How Vietnam's Rehabilitation and Bankruptcy Law Changes the Game for Distressed Companies

Vietnam’s Rehabilitation and Bankruptcy Law (No. 142/2025/QH15), effective March 1, 2026, shifts the country’s insolvency framework from a liquidation first model to one that prioritizes business rehabilitation. The law introduces court appointed administrators, earlier intervention timelines, expanded filing rights, and State funded bankruptcy cost advances. CEOs and investors must now act sooner to protect enterprise value.

Vietnam’s Rehabilitation and Bankruptcy Law (No. 142/2025/QH15)

The Cost of Waiting Just Got Higher

Imagine a manufacturing company in Ho Chi Minh City that has been struggling with overdue payments for months. Management keeps believing the next quarter will turn things around. Suppliers start pulling back. Key employees leave. By the time the board finally considers legal options, the company’s value has already collapsed.

This scenario is common across Vietnam’s business landscape. Until recently, the legal system offered little incentive to intervene early. The old Bankruptcy Law of 2014 was built around one outcome: shutting companies down and selling their assets.

That has changed. Vietnam’s Rehabilitation and Bankruptcy Law (No. 142/2025/QH15) took effect on March 1, 2026, and it rewires the entire approach to corporate distress. The system now encourages companies to restructure before they fail, not after.

For CEOs, the biggest risk is no longer insolvency. It is delay. For investors, the risk is mispricing distressed opportunities by ignoring how timing, control, and execution shape whether any value can still be recovered.

Here are seven strategic lessons from the new law.

How the Rehabilitation and Bankruptcy Process Works

The law creates two distinct pathways. One is designed for companies that can still be rescued. The other handles those that cannot.

The Rehabilitation Pathway

Under the new framework, a company is considered at risk of insolvency if it cannot pay debts coming due within six months or has debts overdue by less than six months. Full insolvency is defined as a failure to pay debts for six months or more. This is a notable shift from the old law, which used a three month threshold.

Only the debtor can initiate rehabilitation by filing a petition with the regional People’s Court. Creditors do not have the right to file for rehabilitation. They can only file for bankruptcy.

The court has 15 days to accept or reject the petition. Once accepted, several protections kick in immediately. Enforcement of secured assets is suspended. Payment of pre acceptance debts and interest is paused. Tax collection may be temporarily frozen. The company can continue operating, but under supervision.

A court appointed administrator then takes charge of overseeing the company’s assets, monitoring operations, and reporting to the court and creditors. The debtor has 30 days from the court’s acceptance to submit a rehabilitation plan.

Creditors vote on the plan. Under the standard process, approval requires support from creditors holding at least 65% of total debt. For smaller companies using the expedited process, the threshold drops to 51%. Once approved, the court formally recognizes the plan within seven days, and it becomes legally binding.

The standard rehabilitation process runs for a maximum of three years. The expedited process, available to companies with 20 or fewer unsecured creditors and total debts under VND 10 billion, lasts up to 18 months.

The Bankruptcy Pathway

Bankruptcy petitions can be filed by creditors, the company, employees, trade unions, and for the first time under the new law, tax authorities and social insurance authorities.

Once the court opens proceedings, creditors must file claims within 15 days, shorter than the 30 day window under the old law. Missing this deadline means losing the right to participate.

The administrator prepares a complete inventory and a verified creditor list. Creditors may then decide to attempt rehabilitation or proceed to liquidation. If no rehabilitation is viable, the court declares bankruptcy, and assets are valued and sold through auction or direct negotiation.

Proceeds follow a strict distribution order: bankruptcy costs first, then unpaid wages and employee benefits, then debts from the rehabilitation period, then State obligations such as taxes, then unsecured creditors, and finally shareholders.

Lesson 1: Delay Destroys Value Faster Than Insolvency

The rehabilitation procedure is built as an early stage tool. It is meant to protect value before a business collapses entirely. Under this framework, waiting is not just a management habit. It is a value destroying decision.

The old mindset of holding on a little longer needs to be replaced with a harder question: how much value disappears with each month of inaction? If management delays too long, the legal tools may still exist, but the commercial foundation for a successful rehabilitation may already be gone. Suppliers, employees, customers, and creditors may have moved on.

