The Validity Of Foreign-Language Contracts In Vietnam


In civil and commercial agreements, the parties to the contract may choose Vietnamese or other foreign languages to be the language of contracts. Except in cases where specialized laws may require the contract to be written (or have a copy) in Vietnamese.

In general, when the foreign enterprises engage in a transaction with individuals and organizations in Vietnam, they often use Vietnamese contracts or bilingual English-Vietnamese contracts following business practices in Vietnam.
2005 Law on Commerce, which is the principle legal reference for commercial transactions in Vietnam, does not specify the contract language. The 2005 Civil Code, which has a broader scope of regulations on civil actions, only provides a definition for civil transactions made orally or in writing; this content is retained in the new 2015 Civil Code which will take effect from January 1st, 2017. However, 2004 Civil Procedure Code specifies that the language and scripts to be used in civil procedures shall be Vietnamese which means that when disputes occur, the contract will be examined on the base of Vietnamese; this content is retained in the new 2015 Civil Procedure Code which will take effect from July 1st 2016.
Enterprises need to comply with the regulations for the documents to be used when working with the Vietnamese government agencies and commercial arbitration as follows:

  • As for the tax regulations, Circular No. 156/2013/TT-BTC specifies that the language used in tax dossiers is Vietnamese; any documents in foreign languages must be translated into Vietnamese. The taxpayers shall sign and stamp on the translation and be responsible before the law for the contents of such translation. The contract is an attachment accompanying the tax dossier. Therefore, it should be presented in Vietnamese.
  • As for regulations on the invoices of goods sale and service provision, Circular No. 26/2015/TT-BTC specifies that the invoices should be presented in Vietnamese. In case there are foreign words that need to be input, they should be placed on the right in parentheses, etc. In case only one language is allowed to use in export invoices, English should be used.
  • As for the law on accounting, the 2013 Accounting Law specifies that the scripts used in accounting are Vietnamese.
  • As for the regulations on notarization, 2014 Law on Notarization specifies that the language and scripts used in notarization are Vietnamese. Types of contracts that require notarization should be translated into Vietnamese.
  • As for the regulations on the arbitral proceedings, the 2010 Commercial Arbitration Act stipulates that in disputes that has no foreign elements, the language used in the arbitral proceedings must be Vietnamese, except for cases where at least one of the parties is foreign-invested enterprise; for any disputes involving foreign elements, the language used in the arbitration will be agreed upon by the parties.
  • In some commercial areas with specific characteristics, the State shall specify the language used in the contracts as follows:

Technology transfer: the 2016 Technology Transfer Act specifies in detail that the contract language should be agreed upon by the parties; in case of conducting transaction in Vietnam, a contract in Vietnamese is required and the legality of Vietnamese and foreign-language contracts should be equal.
Consumer Goods: the 2010 Law on Protection of Consumer Rights specifies that the language used in contracts signing with consumers is Vietnamese.
Information Technology: the 2010 Postal Act clearly specifies that the contracts of supply and use of postal services in writing must be presented in Vietnamese; if the parties agree to use additional languages, Vietnamese documents and other language documents should have the same legal value.
Urban construction: Decree No. 37/2015/ND-CP specifies that the language used for the construction contract is Vietnamese. For construction contracts with foreign elements, the contract language will be Vietnamese and a foreign language which will be agreed upon by the parties; in case no agreement is reached, English will be used.
There are two concerns relating to the contracts that should be noted:

  • The relationship between the parties to the contract: The language is the mean to record the will of the parties in the transaction. When the law does not specify, the parties can freely agree upon the contract language.
  • The relationship between the State and the parties to the contract: In this relationship, the State requires the enterprises to present the contract or written documents in Vietnamese in order to facilitate the management of the State (such as taxes, accounting, notarization, etc.)Thus, foreign-invested enterprises can select the contract language when conducting transaction in Vietnam. For typical contracts with no specific requirements, enterprises can use the bilingual contracts with English as a preferred language. In fact, in the process of working with the State agencies such as the courts, the contracts in English are required to be translated and notarized. For specialized contracts, enterprises need to be in compliance with the specialized law.
PLF Law Firm 
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