Technology Transfer and IP in Vietnam

How does technology transfer differ from IP transfer?

Article 2 of the 2017 Law on Technology Transfer defines technology transfer as the transfer of ownership or the right to use technology from the party entitled to transfer to the technology recipient. “Technology” is understood broadly: technical know-how, technical knowledge in the form of technological plans, technological processes, technical solutions, formulas, technical parameters, drawings, computer programs, data information — with or without attached industrial property subject matter.

IP transfer is a narrower concept, covering only the assignment or licensing of intellectual property (inventions, trademarks, copyright…) under the IP Law. The practical difference: technology transfer bears an additional layer of administrative obligations — licences for restricted technologies and transfer registration within 90 days — which a pure trademark transfer does not. Conversely, when the technology comes with a patented invention, the contract must also satisfy the validity conditions under Article 148 of the IP Law.

Legal framework governing technology transfer in Vietnam

The 2017 Law on Technology Transfer (Law No. 07/2017/QH14) is the central statute, guided by Decree 76/2018/ND-CP. In parallel, the 2005 IP Law (2022 amendments) governs the intellectual property aspects attached to the technology; the Investment Law No. 143/2025/QH15 and the 2020 Enterprise Law govern the investment project and technology capital contribution aspects; the Law on Corporate Income Tax and transfer pricing regulations govern the tax aspects of the transfer price.

For cross-border transactions, Vietnam’s international commitments (WTO/TRIPS, CPTPP, EVFTA) on IP protection and technology transfer must also be noted.

Prohibited, restricted and encouraged technologies for transfer

Article 11 of the 2017 Law on Technology Transfer prohibits technology transfer in cases where: the technology fails to meet regulations on occupational safety and hygiene, human health or environmental protection; the technology is on the List of technologies prohibited from transfer; the technology serves the production of weapons or narcotics (except special cases decided by the Prime Minister). A contract for prohibited technology transfer is void — the most serious legal risk to eliminate at the initial assessment stage.

Restricted technologies (Article 12, List issued by the Government) may be transferred but require a licence. Encouraged technologies include high technology, clean technology and technology creating competitive products — entitled to tax and credit incentives under State policies. Technology classification assessment is the mandatory first step before structuring any transaction.

Licences and registration of technology transfer

For technologies on the List of restricted technologies, Article 28 of the 2017 Law on Technology Transfer requires applying for a Technology Transfer Licence, in a two-step process: approval of the transfer followed by licensing (except for transfers within investment projects whose technology has been appraised). Signing a restricted technology transfer contract without a licence leaves the recipient without a legal basis to perform and pay lawfully.

Article 31 requires registration of technology transfer within 90 days from the contract signing date in three cases: transfer from abroad into Vietnam; from Vietnam abroad; and domestic transfer using state capital or the state budget. Registration is carried out at the state authority for science and technology. Non-registration does not automatically void the contract, but causes difficulties in cross-border payment, cost accounting and dispute resolution — in practice, banks and tax authorities often require the registration certificate.

Intersection with IP rights: accompanying patents and trade secrets

Most valuable technologies come with IP subject matter: a manufacturing process protected by patent, a formula as a trade secret, control software protected by copyright. The technology transfer contract is then simultaneously an IP transfer contract and must satisfy both systems: the validity conditions for industrial property assignment contracts under Article 148 of the IP Law (registration at IP Vietnam), confidentiality obligations for trade secrets, and invention licence conditions.

The accompanying protection strategy determines the strength of the transaction: technology patented in Vietnam gives the recipient enforceable exclusive rights; technology existing only as a trade secret depends entirely on confidentiality clauses and internal control measures. Before signing, the recipient should review the protection status of the related IP subject matter in Vietnam — it is not uncommon for the transferor’s invention never to have been registered in Vietnam, rendering the “exclusive rights” promised in the contract meaningless.

Required contents of a technology transfer contract

Article 23 of the 2017 Law on Technology Transfer lists the main contents: name of the transferred technology; the technology subject matter and products created by the technology; transfer of ownership or of the right to use; transfer method; price and payment method; term and effective time; rights and obligations of the parties; liability for damages; dispute resolution method. The contract must be in writing — FDI transactions should be bilingual with a clause determining which language version prevails in interpretation.

On obligations, the transferor must warrant lawful transfer rights, provide complete technical documentation, train operating personnel and warrant the technology as agreed. The recipient must pay, use the technology within scope, keep disclosed trade secrets confidential, and not re-transfer to third parties without permission.

Technology transfer pricing and price audit obligations

Article 27 of the 2017 Law on Technology Transfer provides that the technology price is agreed by the parties, but the State controls prices in certain cases: transfers using state capital; transfers between related parties under tax administration regulations (anti-transfer-pricing); and technology whose value affects security or national defence. For FDI enterprises, the biggest risk lies in related-party transaction rules — transfer prices between a parent company and its Vietnamese subsidiary must comply with the arm’s length principle.

Tax authorities may impose prices where they detect transfer pricing through unreasonable technology fees (royalties). Businesses need to prepare transfer pricing documentation in which the technology value is proven by appropriate valuation methods. Clearly separating technology transfer fees, IP royalties and technical service fees in the contract helps minimise the risk of tax adjustments.

Common risks in FDI technology transfer transactions

Besides licence and registration risks, common commercial risks include: technology outdated relative to commitments; the transferor failing to provide complete operational know-how so the production line cannot reach designed capacity; trained personnel leaving with trade secrets; and the recipient using the technology beyond scope, improving it independently and registering its own patents. Each risk must be “translated” into specific contract clauses: acceptance criteria, technical parameter commitments, penalties, mechanisms for handling arising improvements.

A distinctive FDI risk is conflict of laws: the contract chooses foreign law, but performance in Vietnam remains subject to Vietnam’s mandatory regulations on licensing, registration and validity conditions.

Technology transfer disputes and how to handle them

Typical disputes include: technology quality and acceptance results; payment when the recipient claims the technology does not meet commitments; scope of the right of use and acts exceeding scope; disclosed trade secrets; and contract validity where licences or registration are missing. Resolution methods as agreed: negotiation, mediation, arbitration or court.

The most effective prevention is designing the contract with clear acceptance milestones, progress payment mechanisms tied to acceptance results, and clauses on independent technical experts determining technology quality when disagreements arise. Once a dispute has arisen, early assessment of the feasibility of continued performance versus termination and damages claims is needed — because with partially implemented technology, “restoring the original state” is nearly impossible, making damages claims the main remedy.

Frequently asked questions