract with, reassigning or dismissing for disciplinary reasons an employee
who is a member of the management board. In case such an agreement cannot be reached, both parties shall send
a notice to the provincial labor authority. After 30 days from the day on which such a notice is sent to the labor
authority in the locality, the employer shall have the right to make the decision. In case of disagreement with the
employer’s decision, the employee and management board may request labor dispute settlement in accordance with
the procedures prescribed by law.
4. In case the employment contract with a member of the management board expires before the end of his/her term
of office, the contract shall be extended until the end of the term of office.
5. Other obligations prescribed by law.
Article 178. Rights and obligations of the representative organization of employees in labor relations
1. Enter into collective bargaining with the employer in accordance with this Labor Code.
2. Hold dialogues at work in accordance with this Labor Code.
3. Comment on the establishment; supervise the implementation of the pay scale, payroll, labor rates, regulations on
salary payment, rewards, internal labor regulations, and other issue relevant to rights and interests of employees that
are members of the organization.
4. Represent the employee during labor dispute settlement when authorized by the employee.
5. Organize and lead strikes in accordance with this Labor Code.
6. Provide technical assistance for legally registered organizations in Vietnam to improve their knowledge about labor
laws, procedures for establishment of the representative organization of employees and performance of
representative activities in labor relation after registration is granted.
7. Be provided a working location, information and other necessary facilities for operation of the representative
organization of employees by the employer.
8. Other rights and obligations prescribed by law.
Chapter XIV
SETTLEMENT OF LABOR DISPUTES
Section 1. GENERAL PROVISIONS FOR SETTLEMENT OF LABOR DISPUTES
Article 179. Labor disputes
1. A labor dispute means a dispute over rights, obligations and interests among the parties during the establishment,
execution or termination of labor relation; a dispute between the representative organizations of employees; a dispute
over a relationship that is directly relevant to the labor relation. Types of labor disputes:
a) Labor disputes between the employee and the employer; between the employee and the organization that sends
the employee to work overseas under a contract; between the dispatched employee and the client enterprise.
b) Right-based or interest-based collective labor disputes between one or several representative organizations of
employees and the employer or one or several representative organizations of employees.
2. A right-based collective labor dispute of rights means a dispute between one or several representative
organizations of employees and the employer or one or several representative organizations of employees in case of:
a) Discrepancies in interpretation and implementation of the collective bargaining agreement, internal labor
regulations and other lawful agreements;
b) Discrepancies in interpretation and implementation of labor laws; or
c) The employer’s discrimination against the employees or members of the management board of the representative
organization of employees for reasons of establishment, operation or participation in the organization; the employer’s
interference or influencing the representative organization of employees; the employer’ violations against amicable
negotiation.
3. a) Interest-based collective labor disputes include:
a) Labor disputes that arise during the process of collective bargaining;
a) A party refuses to participate in the collective bargaining or the collective bargaining is not held within the time limit
prescribed by law.
Article 180. Labor dispute settlement principles
1. Respect the parties’ autonomy through negotiation throughout the process of labor dispute settlement.
2. Prioritize labor dispute settlement through mediation and arbitration on the basis of respect for the rights and
interests of the two disputing parties, and respect for the public interest of the society and conformity with the law.
3. The labor dispute shall be settled publicly, transparently, objectively, promptly, and lawfully.
4. Ensure the participation of the representatives of each party in the labor dispute settlement process.
5. Labor dispute settlement shall be initiated by a competent authority or person after it is requested by a disputing
party or by another competent authority or person and is agreed by the disputing parties.
Article 181. Responsibilities of organizations and individuals during labor dispute settlement
1. The labor authority shall cooperate with the representative organization of employees and representative
organization of employees in giving instructions and assisting the parties during the process of labor dispute
settlement.
2. The Ministry of Labor, Invalids and Social Affairs shall organize training to improve the professional capacity of
labor mediators and arbitrators for labor dispute settlement.
3. The provincial labor authority, when requested, shall receive and classify the request for labor dispute settlement,
provide instructions and assists the parties during the process of labor dispute settlement.
Within 05 working days, the receiving authority shall transfer the request to the labor mediators if mediation is
mandatory; to the arbitral tribunal if the dispute has to be settled by arbitration, or instruct the parties to file the
petition to the court.
Article 182. Rights and obligations of the two parties in labor dispute settlement
1. During the labor dispute settlement process, the two disputing parties have the rights to:
a) Participate directly or through a representative in the labor dispute settlement process;
b) Withdraw or change the contents of the request;
c) Request for a change of the person in charge of labor dispute settlement where there reasonable grounds for
believing that the said person may not be impartial or objective.
2. During the labor dispute settlement process, the two parties have the responsibility to:
a) Promptly and adequately provide documents and evidence to support his/her request;
b) Abide by the agreement reached, decision of the arbitral tribunal, court judgment or decision which when it comes
into effect.
Article 183. Rights of competent labor dispute settlement authorities and persons
Competent labor dispute settlement authorities and persons shall, within their mandates, have the rights to request
the disputing parties, relevant organizations and individuals to provide documents and evidence; request verification;
and invite witnesses and other relevant persons.
Article 184. Labor mediators
1. Labor mediators shall be assigned by the provincial labor authority to mediate labor disputes and disputes over
vocational training contracts; assist in development of labor relation.
2. The Government shall provide for the standards, procedures for assignments, benefits, working conditions and
management of labor mediators; power and procedures for dispatching labor mediators.
Article 185. Labor Arbitration Council
1. The President of the People’s Committee of the province shall issue the decision to establish the Labor Arbitration
Council, designate its chairperson, secretary and labor arbitrators. The tenure of a Labor Arbitration Council is 05
years.
2. The President of the People’s Committee of the province shall decide the number of labor arbitrators which is at
least 15. The number of labor arbitrators nominated by each party shall be equal. To be specific:
a) At least 05 labor arbitrators shall be nominated by the provincial labor authority. The chairperson and secretary
shall be officials of the provincial labor authority;
b) At least 05 labor arbitrators shall be nominated by the provincial trade union;
c) At least 05 arbitrators shall be nominated the representative organizations of employees in the province.
3. Standards and working conditions of labor arbitrators:
a) A labor arbitrator shall conversant with law, experienced in labor relations, reputable and objective;
b) When nominating labor arbitrators as prescribed in Clause 2 of this Article, the provincial labor authority, provincial
trade union and representative organizations of employees may nominate their people or other people that fully
satisfy the standards for labor arbitrators.
c) The secretary of the Labor Arbitration Council shall perform its regular duties. Labor arbitrators may work on a fulltime or part-time basis.
4. Whenever a request for labor dispute settlement is received as prescribed in Article 189, 193 and 197 of this Labor
Code, the Labor Arbitration Council shall establish an arbitral tribunal as follows:
a) The representative of each disputing party shall choose 01 labor arbitrator from the list of labor arbitrators;
b) The labor arbitrators chosen by the parties as prescribed in Point a of this Clause shall choose 01 other labor
arbitrator as the chief of the arbitral tribunal;
c) In case a labor arbitrator is selected by more than one disputing party, the arbitral tribunal shall appoint 01 of the
chosen arbitrators.
5. The arbitral tribunal shall work on the principle of collectives and make decision under the majority rule, except for
the cases specified in Point c Clause 4 of this Article.
6. The Government shall provide for the procedures, requirements, procedures for designation, dismissal, benefits
and working conditions of labor arbitrators and Labor Arbitration Councils; organization and operation of Labor
Arbitration Councils; establishment and operation of the arbitral tribunals mentioned in this Article.
Article 186. Prohibition of unilateral actions during the process of labor dispute settlement
None of the disputing parties shall take unilateral actions against the other party while the labor dispute is being
settled by a competent authority or person within the time limit specified in this Labor Code.
Section 2. COMPETENCE AND PROCEDURES FOR SETTLEMENT OF INDIVIDUAL LABOR DISPUTES
Article 187. Competence to settle individual labor disputes
The following agencies, organizations and individuals have the competence to settle individual labor disputes:
1. Labor mediators;
2. Labor Arbitration Councils;
3. The People’s Court.
Article 188. Procedures for the settlement of individual labor disputes by labor mediators
1. Individual labor disputes shall be settled through mediation by labor mediators before being brought to the Labor
Arbitration Council or the Court, except for the following labor disputes for which mediation is not mandatory:
a) Disputes over dismissal for disciplinary reasons; unilateral termination of employment contracts;
b) Disputes over damages and allowances upon termination of employment contracts;
c) Disputes between a domestic worker and his/her employer;
d) Disputes over social insurance in accordance with social insurance laws; disputes over health insurance in
accordance with health insurance laws ; disputes over unemployment insurance in accordance with employment
laws; disputes over insurance for occupational accidents and occupational disease in accordance with occupational
safety and health laws;
dd) Disputes over damages between an employee and organization that dispatches the employee to work overseas
under a contract;
e) Disputes between the dispatched employee and the client enterprise.
2. The Labor Arbitration Council shall complete the mediation process within 05 working days from the receipt of the
request from the disputing parties or the authority mentioned in Clause 3 Article 181 of this Labor Code.
3. Both disputing parties must be present at the mediation meeting. The disputing parties may authorize another
person to attend the mediation meeting.
4. The labor mediator shall instruct and assist the parties to negotiate with each other.
In case the two parties reach an agreement, the labor mediator shall prepare a written record of successful mediation
which bears the signatures of the disputing parties and the labor mediator.
In case the two parties do not reach an agreement, the labor mediator shall recommend a mediation option for the
disputing parties to consider. In case the parties agree with the recommended mediation option, the labor mediator
shall prepare a written record of successful mediation which bears the signatures of the disputing parties and the
labor mediator.
Where the two parties do not agree with the recommended mediation option or where one of the disputing parties is
absent for the second time without a valid reason after having been legitimately summoned, the labor mediator shall
prepare a record of unsuccessful mediation which bears the signatures of the present disputing parties and the labor
mediator.
5. Copies of the record of successful mediation or unsuccessful mediation shall be sent to the disputing parties within
01 working day from the date on which it is prepared.
6. In case a disputing party fails to adhere to the agreements specified in the record of successful mediation, the
other party may request a Labor Arbitration Council or the Court to settle the case.
7. In case mediation is not mandatory as prescribed in Clause 1 of this Article, the labor mediator fails to initiate the
mediation by the deadline specified in Clause 2 of this Article, or the mediation is unsuccessful as prescribed in
Clause 4 of this Article, the disputing parties may:
a) request the Labor Arbitration Council to settle the dispute in accordance with Article 189 of this Labor Code; or
b) Request the Court to settle the dispute.
Article 189. Settlement of individual labor disputes by Labor Arbitration Council
1. The parties are entitled to, by consensus, request the Labor Arbitration Council to settle the dispute in any of the
cases specified in Clause 7 Article 188 of this Labor Code. After the Labor Arbitration Council has been requested to
settle a dispute, the parties must not simultaneously request the Court to settle the same dispute, except for the
cases specified in Clause 4 of this Article.
2. Within 07 working days from the receipt of the request mentioned in Clause 1 of this Article, an arbitral tribunal
shall be established.
3. Within 30 working days from the establishment of the arbitral tribunal, it shall issue a decision on the settlement of
the labor dispute and send it to the disputing parties.
4. In case an arbitral tribunal is not established by the deadline specified in Clause 2 of this Article, or a decision on
the settlement of the labor dispute is not issued by the arbitral tribunal by the deadline specified in Clause 3 of this
Article, the parties are entitled to bring the case to Court.
5. In case a disputing party fails to comply with the decision of the arbitral tribunal, the parties are entitled to bring the
case to court.
Article 190. Time limits for requesting settlement of individual labor disputes
1. The time limit to request a labor mediator to settle an individual labor dispute is 06 months from the date on which
a party discovers the act of infringement of their lawful rights and interests.
2. The time limit to request a Labor Arbitration Council to settle an individual labor dispute is 09 months from the date
on which a party discovers the act of infringement of their lawful rights and interests.
3. The time limit to bring an individual labor dispute to the Court is 01 year from the day on which a party discovers
the act of infringement of their lawful rights and interests.
4. In case the requester is able to prove that the aforementioned time limits cannot be complied with due to a force
majeure event or unfortunate event, the duration of such event shall not be included in the time limit for requesting
settlement of individual labor dispute.
Section 3. COMPETENCE AND PROCEDURES FOR THE SETTLEMENT OF RIGHT-BASED COLLECTIVE
LABOR DISPUTES
Article 191. Competence to settle right-based collective labor disputes
1. The following agencies, organizations and individuals have the competence to settle right-based collective labor
disputes:
a) Labor mediators;
b) Labor Arbitration Councils;
c) The People’s Court.
2. Right-based labor disputes shall be settled through mediation by labor mediators before being brought to the Labor
Arbitration Council or the Court.
Article 192. Procedures for settlement of right-based collective labor disputes
1. Procedures for the mediation of collective labor disputes are the same as the procedures specified in Clauses 2, 3,
4, 5 and 6 Article 188 of this Labor Code.
If violations of law is found during settlement of the disputes mentioned in Point b and Point c Clause 2 Article 179 of
this Labor Code, the labor mediator shall prepare a record and transfer the documents to a competent authority for
settlement as prescribed by law.
2. In case the mediation is unsuccessful or the labor mediator fails to initiate the mediation by the deadline specified
in Clause 2 Article 188 of this Labor Code, the disputing parties may:
a) request the Labor Arbitration Council to settle the dispute in accordance with Article 193 of this Labor Code; or
b) Request the Court to settle the dispute.
Article 193. Settlement of right-based collective labor disputes by Labor Arbitration Council
1. In case the mediation is unsuccessful, the labor mediator fails to initiate the mediation by the deadline specified in
Clause 2 Article 188 of this Labor Code, or a party fails to adhere to the agreements in the successful mediation
record, the disputing parties are entitled to, by consensus, request the Labor Arbitration Council to settle the dispute.
2. Within 07 working days from the receipt of the request mentioned in Clause 1 of this Article, an arbitral tribunal
shall be established.
3. Within 30 working days from the establishment of the arbitral tribunal, in accordance with labor laws, the registered
internal labor regulations and collective bargaining agreement, other lawful agreement and regulations, the arbitral
tribunal shall issue a decision on dispute settlement and send it to the disputing parties.
If violations of law is found during settlement of the disputes mentioned in Point b and Point c Clause 2 Article 179 of
this Labor Code, the arbitral tribunal shall, instead of making a settlement decision, issue a record and transfer the
documents to a competent authority for settlement as prescribed by law.
4. While the Labor Arbitration Council is settling a dispute at the request of the parties as prescribed in this Article, the
parties must not bring the same dispute to Court.
5. In case an arbitral tribunal is not established by the deadline specified in Clause 2 of this Article, or a decision on
the settlement of the labor dispute is not issued by the arbitral tribunal by the deadline specified in Clause 3 of this
Article, the parties are entitled to bring the dispute to Court.
6. In case a disputing party fails to comply with the decision of the arbitral tribunal, the parties are entitled to bring the
case to court.
Article 194. Time limits for requesting settlement of right-based collective labor disputes
1. The time limit to request a labor mediator to settle a right-based collective labor dispute is 06 months from the date
on which a party discovers the act of infringement of their lawful rights.
2. The time limit to request a Labor Arbitration Council to settle a right-based collective labor dispute is 09 months
from the date on which a party discovers the act of infringement of their lawful rights.
3. The time limit to bring a right-based collective labor dispute to the Court is 01 year from the day on which a party
discovers the act of infringement of their lawful rights.
Section 4. COMPETENCE AND PROCEDURES FOR THE SETTLEMENT OF INTEREST-BASED COLLECTIVE
LABOR DISPUTES
Article 195. Competence to settle interest-based collective labor disputes
1. Agencies, organizations and individuals who have the competence to settle interest-based collective labor disputes
include:
a) Labor mediators;
b) Labor Arbitration Councils.
2. An interest-based collective labor dispute shall be settled through mediation by labor mediators before it is brought
to the Labor Arbitration Council or a strike is organized.
Article 196. Procedures for settlement of interest-based collective labor disputes
1. Procedures for the mediation of interest-based collective labor disputes are the same as the procedures specified
in Clauses 2, 3, 4 and 5 Article 188 of this Labor Code.
2. In case of successful mediation, the labor mediator shall prepare a written record of successful mediation which
contains the agreements between the parties and bears the signatures of the disputing parties and the labor
mediator. The record of successful mediation shall be as legally binding as the enterprise’s collective bargaining
agreement.
3. In case the mediation is unsuccessful, the labor mediator fails to initiate the mediation by the deadline specified in
Clause 2 Article 188 of this Labor Code, or a party fails to adhere to the agreements in the successful mediation
record:
a)The disputing parties are entitled to, by consensus, request the Labor Arbitration Council to settle the dispute in
accordance with Article 197 of this Labor Code; or
b) The representative organization of employees is entitled to organize a strike following the procedures specified in
Articles 200, 201 and 202 of this Labor Code.
Article 197. Settlement of interest-based collective labor disputes by Labor Arbitration Council
1. In case the mediation is unsuccessful, the labor mediator fails to initiate the mediation by the deadline specified in
Clause 2 Article 188 of this Labor Code, or a party fails to adhere to the agreements in the successful mediation
record, the disputing parties are entitled to, by consensus, request the Labor Arbitration Council to settle the dispute.
2. Within 07 working days from the receipt of the request mentioned in Clause 1 of this Article, an arbitral tribunal
shall be established.
3. Within 30 working days from the establishment of the arbitral tribunal, in accordance with labor laws, the registered
internal labor regulations and collective bargaining agreement, other lawful agreement and regulations, the arbitral
tribunal shall issue a decision on dispute settlement and send it to the disputing parties.
4. While the Labor Arbitration Council is settling a dispute at the request of the parties as prescribed in this Article, the
representative organization of employees must not call a strike.
In case an arbitral tribunal is not established by the deadline specified in Clause 2 of this Article, or a decision on the
settlement of the labor dispute is not issued by the arbitral tribunal by the deadline specified in Clause 3 of this Article,
or the employer that is a disputing party fails to implement the settlement decision issued by the arbitral tribunal, the
representative organization of employees that is a disputing party is entitled to call a strike following the procedures
specified in Articles 200, 201 and 202 of this Labor Code.
Section 5. STRIKES
Article 198. Strikes
A strike is a temporary, voluntary and organized stoppage of work by the employees in order to press demands in the
process of the labor dispute settlement. A strike shall be organized and lead by the representative organization of
employees that has the right to request collective bargaining and is a disputing party.
Article 199. Cases in which employees are entitled to strike
The representative organization of employees that is a disputing party to an interest-based collective labor dispute is
entitled to call a strike following the procedures specified in Articles 200, 201 and 202 in the following cases:
1. The mediation is unsuccessful or the labor mediator fails to initiate the mediation by the deadline specified in
Clause 2 Article 188 of this Labor Code;
2. An arbitral tribunal is not established or fails to issue a decision on the settlement of the labor dispute; the
employer that is a disputing party fails to implement the settlement decision issued by the arbitral tribunal.
Article 200. Procedures for going on strike
1. Conduct a survey on the strike in accordance with Article 201 of this Labor Code.
2. Issue a strike decision and strike notice in accordance with Article 202 of this Labor Code.
3. Go on strike.
Article 201. Survey on strike
1. Before going on strike, the representative organization of employees that has the right to call the strike as
prescribed in Article 198 of this Labor Code shall survey all employees or members of the management board of the
representative organization of employees.
2. The survey involves:
a) Whether the employee agrees or disagrees about the strike;
b) The plan of the representative organization of employees according to Point b, c and d Clause 2 Article 202 of this
Labor Code.
3. The survey shall be carried out by collecting votes, signatures or in another manner.
4. The time and method of survey shall be decided by the representative organization of employees and notified to
the employer at least 01 day in advance. The survey must not affect the employer’s normal business operation. The
employers must not obstruct or interfere with the survey conducted by the representative organization of employees.
Article 202. Strike decision and notice of starting time of a strike
1. When over 50% of the surveyed people agree to carry out a strike as prescribed in Clause 2 Article 201 of this
Labor Code, the representative organization of employees shall issue a written strike decision.
2. The strike decision shall contain:
a) The survey result;
b) The starting time and the venue for the strike;
c) The scope of the strike;
d) The demands of the employees;
dd) Full name and address of the representative of the representative organization of employees that organizes and
leads the strike.
3. At least 05 working days prior to the starting date of the strike, the representative organization of employees shall
send the strike decision to the employer, the People’s Committee of the district and the provincial labor authority.
4. At the starting time of the strike, if the employer does not accept the demands of the employees, the strike may
take place.
Article 203. Rights of parties prior to and during a strike
1. The parties have the right to continue negotiating settlement of the collective labor dispute or to jointly request
settlement of the dispute by mediation or Labor Arbitration Council.
2. The representative organization of employees that is entitled to organize a strike as prescribed in Article 198 of this
Labor Code has the rights to:
a) Withdraw the strike decision before the strike; end the strike during the strike.
b) Request the Court to declare the strike as lawful.
3. The employer has the rights to:
a) Accept the entire or part of the demands, and send a written notice to the representative organization of
employees which organizes and leads the strike;
b) Temporarily close the workplace during the strike due to the lack of necessary conditions to maintain the normal
operations or to protect the employer’s assets.
c) Request the Court to declare the strike as illegal.
Article 204. Cases of illegal strike
A strike shall be considered illegal if:
1. It is not the case specified in Article 199 of this Labor Code.
2. The strike is not organized by a representative organization of employees that is entitled to organize a strike.
3. The strike is organized against the procedures in this Labor Code.
4. The collective labor dispute is being settled by a competent authority or person in accordance with this Labor
Code.
5. The strike takes places in the cases in which it is not permitted according to Article 209 of this Labor Code.
6. The strike takes place after a competent authority issues a decision to postpone or cancel the strike according to
Article 210 of this Labor Code.
Article 205. Notice of temporary closure the workplace
At least 03 working days before the date of temporary closure of the workplace, the employer shall publicly post the
decision on temporary closure of the workplace at the workplace and notify the following organizations:
1. The representative organization of employees that organizes the strike;
2. The People’s Committee of the province where the workplace is located.
3. The People’s Committee of the district where the workplace is located.
Article 206. Temporary closure of the workplace is not prohibited:
1. 12 hours prior to the starting time of the strike as stated in the strike decision.
2. After the strike ends.
Article 207. Salaries and other lawful interest of employees during a strike
1. Employees who do not take part in the strike but have to temporarily stop working due to the strike are entitled to
work suspension allowance in accordance with Clause 2, Article 99 of this Code as well as to other benefits as
stipulated in the labor laws.
2. Employees who take part in the strike shall not receive salaries and other benefits as prescribed by law, unless
agreed otherwise by both parties.
Article 208. Prohibited acts before, during and after a strike
1. Obstructing employees exercising their right to strike; inciting, inducing or forcing employees to go on strike;
preventing employee who do not take part in the strike from working.
2. Use of violence; sabotaging equipment or assets of the employer.
3. Disrupting public order and security.
4. Terminating employment contracts, disciplining or reassigning employees or strike leaders to other work or location
workplace due to their preparation for or involvement in the strike.
5. Retaliating, inflicting punishment against employees who take part in strike or against strike leaders.
6. Taking advantage of the strike to commit illegal acts.
Article 209. Workplaces where strike is prohibited
1. Strike is prohibited in workplaces where the strike may threaten national security, national defense, public health or
public order.
2. The Government shall compile a list of workplaces where strike is prohibited as mentioned in Clause 1 of this
Article, and settlements of labor disputes that arise therein.
Article 210. Decisions on postponing or cancelling a strike
1. When deemed that a strike threatens to cause serious damage to the national economy or public interest,
threatens national security, national defense, public health or public order, the President of the People’s Committee of
the province shall issue a decision to postpone or cancel the strike.
2. The Government shall provide for postponing and cancelling strikes and settlement of employees’ rights.
Article 211. Handling of unlawful strikes
Within 12 hours from the receipt of the notification that a strike is organized against the regulations of Articles 200,
201 and 202 of this Labor Code, the President of the People’s Committee of the district shall request the labor
authority to cooperate with the trade union at the same level and relevant organizations in meeting the employer and
the representative organization of employees, assisting the parties in finding a solution and returning the normal
business operation.
Any violations of law shall be dealt with or reported to a competent authority as prescribed by law.
The parties shall be assisted in following proper procedures for settling the labor dispute.
Chapter XV
STATE MANAGEMENT OF LABOR
Article 212. Areas of State management of labor
1. Promulgate and organize implementation legislative documents on labor.
2. Monitor, make statistics and provide information on the labor supply and demand, and the fluctuation thereof; make
decision on salary policies; policies plans on human resources, distribution and utilization of nationwide human
resources, vocational training and development; develop of a national level framework for various levels of vocational
training. Compile the list of occupations that require workers who have undertaken vocational training or have
obtained the national certificate.
3. Organize and conduct scientific research on labor, statistics and information on labor and the labor market, and on
the living standards and incomes of workers; manage the quantity, quality or workers and labor fluctuation.
4. Establish mechanisms for supporting development of progressive, harmonious and stable labor relation; promote
application of this Labor Code to workers without labor relations; organize registration and management of internal
employee organizations.
5. Carry out inspections; take actions against violations of law; handle labor-related complaints; settle labor disputes
as prescribed by law.
6. Seek international cooperation in the area of labor.
Article 213. State management of labor
1. The Government shall uniformly carry out the State management of labor nationwide.
2. The Ministry of Labor, Invalids and Social Affairs shall be responsible to the Government for state management of
labor.
3. Other Ministries and ministerial agencies, within their respective mandates, shall be responsible for implementing
and cooperating with the Ministry of Labor, Invalids and Social Affairs in the state management of labor.
4. People's Committees at all levels shall be responsible for the state management of labor within their administrative
divisions.
Chapter XVI
LABOR INSPECTION AND ACTIONS AGAINST VIOLATIONS OF LABOR LAWS
Article 214. Contents of labor inspection
1. Inspect compliance with labor laws.
2. Investigate occupational accidents and violations against regulations on occupational safety and health.
3. Provide instructions on the application technical standards for working conditions, occupational safety and health.
4. Handle labor-related complaints and denunciation as prescribed by law.
5. Take actions and request competent authorities to take actions against violations of labor laws.
Article 215. Specialized labor inspection
1. The competence to carry out specialized labor inspection is specified in the Law on Inspection.
2. Occupational safety and health inspections shall be carried out in accordance with the Law on Occupational Safety
and Health.
Article 216. Rights of labor inspectors
Labor inspectors have the right to inspect and investigate within the scope of inspection specified in the inspection
decision.
A prior notice is not required for surprise inspection decided by a competent person in case of urgent threat to safety,
life, health, honor, dignity of employees at the workplace.
Article 217. Actions against violations
1. Any person who violates of any provision of this Labor Code shall, depending on the nature and seriousness of the
violation, be held liable to disciplinary actions, administrative penalties or criminal prosecution, and shall pay
compensation for any damage caused as prescribed by law.
2. Where the Court has issued a decision which declares that a strike is illegal, any employee who fails to return to
work shall be held liable to labor disciplinary measures in accordance with labor laws.
In case an illegal strike causes damage to the employer, the representative organization of employees that organizes
the strike shall pay compensation as prescribed by law.
3. Any person who takes advantages of a strike to disrupt public order, sabotage the employer’s assets, obstruct the
execution of the right to strike, or incite, induce or force employees to go on strike; retaliate or inflict punishment on
strikers and strike leaders, depending on the seriousness of the violation, shall be held liable to administrative
penalties or criminal prosecution, and shall pay compensation for any damage caused in accordance with the law.
Chapter XVII
IMPLEMENTATION CLAUSES
Article 218. Exemption and reduction of procedures for employers having fewer than 10 employees
Any employer who has fewer than 10 employees shall follow regulations of this Labor Code and shall be entitled to
exemption and reduction of certain procedures specified by the Government.
Article 219. Amendments to some Articles of labor-related Laws
1. Amendments to the Law on Social insurance No. 58/2014/QH13, which has been amended by the Law No.
84/2015/QH13 and the Law No. 35/2018/QH14:
a) Amendments to Article 54:
“Article 54. Conditions for receiving retirement pension
1. An employee mentioned in Points a, b, c, d, g, h and i Clause 1 Article 2 of this Law, except for the cases specified
in Clause 3 of this, will receive retirement pension if he/she has paid social insurance for at least 20 years and:
a) He/she has reached the retirement age specified in Clause 2 Article 169 of the Labor Code;
b) He/she has reached the retirement age specified in Clause 3 Article 169 of the Labor Code and has at least 15
years’ doing the laborious, toxic or dangerous works or highly laborious, toxic or dangerous works on the lists of the
Ministry of Labor, War Invalids and Social Affairs; or has at least 15 years’ working in highly disadvantaged areas,
including the period he/she works in areas with the region factor of at least 0,7 before January 01, 2021;
c) His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code by up to 10
years and he/she has worked in coal mines for at least 15 years; or
d) He/she contracted HIV due to an occupation accident during performance of his/her assigned duty.
2. An employee mentioned in Points dd and e Clause 1 Article 2 of this Law will receive retirement pension if he/she
has paid social insurance for at least 20 years and:
a) His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code by up to 05
years, unless otherwise prescribed by the Law on Military Officer of Vietnam’s Army, the Law of People’s Police, the
Law on Cipher and the Law on professional servicemen and women, national defense workers and officials;
b) His/her age is younger than the retirement age specified in Clause 3 Article 169 of the Labor Code by up to 05
years and he/she has at least 15 years’ doing the laborious, toxic or dangerous works or highly laborious, toxic or
dangerous works on the lists of the Ministry of Labor, War Invalids and Social Affairs; or has at least 15 years’
working in highly disadvantaged areas, including the period he/she works in areas with the region factor of at least
0,7 before January 01, 2021; or
c) He/she contracted HIV due to an occupation accident during performance of his/her assigned duty.
3. A female employee that is a commune official or a part-time worker at the commune authority and has paid social
insurance for 15 to under 20 years and reaches the retirement age specified in Clause 2 Article 169 of the Labor
Code will receive the retirement pension.
4. The Government shall provide for special cases of retirement age.”;
b) Amendments to Article 55:
“Article 55. Conditions for receiving retirement pension in case of work capacity reduction
1. When an employee mentioned in Points a, b, c, d, g, h and i Clause 1 Article 2 of this Law resigns after having paid
social insurance for at least 20 years will receive a lower retirement pension than the rate specified in Points a, b, c
Clause 1 Article 54 of this Law if:
a) His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code by up to 05
years and he/she suffers from 61% to under 81% work capacity reduction;
b) His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code by up to 10
years and he/she suffers from at least 81% work capacity reduction; or
c) He/she has at least 15 years’ doing laborious, toxic and dangerous occupations or highly laborious, toxic and
dangerous occupations on the lists of the Minister of Labor, War Invalids and Social Affairs and suffers from at least
61% work capacity reduction.
2. When an employee mentioned in Points dd and e Clause 1 Article 2 of this Law resigns after having paid social
insurance for at least 20 years and suffers from at least 61% work capacity reduction will receive a lower retirement
pension than the rate specified in Points a and b Clause 2 Article 54 of this Law if:
a) His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code by up to 10
years;
b) He/she has at least 15 years’ doing highly laborious, toxic and dangerous occupations on the lists of the Minister of
Labor, War Invalids and Social Affairs .”;
c) Amendments to Clause 1 of Article 73:
“1. A worker will receive retirement pension when he/she:
a) reaches the retirement age specified in Clause 2 Article 169 of the Labor Code; and
b) has paid social insurance for at least 20 years.”.
2. Amendments to Article 32 of the Civil Procedure Code No. 92/2015/QH13:
a) Revisions of the title and Clause 1 of Article 32; addition of Clauses 1a, 1b and 1c after Clause 1 of Article 32:
Article 32. Labor disputes and labor-related disputes within the jurisdiction of the court
1. Individual labor disputes between employees and their employers shall be settled through mediation by labor
mediators, unless the mediation is unsuccessful, the parties do not adhere to the agreements specified in the
successful mediation record, or the mediation is not initiated by the labor mediator by the deadline prescribed by
labor laws, or the labor dispute is:
a) over a dismissal for disciplinary reasons or unilateral termination of an employment contract;
b) over compensation and allowances upon termination of an employment contract;
c) between a domestic worker and his/her employer;
d) over social insurance in accordance with social insurance laws; over health insurance in accordance with health
insurance laws ; over unemployment insurance in accordance with employment laws; over insurance for occupational
accidents and occupational disease in accordance with occupational safety and health laws;
dd) over damages between an employee and the organization that dispatches the employee to work overseas under
a contract;
e) between the dispatched employee and the client enterprise.
1a. In case both parties agree to bring an individual labor dispute to a Labor Arbitration Council but an arbitral tribunal
is not established by the deadline prescribed by labor laws, the arbitral tribunal does not issue a decision on dispute
settlement or a party does not adhere to the decision issued by the arbitral tribunal, the dispute may be brought to
Court.1b. In case a right-based collective labor dispute has been undertaken by a labor mediator but the mediation is
unsuccessful, a party does not adhere to the successful mediation record, or the mediation is not initiated by the labor
mediator by the deadline prescribed by labor laws, the dispute may be brought to Court.
1c. In case both parties agree to bring a right-based collective labor dispute to a Labor Arbitration Council but an
arbitral tribunal is not established by the deadline prescribed by labor laws, the arbitral tribunal does not issue a
decision on dispute settlement or a party does not adhere to the decision issued by the arbitral tribunal, the dispute
may be brought to Court.”;
b) Clause 2 of Article 32 is annulled.
Article 220. Entry in force
st
1. This Labor Code shall enter into force as of 1 of January 2021.
The Labor Code No. 10/2012/QH13 ceases to have effect from the effective date of this Labor Code
2. From the effective date of this Labor Code, the employment contracts, collective bargaining agreements, lawful
agreements that are not contrary to this Labor Code or provide for more favorable rights and conditions of employees
than may continue to have effect, unless the parties agree to revise them according to this Labor Code.
3. Labor policies for officials and public employees, and persons working in the People’s Army, People’s Police
forces, social organizations, and members of cooperatives, workers without labor relations shall be regulated by other
legislative documents though certain regulations of this Labor Code may still apply.
th
th
This Labor Code is ratified by the 14 National Assembly of Socialist Republic of Vietnam during its 8 session on
November 20, 2019.
PRESIDENT OF THE NATIONAL ASSEMBLY
Nguyen Thi Kim Ngan
THE NATIONAL
ASSEMBLY
-------The Law No. 91/2015/QH13
SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
--------------Hanoi, November 24, 2015
CIVIL CODE
Pursuant to the Constitution of the Socialist Republic of Vietnam;
The National Assembly promulgates a Civil Code.
PART ONE
GENERAL PROVISIONS
Chapter I
GENERAL PROVISIONS
Article 1. Scope
The Civil Code provides the legal status, legal standards for the conduct of natural and juridical
persons; the rights and obligations of natural and juridical person (hereinafter referred to as
persons) regarding personal and property rights and obligations in relations established on the
basis of equality, freedom of will, independence of property and self-responsibility (hereinafter
referred to as civil relations).
Article 2. Recognition, respect, protection and guarantee of civil rights
1. In the Socialist Republic of Vietnam, all civil rights are recognized, respected, protected and
guaranteed under the Constitution and law.
2. Civil rights may be limited as prescribed in law in exceptional circumstances that due to
national defense and security, social safety and order, social ethics and the community's health.
Article 3. Basic principles of civil law
1. Every person shall be equal in civil relations, may not use any reason for unequal treatment to
others, and enjoy the same protection policies of law regarding moral rights and economic rights.
2. Each person establishes, exercises/fulfills and terminates his/her civil rights and obligations on
the basis of freely and voluntarily entering into commitments and/or agreements. Each
commitment or agreement that does not violate regulations of law and is not contrary to social
ethics shall be bound by contracting parties and must be respected by other entities.
3. Each person must establish, exercise/ fulfill, or terminate his/her civil rights and/or obligations
in the principle of goodwill and honesty.
4. The establishment, exercise and termination of civil rights and/or obligations may not infringe
national interests, pubic interests, lawful rights and interests of other persons.
5. Each person shall be liable for his/her failure to fulfill or the incorrect fulfillment of any such
civil obligations.
Article 4. Application of the Civil Code
1. This Law is a common law that applies to civil relations.
2. Any relevant law that applies to civil relations in specific fields may not be contrary to the
basic principle of civil law prescribed in Article 3 of this Law.
3. If another relevant law has no regulation or has regulations that infringe Clause 2 of this
Article, the regulations of this Law shall apply.
4. In cases where an international agreement to which the Socialist Republic of Vietnam is a
signatory contains provisions different from the provisions of this Code with regard to a same
matter, the provisions of such agreement shall apply.
Article 5. Application of practices
1. Practices mean rules of conduct obvious to define rights and obligations of persons in specific
civil relations, forming and repeating in a long time, recognized and applying generally in a
region, race, or a community or a field of civil.
2. In cases where it is neither provided for by law nor agreed upon by the parties, practices may
apply but they must not contravene the principles provided for in Article 3 of this Code.
Article 6. Application of analogy of law
1. In cases where a issue rises under scope of civil law which it is neither provided for by law nor
agreed upon by the parties nor, nor applied by practices, analogy of law shall apply.
2. In cases where it is neither provided for by law nor agreed upon by the parties, practices may
apply but they must not contravene the principles provided for in Article 3 of this Code.
Article 7. State policies on civil relations
1. The establishment, performance and termination of civil rights and obligations must ensure the
preservation of national identities, respect and promote good customs, practices and traditions,
solidarity, mutual affection and cooperation, the principle of every individual for the community
and the community for every individual and the noble ethical values of ethnicities living together
on Vietnamese soil.
2. In civil relations, the conciliation between contracting parties in accordance with regulations
of law shall be encouraged.
Chapter II
ESTABLISHMENT, EXERCISE AND PROTECTION OF CIVIL RIGHTS
Article 8. Bases for establishment of civil rights
Civil rights shall be established on the following bases:
1. Contracts;
2. Unilateral legal acts;
3. Decisions of courts or other competent state agencies as prescribed;
4. Outcomes of labor, production and business; or creation of subjects of intellectual property
rights;
5. Possession of property;
6. Illegal use of assets or illegal gain therefrom;
7. Damage caused by an illegal act;
8. Performance of a task without authorization;
9. Other bases specified by law.
Article 9. Exercise of civil rights
1. Each person shall exercise his/her civil on his/her own will in accordance with Article 3 and
Article 10 of this Code.
2. The non-exercise of civil rights does not constitute a basis for termination of those rights,
unless otherwise prescribed by law.
Article 10. Limitations on exercise of civil rights
1. Each person may not abuse his/her own civil rights to cause damage to other persons or violate
his/her own obligations or for other unlawful purposes.
2. If a person fails to comply with Clause 1 of this Article, a court or a competent agency shall,
according to the nature and consequences of the violation, either protect part or the whole of
his/her rights, compel him/her to given compensation and other sanctions as prescribed by law.
Article 11. Methods for protecting civil rights
If a person has his/her civil rights violated, he/she may protect them himself/herself as prescribed
in this Code, other relevant laws or request competent authorities to:
1. Recognize, respect, protect and guarantee of his/her civil rights;
2. Order the termination of the act of violation;
3. Order a public apology and/or rectification;
4. Order the performance of civil obligations;
5. Order compensation for damage;
6. Cancellation of isolated unlawful decision of competent agencies, organizations or persons;
7. Other requirements specified by law.
Article 12. Self-protection of civil rights
The self-protection of a particular civil right must conform to the nature and severity of the
violation against such civil right and be not contrary to basic principles of civil law prescribed in
Article 3 of this Code.
Article 13. Compensation for damage
Each person has his/her civil rights violated shall be eligible for total damage, unless otherwise
agreed by parties or unless otherwise prescribed by law.
Article 14. Protection of civil rights by competent authorities
1. Each court and a competent authority must respect and protect civil rights of persons.
If a particular civil right is violated or is under a dispute, the protection of such right shall be
implemented as prescribed in procedural law at the court or arbitrator.
The protection of civil rights under administrative procedures shall be implemented as prescribed
by law. A decision on settlement of case/matter under administrative procedures may be reexamined at a court.
2. Each court may not refuse to settle a civil matter or case with the season that there is no
provision of law to apply; in this case, regulations in Article 5 and Article 6 of this Code shall
apply.
Article 15. Cancellation of isolated unlawful decisions of competent agencies, organizations
or persons
A court or a competent authority is entitled to cancel an isolated decision of another competent
agency, organization or person, upon a request for protection of civil rights.
If the isolated decision is cancelled, the civil right against which the decision violates shall be
restored and protected by the methods prescribed in Article 11 of this Code.
Chapter III
NATURAL PERSONS
Section 1. LEGAL PERSONALITY AND LEGAL CAPACITY OF NATURAL PERSONS
Article 16. Legal personality of natural persons
1. The legal personality of a natural person is his/her capability to have civil rights and civil
obligations.
2. All individuals shall have the same legal personality.
3. The legal personality of a natural person commences at birth and terminates at death.
Article 17. Contents of the legal personality of a natural person
1. Personal rights not associated with property, and personal rights associated with property.
2. Ownership rights, inheritance rights and other rights with respect to property.
3. Rights to participate in civil relations and to assume obligations arising out of such relations.
Article 18. No restrictions on the legal personality of natural persons
The legal personality of a natural person shall not be restricted, unless otherwise provided for by
law.
Article 19. Legal capacity of natural persons
The legal capacity of a natural person is his/her capability to establish and exercise civil rights
and perform civil obligations through his/her acts.
Article 20. Adults
1. Adults are persons who are eighteen years of age or older.
2. Each adult shall have full legal capacity, except for the cases prescribed in Articles 22, 23 and
24 of this Code.
Article 21. Minors
1. Minors are persons who are under eighteen years of age.
2. Civil transactions of each child under six years of age shall be established and performed by
his/her legal representative.
3. Each person who is from six to under eighteen years of age must have the consent of his/her
legal representative to enter in and perform civil transactions, except for civil transactions which
are performed for the purpose of meeting the needs of daily life suitable for the age group.
4. Each person who is from fifteen to under eighteen years of age is entitled to enter in and
perform civil transactions by himself/herself, except for civil transactions related to real estate,
movables required registration and other civil transactions as prescribed by law that are subject
to the consent of his/her legal representative.
Article 22. Lack of legal capacity
1. A court shall, based on the opinion of forensic-psychiatric examination by any authorized
organization and at the request of a person with related rights or interests or a relevant agency or
organization, issue a decision to declare a legally incapacitated person who as a result of his/her
mental or other illnesses cannot realize or conduct his/her actions.
Where the basis on which a person has been declared incapacitated no longer exists, the court
shall, at the request of such person or any person with related rights or interests, issue a decision
to revoke the decision declaring the incapacitated person.
2. All civil transactions of a legally incapacitated person shall be established and performed by
his/her legal representative.
Article 23. Persons with limited cognition or behavior control
1. A court shall, based on the opinion of forensic-psychiatric examination by any authorized
organization and at the request of a person with related rights or interests or a relevant agency or
organization, issue a decision to declare an adult with limited cognition or behavior control due
to his/her physical or spiritual condition, and appoint a legal guardian and define rights and
obligations of such guardian.
2. Where the basis on which a person has been declared limited cognition or behavior control no
longer exists, the court shall, at the request of such person or any person with related rights or
interests, issue a decision to revoke the decision declaring the person with limited cognition or
behavior control.
Article 24. Persons with limited legal capacity
1. A court shall, at the request of a person with related rights or interests or a relevant agency or
organization, issue a decision to declare a person with limited legal capacity after excessive drug
consumption or other psychotropic substances, worsening material situation of the family.
The court shall appoint a legal representative of the person with limited legal capacity and the
representation scope.
2. All civil transactions related to the property of a person with limited legal capacity declared by
a court must obtain the consent of his/her legal representative, except for transactions to meet the
needs of daily life.
3. Where the basis on which a person has been declared limited capacity of exercise no longer
exists, the court shall, at the request of such person or any person with related rights or interests,
issue a decision to revoke the decision declaring the incapacitated person.
Section 2. PERSONAL RIGHTS
Article 25. Personal rights
1. Personal rights specified in this Code are civil rights inherent to each natural person, which
cannot be transferred to other persons, unless otherwise provided for by other laws.
2. All civil relations relating to personal rights of a minor, a legally incapacitated persons, or a
person with limited cognition or behavior control shall be established and performed with the
consent of his/her legal representative as prescribed in this Code, other relevant laws or decisions
of a court.
All civil relations relating to personal rights of a person declared missing or dead shall be
established and performed with the consent of his/her spouse or adult children; or his/her parents
if he/she has no spouse or child, unless otherwise provided for by this Code or other relevant
laws.
Article 26. Right to have family and given names
1. Each natural person has right to have a family name and a given name (including a middle
name, if any). The family and given names of a person shall be the family and given names in
the birth certificate of such person.
2. The family name of a person shall be passed from his/her biological father's or mother’s as
mutually agreed between the parents; if the parents fails to agree, the person’s family name shall
be determined according to customary practices. If the father of such person is undetermined,
his/her family name shall be passed from his/her natural mother’s.
If an abandoned child whose natural parents are unidentified is adopted, his/her family name
shall be passed from his/her adoptive father’s or mother’s as mutually agreed between the
parents. If the child has either an adoptive father or an adoptive mother, his/her family name
shall be passed from such person’s.
If an abandoned child whose natural parents are unidentified and he/she has not been adopted but
has been fostered by a foster establishment or a , his/her family name shall be determined at the
request of the head of such foster family or at the request of the person registering the birth of the
child.
Biological father and mother specified in this Code means a father and mother determined at the
event of parturition; intended father and mother and the resulting child as prescribed in the Law
on marriage and families.
3. The naming is restricted in case it violates lawful rights and interests of other people and
contravenes basic principles of civil law prescribed in Article 3 of this Code.
The name of each Vietnamese citizen must be in Vietnamese or other ethnic minority languages
of Vietnam and not include any figure or any symbol other than a letter.
4. Each natural person shall enter in and perform his/her civil rights and obligations following
his/her family and given name.
5. A person may not use his/her code name or pen name to cause damage to the lawful rights and
interests of other people.
Article 27. Right to change family names
1. An individual has the right to request a competent authority to recognize a change of a family
name in any of the following cases:
a) Changing the family name of a natural child from biological father’s to biological mother's or
vice versa;
b) Changing the family name of an adopted child from biological father’s or mother’s to
adoptive father's or mother’s at the request of the adoptive parents;
c) If a person ceases to be an adopted child and such person or his/her biological father or mother
request to reclaim the family name which is given by the biological father or mother;
d) Changing the family name of a person whose biological parents have been identified upon the
request on that father or mother or such person;
dd) Changing the family name of a lost person who has discovered the origin of his/her
bloodline;
e) Changing the family name of a person to his/her spouse’s in the marriage and family relations
involving foreign elements in accordance with law of the country in which the foreign spouse is
a citizen or retrieves his/her family name before the change;
g) Changing the family names of children upon the change of family names of their father’s or
mother’s;
h) Other cases prescribed in by law on civil status affairs.
2. The changing of the family name of a person who is nine years of age or older shall be subject
to the consent of such person.
3. The changing of a family name shall not change or terminate the civil rights and obligations
which were established in the former family name.
Article 28. Right to change given names
1. An individual has the right to request a competent authority to recognize the change of a given
name in any of the following cases:
a) Where it is so requested by the person who has a given name which causes confusion or has
an adverse effect on his/her feelings or on his/her honor, legitimate rights and interests;
c) Where the adoptive father or mother of the person wishes to change the given name of their
adopted child; of if a person ceases to be an adopted child and such person or his/her biological
father or mother request to reclaim the given name which is given by the biological father or
mother;
d) Changing the given name of a person whose biological parents have been identified upon the
request on that father or mother or such person;
dd) Changing the given name of a lost person who has discovered the origin of his/her bloodline;
dd) Change the given name of a person to his/her spouse’s in the marriage and family relations
involving foreign elements in accordance with law of the country in which the foreign spouse is
a citizen retrieves his/her family name before the change;
e) Changing of given name of a person whose gender identity is re-determined or a transgender
person;
g) Other cases prescribed in by law on civil status affairs.
2. The changing of the given name of a person who is nine years of age or older shall be subject
to the consent of such person.
3. The changing of a given name shall not change or terminate the civil rights and obligations
which were established in the former given name.
