What are payment methods for technology transfer in Vietnam?

What are payment methods for technology transfer in Vietnam?

Pursuant to Article 4 of the Decree 76/2018/ND-CP stipulating price and payment methods for technology transfer in Vietnam as follows: 

1. Contracting parties may sign the agreement on one of or certain payment methods as follows:

a. Payment in lump sum or installments in cash or in kind, including the payment method of paying for each unit of issue which is produced by using the transferred technology.

b. Conversion of the technology value into contributions as capital to an investment project or to an enterprise.

If the capital contribution is made by using technology funded by the State (for the technology produced by using state fund or bought by using state fund), the technology shall be valuated in accordance with laws. 

c. Payment by percentage (%) of the net selling price.

 Net selling price means the total selling price of the product or service produced by using transferred technology (determined based on the sale invoices); less VAT, excise tax, export duty (if any); expenditure on finished–products, spare parts which are imported or bought domestically; expenditure on packages, packaging expenditure, expenditure on transportation of the products to the market and advertising expenditure.  

d. Payment by percentage (%) of the net revenue.

The net revenue is determined by using revenues from selling products or services produced by using the transferred technology and by deducting the revenues such as trade discounts, sales discounts and sales returns.

dd. Payment by percentage (%) of the earnings before income taxes. 

Earnings before income taxes means the net revenue less the total reasonable expenses associated with production of products or services using the transferred technology sold in the market. Contracting parties may sign the agreement on payment method of using the earnings after income taxes.

e. Contracting parties may combine two or all of the methods specified in clause a, b, c, d and dd of this clause, or use other payment methods which comply with the regulations on technology transfer.

2. If the technology is transferred (the technology is produced by using state fund or bought by using state fund) between contracting parties with one or multiple parties use the state fund, the valuation shall be carried out based on technology valuation consultancy as prescribed by laws.

3. If the technology transfer is carried out between the parties having parent company - subsidiary company relationship and the parties having association relationship as prescribed by the law on taxation, the audit of prices shall be carried out by using the technology valuation method as prescribed by laws and as required by the tax authority.

What is the time limit for issuing the Technology Transfer Registration Certificate in Vietnam?

Pursuant to Article 5 of the Decree 76/2018/ND-CP stipulating registration of technology transfer in Vietnam as follows: 

1. If the technology transfer is not required to be registered according to the regulations in clause 1, Article 31 of the Law on Technology Transfer, but the organizations or individuals still have the need to register for the technology transfer, they shall complete the procedures prescribed in the regulations in clauses 3, 4, 5 and 6 of Article 31 of the Law on Technology Transfer and the regulations hereof.

The effective date of the technology transfer agreement which is specified in this clause shall be agreed by contracting parties.  If the parties have not executed this agreement by the time of registration for the technology transfer, this agreement shall come into effect from the date on which the Technology Transfer Registration Certificate is issued.

2. The transferee receiving technology transfer from a foreign country or within Vietnam, or the transferor who transfers technology from Vietnam to a foreign country shall represent both parties to submit the application for registering the technology transfer to the competent authority mentioned in Article 6 hereof.

3. The time limit for issuing the Technology Transfer Registration Certificate:

a. Within 05 working days from the date on which the completed application documents are received as prescribed in clause 3, Article 31 of the Law on Technology Transfer, the competent authority mentioned in Article 6 hereof shall issue a Technology Transfer Registration Certificate to the applicant.

b. If the application is deemed incomplete, within 03 working days from the date on which the application is received, the competent authority shall send a written request to the applicant for providing additional documents.

c. If the contents in the application are required to be amended, within 05 working days from the date on which the application is received, the competent authority shall send a written request to the applicant for additional documents.

d. If the competent authority refuses to issue the certificate, within 05 working days from the date on which the application is received, it shall provide explanation in writing to the parties.

4. The Registration Forms for technology transfer and the Technology Transfer Registration Certificate shall be issued using form No. 1 and form No. 02 in Appendix IV hereto.

Best regards!