1. DECISION NO. 1205/2017/QD-UBCK
“Amending the regulations of margin trading“
Decision No.1205/QD-UBCK (“Decision 1205”), dated 27/12/2017 of Vietnam State Securities Commission on amendments to the Regulations guiding margin trading promulgated with Decision No. 87/QD-UBCK, is effective as of 02/01/2018.
Decision 1205 supplements a case in which enterprises subject to criminal prosecution are prohibited from margin trading.
Concurrently, the new regulations restrict the scope of subjects which are prohibited from margin trading due to administrative penalties for taxes. Accordingly, Decision 1205 only prohibits the companies, which commit tax evasion, tax fraud, or refuse to comply with the enforcement of tax administrative decisions. As per previous regulations, companies are only prohibited from margin trading upon receiving the conclusion of tax agencies regarding the violation of tax laws.
2. THE 2017 LAW ON AMENDMENTS AND SUPPLEMENTATION TO SEVERAL ARTICLES OF THE LAW ON CREDIT INSTITUTIONS
“Perfecting the legal framework for handling weak credit institutions“
On 20/11/2017, the National Assembly passed the 2017 Law on Amendments and supplementation to several articles of the Law on Credit institutions, which takes effect as of 15/01/2018..
Accordingly, the State Bank of Vietnam may consider early intervention in credit institutions, which are yet to be placed under special control, in order to better handle such weak credit institutions.
In addition, the Law also stipulates methods to restructure credit institutions subject to special control, including: (i) Recovery plan; (ii) Merger, consolidation, transfer of all the shares or capital contributions; (iii) Dissolution plan; (iv) Mandatory transfer plan; (v) Bankruptcy plan.
3. DECREE 09/2018/ND-CP
“Amending and supplementing regulations on foreign investment in distribution field“
Decree No. 09/2018/ND-CP (“Decree 09”) dated 15/01/2018 of the Government providing detailed regulations on the Commercial Law and the Law on Foreign Trade Management regarding sale of goods and other activities directly related to sale of goods of foreign investors and foreign-invested business entities (“foreign investor”) in Vietnam, takes effect on the same date and replaces Decree No. 23/2007/ND-CP.
Decree 09 provides for several new key points as follows:
- Foreign investors are not required to apply for Business licenses for importation, wholesale and distribution activities except for oil and grease.
- Grant of Business licenses is now under the authority of Department of Industry and Trade (previously granted by the provincial People’s Committee); Processing time is reduced to 10 working days. In case of consulting the Ministry of Industry and Trade, the maximum time is 01 month.
- For rice; sugar; photographed items; books, newspapers and magazines, investors may only apply for a Retail Business License. At the same time, they need to meet the conditions of having retail premises in the form of supermarkets, mini supermarkets, convenience stores.
- To operate in the retail sector, foreign investors must apply for a License to establish a retail outlet, even for the first retail outlet. When setting up the second retail establishment and so forth, an Economic Needs Test (ENT) is required, unless the retailer meets the following three conditions: (i) an area of less than 500 m2; (ii) is located in a commercial center; (iii) is not a convenience store, mini supermarket.
Compared to previous regulations, Decree 09 partly simplifies the conditions and procedures for investment and business in trading activities and related activities, creating a favorable environment for foreign investors; however, certain “barriers” still remain to control investment intp the domestic market.
4. DECREE 08/2018/ND-CP
“Amendments, supplementation to conditions for commercial franchising“
Specifying Decision No. 3610A/QD-BCT of the Ministry of Industry and Commerce on the plan for reduction and simplification of investment and business conditions, on 15 January 2018, the Government promulgated Decree No. 08/2018/ND-CP (“Decree 08”) amending a number of decrees related to investment and business conditions under the management of the Ministry of Industry and Trade, taking effect on the same date.
Accordingly, Decree 08 abolished many business conditions in the fields of petroleum, tobacco, electricity, franchising, e-commerce, chemicals, industrial explosives, food … Especially for the franchising sector, there are significant changes:
- For the Franchisor: Traders will be allowed to franchise when the business system expecting to be franchised has been in operation for 1 year.
- Abolishing conditions for the Franchisee: Traders receiving commercial rights are not required to register their business in conformity with their franchise rights; there are no restrictions on goods and services permitted to be franchised.
- In reality, there are many cases where the Franchise Contract is invalid because one of the parties did not meet the franchise conditions. Specifically, the franchisee signs the Franchise Contract before registering the appropriate business lines, which results in the franchise contract being invalid if any dispute arises.