Article 29. Right to indentify and re-identify ethnicity
1. Each individual has the right to identify and re-identify his/her ethnicity.
2. Each individual shall have his/her ethnicity identified at birth in accordance with the ethnicity
of his/her biological father and mother. Where the biological father and mother belong to two
different ethnic groups, the ethnicity of the child shall be passed from the father’s or mother’s as
mutually agreed between the parents; if the parents fail to agree, the ethnicity of the child shall
be identified in accordance with relevant customary practices; if the customary practices are
different, the ethnicity of the child shall be identified in accordance with the customary practice
of smaller ethnic minority.
If an abandoned child whose natural parents are unidentified is adopted, his/her ethnicity shall be
passed from his/her adoptive father’s or mother’s as mutually agreed between the parents. If the
child has either an adoptive father or an adoptive mother, his/her ethnicity shall be passed from
such person’s.
If an abandoned child whose natural parents are unidentified and he/she has not been adopted but
has been fostered by a foster establishment, his/her ethnicity shall be identified at the request of
the head of such foster family or at the request of the person temporarily fostering the child at the
time when the birth of the child is registered.
3. An individual has the right to request a competent authority to identify or re-identify the
ethnicity in any of the following cases:
a) Re-identification of the ethnicity of the biological father or mother where they belong to two
different ethnic groups;
b) Re-identification of the ethnicity of the biological father or mother where the adoptive child
have their biological parents identified.
4. The re-identification of the ethnicity of a person who is from fifteen to eighteen years of age
shall be subject to the consent of such person.
5. It is forbidden to abuse the ethnicity re-identification intended to profiteering or divisive,
prejudicial to the unity of the ethnic groups of Vietnam.
Article 30. Right to declaration of birth and death
1. When an individual is born, he/she has the right to have his/her birth declared.
2. When an individual dies, he/she has the right to have his/her death declared.
3. If a newborn dies after 24 hours or later from the time of birth, his/her birth and death must be
declared; if he/she dies under 24 hours from the time of birth, his/her birth and death are not
required to be declared, unless his/her biological father or mother request.
4. The declaration of birth and death shall be prescribed in by law on civil status affairs.
Article 31. Right to nationality
1. Each individual has the right to nationality.
2. The identification, change, acquirement, renouncement, or assume of Vietnamese nationality
shall be stipulated in the Law on Vietnamese nationality.
3. Rights of each non-nationality resident within Vietnam’s territory shall be guaranteed as
prescribed by law.
Article 32. Rights of an individual with respect to his/her image
1. Each individual has rights with respect to his/her own image.
The use of an image of an individual must have his/her consent.
When an image of an individual is used for commercial purposes, that person is eligible for a
remuneration, unless otherwise agreed.
2. The use of image for any of the following purposes needs not the consent of the image’s
owner or his/her legal representative:
a) For national and public benefits;
b) For public activities, including conventions, seminars, sports activities, art shows and other
public activities that do not infringe the honor, dignity or prestige of the image’s owner.
3. If the use of an image violates the regulation prescribed in this Article, the image’s owner has
the right to request a court to issue a decision that compel the violator or relevant entities to
revoke, destroy or terminate the use of the image, compensate for damage and adopt other
measures as prescribed in law.
Article 33. Right to life, right to safety of life, health and body
1. Each individual has the right to life, the inviolable right to life and body, the right to health
protection by law. No one shall be killed illegally.
2. When any person has a life threatening accident or illness, a person who discovers such
situation must take such person or require suitable entities to a nearest health facility; the health
facility must provide medical examination and treatment in accordance with law on medical
examination and treatment.
3. The consent of a person is required for the anesthesia, surgery, amputation, transplant of
his/her tissues or bodily organs; the application of new medical cures to that person; medical,
pharmacy or scientific testing or any method of testing on a human body.
If the person is a minor, a legally incapacitated person, a person with limited cognition or
behavior control or an unconscious patient, the consent of his/her father, mother, spouse, grown
child or legal guardian is required; in cases where there is a threat to the life of the patient which
cannot wait for the consent of the aforesaid persons, a decision of the head of the health facility
is required.
4. A post-mortem operation shall be performed in any of the following cases:
a) The deceased person expressed consent prior to death;
b) In the absence of such consent, the consent of a parent, spouse, grown child or legal guardian
of the deceased was obtained;
c) In necessary cases, pursuant to a decision of the head of the health facility or a competent
authority as prescribed in law.
Article 34. Right to protection of honor, dignity and prestige
1. Honor, dignity and prestige of an individual is inviolable and protected by law.
2. Each individual has the right to request a court to reject any piece of information adversely
affecting to his/her honor, dignity and/or prestige.
The honor, dignity and prestige of a deceased person shall be protected at the request of his/her
spouse or grown children; or his/her parent if he/she has no spouse or child, unless otherwise
prescribed by law.
3. If a piece of information adversely affecting to the honor, dignity and prestige of a person is
posted on a mean of mass media, that piece of information shall be removed or rectified by that
kind of mean. If that piece of information is kept by an agency, organization or individual, such
entity is required to cancel it.
4. In case it is impossible to identify the person informing the information adversely affecting the
honor, dignity and/or prestige of a person, the latter person has the right to request a court to
declare that such piece of information is incorrect.
5. The person receiving the information adversely affected his/her honor, dignity and/or prestige
both has the right to request rejection of such piece of information and has the right to require to
informing person gives a public apology and rectification and compensation.
Article 35. Right to donate or receive human tissues and body organs and donate corpses
1. Each individual has the right to donate his/her tissues or body organs when he/she is alive or
donate his/her tissues, body organs or corpse after his/her death for the purpose of medical
treatment of other persons or medical, pharmacy or other scientific researches.
2. Each individual has the right to receive tissues and/or body organs of other persons for his/her
medical treatment. Health facilities and juridical persons competent to scientific research have
the right to receive human body organs and/or corpses for the purpose of medical treatment or
medical, pharmacy or other scientific researches.
3. The donation or removal of human tissues and body organs and donation or removal of
corpses must comply with statutory requirements and regulations of this Code, the Law on
donation, removal and transplantation of human tissues and organs, and donation or removal of
corpses and other relevant laws.
Article 36. Right to re-determine gender identity
1. An individual has the right to re-determine his/her gender identity.
The re-determination of the gender identity of a person is implemented where the gender of such
person is subject to a congenital defect or has not yet been accurately formed and requires
medical intervention in order to identify clearly the gender.
2. The re-determination of the gender identity of a person shall comply with regulations of law.
3. Each individual undergone re-determination of gender identity has the right and obligation to
apply for change of civil status affairs as prescribed in law on civil status affairs and has the
personal rights in conformity with the re-determined gender identity as prescribed in this Code
and relevant laws.
Article 37. Sex reassignment
The sex reassignment shall comply with regulations of law. Each surged transgender has the
right and obligation to apply for change of civil status affairs as prescribed in law on civil status
affairs and has the personal rights in conformity with the transformed gender as prescribed in this
Code and relevant laws.
Article 38. Right to private life, personal secrets and family secrets
1. The private life, personal secrets and family secrets of a person are inviolable and protected by
law.
2. The collection, preservation, use and publication of information about the private life of an
individual must have the consent of that person; the collection, preservation, use and publication
of information about the secrets of family must have the consent of all family’s members, unless
otherwise prescribed by law.
3. The safety of mails, telephones, telegrams, other forms of electronic information of an
individual shall be ensured and kept confidential.
The opening, control and keeping of mails, telephones, telegrams, other forms of electronic
information of an individual may only be conducted in cases provided by law.
4. Contracting parties of a contract may not disclose information about each other's private life,
personal secrets or family secrets that they know during the establishment and performance of
the contract, unless otherwise agreed.
Article 39. Personal rights in marriage and families
1. Each individual has the right to marry or divorce, the right to equality between husband and
wife, the right to acknowledge father, mother or child, the right to adopt children and be adopted
in marriage relation, parent-children relation and relations between family’s members.
All children, of the same parents, regardless of their parents’ marriage status, have the same
rights and obligations to their parents.
2. Each individual exercises his/her personal rights in marriage and families as prescribed in this
Code, the Law on marriage and families and relevant laws.
Section 3. PLACE OF RESIDENCE
Article 40. Place of residence of individuals
1. The place of residence of an individual is the place where such person usually lives.
2. In cases where it is impossible to determine an individual's place of residence as provided for
in Clause 1 of this Article, his/her place of residence shall be the place where such person is
currently living.
3. If a party, in a particular civil relation, changes his/her place of residence in association with
his/her exercise of right or fulfillment of obligation, he/she must notify the other of the new place
of residence.
Article 41. Place of residence of minors
1. The place of residence of a minor is the place of residence of his/her parents; if the parents
have separate places of residence, the place of residence of the minor shall be the place of
residence of the father or mother with whom the minor usually lives.
2. A minor may have a place of residence separate from the place of residence of his/her parents
if so agreed by his/her parents or so provided for by law.
Article 42. Place of residence of wards
1. The place of residence of a ward is the place of residence of his/her guardian.
2. A ward may have a place of residence separate from the place of residence of his/her guardian
if so agreed by the guardian or so provided for by law.
Article 43. Places of residence of husbands and wives
1. The place of residence of a husband and wife is the place where the husband and the wife
usually live together.
2. A husband and a wife may have separate places of residence if they so agree upon.
Article 44. Places of residence of military personnel
1. The place of residence of a military personnel member currently performing his/her military
service is the place at which his/her military personnel's unit is stationed.
2. The place of residence of a/an army officer, regular member of military personnel, defense
worker or official is the place at which his/her unit is stationed, except in cases where he/she has
a place of residence as specified in Clause 1 Article 40 of this Code.
Article 45. Place of residence of persons performing itinerant occupations
The place of residence of a person performing an itinerant occupation on a ship, boat or other
means for itinerant work is the place of registration of such ship, boat or means, unless he/she
has a place of residence specified in Clause 1 Article 40 of this Code.
Section 4. GUARDIANSHIP
Article 46. Guardianship
1. Guardianship means an individual or organization (hereinafter referred collectively to as
guardian) is required by law or appointed to take care of and protect legitimate rights and
interests of a minor or a legally incapacitated person or a person with limited cognition and
behavior control (hereinafter referred to as a ward).
2. When a person with limited cognition and behavior control is capable of expressing his/her
will anytime when he/she requests the guardianship, his/her consent is required.
3. The guardianship must be registered at a competent authority as prescribed in law on civil
status affairs.
Natural guardians must fulfill their obligations regardless of their registration of guardianship.
Article 47. Wards
1. Wards include:
a) Minors who have lost their mothers and fathers, or whose parents are unidentifiable;
b) Minors whose parents are both incapacitated persons; parents have limited cognition or
behavior control; parents have limited capacity of exercise; parents have their parental rights
restricted by a court; and parents do not have the means to care for or educate such minor and the
parents request the minor to be a ward;
c) Incapacitated persons;
d) Persons with limited cognition or behavior control.
2. A person may only be a ward of one guardian, except where the guardians are parents in
charge of one child or grandparents in charge of one grandchild.
Article 48. Guardians
1. Each natural person or juridical person who meets all requirements prescribed in this Code is
entitled to be a guardian.
2. If a person with full legal capacity chooses a guardian for him/her, such guardian shall be
selected if the person needs the guardianship with the consent of the ward. The selection of
guardian must be made in writing and notarized or certified.
3. Each natural or juridical person may be a guardian of multiple persons.
Article 49. Requirements for natural persons to be guardians
Each natural person who meets all of the following requirements may act as a guardian:
1. Having full legal capacity;
2. Having good ethics and necessary means to exercise rights and fulfill obligations of a
guardian;
3. Not being a person facing a criminal prosecution or a person who has been convicted but
his/her criminal record has been not expunged for a deliberate crime of violation of life, health,
honor, dignity or property of another person;
4. Not being a person having parental rights to minor child restricted by a court.
Article 50. Requirements for juridical persons to be guardians
Each juridical person who meets all of the following requirements may act as a guardian:
1. Having civil legal personality in conformity with the guardianship;
2. Having necessary means to exercise rights and fulfill obligations of a guardian.
Article 51. Supervision of guardianship
1. The relatives of a ward shall have the responsibility to appoint a representative to supervise
the guardianship in among the relatives or appoint another natural or juridical person to act as a
guardianship supervisor.
The appointment of guardianship supervisor must have the consent of such person.
If the supervision relates to management of property of the ward, the supervisor must register it
at the People’s Committee of commune where the ward resides.
Relatives of a ward means his/her spouse, parents and children; if there is no such person,
relatives of the ward means his/her grandparents and biological siblings; if there is also no such
person, relatives of the ward means his/her biological uncles and aunts.
2. If there is no relative of a ward or the relatives fails to appoint a guardianship supervisor as
prescribed in Clause 1 of this Article, the People’s Committees of commune where the guardian
resides shall appoint a natural or juridical person to supervise the guardianship. If there is a
dispute over the appointment of guardianship supervisor, it shall be subject to a court's decision.
3. Each supervisor being natural person must have full legal capacity, each supervisor being
juridical person must have legal personality in conformity with the supervision; the supervisor
must have necessary means to conduct the supervision.
4. Each guardianship supervisor has the following rights and obligations:
a) Monitory and inspect the guardian in the guardianship;
b) Examine and offer opinions in writing in terms of establishment and performance of civil
transactions prescribed in Article 59 of this Code.
c) Request a regulatory agency in charge of guardianship to change or terminate the guardianship
or supervision of guardianship.
Article 52. Natural guardians of minors
A natural guardian of a minor prescribed in Points a and b Clause 1 Article 47 of this Code shall
be determined as follows:
1. The eldest brother or sister shall be the guardian of the ward; if the eldest brother or sister fails
to satisfy all requirements for acting as a guardian, the next eldest brother or sister shall be the
guardian, unless otherwise agreed that another biological brother or sister shall be the guardian;
2. If there is no guardian prescribed in Clause 1 of this Article, the paternal grandfather,
grandmother or the maternal grandfather, grandmother shall be the guardian; or those persons
shall agree to appoint a person or some persons to be guardian(s);
3. If there is no guardian prescribed in Clause 1 and Clause 2 of this Article, a biological uncle or
aunt of the ward shall be the guardian.
Article 53. Natural guardians of incapacitated persons
If there is no guardian prescribed in Clause 2 Article 48 of this Code, the natural guardian of a
legally incapacitated person shall be determined as follows:
1. If a wife is a legally incapacitated person, her husband shall be the guardian; if a husband is a
legally incapacitated person, her wife shall be the guardian;
2. If both parents are incapacitated persons or either of them is a legally incapacitated person and
the other does not fully meet requirements to be a guardian, the eldest child shall be the guardian;
if the eldest child does not fully meet the requirements to be a guardian, the next eldest child
shall be the guardian;
3. If an adult being a legally incapacitated person has no spouse or child or such person has
spouse or children but they do not fully meet the requirements to be a guardian, his/her father
and/or mother shall be the guardian.
Article 54. Appointment of guardians
1. If a minor or a legally incapacitated person has no guardian as prescribed in Article 52 and 53
of this Code, the People’s Committee of commune where such person resides must appoint a
guardian for the ward.
If there is a dispute between guardians prescribed in Article 52 and Article 53 of this Code in
terms of guardians or appointment of guardians, a court shall appoint the guardian.
The expectation of a minor aged 6 years or older in terms of his/her guardian must be considered.
2. The appointment of a guardian must have the consent of such person.
3. The appointment of a guardian must be made in writing, specifying the reason for appointing
the guardian, the specific rights and obligations of the guardian and the status of the ward's
property.
4. Apart from the cases prescribed in Clause 2 Article 48 of this Code, the guardian of a person
with limited cognition and behavior control shall be appointed among the guardians prescribed in
Article 53 of this Code by a court. If there is no such person, the court shall appoint another
natural or juridical person to be a guardian.
Article 55. Obligations of guardians with regard to wards under fifteen years of age
1. Take care of and educate the ward.
2. Represent the ward in civil transactions, except where it is provided for by law that wards
under fifteen years of age can enter in and perform civil transactions by themselves.
3. Manage the property of the ward.
4. Protect legitimate rights and interests of the ward.
Article 56. Obligations of guardians with regard to wards from fifteen to eighteen years of
age
1. Represent the ward in civil transactions, except where it is provided for by law that wards
from fifteen to eighteen years of age can enter in and perform civil transactions by themselves.
2. Manage the property of the ward, unless otherwise prescribed by law.
3. Protect legitimate rights and interests of the ward.
Article 57. Obligations of guardians with regard to incapacitated persons or person with
limited cognition and behavior control
1. The guardian of a legally incapacitated person shall have the following obligations:
a) Take care of and ensure the treatment of illness of the ward;
b) Represent the ward in civil transactions;
c) Manage the property of the ward;
d) Protect legitimate rights and interests of the ward.
2. The guardian of a person with limited cognition and behavior control shall have obligations
specified in the decision of a court according to the obligations prescribed in Clause 1 of this
Article.
Article 58. Rights of guardians
1. The guardian of a minor or a legally incapacitated person shall have the following rights:
a) Use the property of the ward in order to take care of and pay for the needs of the ward;
b) Receive payment of all necessary expenditures on management of the property of the ward;
c) Represent the ward in the establishment and performance of civil transactions in order to
protect legitimate rights and interests of the ward.
2. The guardian of a person with limited cognition and behavior control shall have rights
specified in the decision of a court according to the rights prescribed in Clause 1 of this Article.
Article 59. Management of property of wards
1. The guardian of a minor or a legally incapacitated person must manage the property of his/her
ward as if it were his/her own property.
The sale, exchange, lease, lending, pledge, mortgage, deposit and other transactions involving
the property of the ward, which has a high value, must have the consent of the guardianship
supervisor.
The guardian must not donate the property of his/her ward to other persons. Unless the
transaction is undertaken for the interests of the ward and the guardianship supervisor consents to
the transaction, all civil transactions between the guardian and his/her ward in connection with
the latter's property shall be void.
2. The guardian of a person with limited cognition and behavior control shall manage the
property of the ward specified in the decision of a court according to guardianship scope
prescribed in Clause 1 of this Article.
Article 60. Replacement of guardians
1. A guardian may be replaced in any of the following cases:
a) The guardian no longer meets all of the requirements specified in Article 49 or 50 of this
Code;
b) The guardian being a natural person dies or is declared by court limited cognition or behavior
control, limited legal capacity, incapacitated, missing or the guardian being a juridical person
cease to exist;
c) The guardian seriously violates a guardian's obligation;
d) The guardian proposes his/her replacement and another person agrees to assume the
guardianship.
2. In case of replacing a natural guardian, the persons defined in Article 52 and Article 53 of this
Code shall assume the role of a natural guardian; if there is no natural guardian, the appointment
of a guardian shall comply with the provisions of Article 54 of this Code.
3. The procedures for replacing a guardian shall comply with law on civil status affairs.
Article 61. Transfer of guardianship
1. Upon replacement of a guardian, the person who formally conducted the guardianship must
transfer the guardianship to the new replacement within fifteen days as from the date the new
guardian is found.
2. The transfer of guardianship must be made in writing, specifying the reason for the transfer
and the status of the ward's property at the time of transfer. The agency which appointed the
guardian and the guardianship supervisor shall witness the transfer of the guardianship.
3. With regard to replacement of guardian prescribed in Clause 1 Article 60 of this Code, the
agency which appointed the guardian shall make a record thereon, clearly stating the status of the
ward's property and the rights and obligations which have arisen in the course of performing the
guardianship for transfer to the new guardian with the witness of the guardianship supervisor.
Article 62. Termination of guardianship
1. A guardianship shall be terminated in any of the following cases:
a) The ward attains full legal capacity;
b) The ward dies;
c) The ward's father and/or mother have/has fully met the conditions to exercise his/her rights or
fulfill his/her obligations;
d) The ward has been adopted.
2. The procedures for termination of guardianship shall comply with law on civil status affairs.
Article 63. Consequences of the termination of guardianship
1. When a ward attains full legal capacity, the guardian shall settle the property with the ward
and transfer all rights and obligations arising from civil transactions concluded by the guardian
on behalf of that ward within 15 days from the date of termination of guardianship.
2. If a ward dies, the guardian must settle up the property with the ward's heirs or transfer the
property to the estate administrator of the ward, or transfer all rights and obligations arising from
the civil transactions on behalf of the ward within three months as from the date on which the
guardianship terminates; if the ward's heirs are unidentifiable upon the expiry of such time limit,
the guardian shall continue to manage the property of the ward until the property has been settled
in accordance with the provisions of law on inheritance and shall notify such to the People's
Committee of the commune where the ward resides.
3. With regard to termination of guardianship prescribed in Point c and Point d Clause 1 Article
62 of this Code, the guardian shall settle up the property and transfer all rights and obligations
arising from the civil transactions on behalf of the ward to the ward’s parent within 15 days from
the date of termination of guardianship.
4. The settlement of property and transfer of rights and obligations prescribed in this Article must
be made in writing under supervision of the guardianship supervisor.
Section 5. NOTICE OF SEARCH FOR PERSONS WHO ARE ABSENT FROM THEIR
PLACES OF RESIDENCE, DECLARATION OF MISSING PERSONS AND
DECLARATION OF DEATH
Article 64. Request for notice of search for persons who are absent from their places of
residence and the management of their property
When a person has disappeared for six consecutive months or longer, any person with related
rights or interests may request a court to issue a notice of search for the person absent from
his/her place of residence under the provisions of civil procedure law and may request the court
to apply measures for management of the property of the absent person in accordance with the
provisions of Article 65 of this Code.
Article 65. Management of property of person absent from his/her place of residence
1. At the request of a person with related rights or interests, a court shall hand over the property
of a person absent from his/her place of residence to one of the following persons for
management:
a) With respect to property of which the management has been authorized to person by the
absent person, such person shall continue to manage the property;
b) With respect to joint property, the remaining co-owner(s) shall manage the property;
c) The property being currently managed by the spouse’s absent person shall continue to be
managed by such spouse; if that spouse dies or that spouse is legally incapacitated, has limited
cognition or behavior control or has limited legal capacity, his/her adult children or parents shall
manage the property.
2. If there is no person defined in Clause 1 of this Article, a court shall appoint a person among
the relatives of the absent person to manage his/her property; if the absent person does not have
any relative, the court shall appoint another person to manage the property.
Article 66. Obligations of persons managing property of person absent from his/her place
of residence
1. Keep and preserve the property of the absent persons as if it were his/her own property.
2. Sell immediately any property being crops or other products being in danger of decay;
3. Perform the absent persons' obligations to pay maintenance their dependents and/or pay due
debts or financial obligations with such persons' property under the court's decisions.
4. Return the property to the absent persons upon their return and to notify a court thereof; or
compensate for any damage caused during the course of management of the property due to
his/her fault.
Article 67. Rights of persons managing property of person absent from his/her place of
residence
1. Manage the property of the absent persons.
2. Deduct a portion from the property of the absent person in order to perform the obligations of
such person to pay maintenance to his/her dependents, due debts or financial obligations.
3. Receive payment of all necessary expenditures on management of the property of the absent
person.
Article 68. Declaration of person missing
1. When a person has disappeared for two consecutive years or longer and there is no reliable
information on whether such person is still alive or dead even though notification and search
measures have been fully applied in accordance with the civil procedure law, a court may, at the
request of a person with related rights or interests, declare such person is missing.
The two-year time limit shall commence from the date the last information on such person is
obtained; if the date of the last information cannot be determined, this time limit shall commence
from the first day of the month succeeding the month when the last information is received; if the
date and month of the last information cannot be determined, this time limit shall commence
from the first day of the year succeeding the year when the last information is received.
2. In cases where the wife or the husband of a person who has been declared missing files for a
divorce, a court shall grant the divorce as prescribed in law on marriage and family.
3. The decision on declaration of a missing person issued by a court must be sent to the People’s
Committees of commune where the missing person last resides for record as prescribed in law on
civil status affairs.
Article 69. Management of property of persons declared missing
The person currently managing the property of a person absent from his/her place of residence as
provided for in Article 65 of this Code shall continue to manage the property of such person
when he/she is declared missing by a court and such person shall have the rights and obligations
specified in Article 66 and Article 67 of this Code.
If a court has granted divorce to the wife or the husband of the person who has been declared
missing, the property of the missing person shall be handed over to the adult children or to the
parents of the missing person for management. If there is no such person, the property shall be
handed over to a relative of the missing person for management; if there is no relative, the court
shall appoint another person to manage the property.
Article 70. Annulment of decision declaring person missing
1. When a person who has been declared missing returns or when there is reliable information
that such person is still alive, a court shall, at the request of such person or a person with related
rights or interests, issue a decision on annulment of the decision declaring the person missing.
2. A person who has been declared missing shall, upon his/her return, be permitted to receive
his/her property back from the person managing the property after paying the management
expenses.
3. If the wife or the husband of a person who has been declared missing has been granted a
divorce, the decision granting the divorce shall retain legal effect notwithstanding the return of
the person who has been declared missing or the reliable information that such person is still
alive.
4. The decision on annulment of a decision declaring a person missing issued by a court must be
sent to the People’s Committees of commune where the missing person resides for record as
prescribed in law on civil status affairs.
Article 71. Declaration of person dead
1. A person with related rights or interests may request a court to issue a decision declaring that a
person is dead in any of the following cases:
a) After three years from the effective date of a court's decision declaring a person missing, there
is still no reliable information that such person is alive;
b) The person has disappeared during a war and there is still no reliable information that such
person is alive for five years from the end of the war;
c) The person met with an accident, catastrophe or a natural disaster and there is still no reliable
information that such person is alive for two years from the end of such accident, catastrophe or
natural disaster, unless otherwise provided for by law;
d) The person has been missing for five consecutive years or longer and there is no reliable
information that such person is still alive; this time limit shall be calculated in accordance with
Clause 1 Article 68 of this Code.
2. A court shall, according to the cases specified in Clause 1 of this Article, determine the date of
death of a person declared dead.
3. The decision on declaration of a dead person issued by a court must be sent to the People’s
Committees of commune where the dead person resides for record as prescribed in law on civil
status affairs.
Article 72. Personal relations and property relations of persons declared dead by courts
1. When a decision of a court declaring that a person is dead becomes legally effective, all
marriage and family relations and other personal relations of such person shall be resolved in the
same manner as if the person were dead.
2. The property relations of a person who is declared dead by a Court shall be resolved in the
same manners as if such person were dead; the property of such person shall be dealt with in
accordance with the law on inheritance.
Article 73. Annulment of decision declaring person dead
1. When a person who has been declared dead returns or when there is reliable information that
such person is still alive, a court shall, at the request of such person or a person with related
rights or interests, issue a decision on annulment of the decision declaring the person dead.
2. The personal relations of the person who has been declared dead shall be restored when a
court issues a decision on annulment of the decision which declared that such person was dead,
except for the following cases:
a) If the wife or the husband of the person who has been declared dead was permitted by the
Court for her or his divorce in accordance with the provisions of Clause 2 Article 68 of this
Code, the decision granting the divorce shall remain legally effective;
b) If the wife or the husband of the person who has been declared dead has married to another
person, such marriage shall remain legally effective.
3. A person who has been declared dead but is still alive shall have the right to claim his/her
property from the persons who received that his/her inheritance and/or the value of the remaining
property.
If the heir of a person whom a court has declared dead is aware that such person is still alive, but
intentionally conceals such information for the purpose of enjoying the inheritance, he/she must
return all of the property received, including any benefits and income derived; if any damage has
been caused, he/she must also pay compensation therefor.
4. Property relations between spouses shall be dealt with in accordance with this Code and the
Law on marriage and families.
5. The decision on annulment of a decision declaring a person dead issued by a court must be
sent to the People’s Committees of commune where the dead person resides for record as
prescribed in law on civil status affairs.
Chapter IV
JURIDICAL PERSONS
Article 74. Juridical persons
1. An organization shall be recognized as a juridical person if it meets all of the following
conditions:
a) It is legally established as prescribed in this Code and relevant laws;
b) It has an organizational structure prescribed in Article 83 of this Code;
c) It has property independent from other natural and juridical persons and bears liability by
recourse to its property;
d) It participates independently in legal relations in its own name.
2. Every natural or juridical person has the right to establish a juridical person, otherwise
provided for by law.
Article 75. Commercial juridical persons
1. Commercial juridical person means a juridical person whose primary purpose is seeking
profits and its profits shall be distributed to its members.
2. Commercial juridical persons include enterprises and other business entities.
3. The establishment, operation and termination of commercial juridical person shall comply
with regulations of this Code, Law on enterprises and other relevant laws.
Article 76. Non-commercial juridical persons
1. Non-commercial juridical person means a juridical person whose primary purpose is not
seeking profits and its possible profits may not distributed to its members.
2. Commercial juridical persons include regulatory agencies, people's armed units, political
organizations, socio-political organizations, political-socio-professional organizations, social
organizations, socio-professional organizations, social funds, charitable funds, social enterprises
and other non-commercial organizations.
3. The establishment, operation and termination of non-commercial juridical persons shall
comply with regulations of this Code, laws on organizational structure of the state and other
relevant laws.
Article 77. Charters of juridical persons
1. A juridical person must have a charter if it is required by law.
2. A charter of a juridical person must contain the following primary contents:
a) Name of juridical person;
b) Purpose and scope of its operation;
c) Head office; branches or representative offices (if any);
d) Charter capital (if any);
dd) Legal representative;
e) Organizational structure, the procedures for nomination, election, appointment, discharge from
office and dismissal; duties and powers of the positions in the managing body and other bodies;
g) Membership requirements, if the judicial person has members;
h) Rights and obligations of the members, if the judicial person has members;
i) Procedures for ratifying decisions of the judicial person; rules for internal settlement of
disputes;
k) Procedures for amending and supplementing the charter;
l) Conditions for consolidation, acquisition, total division, partial division or dissolution the
juridical person.
Article 78. Names of judicial persons
1. Each judicial person’s name must be in Vietnamese.
2. The name of a judicial person must clarify its type of organization and distinguish it from
other judicial persons in the same field of activities.
3. Each juridical person must use its own name in civil transactions.
4. The name of a juridical person shall be recognized and protected by law.
Article 79. Head offices of judicial persons
1. The head-office of a juridical person is the place where its executive body is located.
Any change of the judicial person’s head office must be announced.
2. The contact address of a juridical person shall be the address of its head-office. The juridical
person may select another place as its contact address.
Article 80. Nationality of judicial persons
Each juridical person established in accordance with Vietnamese law shall be a Vietnamese
juridical person.
Article 81. Property of judicial persons
Property of a juridical person includes contributed capital of its owners, founders, members and
other kinds of property that the juridical person has established its ownership as prescribed in
this Code or relevant laws.
Article 82. Establishment and registration of juridical persons
1. A juridical person may be established on the initiative of an individual or another juridical
person, or under a decision of a regulatory agency.
2. Registration of juridical person includes registration of establishment, modification to
registration and other registration as prescribed by law.
3. The registration of juridical person must be announced.
Article 83. Organizational structure of juridical persons
1. Each juridical person must have an executive body. The organization, duties and powers of the
executive body of a juridical person shall be stipulated in its charter or establishment decision.
2. Each juridical person may have other bodies as decided itself or as prescribed by law.
Article 84. Branches and representative offices of juridical persons
1. Each branch and/or representative office is an affiliate other than a juridical person.
2. Each branch shall perform all or part of the functions of the juridical person.
3. Each representative office shall perform its duties as authorized by the in accordance with
within the authorized scope and for the juridical person's interests.
4. The establishment or termination of a branch or a representative office of a juridical person
must be registered as prescribed by law and announced.
5. The head of each branch or representative office shall perform his/her duties as authorized by
the juridical person within the authorized scope and for the authorized duration.
6. A juridical person shall have civil rights and obligations arising from civil transactions
established and performed by its representative offices and/or branches.
Article 85. Representatives of juridical persons
The representative of a juridical person may be a legal representative or an authorized
representative. The representative of a juridical person must comply with regulations on
representation in Chapter IX of this Part.
Article 86. Legal personality of juridical persons
1. The legal personality of a juridical person is its capability to have civil rights and civil
obligations.
The legal personality of a juridical person shall not be restricted, unless otherwise provided for in
this Code or relevant laws.
2. The legal personality of a juridical person arises from it is established or authorized to
establish by a competent authority; if a juridical person is required to register of operation, its
legal personality shall arise from the time in which its name is included in a register book.
3. Legal personality of a juridical person terminates from the time of termination of such
juridical person.
Article 87. Civil liability of juridical persons
1. Each juridical person must bear civil liability for the civil rights and obligations established
and performed in the name of the juridical person by its representative.
The juridical person shall bear the civil liability for obligations assumed by its founder or
founder’s representative to establish and/or register the juridical person, unless otherwise agreed
or prescribed by law.
2. Each juridical person must bear civil liability by recourse to its property; shall not bear civil
liability for its members with respect to civil obligations established and performed by such
members not in the name of the juridical person, unless otherwise prescribed by law.
3. A member of a juridical person shall not bear civil liability of the juridical person for the civil
obligations established and performed by such juridical person, unless otherwise prescribed by
law.
Article 88. Consolidation of juridical persons
1. Juridical persons may consolidate into a new juridical person.
2. After consolidation, the former juridical persons shall cease to exist from the time of
establishment of the new juridical person; the civil rights and obligations of the former juridical
persons shall be transferred to the new juridical person.
Article 89. Acquisition of juridical persons
1. A juridical person (hereinafter referred to as acquired juridical person) may be merged into
another juridical person (hereinafter referred to as acquiring juridical person).
2. After acquisition, the acquired juridical person shall cease to exist; the civil rights and
obligations of the acquired juridical person shall be transferred to the acquiring juridical person.
Article 90. Total division of juridical persons
1. A juridical person may be totally divided to multiple juridical persons.
2. After total division, the transferor juridical person shall cease to exist; the civil rights and
obligations of the transferor juridical person shall be transferred to new juridical persons.
Article 91. Partial division of juridical persons
1. A juridical person may be partially divided to multiple juridical persons.
2. After partial division, the transferor juridical person and transferee juridical persons shall
perform their civil rights and obligations in accordance with their own operation objectives.
Article 92. Conversion of forms of juridical persons
1. The form of a juridical person may be converted into another form.
2. After conversion of form, the converting juridical person shall cease to exist from the time of
establishment of the converted juridical person, the civil rights and obligations of the converting
juridical person shall be transferred to the converted juridical person.
Article 93. Dissolution of juridical persons
1. A juridical person shall be dissolved in any of the following cases:
a) In accordance with the provisions of its charter;
b) Pursuant to a decision of a competent authority;
c) Upon expiry of its term of operation as provided in its charter or in the decision of the
competent authority;
d) Other cases as prescribed by law.
2. Prior to dissolution, a juridical person must fulfill all of its property obligations.
Article 94. Settlement of property of dissolved juridical persons
1. The property of a dissolved juridical person shall be settled according to the following order:
a) Dissolution expenses of the juridical person;
b) Unpaid salaries, severance pay, social insurance, health insurance for employees as prescribed
by law, other benefits of employees according to collective bargaining agreement and signed
employment contracts;
c) Tax debts and other debts.
2. After all debts and dissolution costs are paid, the remaining value shall be received by the
juridical person’s owner, capital contributors, except for the case prescribed in Clause 3 of this
Article or otherwise prescribed by law.
3. In case a dissolved social fund or charity fund has paid fully dissolution expenses and other
debts prescribed in Clause 1 of this Article, the remaining property shall be transferred to another
fund with the same purpose.
If there is no fund with the same purpose that receives the property or the above fund is dissolved
because of its violation against to prohibition of law or contrary to social ethics, its property shall
vest in the State.
Article 95. Bankruptcy of juridical persons
The bankruptcy of each juridical person shall comply with regulations of law on bankruptcy.
Article 96. Termination of juridical persons
1. A juridical person shall terminate in any of the following cases:
a) Consolidation, acquisition, total division, conversion of legal, or dissolution prescribed in
Articles 88, 89, 90, 92 and 93 of this Code;
b) Declaration of bankruptcy in accordance with law on bankruptcy.
2. A legal person shall terminate from the time its name is removed from the juridical person
registry or as from the time stated in a decision of competent authority.
3. When a juridical person terminates, its property shall be resolved in accordance with this Code
and relevant laws.
Chapter V
THE SOCIALIST REPUBLIC OF VIETNAM, CENTRAL AND LOCAL REGULATORY
AGENCIES IN CIVIL RELATIONS
Article 97. The Socialist Republic of Vietnam, central and local regulatory agencies in civil
relations
When the Socialist Republic of Vietnam or a central or local regulatory agency engages in a civil
relation, it shall have the equality with other entities and bear civil responsibility as prescribed in
Article 99 and 100 of this Code.
Article 98. Representatives in civil relations
The representation of the Socialist Republic of Vietnam or a central or local regulatory agency
engaging in civil relations shall comply with regulations of law in terms of functions, tasks,
powers and organizational structure of regulatory agencies. The representation by other natural
or juridical persons may only permitted in the cases and procedures prescribed by law.
Article 99. Liability for civil obligations
1. The Socialist Republic of Vietnam, central and local regulatory agencies shall bear liability for
their civil obligations by recourse to the property whose ownership for which they represent and
take centralized management, other than the case that the property is transferred to the juridical
person prescribed in Clause 2 of this Article.
2. The juridical persons established by the Socialist Republic of Vietnam, or a central or local
regulatory agency shall not bear liability for civil obligations of the Socialist Republic of
Vietnam, or such central or local regulatory agency.
3. The Socialist Republic of Vietnam, a central or local regulatory agency shall not bear liability
for civil obligations of the juridical persons established themselves, including state-owned
enterprises, unless the Socialist Republic of Vietnam or such central or local regulatory agency
has acted as a guarantee for those juridical persons as prescribed by law.
4. A central or local regulatory agency shall not bear liability for civil obligations of the juridical
persons of the Socialist Republic of Vietnam, or other central or local regulatory agencies, unless
otherwise prescribed by law.
Article 100. Liability for civil obligations of the Socialist Republic of Vietnam, a central or
local regulatory agency in civil relation in which a foreign state, natural or juridical person
is a party
1. The Socialist Republic of Vietnam, a central or local regulatory agency shall bear liability for
its civil obligations arising from the following cases with a foreign state, natural or juridical
person is a party:
a) An international agreement to which the Socialist Republic of Vietnam is a signatory has
regulations on waiving immunity;
b) An agreement on waiving immunity concluded by the parties in such civil relation;
c) The Socialist Republic of Vietnam, the central or local regulatory agency waives the
immunity.
2. The liability for civil obligations of a foreign state, natural or juridical person with the
Socialist Republic of Vietnam, Vietnamese central or local regulatory agencies, natural or
juridical persons shall apply Clause 1 of this Article.
Chapter VI
HOUSEHOLDS, CO-OPERATIVE GROUPS AND OTHER NON-JURIDICAL
PERSONS IN CIVIL RELATIONS
Article 101. Entities in civil relations with the participation of households, co-operative
groups and other non-juridical persons
1. In case a household, co-operative group or another non-juridical person engages in a civil
relation, the entities establishing or performing civil transactions for such household, cooperative group or the other organization shall be its member or a representative authorized. The
authorization must be made in writing, unless otherwise agreed. If there is any change of
representative, it is required to keep the other party informed about the change.
If a member of a household, co-operative group or another non-juridical person, without
authorization from other members to act as a representative, engages in a civil relation, he/she
shall be the entity of such civil relation.
2. The entities of civil relations with the participation of households using land shall be
determined as prescribed in the Law on land.
Article 102. Common property of members of households, co-operative groups and other
non-juridical persons
1. Common property of members of a household and their rights and obligations to such property
shall be determined as prescribed in Article 212 of this Code.
2. Common property of members of a co-operative group and their rights and obligations to such
property shall be determined as prescribed in Article 506 of this Code.
3. Common property of members of another non-juridical person and their rights and obligations
to such property shall be determined as agreed, unless otherwise prescribed by law.
Article 103. Civil liability of members of households, co-operative groups and other nonjuridical persons
1. Civil obligations arising from the engaging in civil relations by households, co-operative
groups, other organizations as non-juridical person shall be fulfilled by recourse their common
property.
2. If all members have no property or not enough property to fulfill their common obligations,
the obligee may request those members to fulfill the obligations as prescribed in Article 288 of
this Code.
3. If the members have no agreement, co-operative contract or not otherwise prescribed by law,
they must bear the civil liability as prescribed in Clause 1 and Clause 2 of this Article in
proportion to each member’s contribution, if it fails to determine particular proportions, each
member shall have the same proportion.
Article 104. Consequences of civil transactions established and/or performed by
unauthorized persons or by representatives beyond scope of representation
1. If an unauthorized member, on behalf of other members of a household, co-operative group or
another non-juridical person, establish or perform a civil transaction, or a representative establish
or perform a civil transaction beyond his/her scope of representation, the legal consequences of
such transaction shall apply provisions of Articles 130, 142 and 143 of this Code.
2. If a civil transaction established and/or performed by an authorized member or by a
representative beyond his/her scope of representation cause damage to other members of the
household, co-operative group or the non-juridical persons or a third party, such person must
compensate for the infringed person.
Chapter VII
PROPERTY
Article 105. Property
1. Property comprises objects, money, valuable papers and property rights.
2. Property includes immovable property and movable property. Immovable property and
movable property may be existing property or off-plan property.
Article 106. Registration of property
1. Ownership and other rights to immovable property shall be registered in accordance with this
Code and law on registration of property.
2. Ownership and other rights to movable property shall not be required to be registered, unless
otherwise prescribed by law.
3. The registration of property must be public.
Article 107. Immovable property and movable property
1. Immovable property includes:
a) Land;
b) Houses and constructions attached to land;
c) Other property attached to land, houses and constructions;
d) Other property as prescribed by law.
2. Moveable property is property which is not immovable property.
Article 108. Existing property and off-plan property
1. Existing property means a property which is formed and to which an entity has established
his/her ownership rights and other rights before or at the time of transaction establishment.
2. Off-plan property includes:
a) Non-formed property;
b) Formed property that the entity has established his/her ownership rights after the time of
transaction establishment.
Article 109. Yield and income
1. Yield means natural products brought by property.
2. Income means a profit earned from the development of the property.
Article 110. Primary objects and auxiliary objects
1. A primary object is an independent object the utility of which can be exploited according to its
functions.
2. An auxiliary object is an object which directly supports the exploitation of the utility of a
primary object and which is part of the primary object but which may be separated from it.
3. Upon performance of an obligation to transfer a primary object, any auxiliary objects must
also be transferred, unless otherwise agreed.
Article 111. Divisible objects and indivisible objects
1. A divisible object is an object which, after being divided, retains its original characteristics
and usage.
2. An indivisible object is an object which, after being divided, is not able to retain its original
characteristics and usage.
When an indivisible object needs to be divided, it must be valued in money for the purpose of
division.
Article 112. Consumable objects and non-consumable objects
1. A consumable object is an object which, after being having been used once, loses or is not
capable of retaining its original characteristics, appearance and usage.
A consumable object may not be the object of a lease contract or of a lending contract.
2. A non-consumable object is an object which, after being having been used many times,
substantially retains its original characteristics, appearance and usage.
Article 113. Fungible objects and distinctive objects
1. Fungible objects are objects which have the same appearance, characteristics and usage and
which can be determined by units of measurement.
Fungible objects of the same quality may be interchangeable.
2. A distinctive object is an object which is distinguishable from other objects by its own
characteristics regarding markings, appearance, color, material, nature or position.
An obligation to transfer a distinctive object is only able to fulfill by transferring that particular
distinctive object.
Article 114. Integrated objects
An integrated object is an object comprised of components or parts which fit together and are
connected with each other to make up a complete from whereby one of the parts or components
is missing, or if there is a part or component which is not of the right specification or category, it
is not able to be used or its utility value is decreased.
An obligation to transfer an integrated object must be fulfilled by transferring all parts or
components thereof, unless otherwise agreed.
Article 115. Property rights
Property rights are rights which are able to be valued in money, including property rights to
subjects of intellectual property rights, right to use land and other property rights.
Chapter VIII
CIVIL TRANSACTIONS
Article 116. Civil transactions
Civil transaction is a contract or a unilateral legal act which gives rise to, changes or terminates
civil rights and/or obligations.
Article 117. Conditions for effective civil transactions
1. A civil transaction shall be effective when it satisfies all of the following conditions:
a) Participants in the transaction have legal personality and/or legal capacity in conformity with
such transaction;
b) Participants in the transaction act entirely voluntarily;
c) The purpose and contents of the transaction are not contrary to the law and/or social ethics.
2. The forms of civil transactions shall be the conditions for its effectiveness in cases where it is
so provided for by law.
Article 118. Objectives of civil transactions
The objectives of a civil transaction are legitimate interests which the parties wish to achieve at
the time when they enter into such transaction.
Article 119. Forms of civil transactions
1. A civil transaction shall be expressed verbally, in writing, or through specific acts.
Civil transactions by way of electronic means in form of data messages prescribed in law on
electronic transactions shall be deemed to be written civil transactions.
2. In cases where it is provided for by law that a civil transaction must be expressed in writing,
notarized, authenticated, registered or permitted, such provisions must be complied with.
Article 120. Conditional civil transactions
1. In cases where the parties have agreed on the conditions which shall give rise to or terminate a
civil transaction, such civil transaction shall arise or be terminated upon the occurrence of such
conditions.
2. In cases where the conditions which give rise to or terminate a civil transaction cannot occur
due to the direct or indirect action of deliberate impeding of one party, such conditions shall be
considered having occurred; if the direct or indirect efforts of one of the parties promotes
deliberately promote the occurrence of conditions so as to give rise to or terminate the civil
transaction, such conditions shall be deemed not to have occurred.
Article 121. Interpretation of civil transactions
1. In cases where a civil transaction may be understood in different ways, such transaction must
be interpreted in the following order:
a) In accordance with the real intention of the parties at the time when the transaction was
entered into;
b) In a manner consistent with the objective of the transaction;
c) In accordance with the customary practice of the place where the transaction was entered into.
2. The interpretation of civil contracts shall comply with the provisions of Article 404 of this
Code and the interpretation of the contents of testaments shall comply with the provisions of
Article 648 of this Code.
Article 122. Invalid civil transactions
Civil transactions which fail to satisfy any one of the conditions specified in Article 117 of this
Code shall be invalid.
Article 123. Invalidity of civil transactions due to breach of legal prohibitions or
contravention of social ethics
Civil transactions with objectives and contents which breach legal prohibitions or which
contravene social ethics shall be invalid.
Legal prohibitions mean provisions of law which do not permit entities to perform certain acts.
Social ethics are common standards of conduct as between persons in social life, which are
recognized and respected by the community.
Article 124. Invalidity of civil transactions due to falsification
1. If the parties falsely enter into a civil transaction for the purpose of concealing another
transaction, the false transaction shall be invalid and the concealed transaction remains valid,
unless it is also invalid under the provisions of this Code or relevant laws.
2. If the parties enter into a civil transaction falsely for the purpose of evading responsibilities to
a third person, such transaction shall be invalid.
Article 125. Invalidity of civil transactions established and performed by minors or legally
incapacitated persons or persons with limited cognition and behavior control or persons
with limited legal capacity
1. When a civil transaction is established or performed by a minor, a legally incapacitated
person, a person with limited cognition and behavior control, or a person with limited legal
capacity, a court shall, at the request of the representative of that person, declare such transaction
invalid, if it is provided for by law that such transaction must be established and performed by or
with the consent of the representative of that person, except for the cases prescribed in Clause 2
of this Article.
2. A civil transaction of a person prescribed in Clause 1 of this Article shall not be invalid in any
of the following cases:
a) The civil transaction of a child less than 6 years of age or a legally incapacitated person
established for his/her daily needs;
b) The civil transaction only either arising rights or exempting from obligations for the minor,
the legally incapacitated person, the person with limited cognition and behavior control, the
person with limited legal capacity and their contracting parties;
c) The civil transaction of which validity is recognized by the person established such transaction
that become an adult or restore his/her legal capacity.
Article 126. Invalidity of civil transactions due to misunderstanding
1. If there is a misunderstanding in a civil transaction that make a party or the parties fails to
meet the objectives of the transaction establishment, the mistaken party shall have the right to
request a court to declare such transaction invalid, except for the case prescribed in Clause 2 of
this Article.
2. A civil transaction having misunderstanding shall not be invalid if the parties may meet the
objectives of the transaction establishment or the parties may correct the misunderstanding
resulting in the achievement of the objectives of the transaction establishment.
