It is not entirely clear under the foreign exchange (FX) regulations of Vietnam if a Vietnamese individual can provide guarantee for a non-resident (i.e. guarantee for the performance of obligation of such non-resident) (Non-Resident Guarantee). While the FX Ordinance 2005 provides that “economic institutions [established in Vietnam] are permitted to provide offshore loans, except for the export of goods and services on deferred payment, and to provide guarantees for non-residents when the Prime Minister so permits”, there is no similar clause applicable to Vietnamese individuals. Due to this ambiguity, one can take different views on this issue.

From 1 January 2021, Decree 155/2020 requires securities interests (e.g., a mortgage) over listed securities to be registered with the Vietnam Securities Depository and Clearing Corporation (VSD). Since security interest over unlisted securities is registered with the National Register Agency of Secured Transactions (NRAST), a re-registration of the security interest with VSD is likely to be required when the unlisted securities become listed. However, such a re-registration may result in a loss of ranking of the relevant security interests.

For contracts between a foreign-owned company (i.e., companies which are owned and controlled by foreign investors) and other companies in Vietnam, the default position is that Vietnamese law is the governing law. However, there are certain arguments or mechanisms to allow the parties to choose foreign governing law (e.g., English law) for such contracts. Such arguments or mechanism may become important if the foreign-owned company plans to raise financing including non-recourse from foreign lenders based on the cash-flow generated from such contracts (e.g., a power purchase agreement with Vietnam Electricity).