A foreign partner bringing technology into a Vietnamese joint venture faces one decision that shapes its entire position: contribute the technology as capital in exchange for equity, or keep ownership and merely license it to the JV. The two routes differ on valuation, on tax, and above all on what happens the day the JV ends — contributed technology belongs to the company, while licensed technology comes home. This article walks both routes under the current Law on Technology Transfer and Law on Enterprises.
Contributing technology: valuation, and the price of losing title
Contributed technology becomes an asset of the JV under Articles 34 and 35 of the Law on Enterprises: ownership or the right of use must be transferred, and the asset must be valued under Article 36 — by a licensed valuation organisation or by agreement of the members — with the agreed value recorded as charter capital. The legal consequence is heavy: from the transfer date the foreign partner is no longer the owner of that technology, and if the JV dissolves, the technology is dealt with as company property, divided by capital ratio after debts are paid.
Overvaluation cuts both ways. Clause 3 of Article 36 provides that where an asset is valued above its actual worth at the contribution date, the members must jointly make up the shortfall and are liable for resulting damage — so the Vietnamese side has solid ground to demand a revaluation when an independent audit shows a large gap. The safe practice is a recognised valuation firm, an income or market approach with a comparables file, and the valuation report attached to the incorporation dossier rather than a bare number written into the charter.
Licensing instead: keep the IP, collect royalties
The second route keeps full ownership with the foreign partner, who signs a licence agreement with the JV. A technology transfer contract from abroad into Vietnam must be registered with the science and technology authority under the Law on Technology Transfer 07/2017/QH14, as amended by Law 115/2025/QH15 effective 01 April 2026 — registration is what makes the contract fully enforceable and lets royalties be remitted abroad through the banking system without friction.
On tax, royalties the JV pays abroad bear foreign contractor tax: the CIT component is 10% of taxable revenue under Decree 320/2025/ND-CP — the new framework after the CIT part of Circular 103/2014/TT-BTC was repealed from 12 March 2026. Accompanying technical services bear 5%. A common and sound structure separates the two streams — technology licence at 10%, technical support with its own documentation at 5% — because bundling everything into one “management fee” is the fastest route to having the whole amount reassessed at the higher rate in a transfer-pricing audit.
Protecting the IP during the JV and at the end
Whichever route is chosen, four points must be locked: scope of use (the JV only, no sub-licensing, no use at the partner other plants); secrecy and improvements (who owns improvements built on the base technology, with JV staff signing their own confidentiality undertakings); Vietnamese registrations (patents and trademarks must be filed in Vietnam — home-country rights have no automatic effect here); and claw-back (on termination or breach, the right of use ends and technical documents are returned or certified destroyed).
The most commonly forgotten point is the trademark: foreign partners let the JV register their mark in Vietnam in the JV name “for convenience”. When the relationship sours, that mark is a JV asset and the foreign side loses control of its own brand in the Vietnamese market. The non-negotiable rule is that core marks and patents are always registered in the foreign partner name, with the JV receiving only a time-limited right of use.
Frequently Asked Questions
1. How is technology contributed to a JV valued?
Under Article 36 of the Law on Enterprises 59/2020/QH14: either by a licensed valuation organisation or by agreement of the founding members or shareholders. The agreed value becomes the corresponding capital contribution. If the valuation exceeds actual value, the parties must jointly top up the difference and compensate for damage — an independent valuation file protects both sides.
2. If IP is transferred to the JV, what rights does the foreign side keep?
It depends on the structure: contributing ownership means losing title and keeping only member rights proportionate to the stake. Contributing a right of use, or licensing separately, keeps ownership with the foreign partner, who collects royalties and can withdraw the right of use when the licence ends or is breached. This is the single biggest point to settle before signing.
3. How much tax do royalties paid by the JV to the foreign partner bear?
The CIT component of foreign contractor tax is 10% of taxable revenue for royalties under Decree 320/2025/ND-CP — the current framework since the CIT part of Circular 103/2014/TT-BTC was repealed on 12 March 2026. A VAT component may also apply depending on the nature of the payment. Separately documented technical services bear 5% CIT instead of being folded into royalties.
4. What happens to the technology when the JV terminates?
Technology contributed as ownership is company property: on dissolution it is valued and divided by capital ratio after debts, and the foreign partner has no automatic right to take it back. Licensed technology simply stops: the right of use ends under the contract and documents must be returned or destroyed. A licence should therefore auto-terminate on JV dissolution or change of control.
This article has been quality-reviewed by the FLAW AI Legal Council