Article 127. Invalidity of civil transactions due to deception, threat or compulsion
Any party entering into a civil transaction as a result of deception, threat or compulsion has the
right to request a court to declare such transaction invalid.
Deception in a civil transaction means an intentional act of a party or a third person for the
purpose of misleading the other party as to the subject, the nature of the entity or contents of the
civil transaction which has caused the other party to enter into such transaction.
Threat or compulsion in a civil transaction means an intentional act of a party or a third person
which compels the other party to conduct the civil transaction in order to avoid danger to the life,
health, honor, reputation, dignity and/or property or that of its relatives.
Article 128. Invalidity of civil transactions established by person lacking in cognition and
behavior control
A person who has legal capacity but has entered into a civil transaction at the time of he/she is
lacking in cognition and behavior control shall have the right to request a court to declare such
civil transaction invalid.
Article 129. Invalidity of civil transactions due to non-compliance with form
A civil transaction violating conditions for validity pertaining to form shall be invalid, except for
any of the following cases:
1. If the form of a civil transaction, required to be established in writing, does not comply with
regulations of law, but a party or the parties has/have fulfill at least two third of the obligations in
the transaction, a court, at his/her/their request(s), shall issue a decision on recognition of the
validity of such transaction.
2. If the form of a civil transaction, required to be established in writing, violates against
regulations on notarizing or authorization, but a party or the parties has/have fulfill at least two
third of the obligations in the transaction, a court, at his/her/their request(s), shall issue a decision
on recognition of the validity of such transaction. In this case, the parties need not perform the
notarizing or authorization.
Article 130. Partially invalid civil transactions
A civil transaction shall be partially invalid when one part of the transaction is invalid but such
invalidity does not affect the validity of the remaining parts.
Article 131. Legal consequences of invalid civil transactions
1. An invalid civil transaction shall not give rise to, change or terminate any civil rights and
obligations of the parties as from the time the transaction is entered into.
2. When a civil transaction is invalid, the parties shall restore everything to its original state and
shall return to each other what they have received.
If the restitution is not able to make in kind, it may paid in money.
3. A bona fide person in receiving yield and/or income is not required to return such yield and/or
income.
4. The party at fault which caused damage must compensate therefore.
5. The settlement of consequences of invalid civil transactions regarding personal rights shall be
prescribed in this Code and relevant laws.
Article 132. Time limit for requesting court to declare civil transactions invalid
1. The time limit within which a request may be made to a court to declare a civil transaction
invalid as specified in Articles 125 thru 129 of this Code shall be two years as from the date on
which:
a) The representative of a minor, a legally incapacitated person, a person with limited cognition
and behavior control or a person with limited legal capacity knows and should know the ward
established and/or performed the transaction himself/herself.
b) The mistaken or cheated person in a transaction knows and should know that such transaction
is established due to misunderstanding or cheating;
c) The person that threatened or compelled other persons in a transaction put an end to such acts;
d) The person lacking in cognition and behavior control establishes his/her transaction;
dd) The civil transaction is established in non-compliance with form.
2. After the time limit prescribed in Clause 1 of this Article, if there is still no request for
declaring civil transaction invalid, such transaction still remains valid.
3. For civil transactions specified in Articles 123 and 124 of this Code, the time limit for
requesting a court to declare such civil transactions invalid shall not be restricted.
Article 133. Protection of the interests of bona fide third parties with regard to invalid civil
transactions
1. In cases where a civil transaction is invalid but the transacted property being a moveable
property is not required to be registered and such property has already been transferred to a bona
fide third party through another transaction, the transaction with the third party shall remain
valid, except for the case specified in Article 167 of this Code.
2. In cases where a civil transaction is invalid but the transacted property is registered at a
competent authority and such property has already been transferred to a bona fide third party
through another transaction which is established according to that registration, such transaction
shall remain valid.
In cases where the transacted property which is required to be registered has not registered at a
competent authority, the transaction with the third party shall be invalid, except for cases the
bona fide third party received such property through an auction or a transaction with an another
party being the owner of such property pursuant to a judgment or decision of a competent
authority but thereafter such person is not the owner of the property as a result of the judgment or
decision being amended or annulled.
3. The owner of a property shall have no right to reclaim the property from the bona fide third
party if the transaction with such party remains valid as prescribed in Clause 2 of this Article, but
the owner may proceed against the party at fault to refund appropriate expenses and compensate
for his/her damage.
Chapter IX
REPRESENTATION
Article 134. Representation
1. Representation means a person (hereinafter referred to as the representative) acting in the
name and for the benefit of another person (hereinafter referred to as the principal) enters into
and performs a civil transaction within the scope of representation.
2. Each natural or juridical person may enter into and/or perform civil transactions through a
representative. A natural person may not allow another person to represent him/her; if the law
provides for that they must personally enter into and perform such transaction.
3. The representative, if required by law, must have legal personality and/or legal capacity in
accordance with the transactions that he/she enters into and performs.
Article 135. Basis for establishment of representation rights
Representation rights shall be established according to a power of attorney between a principal
and a representative (hereinafter referred to as authorized representation); according to a decision
of a competent authority, a charter of a juridical person or as prescribed by law (hereinafter
referred to as legal representation).
Article 136. Legal representatives of natural persons
1. The father and/or mother with respect to a minor.
2. The guardian with respect to a ward. The guardian of a person with limited cognition and
behavior control is a legal representative if appointed by a court.
3. The person appointed by a court in case where it is not able to determine the representative
prescribed in Clause 1 and Clause 2 of this Article.
4. The person appointed by a court with respect to a person with limited legal capacity.
Article 137. Legal representatives of juridical persons
1. Legal representatives of juridical persons include:
a) The person appointed by the juridical person according to its charter;
b) The person competent to represent as prescribed by law;
c) The person appointed by a court during the proceedings at the court.
2. Each juridical person may have multiple legal representatives and each representative is
entitled to represent the juridical person as prescribed in Articles 140 and 141 of this Code.
Article 138. Authorized representatives
1. Each natural or juridical person may authorize another natural or juridical person to enter into
and perform a civil transaction.
2. Members of a household, co-operative group or a non-juridical person may agree to authorize
another natural or juridical person to enter into and perform a civil transaction related to their
common property.
3. A person aged from fifteen years to below eighteen years may be an authorized representative,
except where the law provides for that the civil transaction must be entered into and performed
by a person who has reached eighteen years of age.
Article 139. Legal consequences of representative acts
1. A civil transaction entered into and performed with a third person by a representative in
accordance with his/her scope of authorization shall give rise to rights and obligations of the
principal.
2. The representative is entitled to enter into and/or perform necessary acts to attain the
objectives of the authorization.
3. In case where a representative still enters into or performs a civil transaction although he/she
knew or should know the establishment of authorization due to misunderstanding, deception,
threat or compulsion, such civil transaction shall not give rise to rights and obligations of the
principal, except for the case that the principal knew or should know such misunderstanding,
deception, threat or compulsion without any objection.
Article 140. Term of representation
1. The term of representation shall be determined according to a power of attorney, a decision of
a competent authority, and a charter of a juridical person or as prescribed by law.
2. If it fails to determine the term of representation prescribed in Clause 1 of this Article, the
term of representation shall be determined as follows:
a) If the representation right is determined according to a specific civil transaction, the time limit
for representation shall be determined until the time of termination of such civil transaction;
b) If the representation right is not determined according to a specific civil transaction, the term
of representation is 1 year, from the time of arising representation right.
3. The authorized representation shall terminate in any of the following cases:
a) Upon an agreement;
b) Upon expiry of the term of authorization;
c) Upon completion of the authorized tasks;
d) The principal or the representative unilaterally revokes the authorization;
dd) The principal or the representative being natural person dies; the principal or the
representative being juridical person ceases to exist;
e) The representative does not meet the conditions prescribed in Clause 3 Article 134 of this
Code;
g) Upon another basis that causes the failure of the representation.
4. The legal representation shall terminate in any of the following cases:
a) The principal being natural person becomes an adult or has his/her legal capacity restored;
b) The principal being person dies;
c) The principal being juridical person ceases to exist;
d) Upon another basis as prescribed in this Code and relevant laws.
Article 141. Scope of representation
1. Each representative may only enter into and/or perform civil transactions within his/her scope
of representation according to any of the following bases:
a) The decision of the competent authority;
b) The charter of the juridical person;
c) Contents of authorization;
d) Other regulations as prescribed by law.
2. If it fails to determine the specific scope authorization prescribed in Clause 1 of this Article,
the legal representative has the right to enter into and perform all civil transactions in the
interests of the principal, unless otherwise prescribed by law.
3. A natural or juridical person may represent multiple natural or juridical persons but he/she/it
may not, on behalf of the principal, enter into and perform a civil transaction with him/her/it or
with a third party that he/she/it also acts as a representative therefor, unless otherwise prescribed
by law.
4. The representative must inform the parties of the scope of his/her representation.
Article 142. Consequences of civil transactions entered into and performed by
unauthorized persons
1. A civil transaction entered into and performed by an unauthorized person representative shall
not give rise to rights and obligations of the principal, except for any of the following cases:
a) The principal recognizes the transaction;
b) The principal knows it without any objection within an appropriate time limit;
c) It is the principal's fault that the other party does not know or is not able to know that the
person entering into and performing the civil transaction therewith was unauthorized.
2. If a civil transaction entered into and performed by an unauthorized person does not give rise
to rights and obligations with respect to the principal, the unauthorized person must fulfill the
obligations to the person with which he/she transacted, unless such person knew or should have
known that the representative was unauthorized.
3. A person having transacted with an unauthorized person has the right to terminate unilaterally
the performance of or to terminate the civil transaction entered into and to demand compensation
for any damage, except where such person knew or should have known that the representative
was unauthorized or the case prescribed in Point a Clause 1 of this Article.
4. If the unauthorized person and the other party in a civil transaction deliberately enter into and
perform such transaction and thereby cause damage to the principal, they must jointly
compensate for the damage.
Article 143. Consequences of civil transactions entered into and performed by
representatives beyond scope of representation
1. A civil transaction entered into and performed by a representative beyond his or her scope of
representation shall not give rise to rights and obligations of the principal with respect to that part
of the transaction which exceeded the scope of representation, except for any of the following
cases:
a) The principal gives consent;
b) The principal knows it without any objection within an appropriate time limit;
c) It is the principal's fault that the other party does not know or is not able to know that the
person entering into and performing the civil transaction therewith was beyond his/her scope of
representation.
2. If a civil transaction entered into and performed by a representative beyond his/her scope of
representation does not give rise to rights and obligations of the principal with respect to that part
of the transaction, the representative must fulfill the obligations owning to the person with which
he/she transacted in respect of the part of transaction which is beyond the scope of
representation, unless such person knew or should have known that the scope of representation
was exceeded.
3. A person having transacted with such representative has the right to terminate unilaterally the
performance of or to terminate the civil transaction with respect to that part which is beyond the
scope of representation or with respect to the entire transaction and to demand compensation for
any damage, except where such person knew or should have known that the scope of
representation was exceeded or the case prescribed in Point a Clause 1 of this Article.
4. Where a person and a representative enter into and perform a civil transaction deliberately
beyond the scope of representation of the representative and thereby cause damage to the
principal, they shall be jointly liable to compensate for the damage.
Chapter X
TIME LIMITS AND LIMITATION PERIODS
Section 1. TIME LIMITS
Article 144. Time limits
1. Time-limit means a length of time calculated from one point of time to another point of time.
2. A time-limit may be calculated by reference to minutes, hours, days, weeks, months or years,
or by reference to the happening of an event.
Article 145. Methods for calculating time-limits
1. The method for calculating a time-limit shall be apply in accordance with the provisions of
this Code, unless otherwise agreed or otherwise provided by law.
2. A time-limit shall be calculated according to the solar calendar, unless otherwise agreed.
Article 146. Detailed provisions on time-limits and point of time for calculating time-limits
1. Where the parties have agreed on a time-limit which is one year, half of one year, one month,
half of one month, one week, one day, one hour or one minute, but such length of time is not
continuous, the time-limit shall be calculated as follows:
a) One year shall be three hundred and sixty five (365) days;
b) Half of one year shall be six months;
c) One month shall be thirty (30) days;
d) Half of one month shall be fifteen (15) days;
dd) One week shall be seven days;
e) One day shall be twenty four (24) hours;
g) One hour shall be sixty (60) minutes;
h) One minute shall be sixty (60) seconds.
2. Where the parties have agreed on a point of time which is at the beginning of a month, the
middle of a month or the end of a month, such point of time shall be determined as follows:
a) The beginning of a month shall be the first day of that month;
b) The middle of a month shall be the fifteenth day of that month;
c) The end of a month shall be the last day of that month.
3. Where the parties have agreed on a point of time which is at the beginning of the year, the
middle of a year or the end of a year, such point of time shall be determined as follows:
a) The beginning of a year shall be the first day of January;
b) The middle of a year shall be the last day of June;
c) The end of a year shall be the last day of December.
Article 147. Commencement of time-limits
1. Where a time-limit is stated by reference to minutes or hours, it shall commence from a
defined moment of time.
2. Where a time-limit is stated by reference to days, weeks, months or years, the first day of the
time-limit shall not be taken into account and the time-limit shall commence from the day
following the defined date.
3. Where a time-limit is stated by reference to the happening of an event, the date on which the
event happens shall not be taken into account and the time-limit shall commence from the day
following the date on which the event happened.
Article 148. End of time-limits
1. Where a time-limit is stated by reference to days, the time-limit shall end at the last moment of
the last day of the time limit.
2. Where a time-limit is stated by reference to weeks, the time-limit shall end at the last moment
of the corresponding day of the last week of the time limit.
3. Where a time limit is stated by reference to months, the time-limit shall end at the last moment
of the corresponding day of the last month of the time-limit. If the month in which the time-limit
ends does not have a corresponding day, the time-limit shall end on the last day of such month.
4. Where a time-limit is stated by reference to years, the time-limit shall end at the last moment
of the corresponding day and month of the last year of the time-limit.
5. Where the last day of a time-limit falls on a weekend or a public holiday, the time-limit shall
end at the last moment of the next working day following such day.
6. The last moment of the last day of a time-limit shall be precisely twelve o'clock midnight on
that day.
Section 2. LIMITATION PERIODS
Article 149. Limitation periods
1. Limitation period means a time-limit provided by law where, upon its expiry, a legal
consequence arises as prescribed by law.
The limitation periods shall apply as prescribed in this Code and relevant laws.
2. A court only applies provisions in terms of limitation periods at the request of a party or the
parties provided that such request is filed before the first trial court of first instance gives a
judgment and/or a decision on settlement.
The person benefiting from the application of the limitation period may refuse to apply such
limitation period, unless such refusal is aimed at evading his/her obligations.
Article 150. Types of limitation periods
1. A limitation period for enjoying civil rights is the time limit where, upon its expiry, an entity
enjoys civil rights.
2. A limitation period for a release from civil obligations is the time limit where, upon its expiry,
a person with civil obligations is released from the fulfillment of those civil obligations.
3. A limitation period for initiating legal action is the time-limit within which an entity has the
right to initiate legal action to request a court to resolve a civil case to protect the infringed legal
rights or interests of the entity. When such time-limit expires, the right to initiate such legal
action shall be lost.
4. A limitation period for requesting resolution of a civil case is the time-limit within which an
entity has the right to request a court to resolve a civil case in order to protect the legal rights and
interests of natural persons, juridical persons, public interest and/or the interest of the State.
When such time-limit expires, the right to request shall be lost.
Article 151. Method for calculating limitation periods
A limitation period shall be calculated from the first moment of time of the first day and shall
end at the last moment of time of the last day of the period.
Article 152. Effectiveness of limitation periods for enjoyment of civil rights and release
from civil obligations
Where the law provides for that a subject may enjoy civil rights or be released from civil
obligations by reference to a limitation period, the enjoyment of civil rights or the release from
civil obligations shall take effect only upon expiry of the limitation period.
Article 153. Continuity of limitation periods for enjoyment of civil rights and release from
civil obligations
1. The limitation period for enjoyment of civil rights or release from civil obligations shall
continue uninterrupted from its beginning to its expiry. If there is an event causing an
interruption, the limitation period shall recommence from the moment when the event causing
the interruption ends.
2. The limitation period for enjoyment of civil rights or release from civil obligations shall be
suspended upon occurrence of any of the following events:
a) A competent authority makes a resolution with respect to the civil rights and obligations
which are the subject of the limitation period;
b) Civil rights or obligations which are the subject of a limitation period are disputed by a person
with related rights or obligations and they are settled by an effective judgment or decision issued
by a court.
3. The limitation period shall continue uninterrupted where the enjoyment of civil rights or the
release from civil obligations or the right to initiate legal action is lawfully transferred to another
person.
Article 154. Commencement of limitation periods for initiating legal action for civil cases
and limitation periods for requesting resolution of civil cases
1. The commencement of the limitation period for initiating legal action for a civil case shall be
calculated from the date on which the eligible person knows or should know that his/her legal
rights or interests are infringed, unless otherwise provided by law.
2. The commencement of the limitation period for requesting resolution of a civil case shall be
calculated from the date when the right to request arises, unless otherwise provided by law.
Article 155. Non-applicability of limitation periods
A limitation period for initiating legal action for a civil case shall not apply in any of the
following cases:
1. Request for the protection of personal rights not associated with property;
2. Request for the protection of ownership rights, unless otherwise provided by this Code or
relevant laws.
3. Dispute over land use right as prescribed in the Law on land;
4. Other cases as provided by law.
Article 156. Time periods excluded from limitation periods for initiating legal action for
civil cases and from limitation periods for requesting resolution of civil cases
The time period during which one of the following events occurs shall be excluded from
limitation periods for initiating legal action for civil cases and from limitation periods for
requesting resolution of civil cases:
1. An event of force majeure or other objective hindrance which renders the person with the right
to initiate legal action for a civil case or make the request not able to do so within the limitation
period.
An event of force majeure is an event which occurs in an objective manner which is not able to
be foreseen and which is not able to be remedied by all possible necessary and admissible
measures being taken.
An objective hindrance is a hindrance which in an objective context results in a person with civil
rights or obligations not knowing that his or her lawful rights and interests have been infringed or
not being able to exercise his or her rights or fulfill his or her civil obligations;
2. The person with the right to initiate legal action for a civil case or to make the request is a
minor or a legally incapacitated person, a person with limited cognition and behavior control or a
person with limited legal capacity, and does not yet have a representative.
3. The representative of a minor or a legally incapacitated person, a person with limited
cognition and behavior control or a person with limited legal capacity has not yet been replaced
in any of the following cases:
a) The representative being natural person dies or the representative being juridical person ceases
to exist;
b) The representative, for good reasons, cannot continue his/her representation.
Article 157. Re-commencement of limitation period for initiating legal action for civil cases
1. The limitation period for initiating legal action for a civil case shall re-commence in any of the
following cases:
a) The obligor has acknowledged part or all of its obligations to the plaintiff;
b) The obligor has acknowledged or fulfilled part of its obligations to the plaintiff;
c) The parties have become reconciled.
2. The limitation period for initiating legal action for a civil case shall re-commence from the
date following the date on which the event provided in clause 1 of this Article occurs.
PART TWO
OWNERSHIP RIGHTS AND OTHER PROPERTY-RELATED RIGHTS
Chapter XI
GENERAL PROVISIONS
Section 1. Rules for establishing and exercising ownership rights and other propertyrelated rights
Article 158. Ownership rights
Ownership rights comprise the rights of an owner to possess, use and dispose of the property of
the owner in accordance with law.
Article 159. Other property-related rights
1. Other property-related rights mean rights of entities directly hold or control the property
belonging to ownership rights of another entity.
2. Other property-related rights include:
a) Right to adjacent immovable property;
b) Usufruct right;
c) Surface rights.
Article 160. Rules for establishing and exercising ownership rights and other propertyrelated rights
1. Ownership rights and other property-related rights shall be established and exercised if they
are prescribed in Code and relevant laws.
Other property-related rights shall remain valid although the ownership right have been
transferred, otherwise provided by this Code or relevant laws.
2. Each owner is entitled to perform all acts on his willpower to the property but it is not contrary
to the provisions of the law, damage or adversely affects national interests, ethnicity, public
interests, rights and legitimate interests of other people.
3. Each holder of other property-related rights is entitled to perform all acts within the scope
prescribed in this Code and relevant laws but it is not contrary to the provisions of the law,
damage or adversely affects national interests, ethnicity, public interests, rights and legitimate
interests of the owner or other people.
Article 161. Time of establishing ownership rights and other property-related rights
1. The time of establishing ownership rights and other property-related rights shall be determined
as prescribed in this Code and relevant laws; if there is no relevant regulations of law, the
agreement of the parties shall prevail; if there is no either relevant regulations of law or
agreement of the parties, the time of establishing ownership rights and other property-related
rights shall be the time when the property is transferred.
The time when the property is transferred is the time when the obligee or his/her legal
representative possesses the property.
2. In case where the property which has been not transferred arise yield or income, such yield or
income shall belong to the transferor, unless otherwise agreed.
Article 162. Bearing risks of property
1. Each owner shall bear all risks of the property under his/her ownership, unless otherwise
agreed or unless otherwise prescribed by this Code or relevant laws.
2. Each holder of other property-related rights shall bear risks of the property within his/her right
scope, unless otherwise agreed with the owner of the property or unless otherwise prescribed by
this Code or relevant laws.
Section 2. PROTECTION OF OWNERSHIP RIGHTS AND OTHER PROPERTYRELATED RIGHTS
Article 163. Protection of ownership rights and other property-related rights
1. No one may be illegally restricted in or deprived of his/her ownership rights or other propertyrelated rights to his/her property.
2. In case of extreme necessity for reasons of national defense, security or national interests, the
State shall affect a compulsory purchase or requisition with compensation of the property of
organizations or individuals in accordance with the market prices.
Article 164. Measures for protection of ownership rights and other property-related rights
1. Each owner or holder of other property-related rights is entitled to self-protect and prevent
anyone from infringing his/her rights by measures in accordance with regulations of law.
2. Each owner or holder of other property-related rights shall have the right to request a court or
another competent authority to compel the person infringing upon their rights to return the
property and terminate the acts of illegally obstructing the exercise of their ownership rights or
other property-related rights, and to request compensation for any damage.
Article 165. Possession with a legal basis
1. Possession with a legal basis is the possession of a property in any of the following cases:
a) The owner possesses the property;
b) A person is authorized by the owner to manage the property;
c) A person to whom the right to possession has been transferred through a civil transaction in
accordance with the provisions of law;
d) A person who discovers and keeps derelict property, property with unidentified owners,
property which has been let drop on the ground, left over out of inadvertence, buried or sunken
in accordance with this Code and/or relevant laws.
dd) A person who discovers and keeps stray domestic animals, poultry or raised aquatic animals
in accordance with this Code and/or relevant laws;
e) Other cases as prescribed by law.
2. A possession of property which does not comply with the provisions of Clause 1 of this
Article is a possession without a legal basis.
Article 166. The right to reclaim property
1. Owners and/or holders of other property-related rights shall have the right to request the
persons possessing, using or receiving benefits from the property without a legal basis to return
such property.
2. The owner of a property has no right to reclaim such property that is in the possession of a
holder of other property-related rights.
Article 167. The right to reclaim movable property not subject to ownership right
registration from bona fide possessors
Owners may reclaim movable property not subject to ownership right registration from bona fide
possessors in cases where such bona fide possessors have acquired such property through
unindemifiable contracts with persons who have no right to dispose of the property; in case of
indemifiable contracts, the owners may reclaim the movable property if such movable property
has been stolen, lost or other cases of possession against the owners' will.
Article 168. The right to reclaim movable property subject to ownership right registration
or immovable property from bona fide possessors
Owners may reclaim their movable property subject to ownership right registration and
immovable property, except for cases prescribed in Clause 2 Article 133 of this Code.
Article 169. The right to request the prevention of acts of illegally obstructing the exercise
of ownership rights and other property-related rights
When exercising their ownership rights or other property-related rights, the owners or holders
shall have the right to request persons committing acts of illegally obstructing the exercise of
their lawful ownership rights or possession rights to terminate such acts or request a court or
another competent authority to compel such persons to terminate their violations.
Article 170. The right to request compensation for damage
Owners or holders of other property-related rights are entitled to request persons infringing upon
their ownership rights or other property-related rights to compensate for any damage.
Section 3. RESTRICTIONS ON PROTECTION OF OWNERSHIP RIGHTS AND
OTHER PROPERTY-RELATED RIGHTS
Article 171. Rights and obligations of owners and holders of other property-related rights
in emergency circumstances
1. An emergency circumstance is a circumstance where in order to avert a danger actually and
directly threatening the interests of the State or of a collective, or the legitimate rights or interests
of their own or of other persons, a person has no alternative but to take an act which would cause
lesser damage than the damage to be prevented.
2. In an emergency circumstance, the owner and holder of other property-related rights to a
property must not hinder another person from using his/her own property or hinder another
person from causing damage to such property in order to prevent or abate the greater danger or
damage that threatens to happen.
3. The causing of damage in an emergency circumstance is not the act of infringing upon
ownership rights or other property-related rights. The owner or the holder of other propertyrelated rights shall be compensated for damage in accordance with the provisions of Article 595
of this Code.
Article 172. Obligations to protection of the environment
When exercising ownership rights and/or other property-related rights, the owner or the holder
must comply with the provisions of law on environmental protection; if he/she causes
environmental pollution, the owner shall have to terminate the acts which cause the pollution, to
take measures to remedy the consequences and to compensate for damage.
Article 173. Obligations to respect and ensure social order and safety
When exercising ownership rights and/or other property-related rights, the owner or the holder
must respect and ensure social order and safety and must not abuse his/her ownership rights to
cause social disorder or unsafety, causing damage to the State interests, public interests or
legitimate rights and interests of other persons.
Article 174. Obligation to respect building regulations
When constructing a project, the owners and holders of other property-related rights must
comply with the law on construction, ensure safety. It may not build beyond the height and
distance specified by the law on construction and infringes the legitimate rights and interests of
owners of adjoining and surrounding immovable properties.
Article 175. Boundaries between immovable properties
1. The boundaries between adjoining immoveable properties shall be determined in accordance
with the agreement of the owners or in accordance with a decision of the competent authority.
The boundaries may also be determined in accordance with customary practice or according to
boundaries which have existed for thirty (30) or more years without dispute.
The land user may not encroach upon the boundary or change the boundary markers, including
boundaries being canals, irrigation ditches, trenches, gutters or boundaries of rice fields. Each
entity must respect and maintain the common boundaries.
2. A person having land use rights may use the airspace and the sub-surface according to the
vertical dimensions of the boundaries around the land as prescribed by law and may not interfere
with the use by other persons of the adjoining land.
A land user may only plant trees and performs other activities within the area covered by its land
use rights and according to the defined boundaries. If the roots and branches of trees extend
beyond the boundaries, such person must clip and prune the parts of the trees beyond the
boundaries, except as otherwise agreed.
Article 176. Boundary markers separating immovable property
1. An owner of adjoining immoveable property may only erect boundary stakes and fences and
build separating walls on the area covered by its land use rights.
2. Adjoining land users may agree to the erection of boundary stakes and fences, the building of
separating walls and the planting of trees on the boundary for use as boundary markers between
the immoveable properties, and the boundary markers shall be under the multiple ownership of
such persons.
Where a boundary marker is erected on the boundary by only one party with the consent of the
owner of the adjoining immoveable property, such boundary marker shall be multiple ownership
property and the construction expenses shall be borne by the party having erected the marker,
unless otherwise agreed. If the owner of the adjoining immoveable property does not give
consent and has legitimate reason, the owner having erected the boundary stake or fence or built
the separating wall must remove it.
3. With respect to boundary markers which are common house walls, the owner of the adjoining
immoveable property may not cut out a window or air ventilating hole or drill the wall in order to
install building structures, except with the consent of the owner of the adjoining property.
Where houses are separately built, but with adjoining walls, an owner may only drill and install
building structures up to the space between the adjoining walls.
With respect to trees which are common boundary markers, the parties have equal obligations to
protect the trees, and the fruits from the trees shall be distributed equally, unless otherwise
agreed.
Article 177. Safety guarantee with regard to trees or constructions posing risks of causing
damage
1. Where there is a danger that a tree or a construction will collapse onto an adjoining
immoveable property, the owner must cut down the tree or repair or demolish the construction at
the request of the owners of adjoining immovable property or a competent authority. If such
person does not cut down the tree or demolish the construction, the owner of an adjoining
immoveable property may request a competent authority to procure that the tree be cut down or
the structure be demolished. The expenses for cutting down the tree or demolishing the
construction shall be borne by the owner of the tree or the structure.
2. When digging a well or a pond or constructing underground structures, the owner of the
project must do so at the distance away from the boundaries provided by the law on construction.
When constructing a hygiene construction work, a storehouse of hazardous materials and other
construction works likely to cause environmental pollution, the owner of that property must build
it a distance far from the markers and in reasonable location, ensure hygiene and safety and do
not affect the owners of other immovable properties.
3. If damage is caused to the owners of adjoining or neighboring properties prescribed in Clauses
1 and 2 of this Article, compensation must be made.
Article 178. Installing doors and windows opening onto adjacent immovable property
1. A house owner may only install entry and exit doors and windows opening onto adjacent
houses or opposite houses and common walkways in accordance with the law on construction.
2. The underside of awnings above entry and exit doors or the underside of awnings of windows
opening onto common walkways must be at least two point five (2.5) meters above the ground.
Chapter XII
POSSESSION
Article 179. Concept of possession
1. Possession means that an entity holds and controls a property directly or indirectly as holder of
rights to such property.
2. Possession includes possession of owners and possession of non-owners.
The possession of non-owners may not be the basis for establishment of ownership, except for
the cases prescribed in Articles 228, 229, 230, 231, 232, 233 and 236 of this Code.
Article 180. Possession in good faith
Possession in good faith means the possession that the possessor has bases to believe that he/she
has the right to the property under his/her possession.
Article 181. Possession not in good faith
Possession not in good faith means that the possession that the possessor knew or should have
known that he/she has no right to the property under his/her possession.
Article 182. Continuous possession
1. Continuous possession of property is possession of property which occurs over a period of
time without dispute relating to such property or with dispute but no effective judgment or
decision on settlement of such dispute is issued, including the case when the property is
delivered to another person for possession.
2. The non-continuous possession shall not be treated as the basis for presuming status and rights
of possessors prescribed in Article 184 of this Code.
Article 183. Overt possession
1. Possession of property shall be deemed to be overt possession when it occurs in a transparent
manner, without concealment; when property currently being possessed is used in accordance
with its functions and usage and is preserved and retained by the possessor as if it were his or her
own property.
2. The overt possession shall not be treated as the basis for presuming status and rights of
possessors prescribed in Article 184 of this Code.
Article 184. Presuming status and rights of possessors
1. Each possessor shall be presumed in good faith. If a person believes that such possessor is not
in good faith, he/she must prove it.
2. If there is a dispute over the rights to a property, the possessor of such property shall be
presumed to have those rights. The disputing person must prove that the possessor have no right.
3. A person possessing in good faith, continuously and overtly shall be eligible for limitation
periods for enjoying the rights and enjoy the yield and income derived from the property as
prescribed in this Code and relevant laws.
Article 185. Protection of possession
When the possession is violated by another person, the possessor is entitled to, personally or
through a court or a competent authority, compels the violator to terminate his/her violation,
make restitution, return the property and compensate for any damage.
Chapter XIII
OWNERSHIP RIGHTS
Section 1. Contents of ownership rights
Sub-section 1. RIGHT TO POSSESS
Article 186. Right to possess of owners
Where an owner possesses its own property, such owner may do all things to keep and manage
the property in accordance with his or her wishes provided that it is not contrary to law or social
morals to do so.
Article 187. Right to possess of persons managing property under authorization of owner
1. When an owner authorizes another person to manage his or her property, the authorized
person shall exercise the right to possess such property within the scope, in the manner and for
the duration determined by the owner.
2. A person authorized to manage property is not able to become the owner of the property
delivered as prescribed in Article 236 of this Code.
Article 188. Right to possess of persons to which property is delivered through civil
transactions
1. Where an owner delivers property to another person through a civil transaction which does not
include the transfer of ownership rights, the person to whom the property is delivered must
undertake the possession of such property in a manner consistent with the purpose and content of
the transaction.
2. The person to which the property is delivered has the right to use such property and is entitled
to transfer the right to possess and use the property to another person if the owner so agrees.
3. The person to whom the property is delivered is not able to become the owner of that property
as prescribed in Article 236 of this Code.
Sub-section 2. RIGHT TO USE
Article 189. Right to use
Right to use means the right to exploit the usage of, and to enjoy the yield and income derived
from, property.
The right to use may be transferred to another person upon an agreement or as prescribed by law.
Article 190. Right to use of owners
The owner has the right to use property in conformity with his/her wishes provided that this will
not cause damage to or adversely affect the interests of the State or the public or the legal rights
and interests of other persons.
Article 191. Right to use of non-owners
A non-owner shall have the right to use a property as agreed with the owner or as prescribed by
law.
Sub-section 3. RIGHT OF DISPOSAL
Article 192. Right of disposal
Right of disposal means the right to transfer ownership rights, renounce ownership rights, right
to use, or destruct the property.
Article 193. Conditions for disposal
Disposal of property must be performed by a person with legal capacity in accordance with law.
Where the law provides formalities and procedures for disposal of property, such formalities and
procedures must be complied with.
Article 194. Right of disposal of owners
Owners shall have the right to sell, exchange, give, loan, bequeath, renounce or ownership rights,
right to use, destruct or implement other forms of disposal in conformity with the law on
property.
Article 195. Right of disposal of non-owners
A non-owner of property shall only have the right to dispose of the property pursuant to
authorization from the owner or in accordance with provisions of the law.
Article 196. Restrictions on right of disposal
1. The right of disposal shall only be restricted in cases where the law so provides.
2. Where a property for sale is an historic or cultural relic as prescribed in law on cultural
heritage, the State shall have the right of first refusal to purchase.
Where a natural or juridical person has the right of first refusal to purchase certain property in
accordance with law, upon the sale of such property, the owner must grant such right of first
refusal to purchase to such person.
Section 2. FORMS OF OWNERSHIP
Sub-section 1. THE PEOPLE’S OWNERSHIP
Article 197. Property under the people’s ownership
Land, water resources, mineral resources, resources in the waters, airspace and other natural
resources and the assets invested and/or managed by the State belong to the entire people with
the representation and centralized management of the State.
Article 198. Exercise of right of owner with respect to the people-owned property
1. The State of the Socialist Republic of Vietnam is a representative that exercises the rights of
the owner with respect to the people-owned property.
2. The Government shall manage centrally and ensure the appropriate, efficient and economic
use of the people-owned property.
Article 199. Possession, use and disposal of the people-owned property
The possession, use and disposal of the people-owned property shall be performed within the
scope and in accordance with the procedures provided by law.
Article 200. Exercise of the people ownership rights with respect to property invested in
enterprises
1. Where the people-owned property is invested in an enterprise, the State shall exercise the
rights of the owner with respect to such property in accordance with the law on enterprises,
management and use of state capital investing in business at enterprises and relevant laws.
2. Enterprises have the right to manage and use capital, land, natural resources and other property
invested by the State in accordance with the relevant laws.
Article 201. Exercise of the people ownership rights with respect to property allocated to
regulatory agencies and units of armed forces
1. Where property in the category of the people-owned property is allocated to a regulatory
agency or unit of the armed forces, the State shall exercise the right to inspect the management
and use of such property.
2. The regulatory agency or unit of the armed forces shall manage and use the property allocated
by the State for the correct purpose in accordance with law.
Article 202. Exercise of the people ownership rights with respect to property allocated to
political organizations, socio-political organizations, and socio-political professional
organizations, social organizations and socio-professional organizations
1. Where property in the category of the people-owned property is allocated to a political
organization, socio-political organization or socio-political professional organization, social
organization or socio-professional organization, the State shall exercise the right to inspect the
management and use of such property.
2. The political organization, socio-political organization or socio-political professional
organization, social organization or socio-professional organization has the right to manage and
use the property allocated to it by the State for the correct purpose, within the scope and in
accordance with the methods and procedures provided by law, and consistent with the functions
and duties of such organization as provided in its charter.
Article 203. Rights of natural and juridical persons with respect to use of property in
category of the people-owned property
Natural and juridical persons may use land and extract aquatic resources, natural resources and
other properties in the category of the people-owned property for the correct purpose and
effectively and must fulfill all of their obligations to the State in accordance with law.
Article 204. Property in category of the people-owned property not having been allocated
to natural and juridical persons for management
With respect to property in the category of the people-owned property which has not been
allocated to a natural and juridical person for management, the Government shall organize
protection, investigation and survey, and formulation of zoning in order to make such property
available for use.
Sub-section 2. PRIVATE OWNERSHIP
Article 205. Private ownership and property under private ownership
1. Private ownership means the ownership by a natural person or a juridical person.
2. The quantity and value of a property under lawful private ownership shall not be restricted.
Article 206. Possession, use and disposal of property under private ownership
1. An owner has the right to possess, use and dispose of property under his or her ownership for
the purpose of satisfying the needs of daily life, consumption or business activities and other
purposes in accordance with law.
2. The possession, use and disposal of property under private ownership must not cause damage
to or adversely affect the interests of the State or the public or the legal rights and interests of
other persons.
Sub-section 3. MULTIPLE OWNERSHIP
Article 207. Multiple ownership and types of multiple ownership
1. Multiple ownership means ownership of property by more than one owner.
2. Multiple ownership comprises ownership in common and joint ownership.
Article 208. Establishment of multiple ownership rights
Multiple ownership rights shall be created as agreed by the owners or in accordance with
provisions of the law or in accordance with customary practice.
Article 209. Ownership in common
1. Ownership in common is multiple ownership whereby each owner's share of the ownership
rights with respect to the multiple ownership property is specified.
2. Each of the owners in common has rights and obligations with respect to the multiple
ownership property corresponding to its share of the ownership rights, unless otherwise agreed.
Article 210. Joint ownership
1. Joint ownership means multiple ownership whereby each owner's share of the ownership
rights with respect to the multiple ownership property is not specified.
Joint ownership includes divisible joint ownership and indivisible joint ownership.
2. Joint owners have equal rights and obligations with respect to the multiple ownership
property.
Article 211. Multiple ownership between communities
1. Multiple ownership between a community is the ownership by a family line, hamlet, village,
tribal village, mountainous hamlet, ethnic hamlet, religious community or other community of
property which is formed in accordance with customary practice, which is jointly contributed to
and raised by the members of the community or which was given to the whole community, and
property which is obtained from other lawful sources for the purpose of satisfying the common
lawful interests of the entire community.
2. Members of a community shall jointly manage, use and dispose of multiple ownership
property in the interests of the community as agreed or in accordance with customary practice,
but not inconsistent with the law or social morals.
3. Multiple ownership property by a community is indivisible joint property.
Article 212. Multiple ownership between family members
1. Property of family members living together includes property that they contributed or made
together and other properties whose ownership rights are established in accordance with this
Code and relevant laws.
2. The possession, use and disposal of multiple ownership property by family members shall be
conducted as mutually agreed. With respect to disposal of an immovable property, a movable
property required registration, or a property being the primary income of the family, the
agreement between all family members being adults with full legal capacity is required, unless
otherwise prescribed by law.
If there is no agreement, the regulations on ownership in common prescribed in this Code and
relevant laws shall apply, except for the case prescribed in Article 213 of this Code.
Article 213. Multiple ownership between husbands and wives
1. Multiple ownership between a husband and wife is divisible joint ownership.
2. A husband and wife jointly create and develop their marital property through their efforts and
have equal rights to possess, use and dispose of such property.
3. A husband and wife shall discuss, agree on or authorize each other in relation to the
possession, use and disposal of the marital property.
4. The marital property may be divided as agreed or pursuant to a decision of a court.
5. If a husband and wife select the regulations on property under agreement as prescribed in law
on marriage and families, the marital property shall apply those regulations.
Article 214. Multiple ownership in apartment buildings
1. The areas, equipment and furnishings which are for common use in an apartment building
prescribed in the Law on Housing are under multiple ownership of all owners of the apartments
in the apartment building and are indivisible, unless otherwise provided by law or unless all of
the owners reach some other agreement.
2. The owners of the apartments in an apartment building have equal rights and obligations with
respect to the management and use of common areas and equipment prescribed in Clause 1 of
this Article, unless otherwise agreed or prescribed by law.
3. Where an apartment building is destroyed, the rights of the owners of the apartment building
shall be exercised in accordance with law.
Article 215. Mixed multiple ownership
1. Mixed multiple ownership means ownership of property in respect of which owners from
different economic sectors contribute capital for the purpose of conducting production and
business for profit-making purposes.
2. Property which is formed from sources being capital contribution by owners, lawful profits
derived from production and business activities or other lawful sources in accordance with law is
mixed multiple ownership property.
3. The possession, use and disposal of property under mixed multiple ownership must comply
with the provisions of Article 209 of this Code and other relevant laws relating to capital
contribution; to the organization and operation of production and business activities; to the
administration and management of property; and to the liability for property and distribution of
profits.
Article 216. Management of multiple ownership property
The owners of multiple ownership property shall manage jointly such property in accordance
with the principle of unanimity, unless otherwise agreed or otherwise provided by law.
Article 217. Use of multiple ownership property
1. Each owner in common has the right to exploit, and to enjoy the yield and income derived
from, the multiple ownership property in proportion to its share of the ownership rights, unless
otherwise agreed or otherwise provided by law.
2. Joint owners have equal rights to exploit and to enjoy the yield and income derived from, the
multiple ownership property, unless otherwise agreed.
Article 218. Disposal of multiple ownership property
1. Each owner in common has the right to dispose of its share of the ownership rights.
2. Disposal of joint property shall be implemented as agreed by the owners of the property or as
provided by law.
3. Where an owner of multiple ownership property sells its share of the ownership rights, the
other owners of the property have the right of first refusal to purchase such share.
Such owner may sell such share to other persons if no other owner purchases within three
months in the case of immoveable property, or within one month in the case of moveable
property, from the date on which the other owners received notice of the sale and the conditions
of the sale. The notice must be made writing and conditions for sale applying to other owners in
common shall be similar to those applying to non-owners in common.
In the case where there is a sale of a share of the multiple ownership rights in breach of this
regulation on priority purchase right, within the time-limit of three months from the date of
discovery of the breach, any one of the multiple owners has the right to request a court to transfer
to it the rights and obligations of the purchaser; and the party at fault which caused damage shall
be liable to compensate for damage.
4. Where one of the owners of immovable property renounces its share of the ownership rights or
where such person dies without leaving an heir, its share of the ownership rights shall belong to
the State, except in the case of multiple ownership between communities where the share of
ownership rights shall belong to the remaining members.
5. Where one of the owners of movable property renounces its share of the ownership rights or
where such person dies without leaving an heir, its share of the ownership rights shall belong to
the remaining members.
6. Where all owners renounce their ownership rights with respect to multiple ownership
property, the ownership rights shall be established as prescribed in Article 228 of this Code.
Article 219. Division of multiple ownership property
1. Where multiple ownership property is divisible, each owner has the right to request the
property to be divided. If the property must be maintained within a certain period of time as
agreed by all owners or as prescribed by law, each owner only has the right to request the
property to be divided upon expiry of that period. Where the property is not able to be divided in
kind, it shall be valued in terms of money for the purposes of division, unless otherwise agreed.
2. Where a person requests one of the owners of multiple ownership property to fulfill a payment
obligation and such owner does not have private property or sufficient private property to make
the payment, the requesting person has the right to request that the multiple ownership property
be divided in order to receive monetary payment and such person shall be entitled to participate
in the division of the property, unless otherwise provided by law.
If the shares of ownership rights are not able to be divided in kind or if such a division is
opposed by the remaining owners, the requesting person has the right to request the owner with
the obligation to sell to sell its share of ownership rights in order to fulfill the payment
obligation.
Article 220. Termination of multiple ownership
Multiple ownership shall terminate in any of the following circumstances:
1. The multiple ownership property has been divided;
2. One of the owners of the multiple ownership property is entitled to enjoy the property in its
entirety;
3. The multiple ownership property no longer exists;
4. Other cases as provided by law.
Section 3. CREATION AND TERMINATION OF OWNERSHIP RIGHTS
Sub-section 1. CREATION OF OWNERSHIP RIGHTS
Article 221. Basis for establishing ownership rights
Ownership rights are created with respect to property in any of the following cases:
1. Through labour, lawful production and business activities, or creation of subjects of
intellectual property rights;
2. Transfer of ownership rights as agreed or pursuant to a decision of a competent authority;
3. Receipt of yield and/or income;
4. Formation of new objects through merging, mixing or processing;
5. Inheritance of property;
6. Acquisition in accordance with law on objects of which owner is unidentified, buried or
sunken objects; lost or mislaid objects, stray poultry or livestock or aquaculture stock.
7. Possession and gain from property prescribed in Article 236 of this Code;
8. Other cases as provided by law.
Article 222. Establishment of ownership rights with respect to property earned from
labour and lawful business and production activities or creation of subjects of intellectual
property rights
Workers and persons conducting lawful business and production activities have ownership rights
with respect to property earned from labour and the lawful business and production activities
from the time when such property is earned.
Person conducting creation activities has ownership rights to the property gained from those
activities as prescribed in the Law on intellectual property.
Article 223. Establishment of ownership rights under agreements
A person to which property has been transferred through a contract of sale and purchase or by a
gift, exchange or loan or another contract of transfer of ownership rights has the right to own
such property as provided by law.
Article 224. Establishment of ownership rights with respect to yield and income
An owner or a user of property has ownership rights with respect to the yield and income derived
from such property as agreed or in accordance with law from the time when such yield and
income are derived.
Article 225. Establishment of ownership rights in case of merger
1. Where property of more than one owner is merged to form an indivisible object and it is not
possible to determine whether the property which is merged is a primary object or an auxiliary
object, the newly formed object shall be the multiple ownership property of such owners. If the
property which is merged consists of a primary object and an auxiliary object, the newly formed
object shall belong to the owner of the primary object from the time when the new object is
formed. The owner of the new property must pay the value of the auxiliary object to its owner,
unless otherwise agreed.
2. Where a person merges the moveable property of another person with his/her own moveable
property, even though he/she knew or should have known that such property was not his/her own
and he/she did not have the consent of the owner of the property which was merged, the owner
of the property which is merged shall have one of the following rights:
a) Request the person having merged the property to deliver the new property to it and to pay the
value of the property;
b) Request the person having merged the property to pay the value of the merged property and to
compensate for any damage if the owner of the property which is merged does not wish to take
the new property.
c) Other rights as provided by law.
3. Where a person merges the moveable property of another person with his/her own
immoveable property, even though he/she knew or should have known that such property was
not his/her own and he/she did not have the consent of the owner of the property which was
merged, the owner of the property which is merged shall have one of the following rights:
a) Request the person having merged the property to pay the value of the merged property and to
compensate for any damage;
b) Other rights as provided by law.
4. Where a person merges the immoveable property of another person with his/her own
moveable property, the owner of the immovable property has the right to request such person to
demolish the illegally merged property and compensate for any damage, or retain the property
and pay the value of the merged property to such person, unless otherwise agreed.
Article 226. Establishment of ownership rights in case of mixing
1. Where the property of more than one owner is mixed to form a new indivisible object, the new
object shall be the multiple ownership property of such owners from the moment of mixing.
2. Where a person has mixed the property of another person with its own property, even though
it knew or should have known that such property is not its own and it does not have the consent
of the owner of the property which has been mixed, the owner of the property which has been
mixed may:
a) Request the person having mixed the property to deliver the new property to it and pay such
person the value of the property of such person;
b) If the owner of the property which has been mixed does not wish to take the new property,
request the person having mixed the property to pay the value of the property of the owner and to
compensate for any damage.
Article 227. Establishment of ownership rights in case of processing
1. An owner of raw materials which are processed to form a new object is also the owner of the
newly formed object.
2. A person using raw materials under the ownership of another person for processing who acts
in good faith shall become the owner of the new property, but must pay the value of the raw
materials to the owner and compensate it for any damage.
3. Where a person processes raw materials not in good faith, the owner of the raw materials has
the right to request that the new object be delivered to it. Where the raw materials are owned by
more than one person, such persons shall become the owners of the newly formed object in
proportion to the value of the raw materials owned by each person. The owners of the raw
materials processed not in good faith may request the person carrying out the processing to
compensate for any damage.
