Our long-standing GBA board member Dr. Oliver Massmann, Partner at Duane Morris Vietnam LCC, is sharing the most relevant legal updates with you. Dr. Oliver Massmann is an International Attorney at Law and a Financial Accountant and Auditor, with over 20 years of experience working as a commercial lawyer in Vietnam.
Dr. Massmann is volunteering as a legal advisor for the GBA from the beginning of the association. Our regards and thank you!
Legal updates by Dr. Oliver Massmann| October 2021
- Hanoi removes 28 administrative procedures in investment
- Regulations on e-commerce involving foreign traders supplemented
- Detailed policies needed to help firms get loans
- Amended law to make VN insurance market keep pace with int’l practices
- Finance Ministry asked to reconsider proposed gold export tax
1. Hanoi removes 28 administrative procedures in investment
Some highlines are as below:
Under Decision No.4324/QD-UBND by the municipal People’s Committee, 33 new procedures are issued and 53 others related to the establishment and operation of enterprises, bidding and non-refundable aid are amended.
The decision, which took effect on October 1, elaborates the issuance, amendment, supplementation and removal of administrative procedures in the establishment and operation of businesses in Vietnam.
It touches on Public Private Partnership investment, bidding to choose investors, official development assistance (ODA) capital, preferential loans of foreign sponsors and non-refundable assistance.
The establishment and operation of household businesses under the management of the Hanoi Department of Planning and Investment are also listed.
2. Regulations on e-commerce involving foreign traders supplemented
Here are some remarks:
Decree No.85/2021/ND-CP amending and supplementing several articles of Decree No.52/2013/ND-CP on e-commerce involving foreign traders has been issued.
Foreign traders and entities operating websites to provide e-commerce services with Vietnamese domains and language, and having over 100,000 transactions from Vietnam each year, must register e-commerce activities in line with regulations, establish representative offices or appoint authorized representatives in the country.
Their representative offices or authorized representatives must work with Vietnam’s State management agencies to prevent transactions of goods and services that violate the nation’s laws.
According to a study conducted by iPrice Group and SimilarWeb, the top 50 shopping sites’ web visits in Vietnam’s Map of E-commerce in the first six months reached more than 1.3 billion, the highest ever and up by 10 percent from the first quarter.
3. Detailed policies needed to help firms get loans
Some points stated as below:
According to the Vietnam Banks Association, the banking system has implemented many policies to support businesses according to Circular 01/2020 of the State Bank of Vietnam (SBV).
According to Pham Binh An, deputy director of HCM City Development Research Institute, firms are facing a dire need for capital, but the capital injection is facing many bottlenecks. The government and the central bank required commercial banks to reduce lending interest rates, not all banks have followed the request. According to a government policy on supporting employees and employers facing difficulties due to the COVID-19 pandemic, firms can borrow from the Bank for Social Policies at zero per cent interest to pay employees’ salaries, but it requires firms to have business plans and no bad debts at credit institutions.
The Alliance for Small and Medium Enterprises (SMEs) proposed the prime minister to carry out support policies for firms. It suggested the PM direct the Ministry of Finance to set up a VND100 trillion lending guarantee fund for SMEs to help the firms get access to loans without needing real estate collateral. To qualify for the policy, corporate borrowers must prove they have good operations with healthy financial statements before the pandemic besides having import-export or sales contracts and orders within the next six months.
4. Amended law to make VN insurance market keep pace with int’l practices
It is time to amend the Law on Insurance Business to help create a safe, transparent, sustainable and efficient insurance market that is close to international practices. Viet Nam is high potential for insurance services, but the development pace is still low compared to the region and world. The amended Law on Insurance Business is expected to take effect from 2023.
Some remarks here:
According to the Ministry of Finance, the draft amended law closely follows seven main contents, aiming at increasing autonomy for insurers in business activities. Management agencies will give priority to supervising and promoting transparency and healthy development of the insurance market.
This draft completes regulations on financial management models for businesses, completes insurance contracts, and ensures the principles of equality, transparency and safety. It also specifically encourages businesses to use and apply information technology to standardise insurance activities and transactions in the market, as well as supplementing regulations on developing and improving the quality of human resources in this field, and regulations on safety assurance, loss prevention and control, insurance fraud prevention, and improvement of dispute settlement.
In the first eight months of the year, the Vietnamese insurance market still recorded positive growth despite the COVID-19 pandemic. By the end of August, total assets in the insurance market were estimated at nearly VND643.6 trillion (US$28.3 billion), up 22.1 per cent year-on-year.
5. Finance Ministry asked to reconsider proposed gold export tax
Some remarks here:
A proposal by the Ministry of Finance to impose a 2 per cent tax on the export of gold products, with a gold content of under 95 per cent, has come under fire as traders claim the tax will cripple their ability to compete. They fear the move will only encourage gold smuggling out of the country.
The Ministry of Public Security said that it supported the tax as gold held a high price domestically at the moment, which would translate into a low amount of gold being exported anyway. They have suggested the Ministry of Finance take time to conduct further studies.
The tax would put Vietnamese gold traders in a disadvantageous position against other countries in the region, including Thailand, Indonesia, Malaysia, and Singapore, who currently impose no import or export tax.
Last year, gold exports accounted for $10 billion for Thailand, $8 billion for Singapore and $6 billion for Indonesia. Vietnam’s exports were $2.6 billion in the same period.