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The Agreement on Investment among the Governments of the Hong Kong Special Administrative Region of the People’s Republic of China and the Member States of the Association of Southeast Asian Nations (“AHK-IA”) introduces investment protection and transfer guarantees for investments between Vietnam, Laos, Myanmar, Singapore, and Thailand and Hong Kong from 17 June 2019.1

Hong Kong and ASEAN cross border investors will enjoy investment safeguards in the form of fair and equitable treatment and full protection and security, compensation for expropriation, and compensation for losses and damages relating to armed conflict, civil strife, revolution, or a state of emergency. Cross border transfers related to covered investments will be allowed ‘freely and without delay.’ In order to take advantage of the AHK-IA, party investors must receive investment approval from the appropriate authority for their investment. Covered investments include property, shares, stocks, bonds and debentures, intellectual property rights, claims to money or to any contractual performance, and business concessions with financial value. (“Investments”).2

Investment protection

The AHK-IA protects Investments from discriminatory treatment as well as provides fair and equitable access to legal or administrative proceedings and full physical protection and security.3 Investors may be eligible for compensation where Investments are expropriated, or damaged by armed conflict, civil strife, revolution, or a state of emergency.4

Guarantee on investment transfers and returns

Cross border transfers related to Investments are to be made “freely and without delay” including:

  1. Contributions to capital;
  2. Profits, capital gains, dividends, royalties, licence fees, technical assistance and technical and management fees, and interest;
  3. Proceeds from the total or partial sale or liquidation;
  4. Remuneration of personnel engaged from abroad;
  5. Payments made under a contract, including a loan agreement; as well as
  6. Other payments, including, expropriation payments, compensations for losses and damages relating to armed conflict, civil strife, revolution, or a state of emergency; or payments arising out of the settlement of a dispute.5

Transfers shall be allowed in a freely usable currency, at the market exchange rate. However, freedom to transfer may be limited in cases involving: bankruptcy or insolvency, securities trading, criminal offences, financial regulatory oversight, on-going adjudication, taxation and social insurance, and employee severance entitlements.6

Next steps

Some terms of the AHK-IA remain undecided, in particular, guidelines applicable to investor-state dispute settlements will be determined by the parties by 17 June 2020, unless otherwise extended.7

The AHK-IA will enter into force for the remaining signatories: Brunei Darussalam, Cambodia, Indonesia, Malaysia, and the Philippines at a later date, following their respective domestic ratification process.

The AHK-IA is part of a wider process of economic integration and trade liberalisation between Hong Kong and ASEAN, as initiated by the ASEAN – Hong Kong, China Free Trade Agreement (“Hong Kong-ASEAN FTA “). The AHK FTA entered into force on 11 June 2019 for Hong Kong, Vietnam, Laos, Myanmar, Singapore, and Thailand and will reduce or eliminate customs duties across various industries, as well as permit greater market access for services.

Hong Kong is the leading foreign investor into Vietnam for 2019 with USD 5.08 billion invested from January through May of this year.8 This number is expected to grow as investors take advantage of the AHK-IA and the Hong Kong-ASEAN FTA in the years to come


Please do not hesitate to contact us if you have any questions related to the AHK-IA, the Hong Kong-ASEAN FTA or ongoing trade and investment between Hong Kong and ASEAN

1 The Agreement on Investment among the Governments of the Hong Kong Special Administrative Region of the People’s Republic of China and the Member States of the Association of Southeast Asian Nations, signed on 12 November 2017 in Manila, Philippines.
2 Ibid, Article 1(e). Note that “investment” does not include an order or judgment entered in a judicial or administrative action or an arbitral award made in an arbitral proceeding; nor does it include claims to money that arise solely from: (i) commercial contracts for sale of goods or services; or (ii) the extension of credit in connection with such commercial contracts.
3 Ibid Article 3, 4, 5
4 Ibid Article 10 & 11.


Frederick Burke is a member of Baker McKenzie’s Global Policy Committee, comprised of the Firm’s Managing Partners globally, responsible for driving the overall strategy of the Firm. He is also the Managing Partner of our Baker McKenzie offices in Vietnam, more particularly in Hanoi and Ho Chi Minh City. He has more than 30 years’ experience practicing in the areas of corporate law, real estate, international trade and is highly regarded for his work on foreign investment projects in Vietnam and China for key players in property development, trade, IT/C, and project finance, among other areas. Mr. Burke is the go-to advisor for big deals in Vietnam’s flourishing industries including: renewable energy, agribusiness, airlines, hotels, resorts and tourism and large scale infrastructure projects. He is currently the representative of the American Chamber of Commerce in Vietnam to the Prime Minister’s Advisory Council on Administrative Reform in Vietnam and he has been recognized by the Ministry of Justice of Vietnam for his “Outstanding contributions in the field of international legal cooperation”. Mr. Burke is consistently ranked as a Leading Lawyer in Corporate / M&A by leading legal publications in Vietnam (Legal 500 AP 2007-2018; Chambers and Partners AP 2012-2018; IFLR1000 2010-2018).


Thanh Vinh Nguyen is a partner in Baker McKenzie's Ho Chi Minh City office. Prior to joining the Firm, he practiced tax and consultancy work for two international accounting firms and worked as a compliance counsel for an international insurance company. He has co-written Business Operations in Vietnam, published by The Bureau of National Affairs, Inc.