Article 228. Ownership rights are established with respect to abandoned objects and
objects the owner of which is not able to be identified
1. An abandoned object is an object in respect of which the owner has renounced its ownership
rights.
A person finding an abandoned object which is moveable property shall have the right to own
such property, unless otherwise prescribed by law. If the found object is immoveable property, it
shall belong to the State.
2. A person finding an object the owner of which is not able to be identified must inform or
deliver the object to the people's committee or police station of the nearest commune in order
that a public announcement may be made notifying the owner to reclaim the object.
The delivery of the object must be recorded, specifying the surnames, given names and addresses
of the finder and the receiver and the condition, quantity and volume of the property delivered.
The people's committee or police station of commune which received the object must notify the
finder of the results of their inquiries in order to determine the owner.
Where the object, the owner of which is not able to be identified, is moveable property, if the
owner of the object is still not able to be identified after one year from the date of the public
announcement, such property shall be under the ownership of the finder in accordance with law.
Where the object is immoveable property, if the owner is still not able to be identified after five
years from the date of the public announcement, such property shall belong to the State. The
finder shall be entitled to enjoy a monetary reward in accordance with law.
Article 229. Establishment of ownership rights with respect to buried or sunken objects
which are found
1. A person finding an object which is buried or sunken must notify and return to the owner; if
the owner is not able to be identified, he/she must inform or deliver the object to the people's
committee or police station of the nearest commune or a competent authority in accordance with
regulations of law.
2. Ownership rights with respect to a buried or sunken object which is found, but which has no
owner or the owner of which is not able to be identified, shall be determined, after deducting
search and maintenance expenses, as follows:
a) A found object which is an historic or cultural relic shall belong to the State as prescribed in
Law on cultural heritage and the finder shall be entitled to enjoy a monetary reward in
accordance with law.
b) A found object which is not an historic or cultural relic as prescribed in Law on cultural
heritage, and which has a value equivalent up to ten-month base salary provided for by the State,
shall belong to the finder; if the value of the found object is more than the equivalent of tenmonth base salary provided for by the State, the finder shall be entitled to the value of ten-month
base salary plus fifty (50) per cent of the remaining value of the object in excess of the ten-month
base salary provided for by the State, with the remaining value belonging to the State.
Article 230. Establishment of ownership rights with respect to objects which other persons
have lost or mislaid
1. A person finding an object which another person has lost or mislaid and being aware of the
address of the person having lost or mislaid the object must inform or return the object to such
person. If the finder is not aware of the address of the person having lost or mislaid the object, it
must inform or deliver the object to the people's committee or police station of the nearest
commune in order that a public announcement may be made notifying the owner to reclaim the
object.
The people's committee or police station of commune which received the object must notify the
finder of the results of their inquiries in order to determine the owner.
2. If, after one year from the date of the public announcement of the object having being found,
the owner of the object is still not able to be identified or the owner does not claim the object, the
ownership rights with respect to such property shall be determined as follows:
a) If the value of lost or mislaid object is up to ten-month base salary provided for by the State, it
shall belong to the finder as prescribed in this Code and relevant laws; if the value of the found
object is more than the equivalent of ten-month base salary provided for by the State, the finder
shall be entitled to the value of ten-month base salary, deducted from preservation expenses, and
plus fifty (50) per cent of the remaining value of the object in excess of the ten-month base salary
provided for by the State, with the remaining value belonging to the State.
b) A lost or mislaid object which is an historic or cultural relic as prescribed in the Law on
cultural heritage shall belong to the State. The finder shall be entitled to enjoy a monetary reward
in accordance with law.
Article 231. Establishment of ownership rights with respect to stray domestic livestock
1. A person capturing a stray domestic livestock must take care of it and notify the people's
committee of the commune in which such person resides in order that a public announcement
may be made notifying the owner to reclaim the stray domestic livestock. After 6 months or after
1 year, with regard to domestic livestock allowed to roam according to customary practice, from
the date of the public announcement, the ownership rights with respect to domestic livestock and
any offspring born thereof shall belong to the capturer.
2. If the owner reclaims the stray domestic livestock, he/she must pay care remuneration and
other expenses for the capturer. During the period of feeding and taking care of the stray
domestic livestock, the capturer shall be entitled to half of or 50% of value any offspring born.
Such person must compensate for any damage if it intentionally causes the death of the stray
domestic livestock.
Article 232. Establishment of ownership rights with respect to stray domestic poultry
1. Where the domestic poultry of a person is lost and captured by another person, the person
having captured the stray domestic poultry must make a public announcement notifying the
owner to reclaim such poultry. If no one reclaims the stray domestic poultry after one month
from the date of the public announcement, it shall be under the ownership of the person having
captured it.
2. An owner reclaiming the stray poultry must remunerate the person having captured it for
feeding and taking care of the stray domestic poultry and any other expenses incurred. During
the period of feeding and taking care of the stray domestic poultry, the person having captured it
shall enjoy the benefits from the stray domestic poultry. Such person must compensate for any
damage if it intentionally causes the death of the stray domestic poultry.
Article 233. Establishment of ownership rights with respect to aquaculture stock
Where the aquaculture stock of a person moves naturally into the field, pond or lake of another
person, the stock shall be under the ownership of the person having such field, pond or lake.
Where the aquaculture stock has special marks which make it possible to determine that it is not
under the ownership of the person having such field, pond or lake, such person must make a
public announcement notifying the owner to reclaim the stock. If no one reclaims the stock after
one month from the date of the public announcement, it shall be under the ownership of the
person having such field, pond or lake.
Article 234. Establishment of ownership rights due to inheritance
An heir shall have ownership rights with respect to inherited property in accordance with Part
Four of this Code.
Article 235. Establishment of ownership rights in accordance with judgment or decision of
court or in accordance with decision of another competent authority
Ownership rights may also be created on the basis of an effective judgment or decision of a court
or an effective decision of another competent authority.
Article 236. Establishment of ownership rights resulting from limitation periods with
respect to possession or deriving benefits from property unlawfully
A person unlawfully but in good faith possessing, or deriving benefits from, property
continuously and in an overt manner for ten (10) years with respect to moveable property, and
for thirty (30) years with respect to immoveable property, shall become the owner of such
property from the moment of commencement of possession, unless otherwise prescribed by this
Code and relevant laws.
Sub-section 2. TERMINATION OF OWNERSHIP RIGHTS
Article 237. Bases for terminating ownership rights
Ownership rights terminate in any of the following cases:
1. The owners transfers his or her ownership rights to another person;
2. The owner renounces his or her ownership rights;
3. The property is consumed or destroyed;
4. The property is realized in order to fulfill the obligations of the owner;
5. The property is requisitioned;
6. The property is confiscated;
7. Other persons have established ownership rights with respect to property in accordance with
this Code;
8. Other bases as provided by law.
Article 238. Transfer of ownership rights by owner
Where an owner transfers its ownership rights to another person through a contract for sale and
purchase, by exchange, gift or loan, or through inheritance, the ownership rights of the owner
with respect to the property shall terminate from the time when the ownership rights of the
transferee arise.
Article 239. Renunciation of ownership rights
An owner may terminate ownership rights with respect to its property by publicly declaring, or
by performing certain acts evidencing, its renunciation of the right to possess, use and dispose of
such property.
With respect to property the renunciation of which may harm social order or security or cause
environmental pollution, the renunciation of ownership rights must comply with the law.
Article 240. Property in respect of which other persons have established ownership rights
When a person has, in accordance with Article 228 through 233 of this Code, lawfully
established ownership rights with respect to an object the owner of which is not able to be
identified; a buried or sunken objects; a lost or mislaid object or stray domestic livestock, poultry
or aquaculture stock, the ownership rights of the person formerly having the property shall
terminate.
When the ownership rights of a possessor or a person benefiting from property have been created
in accordance with Article 236 of this Code, the ownership rights of the person who formally had
the property shall terminate.
Article 241. Realization of property in order to fulfill obligations of owner
1. Ownership rights with respect to property shall terminate when such property is realized in
order to fulfill the obligations of the owner pursuant to a decision of a court or another competent
authority, unless otherwise provided by law.
2. Property which the law provides is not able to be seized may not be realized in order to fulfill
the obligations of the owner.
3. The ownership rights with respect to property realized in order to fulfill the obligations of the
owner shall terminate at the time when the ownership rights of the recipient of such property
arise.
4. The realization of land use rights shall be carried out in accordance with the law on land.
Article 242. Destroyed property
When property is destroyed, the ownership rights with respect to such property shall terminate.
Article 243. Property which is compulsorily acquired
Where property is compulsorily acquired as prescribed by law, the ownership rights of the owner
shall terminate from the time when the decision of the competent authority becomes legally
effective.
Article 244. Confiscated property
Where property of an owner is confiscated and paid into the State Budget due to the owner
committing a crime or an administrative offence, the ownership rights of the owner with respect
to such property shall terminate from the time when the judgment or decision of the court or the
decision of the competent authority becomes legally effective.
Chapter XIV
OTHER PROPERTY-RELATED RIGHTS
Section 1. Right to adjoining immovable property
Article 245. Right to adjoining immovable property
Right to adjoining immovable property means a right to be exercised on an immovable property
(hereinafter referred to as obliged immovable property) to serve the exploitation of another
immovable property under ownership of another person (hereinafter referred to as entitled
immovable property).
Article 246. Bases for establishment of right to adjoining immovable property
The right to adjoining immovable property shall be established according to natural terrain, as
prescribed by law, according to agreement or will.
Article 247. Effect of right to adjoining immovable property
The right to adjoining immovable property shall take effect to every natural and juridical person
and it is transferred concurrently with the transferred immovable property, unless otherwise
prescribed by law.
Article 248. Rules for exercising right to adjoining immovable property
The right to adjoining immovable property shall be exercised as agreed by the parties. If the
parties fail to agree, the rules below must be followed:
1. Ensure the appropriate exploitation of the entitled immovable property in conformity with the
use purposes of both entitled and obliged immovable property;
2. Do not abuse the right to the obliged immovable property;
3. Do not obstruct or hassle the exercising of right to the entitled immovable property.
Article 249. Change of exercising right to adjoining immovable property
In case the change of use or exploitation of the obliged immovable property leading the change
of exercising of right to the entitled immovable property, the owner of the former immovable
property must notify the owner of the latter immovable property within an appropriate period.
The owner of the obliged immovable property must enable the owner of the entitled immovable
property to adapt to such change.
Article 250. Obligation of owners relating to draining of rainwater
An owner of house or construction works must install water drain pipes in order that the
rainwater from its roof does not run onto any adjoining immoveable properties.
Article 251. Obligation of owners relating to draining of waste water
An owner of house or construction work must install underground drains or water drainage
channels to discharge waste water to the prescribed location in order that the waste water does
not run and spill onto any adjoining immoveable properties or onto public streets or public
places.
Article 252. Rights relating to supply and drainage of water through adjoining immoveable
property
Where, due to the natural location of immoveable property, the supply and drainage of water
must pass through another immoveable property, the owner of the immoveable property through
which the water flows must provide an appropriate channel for the supply and drainage of water
and may not hinder or prevent the flow of water.
The person using the water supply and drainage channel must minimize to the lowest possible
extent any damage to the owner of the immoveable property through which the water flows
when installing the water channel. If damage is caused, compensation must be made. Where
water flows naturally from a higher position to a lower position and causes damage to the owner
of the property through which the water flows, the person using the water supply and drainage
channel shall not be liable to compensate for any damage.
Article 253. Rights relating to irrigation and water drainage in cultivation
A person having the right to use land for cultivation has the right to request neighboring land
users to provide a reasonable and convenient water channel for irrigation and drainage. A person
having been so requested has the obligation to grant such request. If the person using such water
channel causes damage to neighboring land users, compensation must be made.
Article 254. Right of passage
1. An owner of immoveable property which is surrounded by immoveable properties of other
owners such that there is no exit has the right to request one of the owners of adjoining
immoveable properties to provide it with a passage to a public road on their land.
The passage shall be opened in the adjoining immoveable property which is deemed to be the
most convenient and reasonable, taking into consideration the special characteristics of the
location, the interests of the immoveable property which does not have an exit, and what will
cause the least damage to the immoveable property through which the passage is created.
The owner of the immovable property eligible for the passage must compensate for the obliged
immovable property, unless otherwise agreed.
2. The location and the length, width and height of the passage shall be agreed by the owners in
order to ensure convenient passage and minimize inconvenience to the parties. If there are any
disputes regarding the passage, the parties may request the authorized State body to resolve.
3. Where immoveable property is divided into more than one portion for different owners or
users, upon division, necessary passages must be provided, without compensation, to persons in
the interior as provided in Clause 2 of this Article.
Article 255. Right to install electricity transmission cables and communication cables
through other immoveable properties
An owner of immoveable property has the right to install electricity transmission cables and
communication cables in a reasonable manner through the immoveable property of other owners,
but must ensure the safety and convenience of such owners. If damage is caused, compensation
must be made.
Article 256. Termination of easements over adjoining immoveable property
An easement over adjoining immoveable property shall terminate in the following
circumstances:
1. The entitled immovable property and the obliged immovable property belong to ownership
rights of a person;
2. The use and exploitation of the immovable property do not arise the needs of enjoying rights;
3. Upon agreement of contracting parties;
4. Other bases as provided by law.
Section 2. USUFRUCT RIGHT
Article 257. Usufruct right
Usufruct right means the right to use a property, under ownership of another entity, and enjoy its
yield or income in a specific period of time.
Article 258. Bases for establishment of usufruct right
The usufruct right shall be established as prescribed by law, according to agreement or will.
Article 259. Effect of usufruct right
The usufruct right shall be established from the time of transfer of the property, unless otherwise
agreed or otherwise prescribed by law.
The established usufruct right shall take effect to every natural and juridical person, unless
otherwise prescribed by law.
Article 260. Time limit of usufruct right
1. The time limit of usufruct right shall be agreed by the parties or prescribed by law provided
that its maximum length is the full life of the first usufructary being natural person or the period
of time for which the first usufructary being juridical person exists as long as it does not exceed
30 years.
2. The usufructary has the right to lease the usufruct right within a specific period of time
prescribed in Clause 1 of this Article.
Article 261. Rights of usufructary
1. On his/her own or permit another person exploit, use and enjoy yield and/or income from the
object of the usufruct right.
2. Request the owner of the property perform obligation to repair the property as prescribed in
Clause 4 Article 263 of this Code; if the usufructary performs the obligation on behalf of the
owner of property is entitled to request the owner to refund the expenses.
3. Lease the usufruct right to the property.
Article 262. Obligations of usufructary
1. Receive property under current conditions and register it if required by law.
2. Exploit the property for appropriate purposes.
3. Preserve property as if it is his/her own property.
4. Maintain and repair property periodically to ensure the normal use; restore the status of the
property and remedy the bad consequences of property due to his/her poor performance of
obligations in line with technical requirements or by custom of property preservation.
5. Return the property to the owner of the expiration of usufruct time limit.
Article 263. Rights and obligations of property owner
1. Dispose property without any change of the usufruct right which has been established.
2. Request a court to deprive usufruct right from a usufructary who seriously breaches his/her
obligations.
3. Do not obstruct or hassle or otherwise violate the legitimate rights and interests of the
usufructary.
4. Perform obligation to repair property to ensure that there is no significant decline leading the
property cannot be used or lost all its utility and value.
Article 264. Right to enjoy yield and income
1. Each usufructary has ownership right to the yield and income derived from the property being
the object of the usufruct right during its effective period of time.
2. If the usufruct right cease to exist before the harvest time of yields and income, the usufructary
shall, upon the harvest time, be entitled to enjoy the value of yield and income received
corresponding the time that person is entitled to such usufruct right.
Article 265. Termination of usufruct right
The usufruct right shall terminate in any of the following cases:
1. The time limit of usufruct right has expired;
2. As agreed by the parties;
3. The usufructary becomes the owner of the property being the subject of the usufruct right;
4. The usufructary waives or fails to exercise the usufruct right during a time limit prescribed by
law;
5. The property being subject of the usufruct right no longer exists;
6. Pursuant to a decision of a court;
7. Pursuant to other provisions of law.
Article 266. Returning property upon termination of usufruct right
The property being subject of usufruct right must be returned to the owner upon the termination
of usufruct right, unless otherwise agreed or otherwise prescribed by law.
Section 3. SURFACE RIGHTS
Article 267. Surface rights
Surface rights mean an entity's rights to the ground, water surface, space thereon and earth bowel
of the land whose land use rights belong to another entity.
Article 268. Bases for establishment of surface rights
Surface rights shall be established by law, according to agreement or will.
Article 269. Effect of surface rights
Surface rights shall take effect from the point of time when the holder of land use rights transfer
ground, water surface, space thereon and earth bowel of the land to the holder of surface rights,
unless otherwise agreed or otherwise prescribed by law.
Surface rights shall take effect to every natural and juridical person, unless otherwise prescribed
by relevant laws.
Article 270. Time limit of surface rights
1. The time limit of surface rights shall be established by law, according to agreement or will
provided that it does not exceed the time limit of land use rights.
2. If the agreement or will does not mention the time limit of surface rights, each party is entitled
to terminate any time provided that it provides a written notification to the other party within 6
months.
Article 271. Contents of surface rights
1. Each holder of surface rights has the right to exploit and use ground, water surface, space
thereon, the water and the earth bowel of the land whose land use rights belong to another entity
for construction, planting or cultivation provided that it is not contrary to the provisions of this
Code, the law on land, construction, planning, resources, minerals and other provisions of
relevant laws.
2. The holder of surface rights has the ownership rights to every property derived as prescribed
in Clause 1 of this Article.
3. If part of the whole of surface rights is transferred, the transferee shall inherit the surface
rights according to conditions and within the scope in proportion to the part or the whole
transferred surface rights.
Article 272. Termination of surface rights
The surface rights shall terminate in any of the following cases:
1. The time limit of surface rights has expired;
2. The holder of surface rights and the holder of land use rights shall be the same;
3. The holder of surface rights waives his/her rights;
4. Surface rights of land use rights are appropriated as prescribed in law on land;
5. As agreed by the parties or as prescribed by law.
Article 273. Realization of property upon termination of surface rights
1. Upon the termination of surface rights, its holder must return ground, water surface, space
thereon and earth bowel of the land to the holder of land use rights, unless otherwise agreed or
otherwise prescribed by law.
2. The holder of surface rights must realize the property under ownership upon its termination,
unless otherwise agreed.
If the holder of surface rights must realize the property under ownership upon its termination, the
ownership of such property shall be transferred to the holder of land use rights from the
termination time, unless the latter holder refuse such property.
If the holder of land use rights refuses the property while the property is required to be realized,
the holder of surface rights must pay the property realization expenses.
PART THREE
OBLIGATIONS AND CONTRACTS
Chapter XV.
GENERAL PROVISIONS
Section 1. Bases for giving rise to and subject matter of obligations
Article 274. Obligations
Obligations means acts whereby one or more entities (hereinafter referred to as obligors) must
transfer objects, transfer rights, pay money or provide valuable papers, perform other acts or
refrain from performing certain acts in the interests of one or more other subjects (hereinafter
referred to as obligees).
Article 275. Bases for giving rise to obligations
Obligations arise from the following bases:
1. Contracts;
2. Unilateral legal acts;
3. Unauthorized performance of acts;
4. Unlawful possession or use of or receipt of benefits from property;
5. Causing damage through unlawful acts;
6. Other bases as provided by law.
Article 276. Subject matter of obligations
1. The subject matter of an obligation may be property or acts which must be performed or acts
which must not be performed.
2. The subject matter of an obligation must be defined precisely.
Section 2. Performance of obligations
Article 277. Places for performing obligations
1. The place for performing an obligation shall be agreed by the parties.
2. Where the parties do not have an agreement, the place for performance of the obligation shall
be:
a) The location of the immoveable property, if the subject matter of the obligation is immoveable
property;
b) The place of residence or head office of the obligee, if the subject matter of the obligation is
not immoveable property.
Where the obligee changes its place of residence or head office, it must notify the obligor of the
change and must bear any increase in expenses resulting from the change in residence or head
office, unless otherwise agreed.
Article 278. Time-limits for performing obligations
1. The time-limit for performing an obligation shall be as agreed by the parties or as provided by
law.
2. The obligor must perform the obligation strictly in accordance with the relevant time-limit,
unless otherwise prescribed by this Code or relevant laws.
If the obligor performs the obligation prior to the time-limit and the obligee accepts such
performance, the obligation shall be deemed to have been fulfilled on time.
3. Where the parties do not have an agreement and the time-limit for the performance of a civil
obligation is not identifiable prescribed in Clause 1 of this Article, a party may fulfill the
obligation or demand the fulfillment of the obligation as the case may be at any time, but must
give reasonable prior notice to the other party.
Article 279. Performance of obligations to deliver objects
1. A person having the obligation to deliver an object must take care of and preserve the object
until the time of delivery.
2. Where an object to be delivered is a distinctive object, the obligor must deliver that particular
object in the same condition as agreed. If the object is a fungible object, it must be delivered in
accordance with the quality and quantity agreed. If there is no agreement as to the quality, the
object delivered must be of average quality. If the object is an integrated object, the whole
integrated object must be delivered.
3. An obligor must bear all expenses related to the delivery of an object, unless otherwise agreed.
Article 280. Performance of obligations to pay money
1. An obligation to pay money shall be performed in full, strictly on time, at the place and by the method
as agreed.
2. The obligation to pay money shall include the payment of interest on principal, unless otherwise
agreed.
Article 281. Performance of obligations to perform acts or not to perform acts
1. Obligation to perform an act means an obligation whereby the obligor must perform that particular act.
2. Obligation not to perform an act means an obligation whereby the obligor must not perform that
particular act.
Article 282. Performance of obligations in stages
An obligation may be performed in stages if so agreed or so provided by law or pursuant to a decision of
a competent authority.
The late performance of one stage of an obligation shall be deemed to be late performance of the
obligation.
Article 283. Performance of obligations through third parties
With the consent of the obligee, an obligor may authorize a third person to perform an obligation on
behalf of the obligor provided that the obligor shall be liable to the obligee if the third person fails to
perform or performs incorrectly the obligation.
Article 284. Conditional performance of obligations
1. Where the parties have agreed on conditions for the performance of a civil obligation or where the law
provides certain conditions for the performance of an obligation, the obligor must perform the obligation
when such conditions are satisfied.
2. If the conditions do not occur or occur resulting from the influence of a party, Clause 2 Article 120 of
this Code shall apply.
Article 285. Performance of obligations having optional subject matters
1. Obligation having an optional subject matter means an obligation the subject matter of which is one of
several different items of property or acts from which the obligor may select at its discretion, except where
it is agreed or provided by law that the right to select is reserved to the obligee.
2. The obligor must notify the obligee of the property or act selected in order to perform the obligation. In
the case where the obligee has fixed a time-limit for performance of the obligation with a selected subject
matter, the obligor must fulfill the obligation on time.
3. Where there remains only one property or one act to select, the obligor must deliver that particular
property or perform that particular act.
Article 286. Performance of substitutable civil obligations
Substitutable obligation means an obligation whereby if the obligor fails to perform the original obligation,
it may perform a different obligation as agreed by the obligee as a substitute for the original obligation.
Article 287. Performance of severable obligations
Where more than one person jointly performs an obligation and each person has a clearly defined share
of the obligation which is severable from that of the other person, each person must perform only its own
share of the obligation.
Article 288. Performance of joint obligations
1. Joint obligation means an obligation which must be performed by more than one person and which the
obligee may request any one of the obligors to perform in its entirety.
2. When one person has performed an obligation in its entirety, such person may require the other joint
obligors to make payment for their respective shares of the joint obligation to such person.
3. Where an obligee designates one person from amongst the joint obligors to perform an entire
obligation and later releases that person, the other obligors shall also be released from performing the
obligation.
4. Where an obligee releases one of the joint obligors from its share of the joint obligation, the other
obligors must, nevertheless, perform jointly their respective shares of the obligation.
Article 289. Performance of obligations for joint obligees
1. Civil obligation for joint obligees means an obligation whereby each joint obligee may require the
obligor to perform the obligation in its entirety.
2. An obligor may perform its obligation with respect to any one of the joint obligees.
3. Where one of the joint obligees releases the obligor from performing the share of the obligation owed
to such joint obligee, the obligor must, nevertheless, perform the remaining shares of the obligation owed
to the other joint obligees.
Article 290. Performance of divisible obligations
1. Divisible obligation means an obligation the subject matter of which is a divisible object or an act which
is able to be divided into portions for the purpose of performance.
2. An obligor may perform the obligation in stages, unless otherwise agreed.
Article 291. Performance of indivisible obligations
1. Indivisible obligation means an obligation the subject matter of which is an indivisible object or an act
which must be performed in its entirety at the one time.
2. Where several persons must perform an indivisible obligation, they must perform the obligation in its
entirety at the same time.
Section 3. SECURITY FOR PERFORMANCE OF OBLIGATIONS
Sub-section 1. GENERAL PROVISIONS
Article 292. Types of security for performance of obligations
Types of security for the performance of obligations comprise the following:
1. Pledge of property;
2. Mortgage of property;
3. Deposit;
4. Security collateral;
5. Escrow deposit;
6. Title retention;
7. Guarantee;
8. Fidelity guarantees;
9. Lien on property.
Article 293. Scope of security for performance of obligations
1. An obligation may be fully or partly secured, as agreed or as provided by law. If there is no agreement
on or if the law does not provide, the scope of the security, the obligation, including the obligation to pay
interest and to compensate for any damage, shall be deemed to be fully secured.
2. Secured obligations may comprise current obligations, future obligations and conditional obligations.
3. With respect to a future obligation which is going to arise within a guaranteed time limit, it shall be the
secured obligation, unless otherwise agreed.
Article 294. Security for performance of future obligations
1. With respect to a future obligation, the parties may agree on the scope of the secured obligation and
the deadline by which the secured obligation must be performed, unless otherwise prescribed by law.
2. When the future obligation arises, the parties are not required to re-establish the security for such
obligation.
Article 295. Collateral
1. Collateral must be under the ownership rights of the securing party, except for the cases of lien on
property or title retention.
2. Collateral may be described generally but must be identified.
3. Collateral may be existing property or off-plan property.
4. The value of collateral may be greater, equal or smaller than the value of the secured obligation.
Article 296. Single item of property used as security for performance of several obligations
1. A single item of property may be used as security for performance of several obligations if, at the time
of establishment of the security transaction, the value of such property is greater than the total aggregate
value of the secured obligations, unless otherwise agreed or otherwise provided by law.
2. Where a single item of property is used as security for performance of several obligations, the securing
party must notify the later secured party that the security property is being used as security for
performance of other obligations. The provision of security on each occasion must be made in writing.
3. Where the security property must be realized in order to satisfy one obligation which has fallen due, the
other obligations which have not yet fallen due shall also be deemed due and all secured parties shall be
entitled to take part in the realization. The secured party which provided notice of realization of the
property shall be responsible for realizing the property, unless otherwise agreed by the secured parties.
If the parties wish to continue to fulfill the obligations which have not yet fallen due, they may agree that
the securing party will use other property as security for performance of the obligation which has fallen
due.
Article 297. Effectiveness against third parties
1. Security shall take effect against a third party from the time of registration of such security or the
secured party keeps or possess the collateral.
2. When the security takes effect against a third party, the secured party is entitled to reclaim the
collateral and the payment prescribed in Article 308 of this Code and relevant laws.
Article 298. Registration of security
1. Security shall be registered as agreed by the parties or provided by law.
The registration shall be the condition for a secured transaction become valid only the case as prescribed
by law.
2. A registered security shall take effect against third party from the time of registration.
3. The registration of security shall comply within regulations of law on registration of security.
Article 299. Cases of realization of collateral
1. An obligator fails to perform or perform not as agreed an obligation when it falls due.
2. An obligator must perform the secured obligation before time limit due to his/her violation against the
obligation as agreed or prescribed by law.
3. Other cases as agreed by the parties or prescribed by law.
Article 300. Notification of realization of collateral
1. Before a collateral is realized, a secured party must notify the securing party and other secured parties
of the realization of the collateral within a reasonable time limit.
If the collateral at risk of being damaged resulting in diminished value or lose the entire value, a secured
party may realize it immediately and notify the securing party and other secured parties of the realization
of such asset.
2. If the secured party does not notify the realization of collateral as prescribed in Clause 1 of this Article
that cause damage to the securing party and/or other secured parties, compensation must be made.
Article 301. Giving collateral for realization
The holder of collateral is obliged to give it to the secured party for realization in any of the cases
prescribed in Article 299 of this Code.
If the holder of collateral fails to give the asset, the secured party is entitled to request a court for
settlement, unless otherwise prescribed by relevant laws.
Article 302. Right to reclaim collateral
The securing party may reclaim the collateral if, before the realization of the collateral, it completely
performs its obligations and pay all expenses incurred for the late performance of obligations, unless
otherwise prescribed by law.
Article 303. Methods of realizing collateral
1. The securing party and the secured party may agree any of the following methods of realizing
collateral:
a) Put collateral up for an auction;
b) The secured party sells collateral itself;
c) The secured party accepts the collateral as substitutions for the performance of obligations of the
securing party;
d) Other methods.
2. If there is no agreement on methods of realizing collateral as prescribed in Clause 1 of this Article, the
collateral shall be put up for auction, unless otherwise prescribed by law.
Article 304. Selling collateral
1. The collateral shall be put up for auction as prescribed by law on property auction.
2. The collateral sold by the secured party must comply with the regulations on property sale in this Code
and the regulations below:
a) The payment amount derived from the realization of collateral shall comply with Article 307 of this
Code;
b) The owner of collateral and the person competent to realize the collateral, upon the completion of the
sale, shall comply with procedures for transfer of ownership rights to the buyer.
Article 305. Acceptance of the collateral as substitution for the performance of obligations of the
securing party
1. The secured party may accept the collateral as substitution for the performance of obligations of the
securing party if agreed by the parties.
2. If there is no agreement prescribed in Clause 1 of this Article, the secured party may only accept the
collateral as substitution for the performance of obligations of the securing party with the written consent
of the securing party.
3. Where the value of the collateral is greater than the value of the secured obligation, the secured party
must pay the difference amount to the securing party; where the value of the collateral is less than the
value of the secured obligations then the unpaid obligations become unsecured obligations.
4. The securing party is obliged to follow the procedures for transfer of ownership rights to the secured
party as prescribed by law.
Article 306. Valuation of collateral
1. The securing party and the secured party may agree on collateral prices or have the collateral valuated
by an asset valuation organization upon the realization of the collateral.
If there is no agreement mentioned above, the collateral shall be valuated by an asset valuation
organization.
2. The valuation of the collateral must be objective and in conformity with market price.
3. The asset valuation organization must compensate for any damage to the securing party and/or the
secured party during the process of valuation due to its legal violations.
Article 307. Payment of the sum of money obtained from the realization of collateral
1. The sum of money obtained from the realization of the collateral after deducting from the cost of
preservation, capture and realization of the collateral shall be paid in order of priority specified in Article
308 of this Code.
2. Where the sum of money obtained from the realization of the collateral, after deducting from the cost of
preservation, seizure and realization of the collateral is greater than the value of secured obligations, the
difference amount must be paid to the securing party.
3. Where the sum of money obtained from the realization of the collateral, after deducting from the cost of
preservation, seizure and realization of the collateral is less than the value of secured obligations, part of
the unpaid obligations are defined as unsecured obligations, unless the parties otherwise agree additional
collateral. The secured party may request the obligor to perform the unpaid secured obligations.
Article 308. Order of priority for payment between joint secured parties
1. When an asset is used to secure the performance of many obligations, payment priority order between
the joint secured parties shall be determined as follows:
a) If all types of security take effect against a third party, the order of priority for payment shall be
determined according to the order of effect against the third party;
b) If there are some types of security take effect against a third party while some types of security do not
take effect against the third party, the payment of obligations with security taking effect against the third
party shall be given priority;
c) If all types of security do not take effect against a third party, the order of priority for payment shall be
determined according to the order of establishment of types of security.
2. The order of priority for payment prescribed in Clause 1 of this Article may be changed as agreed by
the parties. The subrogating party of the right to priority of payment shall only be given priority within the
secured extent of the subrogated party.
Sub-section 2. PLEDGE OF PROPERTY
Article 309. Pledge of property
Pledge of property means the delivery by one party (hereinafter referred to as the pledgor) of property
under its ownership to another party (hereinafter referred to as the pledgee) as security for the
performance of an obligation.
Article 310. Effectiveness of pledge of property
1. Agreement on pledge of property shall take effect from the time of concluding, unless otherwise agreed
or prescribed by law.
2. Pledge of property shall take effect against third party from the time at which the pledgee keeps the
pledged property.
If an immovable property is the subject of pledge as prescribed in law, the pledge on immovable property
shall take effect against third party from the time of registration.
Article 311. Obligations of pledgors
1. Deliver the pledged property to the pledgee as agreed.
2. Notify the pledgee of any third person rights with respect to the pledged property. In the case of failure
to provide such notice, the obligee shall have the right to cancel the contract of pledge of property and
demand compensation for damage or the right to maintain the contract and agree on the rights of the third
person with respect to the pledged property.
3. Pay the pledgee reasonable expenses for taking care of and preserving the pledged property, unless
otherwise agreed.
Article 312. Rights of pledgors
1. Require the pledgee to suspend use of the pledged property in cases provided in Clause 3 of Article
314 of this Code if the pledged property is in danger of losing its value or depreciating in value as a result
of such use.
2. Require the pledgee to hold the pledged property to return the pledged property and related documents
after the obligation secured by the pledge has been fulfilled.
3. Require the pledgee to compensate for any damage caused to the pledged property.
4. Sell, substitute, exchange, or give the pledged property to other property if so agreed by the pledgee or
prescribed by law.
Article 313. Obligations of pledgees
1. Take care of and preserve the pledged property; if the pledgee loses or damages the pledged property,
the pledgee must compensate the pledgor for the damage.
2. Do not sell, exchange, give or use the pledged property as security for the performance of another
obligation.
3. Do not lease, lend, exploit the yield or income derived from, the pledged property, unless otherwise
agreed.
4. Return the pledged property and related documents upon fulfillment of the secured obligation or where
the pledge is substituted with another security.
Article 314. Rights of pledgees
1. Require a person unlawfully possessing or using the pledged property to return the property.
2. Demand the realization of the pledged property in accordance with the methods as agreed or as
provided by law.
3. Lease, lend, exploit, and to enjoy the yield and income derived from, the pledged property if so agreed.
4. Receive reimbursement of reasonable expenses incurred in taking care of the pledged property upon
returning the pledged property to the pledgor.
Article 315. Termination of pledges on property
A pledge of property shall terminate in any of the following cases:
1. The obligation secured by the pledge has terminated;
2. The pledge has been cancelled or substituted with another security;
3. The pledged property has been realized;
4. As agreed by the parties.
Article 316. Return of pledged property
Where a pledge of property is terminated in accordance with Clause 1 or Clause 2 of Article 315 of this
Code or as agreed by parties, the pledged property and documents evidencing the ownership rights with
respect to the property shall be returned to the pledgor. Any yield and income derived from the pledged
property shall also be returned to the pledgor, unless otherwise agreed.
Sub-section 3. MORTGAGES ON PROPERTY
Article 317. Mortgage of property
1. Mortgage of property means the use by one party (hereinafter referred to as the mortgagor) of property
under the ownership of the obligor as security for the performance of an obligation to the other party
(hereinafter referred to as the mortgagee) without transferring such property to the mortgagee.
2. The mortgaged property shall be held by the mortgagor. The parties may agree to deliver the
mortgaged property to a third person to hold.
Article 318. Mortgaged property
1. Where entire immoveable property or moveable property having auxiliary objects is mortgaged, such
auxiliary objects shall also form part of the mortgaged property, unless otherwise agreed.
2. Where a portion of immoveable property or moveable property having auxiliary objects is mortgaged,
such auxiliary objects shall also form part of the mortgaged property, unless otherwise agreed by the
parties.
3. With respect to mortgage on land use rights that property on land is owned by the mortgagor, such
property shall also part of the mortgaged property, unless otherwise agreed.
4. Where mortgaged property is insured, the mortgagee must notify the insurer that the insured property
is being mortgaged. The insurer shall pay the insured sum directly to the mortgagee upon occurrence of
an insured event.
If the mortgagee failed to notify the insurer that the insured property was mortgaged, the insurer shall pay
the insured sum in accordance with the insurance contract and the mortgagor shall be obliged to make
payment to the mortgagee.
Article 319. Effectiveness of mortgage of property
1. Agreement on mortgage of property shall take effect from the time of concluding, unless otherwise
agreed or prescribed by law.
2. The mortgage of property shall take effect against third party from the time of registration.
Article 320. Obligations of mortgagor
1. Transfer documents related to the mortgaged property, unless otherwise agreed or prescribed by law.
2. Take care of and preserve the mortgaged property.
3. If the mortgaged property is in danger of losing its value or depreciating in value due to its exploitation,
to take necessary remedial measures, including ceasing the exploitation of the mortgaged property.
4. When the mortgaged property is damaged, the mortgagor is obligated to, within a reasonable period,
repair or substitute another property with equivalent value, unless otherwise agreed.
5. Provide information about the actual condition of the mortgaged property to for the mortgagee.
6. Deliver the mortgaged property to the mortgagee for realization in one of the cases prescribed in Article
299 of this Code.
7. Notify the mortgagee of any third person rights with respect to the mortgaged property (if any). In the
case of failure to provide such notice, the mortgagee shall have the right to cancel the contract of
mortgage of property and demand compensation for damage or the right to maintain the contract and
agree on the rights of the third person with respect to the mortgaged property.
8. Do not sell, exchange or give the mortgaged property, except in the cases provided in Clauses 4 and 5
of Article 321 of this Code.
Article 321. Rights of mortgagor
1. Exploit, and to enjoy the yield and income derived from, the property, except where the yield and
income also form part of the mortgaged property as agreed.
2. Invest in order to increase the value of the mortgaged property.
3. Recover the mortgaged property and related documents held by a third person when the obligation
secured by the mortgage is terminated or is substituted by other security.
4. Sell or replace mortgaged property being goods rotating during the production and business process.
In the case of a sale of mortgaged property being goods rotating during the production and business
process, the right to require the purchaser to pay money, the proceeds received or the assets formed
from the proceeds received shall form the mortgaged property in substitution for the property which was
sold.
When a warehouse is mortgaged, the mortgagor may substitute goods in the warehouse but must ensure
the value of the goods in the warehouse remains the value agreed.
5. Sell, exchange or give mortgaged property not being goods rotating during the production and
business process with the consent of the mortgagee or as prescribed by law.
6. Lease or lend the mortgaged property provided that notice must be provided to the lessee and the
borrower that the property is being mortgaged and that the mortgagee must also be notified that such
notice has been provided.
Article 322. Obligations of mortgagees
1. Where the parties agree that the mortgagee will hold the documents relating to the mortgaged
property, to return to the mortgagor such documents upon termination of the mortgage.
2. Follow procedures for realization of mortgaged property in accordance with regulations of law.
Article 323. Rights of mortgagees
1. Examine and inspect directly the mortgaged property provided that such examination and inspection
does not hinder or cause difficulty to the use and exploitation of the mortgaged property.
2. Require the mortgagor to provide information on the current status of the mortgaged property.
3. Require the mortgagor to apply necessary measures to preserve the property and the value of the
property if there is a danger that use and exploitation of the mortgaged property will cause loss of value or
depreciation in value of the property.
4. Conduct the registration of mortgage as prescribed by law.
5. Require the mortgagor or a third person holding the mortgaged property to deliver it to the mortgagee
for realization if, upon expiry of the term for fulfillment of the obligation, the obligor has failed to perform or
performed incorrectly the obligation.
6. Hold documents related to mortgaged property as agreed by parties, unless otherwise prescribed by
law
7. Follow procedures for realization of mortgaged property as prescribed in Article 299 of this Code.
Article 324. Rights and obligations of third parties holding mortgaged property
1. A third person holding mortgaged property has the following rights:
a) Exploit the property if so agreed;
b) Receive remuneration and be reimbursed for expenses incurred in taking care of and preserving the
mortgaged property, unless otherwise agreed.
2. A third person holding mortgaged property has the following obligations:
a) Take care of and preserve the mortgaged property, and to compensate for any damage if the third
person loses the mortgaged property or causes the mortgaged property to lose its value or depreciate in
value;
b) Cease the exploitation of the property if it is in danger of losing its value or depreciating in value;
c) Return the mortgaged property to the mortgagee or mortgagor as agreed or prescribed by law.
Article 325. Mortgage on land use rights without mortgage of property on land
1. With respect to mortgage on land use rights without mortgage property on that land but the land user is
also the owner of the property on land; such property shall also part of the realized property, unless
otherwise agreed.
2. With respect to mortgage on land use rights that the land user is not also the owner of the property on
land, such owner may keep using such land within his/her rights and obligations during the realization of
the land use rights. The rights and obligations of the mortgagor in relation with the owner of the property
on land shall be transferred to the transferee of the land use rights, unless otherwise agreed.
Article 326. Mortgage of property on land without mortgage on land use rights
1. With respect to mortgage of property on land without mortgage on land use rights but the owner of the
property on land is also the land user, such land use rights shall also part of the realized property, unless
otherwise agreed.
2. With respect to mortgage of property on land without mortgage on land use rights that the owner of the
property on land is not also the land user, the transferee of property on land may keep using such
property within the transferred rights and obligations from the owner of the property on land during the
realization of the land use rights, unless otherwise agreed.
Article 327. Termination of property mortgages
A mortgage of property shall terminate in any of the following cases:
1. The obligation which is secured by the mortgage has terminated;
2. The mortgage of the property has been cancelled or substituted with another security;
3. The mortgaged property has been realized;
4. As agreed by the parties.
Sub-section 4. DEPOSIT, SECURITY COLLATERAL, ESCROW DEPOSIT
Article 328. Deposit
1. Deposit is an act whereby one party (hereinafter referred to as the depositor) transfers to
another party (hereinafter referred to as the depositary) a sum of money or precious metals,
gemstones or other valuable things (hereinafter referred to as the deposited property) for a period
of time as security for the entering into or performance of a contract.
2. Upon a contract being entered into or performed, any deposited property shall be returned to
the depositor, or deducted from the amount of an obligation to pay money. If the depositor
refuses to enter into or perform the contract, the deposited property shall belong to the
depositary. If the depositary refuses to enter into or perform the contract, it must return the
deposited property and pay an amount equivalent to the value of the deposited property to the
depositor, unless otherwise agreed.
Article 329. Security collateral
1. Security collateral is an act whereby a lessee of a movable property transfers a sum of money
or precious metals, gems or other valuable things (hereinafter referred to as security collateral
property) to the lessor for a specified time limit to secure the return of the leased property.
2. In cases where the leased property is returned, the lessee shall be entitled to reclaim the
security collateral property after pay the rental; if the lessee does not return the leased property,
the lessor shall be entitled to reclaim the leased property; if the leased property is no longer
available for the return, the security collateral property shall belong to the lessor.
Article 330. Escrow deposit
1. Escrow deposit is an act whereby an obligor deposits a sum of money, precious metals, gems
or valuable papers into an escrow account at a credit institution to secure the performance of an
obligation.
2. In cases where the obligor has failed to perform or has improperly performed an obligation,
the obligee shall be entitled to receive payment and compensation for damage caused by the
obligor from the bank where the escrow deposit is affected, after deducting the bank service
charges.
3. The procedures for making deposits and making payments shall be as provided by the law.
Sub-section 5. TITLE RETENTION
Article 331. Title retention
1. In a sale contract, the ownership of property of the seller may remain until the buyer pays the
purchase price in full.
2. Title retention must be made in a separate document or included in the sale contract.
3. The title retention shall take effect against third party from the time of registration.
Article 332. Right to reclaim property
If the buyer fails to fulfill the payment obligation for the seller as agreed, the seller is entitled to
reclaim the property. The seller shall refund the paid amount by the buyer deducted from the
depreciated value due to use. Where the buyer lost or damaged property, the seller has the right
to claim damages.
Article 333. Rights and obligations of the buyer
1. Using the property and enjoying the yield and income derived therefrom within the effective
term of title retention.
2. Facing the risks of the property within the effective term of the title retention, unless otherwise
agreed.
Article 334. Termination of title retention
The title retention shall terminate in any of the following cases:
1. Payment obligation fulfilled completely by the buyer;
2. The seller receives the property under title retention back;
3. As agreed by the parties.
Sub-section 6. GUARANTEES
Article 335. Guarantees
1. Guarantee means an undertaking made by a third person (hereinafter referred to as the
guarantor) to an obligee (hereinafter referred to as the creditor) to perform an obligation on
behalf of an obligor (hereinafter referred to as the principal debtor) if the obligation falls due and
the principal fails to perform or performs incorrectly the obligation.
2. The parties may agree that the guarantor shall only be obliged to perform the obligation if the
principal debtor is incapable of performing it.
Article 336. Scope of guarantees
1. A guarantor may guarantee an obligation in whole or in part on behalf of a principal debtor.
2. A guaranteed obligation includes interest on the principal, penalties and compensation for any
damage and interest on late payment, unless otherwise agreed.
3. The parties may agree on using security as property to secure the performance of guaranteed
obligation.
4. If the obligation to guarantee is an obligation arising in the future, the scope of guarantee is
exclusive of any obligations arising after the guarantor being natural person dies or the guarantor
being juridical person ceases to exist.
Article 337. Remuneration
The guarantor shall be entitled to receive remuneration if so agreed by the guarantor with the
principal debtor.
Article 338. Joint guarantors
When more than one person guarantee an obligation, those persons must perform jointly the
guarantee, except where it is agreed or provided by law that the guarantee comprises separate
portions. The obligee may require any of the joint guarantors to perform the obligation in its
entirety.
Where one of the joint guarantors has performed the entire obligation on behalf of the principal
debtor, the guarantor may require the other guarantors to perform their respective portions of the
obligation with respect to that guarantor.
Article 339. Relationship between guarantors and creditors
1. If the principal fails to perform or performs incorrectly the obligation, the creditor is entitled to
request the guarantor to fulfill the guaranteed obligation , unless contracting parties has agreed
that the guarantor only be required to perform the obligation on behalf of the principal debtor in
case of the failure to perform obligation by the principal debtor.
2. A creditor may not require a guarantor to perform an obligation on behalf of the principal
debtor until the obligation falls due.
3. Where a guarantor is able to offset an obligation with a principal debtor, a guarantor does not
have to perform the guaranteed obligation.
Article 340. Rights to require of guarantors
Each guarantor may require the principal debtor to indemnify the guarantor to the extent of the
guarantee, unless otherwise agreed.
Article 341. Discharge from guaranteed obligations
1. Where the guarantor must perform the guaranteed obligation but the creditor discharges the
guarantor from an obligation, the principal debtor is discharged from performance of the
obligation with respect to the creditor, except where it is agreed or provided by law.
2. Where one person from amongst the joint guarantors is discharged from the performance of its
portion of the guaranteed obligation, the other joint guarantors must, nevertheless, perform their
portion of the guaranteed obligation.
3. Where one person from amongst the joint creditors discharge the guarantor from the
performance of its portion of the guaranteed obligation, the guarantor must, nevertheless,
perform their portion of the guaranteed obligation with respect to remaining joint creditors.
Article 342. Civil liability of guarantor
1. If the principal debtor fails to perform or perform incorrectly the obligation, the guarantor is
obligated to perform such obligation.
2. If the guarantor performs incorrectly the guaranteed obligation, the creditor is entitled to
request the guarantor to pay the value of the breached obligation and compensate for any
damage.
Article 343. Termination of guarantees
A guarantee shall terminate in any of the following cases:
1. The obligation secured by the guarantee terminates;
2. The guarantee is cancelled or is substituted by another security;
3. The guarantor has satisfied the guaranteed obligation;
4. As agreed by the parties.
Sub-section 7. FIDELITY GUARANTEES
Article 344. Fidelity guarantees provided by socio-political organizations
A socio-political organization at the grassroots level may provide a fidelity guarantee in order
that poor individuals and households are able to borrow sums from banks or other credit
institutions for purposes of production, business or provision of services in accordance with the
regulations of law.
Article 345. Formalities and contents of fidelity guarantees
A loan guaranteed by a fidelity guarantee must be made in writing with certification of a sociopolitical organization in terms of conditions and circumstances of the borrower.
