You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

May 11, 2020

Amendments Proposed to Vietnam’s Law on Investment and Law on Enterprises

Subscribe to Updates

Amended versions of Vietnam’s 2014 Law on Investment and 2014 Law on Enterprises, two of the key laws governing companies (including foreign companies) doing business in Vietnam, will be considered at the 9th session of the National Assembly in May 2020. If passed, the draft laws will come into effect on January 1, 2021.

The amended laws are currently in the proposal stage. The Ministry of Planning and Investment recently submitted drafts, as verified by the Economic Committee of the National Assembly, to the Standing Committee of the National Assembly for its opinions.

Proposed Amendments to the Law on Investment

According to Notice No. 3530/TB-TTKQH of the Secretary General of the National Assembly of Vietnam dated March 30, 2020, the Standing Committee, at its 43rd session, concluded the following points on proposed amendments to the Law on Investment:

List of Conditional Business Lines

One of the proposed amendments to the Law on Investment is an update of the list of conditional business lines. Specifically, 12 business lines will be removed (including commercial arbitration, franchising, and logistics services), 19 business lines will be amended, and six new business lines will be introduced: architectural services, data center services, electronic identification and authentication services, import press distribution services, fishing vessel registry, and training crew members of fishing ships. The Standing Committee recommended further review to assess the possible impact of these changes.

Debt Collection Services

There are still two streams of opinion with respect to debt collection services. Some argue that the provision of such services should be prohibited, while others support the notion that debt collection services are still necessary, but strict conditions/requirements for provision of such services must be established. The Standing Committee agreed to submit both opinions to seek further opinions from the National Assembly.

Proposed Amendments to the Law on Enterprises

On March 10, 2020, the Economic Committee issued Report No. 1850/BC-UBKT14 to report to the Standing Committee some key proposed amendments to the Law on Enterprises. The Standing Committee offered no further comments on these amendments.

Corporate Seals

Under proposed amendments to reduce unnecessary administrative procedures and costs relating to corporate seals, companies would have the right to decide whether to have a seal or not, and would no longer be obliged to notify the relevant licensing authority of their seal samples. Instead, the seal samples could be published on company websites, or electronic signatures could be used.

Protection of Minority Shareholders

Under the current Law on Enterprises, a shareholder or a group of shareholders holding at least 10% (or a smaller percentage as stipulated in the charter of the company) of the total ordinary shares has the right, among others, to request the convening of a General Meeting of Shareholders in some specific cases and ask the Board of Inspection to investigate issues relating to the management and administration of the company. A proposed amendment would reduce this percentage to 5%, to enhance protection of the minority shareholders’ rights.

Private Placement of Bonds by Non-Public Companies

A proposed amendment would add new regulations on conditions and procedures for private placement of bonds by non-public companies. Under these regulations, non-public companies would only be allowed to offer corporate bonds to professional securities investors, such as commercial banks and securities investment funds.

***

Should you have any questions or concerns, please reach out to us at [email protected] for further assistance.

