Lawyer in Vietnam Oliver Massmann Legal Update December 2015

1. Lawyer in Vietnam Oliver Massmann Legal Update December 2015
1. Decree No. 99/2015/ND-CP issued by Government detailing and guiding the implementation
of a number of articles of Law on Residential Housing (“Decree 99”)
Issuance date: 20 October 2015
Effective date: 10 December 2015
Decree 99 is to guide in details the house ownership; housing projects, development of commercial
houses, official-duty houses, houses for resettlement; management and use of houses for resettlement,
villas, condominiums; sale of old state-owned houses; transactions on residential housing; house
ownership in Vietnam of foreign individuals, organizations; etc.
In accordance with Decree 99, domestic individuals, organizations, households, overseas Vietnamese,
foreign individuals, organizations will be granted house ownership certificates if they fully have:
(i) documents proving the lawful construction of houses; and
(ii) valid documents proving that they are subjects entitled to own houses in Vietnam (under
separately statutory requirements for each subject).
Foreign individuals and organizations are only permitted to own houses (including condominiums,
detached houses) in commercial housing construction investment projects, except for areas that need
to ensure national defense and security.
With respect to ownership term, first buyer will be entitled for fifty (50) year term subject to one
extension of not more than fifty (50) years. Secondary buyer will enjoy the remaining terms from the
former owners applicable to foreign individuals/organizations; or long term and stable use applicable to
Vietnamese individuals/organizations and Vietnamese residing overseas.
A foreign organization is entitled to own house with term not exceeding term indicated in investment
(registration) certificate and this term will be considered for extension. In case the investment
(registration) certificate does not have term then the house ownership certificate will be indicated as
“non-fixed term”.
In addition, the Law on Residential Housing 2014 provides a list of sources of capital for commercial
residential housing projects which excludes all offshore loans (e.g. loans from offshore credit
institutions). Such list also limits the sources of capital for commercial residential housing developers.
Decree 99 further provides that if the developer fails to comply with the requirements under Law on
Residential Housing 2014 on capital mobilization, such capital mobilization will not be enforceable and
the developer (i) will be subject to administrative sanctions, and (ii) is required to make compensation to
the capital contributor as well. This restriction reduces the ability of real estate developers to raise
capital effectively and makes direct influences on the competitiveness of such developers. Residential
housing developers must then be well-prepared for financial planning purposes.

2. 2. Decree 118/2015/ND-CP issued by the Government guiding Law on Investment 2014 (“Decree
118”)
Issuance date: 12 November 2015
Effective date: 27 December 2015
M&A
New LOI expressly addresses that foreign investors contributing capital or purchasing share/capital in a
domestic enterprise are not required to obtain Investment Registration Certificate. A registration of such
contribution/purchase to the licensing authority is nevertheless required under either following
circumstances:
(i) the business lines of the domestic enterprise fall in the conditional sectors applied to the foreign
investors. However, the checklist of conditional sectors applicable for foreign investors – which
was proposed in the latest draft Decree -- is no more annexed to the official Decree.
(ii) the shareholding of the foreign investor in such domestic enterprise is 51% or more. Particularly,
registration is only required if the contribution/purchase of foreign investors cause the
shareholding of foreign investors to increase (i) from below 51% to 51% or more, or (ii) any
percentage if the shareholding of foreign investors are 51% or more.
Also, it is also worth noting there is another negative change in comparison with the latest draft Decree.
Namely, "DPI's obligation to initially check the registration application within three (3) working days
from the filling date and to get back with the only-once-challenge" has been removed. The official
Decree 118 just says that DPI will issue the notification (i.e. approval) to the investor in question within
15 days from the date of receipt of a completely sufficient application. That is to say, the registration
application may be subject to a number of challenges by DPI and further delay in the absence of the
statutory time-frame.
Investment conditions and incentives
Decree 118 allows foreign investors who are not a member of WTO and invest into Vietnam to be
eligible for the provisions applicable for WTO’s members, unless otherwise regulated by domestic laws
and treaties.
Putting that aside, towards the service lines announced on National Information Website for foreign
investment and non-committed service lines licensed to conduct by investment registration agency
(“IRA”) previously, the IRA will consider granting a license for Investors without ministerial-level
opinions.
Hence, there will be available information sources of investment conditions for the reference of the
foreign investors’ own cases hereinafter:
- WTO Commitment for Commercial Services of Vietnam;
- National Information Website for foreign investment;
- Precedents.

