Vietnam

In an effort to further improve the business environment, and create an equal playing ground for the community of the enterprises doing business in Vietnam, the Government of Vietnam has recently decided to amend its applicable law on enterprise, which came into force in 2005 (the Law on Enterprise 2005)

Currently, the 4th draft of the law on enterprise (the Draft Law on Enterprise) was issued, with focus on resolving the key following sets of issues:
Corporate establishment: In comparison with other countries in the region and in the world, the procedure for the corporate establishment in Vietnam, despite being considerably improved over the time, has been considered complicated, time- and cost-consuming. In addition, there remains great difference in the corporate establishment, share / equity transfer, establishment of representative office, etc… between the local enterprise and foreign-invested enterprise, causing huge difficulty for the foreign-invested enterprises.
Accordingly, the Draft Law on Enterprise is aimed at creating favorable conditions for the corporate establishment by removing requirements for the business conditions at the stage of applying for the enterprise registration certificate in order to shorten the time to obtain the enterprise registration certificates, and providing a uniform legal procedure in the corporate establishment, share / equity transfer… for both local enterprises and foreign invested enterprises.

Capital contribution timeline: Under the Draft Law on Enterprise, members of a limited liability company shall contribute in full their own capital within 90 days since the date of granting the enterprise registration certificate, instead of 3 years as stipulated under the Law on Enterprise 2005. With such provision, there is no longer difference in term of the capital contribution timeline between the limited liability company and the joint stock company.
Corporate governance model and decision-making structure: The Draft Law on Enterprise also provides an additional corporate governance system (one-tier corporate governance system) for the joint stock company besides the existing system (two-tier corporate governance system), with a view to making the corporate governance system in Vietnam adapted to good practices in the world.
With regard to the decision-making structure of the joint stock company, the Draft Law on Enterprise stipulates that the resolution of the General Meeting of Shareholders shall be passed by a number of shareholders representing at least 51 percent (instead of 65 percent under the Law on Enterprise 2005) for common matters and 65 percent (instead of 75 percent under the Law on Enterprise 2005) for key matters.
A new chapter on state-owned enterprises: Under the Draft Law on Enterprise, a new chapter on state-owned enterprises (the SOEs) is included. With 31 articles, the chapter on SOEs is drafted with the aim of (i) identifying role and mission of SOEs in Vietnam’s economy; (ii) identifying principle of protecting and rising state-owned capital in SOEs; (iii) providing in details organisation and implementation of the state-owned capital ownership rights; (iv) stipulating governance principles for SOEs; and (v) regulating information dissemination for the SOEs.
Restructure, dissolution and termination of the enterprises: Under the Law on Enterprises 2005, merger is only permitted for enterprises of the same legal form. This fact has been proved not to be suitable with the practices in Vietnam and caused obstacles for the enterprises wishing to expand their business by way of merger and acquisition.
The Draft Law on Enterprise provides that all enterprises of the same nature (instead of the same legal form) are entitled to merger and acquisition, and supplements a number of articles to instruct in detail procedures for merger and acquisition, corporate registration after merger and acquisition and on the procedure for dissolution of the enterprises.
The Draft Law on Enterprise is currently under the public comments and expected to be put into the agenda of the 8th session of the 13th National Assembly of Vietnam for further discussion and voting in late 2014.

Indochine Counsel
Unit 705, 7th Floor, CMC Tower
Duy Tan Street, Cau Giay District, Hanoi, Vietnam
Tel: (84) 4 3795 5261 | Fax: (84) 4 3795 5262
Email: vinh.luu@indochinecounsel.com
Website: www.indochinecounsel.com
Ho Chi Minh City (Head Office):
Unit 4A2, 4th Floor, Han Nam Office Building
65 Nguyen Du, District 1, Ho Chi Minh City, Vietnam
Tel: (84) 8 3823 9640 | Fax: (84) 8 3823 9641
Email: info@indochinecounsel.com