For investors, a distressed company may appear cheap, but only because time has already eroded most of the value that could have been saved. The best window for action is before a company looks completely broken but after it becomes obvious that management optimism alone will not fix things.

Lesson 2: Saving the Business Does Not Mean Saving Full Management Control

The law significantly expands the role of court appointed administrators. These professionals are not passive observers. They supervise the rehabilitation plan, report to the court and creditors, and can request the court to end the process entirely if they uncover violations.

This means control can start shifting well before ownership changes. A founder may still hold every share. A legal representative may still sign documents. But in practice, their ability to act freely on payments, asset decisions, the rehabilitation plan, and creditor communications will narrow considerably.

Investors assessing a distressed opportunity need to look beyond the ownership structure. The real question is who influences the process. In most cases, effective control sits between three parties: management, key creditors, and the supervising administrator.

Lesson 3: Bargaining Power Shifts Earlier Than You Expect

The rehabilitation framework changes how negotiations play out, even before any court ruling is issued. Once formal rehabilitation becomes a realistic possibility, creditors, suppliers, and potential investors stop negotiating the same way they did before. The law creates pressure in the background, not only through court orders.

For management, informal promises carry less weight once stakeholders sense that formal intervention may be on the horizon. Holding influence requires stronger evidence, better governance, and more credible restructuring plans.

For investors, this same dynamic opens doors. A company with real operating value but shrinking options may become a viable candidate for rescue investment, structured financing, or strategic acquisition. But the law does not make every distressed business worth pursuing. It changes leverage and clarifies the process. It does not guarantee a good outcome.

Lesson 4: Value Preservation Is a Strategic Discipline

The law is designed to protect enterprise value and balance the interests of all parties. This makes the central question not whether a company is struggling, but whether enough value remains to justify restructuring, financing, or a merger and acquisition opportunity.

Boards need to move past mere survival. The relevant test is whether the business retains genuine going concern value that can still be protected. A company that continues operating while its relationships, contracts, workforce, and financing steadily erode may look alive on paper but is losing value in reality.

A distressed company selling at a deep discount is not automatically a bargain. The smarter investor question is whether the business can still be stabilized, managed, and rebuilt.

Lesson 5: The Supporting Market Still Has Gaps

A well written law only works as well as the people and institutions that implement it. Vietnam’s new framework still requires experienced judges, skilled insolvency practitioners, reliable valuation professionals, and strong institutional coordination.

The role of court appointed administrators is especially critical. They serve as the operational arm of the court. If administrators lack sufficient expertise in restructuring, finance, or asset valuation, even a well designed law can produce disappointing results.

Management should not assume the rehabilitation process will operate smoothly on autopilot. Investors should not interpret the new law as evidence that Vietnam is already a mature market for distressed asset transactions.

Lesson 6: State Funded Bankruptcy Costs Open the Door Wider

One of the most practical changes in the new law is that the State budget may now cover upfront bankruptcy costs in specific situations. This applies when the filer is an employee, a trade union, the tax authority, or the social insurance authority, or when the company has no remaining assets.

Previously, some financially distressed companies could not afford to begin the very legal process meant to help them. That paradox left many businesses in limbo. The new provision removes a significant barrier to entry.

For investors, this improvement matters because a functioning insolvency system depends on distressed companies actually being able to enter the process. A market where companies can still access the system even when their cash reserves are nearly gone is more likely to produce clear outcomes and workable timelines.

Lesson 7: Know What Happens When Rehabilitation Fails

Not every rehabilitation attempt will succeed. The law recognizes this by establishing clear rules for what follows a failed rehabilitation, including procedures for asset valuation, sale through auction or negotiation, and oversight of administrators during enforcement.

These enforcement rules have a direct impact on value. For investors evaluating distressed assets and for management trying to avoid a fire sale at deeply discounted prices, the post rehabilitation framework is a core part of the financial calculation.

What CEOs and Investors Should Do Now

For Management

Start acting earlier and documenting everything. Build internal early warning systems that flag distress before it becomes a crisis. Maintain thorough board minutes. Evaluate your core relationships with creditors, suppliers, and customers. Distinguish between a temporary cash flow issue and a deeper structural problem. The new law works best when companies use it early enough to protect real business value.

