Foreign lawyers get shaky foothold in communist Vietnam<\/p>\n
HANOI (Reuter): Vietnam opened a door to foreign lawyers this
\nweek, granting a batch of firms branch office status, but kept a
\nmuch bigger door firmly shut by barring them from advising
\nclients on local law.<\/p>\n
Fourteen firms from Britain, Singapore, Hong Kong, Australia,
\nthe United States and France won licenses to open the country's
\nfirst foreign law company branches, upgrading from representative
\noffice status. About a dozen others are expected to follow soon.<\/p>\n
On paper, the move is a great boost for companies which -- as
\nsimple representative offices -- were not supposed to conduct
\nbusiness and make profits in the communist country.<\/p>\n
\"It's going to be a lot easier,\" Fraser White of Clifford
\nChance said yesterday. \"The situation before licenses was that we
\nwere not allowed to carry on any activity or give advice.\"<\/p>\n
However, not all foreign lawyers were so upbeat about the
\nchanges, which stem from a decree passed last July.<\/p>\n
Until now, lawyers in representative offices have sidestepped
\nrestrictions on doing business by billing their clients offshore.
\nBut as branch offices, they will now have to bring their accounts
\nonshore and pay corporate taxes.<\/p>\n
Under the new rules branch companies are allowed to provide
\nconsultancy services on international and foreign law.<\/p>\n
But they are forbidden from giving advice on Vietnamese law,
\nwhich includes explaining or interpreting and drafting contracts
\nwith an element of Vietnamese law.<\/p>\n
Drafting contracts for clients setting up joint venture
\ncontracts -- big business in Vietnam's now burgeoning and
\nincreasingly open economy -- would be ruled out.<\/p>\n
If they need to advise international clients they will have to
\nwork through Vietnamese firms, few of which have lawyers
\nexperienced in Western ways of working or drafting in English.<\/p>\n
\"They are trying to protect Vietnam's own law firms by keeping
\ncore business for them and at the same time get tax income from
\nforeigners,\" said one disenchanted lawyer, who declined to be
\nnamed.<\/p>\n
Diplomats said the new regulations typified Hanoi's ambiguous
\nstance on foreign business since it embarked on capitalist-style
\nreforms and an open door policy in the late 1980s.<\/p>\n
\"The Vietnamese have a great suspicion of foreign entities and
\nthey have a history of looking very closely at foreign
\ninvolvement and wanting some control,\" one said.<\/p>\n
Vietnam is not alone in banning foreign firms from dealing
\nwith local law: it happens in Singapore, where foreign firms
\nflourish by advising clients on business law around Asia.<\/p>\n
\"It works there because there's enough international business
\ngoing on...to make it worthwhile and because the caliber of
\n(Singaporean) lawyers is high enough to advise international
\nclients\" said one lawyer.<\/p>\n
According to Milton Lawson, an international lawyer at
\nSinclair Roche and Temperley, it remains to be seen how the new
\nlaws will be interpreted.<\/p>\n
Foreign law firms will probably still be able to work behind
\nthe scenes, drafting opinions on contracts and loan transactions
\nwhich would then be signed off by Vietnamese law firms, he said.<\/p>\n
Clifford Chance's White said that foreign law companies can
\nplay an important role, as local lawyers' advisers rather than
\ntheir puppets, and make a lot of money along the way.<\/p>",
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