Related Articles by Firm
Trade remedies in Vietnam
On April 20, the Ministry of Industry and Trade issued a circular detailing provisions on trade remedies.
Guidelines for food safety rules further streamlining administrative procedures
On February 2, 2018, the government promulgated Decree No. 15/2018/ND-CP guiding some articles of the Law on Food Safety 2010 (Decree 15) ...
Vietnam: New law supports start-ups and SMEs
On June 12, 2017 the National Assembly of Vietnam issued Law No. 04/2017/QH14 on supporting small and medium-sized enterprises (the SME Support Law), which took effect on January 1, 2018 ...
Vietnam: Licensing procedures for foreign investors clarified
The simplification of administrative procedures has now been widely acknowledged as an aim of the Vietnamese government as part of its wider plan to attract more foreign investment ..
Vietnam: New regulations on liquor trading
On September 14, 2017, the government promulgated Decree No. 105/2017/ND-CP on liquor trading (Decree 105) ...
Vietnam: New decree for registration of security measures
The government recently issued a decree to streamline the procedures and requirements for registration of security measures, and improve information disclosure for secured assets ...
VIETNAM: New regulations on technology transfer
The Law on Technology Transfer No. 80/2006/QH11 (the 2006 LOTT) was issued on November 29, 2006 when Vietnam was preparing for its accession to the WTO ...
Vietnam Labelling goods circulated in the Vietnamese market
Since its promulgation in 2006, Decree No. 89/2006/ND-CP on labelling products is based on legal documents that, so far, have been invalidated ...
New regulation on title retention in Vietnam
The retention of title, a legal concept recognised throughout the world, has now officially become one of the security measures for the performance of obligations in Vietnam ...
Vietnam Update – Q2, 2017
Including electronic visas, IPRs taxes, import/export rules, new tax regulations for farmland use, management of investment projects and commercial mediation ...
An obvious advance in resolving “.vn” domain name disputes
In a previous article regarding the challenges of resolving “.vn” domain name disputes in Vietnam, we mentioned the recent increase in the number of .vn domain names and the increase in the number of .vn domain name disputes...
Vietnamese citizens allowed to game at casinos
On January 16, 2017, Vietnam’s government issued a decree that allows citizens to game at casinos. Decree No. 03/2017/ND-CP on casino business operations (Decree 03) took effect on March 15, 2017...
Vietnam update
The start of 2017 saw a handful of new regulations that affect business in Vietnam. Indochine Counsel have briefed them and outlined the most important changes from each new regulation, ranging from the Civil Code to minimum wage and from accountancy ...
New capital adequacy regulations in Vietnam
The State Bank of Vietnam (SBV) recently released regulations requiring banks and foreign bank branches in Vietnam to maintain a minimum capital adequacy ratio (CAR) of 8 percent from 2020...
Administrative sanctions in the securities market
On November 1, 2016 the Vietnamese government issued a new decree on sanctions against administrative violations in the securities market...
Pharmacy activities
More than 10 years since its implementation, Vietnam has revised and supplemented the regulatory framework for the pharmaceutical industry to reflect the realities of practice ...
Vietnam Update
Vietnam has passed new regulations governing forex agents, tax, food safety and other aspects which affect conducting business in the country.
Transfer of a registered domain name in Vietnam
Pursuant to Article 49 of the Law on Telecommunications No. 41/2009/QH12, holders of a registered national ...
New regulation on conditions for securities investment and business on the Vietnamese securities market
On July 1, 2016, the Vietnamese Government issued Decree No. 86/2016/ND-CP regulating the conditions ...
New guidance on PPP in Vietnam
Decree No. 15/2015/ND-CP of the Government on public private partnership investment forms (the ‘PPP’) went into ...
Increased penal liabilities for crimes relating to food safety and hygiene
Food safety and hygiene are on red alert in Vietnam. According to local papers and media, food poisoning happens almost everyday ...
New regulation of Vietnam on re-organisation of credit institutions
On December 31, 2015 the State Bank of Vietnam (SBV) promulgated Circular No. 36/2015/TT-NHNN regulating the ...
Client Alert - Vietnam
New regulations affect business in Vietnam. They cover topics ranging from social insurance to stock market actions to real estate trading floors.
New guidance for real estate brokers and trading floors
On December 30, 2015 the Ministry of Construction issued Circular No. 11/2015/TT-BXD (Circular 11) regulating the issuance of real estate ...
Guidance on mortgages of residential houses yet to be built
On December 9, 2015 the State Bank of Vietnam issued Circular No. 26/2015/TT-NHNN guiding on procedures for mortgage and ...
Vietnam Alert - January 2016
New regulations on food safety inspection, stock market actions and offshore direct investment affect the way of doing business in Vietnam. This edition also looks at how the US Foreign Account Tax Compliance Act affects international banking and local accounts ...
Resolving disputes over domain names in Vietnam
This article focuses on resolving disputes over domain names which are identical or confusingly similar to registered trademarks/trade names in Vietnam. According to ...
Enterprise registration in Vietnam – IPRs contributed as capital and IPRs as part of an enterprise name
Similar to the former 2005 Law on Enterprises, the new Law on Enterprises No. 68/2014/QH13 dated November 26, 2014 (New LOE 2014) allows the contribution of ...
New decree on enterprise registration
On November 26, 2014 the National Assembly of Vietnam adopted a new law on enterprise (2014 Enterprise Law) which takes ...
Indochine's Vietnam Client Alert
The September Client Alert contains updates on topics from new rules for intellectual property enforcement to a review of more changes in the new enterprise law which are likely to affect many businesses in Vietnam.
Relaxation of restrictions on share transfer by the founding shareholders under the new enterprise law of Vietnam
