A Research Study Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Business Administration.

Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1993.

Recently on 29th of December 1992 the Law on Foreign Investment in Vietnam attained five full years of existence. During five years the foreign investment in Vietnam has grown at an increasing rate. Among three forms of foreign investment, joint venture is the most common form in Vietnam. Joint venture negotiation as a first step of forming a joint venture plays an important role and creates many effects on joint venture operations later. Many potential joint venture projects could not be implemented because of failed or incomplete negotiations. This research is an attempt to explore the main difficulties of joint venture negotiation, to assess the different styles of negotiation of European and Vietnamese, and also to examine the legislation and the legal system towards joint venture in Vietnam. According to the findings of this research, the obstacles developing during negotiation are mostly related to cultural differences,languages and knowledge gap between joint venture partners. Main areas of discussion during negotiation are valuation of capital contribution and financial issues. Problems related to the legislation and the legal system are mainly incomplete or deficient under-law documents and complicate approval process for setting up joint ventures in Vietnam. Suggestions for Foreign and Vietnamese negotiators are mainly aimed at practical behaviours in carefully preparing for negotiation and overcoming obstacles developing during negotiation. Suggestions for improving the legislation and simplifying the legal system towards setting up joint ventures are also made. All suggestions are given to ensure success for joint venture negotiations in Vietnam.