Technology Use Explanation for FDI company projects in Vietnam

Explanation of technology use for FDI company projects is mandatory according to current Vietnamese Investment Law. Due to the constantly changing nature of regulations on explaining the use of technology in projects, many businesses need to continuously revise and supplement these documents. Therefore, through the article below, Viet An Law will clarify the technology use explanation for FDI company projects in Vietnam as per current law.

Technology Use Explanation for FDI company projects

According to Article 16 of the Law on Technology Transfer 2017, at the stage of investment policy approval, the explanation of technology use in the investment project dossier includes:

• Analysis and selection of technology options;
• Name, origin, technological process diagram; expected list, status, and technical parameters of main machinery and equipment in the technological line of the selected technological plan;
• Documentation proving proven technology (if any);
• Plan for training and technical support to operate the technological line (if any);
• Terms of use of technology;
• Preliminary assessment of the impact of technology on the environment (if any);
• Draft technology transfer contract in case of capital contribution by technology.

During the investment license stage, the explanation of technology use in the investment project dossier:

• Name, origin, technological process diagram; list, status, technical parameters of machinery and equipment in the technological line;
• Products, standards, product quality;
• Ability to provide raw materials, fuels, and materials for technological lines;
• Training program, technical support to operate technological lines;
• Investment costs for technology, machinery, equipment, training, and technical support.

Explanation of technology transfer objects for FDI company projects

According to Article 4 of the Law on Technology Transfer 2017, subjects of technology transfer include:

• Technical know-how;
• Technological plans, processes; solutions, parameters, drawings, technical diagrams; formulas, computer software, data information;
• Solutions to rationalize production and innovate technology;
• Machinery and equipment accompanying one of the following subjects: technical know-how; technological plans and processes; solutions, parameters, drawings, technical diagrams; formulas, computer software, data information; solutions for production rationalization, and technological innovation.

Technology transfer methods for FDI company projects

• Transfer of technology documents.
• Training for the technology recipient to master and control the technology within the agreed period.
• Send technical consultants to the technology recipient to apply and operate the technology to achieve product quality and progress targets as agreed.
• Transfer of machinery and equipment accompanied by one of the following objects: technical know-how; technological plans and processes; solutions, parameters, drawings, technical diagrams; formulas, computer software, data information; solutions for production rationalization, technological innovation.
• Other methods of transfer as agreed by the parties.

Form of technology transfer for FDI company projects

• Independent technology transfer.
• Technology transfer in the following cases: Investment projects; Capital contribution in the form of technology; Franchising; Transfer of intellectual property rights; Purchase and sale of machinery and equipment accompanied by one of the following objects: technical know-how; technological plans and processes; solutions, parameters, drawings, technical diagrams; formulas, computer software, data information; solutions to rationalize production, technological innovation.
• Technology transfer in other forms as prescribed by law.
• Contract form: Independent technology transfer and capital contribution in the form of technology must be established in a contract;
• Technology transfer in investment projects; franchising; transfer of intellectual property rights; purchase and sale of machinery and equipment and technology transfer in other forms are expressed in the form of contracts or terms, clauses, and appendices of contracts or investment project documents.

FDI enterprises register technology transfer

Technology transfer contracts mainly come from Japan, Korea, EU, US, and ASEAN investors. Fields with FDI enterprises registering for technology transfer include:

• Electronics;
• Telecommunications;
• Car;
• Motorbike;
• Pharmaceuticals;
• Medical;
• Petrochemical;
• Cosmetics;
• Mineral exploitation and processing;

Common problems in explaining the use of technology in project documents and solutions

• Difficulty in quantifying performance: Using specific KPIs, comparing with similar projects.
• Technology risk: Build contingency plans, and update technology regularly.
• High Cost: Compare initial costs with long-term benefits, and look for financial solutions.
• Lack of human resources: Training human resources, and cooperating with experienced partners.
• Difficulty in communication: Use simple language, and illustrate with pictures.

Examples of technologies that can be explained

• Information technology: AI, IoT, Big Data, Cloud computing, Blockchain…
• Automation technology: Robots, automatic machines, automatic control systems…
• Biotechnology: Gene technology, stem cell technology…
• New material technology: Nanomaterials, composite materials…

Investment related services of Viet An Law

• Consulting on investment procedures according to current law;
• Drafting and preparing documents explaining the use of technology in implementing FDI company projects and other documents;
• Represent clients in carrying out investment registration procedures and resolving arising issues;
• Committed to performing work professionally, effectively, and on schedule;
• Regular legal advice for businesses

Above is the advice of Viet An Law on Technology Use Explanation for FDI company projects in Vietnam. If there are any other legal problems related to investment projects, establishment of foreign-invested companies, or adjustment of investment certificates, don’t hesitate to get in touch with Viet An Law for more specific and detailed advice. Sincerely!

Updated: 8/2024