Related Professionals

Practices

Banking and Finance

Corporate/M&A

Location

RELATED INSIGHTS​ 

February 21, 2025
As Vietnam continues its government restructuring, including the merging of several key ministries, the country is signaling that mergers of provinces could be next. Conclusion 126-KL/TW of the Politburo and Secretariat, issued on February 14, 2025, sets out several tasks for continuing to streamline the political system in 2025, notably including, among others, the following: Elimination of intermediate administrative levels, and mergers of provincial units: The Government Party Committee is tasked with researching and planning for the elimination of intermediate administrative levels (district levels); reorganizing the commune level with structures, functions, duties, powers, and responsibilities aligned with the new organizational model; and proposing the merging of some provincial administrative units. A report to the Politburo is required by Q3 2025. Reorganization of police structure: The Central Public Security Party Committee is tasked with leading and coordinating the implementation of a three-tier police organization, eliminating the district-level police. Judicial system reforms: The Central Party Committees of the Supreme People’s Court and the Supreme People’s Procuracy are tasked with researching and advising on the organizational model for courts and procuracies, and proposing amendments and supplements to relevant party mechanisms and state laws, with the aim of eliminating the district level. A report to the Politburo is required by Q2 2025. Implications of Merging Provinces The merging of provinces could bring positive impacts as well as new challenges. The expected benefits include: Administrative efficiency and cost saving: Reducing the number of administrative units could lead to more efficient governance and decision-making processes, as well as lower administrative costs due to fewer government offices and personnel. Economic development: Larger administrative areas can benefit from better allocation of resources and infrastructure development. Larger provinces may also attract more investment due to increased economic potential and market size. Improved service delivery: Public services could improve
Read More
February 19, 2025
On January 3, 2025, the Bank of the Lao PDR (BOL) issued Decision No. 11/BOL on the Use of Foreign Currency in Lao PDR, taking effect on the same date. This decision sets out the rules for using foreign currency in Laos and ensures the Lao kip (LAK) remains the primary currency while allowing flexibility for international transactions. Key points in the decision are outlined below. Permissible Activities for Foreign Currency The decision provides that authorized entities can use foreign currency as a secondary currency to LAK in the setting of cost and pricing structures, announcing and advertising prices, and making or receiving payments for goods and services that are imported or have manufacturing inputs imported from other countries. Otherwise, LAK is the only permitted currency. The decision also stipulates that foreign exchange must be conducted only via authorized commercial banks or foreign exchange markets. The exchange rate for setting costs, pricing structures, announcing and advertising prices, and making and receiving payments for goods and services in foreign currency must match the exchange rate announced by commercial banks from time to time. Businesses Allowed to Use Foreign Currency The decision allows certain businesses and organizations to use foreign currency. These entities are divided into two groups: those that need approval before using foreign currency, and those that can use it immediately. Enterprises that can use foreign currency with BOL approval include: Businesses that export goods or services and entities that lease or obtain concessions from the government, generating revenue in foreign currency through commercial banks. Enterprises that provide international freight and passenger transportation services. Enterprises that provide services related to cross-border logistics and warehousing. Enterprises located at international borders and airports, such as duty-free shops and restaurants. Enterprises that have obligations to make payments in foreign currency to other
Read More
February 17, 2025
Thailand’s draft Emergency Decree on Technology Crimes Suppression, which we covered in a client alert in January 2025 primarily addressed to telecom operators and financial institutions, is expected to have significant implications for a wide range of business operators.  The draft emergency decree has already been approved by the cabinet but may undergo further developments as it continues in the legislative process. In this article, we will highlight the material impacts of the draft emergency decree on overseas and local fintech operators. Expanded Definition of “Technology Crimes” The definition of “technology crimes” now includes the following acts of forgery or alteration: Forging or altering the identity of individuals and biometric characteristics by utilizing computer or communication systems or other electronic means to commit offenses. Forging or altering symbols, trademarks, or seals of groups (e.g., foundations, community enterprises) or juristic persons, including acts by juristic persons using individuals or juristic persons as nominal directors or shareholders, regardless of whether such individuals or legal juristic persons reside in Thailand. Forging or altering digital or online platforms, regardless of the platform’s location or legal status. Individuals who conspire, utilize, assist, or support the commission of these offenses will face the same penalties as the principal offender. Business Operator Definition The scope of “business operators” is now expanded to cover various fintech and digital asset operators beyond those under the Payment Systems Act (PSA). The draft emergency decree now includes the following operators, whether they are legally authorized or not: Business operators under the PSA and business operators who operate “as if” they are payment system operators Business operators under the Royal Decree on Digital Asset Businesses or business operators who operate “as if” they are digital asset business operators. Foreign exchange business operators. Disclosure and Exchange of Information Business operators must disclose
Read More
February 11, 2025
On January 24, 2025, the prime minister of Vietnam issued Decision No. 232/QD-TTg, approving the proposal for establishment and development of a carbon market in Vietnam. The decision establishes a compliance mechanism for greenhouse gas (GHG) emitters and creates opportunities for investors interested in carbon trading in Vietnam. Market Development Roadmap Decision 232 establishes a phased approach to developing Vietnam’s carbon market, with the following ambitious milestones: Before June 2025 (preparation period): The legal framework for trading of emissions quotas and carbon credits and a carbon-credit offset exchange mechanism will be developed, along with the necessary infrastructure for organization and operation of the carbon-credit market. From June 2025 to the end of December 2028 (pilot period): A pilot domestic carbon exchange will be launched, with continued legal refinements. From 2029 (official launch period): The carbon market will be fully operational. Carbon Market Structure and Trading Mechanisms Vietnam’s carbon market will function as a centralized, government-regulated exchange, trading two main assets: GHG emissions quotas (allowances) allocated to regulated emitters, which can be traded or auctioned; and Carbon credits generated from domestic and international projects that are certified for trading. The carbon credits generated from international projects include those originating from international exchange or offset-crediting mechanisms such as the Clean Development Mechanism (CDM), the Joint Credit Mechanism (JCM), and Article 6 of the Paris Agreement. The National Registration System for GHG emissions quotas and carbon credits will be primarily developed and operated by the Ministry of Natural Resources and Environment. Transactions of GHG emissions quotas and carbon credits will occur on the domestic carbon exchange, managed by the Hanoi Stock Exchange, and will follow a centralized process where verified quotas and credits receive unique domestic codes for trading and participants must have depository accounts. The Vietnam Securities Depository and Clearing Corporation
Read More