FIE mergers: looking to cover all the bases: in part two of his analysis of the FIE environment in Vietnam, Freshfields Bruckhaus Deringer lawyer Harry Brunt examines the legal guidelines which will shape future FIE mergers and acquisitions. (Analysis)

Vietnam Investment Review, July, 2003 by Harry Brunt

MERGERS and acquisitions in the foreign investment sector will increase with Vietnam's integration into the world economy.

But, the sector could face problems unless Vietnam strengthens the legal guidelines surrounding these ownership transfers. While both the Law on Foreign Investment and Decree 24 refer to mergers, they do not define the legal mechanisms by which the mergers occur.

While Circular 12, a government directive on this matter, also does not specify the method of transfer, it does outline what details the licensing authorities want to see on the "merger plan" or "merger contract" when approving such moves by companies.

Circular 12 suggests that this document should cover certain areas, although the list is not exhaustive. The circular...