The agreement on fidelity guarantee must specify the loan amount, the purpose of loan, the term
of loan, the interest rate, and the rights, obligations and responsibilities of the borrower, the
lending bank or credit institution and the guarantor organization.
Sub-section 8. LIEN ON PROPERTY
Article 346. Lien on property
Lien on property means that the obligee (hereinafter referred to as the lienor) who is legally
possessing the property being an object of a bilateral contract is entitled to retain the property
when the obligor fails to perform the obligations or has performed the obligations not strictly as
agreed upon.
Article 347. Establishment of lien on property
1. Lien on property shall arise from the due time for performance of obligation that the obligor
failed to perform or perform incorrectly the obligation.
2. Lien on property shall take effect against third party from the time of possession of the
possessor.
Article 348. Rights of lienors
1. Request the obligor to fulfill completely the obligations arising from a bilateral contract.
2. Require the obligor to pay expenses necessary for taking care of and keeping such property.
3. Exploit the property to obtain yield and income therefrom with the consent of the obligor.
The value of benefits from the exploitation of the property shall be offset against the value of the
obligation of the obligor.
Article 349. Obligations of lienors
1. Take care and preserve the property
2. Do not change the status of the property.
3. Do not transfer or use the property without the consent of the obligor.
4. Return the property upon the complete performance of the obligation.
5. Compensate for lost or damaged property.
Article 350. Termination of lien on property
A lien on property shall terminate in any of the following cases:
1. The lienor actually no longer retains the property;
2. Contracting parties shall agree on another security instead of retain on property;
3. upon the complete performance of the obligation;
4. The property ceases to exist;
5. As agreed by the parties.
Section 4. CIVIL LIABILITY
Article 351. Civil liability arising from breach of civil obligations
1. An obligor which fails to perform or performs incorrectly an obligation has civil liability to
the obligee.
Breach of obligations means that the obligor fails to perform the obligations on time, perform the
obligations incompletely or incorrectly.
2. Where an obligor is not able to perform a civil obligation due to an event of force majeure, it
shall not have civil liability, unless otherwise agreed or otherwise provided by law.
3. An obligor shall not have civil liability if it is able to prove that failure to perform an
obligation is due entirely to the fault of the obligee.
Article 352. Responsibility for continuing performing obligations
When an obligor perform its obligations improperly, the obligee is entitled to request the obligor
to continue perform such obligations.
Article 353. Late performance of civil obligations
1. Late performance of a civil obligation is the failure to have performed the civil obligation in
whole or in part as at the expiry of the time-limit for the performance of such obligation.
2. The party being late in performance of a civil obligation must notify immediately the obligee
about the failure to have performed the civil obligation in a timely manner.
Article 354. Postponement of performance of civil obligations
1. When it is not possible to perform a civil obligation on time, the obligor must inform
immediately the obligee and may suggest postponement of performance of the civil obligation.
In the case of failure to notify the obligee, the obligor must compensate for any damage arising,
unless otherwise agreed or unless it was impossible to provide notification due to objective
reasons.
2. The obligor may postpone the performance of the obligation only if the obligee consents. The
performance of the civil obligation in this case of postponement shall be deemed to be
performance in a timely manner.
Article 355. Late acceptance of performance of civil obligations
1. The late acceptance of the performance of a civil obligation is where the time-limit for the
fulfillment of the civil obligation has expired and the obligor has already fulfilled the civil
obligation as agreed but the obligee does not accept the performance of such obligation.
2. When the subject matter of late acceptance of performance of a civil obligation is property, the
obligor may hand over the property to a bailee must or take the necessary measures to take care
of the property and is entitled to demand reimbursement of reasonable expenses. If the property
is kept by a bailee, the obligor must notify the obligee.
3. The obligor has the right to sell property which is in danger of being damaged or of
deteriorating, and shall pay the proceeds of sale of such property to the obligee after deducting
necessary expenses for the preservation and sale of the property.
Article 356. Civil liability for failure to perform obligations to deliver objects
1. Where an obligor fails to deliver a distinctive object, the obligee has the right to require the
obligor to deliver that particular object. If the object no longer exists or is damaged, the obligor
must pay the value of the object.
2. Where an obligor fails to deliver a fungible object, the obligee has the right to require the
obligor to deliver another fungible object. If there is no fungible object, the obligor must pay the
value of the object.
3. Where an obligor fails to perform an obligation as provided in clauses 1 and 2 of this article
and causes damage to the obligee, the obligor must compensate for any damage.
Article 357. Liability for late performance of the obligation to pay
1. Where the obligor makes late payment, then it must pay interest on the unpaid amount
corresponding to the late period.
2. Interest arising from late payments shall be determined by agreement of the parties, but may
not exceed the interest rate specified in paragraph 1 of Article 468 of this Code; if there no
agreement mentioned above, the Clause 2 of Article 468 of this Code shall apply.
Article 358. Civil liability for failure to perform obligations to perform acts or not to
perform acts
1. Where an obligor fails to perform an act which it must perform, the obligee has the right to
request the obligor to perform the act, or the obligee may perform the act or assign the
performance of the act to another person and to require the obligor pay reasonable expenses
incurred and compensate for any damage.
2. Where a person has an obligation not to perform an act but, nevertheless, performs such act,
the obligee has the right to require the obligor to cease performing the act, make restitution and
compensate for any damage.
Article 359. Liability for late acceptance of performance of civil obligations
An obligee which is late in accepting the performance of a civil obligation, and thereby causes
damage to the obligor, must compensate the obligor for any damage and shall accept all risks
arising from the time when acceptance fell due, unless otherwise agreed or otherwise provided
by law.
Article 360. Liability for compensation due to breach of obligations
With respect to damage caused by breach of an obligation, the obligor must compensate for the
whole damage, unless otherwise agreed or prescribed by law.
Article 361. Damage caused by breach of obligations
1. Damage caused by breach of obligations comprises physical damage and spiritual damage.
2. The physical damage means those actual physical losses, comprising loss of property,
reasonable expenses to prevent, mitigate or restore damage, and the actual loss or reduction of
income.
3. Spiritual damage means losses related to life, health, honor, dignity or reputation and other
personal benefits of an entity.
Article 362. The obligation to prevent or limit damage
The obligee must adopt the necessary and reasonable measures to prevent or limit its damage.
Article 363. Compensation for damages in case of the aggrieved party at fault
Where the breach of the obligations and damage incurred due to part of the fault of the aggrieved
party, the violating party only be required to pay damages corresponding to its degree of fault.
Article 364. Fault in civil liability
Fault in civil liability includes intentional fault and unintentional fault.
Intentional fault means that a person is fully aware that its act will cause damage to another
person but, nevertheless, performs the act and, irrespective of whether or not it so wishes, allows
the damage to occur.
Unintentional means that a person does not foresee that its act is capable of causing damage,
even though it knows or should know that the damage will occur, or where it does foresee that
such act is capable of causing damage but believes that the damage will not occur or will be able
to be prevented.
Section 5. TRANSFER OF RIGHT TO DEMAND AND TRANSFER OF CIVIL
OBLIGATIONS
Article 365. Transfer of right to demand
1. A party having the right to demand the performance of a civil obligation may transfer such
right to demand to a subrogatee of the obligee as agreed, except in the following cases:
a) The right is the right to demand support or the right to demand compensation for any damage
resulting from harm to life, health, honor, dignity or reputation;
b) The obligee and the obligor agree that the right to demand may not be transferred;
2. Where a person having a right to demand transfers such right to a subrogatee, the subrogatee
of the obligee shall become the person having the right to demand. The transfer of right to
demand does not require the consent of the obligor.
A person transferring a right must notify the obligor in writing of the transfer of the right to
demand, unless otherwise agreed. If the person transferring the right fails to notify the obligor
thereby the obligor incurs expenses, the person transferring the right must pay for those
expenses.
Article 366. Obligation to provide information and documents
1. A person transferring a right to demand must provide the necessary information and the
relevant documents to the subrogatee of the obligee.
2. A person transferring a right to demand and breaching the provisions in Clause 1 of this
Article, thereby causing damage, must compensate for such damage.
Article 367. No liability after transfer of right to demand
A person transferring a right to demand shall not be liable for the capability of the obligor to
perform the obligation, unless otherwise agreed.
Article 368. Transfer of right to demand performance of secured civil obligations
Where a right to demand the performance of a secured civil obligation is transferred, the transfer
of the right to demand shall include the security.
Article 369. Right to refuse of obligors
1. Where the obligor is not notified of the transfer of the right to demand or where the subrogatee
of the obligee does not prove the authenticity of the transfer of the right to demand, the obligor
has the right to refuse to perform the obligation with respect to the subrogatee of the obligee.
2. Where the obligor is not notified of the transfer of the right to demand and has already
fulfilled the obligation with respect to the person having transferred the right to demand, the
subrogatee of the obligee may not demand the obligor to perform the obligation with respect to
that subrogatee.
Article 370. Transfer of civil obligations
1. An obligor may transfer a civil obligation to a subrogatee of the obligor with the consent of
the obligee, except where the obligation is personal to the obligor or where the law provides that
the obligation may not be transferred.
2. Upon a transfer of the obligation, the subrogatee of the obligor shall become the obligor.
Article 371. Transfer of secured civil obligations
Where a secured civil obligation is transferred, the security shall terminate, unless otherwise
agreed.
Section 6. TERMINATION OF CIVIL OBLIGATIONS
Section 372. Termination of civil obligations
A civil obligation shall terminate in any of the following cases:
1. The obligation is fulfilled;
2. The parties so agree;
3. The obligee waives performance of the obligation;
4. The obligation is substituted by another civil obligation;
5. The obligation is offset;
6. The obligee and the obligor merge;
7. The limitation period for a release from the civil obligation has expired;
8. The obligor being a natural person dies, or the obligor being a juridical person ceases to exist,
and the obligation must be performed by that particular natural person or juridical person;
9. The obligee being a natural person dies and the right to demand does not form part of the
bequeathed estate, or the obligee being a juridical person ceases to exist and the right to demand
is not able to be transferred to another juridical person;
10. A distinctive object which is the subject matter of the civil obligation no longer exists and is
substituted by another civil obligation.
11. Other cases as provided by law.
Article 373. Fulfillment of civil obligations
The civil obligation shall be deemed to be have been fulfilled when the obligor has performed
the obligation in its entirety, or has performed a portion of the obligation and the obligee waives
any further performance.
Article 374. Fulfillment of civil obligations where obligees are late in accepting subject
matter of obligations
When an obligee is late in accepting the subject matter of an obligation which is an object, the
obligation to deliver an object shall be fulfilled at the moment when the object is deposited for
bailment as prescribed in Clause 2 Article 355 of this Code.
Article 375. Termination of civil obligations by agreement
Parties may agree to terminate a civil obligation at any time but must not cause damage to the
interests of the State or the public or the legal rights or interests of other persons.
Article 376. Termination of civil obligations due to waiver
1. A civil obligation shall terminate when the obligee waives the obligation of the obligor, unless
otherwise provided by law.
2. When a secured civil obligation is waived, the security arrangement shall also terminate.
Article 377. Termination of civil obligations by substitution
1. Where parties agree to substitute an original civil obligation with another civil obligation, the
original civil obligation shall terminate.
2. A civil obligation shall also terminate if the obligee has accepted another property or the
performance of another act as a substitute for the property or act previously agreed.
3. Where a civil obligation is an obligation to support others or to compensate for any damage
due to harm to life, health, honor, dignity or reputation, or another personal obligation which is
not able to be transferred to other persons, such obligation may not be substituted with another
obligation.
Article 378. Termination of civil obligations where obligations are offset
1. Where parties have reciprocal obligations with respect to fungible objects, when both
obligations fall due, the parties shall not be required to perform their obligations to each other,
and the obligations shall be deemed to have terminated, unless otherwise provided by law.
2. Where the values of properties or acts are not equivalent, the parties shall settle with each
other the difference in value.
3. Objects having monetary value may be used to offset an obligation to pay money.
Article 379. Cases where civil obligations may not be offset
A civil obligation may not be offset in the following cases:
1. The civil obligation is in dispute;
2. The obligation is to compensate for harm to life, health, dignity, honor or reputation;
3. The obligation is to support others;
4. Other obligations as provided by law.
Article 380. Termination of civil obligations upon merger of obligor and obligee
A civil obligation of an obligor shall terminate when the obligor becomes the obligee with
respect to that particular obligation.
Article 381. Termination of civil obligations due to expiry of duration of waiver of civil
obligation
Upon expiry of the duration of waiver of a civil obligation, the obligation shall terminate.
Article 382. Termination of civil obligations when obligor being natural person dies or
when obligor being juridical person ceases to exist
Where parties have agreed or the law provides that an obligation must be performed by a
particular obligor, when such natural person dies or such juridical person ceases to exist, the
obligation shall terminate.
Article 383. Termination of civil obligations when distinctive objects no longer exist
An obligation to deliver a distinctive object shall terminate when such distinctive object no
longer exists.
Parties may agree on the substitution of such object with another object or on compensation for
any damage.
Article 384. Termination of civil obligations in cases of bankruptcy
In cases of bankruptcy, civil obligations shall terminate in accordance with the Law on
bankruptcy.
Section 7. CONTRACTS
Sub-section 1. ENTERING INTO CIVIL CONTRACTS
Article 385. Definition of civil contract
Civil contract means an agreement between parties in relation to the establishment, modification
or termination of civil rights and obligations.
Article 386. Offers to enter into civil contracts
1. Offer to enter into a contract means a clear expression by the offeror of its intention to enter
into a contract and to be bound by such offer made to another specific party or the public
(hereinafter referred to as the offeree).
2. Where an offer to enter into a contract has specified the time for reply and the offeror enters
into a contract with a third person during the time-limit for reply by the offeree, if the offeror
fails to enter into the contract with the offeree and the offeree suffers damage, the offeror must
compensate the offeree for such damage.
Article 387. Information in entering into contracts
1. Each party must notify the other party of any piece of information affecting the acceptance of
offer to enter into the contract by the latter party.
2. When a party receives any secret information from the other party during the process of
entering into the contract, it must protect that information and may not use it for its own purposes
or other illegal purposes.
3. Any party violating Clause 1 or Clause 2 of this Article thereby causes damage must
compensate for it.
Article 388. Time-limit within which offer to enter into contract remains effective
1. The time-limit within which an offer to enter into a contract remains effective shall be
determined as follows:
a) Where an offeror has specified such time-limit;
b) Where an offeror has not specified the time-limit, the offer to enter into the contract is
effective as from the time the offeree receives the offer.
2. The following cases shall be deemed to be receipt of an offer to enter into a contract:
a) The offer is delivered to the place of residence if the offeree is a natural person, or the offer is
delivered to the head office if the offeree is a juridical person;
b) The offer is placed into the official information system of the offeree;
c) When the offeree knows about the offer to enter into a contract by way of other means.
Article 389. Modification or withdrawal of offers to enter into contracts
1. An offeror may modify or withdraw an offer to enter into a contract in the following cases:
a) If the offeree receives notice of modification or withdrawal of the offer prior to or at the same
time as receipt of the offer;
b) The offeror clearly specified the circumstances in which the offer could be modified or
withdrawn and such circumstances have in fact arisen.
2. When the offeror modifies the contents of the offer, that offer shall be deemed to be a new
offer.
Article 390. Rescission of offers to enter into contracts
If the offeror exercises the right to rescind the offer to enter into a contract on the ground that
such right was specified in the offer, the offeror must notify the offeree and such notice shall
only be effective if the offeree receives the notice prior to the offeree providing its acceptance of
the offer to enter into the contract.
Article 391. Termination of offers to enter into contracts
An offer to enter into a civil contract shall terminate in the following cases:
1. The offeree replies that the offer is accepted.
2. The offeree replies that the offer is not accepted;
3. The time-limit for acceptance has expired;
4. When notice of modification or withdrawal of the offer becomes effective;
5. When notice of rescission of the offer becomes effective;
6. As agreed by the offeror and the offeree within the time-limit within which the offer to enter
into a contract remains effective.
Article 392. Amendment of offer proposed by offeree
When an offeree accepts the offer to enter into a contract but specifies conditions or amendments
to the offer, the offeree shall be deemed to have made a new offer.
Article 393. Acceptance of offers to enter into contracts
1. Acceptance of an offer to enter into a contract means a reply by the offeree to the offeror
accepting the entire contents of the offer.
2. The silence of the offeree shall not mean an acceptance of the offer to enter into the contract,
unless it is agreed upon or habit established by the parties.
Article 394. Time-limits for acceptance of offers to enter into civil contracts
1. Where an offeror has specified a time limit for reply, a reply accepting shall only be effective
if it is made within that time limit. If the offeror receives an acceptance after the time-limit has
expired, such acceptance shall be deemed to be a new offer from the party which is late in
replying.
When the offeror does not specify the time limit for reply, the reply accepting shall only be
effective if it is made within reasonable period.
2. If a notice of acceptance of an offer to enter into a contract arrives late for objective reasons
which the offeror knows or should know, such notice shall still be effective, unless the offeror
immediately replies that it does not agree with such acceptance by the offeree.
3. Where the parties communicate directly, including conversations by telephone or other means
of communication, the offeree must reply immediately as to whether or not it will accept, except
where there is an agreement on the time-limit for reply.
Article 395. Cases where offeror dies or lacks of legal capacity or has limited cognition and
behavior control
Where the offeror dies or lacks of legal capacity or has limited cognition and behavior control
after the offeree has replied accepting the offer, the offer to enter into a contract shall still be
valid, unless the contents of contract is associated with the personal identity of the offeror.
Article 396. Cases where offeree dies or lacks of legal capacity or has limited cognition and
behavior control
Where the offeree dies or lacks of legal capacity or has limited cognition and behavior control
after the offeree has replied accepting the offer, the offer to enter into a contract shall still be
valid, unless the contents of contract is associated with the personal identity of the offeror.
Article 397. Withdrawal of notice of acceptance to enter into contract
The offeree may withdraw notice of acceptance to enter into a contract if such notice arrives
prior to or at the same time as the offeror receives the reply accepting the offer to enter into a
contract.
Article 398. Contents of contracts
1. The contracting parties may agree on the contents of a contract.
2. A contract may have the following contents:
a) Subject matter of the contract;
b) Quantity and quality;
c) Price and method of payment;
d) Time-limit, place and method of performing the contract;
dd) Rights and obligations of the parties;
e) Liability for breach of contract;
g) Methods of settlement of disputes.
Article 399. Places for entering into contracts
The place where a contract is entered into shall be as agreed by the parties; if there is no
agreement, such place shall be the residence of the individual, or the head office of the legal
entity, having made the offer to enter into the contract.
Article 400. Time when contracts are entered into
1. A contract is entered into at the time when the offeror receives the reply accepting to enter into
the contract.
2. If the parties have agreed that silence shall constitute an acceptance within a time limit, the
contract shall also be deemed to be entered into when such time-limit has expired.
3. The time when an oral contract is entered into is the time when the parties have reached
agreement on the contents of the contract.
4. The time when a written contract is entered into shall be the time when the last party signs the
contract or by other forms of written acceptance.
If a contract is entered into orally and then it is made in writing, the time when the contract is
entered into shall be determined as prescribed in Clause 3 of this Article.
Article 401. Effectiveness of contracts
1. A contract legally entered into shall take effect from the time when it is entered into, unless
otherwise agreed or otherwise provided by law.
2. From the effective date of the contract, contracting parties must mutually exercise rights and
perform obligations as agreed. A contract may be amended or terminated as agreed by the parties
or prescribed by law.
Article 402. Principal types of contracts
Contracts comprise the following principal types:
1. A bilateral contract is a contract whereby each party has an obligation to the other;
2. A unilateral contract is a contract whereby only one party has an obligation;
3. A principal contract is a contract the effectiveness of which does not depend on another
contract;
4. An ancillary contract is a contract the effectiveness of which depends on a principal contract;
5. A contract for the benefit of a third person is a contract whereby contracting parties must
perform obligations for the benefit of a third person and the third person enjoys benefits from
such performance;
6. A conditional contract is a contract the performance of which depends on the occurrence,
modification or termination of a specified event.
Article 403. Appendices to contracts
1. Appendices providing details on certain terms and conditions of a contract may be attached to
the contract. The appendices shall have the same effectiveness as the contract. The contents of
the appendices shall not contradict the contents of the contract.
2. If the terms and conditions of the appendices contradict the terms and conditions of the
contract, such terms and conditions of the appendices shall be ineffective, unless otherwise
agreed. If the parties agree that the terms and conditions of the appendices contradict the terms
and conditions of the contract, the terms and conditions of the contract which are contradicted
shall be deemed to have been amended.
Article 404. Interpretation of contracts
1. Where a contract contains terms and conditions which are unclear, the interpretation of such
terms and conditions shall be based not only on the wording of the contract but also on the
mutual intentions of the parties during the process prior to and after the time of establishment
and performance of the contract.
2. Where a term of a contract may be interpreted in different ways, it shall be interpreted in the
way which, when effective, will best benefit the parties.
3. Where the wording of a contract may be interpreted in different ways, such wording shall be
interpreted in the way most appropriate to the nature of the contract.
4. Where a contract contains a term or wording which is difficult to understand, such term or
wording shall be interpreted in accordance with the customary practice of the place where the
contract was entered into.
5. Where there is a conflict between the mutual intentions of the parties and the wording used in
the contract, the mutual intentions of the parties shall be used in order to interpret the contract.
6. Where the party in a powerful position inserts into the contract contents which are
disadvantageous to the party in a weak position, the contract shall be interpreted in a manner
favoring the party in a weak position.
Article 405. Standard form contracts
1. Standard form contract means a contract containing terms and conditions which are prepared
by a party based on a standard form requiring the other party to reply within a reasonable period
of time. If the offeree accepts, it shall be deemed to have accepted the entire contract provided by
the offeror.
The standard form contract must be public in order for the parties to know or should know the
contents of the contract.
Procedures for announcement of standard form contract shall comply with regulations of law.
2. Where a standard form contract contains terms and conditions which are unclear, such terms
and conditions shall be interpreted in a manner favoring the offeree.
3. Where a standard form contract contains provisions exempting the party providing such
standard form contract from liability, or increasing the liability of or waiving legitimate interests
of the other party, such provisions shall be ineffective, unless otherwise agreed.
Article 406. General trading conditions in concluding contracts
1. General trading conditions are stable terms announced by a party to apply to the offeree; if the
offeree accepts the contract is then deemed to accept these terms.
2. General trading conditions shall be effective only with the parties as long as these conditions
have been publicly in order for the parties to know or should know them.
The procedures for announcement of general trading conditions shall comply with regulations of
law.
3. The general trading conditions must ensure equality between the parties. If the general trading
conditions contain provisions on discharge of liability from the party giving the general trading
conditions, increase of responsibility or removal of the legitimate interests of the other party,
these provisions do not take effect, unless otherwise agreed.
Article 407. Invalid civil contracts
1. The provisions on invalid civil transactions in Articles 123 to 138 inclusive of this Code shall
also govern invalid contracts.
2. Invalidity of a principal contract shall terminate an ancillary contract, unless the parties agree
that the ancillary contract replaces the principal contract. This provision shall not apply with
respect to security for the performance of civil obligations.
3. Invalidity of an ancillary contract shall not terminate the principal contract, unless the parties
agree that the ancillary contract is an inseparable part of the principal contract.
Article 408. Invalidity of civil contracts due to impossibility of performing subject matter
1. If, immediately as from the time a contract is signed, it is impossible to perform the subject
matter of the contract for objective reasons, the contract shall be invalid.
2. If, when entering into a contract, one party knew or should have known that it was impossible
to perform the subject matter of the contract for objective reasons but failed to notify the other
party which entered into the contract, the former party must compensate the latter party for
damage, unless the latter party knew or should have known that it was impossible to perform the
subject matter of the contract.
3. The provision in Clause 1 and Clause 2 of this Article shall also apply to a contract containing
one or more parts with subject matter which is impossible to perform, but the remaining parts of
the contract shall remain valid.
Sub-section 2. PERFORMANCE OF CONTRACTS
Article 409. Performance of unilateral contracts
With respect to a unilateral contract, the obligor must perform the obligation strictly as agreed.
The obligor may only perform the obligation prior to or after the time-limit with the consent of
the obligee.
Article 410. Performance of bilateral contracts
1. With respect to a bilateral contract, where the parties have agreed on a time limit for the
performance of an obligation, each party must perform its obligation when the obligation falls
due. One party may not postpone performance by reason of the other party not having performed
the obligations owed to the former party, except in the cases provided in Articles 411 and 413 of
this Code.
2. Where the parties have no agreement on which party will perform its obligation first, the
parties must perform their obligations concurrently; where obligations are not able to be
performed concurrently, the obligation the performance of which will take longer shall be
performed first.
Article 411. Right to postpone performance of civil obligations in bilateral contracts
1. The party which is required to perform its obligation first has the right to postpone the
performance of such obligation, if the property of the other party has substantially decreased in
value such that its obligation is not able to be performed as undertaken, until the other party is
able to perform its obligation or has a guarantor.
2. The party which is required to perform its obligation last has the right to postpone the
performance of such obligation when it falls due if the party which was required to perform its
obligation first failed to do so when such obligation fell due.
Article 412. Lien on property in bilateral contracts
If the obligor fails to perform his/her obligations, the obligee shall establish the right to lien on
property of the obligor as prescribed in Article 346 to Article 350 of this Code.
Article 413. Obligations not able to be performed due to fault of obligee
With respect to a bilateral contract, when one party is not able to perform its obligations due to
the fault of the other party, the former party has the right to demand the latter party to continue to
perform its obligation with respect to the former party or has the right to cancel the contract and
demand compensation for damage.
Article 414. Failure to perform obligations not due to fault of parties
With respect to a bilateral contract, when one party is not able to perform its obligations but there
is no fault of any party, the party not being able to perform does not have the right to demand the
other party to perform its obligation with respect to the former party. When one party has
performed part of its obligations, such party has the right to demand the other party to perform its
corresponding obligation with respect to the former party.
Article 415. Performance of contracts for benefit of third parties
Where a contract is performed for the benefit of a third person, the third person has the right to
demand personally the obligor to perform the obligations with respect to such third person. If
there is a dispute between the parties over the performance of the contract, the third person does
not have the right to demand performance until the dispute is resolved.
An obligee also has the right to demand the obligor perform a contract for the benefit of a third
person.
Article 416. Right to waive of third persons
1. Where a third person waives its right to benefits prior to the performance of an obligation by
an obligor, the obligor shall not be required to perform the obligation but must notify the obligee,
the contract shall be deemed to be cancelled, and each party shall return anything it has received
from the other party.
2. If a third person waives its [right to] benefits after the obligor has performed the obligation,
the obligation shall be deemed to have been fulfilled and the obligee must perform its
undertakings with respect to the obligor. In this case, benefits derived from the contract shall be
enjoyed by a party that should have been the beneficiary if the contract is performed for the
interests of a third party, unless otherwise agreed.
Article 417. No amendment or cancellation of contracts for benefit of third persons
Where a third person has agreed to receive a benefit, the parties to the contract may not amend or
cancel the contract, even where the contract is yet to be performed, except with the consent of
the third person.
Article 418. Agreements on fines against violations
1. Agreements on fines for violations are reached by the parties to a contract which requires the
violating party to pay a fine to the aggrieved party.
2. The fine levels shall be agreed among the parties, unless otherwise prescribed by relevant
laws.
3. The parties may reach an agreement that the violating party has to pay only a fine for
violations and is not liable to any compensation for damage, or has to pay both a fine for
violations and a compensation for damage.
In case the parties have an agreement on fines against violation which does not specify that the
violating party has to pay both a find for violations and a compensation for damage, then the
violating party has to pay only the fine for violations.
Article 419. The damage to be compensated for breach of contract
1. The damage to be compensated for breach of contractual obligations is determined in
accordance with Clause 2 of this Article, Article 13 and Article 360 of this Code.
2. The obligee may demand compensation for damage to its supposed benefits that will be
enjoyed by the contract offer. The obligee also may request the obligor to pay the costs incurred
due to its non-fulfillment of contractual obligations which do not overlap with the compensation
for damages for contractual benefits.
3. At the request of the obligee, a court may compel the obligor to pay spiritual damages to the
obligee. The damages shall be decided by the court according to contents of case.
Article 420. Performance of contract upon the basic change of circumstances
1. The change of circumstances shall be deemed basic when it meets all following conditions:
a) The circumstances change due to objective reasons occurred after the conclusion of the
contract;
b) At the time of concluding the contract, the parties could not foresee a change in
circumstances;
c) The circumstances change such greatly that if the parties know in advance, the contract has
not been concluded or are concluded, but with completely different content;
d) The continuation of the contract without the change in the contract would cause serious
damage to one party;
dd) The party having interests adversely affected has adopted all the necessary measures in its
ability, in accordance with the nature of the contract, cannot prevent or minimize the extent of
effect.
2. In the case of basic circumstances change, the affected party may request the other party to the
re-negotiate the contract in a reasonable period of time.
3. If the parties cannot reach an agreement on amending the contract within a reasonable period
of time, any of the parties may request a court to:
a) Terminate the contract at a specific time;
b) Amend the contract to balance the lawful rights and interests of the parties due to basic change
of circumstances.
The court may only decide to amend the contract in the event that the termination of the contract
would cause greater damage than the cost to perform the contract if it is modified.
4. In the process of negotiating amendments and termination of the contract and the court
handling the case, the parties must continue to perform its obligations under the contract, unless
otherwise agreed.
Sub-section 3. AMENDMENT AND TERMINATION OF CONTRACTS
Article 421. Amendment to contracts
1. Parties may agree to amend a contract.
2. Each contract may be amended as prescribed in Article 420 of this Code.
3. Each amended contract must also comply which the formalities of the initial contract.
Article 422. Termination of contracts
A civil contract shall terminate in any of the following cases:
1. The contract has been completed;
2. The parties so agree;
3. Where a contract is only able to be performed by a particular natural person or juridical person
having entered into the contract, and that particular natural person dies or that juridical person
ceases to exist.
4. The contract is cancelled or unilaterally terminated;
5. The contract is not able to be performed because the subject matter of the contract no longer
exists;
6. The contract terminates as prescribed in Article 420 of this Code;
7. Others circumstances as provided by law.
Article 423. Cancellation of contracts
1. A party has the right to cancel a contract and shall not be liable to compensate for damage in
any of the following cases:
a) A violation of contract by the other party gives rise to cancellation as agreed by the parties;
b) The other party seriously violates the obligations in the contract;
c) Others circumstances as provided by law.
2. Serious violation means the failure to fulfill obligations properly by a party leading the failure
to achieve the purposes of entering into contract by the other party.
3. A party cancelling a contract must notify the other party immediately of the cancellation [and]
must compensate if the failure to notify causes damage.
Article 424. Cancellation of the contract due to late performance of obligations
1. Where the obligor fails to perform the obligations that the obligee requests in a reasonable
period of time but the obligor still fails to perform, the obligee may cancel the contract.
2. If, due to the nature of the contract or by the will of the parties, the contract will not achieve
the objective if it is not performed within a certain time limit, but the obligor fails to perform that
contract upon the expiry date of such time limit, the obligee has the right to cancel the contract
without adherence to Clause 1 of this Article.
Article 425. Cancellation of the contract due to inability to perform
Where the obligor cannot perform part or all of its obligations to make the purpose of the obligee
may not be reached, the obligee party can cancel the contract and claim damages.
Article 426. Cancellation of the contract in the case of lost or damaged property
Where a party losses or causes damage to property being the subject of a contract that cannot be
refunded or compensated by other property or cannot be repaired or replaced with the same type
of property, the other party may cancel contract.
The violating party shall compensate in cash equal to the value of lost or damaged property,
unless otherwise agreed or stipulated in Clause 2, Clause 3, Article 351 and Article 363 of this
Code.
Article 427. Consequences of cancellation of contracts
1. When a contract is canceled, the contract is void from the time of signing; the parties do not
have to fulfill the obligations agreed upon, except for agreement on fines against violations,
compensation and settlement of disputes.
2. The parties must return to each other what they have received after deducting from the
reasonable costs of contract performance and cost of preservation and development of property.
The refund is made in kind. In case it cannot be returned in kind, it is worth the money to repay.
Where the parties are jointly obliged to refund, the refund must be made at the same time, unless
otherwise agreed or otherwise provided by law.
3. The aggrieved party shall be compensated due to breach of obligations of the other party.
4. The settlement of the consequences of the cancellation of the contract relating to personal
rights shall comply with this Code and other relevant law provisions.
5. In case of canceling the contract without grounds specified in Articles 423, 424, 425 and 426
of this Code, the cancellation of the contract is determined as the violating party to perform its
obligations and responsibilities to comply with its obligations under the provisions of this Code,
other relevant laws.
Article 428. Unilateral termination of performance of contracts
1. A party has the right to terminate unilaterally the performance of a contract without any
compensation for damage when a party violates its obligations seriously if so agreed by the
parties or so provided by law.
2. A party terminating unilaterally the performance of a contract must notify the other party
immediately of its termination of the contract and must compensate if the failure to notify causes
damage.
3. Where the performance of a contract is terminated unilaterally, it shall terminate from the time
when the other party is notified of the termination. In such case, the parties are not required to
continue to perform their obligations, except for agreement on fines for violations, compensation
for damage and settlement of disputes. A party which has already performed its obligation may
demand the other party to make payment for the performed obligation.
4. The aggrieved party shall receive a compensation for damage caused by the improper
performance of obligation by the violating party.
5. If a contract is terminated unilaterally without any basis prescribed in Clause 1 of this Article,
the party terminating unilaterally the performance of the contract shall be deemed to be the
violating party and must perform civil liability as prescribed in this Code and relevant laws.
Article 429. Limitation period for initiating legal action with respect to contracts
The limitation period for initiating legal action to request a court to resolve a dispute relating to a
contract is three years from the date on which the party entitled to request knows or should know
that their lawful rights and interests are infringed.
Chapter XVI
COMMON CONTRACTS
Section 1. SALE CONTRACTS OF PROPERTY
Article 430. Sale contract of property
Sale contract means an agreement between parties whereby a seller is obligated to transfer the
ownership rights of property to the purchaser and the purchaser is obligated to make a payment
to the seller.
Sale contracts of houses or sale contracts of houses for other purposes shall comply with this
Code, the Law on Housing and relevant laws.
Article 431. Subject matter of sale contracts
1. Each property prescribed in this Code may be the subject matter of a sale contract. If a
property is banned or restricted from transfer as prescribed by laws, it shall become a subject
matter of a sale contract if it complies with the regulations of such laws.
2. The property is under ownership of the seller and the seller has the right to sell it.
Article 432. Quality of objects for sale
1. The quality of an object for sale and purchase shall be as agreed by the parties.
2. Where the quality of an object has been proclaimed or is provided by a competent authority,
the quality of the object agreed by the parties shall not be lower than the quality proclaimed
standard or the stipulations of the competent authority.
3. Where parties have not agreed on or agree unclearly on the quality of the object for sale, its
quality shall conform to requirements pertaining to quality of the object proclaimed or prescribed
by a competent authority or by industry standards.
If there is no quality standard, regulations of a competent authority and industry standard in
terms of an object for sale, its quality shall be determined according to normal standards or
separate standards in conformity with the purposes of entering into contract and as prescribed in
the Law on consumers’ right protection.
Article 433. Price and method of payment
1. Price shall be as agreed by the parties or as determined by a third person at the request of the
parties. With respect to property in a transaction for which a competent authority has provided
price and method of payment, the parties shall reach an agreement in accordance with such
regulations.
2. Where parties reach no agreement or reach an agreement with unclear terms about price and
method of payment, the price shall be determined according to the market price and the method
of payment shall be determined according to the customary practice at the time and place of
entering into the contract.
Article 434. Time limits for performance of sale contracts
1. The time limit for performance of a sale contract shall be as agreed by the parties. The seller
must deliver the property to the purchaser at the agreed time. The seller may only deliver the
property prior to the time limit with the consent of the purchaser.
2. Where the parties have not agreed on a time limit for delivery of the property, the purchaser
has the right to demand, at any time, the seller to deliver the property and the seller also has the
right to demand, at any time, the purchaser to accept the property, but the parties must give an
advanced reasonable notice to each other.
3. The purchaser shall make the payment according to the agreed time. Where the parties have no
agreement or have an unclear agreement on the time-limit for payment, the purchaser must pay
immediately upon receipt of the property or documents proving the ownership of the property.
Article 435. Place for delivery of property
The place for delivery of the property shall be as agreed by the parties. If there is no agreement,
Clause 2 of Article 277 of this Code shall apply.
Article 436. Method for delivery of property
1. Property shall be delivered by the method as agreed by the parties. If there is no agreement on
the method for delivery of the property, the property shall be delivered at one time directly to the
purchaser.
2. If the parties agreed that the seller shall deliver property to the purchaser many times, but the
seller violates obligation of delivery in a certain time, the purchaser may cancel the part of
contract related to such violation and claim compensation.
Article 437. Liability in respect of delivery of objects in incorrect quantities
1. Where a seller delivers objects in a quantity which is more than that agreed, the purchaser has
the right to accept or not to accept the excess. If it accepts the excess, payment shall be made in
accordance with the agreement on the excess.
2. Where a seller delivers objects in a quantity which is less than that agreed, the purchaser has
one of the following rights:
a) Accept the amount delivered and set a time-limit for the seller to deliver the amount
outstanding;
b) Accept the amount delivered and demand compensation for damage;
c) Cancel the contract and demand compensation for damage if the violation prevents the
purchaser from achieving the purposes of enter into the contract.
Article 438. Liability in respect of delivery of incomplete integrated objects
1. Where an integrated object is delivered incomplete, thereby rendering the object unusable, the
purchaser has one of the following rights:
a) Accept the object and demand the seller to deliver the remaining parts, demand compensation
for damage, and postpone payment in respect of the parts received until the missing parts are
delivered;
b) Cancel the contract and demand compensation for damage.
2. Where a purchaser has paid for, but not yet accepted, the delivery of an incomplete integrated
object, the purchaser shall be paid interest on the amount pre-paid as agreed by the parties
provided it does not exceed the interest rate prescribed in Clause 1 Article 468 of this Code. If
the parties do not agree the interest rate, Clause 2 Article 468 of this Code shall apply and the
purchaser may demand the seller to compensate for damage due to the delivery of the incomplete
integrated object from the time when the contract is required to be performed to the time when
the complete integrated object is delivered.
Article 439. Liability in respect of delivery of objects of incorrect type
Where an object delivered is of an incorrect type, the purchaser has one of the following rights:
1. Accept the object and pay the agreed price;
2. Demand delivery of an object of the correct type and compensation for damage;
3. c) Cancel the contract and demand compensation for damage if the delivery of incorrect type
prevents the purchaser from achieving the purposes of enter into the contract.
With regard to an object including many types, if the seller fails to deliver it in conformity with
the agreement, the purchaser may cancel the part of contract related to such object and claim
compensation.
Article 440. Obligation to make payment
1. A purchaser must pay the full price at the agreed place and time.
2. If the parties only agree on time limit for delivery of object, the time limit for payment shall be
determined equivalent to the time limit for delivery of object. If the parties do not agree on time
limit for delivery of object and payment, the purchaser must make payment upon the receipt of
the object.
3. If the purchaser fails to make payment, he/she/it must pay interest on the late payment as
prescribed in Article 357 of this Code.
Article 441. Transfer of risks
1. The seller shall bear all risks of the property until the property is delivered to the purchaser,
the purchaser shall bear all risks of the property from the time of acceptance of the property,
unless otherwise agreed or prescribed by law.
2. Where the law requires that ownership rights with respect to property which is the subject
matter of a contract for sale and purchase must be registered, the seller bear all risks until the
completion of the registration procedures and the purchaser bear all risks from the completion of
the registration procedures, unless otherwise agreed.
Article 442. Transport costs and costs related to transfer of ownership rights
1. Transport costs and costs related to transfer of ownership rights shall be agreed by the parties,
unless otherwise prescribed by law.
2. Where the parties do not reach an agreement or reach an unclear agreement on transport costs
and costs related to transfer of ownership rights, those costs shall be determined according to the
costs proclaimed or prescribed by a competent authority or industry standards.
3. If there is no basis prescribed in Clause 1 and Clause 2 of this Article, the transport costs and
costs related to transfer of ownership rights shall be determined according to normal standards or
separate standards in conformity with the purposes of entering into contract.
4. Where the parties have not agreed on and the law does not provide transport costs and costs
related to transfer of ownership rights, the seller shall be liable for the costs of transportation to
the place of delivery of the property and the costs related to the transfer of the ownership rights.
Article 443. Obligation to provide information and instructions for use
A seller has the obligation to provide a purchaser with necessary information on the property for
sale and instructions on the use of the property. If the seller fails to perform this obligation, the
purchaser has the right to require the seller to perform such obligation within a reasonable time
limit and, if the seller still fails to perform such obligation that prevents the purchaser from
achieving the purposes of entering into the contract, the purchaser has the right to cancel the
contract and demand compensation for damage.
Article 444. Assurances as to ownership rights of purchasers with respect to purchased
property
1. A seller has the obligation to assure that the ownership rights with respect to the property sold
to a purchaser are not disputed by a third person.
2. Where ownership rights with respect to property are disputed by a third person, the seller must
support the purchaser in protecting the interests of the purchaser. If a third person has the
ownership rights with respect to all or part of the property for sale and purchase, the purchaser
has the right to cancel the contract and require the seller to compensate for damage.
3. Where a purchaser knows or should know that property for sale and purchase is under the
ownership of a third person but, nevertheless, purchases the property, the purchaser must return
the property to the owner and does not have the right to demand compensation for damage.
Article 445. Assurances as to quality of objects for sale
1. A seller must assure the utility value or the characteristics of the object for sale and purchase.
If, after having purchased an object, a purchaser discovers defects which cause the object to lose
its value or diminish its utility value, the purchaser must notify the seller immediately of such
defects and has the right to require the seller to repair or replace the defective object with another
object, to reduce its price and to compensate for damage, unless otherwise agreed.
2. A seller must assure that an object for sale corresponds to descriptions on any package, to any
trademark or to any sample selected by the purchaser.
3. A seller shall not be liable for any defect of an object in the following cases:
a) Where the purchaser knew or should have known of the defect at the time of purchase;
b) Where the object was sold at an auction or a second-hand shop;
c) Where the purchaser was at fault for causing the defect.
Article 446. Warranty obligation
If agreed by parties or provided by law, a seller has the obligation to provide a warranty for the
object for sale and purchase for a certain period, hereinafter referred to as the warranty period.
The warranty period shall be calculated from the time when the purchaser has the obligation to
accept the object.
Article 447. Right to claim on warranty
If a purchaser discovers a defect in a purchased object during the warranty period, it has the right
to require the seller to repair the object free of charge, or reduce its price or replace it with
another object, or it has the right to return the object in exchange for a refund.
Article 448. Repairs of objects during warranty periods
1. A seller must repair a defective object and assure that it satisfies the quality standards or
characteristics as undertaken.
2. A seller shall pay the costs for repairing a defective object and for transporting it from the
place of residence or head office of the purchaser to the place of repair and vice versa.
3. A purchaser has the right to require the seller to complete the repairs within a time limit
agreed by the parties or within a reasonable time. If the seller is not able to make or complete the
repairs within such time, the purchaser has the right to demand a price reduction or replacement
of the defective object with another object, or it has the right to return the object in exchange for
a refund.
Article 449. Compensation for damage during warranty periods
1. In addition to demanding the performance of warranty obligations, a purchaser has the right to
require the seller to compensate for damage caused during the warranty period due to technical
defects of the object.
2. A seller shall not be liable to compensate for damage if it is able to prove that the damage was
caused due to the fault of the purchaser. The seller shall be entitled to a reduction in the amount
of compensation for the damage where the purchaser has failed to take all necessary measures
available to it to mitigate the damage.
Article 450. Sale of property rights
1. Where property rights are sold, a seller must deliver the relevant documents and complete the
procedures for transferring the ownership rights to the purchaser and the purchaser must pay the
seller.
2. Where property rights are the right to demand payment of a debt and the seller has guaranteed
the ability to pay of the debtor, the seller must be jointly liable for payment if the debt falls due
and the debtor fails to pay.
3. The time when ownership rights with respect to property rights are transferred is the time
when a purchaser receives documents evidencing the ownership rights with respect to the
property rights, or the time when the transfer of the ownership rights is registered if so provided
by law.
Article 451. Auctions
Property may be sold at an auction as required by the owner or as provided by law. A sale by
auction of multiple ownership property must have the consent of all owners, unless otherwise
agreed or otherwise provided by law.
The auction must be conducted in conformity of principles of objective, public and transparent,
assurance of lawful rights and interests of the participants and in accordance with law on auction.
Article 452. Purchases after trial use
1. Parties may agree on the trial use of purchased property by the purchaser for a period,
hereinafter referred to as the trial use period. During the trial use period, the purchaser may
inform the seller whether or not the purchaser wishes to make the purchase. If the purchaser fails
to inform the seller prior to the expiry of the trial use period, the purchaser shall be deemed to
have accepted the purchase on the terms agreed prior to the property being received for trial use.
If the parties do not reach an agreement and reach an unclear agreement on the trial use period,
such period shall be determined according to the customary practice of the transactions with the
same subject matter.
2. During the trial use period, property shall remain under the ownership of the seller. The seller
shall bear all risks of the property, unless otherwise agreed. During the trial use period, the seller
may not sell, give, lease, exchange, mortgage or pledge the property until the purchaser informs
the seller whether or not it wishes to make the purchase.
3. Where a prospective purchaser informs the seller that it does not wish to make the purchase,
the prospective purchaser must return the property to the seller and must compensate the seller if
the prospective purchaser loses or damages the trial property. The prospective purchaser shall not
be liable for normal wear and tear caused by the trial use and shall not have to return any yield
derived from the trial use.
Article 453. Purchases by deferred payment or payment in instalments
1. Parties may agree that the purchaser may purchase by deferred payment or payment in
instalments of the purchase price within a time limit after delivery of the purchased property. The
seller has title retention of the property sold until the purchaser has paid the purchase price in
full, unless otherwise agreed.
2. Contracts for purchase by deferred payment or payment in instalments shall be made in
writing. The purchaser may use the property purchased by deferred payment or payment in
instalments and bear all risks during the period of use, unless otherwise agreed.
Article 454. Buy-back of property sold
1. A seller and purchaser of property may agree that the seller has the right to buy-back the
property within a period of time following the sale (hereinafter referred to as the buy-back
period).
The buy-back period for property shall be as agreed by the parties but shall not exceed one year
in respect of moveable property, and five years in respect of immoveable property, from the time
of delivery of the property, unless otherwise prescribed by law. During this period, the seller may
buy back the property at any time provided that reasonable prior notice is given to the purchaser.
The buy-back price shall be the market price at the time when and place where the buy-back
occurs, unless otherwise agreed.
2. During the buy-back period, a purchaser may not sell, exchange, give, lease, mortgage or
pledge the property, and shall bear all risks with respect to the property, unless otherwise agreed.
Section 2. CONTRACTS FOR EXCHANGE OF PROPERTY
Article 455. Contracts for exchange of property
1. Contract for the exchange of property means an agreement between parties whereby they
deliver property, and transfer the ownership rights thereto, to each other.
2. A contract for the exchange of property must be made in writing, and must be notarized,
certified or registered if so provided by law.
3. Where one party exchanges with another party property which it does not own or property in
respect of which it has no authorization from the owner, the other party may cancel the contract
and demand compensation for damage.
4. Each party shall be deemed to be the seller of the property delivered to the other party and the
purchaser of the property delivered to it. The provisions on contracts for sale and purchase in
articles 430 to 439 inclusive and articles 449 to 454 inclusive of this Code shall also apply to
contracts for the exchange of property.
Article 456. Settlement of differences in value
Where exchanged property differs in value, the parties must settle that difference between
themselves, unless otherwise agreed or otherwise provided by law.
Section 3. CONTRACTS FOR GIFTS OF PROPERTY
Article 457. Contracts for gifts of property
Contract for a gift of property means an agreement between parties whereby the giver delivers its
property and transfers its ownership rights to the recipient without requiring compensation and
the recipient agrees to accept the gift.
Article 458. Gifts of moveable property
1. A contract for a gift of moveable property shall take effect when the recipient accepts the
property, unless otherwise agreed.
