Investing In Vietnam - Technology Transfer

Technology transfer in Vietnam is regulated by the following:

• Law on Technology Transfer (“LTT”) 2018 which took effect from 1st July 2018

• The LTT has seven chapters with 61 articles, dealing with objects eligible for transfer; technologies encouraged for, restricted to, and prohibited from transfer; technology transfer agreements; technology transfer services (including technology transfer brokerage, appraisal, evaluation, assessment and promotion); measures for encouraging and boosting technology transfers; approval and registration of technology transfers; and handling disputes, claims, denouncements and breaches in technology transfers

General Principles

The LTT defines technology as solutions, processes and know-how, which may or may not be associated with tools and means, to turn resources into products.

The term “transfer of technology” refers to either the transfer of the right to own the technology or the licensing/sublicensing of the right to use the technology either by an individual or a corporation.

Governing Law

The parties are allowed to agree on foreign governing law, together with other terms and conditions which are not contrary to Vietnamese law. Article 776 of the Civil Code 2005 provides that technology transfer with a foreign element (i.e., between a Vietnamese entity and foreign entity and technology transfer from any foreign country into Vietnam or from Vietnam to any foreign country) must comply with (i) provisions of the Civil Code 2005 and other legal documents of Vietnam concerning technology transfers; (ii) international treaties to which Vietnam is a contracting party; or (iii) foreign law, if the application of such foreign law or the consequence of its application does not contradict “the basic principles of the law of Vietnam.

Registration

Beside some cases where the Technology Transfer Contracts (“TTCs”) are compulsorily required to register with the Government such as technology transfer from a foreign

country to Vietnam and vice versa, the LTT also provides the right of the parties to register on a voluntary basis with respect to “unrestricted” TTCs in order to set the ground for the parties to enjoy incentives given in this Law and other relevant laws. It is therefore suggested that parties register TTCs in order to enjoy incentives under the LTT and other laws.

The LTT requires that “restricted” technology transfers are subject to approval by the technology management authority (the “Technology Authority”) before the TTC is

entered into by the parties, and then a permit is issued after the TTC’s execution.

Confidentiality

Competent authorities responsible for the issuance of technology transfer permits and certificates of registration of TTCs are obligated to maintain confidentiality of the technologies and business secrets in application files for issuance of technology transfer permits and registration of technology transfer contracts.

Source RSM Vietnam

(AGBT search)