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I. Decree number 84/2015/ND-CP on investment monitoring and evaluation (“Decree 84”)
Sector: Investment_ Enterprise
Effective date: 20 November 2015
Decree 84 clarifies implemented subjects and stipulates the principles of monitoring and evaluation of investment activities. In addition, Decree 78 expands its scope of application, including objects and sorts of monitored investment.
- As of the effective date, not only investment projects, but also investment programs would be monitored and evaluated;
- Various kinds of monitored and evaluated investment are supplemented, such as: PPP investment projects; a list of investment programs and projects using State capital- without limiting the minimum capital rate; the offshore direct investment and community evaluation now stipulated in this Decree;
- The responsibilities of monitoring become an initial part beside the regulations on content of such activities, which are allocated to the investors, authorities and related specialized agencies; and
- Separated chapters regarding cost and capability of organizations and individuals performing monitoring consultants in evaluation of investment projects are newly stipulated;
This Decree provides new and innovative detailed guidelines for monitoring and evaluating investment, in comparison to the old Decree No. 113/2009/ND-CP on investment monitoring and evaluation.
Such clearer regulations can practically increase the responsibilities of investors and relevant authorities; also guarantee the effectiveness of monitoring and evaluation activities.
II. Decree No. 83/2015/ND-CP on stipulation of outbound investment (Decree 83)
Sector: Investment_ Enterprise
Effective date: 25 September 2015
Following the Law on Investment 2014, Decree 83 has been issued to provide detailed guidance for outbound investment activities as follows:
- Each investment project is granted a project number, which shall be also outbound investment certificate number;
- Appraisal process is removed. Project registration procedure is divided into 2 types: projects subject to outbound investment policy of the Prime Minister (PM) and projects not subject to outbound investment policy of the PM. Procedure for projects required outbound investment policy of the PM is similar to appraisal process under the Law on Investment 2005. Projects not subject to outbound investment policy shall require confirmation of SBV if their capitals transferring to foreign countries are: (i) in foreign currencies, and (ii) equal to 20 billion VND;
- Investors are entitled to transfer money, assets to foreign countries to establish investment project before receiving Investment Registration Certificate. However, the value of such money and assets is restricted to be less than 5% of project capital or 300.000 USD (whichever is smaller); and
- Investors have to report about the implementation of projects quarterly and to more authorities.
Procedure of registration is simplified and investors can transfer capital and assets to foreign countries before receiving IRC. This shall allow investment projects to be implemented more quickly and effectively.
However, investors are now obliged to frequently report the implementation of the project in writing as well as through online update. This might create more responsibilities for the investors.
III. Decree No. 78/2015/ND- CP dated 14 September 2015 on Enterprise Registration (Decree 78)
Sector: Investment_ Enterprise
Effective date: 1 November 2015
Decree 78 provides guidelines for enterprise registration procedures under the Law on Enterprise 2014. Some notable points of the Decree are as follows:
- Online registration is now available. As such, the entire procedures for registering the formation of an enterprise or the changes in enterprise information may be carried out at the National Business Registration Portal (https://dangkyquamang.dkkd.gov.vn).
- The timeline for enterprise formation registration and for registration of changes in enterprise information is significantly reduced (from 5 to 3 working days).
- The registrar agency must not request the enterprise to submit additional documents other than registration documents prescribed by laws.
Decree 78 is expected to significantly remove the administrative burdens from the backs of the investors and enterprises and improve the investment climate of Vietnam
IV. Decree No. 76/2015/ND-CP providing detailed regulations on the implementation of a number of articles of the law on real estate business (Decree 76)
Sector: Real estate
Effective date: 01 November 2015
Below are some salient points of Decree 76:
- Legal capital required for real estate trading is minimum VND20 billion for all types of projects. Financial statement or bank acknowledgement is no longer required to prove the financial capacity with respect to the fulfilment of legal capital;
- Model contracts for key real estate transactions are enclosed in the Decree for the parties to follow; and
- Regarding transfer of the entirety or part of the project, procedures and detailed forms for application dossier and timeline for the approval process are specified.
Procedures for registration of the real estate business and project transfer are simplified and less time-consuming
The model contracts, while causing no restriction to freedom of contract, will help reduce disputes in the market.
V. Decree No. 82/2015/ND-CP dated 24 September 2015 regarding visa exemption for Vietnamese people residing overseas and foreigners who are spouses, children of Vietnamese people residing overseas or of Vietnamese citizens (Decree 82)
Effective date:15 November 2015
Decree 82 provides detailed guidance for procedures of issuance of visa exemption certificates and its conditions:
- Regarding conditions for visa exemption, the applicant’s visa or equivalent document must be valid for at least one year;
- Regarding the format of certificate, it shall be granted in the passport or a detached certificate in some certain circumstances;
- The competence and processing procedures of authorities are more detailed than before. For example, processing procedure of overseas authority is separated from the Immigration Administration; and
- The duration of certificate of temporary residence for people using certificates of visa exemption is extended to 6 months.
Although the processing time stays the same as Decision 135/2007/QD-TTg on the promulgation of the regulation on visa exemption for Vietnamese residing overseas, the procedure is now much clearer for applicants to follow.
The extension of certificate of temporary residence from 90 days to 6 months is considered to be a big support for Vietnamese people residing overseas to come back home country.
