In the context of growing globalization, connection and cooperation between countries have become more popular than ever and raise many important legal issues, in which understanding and implementing contracts in foreign languages in Vietnam is one of the important challenges because it is the basis of all commercial transactions and international cooperation.
In civil and commercial agreements, the rule of principle remains that the parties are free to choose the language of their contract, except in cases where the law has expressly restricted their drafting to the Vietnamese language..
In general, foreign businesses when dealing with individuals and organizations in Vietnam often use Vietnamese contracts or bilingual English – Vietnamese contracts according to business practices in Vietnam.
According to the Commercial Law 2005, the basic legal basis for commercial transactions in Vietnam, contract language is not regulated.
The Civil Code 2015 has a broader scope of regulation of civil acts but only provides a definition of civil transactions performed verbally or in writing.
However, The Civil Procedure Code 2015 stipulates that the language and script used in civil proceedings is Vietnamese, meaning that when a dispute occurs, the contract will be checked on the basis of Vietnamese.
Enterprises need therefore to comply with regulations on documents used when working with Government agencies and Vietnamese commercial arbitrators
1. Regarding tax regulations
Circular No. 80/2021/TT-BTC stipulates that the language used in tax records is Vietnamese; Documents in foreign languages must be translated into Vietnamese. The taxpayer signs and stamps the translation and is responsible before the law for the content of that translation. The contract is an attached document attached to tax records. Therefore, it should be presented in Vietnamese.
2. Regarding regulations on invoices for selling goods and providing services
Circular No. 26/2015/TT-BTC stipulates that invoices must be written in Vietnamese. In case there are foreign words that need to be imported, they should be placed in parentheses on the right… In cases where only one language is allowed to be used on the export invoice, English should be used.
3. Regarding accounting law
The Accounting Law 2015 stipulates that the script used in accounting is Vietnamese. In case a foreign language must be used on accounting documents, accounting books and financial reports in Vietnam, Vietnamese and foreign languages must be used simultaneously.
4. Regarding regulations on notarization
The Notary Law 2014 stipulates that the language and script used in notarization is Vietnamese. Contracts that require notarization should be translated into Vietnamese.
5. Regarding regulations on arbitration proceedings
The Commercial Arbitration Law 2010 stipulates that in disputes without foreign elements, the language used in arbitration proceedings must be Vietnamese, unless there is at least one of the following parties is a foreign-invested enterprise; For all disputes with foreign elements, the language used in arbitration will be agreed upon by the parties.
6. Regarding regulations on commercial fields of specific nature
The State regulates the language used in contracts as follows:
- Consumer goods: The Law on Consumer Rights Protection 2010 stipulates that the language used in contracts signed with consumers is Vietnamese, unless the parties agree otherwise or the law provides otherwise.
- Information technology: The Postal Law 2010 clearly stipulates that written contracts for providing and using postal services must be in Vietnamese; If the parties agree to use an additional language, the Vietnamese document and the document in another language have the same legal value.
- Construction: Decree No. 37/2015/ND-CP stipulates that the language used in construction contracts is Vietnamese. For construction contracts with foreign elements, the contract language is Vietnamese and a foreign language agreed upon by the parties; In case an agreement cannot be reached, English will be used.
There are two contract-related issues to note
- Relationship between parties in a contract
Language is a means of recording the will of the parties in a transaction. When the law is silent on the language imposed, the parties can freely agree on the contract language.
- Relationship between the State and the parties to the contract:
In this relationship, the State requires businesses to present contracts or documents in Vietnamese to facilitate State management (such as taxes, accounting, notary, etc). Therefore, foreign-invested enterprises can choose contract language when conducting transactions in Vietnam. For regular contracts without specific requirements, businesses can use bilingual contracts with English as the preferred language. In practice, in the process of working with state agencies such as courts, contracts in English must be translated and notarized. For specialized contracts, businesses need to comply with specialized laws.
In summary, individuals and organizations need to master the regulations on the validity of contracts in foreign languages in Vietnam, which is not only mandatory for the contract to be effective but also ensures that their rights and interests are protected in the best possible way. Furthermore, understanding these regulations helps avoid disputes and loss of time and money in the future. This is especially important in a business environment where accuracy and transparency play an important role in building trust and credibility with trading partners.