For Investors

Use the new framework to assess distress more clearly. Look beyond share ownership to understand who truly controls the process. Evaluate whether the company retains enough value to justify a rescue. Assess the quality of the appointed administrators, the relevant court’s track record, and available enforcement options. A low price does not automatically equal a good deal. The law may position Vietnam as a more transparent market for restructuring and special situations, but returns ultimately depend on execution.

Frequently Asked Questions

What is Vietnam’s Rehabilitation and Bankruptcy Law?

It is Law No. 142/2025/QH15, passed on December 11, 2025 and effective from March 1, 2026. It replaces the Law on Bankruptcy 2014 and introduces a separate rehabilitation procedure that allows financially distressed companies to restructure before being forced into liquidation.

How does the rehabilitation process work in Vietnam?

The debtor files a petition with the People’s Court. If accepted within 15 days, protections take effect immediately. An administrator is appointed, the company has 30 days to submit a rehabilitation plan, and creditors vote on it (65% approval needed under the standard process). The plan can run for up to three years under court supervision.

Why does Vietnam’s new insolvency law matter for foreign investors?

The law creates a clearer framework for assessing distressed companies in Vietnam. It shifts the system toward earlier intervention, gives court appointed administrators stronger oversight roles, and makes the process more accessible. Investors gain better visibility into restructuring timelines and value preservation opportunities.

How long can the rehabilitation process last?

The standard process runs for up to three years. The expedited version, available for companies with 20 or fewer unsecured creditors and total debts under VND 10 billion, lasts up to 18 months.

What happens when rehabilitation fails under the new law?

If creditors reject the plan or the rehabilitation process does not achieve its goals, the case moves to the bankruptcy track. The court declares bankruptcy, and assets are valued and sold through auction or direct negotiation. Proceeds are distributed in a legally defined priority order.

Read the full guide from ANT Lawyers: 7 Strategic Lessons from Vietnam’s Rehabilitation and Bankruptcy Law on Timing, Control, and Value

If you are managing a company facing financial difficulty or evaluating a distressed investment in Vietnam, what is your biggest concern: timing, control, or enforcement? Share your thoughts in the comments.

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Equity Transfer Disputes in Vietnam: 9 Warning Signs Investors Keep Missing

Quick Answer

Equity transfer disputes in Vietnam often stem from overlooked ownership gaps, not fraud. Common triggers include unpaid charter capital, informal nominee structures, and delays in regulatory registration. Investors can reduce risk by verifying actual capital contributions, confirming beneficial ownership, and aligning payment schedules with official registration milestones.

 

You found the perfect acquisition target in Vietnam. The financials look solid. The deal closes. Then, months later, a shareholder you never heard of surfaces with a beneficial ownership claim, and suddenly your capital is locked in litigation.

This scenario plays out more often than most investors expect. Vietnam’s M&A landscape is growing fast, with private equity firms, strategic buyers, and regional conglomerates actively pursuing deals in manufacturing, logistics, technology, and consumer sectors. But as deal volume rises, so do equity transfer disputes.

Here is the pattern worth paying attention to: most of these disputes are not caused by deliberate fraud. They grow out of structural ownership weaknesses that were sitting in plain sight during due diligence.

This guide breaks down nine recurring red flags, explains why they persist in Vietnam’s business environment, and offers a practical framework for protecting your investment.

What Are Equity Transfer Disputes?

Equity transfer disputes are legal conflicts that arise when ownership interests in a company change hands. In Vietnam, these disputes typically involve disagreements over the validity of a share transfer, compliance with company charter procedures, whether capital was actually contributed, how equity was valued, or the enforcement of shareholder rights.

These conflicts can occur between existing shareholders, between a buyer and seller, or they may involve third party creditors who claim a stake.

Why These Disputes Are Becoming More Common

Several structural factors are driving the increase in equity transfer disputes across Vietnam.

Over the past decade, company formation has been rapid, often outpacing the governance structures needed to support it. Many businesses were built around a single founder with broad control and little formal documentation. Informal nominee arrangements remain widespread, especially in sectors with foreign ownership restrictions.

On top of that, enterprise registration certificates are often treated as definitive proof of ownership. In reality, registration records do not always reflect the actual capital that was contributed. This gap between paperwork and financial reality is at the heart of many disputes.

