There is an uncountable number of transactions and business activities in business, and many of them are different. When doing business in Vietnam, agreements or contracts are important to make sure that your rights are safeguarded for these transactions or activities.
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An agreement, or a contract, is a legal document that formalizes an understanding, obligations, and responsibilities among parties. Each party must be committed to and meet the specific needs described in detail in the agreement. When doing business in Vietnam, while foreign business owners are too busy paying attention to the market, operation, employment, finance, profit, and budget, they often overlook the importance of a properly drafted agreement by a professional legal specialist.
A business transaction or partnership without a legal agreement may lead to legal complications in the future that can be disastrous to the company. Our intention in this article is to let you know the 5 common agreements in Vietnam every aspiring should know and what the risks are when it comes to contract violation.
With that, you will be able to eliminate unnecessary risks and disputes when doing business in Vietnam.
Doing Business: 5 Common Agreements in Vietnam
There are plenty of different types of business agreements in Vietnam that function in various ways. Some are simple and some are complicated.
These are the five most common business agreements for businesses in Vietnam.
1. Employment Agreement
An employment agreement is essential for employee recruitment and hiring. It is necessary when an employee is not a temporary worker and often works for more than 3 months. An employment agreement lays out both an employer’s and an employee’s rights and obligations during employment in Vietnam.
2. Shareholder Agreement
This agreement is crucial when you are doing business in Vietnam with one or more partners. You and your partners will share costs, profits, and losses, and responsibilities stated in this agreement.
3. Investment Agreement
This is similar to a share purchase agreement and is utilized to govern the relationship between investors and the company for capital funding.
4. Non-disclosure Agreement
All companies are concerned about the confidentiality of their business activities and trade secrets. This is when you need a non-disclosure agreement with another party when they have access to your company’s information.
5. Sales and Services Agreement
A sales and services agreement lays out the terms and conditions for your goods and services. This is to prevent misunderstandings between your customers and your company.
Risks of Contract Violation in Vietnam
The consequences of contract violation could be severe and that’s why a legal agreement is mandatory so that all parties will fulfill their responsibilities and obligations in order not to breach the contracts.
In Vietnam, compensation must be paid for the breach of a legal contract or agreement, when one of the parties fails to fulfill the obligations and has caused damage to another party or parties. The damaged party may request compensation or the court will be the one to enforce it.
How Cekindo Can Assist in Drafting Agreements
It is inevitable for business owners to get involved in contracts and agreements in day-to-day business operations when doing business in Vietnam.
Cekindo’s team consists of highly experienced legal consultants who are knowledgeable in the Vietnamese regulations laws to ensure that your rights as a business as well as a business owner are protected in any contracts or agreements drafted.
Agreement drafting assistance that Cekindo can provide includes but not limited to employment agreements, partnership agreements, non-disclosure agreements, joint venture agreements, memorandum of understanding and memorandum of association.
The entire drafting process is done through careful and thorough evaluation and the provision of recommendations.
Should you require assistance for agreement drafting or review before the signing or execution, Cekindo is just one call away.
Get in touch with us now to avoid future pitfalls when doing business in Vietnam. Fill in the form below.