2. Where the law requires the ownership rights with respect to such moveable property to be
registered, the contract shall take effect from the time of registration.
Article 459. Gifts of immoveable property
1. A gift of immoveable property must be recorded in writing and notarized or certified, and
must be registered if the law on immoveable property requires registration of ownership.
2. A contract for a gift of immoveable property shall take effect from the time of registration. In
the case of immoveable property for which no registration of ownership rights is required, the
gift contract shall take effect from the time when the property is delivered.
Article 460. Liability in respect of intentional gift of property not under one's ownership
Where a giver intentionally gives property which is not under its ownership and the recipient
does not know or is not able to know, such giver must reimburse the recipient for expenses
incurred by the recipient in increasing the value of the property at such time as it is reclaimed by
the owner.
Article 461. Disclosure of defects in gifts
A giver has the obligation to notify the recipient of any defects in a gift. If the giver knows about
defects in a gift but fails to provide notice thereof, the giver must be liable to compensate for
damage caused to the recipient; but if the giver does not know about defects in a gift, the giver
shall not be liable to compensate for damage.
Article 462. Conditional gifts of property
1. A giver may require a recipient to perform one or several civil obligations prior to or after the
giving of a gift. The conditions for giving a gift must not contravene the law or social morals.
2. Where a recipient performs an obligation required to be performed as a condition to the giving
of a gift and the giver fails to deliver the gift, the giver must pay for the obligation already
performed by the recipient.
3. Where a recipient fails to perform an obligation required to be performed after the giving of a
gift, the giver may reclaim the gift and demand compensation for damage.
Section 4. CONTRACTS FOR LOAN OF PROPERTY
Section 463. Contracts for loan of property
Contract for the loan of property means an agreement between parties whereby a lender delivers
property to a borrower. When the loan falls due, the borrower must repay the lender property of
the same type in accordance with the correct quantity and quality, and must pay interest if so
agreed or so provided by law.
Article 464. Ownership rights with respect to property lent
A borrower shall become the owner of borrowed property from the time of delivery of the
property.
Article 465. Obligations of lenders
1. Deliver the property to the borrower in full, strictly in accordance with the quality and
quantity, and at the time and place, agreed.
2. Compensate the borrower for any damage where the lender knows that the property is not of
the agreed quality but fails to notify the borrower, unless the borrower accepts the property with
knowledge that the property is not of the agreed quality.
3. Do not demand the borrower to return the property prior to the due date, except in the cases
provided in article 470 of this Code or relevant laws.
Article 466. Obligations of borrowers to repay loans
1. Where the property lent is a sum of money, the borrower must repay the lender the loan in full
when due. If the property is an object, the borrower must deliver to the lender an object of the
same type, quantity and quality, unless otherwise agreed.
2. Where a borrower is not able to deliver an object, it may, with the consent of the lender, repay
the value of the borrowed object, in cash, as at the time and place of delivery.
3. The place for repayment of a loan shall be the place of residence or head office of the lender,
unless otherwise agreed.
4. If a borrower fails to repay all or any instalment of an interest-free loan, in whole or in part,
when payment falls due, the borrower must, if the parties so agree, pay interest on the overdue
amount from the due date until the date on which payment is made, at the basic interest rate
prescribed in Clause 2 Article 468 of this Code, unless otherwise agreed or otherwise prescribed
by law.
5. If a borrower fails to repay, in whole or in part, a loan with interest, the borrower must pay:
a) Interest on the principal as agreed in proportion to the overdue loan term and interest at the
rate prescribed in Clause 2 Article 468 in case of late payment;
b) Overdue interest on the principal equals one hundred and fifty (150) per cent of the interest
rate in proportion to the late payment period, unless otherwise agreed.
Article 467. Use of borrowed property
Parties may agree that borrowed property may only be used for the agreed purpose of the loan.
The lender may check the use of the property and may demand its early return if, despite
warning, the borrower continues to use the property contrary to the agreed purpose.
Article 478. Interest rates
1. The rate of interest for a loan shall be as agreed by the parties.
The rate of interest for a loan agreed by the parties may not exceed 20% per year, unless
otherwise prescribed by law. According to actual conditions and at the proposal of the
Government, the Standing Committee of National Assembly shall adjust the above interest and
send report to the National Assembly at the latest session.
If the agreed interest exceeds the maximum interest prescribed in this Clause, the agreed interest
shall become invalid.
2. Where parties agree that interest will be payable but fail to specify the interest rate, or where
there is a dispute as to the interest rate, the interest rate for the duration of the loan shall equal
50% of the maximum interest prescribed in Clause 1 of this Article at the repayment time.
Article 469. Performance of contracts for loans without fixed term
1. With respect to a contract for an interest-free loan without a fixed term, the lender may
reclaim the property, and the borrower may repay the debt, at any time provided that each party
gives reasonable prior notice to the other party, unless otherwise agreed.
2. With respect to a contract for a loan with interest without a fixed term, the lender may reclaim
the property at any time, subject to giving reasonable prior notice to the borrower, and shall be
paid interest until the time when the property is returned. The borrower may also return the
property at any time, subject to giving reasonable prior notice to the lender, in which case the
borrower shall pay interest only up to the date on which repayment is made.
Article 470. Performance of contracts for fixed term loans
1. With respect to a contract for a fixed term interest-free loan, the borrower may return the
property at any time, subject to giving reasonable prior notice to the lender. The lender may
reclaim the property prior to the due date, subject to the consent of the borrower.
2. With respect to a contract for a fixed term loan with interest, the borrower may return the
property prior to the due date, but must pay interest for the entire term, unless otherwise agreed
or otherwise prescribed by law.
Article 471. "Họ, hụi, biêu, phường"
1. "Họ, hụi, biêu, phường" (hereinafter referred to as "ho") means a form of transaction regarding
property in accordance with customary practice on the basis of an agreement reached by a group
of people who assemble together and jointly determine the number of people, the term, the
amount of money or other property, the form of contribution and payment of "ho", and the rights
and obligations of the members of the group.
2. "Ho" is aimed at mutual assistance of citizens and shall be implemented in accordance with
law.
3. If "ho" is organized with interest, it shall comply with this Code.
4. It shall be strictly prohibited to organize "ho" in the form of lending at high interest rates.
Section 5. CONTRACTS FOR LEASE OF PROPERTY
Sub-section 1. GENERAL PROVISIONS ON CONTRACTS FOR LEASE OF
PROPERTY
Article 472. Contracts for lease of property
Contract for lease of property means an agreement between parties whereby a lessor delivers
property to a lessee for use during a fixed term and the lessee is required to pay rent.
Lease contracts of houses or lease contracts of houses for other purposes shall comply with this
Code, the Law on Housing and relevant laws.
Article 473. Rent
1. Rent for a lease of property shall be as agreed by the parties or determined by a third party at
the request of the parties, unless otherwise prescribed by law.
2. Where parties reach no agreement or reach an agreement with unclear terms about the rent, it
shall be determined according to the market price at the time and place of entering into the
contract.
Article 474. Lease term
1. The term of a lease shall be as agreed by the parties. If there is no agreement, the term of the
lease shall be determined according to the purpose of the lease.
2. Where parties have not agreed on the term of a lease or where the term of a lease is not able to
be determined according to the purpose of the lease, the lease shall terminate when the lessee has
achieved the purpose of the lease.
Article 475. Sub-leases
A lessee may sub-lease leased property with the consent of the lessor.
Article 476. Delivery of leased property
1. A lessor must deliver property to the lessee strictly in accordance with the agreed quantity,
quality, type and condition and at the agreed place and time, and must provide information
necessary for use of the property.
2. Where a lessor is late in delivering property, the lessee may extend the time for the delivery of
the property or may cancel the contract and demand compensation for damage. If the leased
property is not of the quality agreed, the lessee has the right to require the lessor to repair the
property or reduce the rent, or to cancel the contract and demand compensation for damage.
Article 477. Obligation to assure utility value of leased property
1. A lessor must assure that leased property is in the condition agreed and is suitable for the
purpose of the lease contract for the entire term of the lease. The lessor must repair any damage
to or defect in the leased property, with the exception of minor damage which the lessee must
repair in accordance with customary practice.
2. Where the utility value of leased property decreases otherwise than due to the fault of the
lessor, the lessee has the right to demand the lessor:
a) Repair the property;
b) Reduce the rent;
c) Replace the property or, if the leased property is beyond repair and the purpose of the lease is
not able to be achieved as a result or if the property has defects which the lessee did not know of,
the lessee may terminate unilaterally the performance of the contract and demand compensation
for damage.
3. Where a lessee demands repair but the lessor fails to repair in time or at all, provided that the
lessee informs the lessor, the lessee has the right to repair personally the leased property and has
the right to require the lessor to reimburse the costs of repair.
Article 478. Obligation to assure right of lessees to use property
1. A lessor must assure the right of a lessee to uninterfered use of the property.
2. In the event of a dispute as to the ownership rights with respect to leased property, which
interferes with use of that property by the lessee, the lessee has the right to terminate unilaterally
the performance of the contract and demand compensation for damage.
Article 479. Obligation to take care of leased property
1. A lessee shall take care of leased property as if it were its own and shall carry out minor
repairs and maintenance. If the lessee causes any loss of or damage to the property, it must
compensate the lessor.
The lessee shall not be liable for normal wear and tear due to the use of the leased property.
2. A lessee may, with the consent of the lessor, carry out repairs and improvements to leased
property which increase its value and may require reimbursement from the lessor for reasonable
costs incurred.
Article 480. Obligation to use leased property strictly in accordance with utility and
purpose
1. A lessee must use leased property strictly in accordance with its utility and the agreed purpose.
2. Where a lessee fails to use leased property strictly in accordance with its utility and purpose,
the lessor has the right to terminate unilaterally the performance of the contract and to demand
compensation for damage.
Article 481. Payment of rent
1. A lessee must pay rent in full and on time as agreed. If there is no agreement on the time for
payment of rent, the time shall be determined in accordance with the customary practice at the
place of payment. If it is not possible to determine the time of payment in accordance with such
customary practice, the lessee must make payment when the lessee returns the leased property.
2. Where the parties have agreed on payment of rent in instalments, if the lessee fails to make
payment for three consecutive instalments, the lessor has the right to terminate unilaterally the
performance of the lease contract, unless otherwise agreed or otherwise provided by law.
Article 482. Return of leased property
1. A lessee must return leased property in the same condition in which it was received, normal
wear and tear excepted, or in the condition agreed. If the value of the leased property has
decreased in comparison with its condition at the time it was received, the lessor has the right to
demand compensation for any damage, normal wear and tear excepted.
2. Where leased property is moveable property, the place for returning the leased property shall
be the place of residence or head office of the lessor, unless otherwise agreed.
3. Where leased property is livestock, the lessee must return both the leased livestock and any
offspring born during the term of the lease, unless otherwise agreed. The lessor must reimburse
the lessee for expenses incurred in caring for the offspring.
4. Where a lessee is late in returning leased property, the lessor has the right to require the lessee
to return the leased property and to pay rent for the period of delay and the lessee must
compensate for damage. The lessee must pay a penalty for the late return of the leased property if
so agreed.
5. The lessee must bear the risk in relation to the leased property during the period of delay.
Sub-section 2. CONTRACTS FOR "THUE KHOAN" OF PROPERTY
Article 483. Contracts for "thue khoan" of property
Contract for "thue khoan" of property means an agreement between parties whereby a "thue
khoan" lessor delivers the property to a "thue khoan" lessee for the exploitation of its utility and
for the enjoyment of the yield and income derived from such property and the lessee has the
obligation to pay rent.
Article 484. Subject matter of contracts for "thue khoan" of property
The subject matter of a contract for "thue khoan" may be land, forest, and water surfaces which
have not been exploited, livestock, production and business facilities, and other means of
production together with the equipment required to exploit the utility of such property and to
enjoy the benefits and income derived therefrom, unless otherwise provided by law.
Article 485. Terms of "thue khoan"
The term of a "thue khoan" shall be agreed by parties. If the parties do not reach an agreement
and reach an unclear agreement on the term of “thue khoan”, such period shall be determined
according to the production or business cycle appropriate to the nature of the subject matter of
the "thue khoan".
Article 486. Rent in respect of "thue khoan"
Rent in respect of a "thue khoan" shall be as agreed by the parties. If a "thue khoan" is awarded
by tender, the rent in respect of such "thue khoan" shall be determined in the bidding process.
Article 487. Delivery of "thue khoan" property
Upon delivery of "thue khoan" property, parties must record their assessment of the condition
and value of the property.
If the parties are not able to determine the value, a third person shall be invited to determine the
value. Such determination shall be made in writing.
Article 488. Payment of "thue khoan" rent and method of payment
1. "Thue khoan" rent may be paid in kind or money, or by performance of acts.
2. A "thue khoan" lessee must pay "thue khoan" rent in full even where the lessee does not
exploit the utility of the "thue khoan" property.
3. When entering into a contract for "thue khoan", parties may agree on conditions for a
reduction in rent. If at least one third of the benefits or income is lost due to an event of force
majeure, a "thue khoan" lessee may demand a reduction of or exemption from rent, unless
otherwise agreed.
4. Where a "thue khoan" lessee must pay in kind according to the season or cycle in the
exploitation of the utility of the "thue khoan" property, payment must be made at the end of such
season or cycle, unless otherwise agreed.
5. Where a "thue khoan" lessee is required to perform an act, the "thue khoan" lessee must
perform that particular act.
6. Repayment term of “thue khoan” shall be agreed by the parties. If the parties have no
agreement, the lessee has to pay on the last day of each month; in case the “thue khoan” follows
the business cycle, the payment must be made at the end of the business cycle at the latest.
Article 489. Exploitation of "thue khoan" property
A "thue khoan" lessee must exploit "thue khoan" property strictly in accordance with the agreed
purpose and must inform the "thue khoan" lessor periodically of its condition and its
exploitation. If the "thue khoan" lessor demands or requires information at any other time, the
"thue khoan" lessee must provide such information promptly. If the "thue khoan" lessee does not
exploit the "thue khoan" property strictly in accordance with the agreed purpose, the "thue
khoan" lessor has the right to terminate unilaterally the performance of the contract and demand
compensation for damage.
Article 490. Taking care, maintenance and disposal of "thue khoan" property
1. During the period of exploitation of the "thue khoan" property, the "thue khoan" lessee must
take care of and preserve the "thue khoan" property and any related equipment at its own
expense, unless otherwise agreed. If the "thue khoan" lessee loses or damages the "thue khoan"
property or causes any loss or reduction in its value, the "thue khoan" lessee must compensate
for damage. The "thue khoan" lessee shall not be liable for normal wear and tear due to the use
of the "thue khoan" property.
2. A "thue khoan" lessee may replace or improve "thue khoan" property if the parties so agree,
but must preserve its value.
A "thue khoan" lessor must reimburse a "thue khoan" lessee for the reasonable expenses incurred
in replacing or improving the "thue khoan" property as agreed.
3. A "thue khoan" lessee may not sub-lease "thue khoan" property without the consent of the
"thue khoan" lessor.
Article 491. Enjoyment of benefits and liability for damage with respect to "thue khoan"
livestock
During the term of a "thue khoan" of livestock, the "thue khoan" lessee shall be entitled to enjoy
half of the number of offspring born and shall be liable for half of any damage of the "thue
khoan" livestock caused by an event of force majeure, unless otherwise agreed.
Article 492. Unilateral termination of performance of contracts for "thue khoan"
1. Where a party terminates unilaterally the performance of a "thue khoan" contract, that party
must give reasonable prior notice to the other party. If the "thue khoan" is based on a season or
cycle of exploitation, the period of prior notice must conform to such season or cycle.
2. Where a "thue khoan" lessee breaches an obligation and the exploitation of the "thue khoan"
property is the sole means of livelihood of the lessee and continuation of the "thue khoan" would
not seriously affect the interests of the "thue khoan" lessor, the "thue khoan" lessor may not
terminate unilaterally the performance of the contract. In such case, the "thue khoan" lessee must
undertake to the "thue khoan" lessor not to commit further breaches of the contract.
Article 493. Return of "thue khoan" property
Upon termination of a "thue khoan" contract, the "thue khoan" lessee must return the "thue
khoan" property in a condition which takes into account the agreed depreciation. If the "thue
khoan" lessee has caused any reduction in the value of the "thue khoan" property, the "thue
khoan" lessee must compensate for damage.
Section 6. CONTRACTS FOR BORROWING PROPERTY
Article 494. Contracts for borrowing property
Contract for borrowing property means an agreement between parties whereby a lender delivers
property to a borrower for use free of charge for a period of time and the borrower returns the
property at the end of the period of time or when the purpose of the borrowing has been
achieved.
Article 495. Subject matter of contracts for borrowing property
Any non-consumable object may be the subject matter of a contract for borrowing property.
Article 496. Obligation of borrowers of property
1. Take care of and preserve the borrowed property and not to change the condition thereof at the
volition of the borrower. The borrower must repair any normal damage to the property.
2. Do not on-lend the property to any other person without the consent of the lender.
3. Return the borrowed property on the due date. If there is no agreement on the time for
returning the property, the borrower must return the property immediately after the purpose of
the borrowing has been achieved.
4. Compensate for damage where the borrower causes damage to or loss of the borrowed
property.
5. The borrower must bear the risk in relation to the borrowed property during the period of late
return.
Article 497. Rights of borrowers of property
1. Use the borrowed property strictly in accordance with its utility and agreed purpose.
2. Require the lender to reimburse reasonable expenses incurred in carrying out repairs or
improvements to the borrowed property which increase its value if so agreed.
3. Do not bear liability for normal wear and tear of the borrowed property.
Article 498. Obligations of lenders of property
1. Provide necessary information on the use of the property and its defects, if any.
2. Reimburse the borrower for expenses incurred in carrying out repairs or improvements to the
borrowed property which increase its value if so agreed.
3. Where the lender knows but fails to notify the borrower of a defect in the property which
results in damage to the borrower, to compensate the borrower for such damage, except where
the borrower knows or should know of such defect.
Article 499. Rights of lenders of property
1. Reclaim the property immediately after the borrower has achieved its purpose where there is
no agreement on the borrowing period. If the lender suddenly and urgently needs to use the
borrowed property, the lender may reclaim it upon giving reasonable prior notice to the
borrower, even if the borrower has not yet achieved its purpose.
2. Reclaim the property where the borrower fails to use it strictly in accordance with the agreed
purpose, utility, or method or where the borrower on-lends the property without the consent of
the lender.
3. Demand compensation for damage to the property caused by the borrower.
Section 7. CONTRACTS OF LAND USE RIGHTS
Article 500. Contract of land use rights
The contract of land use rights means the agreement between the parties that the land user
convert, transfer, lease, sublease, donate, mortgage and contribute land use rights as capital or
exercise other rights to the other party as prescribed in the Law on land; and the other party shall
exercise rights and perform obligations according to the contract to the land user.
Article 501. Contents of contract of land use rights
1. General provisions on contracts and the content of common contracts related in this Code shall
also apply to contracts on land use rights, unless otherwise provided by law.
2. Contents of the contract of land use rights are not contrary to the provisions of the purpose of
use, the duration of land use, zoning, land use planning and the rights and obligations stipulated
by law on land and other provisions of relevant laws.
Article 502. Forms and procedures for performing contract of land use rights
1. Contracts relating to land use rights must be made in writing in the form consistent with the
provisions of this Code, the law on land and other provisions of relevant laws.
2. The performance of the contract for the land use rights must follow the procedures prescribed
by the law of the land and other provisions of relevant laws.
Article 503. Effect of the transfer of land use rights
The transfer of land use rights shall be effect from the date of registration under the provisions of
the law on land.
Section 8. COOPERATION CONTRACT
Article 504. Cooperation contract
1. A cooperation contract means an agreement between natural and/or juridical persons regarding
the property contribution, effort to perform certain jobs, the same benefit and mutual
responsibility.
2. Each cooperation contract must be made in writing.
Article 505. Contents of cooperation contract
Each cooperation contract shall contain the major contents below:
1. Purpose and duration of cooperation;
2. Full name and place of residence of natural person; name and headquarters of juridical person;
3. Contributed property (if any);
4. Contributed labor (if any);
5. Method of distributing the yield and/or income;
6. Rights and obligations of cooperative members;
7. Rights and obligations of representatives (if any);
8. Conditions for participation and withdrawal from the cooperation contract (if any);
9. Conditions for termination of cooperation.
Article 506. Common property of the cooperative members
1. Property contributed and created by the members and other property as prescribed by law shall
be considered as common property part of the cooperative members.
Where there is agreement on the contribution that members fail to contribute money on schedule,
they must pay interest on the unpaid portion of the money under the provisions of Article 357 of
this Code and must pay damages.
2. The disposition of the property is land use rights, housing, factories, other production
materials must have a written agreement of all the members; the disposal of other property shall
be decided by the representatives of the members, unless otherwise agreed.
3. The common property may not be divided before the termination of the cooperation contract,
unless otherwise agreed by all members.
The division of common property shall not change or terminate the rights and obligations
established before the division time.
Article 507. Rights and obligations of cooperative members
1. Enjoy the yield and income gained from cooperation activities.
2. Participate in decisions involving issues of performance of cooperation contract and cooperation monitoring.
3. Compensate for damages to other cooperative members caused by their faults.
4. Perform other rights and obligations under the contract.
Article 508. Establishing and performing civil transactions
1. Where the cooperative members appoint representatives, they shall establish and perform civil
transactions.
2. Where the cooperative members do not appoint any representative, they shall jointly establish
and perform civil transactions, unless otherwise agreed.
3. Civil transactions that are be established and performed by entities specified in Clauses 1 and
2 of this Article shall give rise to rights and obligations of all cooperative members.
Article 509. Civil liability of cooperative members
The cooperative members are responsible for general civil liability by their common property; if
the common property is insufficient to fulfill the obligation, the members shall be held
responsible by their own property corresponding to its contribution, unless otherwise specified
by the cooperation contract or otherwise prescribed by law.
Article 510. Withdrawal from the cooperation contract
1. A member has the right to withdraw from the cooperation contract in any of the following
cases:
a) Satisfy the conditions specified in the cooperation contract;
b) There is a good reason and the consent of more than half the total cooperative members.
2. The member withdrawing from the cooperation contract has the right to reclaim contributed
property, divided part of the property in the common property and must pay all obligations under
the agreement. Where the division of property in kind affects the cooperation activities, the
property are worth the money to divide.
The withdrawal of a member from the cooperation contract does not terminate his/her rights and
obligations that are established or performed before the withdrawal time.
3. The withdrawal of a member from the contract in a case other than Clause 1 of this Article
shall be defined as the breach of contract and should execute the civil liability as prescribed in
this Code and other relevant laws.
Article 511. Joining cooperation contract
Unless the cooperation contract otherwise specifies, a natural or juridical person shall become a
new member of the contract with the consent of more than half the total cooperative members.
Article 512. Termination of cooperation contract
1. A cooperation contract shall terminate in any of the following cases:
a) As agreed by cooperative members;
b) The time limit mentioned in the cooperation contract has expired;
c) The purpose of cooperation has been achieved;
d) Pursuant to a decision of a competent authority;
dd) Other cases prescribed in this Code or other relevant laws.
2. Upon the termination of the cooperation contract, the debts arising from the contract must be
paid; if the common property is insufficient to repay it to private assets of cooperative members
to pay under the provisions of Article 509 of this Code.
Where the debt was repaid and the common property still exists, it shall be divided by the
cooperative members in proportion to the contribution of each person, unless otherwise agreed.
Section 9. CONTRACTS FOR SERVICES
Article 513. Contracts for services
Contract for services means an agreement between parties whereby a service provider performs
an act for a client which pays a fee for that act.
Article 514. Subject matter of contracts for services
The subject matter of a contract for services must be an act which is capable of being performed,
which is not prohibited by law and which does not contravene social morals.
Article 515. Obligations of clients
1. Supply the service provider with the information, documentation and facilities necessary for
the performance of the act if so agreed or required for the performance of the act.
2. Pay a fee to the service provider as agreed.
Article 516. Rights of clients
1. Require the service provider to perform the act strictly in accordance with the agreement on
quality, quantity, time, location and other matters.
2. Where a service provider commits a serious breach of its obligations, the client may terminate
unilaterally performance of the contract and demand compensation for damage.
Article 517. Obligation of service providers
1. Perform the act strictly in accordance with the agreement on quality, quantity, time, location
and other matters.
2. Do not assign the act to another person for performance on its behalf without the consent of
the client.
3. Take care of, and to return to the client after completion of the act, the documents and
facilities provided to it.
4. Notify the client promptly of any inadequacy in the information or documents and any failure
of the facilities to satisfy the quality required for the completion of the act.
5. Keep confidential any information of which it has had knowledge during the period of
providing the service as agreed or as provided by law.
6. Compensate the client for damage where the service provider causes any loss of or damage to
the documents or facilities supplied or discloses confidential information.
Article 518. Rights of service providers
1. Require the client to provide information, documents and facilities.
2. Amend the terms of service in the interests of the client without necessarily asking for the
opinion of the client where waiting for such opinion would cause damage to the client provided
that the service provider promptly informs the client thereof.
3. Require the client to pay the fee.
Article 519. Payment of fees
1. A client must pay the agreed fee for services.
2. If, upon entering a contract, there is no agreement on the service fee rate or on the method for
fixing the fee for services and there are no other instructions on fees, the service fee rate shall be
fixed on the basis of market fees for services of the same type at the time when and place where
the contract was entered into.
3. A client must pay the fee for services at the place where the service is provided and at the time
of its completion, unless otherwise agreed.
4. Where the services provided fail to meet the terms of the agreement or the act is not completed
in time, the client has the right to reduce the fee for services and demand compensation for
damage.
Article 520. Unilateral termination of performance of contracts for services
1. Where the continued provision of services does not benefit the client, the client has the right to
terminate unilaterally the performance of the contract but must provide reasonable prior notice to
the service provider, in which case the client must pay a fee according to the portion of services
already provided and [must] compensate for damage.
2. Where the client fails to perform its obligations or performs its obligations not as agreed, the
service provider has the right to terminate unilaterally the performance of the contract and
demand compensation for damage.
Article 521. Continuation of contracts for services
If, after the expiry of the agreed period for the provision of services, the act has not been
completed and the service provider continues its performance and the client is aware of this but
does not object, the performance of the contract for services shall automatically be deemed to
continue in accordance with the agreed terms until the act is completed.
Section 10. TRANSPORT CONTRACTS
Sub-section 1. Transport contracts
Article 522. Contracts for transport of passengers
Contract for transport of passengers means an agreement between parties whereby a carrier
transports passengers and luggage to an agreed destination and the passengers must pay transport
fares.
Article 523. Formalities for contracts for transport of passengers
1. A contract for transport of passengers may be made in writing or orally.
2. A ticket is evidence of the entry into a contract for transport of passengers by the parties.
Article 524. Obligations of carriers
1. Carry the passengers safely from the place of departure to the agreed destination on time, in a
civilized and courteous manner, by the means agreed and on the agreed route; to ensure that
there are sufficient seats for the passengers and that the transport capacity of the carrier is not
exceeded.
2. Purchase civil liability insurance for the passengers, as provided by law.
3. Ensure that the departure time is adhered to as notified or agreed.
4. Carry and return the luggage to the passenger or person entitled to receive the luggage in
accordance with the agreed destination, time and route.
5. Refund the transport fare to any passenger as agreed or as prescribed by law.
Article 525. Rights of carriers
1. Require the passengers to pay in full the passenger transport fares and fares for the transport of
personal luggage in excess of the prescribed limit.
2. Refuse to carry a passenger in the following cases:
a) Where the passenger fails to follow the regulations of the carrier, where the acts of the
passenger disturb public order, obstruct the work of the carrier, or pose a threat to life, health or
property of other persons, or where a passenger commits other acts which make it impossible to
ensure safety during the journey. In this case, the passenger shall not receive a refund of the
passenger transport fare, and must pay a fine if so provided by the transport regulations;
b) Where the health of the passenger is such that it is obvious to the carrier that the transport [of
such person] will endanger the passenger or other persons during the journey;
c) In order to prevent the spread of contagious diseases.
Article 526. Obligations of passengers
1. Pay in full the passenger transport fare and fares for the transport of luggage in excess of the
prescribed limit, and to take care of his or her hand-luggage.
2. Present at the place of departure at the agreed time.
3. Respect and comply strictly with the regulations of the carrier and all other regulations
ensuring traffic safety.
Article 527. Rights of passengers
1. Request to be transported by the agreed means of transport, in the class commensurate with
the value of the ticket and in accordance with the agreed route.
2. Be exempt from transport fares for check-in luggage and hand-luggage within the limits as
agreed or as provided by law.
3. Demand reimbursement of expenses incurred or compensation for any damage if the carrier is
at fault in failing to transport according to the agreed time schedule and destination.
4. Receive a refund of all or part of the transport fare in the cases provided for in Points b and c
Clauses 2 of Article 525 of this Code and in other cases as agreed or as provided by law.
5. Receive the luggage at the agreed destination in accordance with the agreed time and route.
6. Request temporary interruption of the journey for the duration and in accordance with the
procedures provided by law.
Article 528. Liability to compensate for damage
1. In case of loss of life of or damage to the health or luggage of a passenger, the carrier must
compensate for any damage in accordance with law.
2. Unless otherwise provided by law, a carrier shall not be liable to compensate for loss of life of
or damage to the health and luggage of a passenger in the case where such loss or damage is
entirely due to the fault of the passenger, unless otherwise prescribed by law.
3. A passenger which breaches the agreed terms for transport or the transport regulations, thereby
causing damage to the carrier or a third person, must compensate.
Article 529. Unilateral termination of contracts for transport of passengers
1. A carrier has the right to terminate unilaterally the performance of a contract in the cases
provided in Clause 2 of Article 525 of this Code.
2. A passenger has the right to terminate unilaterally the performance of a contract where the
carrier breaches the obligations provided in Clauses 1, 3 and 4 of article 524 of this Code.
Sub-section 2. CONTRACTS FOR TRANSPORT OF PROPERTY
Article 530. Contracts for transport of property
Contract for transport of property means an agreement between parties whereby a carrier has the
obligation to transport property to an agreed destination and to deliver it to the authorized
recipient, and the customer has the obligation to pay the freight charges.
Article 531. Formalities for contracts for transport of property
1. A contract for transport of property may be entered into orally or in writing or a specific act.
2. A bill of lading or equivalent source document of transport shall be evidence of the entering
into of a contract by the parties.
Article 532. Delivery of property to carriers
1. A customer has the obligation to deliver property to a carrier at the agreed time and place and
pack the property in accordance with the agreed specifications. The customer must bear the costs
f loading the property onto and unloading the property from the means of transport, unless
otherwise agreed.
2. Where a customer is late in delivering property to the agreed place, the customer must
reimburse the carrier for the costs associated with the delay and pay the freight charges for
transporting the property to the place agreed in the contract, or must pay a penalty for breach of
the contract.
If the carrier is late in accepting the property at the agreed at the agreed place, it shall be liable
for the costs incurred due to such late acceptance.
Article 533. Freight charges
1. The rate of freight charges shall be as agreed by the parties. If the law regulates freight
charges, charges shall apply as regulated.
2. A customer must pay freight charges in full after the property is loaded onto the means of
transport, unless otherwise agreed.
Article 534. Obligations of carriers
1. Transport the property in its entirety and safely to the agreed destination at the agreed time.
2. Deliver the property to the person entitled to receive it.
3. Bear all costs related to the transport of the property, unless otherwise agreed.
4. Purchase civil liability insurance as required by law.
5. Compensate the customer for damage where the loss of or damage to the property is caused by
the fault of the carrier, unless otherwise agreed or otherwise provided by law.
Article 535. Rights of carriers
1. Check the authenticity of the property and the bill of lading or equivalent source document of
transport.
2. Refuse to transport property which is different from that agreed in the contract.
3. Demand the full and timely payment of the freight charges by the customer.
4. Refuse to transport property if the carrier knows or should know that the transacting of such
property is prohibited or the property is of a dangerous or toxic nature.
Article 536. Obligations of customers
1. Pay in full the freight charges to the carrier, at the time and by the method of payment as
agreed.
2. Provide necessary information about the transported property to ensure its safety.
3. Take care of the property during transport if so agreed. Where the customer takes care of the
property and it is lost or damaged, the customer shall not be entitled to compensation.
Article 537. Rights of customers
1. Demand the carrier to transport the property to the agreed destination at the agreed time.
2. Receive directly the property which has been transported, or appoint a third person to receive
it.
Article 538. Delivery of property to recipients
1. A recipient of property may be the customer or a third person appointed by the customer to
receive the property.
2. A carrier must deliver the property to a recipient in full, at the time and place and by the
method as agreed.
3. Where property has been delivered to the point of delivery on time but there is no recipient of
the property, the carrier may deposit such property at a place of bailment and must notify
immediately the customer or the recipient of the property. The customer or recipient of the
property must bear the reasonable expenses incurred in relation to the bailment of the property.
The obligation to deliver property shall be completed upon bailment of the property in
compliance with the agreed terms and when the customer or the recipient of the property has
been notified about the bailment.
Article 539. Obligation of recipients of property
1. Produce to the carrier the bill of lading or other equivalent source document of transport, and
to receive the property at the agreed time and place.
2. Bear the costs for loading and unloading the transported property, unless otherwise agreed or
otherwise provided by law.
3. Reimburse the carrier for reasonable costs incurred due to late acceptance of the property.
4. Notify the customer of the acceptance of the property and provide other necessary information
required by the customer if the recipient is a third party appointed by the customer.
Article 540. Rights of recipients of property
1. Verify the quantity and quality of the delivered property.
2. Accept the delivered property.
3. Require the carrier to reimburse reasonable costs incurred due to any delay by the carrier in
delivering the property.
4. Require the carrier compensate for loss of or damage to the property.
Article 541. Liability to compensate for damage
1. Where a carrier is responsible for the loss of or damage to property, the carrier must
compensate the customer for damage, except in the case provided in Clause 3 of Article 536 of
this Code.
2. A customer must compensate a carrier and any third parties for damage caused by the
transport of dangerous or toxic property which is not safely packaged or the safety of which is
not otherwise ensured.
3. A carrier shall not be liable to compensate for damage in the event of force majeure causing
loss or deterioration of or damage to the property during transport, unless otherwise agreed or
otherwise provided by law.
Section 11. PROCESSING CONTRACTS
Article 542. Processing contracts
Processing contract means an agreement between parties whereby a processor carries out work to
create products at the request of a supplier, and the supplier receives the products and pays fees.
Article 543. Subject matter of processing contracts
The subject matter of a processing contract shall be items which are specified by samples, the
standard of which is agreed by the parties or provided by law.
Article 544. Obligation of suppliers
1. Supply raw materials to the processor strictly in accordance with the agreed quantity, quality,
time and place, unless otherwise agreed by the parties; and to provide necessary documents
relating to the processing.
2. Provide the processor with instructions as to how to perform the contract.
3. Pay agreed fees.
Article 545. Rights of suppliers
1. Accept the processed products in accordance with the agreed quantity, quality, manner, time
and place.
2. Terminate unilaterally performance of the contract and demand compensation for damage if
the processor commits a serious breach of the contract.
3. Where the products are not of the agreed quality and the supplier accepts the products but
requests repairs, but the processor is not able to perform the repairs within the agreed time, the
supplier has the right to cancel the contract and demand compensation for damage.
Article 546. Obligations of processors
1. Take care of the raw materials supplied by the supplier.
2. Notify the supplier to replace any raw materials supplied which are not of the agreed quality;
to refuse to perform the processing if the use of the raw materials may create products which
pose a danger to society.
3. Deliver the products to the supplier strictly in accordance with the agreed quantity, quality,
method, time and place.
4. Keep confidential all information relating to the processing and the products.
5. Bear liability for the quality of the products, unless the lack of quality is due to the raw
materials supplied by the supplier or due to the unreasonable instructions of the supplier.
6. Return any leftover raw materials to the supplier after completing performance of the contract.
Article 547. Rights of processors
1. Require the supplier to deliver the raw materials strictly in accordance with the agreed quality,
quantity, time and place.
2. Refuse to comply with unreasonable instructions of the supplier where the processor is of the
view that [compliance with] such instructions could decrease the quality of the products provided
that the processor immediately informs the supplier.
3. Require the supplier to make payment of the fees in full, at the time and by the method as
agreed.
Article 548. Liability for risk
Unless otherwise agreed, the owner of the raw materials shall bear all risks with respect to such
materials and the products processed therefrom until the products are delivered to the supplier.
If the supplier is late in accepting the products, it shall bear all risks during the period of delayed
acceptance, including where the products are processed from the raw materials of the processor,
unless otherwise agreed.
If the processor delays delivery of the products and the delay damages the processed property,
the processor must compensate for damage suffered by the supplier.
Article 549. Delivery and acceptance of processed products
A processor must deliver, and the supplier must accept, products at the agreed time and place.
Article 550. Late delivery and acceptance of processed products
1. Where the processor is late in delivering processed products, the supplier may extend the time
of delivery. If, upon expiry of such extension, the processor still has not delivered the products,
the supplier has the right to terminate unilaterally the performance of the contract and demand
compensation for damage.
2. Where the supplier is late in accepting the products, the processor may deposit the products at
a place of bailment and must notify the supplier immediately. The obligation to deliver the
products shall be fulfilled when the agreed terms are satisfied and the supplier has been notified.
The supplier must bear all costs incurred for bailment.
Article 551. Unilateral termination of performance of processing contracts
1. Unless otherwise agreed or otherwise provided by law, each party has the right to terminate
unilaterally the performance of a processing contract if continued performance would not benefit
that party but must give reasonable prior notice to the other party.
2. If the supplier terminates unilaterally the performance of the contract, the supplier must pay
fees for the work already performed, unless otherwise agreed. If the processor terminates
unilaterally the performance of the contract, it shall not be paid fees, unless otherwise agreed.
3. A party which unilaterally terminates the performance of a contract and thereby causes
damage to the other party must compensate.
Article 552. Payment of fees
1. Unless otherwise agreed, the supplier must pay fees in full at the time of accepting the
products.
2. If there is no agreement on the rate of fees, the applicable rate shall be the average rate
charged for the production of products of the same type at the place of processing at the time of
payment.
3. If the products fail to meet the agreed quality due to the raw materials supplied or the
unreasonable instructions provided by the supplier, the supplier does not have the right to reduce
the fees.
Article 553. Dealing with leftover raw materials
Unless otherwise agreed, the processor must return leftover raw materials to the supplier upon
termination of the processing contract.
Section 12. CONTRACTS FOR BAILMENT OF PROPERTY
Article 554. Contracts for bailment of property
Contract for bailment of property means an agreement between parties whereby a bailee accepts
the property of a bailor for safekeeping, for return to the bailor upon expiry of the duration of the
contract, and the bailor must pay a fee to the bailee, except where the bailment is free of charge.
Article 555. Obligation of bailors of property
1. Inform the bailee of the condition of the property and the appropriate safekeeping measures
upon delivery of the property; if the bailor fails to inform the bailee, and the property is
destroyed or damaged as a result of inappropriate safekeeping, the bailor must be liable itself for
such destruction of or damage to the bailed property and must compensate for other damage
caused.
2. Pay the bailment fees in full, at the time and by the method as agreed.
Article 556. Rights of bailors of property
1. Reclaim the property at any time subject to giving reasonable prior notice to the bailee if the
bailment contract does not specify a period of time.
2. Demand compensation for loss of or damage to the bailed property caused by the bailee,
except in the case of an event of force majeure.
Article 557. Obligation of bailees of property
1. Take care of the property as agreed and return it to the bailor in the same condition in which
the bailee received it.
2. Change the method for safekeeping of the property only where such change is necessary for
better safekeeping of such property and provided that the bailor is notified immediately of the
change.
3. Notify promptly the bailor in writing and request the bailor to advise, within a certain period
of time, a solution where, due to its nature, the bailed property is in danger of being damaged or
destroyed. If the bailor fails to reply within such period of time, the bailee has the right to take all
necessary measures to take care of the property and to require the bailee to reimburse the costs
incurred.
4. Compensate for damage where the bailee causes any loss of or damage to the bailed property,
except in the case of an event of force majeure.
Article 558. Rights of bailees of property
1. Require the bailor to pay the agreed bailment fees.
2. Require the bailor to pay the reasonable costs of taking care of the property where the
bailment is free of charge.
3. Request, at any time, the bailor to take back the property subject to giving reasonable prior
notice to the bailor where the bailment is for an indefinite period of time.
4. Sell the property in the interests of the bailor where the bailed property is in danger of being
damaged or destroyed, inform the bailor thereof and pay the proceeds of the sale to the bailor
after deduction of reasonable expenses incurred for the sale of the property.
Article 559. Return of bailed property
1. A bailee must return the same property that was received, including any benefits derived
therefrom, unless otherwise agreed.
The bailed property shall be returned to the bailor at the place where it was delivered. If the
bailor wishes to have the property returned at another place, the bailor must bear the transport
costs to such place, unless otherwise agreed.
2. A bailee must return property at the agreed time and only has the right to request the bailor
take back the property prior to such time for a legitimate reason.
Article 560. Late taking back of bailed property
If a bailee is late in returning the property, the bailee may not require the bailor to pay bailment
fees and costs for taking care of the property incurred from the agreed time for return of the
property to the time it is actually returned and bears the risk with respect to the property during
such period.
Where a bailor is late in taking back property, the bailor must pay all costs for taking care of the
property and the bailment fees to the bailee during the period for which the bailor is late.
Article 561. Payment of fees
1. A bailor must pay bailment fees in full when taking back the bailed property, unless otherwise
agreed.
2. Where the parties have no agreement on the rate of bailment fees, the applicable rate shall be
the average rate of bailment fees at the time when and place where the bailment fee is paid.
3. Notwithstanding that the bailor takes back the property prior to the agreed time, the bailor
must pay the bailment fees in full and must pay the necessary costs which the bailee incurs due
to the return of the property by the bailee prior to the agreed time, unless otherwise agreed.
4. Where a bailee requests a bailor to take back the property prior to the agreed time, the bailee
shall not be entitled to be paid bailment fees and must compensate for any damage to the bailor,
unless otherwise agreed.
Section 13. AUTHORIZATION CONTRACTS
Article 562. Authorization contracts
Authorization contract means an agreement between parties whereby an attorney has the
obligation to perform an act in the name of a principal. The principal shall only be required to
pay remuneration if so agreed or so provided by law.
Article 563. Duration of authorization
The duration of the authorization shall be as agreed by the parties or as provided by law. If there
is no agreement and the duration is not provided by law, the authorization contract shall be
effective for one year from the date on which the authorization is made.
Article 564. Sub-authorization
1. An attorney may only sub-authorize its authorization to a third person in any of the following
cases:
a) With the consent of the principal;
b) Due to force majeure events that if the sub-authorization does not apply, the purposes of
entering into a civil transaction for the interests of the principal is unachievable.
2. A sub-authorization shall not exceed the scope of the original authorization.
3. The formalities of the sub-authorization contract must conform to the formalities of the
original authorization contract.
Article 565. Obligation of attorneys
1. Perform the act in accordance with the authorization and inform the principal of such
performance.
2. Notify any third parties involved in the performance of the authorized act of the duration and
scope of the authorization and of any amendments of or additions to such scope.
3. Take care of and preserve documents and facilities provided for the performance of the
authorized act.
4. Keep all information confidential which the attorney comes to know during the performance
of the authorized act.
5. Return to the principal any property received and benefits derived during the performance of
the authorized act as agreed or as provided by law.
6. Compensate for damage caused by a breach of any of the obligations provided in this Article.
Article 566. Rights of attorneys
1. Require the principal to provide the information, documentation and facilities necessary for
performance of the authorized act.
2. Receive remuneration and be reimbursed for reasonable expenses incurred in the performance
of the authorized act.
Article 567. Obligation of principals
1. Provide the information, documentation and facilities necessary for the attorney to perform the
authorized act.
2. Be liable for undertakings given by the attorney within the scope of the authorization.
3. Reimburse the attorney for reasonable expenses incurred by the attorney in the performance of
the authorized act and pay any agreed remuneration to the attorney.
Article 568. Rights of principals
1. Require the attorney to report fully on the performance of the authorized act.
2. Require the attorney to return any property and benefits derived from the performance of the
authorized act, unless otherwise agreed.
3. Compensate for damage caused by a breach of any of the obligations provided in Article 565
of this Code.
Article 569. Unilateral termination of performance of authorization contracts
1. Where an authorization involves payment of remuneration, the principal has the right, at any
time, to terminate unilaterally the performance of the contract but must remunerate the attorney
in proportion to the acts performed and compensate for damage. If the authorization does not
involve payment of remuneration, the principal has the right, at any time, to terminate the
performance of the contract, subject to giving reasonable prior notice to the attorney.
A principal must notify any third person in writing of the termination of the performance of the
contract by the principal. If the principal fails to do so, any contract with any such third person
shall remain in effect, unless such third person knows or should know of the termination of the
performance of the contract.
2. Where an authorization does not involve payment of remuneration, the attorney has the right,
at any time, to terminate unilaterally the performance of the contract, subject to giving
reasonable prior notice to the principal. If the authorization involves payment of remuneration,
the attorney has the right, at any time, to terminate unilaterally the performance of the contract
and must compensate for any damage caused to the principal.
Chapter XVII
PROMISES OF REWARDS AND PRIZE COMPETITIONS
Article 570. Promises of rewards
1. A person having made a public promise of a reward must pay that reward to a person having
performed the act requested by the promissor.
2. An act for which a reward is promised must be specific and capable of being performed and
must not be prohibited by law nor contravene social morals.
Article 571. Withdrawal of promises of rewards
A promissor may withdraw its promise of a reward at any time prior to the commencement of the
performance of the act. A withdrawal of a promise of reward must be made in the same manner
and by the same media in which the promise of reward was announced.
Article 572. Payment of rewards
1. Where a person performs an act for which a reward is promised, that person shall be given the
reward upon completion of the act.
2. Where several persons perform an act for which a reward is promised, concurrently but
independently, the person having first completed the act shall be given the reward.
3. Where more than one person complete, at the same time, an act for which a reward is
promised, the reward shall be distributed in equal shares amongst such persons.
4. Where more than one person co-operate with each other to perform, at the request of the
promissor, an act for which a reward is promised, each person shall receive a share of the reward
in proportion to its contribution.
Article 573. Prize competitions
1. Organization of a cultural, artistic, sports, scientific, technical or other competition shall not
violate prohibitions of law and contravene social morals.
2. A person organizing the competition must announce publicly the terms of participation, the
scale of marks, the prizes and the value of each prize.
Any alteration of the terms of participation must be announced in the manner in which the
competition was announced, within a reasonable period of time prior to the competition being
conducted.
3. A winner of a prize has the right to demand the organizer of a competition give a prize of the
value announced.
Chapter XVIII
PERFORMANCE OF ACTS WITHOUT AUTHORIZATION
Article 574. Performance of acts without authorization
Performance of acts without authorization means the voluntary performance of acts by a person
being under no obligation to perform the act, solely for the benefit of a beneficiary, without the
knowledge of the beneficiary, or with its knowledge but without the beneficiary raising any
objection.
Article 575. Obligation to perform acts without authorization
1. A person performing an act without authorization has the obligation to do so in accordance
with its capabilities and conditions.
2. A person performing an act without authorization must do so as if such person were
performing such act for its own benefit. If such person knows or is able to guess the wishes of
the beneficiary, such person must perform the act in accordance with such wishes.
3. A person performing an act without authorization must, if requested, notify the beneficiary of
the progress and results of the performance, unless the beneficiary already knows such
information or the person performing the act without authorization does not know the place of
residence of the beneficiary.
4. If a beneficiary being natural person dies or a beneficiary being juridical person ceases to
exist, the person performing an act without authorization must continue to perform the act until
the heir or representative of the beneficiary takes over the act.
5. Where a person performing an act without authorization has legitimate reasons for not being
able to continue performance, such person must notify the beneficiary, or the representative or
close relatives of the beneficiary, or may ask another person to perform the act on its behalf.
Article 576. Obligation of beneficiary to pay for acts performed without authorization
1. A beneficiary of an act performed without authorization must accept the results of the act
when it is handed over to the beneficiary by the person having performed the act and [must]
reimburse that person for reasonable expenses incurred in performing such act, even where the
performance has failed to achieve the results desired by the beneficiary.
