All latest regulations on technology transfer activities in Vietnam

Decree No. 76/2018/NĐ-CP of Vietnam’s Government stipulates some regulations relating to technology transfer activities as follows:

List of technologies encouraged for transfer, list of technologies restricted from transfer and list of technologies banned from transfer

Promulgated together with Decree No. 76/2018/NĐ-CP of Vietnam’s Government are List of technologies encouraged for transfer, list of technologies restricted from transfer and list of technologies banned from transfer:

- List of technologies encouraged for transfer (Appendix I), including:

+ High technologies on the List of high technologies prioritized for investment and development in accordance with the law on high technology;

+ Other technologies encouraged for transfer (143 technologies).

- List of technologies restricted from transfer (Appendix II), including:

+ Technologies transfer from foreign countries to Vietnam or domestically (34 technologies);

+ Technologies transfer from Vietnam to a foreign country (06 technologies).

- List of technologies banned from transfer (Appendix III), including:

+ Technologies transfer from foreign countries to Vietnam or domestically (48 technologies);

+ Technologies transfer from Vietnam to a foreign country (02 technologies).

Based on the economic and social development process and the governance management requirements; the ministries and ministerial agencies shall make and send lists of technologies specified above to the Ministry of Science and Technology in order to have them consolidated by the Ministry and then amended by the Government.

Price and payment methods for technology transfer

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

- 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.

- 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 evaluated in accordance with laws. 

- 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.  

- 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.

- 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.

+ 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.

- 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.

- 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.

View more details at Decree No. 76/2018/NĐ-CP of Vietnam’s Government, effective from July 01, 2018.

-Thao Uyen-

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