VI. Decision No. 41/2015/QD-TTg on selling shares in blocks (Decision 41)
Sector: Governmental management/ Corporate
Effective date: 15 September 2015
Decision 41 deals with withdrawal of state capital of unlisted public companies from joint-stock companies that have not been listed or registered on Upcom (Hanoi Stock Exchange), the ownership of which is represented by Ministries, ministerial agencies, Governmental agencies , People’s Committees of central-affiliated cities and provinces, state-owned corporations, and companies whose 100% charter capital is held by the State. The striking features of Decision 41 can be summarized as follow:
- the sales of shares in blocks must be implemented via Stock Exchange by audit method with the following information: number and price of each block, status of investors attending audit, solutions in case of an unsuccessful audit. Each block must not be less than 5% of the company’s charter capital;
- Starting price of the block, which is determined by a valuation organization, equals to the starting price of a share multiplied by the quantity of shares in a block; and
- According to the Decision to approve the plan for selling shares in blocks issued by a competent authority and regulations on selling shares in blocks, the owner’s representative agency, the Chairperson of the Board of members, the President of the enterprise shall request the representative to cooperate with Stock Exchange in formulating the enterprise’s own statute on selling shares in blocks.
Decision 41 sets out a clear procedure and conditions for the withdrawal of the state in joint-stock companies, which is considered to be a concession of the Government in intervening into the market. As a result, a free market without control of the Government is constructed step-by-step.
VII. Decree 79/2015/ND-CP on penalties for administrative violations against regulations on vocational training (Decree 79)
Effective date: 01 November 2015
Decree 79 provides detailed regulations of administrative fines upon the violations related to: vocational school establishment; organization of vocational education quality control; vocational education organizations, student recruitment, program syllabus, class size, bridge programs and educational association in vocational education; test, examination; issue and utilization of certificates, degrees.
- The limitation for the maximum fine is maintained at 75,000,000 VND for individuals, 150,000,000 VND for organizations;
- There are not many changes in the rate of fines imposed on the violation of regulations, except for some certain violations in registration of vocational activities, maintenance of ratio of full-time teachers/ lecturers, and others; and
- Beside a number actions which are newly added to the scope of administrative fine application, Decree 79 provides more remedial measures applicable to the violators, such as transferring illegal benefits obtained from the violations, cancellation of the decisions on admission, returning collected amounts to learners.
Financial penalties seem not to be strong enough to prevent individuals and organizations from violating regulations on vocational training. Hence, Decree 79 imposes more intensive preventative measures to violators to enhance the protection for the rights of learners as well as vocational education organization.
VIII. Circular No. 139/2015/ TT – BTC providing guidance on guarantee for foreign loans on lent by the Government (Circular 139)
Sector: Banking and finance
Effective date: 01 November 2015
Circular 139 provides detailed guidance on the procedures for guarantee of loans, settlement of secured assets, and responsibilities of relevant Parties concerning the foreign loans on-lent by the Government with the following remarkable regulations:
- The execution of a guarantee contract depends on the involvement of the Ministry of Finance (MOF). If the MOF directly undertakes on-lending, a credit institution satisfying certain conditions set out by this Circular shall be nominated by the obligor to act on behalf of the Ministry of Finance (MOF) to perform loan guarantee operations. Upon approval by the MOF, a Security Service Agreement shall be executed between the MOF, the obligor and the credit institution. If the MOF authorizes an on-lending agency to perform on-lending, the loan guarantee contract shall be signed between such agency and the obligor under the scope of on-lending authorization between the MOF and the agency;
- The total value of secured assets must be equivalent to 100% of the loan; and
- A loan guarantee contract must be registered with competent authority by the obligor regardless of the secured assets not required to be registered by the laws. If the obligor fails to register, either the disbursement process might be suspended or the total loans might be immediately recovered before the due date.
Decree 78/2010/ND-CP on on-lending of the Government’s foreign loans took effect as of 2010 with only one article on the loan security causing numerous issues during its implementation. On the other hand, Circular 139 offers solutions for this issue by forming a detailed legal basis for guarantee for foreign loans on-lent by the Government.
IX. Circular No. 15/2015/TT-NHNN guiding foreign currency transactions on foreign currency market for credit institution permitted to make foreign currency transactions (Circular 15)
Sector: Banking and Finance
Effective date: 05 October 2015
Circular 15 replaces a numbers of decisions providing guidance on foreign exchange transaction to regulate the exchange rates, terms, means and documents of the transaction, form of the transacting agreement as well as the responsibility of the authorized credit institutions and departments belonging to the State Bank of Vietnam concerning the foreign exchange transactions.
The most important point of the new Circular is the stipulation on the latest payment date of foreign exchange transactions. Particularly, regarding the spot transaction in swap transaction, the parties could agree on the payment date which is subject to be within two days from the transacting date. Meanwhile, regarding the forward transaction in the swap transaction, the payment date must not be later than the last date of transacting term which lasts from 3 to 365 days from the transacting date.
Circular 15 shall deter the foreign exchange hoard in financial market.
X. Decree No. 85/2015/ND-CP providing detailed regulation on a number of articles of the Labor Code on policies for female employees (Decree 85)
Effective date: 15 November 2015
Decree 85 provides in details state policies on female employees, which requires employers employing multiple female employees to conduct necessary works with the purpose of improving the working conditions, healthcare and also supporting female employees in taking care of their children.
In return, employers may enjoy notable policies as follows:
- Employers investing in building nurseries, kindergartens and healthcare facilities which meet statutory requirements may be entitled to enjoy incentives under the current policies encouraging socialization in education, occupational training and medical health as provided by the laws, e.g. exemption of land lease fees or corporate income tax incentives (tax rate, tax exemption and reduction);
- Employers may also be entitled to incentives as stipulated in the Law on Residential Housing if investing in constructing residential housing for employees; and
- Additional expenses for female employees may be included in deductible expenses for income tax purposes as provided by the laws.
Decree 85 shows the effort of the Government in encouraging employers to practically ensure and improve working conditions for female employees, through which employers may receive preferential support from the State of Vietnam, by ways of. tax incentives, upon satisfaction of certain conditions stipulated by the laws.
By Vietnam Law Insight
Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us at info@LNTpartners.com