2. If a person has performed an act properly for the benefit of a beneficiary, the beneficiary must
remunerate the person having performed the act, unless the person having performed the act
refuses to accept the remuneration.
Article 577. Obligation to compensate for damage
1. If a person performing an act without authorization intentionally causes damage to the
beneficiary while performing the act, such person must compensate for such damage.
2. If a person performing an act without authorization unintentionally causes damage to the
beneficiary while performing the act, the compensation by such person may be reduced on the
basis of the circumstances in which the act was performed.
Article 578. Termination of performance of acts without authorization
The performance of acts without authorization shall terminate in the following cases:
1. The beneficiary so requests;
2. The beneficiary, or its heir or representative, takes over the acts;
3. The person performing the acts without authorization becomes not able to continue
performance in accordance with Clause 5 Article 575 of this Code;
4. The person performing the acts without authorization dies with regard to natural person or
juridical person ceases to exist with regard to juridical person.
Chapter XIX
OBLIGATIONS TO RETURN PROPERTY DUE TO UNLAWFUL POSSESSION OR
USE OF PROPERTY OR DERIVING OF BENEFITS FROM PROPERTY
Article 579. Obligation to return property
1. A person possessing or using property of another unlawfully must return the property to its
owners and holders of other property-related rights. If the lawful owners and holders of other
property-related rights of such property are not able to be found, the property must be delivered
to a competent authority, except in the case provided in article 236 of this Code.
2. A person deriving benefits from property unlawfully, thereby causing damage to another
person, must give such benefits to such other person, except in the case provided in Article 236
of this Code.
Article 580. Property to be returned
1. A person possessing or using property unlawfully must return the whole of such property.
2. Where the property to be returned is a distinctive object, that particular object must be
returned and, if such distinctive object is lost or damaged, monetary compensation must be paid,
unless otherwise agreed.
3. If the property to be returned is a fungible object which has been lost or damaged, an object of
the same type must be returned or monetary compensation must be paid, unless otherwise
agreed.
4. A person deriving benefits from property unlawfully must return, either in kind or in money,
the benefits derived from the property to any person having suffered loss of such benefits.
Article 581. Obligation to return yield and income
1. A person possessing or using property, or a person deriving benefits from property, unlawfully
and not in good faith, must return yield and income derived from the property during the time of
unlawful possession or use of, or deriving benefits from, the property.
2. A person possessing or using property, or a person deriving benefits from property, unlawfully
but in good faith, must return any yield and income derived from the property from the time
when it knew or should have known that the possession or use of, or deriving benefits from, the
property was unlawful, except in the case provided in Article 236 of this Code.
Article 582. Right to require third person to return property
Where a person unlawfully possessing or using property transfers the property to a third person,
the third person must return the property if so demanded by the owner and holders of other
property-related rights, unless this Code contains some other provision. If money or
compensation has been paid for such property, the third person has the right to demand the party
having transferred the property to the third person to compensate for damage.
Article 583. Obligation to pay
Upon taking back property, an owner or holders of other property-related rights or an aggrieved
person must reimburse the person having taken possession of or used the property, or having
derived benefits from the property, unlawfully but in good faith, for the necessary expenses such
person has incurred for taking care of the property and increasing its value.
Chapter XX
LIABILITY FOR COMPENSATION FOR NON-CONTRACTUAL DAMAGES
Section 1. GENERAL PROVISIONS
Article 584. Grounds giving rise to liability to compensate for damage
1. A person intentionally or unintentionally harming the life, health, honor, dignity, reputation,
property, or other legal rights or interests of a person, must compensate for such damage, unless
otherwise prescribed in this Code or relevant laws.
2. The person who causes damage shall be discharged from liability for compensation in case
where the damage incurs due to force majeure events or at entire fault of the aggrieved person,
unless otherwise agreed or otherwise prescribed by law.
3. If a property causes damage, its owner or possessor must compensate for the damage, except
for the damage prescribed in Clause 2 of this Article.
Article 585. Principles of compensation for damage
1. Actual damage must be compensated in full and promptly. Unless otherwise provided by law,
parties may agree on the amount of compensation; on the form of compensation, which may be
money, in kind or the performance of an act; lump sum payment or payment in instalments; and
on the method of compensation.
2. The compensation payable by a person having caused damage may be reduced if such damage
was caused unintentionally and is very large in comparison to the financial positions of such
person.
3. If the amount of compensation determined becomes unrealistic, the aggrieved person, or the
person having caused damage, has the right to request a court or another competent authority to
change the amount of compensation.
4. If the aggrieved party is partly his/her fault for causing the damage, that part of damage shall
not be compensated.
5. The party having rights and interests infringed shall not be compensated if such damage incurs
due to his/her failure to adopt necessary measures to prevent the damage.
Article 586. Capacity of individuals for liability to compensate for damage
1. A person of eighteen years of age or older who causes damage shall be personally liable to
compensate.
2. Where a minor under fifteen years of age causes damage, his or her parents, if any, must
compensate for the total damage. If the parents have insufficient property to compensate and the
minor who has caused the damage has property of his or her own, such property shall be used to
satisfy the outstanding amount of compensation, except in the cases provided in Article 599 of
this Code.
Where a person who is between fifteen and eighteen years of age causes damage, such person
must compensate by recourse to his or her own property. If such person has insufficient property
to compensate, the parents of such person must satisfy the outstanding amount by recourse to
their own property.
3. Where a minor, legally incapacitated person, person with limited cognition and behavior
control, causes damage but there is a guardian, such guardian shall use the property of the ward
to compensate. If the ward has no or insufficient property to compensate, the guardian must do
so by recourse to the property of the guardian. If the guardian is able to prove that he or she was
not at fault with respect to guardianship, the guardian shall not be required to use its property to
compensate.
Article 587. Compensation for damage caused jointly by several persons
Where several persons jointly cause damage, they must jointly compensate any aggrieved
person. Liability for compensation of each person having jointly caused the damage shall be
determined in proportion to the degree of fault of each person. If the degree of fault is not able to
be determined, the persons causing damage must compensate in equal shares.
Article 588. Limitation period for initiating legal action claiming compensation for damage
The limitation period for initiating legal action claiming compensation for damage shall be two
years from the date on which the legal rights or interests of an individual, legal entity or other
subject were infringed.
Section 2. ASSESSMENT OF DAMAGE
Article 589. Damage caused by infringement of property
In the event of an infringement of property, the compensable damage shall comprise:
1. Property which was lost, destroyed or damaged;
2. Interests associated with the use and exploitation of the property was lost or declined;
3. Reasonable costs for the prevention, mitigation and remedy of the damage;
4. Other damage as prescribed by law.
Article 590. Damage caused by harm to health
1. Damage caused by harm to health shall comprise:
a) Reasonable costs for treating, nursing and rehabilitating health, and functional losses and
impairment of the aggrieved person;
b) Loss of or reduction in the actual income of the aggrieved person. If the actual income of the
aggrieved person is irregular and is not able to be determined, the average income level for the
type of work performed by the aggrieved person shall be applied;
c) Reasonable costs and actual income losses of the carers of the aggrieved person during the
period of treatment. If the aggrieved person loses his or her ability to work and requires a
permanent carer, the damage shall also include reasonable costs for taking care of the aggrieved
person.
d) Other damage as prescribed by law.
2. A person causing harm to the health of another person must pay the items provided in Clause
1 of this Article together with an amount of money as compensation for mental suffering of the
aggrieved person. The amount of compensation for mental suffering shall be as agreed by the
parties; if the parties are not able to agree, the maximum sum shall not exceed fifty-month base
salary prescribed by the State.
Article 591. Damage caused by harm to life
1. Damage caused by harm to life shall comprise:
a) Damage caused by harm to life prescribed in Article 590 of this Code;
b) Reasonable funeral costs;
c) Support for the dependants of the aggrieved person;
d) Other damage as prescribed by law.
2. A person causing death to another person must pay compensation for damage as provided in
Clause 1 of this Article together with an amount of money as compensation for mental suffering
of the closest relatives in the first line of succession to the deceased. If there are no such
relatives, this sum shall be paid to the persons who were directly reared by the deceased or to the
persons who directly reared the deceased. The amount of compensation for mental suffering shall
be as agreed by the parties; if the parties are not able to agree, the maximum sum shall not
exceed one-hundred-month base salary prescribed in by the State.
Article 592. Damage caused by harm to honor, dignity or reputation
1. Damage caused by harm to the honor, dignity or reputation shall comprise:
a) Reasonable costs for mitigating and remedying the damage;
b) Loss of or reduction in actual income;
c) Other damage as prescribed by law.
2. A person causing harm to the honor, dignity or reputation of another person must pay
compensation for damage as provided in Clause 1 of this Article together with another amount of
money as compensation for mental suffering of the aggrieved person. The amount of
compensation for mental suffering shall be as agreed by the parties; if the parties are not able to
agree, the maximum sum shall not exceed ten-month base salary prescribed by the State.
Article 593. Period of entitlement to compensation for damage caused by harm to health or
resulting from loss of life
1. Where an aggrieved person loses totally the ability to work, the aggrieved person shall receive
compensation until the time of his or her death, unless otherwise agreed.
2. Where the aggrieved person dies, his or her dependants shall be entitled to receive support for
the following durations:
a) A child of the deceased, whether living or conceived prior to his or her death, shall be entitled
to compensation until the age of eighteen years, except a child between fifteen and eighteen
years of age who is employed and earns sufficient income to look after himself or herself;
b) An adult who is not able to work shall be entitled to receive support until his or her death.
3. With regard to the conceived child of the deceased, the compensation shall be paid from the
time he/she is born and alive.
Section 3. COMPENSATION FOR DAMAGE IN A NUMBER OF SPECIFIC CASES
Article 594. Compensation for damage by persons exceeding limits of reasonable selfdefense
A person causing damage while acting in reasonable self-defense shall not be liable to
compensate any aggrieved person.
A person causing damage while not acting in reasonable self-defense must compensate any
aggrieved person.
Article 595. Compensation for damage by persons exceeding requirements of emergency
situation
1. A person causing damage as a result of exceeding the requirements of an emergency situation
must compensate any aggrieved person for that part of the damage which resulted from
exceeding the requirements of an emergency situation.
2. A person creating an emergency situation which leads to damage being caused must
compensate any aggrieved person.
Article 596. Compensation for damage caused by persons using stimulants
1. A person who, due to the consumption of alcohol or the use of other stimulants, becomes
incapable of being aware of or controlling his or her acts, thereby causing damage to another
person, must compensate such person.
2. A person who intentionally causes another person to take alcohol or stimulants, thereby
causing such person to become incapable of being aware of or controlling his or her acts, must
compensate any person aggrieved thereby.
Article 597. Compensation for damage caused by persons belonging to juridical persons
A juridical person must compensate for any damage caused by any person belonging to the
juridical person during the performance of duties assigned by it to such person. If a juridical
person has compensated for any damage, it has the right to demand the person at fault for
causing the damage to reimburse it an amount of money in accordance with law.
Article 598. Compensation for damage caused by law enforcers
The State must compensate for damage caused by law enforcers as prescribed in the Law on
compensation liability of the State.
Article 599. Compensation for damage caused by persons under fifteen years of age or
persons having lost capacity for civil acts and under direct supervision of school, hospital
or other organization
1. Where a person under fifteen years of age causes damage during school hours, the school must
compensate for the damage.
2. If a legally incapacitated person causes damage to another person while under the direct
supervision of a hospital or another juridical person, such hospital or the juridical person must
compensate for the damage.
3. If, in the cases provided in Clauses 1 and 2 of this Article, the school, hospital or another
juridical person proves that it was not at fault with respect to supervision, the parents or guardian
of the person under fifteen years of age or of the legally incapacitated person must compensate.
Article 600. Compensation for damage caused workers and trainees
A natural person or juridical person must compensate for any damage caused by any worker or
trainee belonging to it during the performance by the employee or trainee of his or her assigned
duties. The natural person or juridical person has the right to demand such worker or trainee
reimburse it an amount of money in accordance with law.
Article 601. Compensation for damage caused by sources of extreme danger
1. Sources of extreme danger comprise motorized means of transport, power transmission
systems, operating industrial plants, weapons, explosives, inflammable substances, toxic
substances, radioactive substances, dangerous animals and other sources of extreme danger as
provided by law.
An owner of a source of extreme danger must comply strictly with the regulations on taking care
of, preserving, transporting and using sources of extreme danger in accordance with law.
2. An owner of a source of extreme danger must compensate for damage caused by such source.
If the owner has transferred possession or use of the source of extreme danger to another person,
such other person must compensate [for the damage], unless otherwise agreed.
3. An owner, or person to which an owner has transferred the possession or use, of a source of
extreme danger must compensate for damage caused by such source, even where such owner or
person is not at fault, except in either of the following cases:
a) The aggrieved person is entirely at fault for intentionally causing the damage;
b) The damage occurred due to an event of force majeure or in an emergency situation, unless
otherwise provided by law.
4. Where a source of extreme danger is taken into possession or used unlawfully, the person
possessing or using [it] unlawfully must compensate for damage.
Where an owner, or a person to which an owner has transferred possession or use, of a source of
extreme danger is at fault by allowing the unlawful possession or use of the source of extreme
danger, the owner, or the person to which the owner has transferred possession or use, of the
source of extreme danger as the case may be must compensate jointly for the damage.
Article 602. Compensation for damage caused by environmental pollution
Any entity polluting the environment, thereby causing damage, must compensate in accordance
with the law, including when the entity polluting the environment was not at fault.
Article 603. Compensation for damage caused by livestock
1. An owner of livestock must compensate for damage caused to another person by such
livestock. The possessor or user of livestock must compensate during the period of possession or
using, unless otherwise agreed.
2. Where a third person is entirely at fault in causing livestock to cause damage to another
person, the third person must compensate for the damage. If both the third person and the owner
are at fault, both of them must compensate jointly for the damage.
3. Where livestock which is possessed or used unlawfully causes damage, the unlawful possessor
or user must compensate for the damage. When the owner, possessor or user of livestock is at
fault leading the livestock is possessed or used unlawfully thereby causes damage, they must
jointly compensate for damage.
4. Where livestock which is allowed to roam according to customary practice causes damage, its
owner must compensate according to customary practice provided that such compensation does
not contravene the law or social morals.
Article 604. Compensation for damage caused by trees
An owner, a possessor or a person in charge of trees must compensate for damage caused by the
trees.
Article 605. Compensation for damage caused by houses and other construction works or
buildings
An owner or a possessor of a house or another construction work, or a person to which the owner
has assigned the management or use thereof, must compensate for damage if such house or
construction causes damage to another person.
If the executor of the house or construction work is partly fault that such house or construction
work causes damage, he/she must jointly compensate for such damage.
Article 606. Compensation for damage caused by infringement of corpses
1. Each natural person or juridical causing damage to a corpse must compensate.
2. Damage caused by infringement of a corpse shall include reasonable costs for mitigating and
remedying the damage.
3. A person causing damage to a corpse must pay an amount of money as provided in Clause 2 of
this Article together with another amount of money as compensation for mental suffering of the
closest relatives in the first line of succession to the deceased. If there are no such relatives, this
sum shall be paid to the persons who directly reared the deceased. The amount of compensation
for mental suffering shall be as agreed by the parties; if the parties are not able to agree, the
maximum sum shall not exceed thirty-month base salary prescribed by the State.
Article 607. Compensation for damage caused by infringement of graves
1. Each natural person or juridical person causing damage to the grave of another must
compensate.
2. Damage caused by infringement of a grave shall include reasonable costs for mitigating and
remedying the damage.
3. A person causing damage to a grave must pay an amount of money as provided in Clause 2 of
this Article together with another amount of money as compensation for mental suffering of the
closest relatives in the first line of succession to the deceased. If there are no such relatives, this
sum shall be paid to the persons who directly reared the deceased. The amount of compensation
for mental suffering shall be as agreed by the parties; if the parties are not able to agree, the
maximum sum for each damaged grave shall not exceed ten-month base salary prescribed by the
State.
Article 608. Compensation for damage caused by infringement of consumer interests
A natural person or juridical person carrying out production or business and failing to ensure the
quality of goods, thereby causing damage to consumers, must compensate for such damage.
PART FOUR
INHERITANCE
Chapter XXI
GENERAL PROVISIONS
Article 609. Rights of inheritance
A natural person may make a will to dispose of his or her estate, may leave his or her property to
an heir in accordance with law, or may inherit an estate left to him or her under a will or in
accordance with law.
An heir not being natural person has the right to inherit estate under a will.
Article 610. Equality of individuals with respect to rights of inheritance
All natural persons are equal with respect to rights to bequeath their property to others and to
inherit estates under wills or in accordance with law.
Article 611. Time and place of commencing inheritance
1. The time of commencement of an inheritance shall be the time when the deceased dies. Where
a court declares that a person is dead, the time of commencement of the inheritance shall be the
date provided in Clause 2 of Article 81 of this Code.
2. The place of commencement of the inheritance shall be the last place of residence of the
owner of the estate. If the last place of residence is not able to be determined, the place of
commencement of the inheritance shall be the place at which all or most of the estate is located.
Article 612. Estates
An estate comprises property which the deceased owned and property which the deceased jointly
owned with other persons.
Article 613. Heirs
If an heir is an individual, such person must be alive at the time of commencement of the
inheritance or, if such person is born and alive after the commencement of inheritance, must
have been conceived prior to the time when the deceased dies. Where an heir under a will is a
body or organization, it must be in existence at the time of commencement of the inheritance.
Article 614. Time when rights and obligations of heirs arise
From the time of commencement of an inheritance, the heirs have the property rights and
obligations left by the deceased.
Article 615. Performance of property obligations left by deceased
1. A person entitled to an inheritance has the responsibility to perform the property obligations
within the scope of the estate left by the deceased, unless otherwise agreed.
2. Where an estate has not yet been divided, the property obligations left by the deceased shall be
performed by the administrator of the estate as agreed by the heirs.
3. Where an estate has already been divided, each heir shall perform those property obligations
left by the deceased corresponding to, but not exceeding, that part of the estate that the heir has
inherited, unless otherwise agreed.
4. Where the heir inheriting an estate under a will is not a natural person, it must perform the
property obligations left by the deceased in like manner as a natural person.
Article 616. Administrators of estates
1. Administrator of an estate means the person who is appointed in the will or by agreement of
the heirs.
2. Where a will fails to appoint, and the heirs have not yet appointed, an administrator, any
person currently possessing, using or managing property within the estate at the time of the
commencement of the inheritance shall continue its administration until the heirs have appointed
an administrator.
3. Where an heir has not yet been determined and there is not yet an administrator of the estate as
prescribed in Clauses 1 and 2 of this Article, the estate shall be administered by a competent
authority.
Article 617. Obligations of administrators of estates
1. An administrator of an estate as provided in Clauses 1 and 3 of article 616 of this Code has the
following obligations:
a) Make a list of the property within the estate and collect any property belonging to the estate of
the deceased which is possessed by others, unless otherwise provided by law;
b) Take care of the estate and do not sell, exchange, give, pledge, mortgage or otherwise dispose
of property within the estate without the written consent of the heirs;
c) Notify the heirs of the estate;
d) Compensate for any damage if the administrator breaches any of its obligations, thereby
causing damage;
dd) Deliver back the estate at the request of the heirs.
2. A person possessing, using or managing property within an estate as provided in Clause 2 of
Article 638 of this Code has the following obligations:
a) Take care of the estate and do not sell, exchange, give, pledge, mortgage or otherwise dispose
of property within the estate;
b) Notify the heirs of the estate;
c) Compensate for any damage if the administrator breaches any of its obligations, thereby
causing damage;
d) Deliver back the estate as agreed with the deceased in a contract or at the request of the heirs.
Article 618. Rights of administrators of estates
1. An administrator of an estate as provided in clauses 1 and 3 of article 616 of this Code has the
following rights:
a) Represent the heirs in dealings with any third parties in relation to the estate of inheritance;
b) Receive remuneration as agreed with the heirs;
c) Receive payment of costs of estate preservation.
2. A person possessing, using or managing property within an estate as provided in Clause 2 of
Article 616 of this Code has the following rights:
a) Continue to use the estate as agreed with the deceased in a contract or with the consent of the
heirs;
b) Receive remuneration as agreed with the heirs;
c) Receive payment of costs of estate preservation.
3. If the estate administrator fails to reach an agreement on the remuneration with the heirs,
he/she shall be entitled to receive an appropriate remuneration.
Article 619. Inheritance by persons entitled to inherit each other's estate but dead at same
time
Where persons who are entitled to inherit each other's estate die at the same time or are deemed
to have died at the same time because it is impossible to determine who of them died first
(hereinafter referred to as simultaneous death), they do not have the right to inherit each other's
estate and the estate of each of the deceased shall be inherited by their respective heirs, except in
the case of inheritance pursuant to Article 652 of this Code.
Article 620. Disclaimer of inheritance
1. An heir may disclaim an inheritance, unless such disclaimer is for the purpose of avoiding the
performance of its property obligations to other persons.
2. A disclaimer of an inheritance must be made in writing. A person disclaiming must notify the
other heirs and the person authorized to distribute the estate.
3. The disclaimer of an estate must be expressed before the time of inherit distribution.
Article 621. Persons not entitled to inherit
1. The following persons are not entitled to inherit:
a) Persons convicted of having intentionally caused the death of or harmed the health of the
deceased, of having seriously mistreated or tortured the deceased, or of having harmed the honor
or dignity of the deceased;
b) Persons having seriously breached their duty to support the deceased;
c) Persons convicted of having intentionally caused the death of another heir in order to obtain
all or part of the entitlement of such other heir to the estate;
d) Persons deceiving, coercing or obstructing the deceased with respect to the making of the will,
or forging, altering or destroying the will in order to obtain all or part of the estate contrary to the
wishes of the deceased.
2. Persons provided in Clause 1 of this Article may, nevertheless, inherit the estate if the
deceased was aware of such acts but, nevertheless, allowed them to inherit the estate under the
will.
Article 622. Estates which no one inherits
Where there is no heir under a will and at law, or where there is an heir but such heir is not
entitled to inherit the estate or disclaims the inheritance of the estate, the residual estate for
which there is no heir shall, after fulfillment of property obligations, belong to the State.
Article 623. Limitation periods with respect to inheritance
1. The limitation period with respect to a claim of an heir for distribution of an estate shall be
thirty years regarding immovable property or ten years regarding movable property from the
time of commencement of the inheritance. Upon the expiry date of the aforesaid period, the
estate shall belong to the estate administrator. In case where there is no estate administrator, the
estate shall be dealt with as follows:
a) It shall belong to the person possessing it as prescribed in Article 236 of this Code;
b) It shall belong the State if there is no possessor prescribed in Point a of this Clause.
2. The limitation period with respect to a claim of an heir for a declaration of right of inheritance
of the requester or to disallow the claim to inheritance of another shall be ten years from the time
of commencement of the inheritance.
3. The limitation period with respect to a claim for an heir to fulfill property obligations of the
deceased shall be three years from the time of commencement of the inheritance.
Chapter XXII
INHERITANCE UNDER WILLS
Article 624. Wills
Will means an expression of the wishes of a natural person, made in order to bequeath his or her
property to others after his or her death.
Article 625. Testators
1. An adult satisfying conditions prescribed in Point a Clause 2 Article 630 of this Code may
make a will to dispose his/her property.
2. A person who is between fifteen and eighteen years of age may make a will with the consent
of his or her parents or guardian.
Article 626. Rights of testators
A testator has the following rights:
1. Appoint heirs or to deprive an heir of the right to inherit the estate;
2. Determine those parts of the estate which each heir is entitled to;
3. Reserve part of the estate as a gift or for worship purposes;
4. Designate heirs to perform obligations;
5. Appoint a custodian of the will, an administrator of the estate, and a distributor of the estate.
Article 627. Formalities for wills
A will must be made in writing. If it is not able to be made in writing, it may be made orally.
Article 628. Written wills
Written wills comprise:
1. Unwitnessed written wills;
2. Witnessed written wills;
3. Written wills which are notarized;
4. Written wills which are certified.
Article 629. Oral wills
1. Where a person is likely to die due to illness or any other reason and it is not possible for him
or her to make a written will, such person may make an oral will.
2. If the testator is alive and is of sound mind three months after he or she has made an oral will,
such will shall automatically become invalid.
Article 630. Lawful wills
1. A will must satisfy the following requirements in order to be lawful:
a) The testator was of sound mind when he or she made the will; and he or she was not deceived,
threatened or coerced into making the will;
b) The contents of the will are not contrary to law or social morals and the will complies with
legal formalities.
2. A will made by a person between fifteen and eighteen years of age must be made in writing
and with the consent of the parents or guardian of such person.
3. A will made by a person who is incapacitated or illiterate must be made in writing by a
witness and must be notarized or certified.
4. A written will which is not notarized or certified shall be deemed lawful only if it satisfies the
requirements provided in Clause 1 of this Article.
5. An oral will shall be deemed lawful only if the testator orally expressed his or her last wishes
before at least two witnesses who immediately thereafter recorded those wishes in writing and
signed or fingerprinted the document. Such will must be notarized or certified within five
working days of the date on which the testator orally expressed his or her last wishes.
Article 631. Contents of written wills
1. A will must specify clearly the following:
a) The date on which the will is made;
b) The full name and place of residence of the testator;
c) The full names of the persons and the bodies or organizations entitled to inherit the estate;
d) The estate to be bequeathed and its location.
2. Apart from the contents prescribed in Clause 1 of this Article, the will may have other
contents.
3. A will may not be written using abbreviations or other symbols. If a will consists of several
pages, each page must be numbered and bear the signature or fingerprint of the testator.
Where a will has erasure or correction, the testator or the testament witness must sign beside
erasing and corrected place.
Article 632. Witnesses to making of will
Any person may act as a witness to the making of a will, except the following persons:
1. Persons who are heirs of the testator under the will or at law;
2. Persons with property rights or obligations which relate to the will;
3. Minors, legally incapacitated persons, persons with limited cognition and behavior control.
Article 633. Unwitnessed written wills
A testator must write a will by his or her own hand and must sign it.
The drawing up of a written will without witnesses must comply with article 631 of this Code.
Article 634. Witnessed written wills
Where a testator is not able to write a will by his or her own hand, the testator may request
another person to write the will, but there must be at least two witnesses. The testator must sign
or fingerprint the will in the presence of the witnesses; the witnesses shall acknowledge the
signature or fingerprint of the testator and sign the will.
The will must be made in compliance with articles 631 and 632 of this Code.
Article 635. Wills which are notarized or certified
A testator may request that the will be notarized or certified.
Article 636. Procedures for preparation of wills at notary office or people's committee of
commune
The preparation of a will at a notary office or the people's committee of the commune must
comply with the following procedures:
1. The testator shall declare the contents of his or her will to a notary public officer or a member
of the people's committee of the commune who has the authority to certify it. The notary public
officer or the person having the authority to certify must record the wishes stated by the testator.
The testator shall sign or fingerprint the will after acknowledging that it has been recorded
accurately and that it expresses faithfully the intentions of the testator. Thereafter, the notary
public officer or the member of the people's committee of the commune shall sign the will;
2. Where the testator is not able to read or hear the will or not able to sign or fingerprint it, there
must be a witness who must acknowledge the will by signing it before a notary public officer or
a member of the people's committee of the commune who has the authority to certify it. The
notary public officer shall notarize the will, or the member of the people's committee of the
commune who has the authority to certify the will shall certify it, in the presence of the testator
and the witnesses.
Article 637. Persons not permitted to notarize or certify wills
A notary public officer or a member of the people's committee of the commune who has
authority shall not be permitted to notarize or certify a will if such person is:
1. An heir of the testator under the will or at law;
2. A person whose father, mother, wife, husband or child is an heir under the will or at law;
3. A person having property rights or obligations relating to the will.
Article 638. Written wills valid as though notarized or certified
1. A written will made by a serving soldier who is not able to request a notarization or
certification of his or her will provided that such will is certified by the head of his or her unit
having the rank of a company commander or higher.
2. A written will made by a person travelling on a seagoing vessel or aircraft provided that the
will is certified by the captain of the vessel or aircraft.
3. A written will made by a person undergoing medical treatment in a hospital or other medical
establishment or sanatorium provided that the will is certified by the person in charge of such
hospital or establishment or sanatorium.
4. A written will made by a person conducting surveys, explorations or research in mountainous
areas, forests or offshore islands provided that the will is certified by the person in charge of the
unit.
5. A written will made by a Vietnamese citizen residing abroad provided that the will is certified
by a Vietnamese consular or diplomatic representative mission in that country.
6. A written will made by a person held in temporary detention, serving a prison sentence or
administrative penalty, or at an educational or medical facility provided that the will is certified
by the person in charge of such facility.
Article 639. Wills prepared by notary public officers at places of residence of testators
1. A testator may request a notary public officer to visit his or her place of residence in order to
prepare a will.
2. Such will shall be prepared in accordance with the procedures for the preparation of wills at a
State notary public provided in article 636 of this Code.
Article 640. Amendment of, addition to, replacement or revocation of wills
1. A testator may amend, add to, replace or revoke his or her will at any time.
2. If a testator adds to his or her will, the original will and the codicil shall have equal validity. If
a part of the original will and the codicil conflict with each other, the codicil shall prevail.
3. Where a testator replaces a will with a new will, the previous will shall be deemed to have
been revoked.
Article 641. Custody of wills
1. A testator may request a notary office or another person to keep custody of the will of the
testator.
2. Where a will is kept in custody by a notary office, it must be taken care of and looked after in
accordance with the law on notaries.
3. An individual keeping custody of a will has the following obligations:
a) Keep the contents of the will confidential;
b) Take care of and look after the will. If the will is lost or damaged, the person must notify
immediately the testator;
c) Upon the death of the testator, to deliver the will to his or her heirs or to the person authorized
to announce the will. The delivery of the will must be recorded in writing and signed by the
person delivering the will, and by the person receiving it, in the presence of two witnesses.
Article 642. Loss and damage of wills
1. If, from the commencement of the inheritance, the will is lost or damaged to the extent that it
is incapable of indicating clearly the wishes of the testator and there is no evidence of the true
wishes of the testator, it shall be deemed that no will exists and inheritance at law shall apply.
2. Where the will is found prior to distribution of the estate, the estate shall be distributed
according to the will.
3. Within the limitation periods for requesting estate distribution, if a will is found after the
distribution of the estate, the estate shall be distributed according to the will at the request of the
heir under will.
Article 643. Legal effectiveness of wills
1. A will shall become legally effective from the time of commencement of the inheritance.
2. All or part of a will shall be legally ineffective in any of the following cases:
a) An heir under the will dies prior to or at the same time as the testator dying;
b) A body or organization named as an heir no longer exists at the time of commencement of the
inheritance.
Where there are several heirs under a will and one of them dies prior to or at the same time as the
death of the testator or one of the bodies or organizations named as an heir under the will no
longer exists at the time of commencement of the inheritance, only that part of the will which
relates to the individual, body or organization no longer existing shall be legally ineffective.
3. A will shall not be legally effective if the estate left to the heirs no longer exists at the time of
commencement of the inheritance. If only part of the estate left to the heirs remains, only that
part of the will which relates to such part of the estate shall be legally effective.
4. Where a will contains provisions which are unlawful but such provisions do not affect the
effectiveness of the remainder of the will, only such provisions shall be legally ineffective.
5. Where a person leaves behind more than one will with respect to certain property, only the
most recent of such wills shall be legally effective.
Article 644. Heirs notwithstanding contents of wills
1. Where a testator does not grant any of the following persons an inheritance, or grants any such
person an inheritance which is less than two-thirds of the share that person would have received
if the estate had been distributed according to law, such person shall be entitled to a share of the
estate equivalent to two-thirds of the share that he or she would have received if the estate had
been distributed in accordance with law:
a) Children who are minors, father, mother, wife or husband of the testator;
b) Children who are adults but who are incapable of working.
2. Clause 1 of this Article shall not apply to persons who have disclaimed their inheritance as
prescribed in Article 620 or person who are not entitled to inherit as prescribed in Clause 1
Article 621 of this Code.
Article 645. Estates used for worship purposes
1. Where a testator designates part of his or her estate for worship purposes, such part of the
estate shall not be distributed among the heirs and shall be delivered to the person appointed in
the will to manage for worship purposes. If such appointee fails to implement strictly the will or
the agreement of the heirs, the heirs have the right to appoint another person to manage for
worship purposes.
Where the testator fails to appoint a person to manage that part of his or her estate which is
designated for worship purposes, the heirs shall appoint a person to manage such part of the
estate.
Where all heirs under a will have died, that part of the estate which is designated for worship
purposes shall belong to the person managing that part of the estate for worship purposes
provided that he or she is an heir at law.
2. Where the entire estate of the deceased is insufficient to satisfy all property obligations of the
deceased, no part of the estate may be designated for worship purposes.
Article 646. Testamentary gifts
1. A testator may designate part of his or her estate as a testamentary gift to another person. The
testamentary gift must be expressly stated in the will.
2. The grantee of the testamentary gift must be alive at the time of commencement of the
inheritance or he/she must bear and alive after the time of commencement of the inheritance
he/she must be conceived before the death of the estate leaver. If the grantee of the testamentary
gift is not a natural person, it must exist at the time of commencement of the inheritance.
3. The grantee of a gift shall not be required to fulfill property obligations with respect to that
part of the estate granted as a gift, unless the whole estate is insufficient to satisfy all property
obligations of the grantor, in which case the part of the estate granted as a gift shall also be
applied towards satisfying the remainder of the obligations of the grantor.
Article 647. Announcement of wills
1. Where a written will is kept by a notary office, the notary officer shall be the person
announcing the will.
2. Where a testator has appointed a person to announce the will, such person shall announce the
will. If the testator fails to appoint a person or has appointed a person but the appointee refuses to
announce the will, the heirs shall agree on the appointment of a person to announce the will.
3. After the time of commencement of an inheritance, the person announcing the will must send
copies of the will to all persons with an interest in the contents of the will.
4. A recipient of a copy of a will has the right to verify the copy against the original.
5. Where a will has been prepared in a foreign language, it must be translated into Vietnamese
and notarized.
Article 648. Interpretation of contents of wills
Where the contents of a will are unclear and may be interpreted in different ways, the person
announcing the will and the heirs must interpret jointly the contents of the will based on the true
wishes of the deceased, taking into consideration the relationship of the deceased with the heirs
under the will. If such persons fail to agree on the interpretation of the contents of the will, they
have the right to request a court for settlement.
Where part of the contents of a will is not able to be interpreted but the remainder of the will is
not affected, only that part which is not able to be interpreted shall not be legally effective.
Chapter XXIII
INHERITANCE AT LAW
Article 649. Inheritance at law
Inheritance at law means inheritance in accordance with the order of priority of inheritance and
the conditions and procedures of inheritance provided by law.
Article 650. Cases of inheritance at law
1. Inheritance at law shall apply in the following cases:
a) There is no will;
b) The will is unlawful;
c) All heirs under the will died prior to or at the same time as the testator dying, or the bodies or
organizations which are entitled to inherit under the will no longer exist at the time of
commencement of the inheritance;
d) The persons appointed as heirs under the will do not have the right to inherit or disclaimed the
right to inherit.
2. Inheritance at law shall also apply to the following parts of an estate:
a) Parts of an estate in respect of which no disposition has been made in the will;
b) Parts of an estate related to an ineffective part of the will;
c) Parts of an estate related to heirs under the will not having the right to inherit, having
disclaimed the right to inherit, or having died prior to or at the same time as the testator dying;
and parts of an estate related to bodies or organizations entitled to inherit under the will but no
longer existing at the time of commencement of the inheritance.
Article 651. Heirs at law
1. Heirs at law are categorized in the following order of priority:
a) The first level of heirs comprises: spouses, biological parents, adoptive parents, offspring and
adopted children of the deceased;
b) The second level of heirs comprises: grandparents and siblings of the deceased; and biological
grandchildren of the deceased;
c) The third level of heirs comprises: biological great-grandparents of the deceased, biological
uncles and aunts of the deceased and biological nephews and nieces of the deceased.
2. Heirs at the same level shall be entitled to equal shares of the estate.
3. Heirs at a lower level shall be entitled to inherit where there are no heirs at a higher level
because such heirs have died, or because they are not entitled to inherit, have been deprived of
the right to inherit or have disclaimed the right to inherit.
Article 652. Succeeding heirs
Where a child of a testator died prior to or at the same time as the testator, the grandchildren of
the testator shall inherit that part of the estate which their father or mother would have been
entitled to inherit had such father or mother still been alive. If the grandchildren also died prior to
or at the same time as the testator, the great-grandchildren of the testator shall inherit that part of
the estate which their father or mother would have been entitled to inherit had such father or
mother still been alive.
Article 653. Inheritance relations between adopted children and their adoptive parents and
biological parents
An adopted child and his or her adoptive parents may inherit each other's estates and may also
inherit in accordance with articles 651 and 652 of this Code.
Article 654. Inheritance relations between stepchildren and their stepparents
If a stepchild and his or her stepparents care for and support each other as though they were
biologically related, they may inherit each other's estates and may also inherit in accordance with
articles 652 and 653 of this Code.
Article 655. Inheritance where wives and husbands have divided multiple ownership
property, have applied for divorce or have remarried
1. Where a wife and husband have divided their multiple ownership property while they are still
married and one of them subsequently dies, the surviving spouse shall still be entitled to inherit
the estate of the deceased.
2. Where a wife and husband have applied for but not yet obtained a legally effective divorce
pursuant to a judgment or decision of a court, or they have obtained such a divorce but the
judgment or decision of the court is not yet effective, and one of them dies, the surviving spouse
shall, nevertheless, be entitled to inherit the estate of the deceased.
3. A person who is the wife or husband of the deceased at the time when his or her spouse dies
shall be entitled to inherit the estate of the deceased even if that person subsequently remarries.
Chapter XXIV
SETTLEMENT AND DISTRIBUTION OF ESTATES
Article 656. Meeting of heirs
1. After being notified of the commencement of an inheritance, or after a will has been
announced, the heirs may meet to agree on the following matters:
a) If the testator has failed to appoint an administrator of the estate or a distributor of the estate,
or has not determined the powers and obligations of such persons, the appointment of such
persons and the determination of their powers and obligations, as the case may be;
b) Method of distributing the estate.
2. All agreements by the heirs must be made in writing.
Article 657. Distributors of estates
1. A distributor of an estate may also be the administrator of the estate appointed in the will or by
agreement of the heirs.
2. A distributor of an estate must distribute it strictly in accordance with the will or the
agreement of the heirs at law.
3. A distributor of the estate may receive remuneration if so allowed by the testator in the will or
if so agreed by the heirs.
Article 658. Order of priority of payment
Property obligations and expenses related to an inheritance shall be paid in the following order of
priority:
1. Reasonable funeral expenses in accordance with customary practice;
2. Outstanding support payments;
3. Expenditures on preservation of estate;
4. Allowances for dependants of the deceased;
5. Wages;
6. Monetary compensation for any damage;
7. Taxes and other liabilities owed to the State;
8. Other liabilities owed to other natural persons or juridical persons;
9. Fines;
10. Other expenses.
Article 659. Distribution of estates in accordance with wills
1. An estate shall be distributed in accordance with the wishes of the testator. If the will fails to
specify the share of each heir, the estate shall be divided equally between the persons named in
the will, unless otherwise agreed.
2. Where a will provides for the distribution in kind of an estate, each of the heirs shall be
entitled to receive his or her share in kind, plus the benefits and income derived therefrom, or
must bear the depreciation in value of such share in kind up to the time when the estate is
distributed. If the property which is the subject of a share in kind has been destroyed due to the
fault of another person, the heir has the right to demand compensation for damage.
3. Where a will provides for the distribution of an estate according to certain proportions of the
total value of the estate, such proportions shall be calculated on the basis of the value of the
estate at the time of distribution.
Article 660. Distribution of estates in accordance with law
1. If, at the time of distribution, an heir has been conceived but not yet born, a part of the estate
equal to the share of another heir at the same level of heirs shall be set aside for the unborn heir.
If the heir is born alive, he or she shall inherit such part of the estate. If the heir does not survive
his or her birth, the other heirs at the same level of heirs shall be entitled to his or her share.
2. The heirs have the right to demand the estate to be distributed in kind. If the estate is not able
to be equally distributed in kind, the heirs may agree that the property shall be valued and may
agree on which heirs shall be entitled to receive which particular items of property. Failing such
agreement, the assets in kind shall be sold for distribution.
Article 661. Limited distribution of estates
Where it was the wish of a testator, or where the heirs agree, that an estate is to be distributed
only after a certain period of time, it shall be distributed only after such period of time has
expired.
If there is a request to distribute an estate but such distribution will seriously and adversely affect
the life of the remaining wife or husband and family, such spouse has the right to request a court
to fix the share of the estate to which other heirs are entitled but not to allow distribution of the
estate during a certain period of time. Such period shall not exceed three years from the date of
commencement of inheritance. When such period fixed by the court has expired or such
remaining spouse has remarried, the other heirs have the right to request the court to permit
distribution of the estate.
Article 662. Distribution of estates where new heir or where right of heir to inherit has
been disallowed
1. Where a new heir appears after an estate has been distributed, the estate shall not be redistributed in kind but the heirs which have received [a share of] the estate must pay the new heir
a sum equivalent to the share of the estate of such [new heir] at the time of distribution of the
estate in proportion to the [respective] share of the estate already received [by each heir], unless
otherwise agreed.
2. Where the right of an heir to inherit is disallowed after an estate has been distributed, such heir
must return the inheritance or pay to the other heirs a sum equivalent to the value of the
inheritance received at the time of distribution of the estate, unless otherwise agreed.
PART FIVE
CIVIL RELATIONS INVOLVING FOREIGN ELEMENTS
Chapter XXV
GENERAL PROVISIONS
Article 663. Scope
1. This Part provides for applied law to civil relations involving foreign elements.
If any regulation of law providing for applied law to civil relations involving foreign elements
complies with Article 664 through Article 671 of this Code, it shall prevail; if it does not comply
with those Articles, Part Five of this Code shall prevail.
2. Civil relation involving a foreign element means any of the following civil relations:
a) There is at least one of the participating parties is a foreign natural person or juridical person;
b) The participating parties are Vietnamese natural persons or juridical persons but the basis for
the establishment, modification or termination of such relation arose in a foreign country;
c) The participating parties are Vietnamese natural persons or juridical persons but the subject
matter of such civil relation is located in a foreign country.
Article 664. Determination of law applying to civil relations involving foreign elements
1. The international agreements to which the Socialist Republic of Vietnam is a signatory or
Vietnamese law shall apply to civil relations involving foreign elements.
2. In case the international agreements to which the Socialist Republic of Vietnam is a signatory
or a Vietnamese law stipulates that contracting parties have the right to select applied law, the
law applied to civil relations involving foreign elements shall be determined according to the
selection of the contracting parties.
3. If it fails to determine the applied law as prescribed in Clause 1 and Clause 2 of this Article,
the applied law is the law of the country that closely associates with the civil relations involving
foreign elements.
Article 665. Application of international treaty in terms of civil relations involving foreign
elements
1. In case an international treaty to which the Socialist Republic of Vietnam is a signatory
contains regulations on rights and obligations of contracting participants in the civil relations
involving foreign elements, such international treaty shall prevail.
2. In case an international treaty to which the Socialist Republic of Vietnam is a signatory
contains provisions different from those in this Code and other laws in terms of applied law on
civil relations involving foreign elements, such international treaty shall prevail.
Article 666. Application of international customary practices
Contracting parties may select international customary practices in the case prescribed in Clause
2 Article 664 of this Code. If the application of such international customary practices is contrary
to the basic principles of the laws of the Socialist Republic of Vietnam, Vietnamese laws shall
prevail.
Article 667. Application of foreign laws
Where foreign law applies to a civil relation with different interpretations, the application must
follow the interpretation of the competent authority in that country.
Article 668. Scope of the law to be referred to
1. The law to be referred to include regulations on determination of applied law and regulations
on rights and obligations of participants in civil relations, other than the case prescribed in
Clause 4 of this Article.
2. Where the Vietnamese law is referred to, regulations of Vietnamese law on rights and
obligations of participants of a civil relation shall apply.
3. Where law of a third country is referred to, regulations of that law on rights and obligations of
participants of a civil relation shall apply.
4. With respect to regulations on Clause 2 Article 664 of this Code, the law selected by the
contracting parties shall include rights and obligations of participants of the civil relation, and
not include regulations on applied law.
Article 669. Application of law of countries having multiple legal systems
If the law of a country having multiple legal systems is referred to, the applied law shall be
determined according to the rules prescribed by such country's law.
Article 670. Non-application of foreign laws
1. The foreign law, notwithstanding being referred to, shall not apply in any of the following
cases:
a) The consequences of its application are not inconsistent with the fundamental principles of the
law of the Socialist Republic of Vietnam;
b) The contents of foreign law are not identifiable regardless of the adoption of necessary
measures prescribed by procedural law.
2. In case the foreign law is not applied as prescribed in Clause 1 of this Article, Vietnamese law
shall apply.
Article 671. Limitation periods
Limitation periods for civil relations involving foreign elements shall be determined according to
the law applying to such civil relations.
Chapter XXVI
THE LAW APPLIED TO NATURAL PERSONS AND JURIDICAL PERSONS
Article 672. Bases for choice of law applicable to stateless persons and to foreigners with
multiple foreign nationalities
1. Where the law referred to is the law of a country of which a foreigner is a citizen but he/she is
a stateless person, the applied law shall be the law of the country of residence of such person at
the time when the civil relations involving foreign elements were established. If that person has
multiple residences or his residence is unidentifiable at the time of establishing the civil relation
involving foreign elements, the applied law shall be the law of the country with which such
person closely associates.
2. Where the law referred to is the law of a country of which a foreigner is a citizen but he/she
has multiple foreign nationalities, the applied law shall be the law of which he/she holds
nationality and where he/she resided at the time when the civil relations involving foreign
elements were established. If that person has multiple residences or his residence is
unidentifiable or his/her residence is different from the country of which he/she holds nationality
at the time when the civil relations involving foreign elements were established, the applied law
shall be the law of the country with which such person closely associates.
Where the law referred to is the law of a country of which a foreigner is a citizen but he/she has
multiple foreign nationalities, including Vietnamese nationality, the applied law shall be
Vietnamese law.
Article 673. Legal personality of natural persons
1. Legal personality of a natural person shall be determined according to the law of the country
of which he/she holds nationality.
2. A foreigner in Vietnam shall have legal personality in the same manner as a Vietnamese
citizen, unless otherwise provided by the law of Vietnam.
Article 674. Legal capacity of natural persons
1. Legal capacity of a natural person shall be determined according to the law of the country of
which he/she holds nationality, other than the case prescribed in Clause 2 of this Article.
2. Where a foreigner establishes or performs civil transactions in Vietnam, his/her legal capacity
shall be determined in accordance with the law of Vietnam.
3. The determination of a legally incapacitated person, a person with limited cognition or
behavior control or a person with limited legal capacity in Vietnam shall be in accordance with
the law of Vietnam.
Article 675. Determination of persons disappeared or died
1. A determination that a person has disappeared or died must comply with the law of the
country of which such person held nationality at the point of time prior to the last information
about such disappearance or death, except for the case prescribed in Clause 2 of this Article.
2. The determination of a disappeared or dead person in Vietnam shall be in accordance with the
law of Vietnam.
Article 676. Juridical persons
1. The nationality of a juridical person shall be determined according to the law of the country in
which such juridical person was established.
2. Legal personality, name, legal representatives, organization, restructuring, dissolution of a
juridical person; relations between a juridical person and its members; responsibilities of a
juridical person and its members pertaining to its obligations shall be determined in accordance
with the law of the country of which such juridical person holds nationality, other than the case
prescribed in Clause 3 of this Article.
3. Where a foreign juridical person establishes or performs civil transactions in Vietnam, its legal
personality shall be determined in accordance with the law of Vietnam.
Chapter XXVII
THE LAW APPLIED TO PROPERTY RELATIONS AND PERSONAL RELATIONS
Article 677. Classification of property
The classification between moveable and immoveable property shall be made in accordance with
the laws of the country in which such property is located.
Article 678. Ownership rights and other property-related rights
1. The establishment, exercise, operation and termination of ownership rights and other propertyrelated rights shall be determined in accordance with the laws of the country in which the
property is located, except in the cases provided in Clause 2 of this Article.
2. Ownership rights with respect to moveable property in transit shall be determined in
accordance with the law of the country of destination, unless otherwise agreed.
