Asia Counsel Insights
Asia Counsel Insights provide an overview of the key trending legal and business issues in Vietnam and how they may impact your business. Please enjoy your read.
Vietnam is experiencing the greatest challenge in tackling the Covid-19 pandemic. We are doing our small part to help. We have donated VND20 mil to the Vietnam Government’s vaccination fund and VND20 million to Red Cross Vietnam to assist those in need. Keep strong and safe!
Decree 70/2021/ND-CP dated 20 July 2021 of the Government (“Decree 70”), which will take effect on 15 September 2021, regulates cross-border advertising services.
Under Decree 70, the provision of cross-border advertising services is broadly defined as “the use of electronic information sites by foreign individuals and organisations to provide advertising services from the systems located outside Vietnam to users in Vietnam and generate revenue in Vietnam.”
Cross-border advertising service providers are required to inform the Ministry of Information and Communications of their contact details and contact point in Vietnam at least 15 days before providing services in Vietnam. Upon a request of the authorities, service providers are further obliged to: (i) remove illegal contents from advertisements; and (ii) provide information on any suspected illegal content.
Credit Information Service
On 10 June 2021, the Government issued Decree 58/2021/ND-CP regulating the provision of information services (“Decree 58”).
Key changes under Decree 58 are detailed below.
Under Decree 58, the conditions for credit information service companies (“CIS Companies”) to obtain a certificate of satisfaction of conditions for a credit information operation (“SC Certificate”) will be amended to the following effect:
- CIS Companies will be required to maintain a server in Vietnam..
- The management personnel of CIS Companies will no longer need to hold a university degree (bachelor or higher level) majoring in economics, accounting, finance, banking or IT. Instead, a university degree in any field will be acceptable, as long as the management personnel in question have the required experience in finance, banking, accounting, auditing or IT.
SC Certificate Revocation
Decree 58 also sets out new circumstances in which the SC Certificate of a CIS Company may be revoked, including:
- Failure to commence the provision of credit information services within 12 months from the issuance of the SC Certificate; and
- Upon the dissolution, division, consolidation or merger of a CIS Company. Any new company established upon a division, consolidation or merger will consequently have to apply for a new SC Certificate if it intends to provide credit information services
Decree 58 will take effect on 15 August 2021..
On 1 April 2021, the Vietnamese Government issued Decree No. 47/2021/ND-CP guiding certain regulations of the Law on Enterprises (“Decree 47”). Taking immediate effect, Decree 47 has removed several reporting obligations applicable to social enterprises.
Under Decree 47, social enterprises receiving annual financial support and sponsorship are no longer required to submit annual social impact assessment reports to the relevant provincial authorities within 90 days from the end of every fiscal year. Further, social enterprises now have up to 10 business days (instead of the prior mandated 5 business days) from the date of receiving sponsorship to notify the provincial authorities of the sponsorship. Further, under Decree 47 it is now also optional to secure the signature of sponsors on donor acknowledgement letters. In addition, changes to notified sponsorships no longer require amending the respective notification.
Decree 47 further confirms that social enterprises are now permitted to pursue a division, separation, amalgamation or merger with enterprises that are not social enterprises.
Decree 54/2021/ND-CP of the Government dated (and effective from) 21 May 2021, introduces requirements on preliminary environmental impact assessments (“Decree 54”). Pursuant to Decree 54, entities required to conduct a preliminary environmental impact assessment (“PEIA”) include investment projects that are subject to environmental impact assessment (“EIA”) and fall within one of the following cases:
- Public investment projects (excluding: (i) emergency public investment projects within the national target program; and (ii) component projects forming part of a project for which the authorized level has made decisions on the investment policy, investment preparation tasks or master planning/zoning tasks);
- PPP projects;
- Investment projects that require investment policy approval (under the Law on Investment);
- Projects for which an investment registration certificate (“IRC”) must be issued, except in cases where an IRC is issued at the request of an investor.
Decree 54 further sets out that a PEIA must comprise of:
- An assessment of the suitability of the project implementation site compared with the national environmental protection strategy, the national environmental protection master plan, as well as items on environmental protection in regional master planning, provincial master planning and other related master planning;
- An identification and forecast of the main environmental impact of the investment project based on the scale, production technology and implementation site of the project;
- An identification of environmentally sensitive factors at the location of the project;
- An analysis, evaluation and selection plan on the scale, production technology, waste treatment technology, project implementation site and measures for minimizing the environmental impact; and
- An identification of the main environmental issues and the scope of the environmental impact that needs to be kept in mind during the implementation of the environmental impact assessment.
Decree 47 imposes stricter cross ownership limitations on subsidiaries of state-owned companies, namely by prohibiting the following actions:
- Jointly contributing capital to establish new companies;
- Jointly subscribing to new shares or contributing capital to existing companies; and
- Jointly acquiring shares or equity of existing shareholders or equity owners.
Under previous decrees, the above actions were only prohibited if the result of such actions was that the state-owned subsidiaries in question owned 51% or more of the charter capital or total number of ordinary shares in the relevant company. Given that Decree 47 has now removed the 51% threshold, any of the aforementioned movements are outright prohibited.
Vietnam Fact Box
Four top leaders of Vietnam have been elected in 2021:
- Party General Secretary: Nguyen Phu Trong
- President: Nguyen Xuan Phuc
- Chairman of the National Assembly: Vuong Dinh Hue
- Prime Minister: Pham Minh Chinh
- The cabinet of the Government remains unchanged in quantity with 27 ministers. The National Assembly also reappointed Mr Nguyen Hoa Binh as the Chief Justice of the Supreme People’s Court.
The cabinet of the Government remains unchanged in quantity with 27 ministers. The National Assembly also reappointed Mr Nguyen Hoa Binh as the Chief Justice of the Supreme People’s Court.