You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

January 16, 2015

The International Comparative Legal Guide to: Franchise 2015 – Vietnam Chapter

Subscribe to Updates
Global Legal Group

Jim Dao and Tu Ngoc Trinh, registered foreign attorney and attorney-at-law of the Tilleke & Gibbins corporate and commercial group in Vietnam, have coauthored the Vietnam chapter of The International Comparative Legal Guide to: Franchise 2015  (1st edition), a Q&A-style guide that provides a practical, cross-border overview of franchising law in 24 jurisdictions worldwide. The Vietnam chapter, which serves as a vital tool for franchisors and franchisees operating in the country, covers the following subjects in detail:

  • Franchise Legislation and Rules: Laws regulating the offer and sale of franchises, registration requirements, mandatory presale disclosure obligations, requirements to offer or sell a franchise, membership of national franchise associations, and translation of franchise documents into Vietnamese
  • Franchise Business Vehicles: Restrictions on non-nationals, business entities used by franchisors, and registration requirements and formalities
  • Competition Law: Overview of competition laws, maximum permitted terms for franchise agreements, minimum resale prices, encroachment, and in-term and post-term non-compete and non-solicitation of customers covenants
  • Enforcing Intellectual Property: Trademarks, trade secrets, and copyright
  • Liability: Franchisors failing to comply with mandatory disclosure obligations, rescinding franchise agreements, claiming damages, allocation of liability for disclosure non-compliance or misrepresentation, disclaimer clauses, and class-action lawsuits
  • Governing Law: Requirements to use local law, local court remedies, and enforcing foreign orders
  • Real Estate: Duration of commercial property leases, conditional lease assignments, restrictions on non-national entities, and the commercial real estate market in Vietnam
  • Online Trading: Online orders received from abroad and requiring former franchisees to assign local domain names to the franchisor on the expiry or termination of the franchise agreement
  • Termination: Mandatory local laws that may override termination rights
  • Labor Laws: Vicarious liability and mitigating risk
  • Currency Controls and Taxation: Limitations on the repatriation of royalties to overseas franchisors, withholding tax requirements, and conducting transactions in the Vietnamese Dong
  • Franchise Renewal: Disclosure obligations and compensation for non-renewal or refusal to extend a franchise agreement
  • Franchise Migration: Imposing restrictions on franchisees and step-in rights

This article appeared in the 2015 edition of The International Comparative Legal Guide to: Franchise, published by Global Legal Group Ltd, London. www.iclg.co.uk