Article 679. Intellectual property rights
The intellectual property rights shall be determined in accordance with the laws of the country in
which the objects of the intellectual property rights are required to be protected.
Article 680. Inheritance
1. Inheritance must comply with the law of the country of which the person who bequeathed the
assets held nationality prior to his or her death.
2. The right to inherit immoveable property must comply with the law of the country where such
immoveable property is located.
Article 681. Wills
1. The capacity to create a will, and to alter or rescind a will, must comply with the law of the
country of which the testator is a citizen.
2. The form of a will must comply with the law of the country in the place where the will is
created. The form of a will shall be also recognized in Vietnam if it complies with the laws of
any of the following countries:
a) The country in which the testator resides at the time when the will is created or the testator
dies;
b) The country of which the testator holds nationality at the time when the will is created or the
testator dies;
c) The country where the inheritance being immovable property is located.
Article 682. Guardianship
The guardianship shall be determined in accordance with the law of the country where the ward
resides.
Article 683. Contracts
1. Contracting parties in a contract may agree to select the applied law for the contract, other
than regulations of Clauses 4, 5 and 6 of this Article. In case the contracting parties fail to agree
the applied law, the law of the country with which such contract closely associates shall apply.
2. The laws of any of the following countries shall be treated as the law of the country with
which such contract closely associates:
a) The law of the country where the seller being natural person resides or the seller being
juridical person is established in terms of sale contracts;
b) The law of the country where the provider being natural person resides or the provider being
juridical person is established in terms of service contracts;
c) The law of the country where the transferee being natural person resides or the seller being
juridical person is established in terms of contracts of transferring rights to use or intellectual
property rights;
d) The law of the country where employees frequently perform do jobs in terms of labor
contracts. If an employee frequently does jobs in multiple countries or the country in which the
employee frequently does his/her job is unidentifiable, the law of the country with which his/her
labor contract closely associates shall be the law of the country where the employer being natural
person resides or the employer being juridical person is established.
dd) The law of the country where consumers resides in terms of consume contract.
3. If there is evident that the law of a country other than the country prescribed in Clause 2 of
this Article associates with the contract more closely than the latter, the law of the former
country shall prevail.
4. If the object of a contract is an immovable property, the law applied to transfer of its
ownership rights and/or other property-related rights, lease of immovable property or using the
immovable property as the guarantee for performance of obligations shall be the law of the
country where the immovable property is located.
5. If the applied law selected by contracting parties in a labor contract or a consume contract
affects adversely minimum interests of employees or consumers as prescribed in the law of
Vietnam, the law of Vietnam shall prevail.
6. Contracting parties in a contract may agree to change the applied law provided that such
change does not affect adversely lawful rights and interests of a third party before changing,
otherwise agreed by the third party.
7. Form of a contract shall be determined in accordance with the law applied to such type of
contract. In case where the form of a contract does not comply with the form of the law applied
to such contract but it comply with the form of the law of the country where the contract is
entered into or the law of Vietnam, such form of contract shall be recognized in Vietnam.
Article 684. Unilateral acts
The law applied to unilateral acts of a person shall be determined in accordance with the law of
the country of residence with regard to natural person or the law of the country of establishment
with regard to juridical person.
Article 685. Obligation to refund property possessed, used or derived unlawfully
The obligation to refund property possessed, used or derived unlawfully shall be determined
according to the law of the country where the property is possessed, used or derived unlawfully.
Article 686. Performance of acts without authorization
Contracting parties may agree to select the law applied to the performance of acts without
authorization. If the contracting parties fail to agree to select the applied law, the law of the
country where the acts without authorization are performed shall prevail.
Article 687. Compensation for non-contractual damage
1. Contracting parties may agree to select the law applied to the compensation for noncontractual damage, except for the case prescribed in Clause 2 of this Article. If the contracting
parties fail to agree to select the applied law, the law of the country where the consequences of
such acts arise shall prevail.
2. Where the party causing damage and the aggrieved party being natural persons have residence
or being juridical person place of establishment in the same country, the law of such country
shall prevail.
PART SIX
IMPLEMENTATION
Article 688. Transitional regulations
1. With respect to civil transactions established before the effective date of this Code, the law
shall be implemented as follows:
a) The parties of non-performed civil transactions whose contents and forms are different from
this Code shall keep complying with regulations of the Civil Code No. 33/2005/QH11 and
legislative documents on guidelines for the Civil Code No. 33/2005/QH11, unless the parties
agree to amend the contents or forms of the transactions in accordance with this Code.
a) The parties of being-performed civil transactions whose contents and forms are different from
this Code shall keep complying with regulations of the Civil Code No. 33/2005/QH11 and
legislative documents on guidelines for the Civil Code No. 33/2005/QH11;
b) The parties of non-performed or being-performed civil transactions whose contents and forms
are conformable to this Code shall comply with regulations of this Code;
c) The parties of civil transactions that are completely performed before the effective date of this
Code but arise dispute shall keep complying with regulations of the Civil Code No.
33/2005/QH11 and legislative documents on guidelines for the Civil Code No. 33/2005/QH11;
d) Limitation periods shall comply with this Code.
2. This Code shall not apply to a case settled by a court in accordance with law on civil before
the effective date of such Code for the purpose of appeal under cassation procedures.
Article 689. Effect
This Code comes into force from January 1, 2017.
The Civil Code No. 33/2005/QH11 shall be annulled from the effective date of this Code.
This Code is passed by the 13th National Assembly of Socialist Republic of Vietnam during the
10th session on November 24, 2015.
THE NATIONAL ASSEMBLY
No: 36/2005/QH11
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
Ha Noi, day 14 month 06 year
2005
COMMERCIAL LAW
Pursuant to Article 103 and Article 106 of the 1992 Constitution of the Socialist Republic of
Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10 of 25
December, 2001, of the X th National Assembly, the 10 th session;
This Law provides for commercial activities.
Chapter I
GENERAL PROVISIONS
Section 1. GOVERNING SCOPE AND SUBJECTS OF APPLICATION
Article 1.- Governing scope
1. Commercial activities conducted in the territory of the Socialist Republic of Vietnam.
2. Commercial activities conducted outside the territory of the Socialist Republic of Vietnam in
cases where the involved parties agree to this Law for application, or where a foreign law or a
treaty to which the Socialist Republic of Vietnam is a contracting party stipulates the application
of this Law.
3. Activities not for profit purposes conducted by a party in its transactions with traders in the
territory of the Socialist Republic of Vietnam in cases where the party conducting such not-forprofit activities chooses to apply this Law.
Article 2.- Subjects of application
1. Traders conducting commercial activities as provided for in Article 1 of this Law.
2. Other organizations and individuals conducting commerce-related activities.
3. Basing itself on the principles provided for by this Law, the Government shall specify the
application of this Law to individuals who independently and regularly conduct commercial
activities without having to make business registration.
Article 3.- Interpretation of terms
In this Law, the following terms shall be construed as follows:
1. Commercial activities mean activities for the purpose of generating profits, including: sale and
purchase of goods, provision of services, investment, commercial promotion and other activities
for the profit purpose.
2. Goods include:
a/ All types of movables, including those to be formed in the future;
b/ Things attached to land;
3. Custom in commercial activities means a code of conduct that has an explicit meaning, is
established and repeated time and again for a long period of time between and implicitly
recognized by involved parties in order identify their respective rights and obligations in
commercial contracts.
4. Commercial practice means a custom that is widely recognized in commercial activities in an
area, a region or a commercial domain, has an explicit meaning, and is recognized by involved
parties in order to identify their respective rights and obligations in commercial activities.
5. Data message means information created, sent, received and stored in electronic media.
6. Vietnam-based representative office of a foreign trader means a dependent unit of the foreign
trader, which is established under the provisions of Vietnamese law to conduct market survey
and a number of commercial promotion activities permitted by Vietnamese law.
7. Vietnam-based branch of a foreign trader means a dependent unit of the foreign trader, which
is established and conducts commercial activities in Vietnam under the provisions of Vietnamese
law or treaties to which the Socialist Republic of Vietnam is a contracting party.
8. Purchase and sale of goods mean commercial activities whereby the seller is obliged to
deliver goods, transfer ownership of goods to the purchaser and receive payment; the purchaser
is obliged to pay to the seller and receive goods and the ownership thereof as agreed.
9. Provision of services means commercial activities whereby a party (hereinafter referred to as
the service provider) is obliged to provide a service to another party and receive payment; the
service-using party (hereinafter referred to as the customer) is obliged to pay to the service
provider and use the service as agreed.
10. Commercial promotion means activities of promoting and seeking opportunities for the
purchase or sale of goods and provision of services, including sale promotion, commercial
advertisement, display and exhibition of goods and services, and trade fairs and exhibitions.
11. Commercial intermediary activities mean activities carried out by a trader to effect
commercial transactions for one or several identified traders, including representation for traders,
commercial brokerage, goods sale or purchase entrustment, and commercial agency.
12. Contractual breach means the failure of a party to perform, to fully or properly perform its
obligations according to the agreement between the involved parties or the provisions of this
Law.
13. Substantial breach means a contractual breach by a party, which causes damage to the other
party to an extent that the other party cannot achieve the purpose of the entry into the contract.
14. Origin of goods means a country or a territory where all the goods are turned out or where
the last stage of substantial processing of goods is performed in cases where many countries or
territories join in the process of producing such goods.
15. Forms of validity equivalent to documents include telegraph, telex, facsimile, data message
and other forms provided for by law.
Article 4.- Application of the Commercial Law and relevant laws
1. Commercial activities must comply with the Commercial Law and relevant laws.
2. Particular commercial activities provided for in other laws shall comply with the provisions of
such laws.
3. Commercial activities which are not provided for in the Commercial Law and other laws shall
comply with the provisions of the Civil Code.
Article 5.- Application of treaties, foreign laws and international commercial practices
1. Where a treaty to which Vietnam is a contracting party stipulates the application of foreign
laws or international commercial practices, or contain provisions different from those of this
Law, the provisions of such treaty shall apply.
2. Parties to commercial transactions involving foreign elements may agree to apply foreign laws
or international commercial practices if such foreign laws or international commercial practices
are not contrary to the fundamental principles of the Vietnamese law.
Article 6.- Traders
1. Traders include lawfully established economic organizations and individuals that conduct
commercial activities in an independent and regular manner and have business registrations.
2. Traders are entitled to conduct commercial activities in occupations and sectors, in
geographical areas, in forms and by modes which are not banned by law.
3. The right of traders to conduct lawful commercial activities is protected by the State.
4. The State exercises for a definite time its monopoly over commercial activities in respect to a
number of goods and services or in a number of geographical areas in order to ensure the
national interests. The Government shall specify the lists of goods, services and geographical
areas subject to the State monopoly.
Article 7.- Obligation of traders to register business
Traders are obliged to register their business according to the provisions of law. Where traders
have not yet registered their business, they are still held responsible for all of their activities
according to the provisions of this Law and other provisions of law.
Article 8.- Agencies in charge of state management over commercial activities
1. The Government performs the unified state management over commercial activities.
2. The Trade Ministry is answerable to the Government for performing the state management
over activities of goods sale and purchase and specific commercial activities provided for in this
Law.
3. Ministries and ministerial-level agencies shall, within the scope of their respective tasks and
powers, have to perform the state management over commercial activities in their assigned
domains.
4. People's Committees at all levels perform the state management over commercial activities in
their respective localities according to the decentralization by the Government.
Article 9.- Commercial associations
1. Commercial associations are established to protect the legitimate rights and interests of
traders, mobilize traders to take part in commercial development, and disseminate and propagate
the provisions of law on commerce.
2. Commercial associations are organized and operate according to the provisions of law on
associations.
Section 2. FUNDAMENTAL PRINCIPLES IN COMMERCIAL ACTIVITIES
Article 10.- Principle of traders' equality before law in commercial activities
Traders of all economic sectors are equal before law in commercial activities.
Article 11.- Principle of freedom and freewill to agreement in commercial activities
1. Parties have the rights of freedom to reach agreements not in contravention of the provisions
of law, fine traditions and customs and social ethics in order to establish their rights and
obligations in commercial activities. The State respects and protects such rights.
2. In commercial activities, the parties shall act on their own freewill, and neither party is
allowed to impose its own will on, to force, intimidate or obstruct, the other party.
Article 12.- Principle of application of customs in commercial activities pre-established
between parties
Except otherwise agreed, the parties shall be regarded as automatically applying customs in
commercial activities pre-established between them which they have already known or ought to
know, provided that such customs are not contrary to the provisions of law.
Article 13.- Principle of application of practices in commercial activities
Where it is neither provided for by law nor agreed by the parties, and there exist no customs pre-
established between them, commercial practices shall be applied provided that such practices are
not contrary to the principles provided for in this Law and the Civil Code.
Article 14.- Principle of protection of legitimate interests of consumers
1. Traders conducting commercial activities are obliged to provide consumers with sufficient and
truthful information on goods and/or services they trade in or provide and take responsibility for
the accuracy of such information.
2. Traders conducting commercial activities must be responsible for the quality and lawfulness of
goods and/or services they trade in or provide.
Article 15.- Principle of recognition of legal validity of data messages in commercial
activities
In commercial activities, data messages which satisfy all technical conditions and standards
provided for by law shall be recognized legally valid as documents.
Section 3. FOREIGN TRADERS CONDUCTING COMMERCIAL ACTIVITIES IN
VIETNAM
Article 16.- Foreign traders conducting commercial activities in Vietnam
1. Foreign traders mean traders established and making their business registrations according to
the provisions of foreign laws or recognized by foreign laws.
2. Foreign traders are entitled to set up their representative offices or branches in Vietnam; to
establish in Vietnam foreign-invested enterprises in the forms provided for by Vietnamese law.
3. Vietnam-based representative offices and branches of foreign traders have the rights and
obligations specified by Vietnamese law. Foreign traders shall be held responsible before
Vietnamese law for all activities of their Vietnam-based representative offices and branches.
4. Foreign-invested enterprises established in Vietnam by foreign traders according to the
provisions of Vietnamese law or international treaties to which the Socialist Republic of Vietnam
is a contracting party shall be regarded as Vietnamese traders.
Article 17.- Rights of representative offices
1. To operate for the purposes, within the scope and duration stipulated in their establishment
licenses.
2. To rent offices, rent and purchase equipment and facilities necessary for their operations.
3. To recruit Vietnamese and expatriate employees to work for them according to the provisions
of Vietnamese law.
4. To open accounts in foreign currencies or foreign currency-based Vietnam dong at banks
licensed to operate in Vietnam, and to be allowed to use those accounts solely for their
operations.
5. To have seals bearing their names according to the provisions of Vietnamese law.
6. To have other rights as defined by law.
Article 18.- Obligations of representative offices
1. Not to directly conduct profit-generating activities in Vietnam.
2. To conduct commercial promotion activities within the scope permitted by this Law.
3. Not to enter into contracts, not to amend or supplement contracts already entered into by
foreign traders, except where chief representatives obtain valid letters of authorization from
foreign traders or other cases specified in Clauses 2, 3 and 4, Article 17 of this Law.
4. To pay taxes, fees and charges, and fulfil other financial obligations provided for by
Vietnamese law.
5. To report on their operations according to Vietnamese law.
6. To have other obligations as defined by Vietnamese law.
Article 19.- Rights of branches
1. To rent offices, rent and purchase equipment and facilities necessary for their operations.
2. To recruit Vietnamese and expatriate employees to work for them according to Vietnamese
law.
3. To enter into contracts in Vietnam in compliance with their operation contents specified in
their establishment licenses and the provisions of this Law.
4. To open Vietnam dong accounts and foreign-currency accounts at banks licensed to operate in
Vietnam.
5. To transfer profits overseas according to the provisions of Vietnamese law.
6. To have seals bearing their own names according to the provisions of Vietnamese law.
7. To conduct activities of goods purchase and sale and other commercial activities in
compliance with their establishment licenses according to the provisions of Vietnamese law and
treaties to which the Socialist Republic of Vietnam is a contracting party.
8. To have other rights provided for by law.
Article 20.- Obligations of branches
1. To observe the accounting regime provided for by Vietnamese law; in cases where it is
necessary to apply another commonly used accounting system, the approval by the Finance
Ministry of the Socialist Republic of Vietnam is required.
2. To report on their operations according to the provisions of Vietnamese law.
3. To have other obligations provided for by law.
Article 21.- Rights and obligations of foreign-invested enterprises
Rights and obligations of foreign invested enterprises shall be determined according to the
provisions of Vietnamese law or treaties to which the Socialist Republic of Vietnam is a
contracting party.
Article 22.- Competence to license foreign traders to conduct commercial activities in
Vietnam
1. The Government shall uniformly manage the licensing of commercial activities of foreign
traders in Vietnam.
2. The Planning and Investment Ministry shall be answerable to the Government for managing
the issuance of licences to foreign traders investing in Vietnam according to the provisions of
Vietnamese law.
3. The Trade Ministry shall be answerable to the Government for managing the issuance of
licences to set up Vietnam-based representative offices of foreign traders; or licenses to set up
branches, joint-venture enterprises or enterprises with 100% foreign capital in Vietnam in cases
where such traders are specialized in conducting activities of goods purchase and sale or other
activities directly related to goods purchase and sale in compliance with Vietnamese law and
treaties to which the Socialist Republic of Vietnam is a contracting party.
4. Where a specialized law contains specific provisions on the competence of ministries or
ministerial-level agencies, which are responsible before the Government for managing the
issuance of licences to foreign traders for conducting commercial activities in Vietnam, the
provisions of such specialized law shall apply.
Article 23.- Termination of operations in Vietnam of foreign traders
1. Foreign traders shall terminate their operations in Vietnam in the following cases:
a/ Upon expiration of the operation duration stipulated in their licenses;
b/ At the request of traders, which is approved by competent state management agencies;
c/ Under decisions of competent state management agencies as a sanction against their violations
of law and their licenses;
d/ Where traders are declared bankrupt;
e/ Where foreign traders terminate their operations according to foreign laws, for representative
offices, branches or foreign parties to business cooperation contracts with Vietnamese parties;
f/ Other cases provided for by law.
2. Before terminating their operations in Vietnam, foreign traders are obliged to pay debts and
fulfill other obligations toward the State, concerned organizations and individuals in Vietnam.
Chapter II
PURCHASE AND SALE OF GOODS
Section 1. GENERAL PROVISIONS ON ACTIVITIES OF PURCHASE AND SALE OF
GOODS
Article 24.- Form of contracts for purchase and sale of goods
1. Contracts for sale and purchase of goods may be expressed in verbal or written form or
established by specific acts.
2. For types of contracts for purchase and sale of goods, which, as provided for by law, must be
made in writing, such provisions must be complied with.
Article 25.- Goods banned from business, goods subject to business restrictions and goods
subject to conditional business
1. On the basis of socio-economic conditions of each period and international treaties to which
the Socialist Republic of Vietnam is a contracting party, the Government shall specify the lists of
goods banned from business, goods subject to business restrictions, and goods subject to
conditional business and the conditions for trading in such goods.
2. For goods subject to business restrictions and goods subject to conditional business, the
purchase and sale thereof shall be effected only when goods and the goods purchasing and
selling parties fully meet the conditions provided for by law.
Article 26.- Application of urgent measures with respect to domestically circulated goods
1. Goods legally and domestically circulated may be subject to the application of one or all of
such measures as compulsory withdrawal from circulation, circulation ban, circulation
suspension, conditional circulation, or compulsory circulation permission in the following cases:
a/ Where such goods constitute sources or transmitters of various epidemics and diseases;
b/ Where an emergency circumstance occurs.
2. Specific conditions, order, procedures and competence for announcing the application of
urgent measures to domestically circulated goods shall comply with the provisions of law.
Article 27.- International purchase and sale of goods
1. International purchase and sale of goods shall be conducted in form of export, import,
temporary import for re-export, temporary export for re-import and transfer through bordergates.
2. International purchase and sale of goods shall be conducted on the basis of written contracts or
other forms of equal legal validity.
Article 28.- Export and import of goods
1. Export of goods means the bringing of goods out of the territory of the Socialist Republic of
Vietnam or into special zones in the Vietnamese territory, which are regarded as exclusive
customs zones according to the provisions of law.
2. Import of goods means the bringing of goods into the territory of the Socialist Republic of
Vietnam from foreign countries or special zones in the Vietnamese territory, which are regarded
as exclusive customs zones according to the provisions of law.
3. On the basis of socio-economic conditions in each period and treaties to which the Socialist
Republic of Vietnam is a contracting party, the Government shall specify the lists of goods
banned from import and/or export, goods to be imported or exported under permits of competent
state management agencies, and the procedures for granting permits.
Article 29.- Temporary import for re-export and temporary export for re-import of goods
1. Temporary import of goods for re-export means the bringing of goods into Vietnam from
foreign countries or special zones locating in the Vietnamese territory, which are regarded as
exclusive customs zones according to the provisions of law, with the completion of the
procedures for importing such goods into Vietnam, then procedures for exporting the same goods
out of Vietnam.
2. Temporary export of goods for re-import means the bringing of goods overseas or into special
zones in the Vietnamese territory which are regarded as exclusive customs zones according to
the provisions of law, with the completion of procedures for exporting such goods out of
Vietnam, then procedures for importing the same goods back into Vietnam.
3. The Government shall specify activities of temporary import for re-export and temporary
export for re-import of goods.
Article 30.- Transfer of goods through border-gates
1. Transfer of goods through border-gates means the purchase of goods from a country or
territory for sale to another country or territory outside the Vietnamese territory without carrying
out the procedures for importing such goods into Vietnam and the procedures for exporting such
goods out of Vietnam.
2. Transfer of goods through border-gates shall be conducted in the following forms:
a/ Goods are transported directly from the exporting country to the importing country without
going through Vietnamese border-gates;
b/ Goods are transported from the exporting country to the importing country through
Vietnamese border-gates without carrying out the procedures for importing them into Vietnam
and the procedures for exporting them out of Vietnam;
c/ Goods are transported from the exporting country to the importing country through
Vietnamese border-gates and brought into bonded warehouses or areas for transshipment of
goods at Vietnamese ports without carrying out the procedures for importing them into Vietnam
and the procedures for exporting them out of Vietnam.
3. The Government shall provide for in detail activities of transfer of goods through border-gates.
Article 31.- Application of urgent measures to activities of international purchase and sale
of goods
Where it is necessary to protect the national security or other national interests in compliance
with Vietnamese law and treaties to which the Socialist Republic of Vietnam is a contracting
party, the Prime Minister shall decide on the application of urgent measures to activities of
international purchase and sale of goods.
Article 32.- Labels for domestically circulated, exported and imported goods
1. Goods labels mean writings, prints, drawings or photos of texts, pictures or images, which are
stuck, printed, affixed, molded, carved or engraved directly on goods or their commercial
packing or other materials which are attached to the goods or their packing.
2. All goods that are domestically circulated, imported and exported must have their labels,
except for some cases specified by law.
3. Contents which must be inscribed in goods labels and the labeling of goods shall comply with
regulations of the Government.
Article 33.- Certificates of origin of goods and rules of origin of goods
1. Export goods and import goods must have certificates of origin in the following cases:
a/ Goods are eligible for tax or other preferences;
b/ It is so provided for by Vietnamese laws or treaties to which the Socialist Republic of Vietnam
is a contracting party.
2. The Government shall provide in detail for the rules of origin for exports and imports.
Section 2. RIGHTS AND OBLIGATIONS OF PARTIES TO CONTRACTS FOR PURCHASE
AND SALE OF GOODS
Article 34.- Delivery of goods and goods-related documents
1. The seller must deliver goods and relevant documents, as agreed in contracts on quantity,
quality, packing and preservation modes and other contractual terms.
2. In cases where there is no specific agreement, the seller is obliged to deliver goods and
relevant documents according to the provisions of this Law.
Article 35.- Place of delivery of goods
1. The seller is obliged to deliver goods at the agreed place.
2. In cases where there is no agreement on place of goods delivery, such a place shall be
specified as follows:
a/ In cases where goods are things attached to land, the seller must deliver goods at the place
where such goods exist;
b/ In cases where the contract contains a provision on goods transportation, the seller is obliged
to deliver goods to the first carrier;
c/ In cases where the contract contains no provision on goods transportation, and at the time the
contract is entered into, the parties know the location of the goods storage, the place of goods
loading or the place of goods manufacture, the seller shall have to deliver the goods at such
place;
d/ In other cases, the seller shall have to deliver goods at his/her place of business, or his/her
place of residence identified at the time the purchase and sale contract is entered into in cases
he/she has no place of business.
Article 36.- Responsibilities upon delivery of goods where carriers are involved
1. Where goods are handed over to the carrier without being identified with specific signs or
marks on them, accompanied with transportation documents or otherwise, the seller must notify
the purchaser of the handover of goods to the carrier and clearly identify names and method of
recognizing transported goods.
2. Where the seller is obliged to arrange the goods transportation, the seller shall have to enter
into necessary contracts for the transportation of goods to the destination by means of
transportation suitable to specific circumstances and under normal conditions for such modes of
transportation.
3. Where the seller is not obliged to purchase insurance for the goods in the course of
transportation and if requested by the purchaser, the seller must supply to the purchaser all
necessary information on the goods and the transportation thereof to enable the purchaser to
purchase insurance for the goods.
Article 37.- Time limit for delivery of goods
1. The seller must deliver goods at the time already agreed upon in the contract;
2. Where only the time limit for delivery of goods is agreed upon without a specific time for
delivery of goods, the seller may deliver goods at any time within such time limit and must
notify the purchaser of the delivery in advance;
3. Where there is no agreement on the time limit for delivery of goods, the seller must deliver
goods within a reasonable time limit after the contract is entered into.
Article 38.- Delivery of goods before the agreed time
Where the seller delivers goods earlier than the agreed time, the purchaser may receive or reject
the goods, unless otherwise agreed upon by the parties.
Article 39.- Goods which are not appropriate to contracts
1. Where it is not specified in the contract, goods shall be considered not appropriate to the
contract when they fall into one of the following cases:
a/ They are not suitable to common use purposes of goods of the same type;
b/ They are not suitable to any specific purpose that has been notified by the purchaser to the
seller or the seller should have known at the time the contract is entered into;
c/ Their quality is not the same as the quality of the samples previously handed over by the seller
to the purchaser;
d/ They are not preserved or packaged by a method common to such goods, or not preserved by
proper preserving methods in cases where no common preserving method is available.
2. The purchaser may reject the goods if such goods are not appropriate to the contract according
to the provisions of Clause 1 of this Article.
Article 40.- Liability for goods which are not appropriate to contracts
Unless otherwise agreed upon by the parties, the liability for goods which are not appropriate to
contracts is provided for as follows:
1. The seller shall not be liable for any defect of the goods if the purchaser, at the time the
contract is entered into, knew or should have known such defect;
2. Except for the case specified in Clause 1 of this Article, within the time limit for lodging
complaint provided for in this Law, the seller shall be liable for any defect of the goods which
already exists before the time of passing the risk to the purchaser despite the fact that such defect
may be discovered after passing the risks.
3. The seller shall be liable for defects of goods occurring after the pass of risks if such defects
are attributable to contract breaches by the seller.
Article 41.- Remedies in case of delivery of goods in insufficient quantity or delivery of
goods not appropriate to contracts
1. Unless otherwise agreed, and where the contract only provides for a time limit for delivery of
goods and does not determine a specific time for delivery of goods, and the seller delivers goods
before the expiration of such time limit but in insufficient quantity or goods not appropriate
to the contract, the seller may still deliver the deficit quantity of goods or provide substitute
goods which are appropriate to the contract or remedy the inappropriateness of the goods within
the remaining duration.
2. Where the seller, when applying the remedies provided for in Clause 1 of this Article, causes
disadvantages or unreasonable costs to the purchaser, the purchaser shall have the right to
request the seller to deal with such disadvantages or bear such costs.
Article 42.- Delivery of goods-related documents
1. Where there is an agreement on the delivery of documents, the seller is obliged to deliver all
goods-related documents to the purchaser within the time limit, at the place and by mode already
agreed.
2. Where there is no agreement on the time limit and place for delivery of goods-related
documents to the purchaser, the seller must deliver such documents to the purchaser within a
reasonable time limit and at a convenient place so that the purchaser can receive the goods.
3. Where the seller has delivered goods-related documents before the agreed time, the seller can
still rectify errors of such documents within the remaining duration of the time limit.
4. When the seller, when rectifying errors mentioned in Clause 3 of this Article, causes
disadvantages or unreasonable costs to the purchaser, the purchaser shall have the right to
request the seller to deal with such disadvantages or bear such costs.
Article 43.- Delivery of goods in excessive quantity
1. Where the seller delivers goods in excessive quantity, the purchaser may reject or accept such
excessive quantity of goods.
2. Where the purchaser accepts the excessive quantity of goods, the purchaser must pay for that
quantity at the price agreed in the contract unless otherwise agreed upon by the parties.
Article 44.- Pre-delivery examination of goods
1. Where it is agreed by the parties that the purchaser or the purchaser's representative shall
examine the goods before the delivery, the seller must ensure that the purchaser or the
purchaser's representative shall be given conditions for conducting such examination.
2. Except where it is otherwise agreed, the purchaser or the purchaser's representative in the
cases mentioned in Clause 1 of this Article must examine the goods within the shortest period of
time allowed by practical circumstances. Where the contract provides for the transportation of
goods, the examination of goods may be postponed until the goods are transported to the
destination.
3. Where the purchaser or the purchaser's representative does not conduct the examination of
goods before the delivery of goods as agreed, the seller may deliver the goods according to the
contract.
4. The seller shall not be liable for defects of goods which the purchaser or the purchaser's
representative has known or should have known but failed to notify them to the seller within a
reasonable time limit after the examination of goods.
5. The seller shall be liable for defects of goods already examined by the purchaser or the
purchaser's representative if the defects of the goods cannot be detected in the course of
examination through common measures and the seller knew or should have known such defects
but failed to notify them to the purchaser.
Article 45.- Obligation to assure the ownership right over goods
The seller must assure that:
1. The ownership right of the purchaser over goods sold is not disputed by any third party;
2. The goods are lawful;
3. The handover of the goods is lawful.
Article 46.- Obligation to assure intellectual property rights over goods
1. The seller must not sell goods infringing upon intellectual property rights. The seller shall be
held responsible for any dispute related intellectual property rights over goods sold.
2. Where the purchaser requests the seller to observe technical drawings, designs, formulas or
specifications furnished by the purchaser, the purchaser shall be liable for complaints related to
infringements of intellectual property rights which arise from the fact that the seller has complied
with the request of the purchaser.
Article 47.- Notification requirements
1. The seller shall lose the right to invoke the provisions of Clause 2, Article 46 of this Law
when failing to promptly notify the purchaser of a third party's complaint about the delivered
goods after the seller knew or should have known such complaint, except for cases where the
purchaser knew or should have known a third party's complaint.
2. The purchaser shall lose the right to invoke the provisions of Article 45 and Clause 1, Article
46 of this Law when failing to promptly notify the seller of a third party's complaint about the
delivered goods after the purchaser knew or should have known such complaint, except for cases
where the purchaser knew or should have known a third party's complaint.
Article 48.- Obligation of the seller in cases where goods are subject to measures of security
for performance of civil obligations
Where the goods sold are subject to measures of security for performance of civil obligations, the
seller must notify the purchaser of such security measures and must obtain the consent of the
security beneficiary regarding the sale of such goods.
Article 49.- Obligation to provide warranty for goods
1. Where goods are purchased and sold under warranty, the seller shall have to provide warranty
for such goods according to the agreed contents and duration.
2. The seller must fulfill the warranty obligation as soon as the practical situation permits.
3. The seller must bear all warranty expenses unless otherwise agreed.
Article 50.- Payment
1. The purchaser is obliged to pay for goods and receive goods as agreed upon.
2. The purchaser must comply with the payment modes and make the payment according to the
agreed order and procedures and the provisions of law.
3. The purchaser shall still have to pay for goods in cases where goods are lost or damaged after
the time the risk is passed from the seller to the purchaser, except for cases where the loss or
damage is caused due to the fault of the seller.
Article 51.- Suspension of payment for goods
Unless otherwise agreed, the suspension of payment for goods is provided for as follows:
1. The purchaser that has proofs of deceit of the seller shall have the right to suspend the
payment.
2. The purchaser that has proofs that the goods are subject to a dispute shall have the right to
suspend the payment until the said dispute is settled.
3. The purchaser that has proofs that the seller has delivered goods which do not conform with
the contract shall have the right to suspend the payment until the seller remedy such
inconformity.
4. If the proofs produced by the purchaser for the cases of payment suspension mentioned in
Clauses 2 and 3 of this Article are unfounded, thus causing damage to the seller, the purchaser
must pay compensations for such damage and be subject to other penalties provided for in this
Law.
Article 52.- Determination of prices
Where there is neither agreement on goods price or on the price-determining method nor other
price indexes, the goods price shall be determined according to the price of such type of goods
under similar conditions on mode of goods delivery, time of goods purchase and sale,
geographical market, payment mode and other conditions which affect the prices.
Article 53.- Pricing by weight
Unless otherwise agreed, if the goods price is determined according to the weight of the goods,
such weight must be net weight.
Article 54.- Place of payment
Where there is no agreement on specific place of payment, the purchaser must pay to the seller at
one of the following places:
1. The seller's place of business, which is identified at the time of entering into the contract; or
the seller's place of residence where the seller has no place of business.
2. The place where the goods or documents are delivered, if the payment is made concurrently
with the delivery of goods or documents.
Article 55.- Time limit for payment
Unless otherwise agreed, the time limit for payment is provided for as follows:
1. The purchaser must make payment to the seller at the time the seller delivers the goods or the
goods-related documents.
2. The purchaser is not obliged to make payment until the goods examination can be completed
in cases where an agreement is reached according to the provisions of Article 44 of this Law.
Article 56.- Receipt of goods
The purchaser is obliged to receive the goods as agreed upon and do appropriate things to help
the seller deliver the goods.
Article 57.- Pass of risks in cases where there is a fixed place of delivery of goods
Unless otherwise agreed, if the seller is obliged to deliver the goods to the purchaser at a
particular place, the risk of goods loss or damage shall be passed to the purchaser as soon as the
goods are delivered to the purchaser or the person authorized by the purchaser to receive the
goods at such place, even in cases where the seller is authorized to retain the documents which
establish the ownership rights over the goods.
Article 58.- Pass of risks in cases where there is no fixed place of delivery of goods
Unless otherwise agreed, if the contract contains provisions on the goods transportation and the
seller is not obliged to deliver the goods at a given place, the risk of goods loss or damage shall
be passed to the purchaser as soon as the goods are delivered to the first carrier.
Article 59.- Pass of risks in cases where goods are handed over to a bailee that is not a
carrier
Unless otherwise agreed, if the goods are being kept by a bailee that is not a carrier, the risks of
goods loss or damage shall be passed to the purchaser in one of the following cases:
1. Upon receipt by the purchaser of documents of title to the goods;
2. Upon the confirmation by the bailee of the purchaser's right to possession of the goods.
Article 60.- Pass of risks in case of purchase and sale of goods in transportation
Unless otherwise agreed, if the subject matter of the contract is goods in transportation, the risk
of goods loss or damage shall be passed to the purchaser as from the time the contract is entered
into.
Article 61.- Pass of risks in other cases
Unless otherwise agreed, the pass of risks in other cases is provided for as follows:
1. For cases not specified in Articles 57, 58, 59 and 60 of this Law, the risk of goods loss or
damage is to be passed to the purchaser as from the time the goods fall under the purchaser's
right of disposal and the purchaser breaches the contract by rejecting the goods.
2. Risk of goods loss or damage is not to be passed to the purchaser if the goods are neither
clearly identified by their signs, codes or bills of transportation, nor notified to the purchaser, nor
identified by any means.
Article 62.- Time of transferring ownership of goods
Unless otherwise provided for by law or agreed upon by the parties, ownership of goods shall be
passed from the seller to the purchaser as from the time of handover of the goods.
Section 3. PURCHASE AND SALE OF GOODS THROUGH THE GOODS EXCHANGE
Article 63.- Purchase and sale of goods though the Goods Exchange
1. Purchase and sale of goods through the Goods Exchange mean commercial activities whereby
the parties agree to purchase and sell a defined quantity of goods of a defined type through the
Goods Exchange under the standards of the Goods Exchange, at a price agreed upon at the time
the contract is entered into, and with the time of goods delivery determined to be a specific point
of time in the future.
2. The Government shall specify activities of purchase and sale of goods through the Goods
Exchange.
Article 64.- Contracts for purchase and sale of goods through the Goods Exchange
1. Contracts for purchase and sale of goods through the Goods Exchange include forward
contracts and option contracts.
2. Forward contract means an agreement whereby the seller undertakes to deliver and the
purchaser undertakes to receive the goods at a specific point of time in the future under the
contract.
3. Call option or put option contract means an agreement whereby the purchaser has the right to
purchase or sell a specific goods at a pre-fixed price level (hereinafter called executed price) and
must pay a certain sum of money to buy this right (hereinafter called option money). The option
purchaser may opt to effect or not to effect such purchase or sale of goods.
Article 65.- Rights and obligations of parties to forward contracts
1. Where the seller delivers the goods under the contract, the purchaser is obliged to receive the
goods and pay for them.
2. Where the parties agree that the purchaser may make cash payment and reject the goods, the
purchaser shall have to pay to the seller a sum of money equal to the difference between the price
agreed upon in the contract and the market price announced by the Goods Exchange at the time
the contract is performed.
3. Where the parties agree that the purchaser may make cash payment and refuse to deliver the
goods, the seller shall have to pay to the purchaser a sum of money equal to the difference
between the market price announced by the Goods Exchange at the time the contract is
performed and the price agreed upon in the contract.
Article 66.- Rights and obligations of parties to option contracts
1. The call option or put option purchaser shall have to pay for option purchase in order to
become call option or put option holder. The sum of money to be paid for option purchase shall
be agreed upon by the parties.
2. The call option holder has the right to purchase but is not obliged to purchase goods
ascertained in the contract. Where the call option holder decides to perform the contract, the
seller shall be obliged to sell goods to the call option holder. The seller that has no goods to
deliver shall have to pay to the call option holder a sum of money equal to the difference
between the price agreed upon in the contract and the market price announced by the Goods
Exchange at the time the contract is performed.
3. The put option holder has the right to sell but is not obliged to sell goods ascertained in the
contract. Where the put option holder decides to perform the contract, the purchaser shall be
obliged to purchase goods from the put option holder. Where the purchaser does not purchase
goods, it shall have to pay to the put option holder a sum of money equal to the difference
between the market price announced by the Goods Exchange at the time the contract is
performed and the price agreed upon in the contract.
4. Where the call option or put option holder decides not to perform the contract within the valid
duration of the contract, the contract shall automatically be invalidated.
Article 67.- The Goods Exchange
1. The Goods Exchange has the following functions:
a/ Providing the material - technical conditions necessary for transactions of purchasing or
selling goods;
b/ Running trading operations;
c/ Listing specific prices formed at the Goods Exchange at each specific time.
2. The Government shall specify the conditions for the establishment of the Goods Exchange, the
powers and tasks of the Goods Exchange, and the approval of the operation charter of the Goods
Exchange.
Article 68.- Goods traded at the Goods Exchange
The list of goods traded at the Goods Exchange shall be promulgated by the Trade Minister.
Article 69.- Brokers for purchase and sale of goods through the Goods Exchange
1. Brokers for purchase and sale of goods through the Goods Exchange shall be allowed to
operate at the Goods Exchange only when they fully satisfy the conditions provided for by law.
The Government shall specify the conditions for operation of brokers for the purchase and sale
of goods through the Goods Exchange.
2. Brokers for purchase and sale of goods through the Goods Exchange shall be allowed to
conduct only activities of brokerage for purchase and sale of goods through the Goods Exchange
and must not be a party to a contract for purchase and sale of goods through the Goods
Exchange.
3. Brokers for purchase and sale of goods through the Goods Exchange shall be obliged to
deposit money at the Goods Exchange to secure the performance of their obligations arising in
the course of goods purchase and sale brokerage activities. The deposit level shall be set by the
Goods Exchange.
Article 70.- Prohibited acts of brokers for purchase and sale of goods through the Goods
Exchange
1. Enticing customers to enter into contracts by promising to compensate the whole or part of
loss incurred or to guarantee profits for them.
2. Offering or conducting brokerage for goods without entering into contracts with customers.
3. Using sham prices or other fraudulent measures in the course of brokerage.
4. Refusing or unreasonably delaying the brokerage for contracts in accordance with contents
agreed upon with customers.
5. Other prohibited acts specified in Clause 2, Article 71 of this Law.
Article 71.- Prohibited acts in activities of purchase and sale of goods through the Goods
Exchange
1. Staff members of the Goods Exchange shall not be allowed to conduct the brokerage for,
purchase or sale of goods through the Goods Exchange.
2. Parties involved in the purchase and sale of goods through the Goods Exchange must not
conduct the following acts:
a/ Committing fraudulences or deceits about volumes of goods in forward or option contracts
which are transacted or may be transacted, and fraudulences and deceits about real prices of
goods in forward or option contracts;
b/ Supplying false information on transactions, the market or prices of goods purchased or sold
through the Goods Exchange;
c/ Applying illegal measures to cause disorder of the goods market at the Goods Exchange;
d/ Committing other prohibited acts provided for by law.
Article 72.- Application of management measures in emergency cases
1. Emergency cases mean circumstances where the disorder of the goods market occurs, making
transactions through the Goods Exchange unable to accurately reflect the goods supply and
demand relation.
2. In emergency cases, the Trade Minister shall be entitled to apply the following measures:
a/ Temporarily suspending transactions through the Goods Exchange;
b/ Limiting transactions within a price bracket or a specific quantity of goods;
c/ Changing the schedule of transactions;
d/ Adjusting the operation charter of the Goods Exchange;
e/ Other necessary measures as provided for by the Government.
Article 73.- Right to conduct the purchase and sale of goods through overseas Goods
Exchanges
Vietnamese traders are entitled to conduct purchase and sale of goods through overseas Goods
Exchanges according to regulations of the Government.
Chapter III
PROVISION OF SERVICES
Section 1. GENERAL PROVISIONS ON ACTIVITIES OF PROVISION OF SERVICES
Article 74.- Forms of service contracts
1. A service contract shall be expressed in verbal or written form or established with specific
acts.
2. For those types of service contract which are required by law to be made in writing, such
requirement must be abided by.
Article 75.- Rights of traders to provide and use services
1. Unless otherwise provided for by law or treaties to which the Socialist Republic of Vietnam is
a contracting party, traders shall have the following rights to provide services:
a/ To provide services to residents in Vietnam for use in the Vietnamese territory;
b/ To provide services to non-residents in Vietnam for use in the Vietnamese territory;
c/ To provide services to residents in Vietnam for use in foreign territories;
d/ To provide services to non-residents in Vietnam for use in foreign territories.
2. Unless otherwise provided for by law or treaties to which the Socialist Republic of Vietnam is
a contracting party, traders shall have the following rights to use services:
a/ To use services provided in the Vietnamese territory by residents in Vietnam;
b/ To use services provided in the Vietnamese territory by non-residents in Vietnam;
c/ To use services provided in foreign territories by residents in Vietnam;
d/ To use services provided in foreign territories by non-residents in Vietnam.
3. The Government shall specify the residents and non-residents that are subject to the
implementation of tax and import-export management policies toward various types of services.
Article 76.- Services banned from business, services subject to business restrictions and
services subject to conditional business
1. On the basis of socio-economic conditions in each period and treaties to which the Socialist
Republic of Vietnam is a contracting party, the Government shall specify the lists of services
banned from business, services subject to business restrictions and services subject to conditional
business as well as the conditions for providing such services.
2. Services subject to business restrictions and services subject to conditional business shall be
provided only when these services and parties involved in the provision thereof fully satisfy the
conditions defined by law.
Article 77.- Application of urgent measures to activities of providing or using services
Where it is necessary to protect the national security and other national interests in compliance
with the Vietnamese law and treaties to which the Socialist Republic of Vietnam is a contracting
party, the Prime Minister shall decide on application of urgent measures to activities of providing
or using services, including temporary ban on the provision or use of one or several types of
service or other urgent measures to one or several particular markets for a definite time period.
Section 2. RIGHTS AND OBLIGATIONS OF PARTIES TO SERVICE CONTRACTS
Article 78.- Obligations of the service providers
Unless otherwise agreed, the service provider shall have the following obligations:
1. To provide services and fully perform related jobs in accordance with agreements and the
provisions of this Law;
2. To preserve and hand back to their customers documents and means supplied to them for the
service provision after the completion thereof;
3. To promptly notify to their customers in cases where information and documents are
insufficient and means are inadequate for completion of the service provision;
4. To keep secret information they know in the course of service provision if so agreed upon by
the parties or provided for by law.
Article 79.- Obligations of the service providers according to performance result
Unless otherwise agreed, if the nature of the type of service to be provided requires a service
provider to achieve a certain result, the service provider must conduct the service provision with
a result appropriate with the terms and purpose of the contract. Where the contract does not
specify the standards of result to be achieved, the service provider must conduct the service
provision with a result compliant with the common standards applicable to such type of service.
Article 80.- Obligations of the service providers to make the best effort
Unless otherwise agreed, if the nature of the type of service to be provided requires a service
provider to make the best effort to achieve a desired result, the service provider shall perform the
obligation of service provision with the best effort and the highest capacity.
Article 81.- Cooperation among service providers
Where under a contractual agreement or on the basis of practical circumstances, a service is
jointly performed by many service providers or performed by a service provider in cooperation
with other service providers, each of the said service providers shall have the following
obligations:
1. To exchange and communicate to each other information on the performance progress and its
demands related to the service provision, at the same time to provide services at a proper time
and by an appropriate mode so as not to impede operations of other service providers;
2. To carry out any necessary cooperation with other service providers.
Article 82.- Time limit for completion of services
1. Service providers must complete their services within the time limits already agreed upon in
contracts.
2. Where there is no agreement on the time limits for completing services, service providers shall
have to complete their services within a reasonable time limit on the basis of taking into account
all conditions and circumstances which service providers knew at the time the contracts were
entered into, including any specific needs of customers regarding such time limit for service
completion.
3. Where a service can be completed only when the customer or another service provider
satisfies certain conditions, the provider of such service is not obliged to complete his/her service
until those conditions are satisfied.
Article 83.- Customers' requests for changes during the provision of services
1. During the provision of services, service providers must satisfy all reasonable requests of their
customers for changes during the provision of services.
2. Unless otherwise agreed, customers must bear reasonable expenses for the satisfaction of their
requests for changes.
Article 84.- Continued provision of services after the expiration of the time limit for
completing the provision of services
If services, after the expiration of the time limit for completing the provision thereof, are not yet
completed, and if customers have no objection, service providers shall have to continue
providing the agreed services and compensate for damage, if any.
Article 85.- Obligations of customers
Unless otherwise agreed, customers shall have the following obligations:
1. To pay charges for provision of services as agreed upon in contracts;
2. To provide in a timely manner plans, instructions and other details so that the provision of
services can be made without any delay or interruption;
3. To cooperate with service providers in all other matters necessary for the proper provision of
services;
4. Where a service is performed jointly by many service providers or by a provider in
coordination with other service providers, customers shall be obliged to coordinate operations of
these service providers so as not to impede the work of any service provider.
Article 86.- Service charge rate
Where there is no agreement on service charge rate, no agreement on methods of determining
service charge rate, and also there is not any indication to service charge rate, the service charge
rate shall be determined according to the charge rate of the same type of service under similar
conditions on mode of provision, time of provision, geographical market, mode of payment and
other conditions which can affect the service charge rate.
Article 87.- Time limit for payment
Where there is no agreement and there exist no customs pre-established between the parties
concerning payment for services, the time limit for payment shall be the time when the provision
of services is completed.
Chapter IV
COMMERCIAL PROMOTION
Section 1. SALE PROMOTION
Article 88.- Sale promotion
1. Sale promotion means activities of commercial promotion conducted by traders to promote the
purchase and sale of goods or the provision of services by offering certain benefits to customers.
2. Traders conducting sale promotion are those falling into one of the following cases:
a/ Traders directly conduct sale promotion for goods and/or services that they trade in;
b/ Traders engaged in providing sale promotion services conduct sale promotion for goods
and/or services of other traders under an agreement with the latter.
Article 89.- Provision of sale promotion service
Provision of sale pr