ASIA COUNSEL INSIGHTS

June 2017

Asia Counsel Insights provide an

overview of the key trending

legal and business issues in

Vietnam and how they may

impact your business. Please

enjoy your read.

Key Dates

• The minimum wage is

increased to VND 1,300,000

/Month starting from 01July

2017.

• HCMC telephone prefixes

have changed and callers

will need to dial 82, 83, 84 or

85 for HCMC area code

depending on the telecoms

service provider.

Oil & Gas On 25 May 2017, the Government

issued Decree 67/2017/ND-CP on

administrative penalties in the oil & gas

sector which takes effect from 10 July

2017. This Decree sets out the

following:

• A business establishment may be

imposed a fined from VND60 million

to VND100 million if it mixes other

chemicals into petroleum.

• At the downstream level, VND200

million is the highest penalty if a

business establishment is not licensed

to provide LPG bottle gas re-filling,

borrows or leases the license from

another party.

• At the upstream level, the highest

penalty for violation in petroleum

exploration and exploitation is VND2

billion.

• A business establishment which

adjust petroleum price outside the

permitted range shall be fined from

VND 40 million to VND 60 million.

Public Company Corporate Governance

On 6 June 2017, the Government

issued Decree 71/2017/ND-CP guiding

corporate governance of public

companies. Decree 71 will replace

Circular 121/2012/TT-BTC from 1 August

2017. New provisions include:

• All public companies must have

internal corporate governance rules,

which previously applies to large-

scale public companies only. The

rules are developed by the board

and approved by the general

meeting of shareholders (GMS).

• A public company must notify

shareholders of a GMS at least 20

days in advance of the meeting,

compared to 5 days under Circular

121.

• With effect from 1 August 2020, the

chairman of the board of

management may not be an

executive director of the same

public company.

• With effect from 1 August 2019, a

board member of a public

company may not be a board

member of more than 5 other

companies.

• A public company having its

operational model changed must

notify the State Securities

Commission and the Securities

Exchange, and disclose

information within 24 hours of the

GMS’s resolutions on such change.

• An unlisted company selecting the

model of having an internal

auditing committee under the

board as stipulated under Article

134.1(b) of the Law on Enterprises

must have at least 1/5 of the board

members as independent

members.

• The board of a listed company

must appoint at least one person in

charge of corporate governance,

who may also be the company

secretary.

About Asia Counsel Asia Counsel is a dynamic international corporate and commercial law firm dedicated to serving clients in Vietnam. Our partners have over eight years of

experience in working on complex and challenging matters in Vietnam. We are committed to helping clients achieve their business strategies and providing

outstanding legal services.

If you have any questions on any of the items discussed above, please do not hesitate to contact us.

Christian Schaefer

Managing Partner

E christian@asia-counsel.com

Minh Duong

Partner

E minh@asia-counsel.com

Asia Counsel Vietnam Law Company Limited, Level 5, 18 HBT Building, 16-18 Hai Ba Trung Street, Ben Nghe Ward, District 1, Ho Chi Minh City

ASIA COUNSEL INSIGHTS

June 2017

Competition Proposed Changes to Competition Law

Ministry of Industry and Trade has

uploaded the proposed changes to

current Competition Law no.

27/2004/QH11 dated 3 December 2004

on its website for public comment. Key

proposed changes include:

• Foreign enterprises established and

operated under foreign laws are

also now regulated by the new

draft.

• The new draft recognizes

determination of market shares of

enterprise on relevant markets

based on quantity of goods and

services beside sales turnover,

purchase turnover as prescribe

under the current Competition Law.

• Notification of economic

concentration is required for the

following: (a) investment in which

one out of two parties has combine

market share over 20% of the

relevant market; or (b) the value of

economic concentration

exceeding 300 billion VND or one

out of the two parties has total

revenues in Vietnam exceeding 500

billion VND.

The National Assembly is expected to

debate the new draft in May 2018.

Business Draft Decree on automobile

conditions for manufacturing,

assembly and import

The Ministry of Industry and Trade

has proposed a draft decree on

conditions for automobile

manufacturing, assembly and

import. Some notable points are as

follows:

• Automobile manufacturers,

assemblers and importers would

be responsible for recalling

automobiles with technical

problems, regulation violations

at their own costs.

• Automobile importers would no

longer be required to have a

power of attorney for distributing

automobiles in Vietnam.

• Automobile assemblers,

manufacturers and importers

would need to satisfy conditions

on facilities, workforce,

occupational safety and health,

etc. in order to obtain a

certification to conduct business.

• Automobile manufacturers and

assemblers must have testing

roads of at least 500m which

meet other technical

requirements under the draft

decree.

Vietnam Fact Box Vietnam's GDP for the first quarter

of 2017 was 5.1%, the lowest in

two years. The target rate of

growth for 2017 is still at 6.7%,

which Vietnam hopes to achieve

through macroeconomic

stabilization, controlling inflation,

recovering tax arrears, attracting

more foreign investment,

accelerating administrative

reforms, and boosting tourism

development.

Inflation has also decreased to

3.19% in the past quarter, the

lowest since September of 2016.

Based on findings from

MarketIntello, the inflation rate

may fall below 3%. This is said to

be caused by the falling prices of

fresh produce, oil, and petroleum

products.

Securities Penalties

On 27 April 2017, Ministry of Finance

issued Circular 36/2017/TT-BTC

amending, supplementing some

articles of Circular 217/2013/TT-BTC

guiding the sanction on

administrative violations in the

securities sector. The main points

are:

(i) For a violation of regulations on

application dossiers for

registration of a public

company (submitting dossier

one month to twelve months

behind the deadline), the

Circular clarifies that the

sanction is calculated from the

date when the minutes on

such violation is issued.

(ii) The violation “Failing to submit

a registration dossier for a

public company” is applicable

after the State Securities

Commission has issued an

official letter to request such

public company to submit the

registration dossier or

supplement the registration

dossier but the requested

company fails to do so.

Gaming Business of Electronic Prized Gaming for foreigners

On 2 June 2017, the Ministry of Finance issued Circular No. 57/2017/BTC amending

and supplementing Circular No. 11/2014/TT-BCT to align with the new Decree No.

175/2016/ND-CP on business of electronic prized gaming for foreigners.

Additionally, enterprises which have been permitted to duly operate the electronic

prized gaming before 15 February 2017 may continue such business with the gaming

machines they duly purchased at the time, up until they replace them with new

machines.

This Circular takes effective from 17 July 2017.