A Real World Example: When Capital Was Never Fully Paid

Consider a case from a Vietnamese People’s Court. A dispute arose after equity in a private enterprise was transferred and the buyer completed payment under the share purchase agreement. However, the seller had never fully contributed the registered capital within the required statutory timelines. Banking records were inconsistent, and internal shareholder approval procedures were later challenged.

The result was prolonged litigation over whether the transferred equity legally existed as recorded. The court ultimately examined actual contribution evidence and corporate records before reaching its decision.

This case illustrates a recurring theme: ownership formalities in Vietnam often lag behind commercial transactions.

The 9 Red Flags Behind Equity Transfer Disputes

1. Inconsistent Capital Contribution Records

Many disputes begin with a simple mismatch: the registered charter capital does not match the actual paid in capital. Investors frequently assume that what appears on registration documents reflects reality. Vietnamese courts have shown otherwise.

What to do: Always verify bank transfer records and accounting entries independently. Do not rely on enterprise registration certificates alone.

2. Undocumented Nominee Shareholding Structures

Nominee arrangements are common in restricted sectors, and they often go undocumented. When the company’s value increases or control shifts, hidden beneficial ownership claims surface and trigger disputes.

What to do: Obtain formal beneficial ownership declarations and indemnities from all parties before closing.

3. Share Purchase Agreement Completed Without Regulatory Updates

A signed share purchase agreement does not finalize ownership on its own. If enterprise registration is not updated promptly, there is a gap that can trigger disputes over who actually holds the equity.

What to do: Structure staged payments that are tied to confirmed regulatory registration, not just contract execution.

4. Ambiguous Pre Emption Procedures

Many company charters include pre emption clauses, but without specifying clear notice procedures. Minority shareholders may later challenge the transfer by pointing to procedural defects.

What to do: Issue formal written notices to all shareholders and collect explicit waivers before proceeding.

5. Historic Informal Transfers

It is common in Vietnam for internal share transfers to happen informally, especially in the company’s early years. These unregistered transfers create inconsistencies in the shareholder register that resurface during M&A transactions.

What to do: Reconstruct the full shareholder history from incorporation to the present day before executing any deal.

6. Undisclosed Share Pledges

Shares that have been pledged to lenders create complications around ownership validity. When these encumbrances go undetected, they can escalate into disputes after closing.

What to do: Conduct secured transaction searches and obtain written confirmations from creditors that no pledges exist.

7. Founder Exit Misalignment

Earn outs and deferred payment structures, when poorly designed, can create perverse incentives. Founders may dispute performance metrics or withhold cooperation, leading to conflicts over the remaining equity.

What to do: Draft precise, measurable performance benchmarks and include dispute escalation clauses in the agreement.

8. Deadlock Clauses Without Valuation Methodology

Joint ventures often include buy out triggers but fail to specify how equity should be priced. When a deadlock occurs, disagreement over valuation becomes the central issue.

What to do: Include expert determination provisions with a clearly defined valuation methodology from the outset.

9. Underestimating Enforcement Timelines

Many investors do not fully account for how long dispute resolution takes in Vietnam. Court proceedings can stretch over years, and even arbitration does not eliminate procedural complexity. The longer enforcement takes, the higher the commercial cost.

What to do: Evaluate arbitration options and confirm asset locations before closing, so you have a realistic picture of enforcement viability.

A Practical Framework for Reducing Risk

Step 1: Conduct a Forensic Ownership Review. Verify when capital was actually contributed, confirm who the true beneficial owners are, and check every historical share transfer on record.

Step 2: Separate Regulatory Records from Ownership Validation. Review enterprise registration documents, then cross check them against shareholder resolutions and investment approval records.

Step 3: Confirm There Are No Encumbrances. Run pledge searches and get written confirmations that shares are free and clear.

Step 4: Stress Test Pre Emption Rights. Issue formal notices and secure waivers from all shareholders with pre emption rights before the transfer proceeds.

Step 5: Align Payment with Legal Effectiveness. Structure payments in stages, tying each release to an official registration milestone.

Step 6: Plan for Dispute Resolution Before It Is Needed. Evaluate whether arbitration or court litigation is more appropriate, and consider enforcement realities in Vietnam.

Experienced investors treat equity transfer disputes as foreseeable governance risks, not as surprises.