One of the notable points of the new law on enterprises, dated November 26, 2014 (Law on Enterprise 2014), is the relaxation of restrictions on the founding shareholders’ ordinary shares during the ...
New Vietnam bank guarantee provisions
On June 25, 2015 the State Bank of Vietnam promulgated Circular No. 07/2015/TT-NHNN on bank guarantees, effective as of August 9, 2015 (Circular 07), to replace Circular No. 28/2012/TT-NHNN dated October 3, 2012 ...
New investment law – new provisions on licensing procedures for foreign investors
On November 26, 2014 the National Assembly of Vietnam adopted a new law on investment (2014 Investment Law) which will take effect on July 1, 2015 and replace the current ...
New Regulations Affecting Business in Vietnam
Vietnam has issued new regulations that affect PPPs, derivative securities, cross border provision of public information and employment. Here are the most important changes from each new regulation.
Vietnam approves new decree on PPP investment form
On February 14, 2015, the government of Vietnam enacted Decree No. 15/2015/ND-CP (Decree 15) regulating the investment in the ...
Vietnam: Client Alert for March 2015
This issue discusses the new decree governing notary offices in Vietnam and the new Ministry of Finance circular detailing the payment forms for enterprises in the country. Moreover, it gives some tips on legal networking in Southeast Asia.
New provisions for foreign investors and conditional investment sectors under the law on investment 2014
On November 26, 2014, the Vietnamese National Assembly passed a new law on investment (LOI). The LOI appears to make …
Notable changes of the new law on real estate business
real estate business No. 66/2014/QH13 (the New REB Law), which will take effect on July 1 2015 and replace the law on real estate …
Enterprise Law 2014 – an institutional breakthrough for Vietnam’s economy
On November 26, 2014, the same promulgation day of Investment Law 2014, the National Assembly of Vietnam promulgated a new enterprise law with many positive new regulations and meaningful …
Foreign exchange control of foreign direct investment
On August 11, 2014 the State Bank of Vietnam enacted Circular No. 19/2014/TT-NHNN (Circular 19) guiding the foreign exchange control of foreign direct investment activities in Vietnam …
E-commerce in Vietnam
Vietnam has been ranked 15th for Internet users internationally, however only 20 percent of those users in Hanoi and Ho Chi Minh City use the internet for online shopping1. The Vietnam E-Commerce and …
New procedural rules for setting up a general information website and social network
Under the Vietnamese regulations of Internet service and online information, social network is defined as an information system that provides its users with such …
Remarkable changes in FOREX Rules
On July 17th, 2014 the Government issued Decree No. 70/2014/ND-CP (Decree 70) guiding the implementation of a number of articles of Ordinance No. 28/2005/PL-UBTVQH11 dated December …
More restrictions on multi-level marketing in Vietnam
On May 14th, 2014 the Government issued Decree No. 42/2014/ND-CP on the management of multi-level marketing activities (Decree 42) to replace the previous Decree No. 110/2005/ND-CP, …
New guidance on labour contracts
Decree No. 44/2013/ND-CP, dated May 10th 2013, (Decree 44) addresses a number of issues as set out under the Labor Code 2012. Some of the issues addressed include: (i) rules for participating in compulsory …
New schedule for foreign owned capital to implement trading and related activities
On May 21st, 2007 the Ministry of Trade (currently Ministry of Industry and Trade (MOIT)) promulgated Decision No. 10/2007/QD-BTM to announce the schedule for implementation of trading …
For unified PPP legislation in Vietnam
With the goal of developing a comprehensive and unified legal framework for public-private partnership (PPP) model for infrastructure projects, …
Significant points of the Land Law 2013
It has been over ten years since the promulgation of Land Law No.13/2003/QH11, dated November 26th, 2003 (Land Law 2003). …
Re-registration of FIEs in Vietnam
Foreign-invested enterprises (FIEs) have, on the whole, been considered an attractive channel for investment in the Vietnam market …
Significant changes on tax administration
On July 22nd, 2013 the Government issued Decree No. 83/2013/ND-CP (Decree 83) detailing a number of articles of the Law on …
Development trends in the regulation on goods distribution and trading activities conducted by foreign traders
To provide guidance to Vietnam’s commitments made upon its accession to the WTO on market openings, the Government …
Some changes of rules in distribution and trading sector for foreign invested enterprises
On April 22nd, 2013 the Ministry of Industry and Trade issued Circular No. 08/2013/TT-BCT on trade in goods by foreign invested …
Related Articles
Private businesses: Besieged and under pressure
Domestic private businesses are under pressure from state invested and foreign enterprises, plus other updates.
Keeping your mobile number for a lifetime
A new law facilitates the easy movement of subscribers from one service provider to another.
Payments regulatory landscape in APAC: Six things to be aware of
Important considerations for payment service providers operating in Asia Pacific.
Related Articles by Jurisdiction
New capital adequacy regulations in Vietnam
The State Bank of Vietnam (SBV) recently released regulations requiring banks and foreign bank branches in Vietnam to maintain a minimum capital adequacy ratio (CAR) of 8 percent from 2020...
Managing the relationship with special managers in Vietnam
Successful cooperation between a special manager and the acquirer requires the involved parties to know, name and manage this relationship ...
Dispute Resolution Special Report
In the latest issue of Asian-Counsel, we uncover the lofty aims of several arbitration centres in the region. We also receive comprehensive updates from a host of leading law firms, and the SIAC, as to the state of dispute resolution ...
Latest Articles
Private businesses: Besieged and under pressure
Domestic private businesses are under pressure from state invested and foreign enterprises, plus other updates.
Keeping your mobile number for a lifetime
A new law facilitates the easy movement of subscribers from one service provider to another.
Payments regulatory landscape in APAC: Six things to be aware of
Important considerations for payment service providers operating in Asia Pacific.