May 2021

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.

Bao Vo


Deal Update

Advising a UK based investment fund on its investment in a rooftop solar portfolio in Vietnam.
Advising G Group and G Pay on their Series A investment by KB Securities.
New Decree on Investment Law

On 26 March 2021, Decree  31/2021/ND-CP Guiding the  Implementation of the Law on  Investment (“Decree 31”) was adopted  by the Government to replace Decree  118/2015/ND-CP (“Decree 118”).  Notable updates from Decree 31 include:

Foreign Investment Sector  Restrictions

Decree 31 provides a list of business sectors that are subject to investment restrictions, which includes: (i) a list of prohibited business sectors; and (ii) a list of conditional business sectors for foreign investors. Prohibited sectors now include 25 business sectors (such as press activities and private investigation services). Conditional business sectors include 58 business sectors (including advertisement, education and logistics services). The market approach conditions for foreign investors are posted in the National Investment Portal ( Any business lines that are not included in the list (such as management consultancy) are open 100% foreign ownership on the same conditions as domestic Vietnamese investors.
Any business sectors that are not committed under international treaties to which Vietnam is a party, are subject to Vietnamese domestic laws. If Vietnamese law is silent on restrictions for a specific business sector, foreign investors will be treated on the same terms as local entities and will therefore, no longer need to obtain ministerial opinions (as per the previous regulations).
Furthermore, non-WTO-member foreign investors are entitled to receiving the same investment conditions as WTO member foreign investors, unless stated otherwise in any applicable law or treaty.

Additional Investment Conditions

In addition to sector restrictions, foreign investors are further subject to legal conditions relating to: (i) the use of land, labour, and natural resources; (ii) the production and provision of state exclusive business sectors; (iii) real estate; and (iv) equitization.

Project Suspension

An investment project may be suspended for up to 12 months at the discretion of the Government, if such investment project could impact national security and defence.

Termination of Facade Transactions

Licensing authorities may decide to terminate any investment project formed by facade transactions, as determined by a court or arbitration centre. Licensing authorities may also request a court to declare a transaction invalid.

Share Swaps

Decree 31 prescribes for the first time the ability for foreign investors to undertake share swaps with Vietnamese investee companies.

Outward Direct Investments

Decree 31 prescribes the process to apply for approval for outward direct investments and allows the filing of online applications for offshore investments with investment capital of less than VND20 billion.

Housing Decree Amendments

On 26 March 2021, the Government issued Decree 30/2021/ND-CP (“Decree 30”) on Amendments to Decree 99/2015/ND-CP on Guidelines for the Law on Housing (“Decree 99”). The aim of Decree 30 is to amend and update elements of Decree 99 in order to minimize and clarify administrative procedures related to housing. Some notable provisions are below.

Amendments to the evaluation process for housing projects: under Decree 30, all housing investment policy approvals are brought under the regulations on investment. In other words, policy approvals for housing projects now belongs to the competency of investment authorities including the Ministry of Planning and Investment and the relevant Departments of Planning and Investment.  The investment authority evaluating the housing investment policy must consult
with the Ministry of Construction or Department of Construction during the approval process, as the case may be.
Investor selection process for housing investment projects: Under Decree 30, the following investors are eligible to be project owners for commercial housing projects: (i) investors who have won bidding or auctions for land use rights to implement housing projects meeting the criteria under the Law on Housing; and (ii) investors having land use rights meeting the criteria as set out the Decree and the Law on Housing.
If there are multiple investors for a commercial housing project, the investors may collectively authorize one eligible investor or form an enterprise meeting the above criteria to carry out the procedure for recognition of housing construction project owner.
Removal of regulations related
to investment following the build – transfer (BT) method: all references to BT projects have been removed to consolidate projects performed following the build-transfer (BT) method under the single governance of the laws on public-private partnership (PPP) investment.
Stricter regulations on the handover of apartment maintenance funds: Under Decree 30, apartment project owners must open a funding account for the purpose of receiving and managing apartment building maintenance funds. This account must be notified to the provincial Department of Construction in writing. This new addition is aimed at preventing apartment project owners from abusing apartment maintenance funds whilst the apartment buildings are yet to be handed over to the management committee of the apartment building.
Tax Deferrals for 2021

In order to help alleviate some of the difficulties from Covid-19, the Government of Vietnam issued Decree no. 52/2021/ND-CP on 19 April 2021 (“Decree 52”) to defer the payment of value-added tax, corporate income tax, personal income tax and land rent for 2021 for eligible taxpayers.
The deferrals are applicable to enterprises, household business and individuals operating in several manufacturing and service sectors as set out in the Decree, such as agriculture, textiles, construction, real estate trading, transport and warehousing, health care, travel agencies,
tourism services, as well as microenterprises, and credit institutions and foreign bank branches providing assistance for enterprises, organizations and individuals affected by Covid-19 as prescribed by the relevant governmental authority.
More specifically, declaration for VAT is deferred from 3-5 months depending on the declaration period. Corporate income tax declared in the first and second quarters of 2021 will be deferred for 03 months.
The deadline for annual payment of land rent which are due in beginning of 2021 for direct lease of land by the State to enterprises, organizations, household businesses or individuals under decisions or contracts of competent authorities will be deferred for 06 months starting from 31 May 2021.

Vietnam Fact Box

According to the Ministry of Planning and Investment’s Foreign Investment Agency, as of 20 April 2021, Vietnam has attracted USD12.25 billion in foreign direct investment (FDI), which is equivalent to 99.3% of the FDI obtained in the same period in 2020. Foreign investors have invested in 53 provinces and cities nationwide, in which Long An Province took the lead with a total registered investment capital of nearly USS3.3 billion. Can Tho City and Ho Chi Minh City were second and third with over USD1.3 billion and USD1.1 billion, respectively.