Download Full Article
Related Professionals

Practices

Corporate/M&A

Intellectual Property

Real Estate

Tax

Location

RELATED INSIGHTS​ 

October 30, 2025
Recent events at a Thai listed company, where a proposal to remove the director was not successful, amid claims that a competitor was attempting to gain control of the company, illustrate how disputes over corporate control can unfold differently at the board level and shareholder level. At the board level, removing directors of a listed company mid-term to gain corporate control is not an easy task under Thai law, as it requires a higher threshold than appointing a new director, which typically only requires a simple majority vote in a listed company. At the shareholder level, Thailand’s tender offer and competition regimes add complexity where different shareholder groups act in concert to remove opposing board representatives or otherwise influence control. In this article, we will explore why the attempted removal of a director may fail, and how the tender offer regime may apply. Key Issues at a Glance Shareholder groups may seek to convene meetings to propose changes to board composition or company authority. Such proposals can be delayed or complicated by regulatory requirements and the need for additional disclosures. Regulatory authorities and minority shareholders may raise concerns when major shareholders coordinate to influence board control, especially if such actions could trigger tender offer or merger control obligations. Companies often respond by seeking further information on shareholder relationships and potential conflicts before proceeding. Why the Director Removal Failed Under Section 76 of the Public Limited Companies Act B.E. 2535 (as amended), the early removal of a director requires two conditions to be satisfied at the same meeting of shareholders: Headcount test: At least 75% of shareholders attending and entitled to vote must vote in favor. If multiple shareholders appoint the same person as proxy, each proxy is counted as a separate head for the purpose of the headcount test,
Read More
October 30, 2025
Thailand has introduced a comprehensive overhaul of its tax litigation procedures that will significantly impact how tax disputes are handled. The Regulations for Tax Cases B.E. 2568 (2025) take effect on November 24, 2025, and repeal the prior B.E. 2544 (2001) regulations in full. These regulations support the implementation of the Act on the Establishment of the Tax Court and Tax Case Procedure (No. 3) B.E. 2568 (2025), which expands the Tax Court’s jurisdiction to certain criminal tax matters. Published in the Government Gazette on October 14, 2025, the regulations have been reorganized into three parts covering civil cases, criminal cases, and forms, and are designed to accelerate proceedings, tighten evidentiary discipline, and modernize court operations. Structural Reform and Scope The prior regime governed only civil tax disputes. Under the new framework, the regulations introduce a dedicated chapter for criminal cases alongside updated civil procedures, as the Tax Court now has express authority to adjudicate specified criminal tax offenses. Select mechanisms applied in civil case proceedings, such as electronic communication, recording testimony, and appointing experts, also apply to criminal proceedings mutatis mutandis where they do not conflict with criminal procedure. Civil Cases: Evidence Submission, Deadlines, and Scheduling Parties must submit, together with the witness list, originals of all documentary evidence, media, or electronic data (such as files, USB drives, or CDs), and all physical evidence in the party’s possession. Failure to submit any original within the deadline (see below) results in a loss of the right to adduce that item at trial, subject only to narrow exceptions where submission is impossible due to force majeure or where receipt of the evidence is indispensable to the interests of justice. The practical impact is that parties are now obligated to assemble and verify all original documents and data at the very
Read More
October 26, 2025
AI-generated songs are now making waves in Vietnam on platforms like TikTok, with tracks such as “Say mot doi vi em” quickly gaining popularity and sparking widespread attention. This phenomenon raises a host of legal and ethical questions: Who is the author of these songs? Can they be protected by copyright? Who is responsible if there is an infringement? These questions are becoming increasingly urgent as AI music becomes more mainstream in Vietnam. Copyright Protection for AI-Generated Music in Vietnam Under current Vietnamese law, copyright protection is reserved for works that bear the mark of human creativity. The 2022 amendments to Vietnam’s Intellectual Property Law reaffirm that only works created by humans are eligible for copyright. In practice, if a human meaningfully contributes to the creative process—by providing prompts, making selections, editing, or arranging—their contribution may be protected. However, if a song is generated entirely by AI without significant human input, it is unlikely to qualify for copyright protection. When an AI-generated song does not qualify for copyright protection, the question arises as to whether the person who writes the prompts, edits, or compiles the work can still be considered the owner of an asset under the Vietnamese Civil Code. According to Article 105 of the Civil Code 2015, assets include objects, money, valuable papers, and property rights. While AI-generated music that is not protected by copyright is not considered money or valuable papers, it may be regarded as an object (in the form of a digital file or recording) or as a property right if it can be possessed, used, transferred, or exploited for value. Use of AI-Generated Works Without Copyright Protection If a song is not protected by copyright, does that mean anyone can use it freely? Not necessarily. The absence of copyright does not mean the
Read More
October 24, 2025
Thailand currently lacks a specific franchise act. Consequently, the legality of any franchise agreement is determined by its compliance with various existing laws, such as the Civil and Commercial Code, the Trademark Act B.E. 2534 (1991) (as amended), and the Unfair Contract Terms Act B.E. 2530 (1997). Thailand is a freedom-to-contract jurisdiction. This allows for a high degree of flexibility and autonomy in contractual arrangements, provided that the terms do not violate any laws or public policy and do not fall under the scope of unfair contract terms. Given this, the requirement for fairness in franchise agreement terms often leads to uncertainty, but decisions from the Trade Competition Commission of Thailand (TCCT) can provide guidance on whether specific contentious terms are in fact fair.  One issue worth examining in this light is the inclusion of terms on nonrefundable franchise fees and strict purchasing conditions. Franchise Fee: Unfair to Refuse Refund? Nonrefundable franchise fees represent a significant upfront investment for franchisees, often becoming a point of contention if the franchise relationship deteriorates or the franchisor ceases operations. Their fairness and enforceability are frequently scrutinized by regulatory bodies like the TCCT, highlighting the critical balance between contractual freedom and franchisee protection. Faced with one such case, the TCCT considered whether it was unfair for the franchisor to refuse to refund the franchise fee after the franchisor ceased operations.  The franchisee had entered into a service agreement on August 2, 2021, and begun operating on October 9, 2021. However, by November 21, 2023, the franchisee was notified that the system would be shut down for maintenance, and by December 26, 2023, the franchisor announced the cessation of operations due to financial losses. The franchisee then requested a refund of the franchise fee. Unfortunately for the franchisee, the TCCT found that the franchisor’s
Read More