Thus, expanding the scope of subjects involved in franchise relations by eliminating some of the conditions for franchising is one of the turning points in implementing the policies on reduction, simplification of business conditions to create a favorable business environment for investors and enterprises.
5. DECREE NO. 141/2017/ND-CP
“Regional minimum wage to be increased from 180,000 to 230,000 VND in 2018“
Decree No. 141/2017/ND-CP (“Decree 141”) dated 07/12/2017 of the Government, on regional minimum wage for employees working under labor contracts, takes effect as of 25/01/2018.
According to Decree 141, the regional minimum wage for employees will be increased as follows:
- Region I: from 3.750.000 VND/month to 3.980.000 VND/month;
- Region II: from 3.320.000 VND/month to 3.530.000 VND/month;
- Region III: from 2.900.000 VND/month to 3.090.000 VND/month;
- Region IV: from 2.580.000 VND/month to 2.760.000 VND/month.
Therefore, there is an average increase of 6.5%, in which Region IV has the highest increase rate of 7%.
6. CIRCULAR NO. 01/2018/TT-NHNN
“New regulations on special loans to credit institutions under special control“
Circular No. 01/2018/TT-NHNN (“Circular 01”) dated 26/01/2018 of Vietnam State Bank (“SBV”), on special loans to credit institutions under special control. Circular 01 takes effect as of 29/01/2018, replacing Circular No. 06/2012/TT-NHNN.
One of the changes of Circular 01 is expanding the scope for credit institutions under special control to be granted special loans by the Co-Operative Bank of Vietnam and the Deposit Insurance of Vietnam, instead of only by SBV and other credit institutions appointed by SBV as per previous regulations.
In addition, Circular 01 permits SBV to grant special loans with preferential interest rates up to 0% in the cases stipulated in Article 5 of Circular 01.
The overdue interest on the principal of special loans is 130% the interest on the principal of special loans prior to becoming overdue, unless the overdue loan is a refinancing loan.
7. CIRCULAR NO. 20/2017/TT-NHNN
“New regulations on the sale of receivables from financial leasing contracts“
Circular No. 20/2017/TT-NHNN (“Circular 20”), dated 29/12/2017 of the State Securities Commission of Vietnam on sale of receivables from financial leasing contracts replacing Circular No. 09/2006/TT-NHNN (“Circular 09”), shall take effect as of 12/20/2018.
One of new changes of Circular 20 is supplementing the subjects permitted to purchase debts from financial lease. Accordingly, not only domestic enterprises and individuals but also foreign enterprises and individuals are permitted to purchase debts from financial leasing.
In addition, Circular 20 stipulates new regulations on the principles of sale of receivables. Accordingly, the seller may only transfer the right to reclaim the debt to the purchaser. Except for the case where the purchaser is a financial company or financial leasing company, the seller has the right to transfer both the property rights and the right to reclaim the debt. Concurrently, if the financial leasing contract provides for security measures, the transfer of the right to reclaim debts shall also include such measures.
However, the new regulations prohibit the sale of receivables in the following cases: (i) Selling to the subsidiary company of the seller; (ii) Financial leasing contracts which stipulates that debts are not allowed to be sold; (iii) The receivables used as a security for the performance of a civil obligation at the time of sale of receivables, unless the secured party agrees in writing on the sale of receivables.
“New regulations on logistics service business“
Decree No. 163/2017/ND-CP (“Decree 163”), dated 30/12/2017 of the Government providing regulations on logistics service business, shall take effect as from 20/02/2018 and replace Decree No. 140/2007/ND-CP (“Decree 140”) specifying the Commercial Law on business conditions for provisions of logistic services and limitation of liability of logistic service providers.
Accordingly, in terms of business criteria of logistics services, Decree 163 requires the trader in particular logistics services to satisfy the criteria of investment and business for such services prescribed by law.
Traders may conduct a part or all of the logistics business activities by electronic means connected to the Internet, mobile telecommunications networks or other open networks.
Decree 163 also regulates the limitation on liability of traders providing logistics services. In cases where the relevant laws stipulate limitation on liability of the trader providing logistic services, the provisions of relevant laws shall be applied. In case the relevant laws do not specify the limitation of liability, the limitation shall be agreed upon by the parties. In case the parties have no agreement:
- If the customer does not provide prior notice of the value of goods, the maximum limitation on liability shall be 500 million VND for each claim;
- If the customer, who has provided prior notice of the value of goods, and such value is confirmed by trader engaging in the business of logistic services, the limitation on liability shall not exceed the value of the goods. This is different from the regulations of Decree 140, whereby the limitation on liability in such case is the total value of the goods.