The Commercial Cost of Getting It Wrong

Unresolved equity transfer disputes do not just create legal headaches. They lead to capital being locked up, governance paralysis, reduced exit valuations, complications with banking covenants, and reputational damage.

In competitive capital markets, these consequences directly affect deal pricing and investor confidence.

FAQ on Equity Transfer Disputes in Vietnam

Why are equity transfer disputes so common in Vietnam?

Rapid company formation combined with informal documentation practices has created widespread structural ownership risk. Many companies grew faster than their governance systems, leaving gaps that surface during share transfers.

Can an equity transfer dispute invalidate a completed share transfer?

Yes. Vietnamese courts have the authority to suspend or unwind transfers when procedural requirements were not properly followed, especially around capital contribution and shareholder approvals.

Are foreign investors more exposed to these disputes?

Foreign investors face additional complexity because cross border enforcement is more difficult. Language barriers, unfamiliarity with local procedures, and reliance on nominee structures can amplify the risk.

How long do equity transfer disputes typically take to resolve?

Court proceedings in Vietnam can last several years. Arbitration may shorten the timeline, but it does not eliminate procedural complexity or enforcement challenges.

What is the single most common trigger?

Incomplete capital contribution is the most frequent root cause, followed closely by procedural defects in the transfer process itself.

Vietnam remains one of Asia’s most attractive investment destinations. But governance infrastructure has not kept pace with the speed of capital deployment. The good news is that most equity transfer disputes are preventable. They grow from structural weaknesses in ownership documentation, procedural compliance, and transaction design that are visible during due diligence, if you know where to look.

👉 Read the full guide from ANT Lawyers: 9 Red Flags of Equity Transfer Disputes Investors Miss During Due Diligence in Vietnam

Have you encountered ownership red flags during due diligence in Vietnam? What was the biggest surprise? Share your experience in the comments.

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Vietnam Company Formation Just Changed: Here’s What Foreign Investors Need to Know

 Starting March 1, 2026, Vietnam now allows foreign investors to register a company (ERC) before obtaining an Investment Registration Certificate (IRC). This reverses the previous sequence. However, market access conditions and project registration requirements still apply. The change simplifies the process but does not eliminate investment compliance obligations.

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Vietnam Company Formation in the ERC 1st ERA

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7 Crucial Steps to Appeal Against Trademark Registration Refusal in Vietnam

Introduction

Receiving a trademark registration refusal notice in Vietnam can make you feel unpleasant.

But, that is not the end!

You have the right to appeal against trademark registration refusal in Vietnam, and knowing the right steps can make all the difference.

Foreign companies often encounter unexpected complexities when navigating Vietnam’s trademark laws, potentially jeopardizing their brand protection strategy.

Fortunately, understanding the appeals process clearly and methodically can effectively turn around an initial refusal. This guide walks you through the essentials, answering the of appealing a trademark registration refusal.

Who Can Appeal Against Trademark Registration Refusal in Vietnam?

Any trademark applicant, local or foreign can appeal a trademark registration refusal decision issued by the Intellectual Property Office of Vietnam (IP Vietnam). This includes businesses, individuals, and legal representatives authorized by applicants.

What is an Appeal Against Trademark Registration Refusal in Vietnam?

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Guidance to Establish Representative Office in Vietnam

To establish representative office in Vietnam, the foreign traders have to follow the procedures as guided by the Commercial Law in Vietnam and the related decrees providing instructions of the law.

Establish Representative Office in Vietnam

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Note on Setting up a Representative Office in Vietnam

Setting up a representative office in Vietnam is considered one of the simplest forms of investment in Vietnam for foreigners.

Setting up a Representative Office in Vietnam under Vietnam Laws

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7 Key Ways Shareholder Dispute Attorneys Can Mitigate Conflict in Corporations

 In the dynamic environment of joint-stock companies, shareholder disputes are a common but complex challenge that can significantly impact business operations and stakeholder relationships. Shareholder dispute attorneys play a crucial role in addressing and resolving these conflicts. Whether it’s a disagreement over rights, interests, and obligations between shareholders or disputes involving the management team, shareholder dispute attorneys provide essential guidance and legal expertise. Here’s a closer look at how shareholder dispute attorneys can help navigate and resolve conflicts within a corporation.

