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.
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