3. Principles of implementation of investment procedure
Under Decree 118, the IRA does not have the right to request other dossiers not being specified in the
New Law on Investment 2014 and Decree 118. It also clearly specifies that the investors have right to
request information of investment list and other relevant information and the competent agencies are
obliged to provide such requested information no later than five (5) days from the date of receiving the
request in writing.
Project transfer
According to Decree 118, when a project is terminated, the enterprise conducting this project will still be
maintained thanks to the separation between Investment Registration Certificate and Enterprise
Registration Certificate.
3. Decree No. 108/2015/ND-CP issued by the Government detailing and guiding the
implementation of some articles of Law on Excise Tax and Law on amending, supplementing
some articles of Law on Excise Tax (“Decree 108”)
Issuance date: 28 October 2015
Effective date: 1 January 2016
From 01 January 2016, gasoline of all kinds, naphtha, reformed component and other finished products
will not be subject to excise tax. The votive paper being kid toys, teaching aids will also not be subject to
this kind of tax.
Goods being carried into zones which are permitted to apply the regulations for non-tariff zones having
residents and without hard fence will be subject to excise tax.
Decree 108 has detailed principles and methods of determining the excise taxable price applicable to
each goods group, services group, such as imports (except for gasoline of all kinds), trading in golf,
casino, etc.
It is also worth noting that from 01 January 2016, taxpayers who already paid excise tax for imported
excise tax-liable goods (except for gasoline) will be permitted to deduct that amount at the import stage
when determining payable excise tax when selling their goods into inland.
4. Decree No. 114/2015/ND-CP issued by the Government on amending, supplementing Article
21 of Government’s Decree No. 29/2008/ND-CP regulating industrial parks, export processing
zones and economic zones (“Decree 114”)
Issuance date: 9 November 2015
Effective date: 25 December 2015
Decree 114 amends, supplements some exclusive provisions applicable to export processing zones and
export processing enterprises.

4. Export processing zones and export processing enterprises are permitted to be entitled to provisions
applicable to non-tariff areas, except for the exclusive incentives applicable to non-tariff areas of border
economic zones.
Moreover, from 25 December 2015, export processing enterprises that are granted permits for goods
trading and goods trading-related activities in Vietnam are not required to establish their own branches
outside the export processing enterprises, export processing zones to conduct these activities.
5. Decree No. 115/2015/ND-CP issued by the Government detailing a number of articles of Law
on Social insurance with respect to compulsory social insurance (“Decree 115”)
Issuance date: 11 November 2015
Effective date: 1 January 2016
From 01 January 2016 to 31 December 2017, the monthly salary on which social insurance premium is
based includes salary and salary-based allowances as recorded in the labor contract.
From 01 January 2018, the monthly salary on which social insurance premium is based includes salary,
salary-based allowances and other added amounts as recorded in the labor contract.
Cases of retrospective collection and retrospective payment of monthly salaries which compulsory social
insurance premiums are based on comprise of the following circumstances:
(i) Adjusting (i.e. increasing or decreasing) the employees’ monthly salary; and
(ii) Making supplementary payment for the period of outstanding social insurance premiums of
employees who are working abroad under labor contracts.
In addition, Decree 115 also guides in detail a number of regimes of compulsory social insurance
entitlements such as: maternity regime for female employees as surrogate mothers and intended
mothers; retirement regime; and survivorship allowance regime.
6. Decree No. 122/2015/ND-CP issued by the Government providing for region-based minimum
wage levels in 2016 for employees of enterprises, cooperative union, cooperatives,
cooperative groups, farms, households, individuals and agencies and organizations employing
laborers under labor contracts (“Decree 122”)
Issuance date: 14 November 2015
Effective date: 1 January 2016
The Government has increased the region-based minimum wage by around 12% in comparison with that
in 2015. Accordingly, from 01 January 2016, the region-based minimum wage levels is:
Region-based minimum wage
for 2016
VND/month
Region-based minimum wage
for 2015
VND/month
Region I 3,500,000 3,100,000
Region II 3,100,000 2,750,000

5. Region III 2,700,000 2,400,000
Region IV 2,400,000 2,150,000
In addition, a "trained worker" as defined under Article 5.2 of Decree 122 is entitled to receive wage
that is at least 7% higher than the minimum wage above.
7. Decree No. 124/2015/ND-CP issued by the Government on amending, supplementing a
number of articles of Government’s Decree No. 185/2013/ND-CP on administrative sanction
of violations in trade activities, production of and trading in counterfeit or prohibited goods
and protection of consumer’s interests (“Decree 124”)
Issuance date: 19 November 2015
Effective date: 5 January 2016
Decree 124 supplements some entities which are subject to administrative sanction of violations in
trade activities, production of and trading in counterfeit or prohibited goods and protection of
consumer’s interests, including: representative offices, branches of foreign traders in Vietnam; and
representative offices of foreign trade promotion organizations in Vietnam.
Many new acts of violations together with relevant sanctions of up to VND20,000,000 are added to the
list, including but not limited to:
(i) acts of restricting or hindering consumers from unilaterally terminating the already-signed
contracts within ten (10) days from the signing date of contracts in case the business
organizations, individuals provide improperly, incompletely information; or
(ii) acts of forcing or requiring the consumers to pay the expenses for termination of the already-
signed contracts in case of signing remote-concluded contracts.
Further, violations in the sector of e-commercial operation would be subject to a monetary sanction of
up to VND50,000,000.
Acts of hoarding and speculation of goods, biding of goods, services and commercial franchise with signs
of competition restriction acts are subject to regulations on investigation and settlement of violation in
competition sector.