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Protecting Your Business: The Role of Dispute Solicitors in Vietnam

In the dynamic business landscape of Vietnam, commercial disputes are an inevitable reality. Whether they stem from contractual disagreements, partnership disputes, or issues related to business transactions, these conflicts can pose significant challenges to the smooth operation of a company. In such situations, the expertise of dispute solicitors in Vietnam becomes invaluable, playing a crucial role in safeguarding the interests and reputation of businesses.

This article explores the landscape of commercial disputes in Vietnam and sheds light on how dispute solicitors contribute to protecting businesses in the face of legal challenges.

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10 Essential Insights into Vietnam Trademark Opposition Procedures for Brand Protection

In Vietnam’s rapidly evolving market, protecting your brand’s identity is more crucial than ever. The Vietnam trademark opposition procedures serve as a vital legal mechanism for preventing unauthorized trademark registrations that could harm your business. With the shortened opposition timeframe under Decree 65/2023/ND-CP, businesses must be more proactive in monitoring and challenging conflicting trademarks.

10 Essential Insights into Vietnam Trademark Opposition Procedures for Brand Protection

This article provides a brief guide to Vietnam trademark opposition procedures. Whether you are a business owner, an IP attorney, or a startup looking to safeguard your brand, this guide will help you navigate the trademark opposition landscape effectively.

Claude Chat: How much does it cost to file a trademark opposition?

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Cancellation Against of Trademark in Vietnam

It usually takes a long time and attempts for your company to gain the trust and belief from customers on your goods and trademark. However, if there is any other same trademark of the same goods like yours, it will easily make customer mistake or confuse and lead many damages to your company such as distinguishing capacity, losing reputation and sale decline.

Cancellation Against of Trademark in Vietnam

In fact, many international companies after co-operating with domestic companies to distribute or sell good, find that co-operators steal their trademark by registered trademark protection in National offices intellectual property. Because trademark is protected independently in each nation, it is easy for violators to do steal trademarks.

To protect your rights and benefits, you should request Vietnam IP authority to cancel violated trademark. With highly professional staff and great experience in IP aspect in Vietnam, ANT Lawyers would like to support you in cancelling against of trademark in Vietnam as follows:

Cancellation of Trademark in Vietnam

Under the Article 96 of the Law on Intellectual Property of Vietnam (IP Law), a certificate of trademark registration may be cancelled wholly or partly, by any third party’s request.

The applicant may request to the National Office of Intellectual Property (NOIP) in written form to cancel protection titles in the cases specified provided that they pay fees and charges.

Period for Filing Request of Cancellation Against of Trademark in Vietnam

To request cancellation of a trademark due to the Applicant’s bad faith: the period for lodging such a request is the whole term of a Protection Title.

To request cancellation of a trademark due to other legal reasons: the period for lodging such a request is within 5 years as from the granting date.

The Cases for Cancellation of Trademark in Vietnam

A certificate of trademark registration may be cancelled wholly or partly, by any third party’s request, in the following cases:

The registration applicant has neither had nor been assigned the right to register an invention, industrial design, layout-design or mark;

The subject matter of industrial property fails to satisfy the protection conditions at the time the protection title is granted.

Required Documents for Cancellation of Trademark in Vietnam?

Proofs (if any);

Power of attorney;

Written justification of the reason for request (clearly stating the serial number of the protection title, reason, legal grounds, contents of the request for termination or Cancellation of part of or the entire protection title) and relevant documents.

Time and Procedures for Cancellation of Trademark Protection?

In case a request for cancellation of trademark protection title is made by a third party, the NOIP shall notify in writing the third party’s opinions to the protection title holder, setting a time limit of two months from the date of notification for the trademark protection title holder to respond.

After considering opinions of the parties, the NOIP shall issue a decision on cancellation of part of the entire protection title or notify its refusal to cancellation the trademark protection title.

If disagreeing with the NOIP’s decision on handling of the request for Cancellation of the trademark protection title, the requester or an involved party may lodge a complaint about that decision or the relevant notice.

A decision on cancellation of a trademark protection title shall be published in the Industrial Property Official Gazette and recorded in the National Register of Industrial Property within two months from the date of its signing.

Source ANT Lawyers: Cancellation Against of Trademark in Vietnam

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