July 1 2006 marks the commencement of the uniform Enterprise Law (“UEL”) and common Investment Law (“CIL”), two laws which will significantly change the business environment in Vietnam. The CIL and UEL will replace the Law on Foreign Investment (“LFI”) which currently regulates the licensing and operation of foreign investment.

Exclusive rights to distribute particular products in Viet Nam will be addressed in a new decree being drafted by the Ministry of Trade.

The draft Decree on Trading Enterprises promises to be the first of several regulations addressing the concerns of foreign-invested enterprises seeking guarantee of distribution rights in Viet Nam.

For the last several years, dismissal of employees has been the subject matter of most labour court cases in Viet Nam. In many cases, employees won the case because the usual assumptions of foreign investors are different from the way Vietnamese employment law operates. Recently, Official Letter 1593 of the Ministry of Labour, Invalids and Social Affairs (MoLISA), dated 27 May 2005, has confirmed one strict interpretation of the Labour Code. This article discusses some issues that employers should be aware of to avoid being hauled to court.

The National Assembly passed the unified Enterprise Law and the common Investment Law in November. They will replace the existing Enterprise Law and Foreign Investment Law on July 1, 2006. As it is with much of Vietnamese law, it is difficult to clearly interpret the law and fully predict the impact without implementing decrees.

The amended Commercial Law and the amended Civil Code have recently been approved by the National Assembly of Vietnam and they will take effect from 1 January 2006. Set forth below are the highlights of those amendments. Clearer legal relationship: Currently, the laws of Vietnam are very confusing with the provisions in Civil Code, the Commercial Law and the Ordinance on Economic Contracts overlapping and contradicting each other.

The sixteenth Draft Investment Law currently in the works is part of Viet Nam's efforts to follow international investment practices as it looks to further integrate into the global market. While this effort indicates Viet Nam's seriousness regarding trade and joining bodies like the WTO, the draft has faults that alarm foreign investors.

On November 29, 2005 the National Assembly passed the unified Enterprise Law (UEL) and the common Investment Law (CIL), which will take the place of the current Enterprise Law (EL) and Foreign Investment Law (FIL) on July 1, 2006. The CIL regulates access and entrance to the market through licensing and registration requirements, and conditional sectors of the market. The UEL regulates matters of corporate governance for both domestic and foreign enterprises, granting a more level playing field than is found under the current investment regime.

On November 29, 2005 the National Assembly passed the unified Enterprise Law (UEL) and the common Investment Law (CIL), which will take the place of the current Enterprise Law (EL) and Foreign Investment Law (FIL) on July 1, 2006.

Vilaf