Technology transfer agreement must be registered with the competent authority
Technology transfer refers to the transfer of the ownership or the right to use a given technology from the party that has the right to transfer such technology to the transferee. As such, transferee will have the right to use all the skills, pieces of knowledge, technologies, production methods and product samples ... of the transferor.
Technology transfer shall be executed through Technology transfer Agreement, and this agreement must be concluded in writing or in any other forms of equivalent value. The agreement must be signed and sealed (if any) by the parties; all pages of the agreement or its appendixes must be initialed and sealed (if any).
Article 31, Law on Technology transfer, issued on June 9th, 2017 and taking effects on July 1st ,2018 provided that there have 3 cases of technology transfer that must be registered with competent authority on science and technology, including:
“(a) Transfer of technology from a foreign country to Vietnam;
(b) Transfer of technology from Vietnam to a foreign country;
(c) Domestic technology transfer with use of state funding or state budget, excluding cases where Certificate of registration of science and technology task outcomes is available”.
In order to apply the regulations in practice, recently, Decree no 76/2018/NĐ-CP of the Government has been issued, detailing and guiding the implementation of a number of articles of Law on technology transfer. This Decree took effects on the same day as the Law on Technology transfer. Specifically, The Decree regulated the responsibility of registration of technology transfer belongs to transferee in the case of transfer of technology from a foreign country to Vietnam and Domestic technology transfer. In the event of transfer of technology from Vietnam to a foreign country, the transferor shall on behalf of the parties, submit the dossier for registration of technology transfer to the agency competent to grant the Certificate of registration of technology transfer.
Besides, Decree no 76/2018/NĐ-CP also provides guidance for payment method and for transferor and transferee to determine the price for technology transfer. Accordingly, parties of technology transfer transaction can choose 1 in 5 payment methods, such as:
- Payment based on net turnover (determined as the total turnover from the sale of product or service generated by transferred technology minus deduction from turnover, including discounts on trade, selling price discounts and goods returned); or
- Payment based on profit before tax (determined as the total turnover minus total reasonable cost to produce the product, service on sale in which technology transfer is applied. Parties can agree to use the method of payment based on profit after tax);
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Moreover, Law on Technology transfer 2017 is more open than the Law on Technology transfer 2006, accordingly, the old one regulated that in case the technology transfer transaction is executed in Viet Nam, the parties must make a contract in Vietnamese. But now, the language used in the agreement shall be agreed upon by the parties according to Law on Technology 2017 and the Law don’t require agreement in Vietnamese anymore.
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