PROPOSED PLAN TO RESUME BUSINESS OPERATIONS IN HO CHI MINH CITY

LEGAL UPDATE

The fourth wave of the COVID-19 outbreak has significantly impacted Ho Chi Minh City (HCMC), with almost 300,000 positive cases and 12,000 fatalities as of half September 2021.

As per Directive No. 16 dated 31 March 2020, stringent lockdown measures have been applied since 16 August 2021. As a result, residents cannot leave their homes and sometimes have difficulties managing their lives accordingly. The lockdown is taking its toll on the city's economy, as most businesses had to cease operation.

According to the draft Plan on Prevention and Control of COVID-19 and Economic Recovery in HCMC, the People's Committee (PC) of HCMC aims to take steps to recover the city's economy from 15 September 2021 onwards (Draft Plan). This plan was issued on 10 September 2021 but has yet to be approved

There is ground for optimism, and things in HCMC are moving in the right direction since the number of hospitalisations and fatalities seem to decrease. The Draft Plan forecasts that the COVID-19 pandemic situation in the city will gradually turn to Level 3 based on the World Health Organisation criteria.

1. Key Takeaways for Enterprises

The ultimate goal of the Draft Plan is to protect the lives of the city's citizens. From a business perspective, the following policies are relevant:

• HCMC will implement the pilot program of COVID Green Card and Yellow Card;

• The recovery of the city's economic recovery will be implemented in three phases, starting 16 September 2021;

• Enterprises can enjoy various types of governmental support during the recovering period;

• Minimise the risk of contamination, the application of technology in administrative procedures shall be accelerated; and

• Based on the statistics related to the COVID-19 situation in each area, the PC of HCMC shall decide to loosen further, maintain or tighten current lockdown measures.

2. Green Card and Yellow Card

Upon approval of the Draft Plan, the PC of HCMC will implement the pilot program of Green and Yellow Cards. These cards would be made available in the form of digital certificates. These would be issued to individuals as a QR code and would be the tool for authorities to check the citizens in HCMC during the recovery process of the city's economy. Holders of Green and Yellow Cards have related rights for each phase of the economic recovery. There will also be an alternative available for people who do not have a mobile phone.

2.1 Green Card

Individuals can obtain a Green Card if they

• Have been vaccinated with an approved vaccine (either single- or two-dose) and have completed the waiting period of 14 days calculated from the date of the last shot required for complete protection as per the guidance of the Ministry of Health. For specific working environments, tests for antibodies may be additionally required;

• Have been tested positive for SARS-CoV-2 by an authorised medical facility, recovered from it, and have completed the waiting or self-quarantine period of 180 days calculated from the recovery date; or

• Have been tested positive with SARS-CoV-2 via a self-test, conducted self-quarantine until fully recovered, and have been issued with test results confirming the presence of antibodies.

The Green Card is valid for six months from the date of completing the vaccination. The Draft Plan does not mention the validity period for former positive cases and shall be subject to further guidance.

2.2 Yellow Card

Individuals can obtain a Yellow Card if they:

• Have received the first shot of an approved two-dose vaccine and completed the waiting period of 14 days as from the date of the first shot; and

• Have obtained periodic negative test results. The test shall be conducted every three days, and the result must be certified and updated to the digital system following the guidance of the Department of Health.

3. Phases of Economic Recovery for HCMC

For each phase, the Draft Plan envisages two scenarios that might occur during the implementation based on the seriousness of the pandemic in the city. Each scenario depends on developments being as expected according to the control plans of the health authorities or worse than expected.

3.1 Phase 1: Likely from 16/09/2021 to 31/10/ 2021

3.1.1 Pandemic Developments as Expected

This phase applies with priority in areas with a high level of safety, such as District 7, Cu Chi District, Can Gio District, Tan Thuan processing zone, and high-tech zones.

3.1.1.1 Rights of Green Card Holders

• Green Cardholders can participate in all activities.

• Enterprises with 100% employees being a Green Card Holder shall be permitted to participate in all business activities, except for prohibited business set out in paragraph 3.1.1.2 below.

• The rights of Green Card Holders and enterprises with employees being 100% Green Cards Holders are subject to compliance with safety regulations for pandemic prevention and control of the health authorities.

3.1.1.2 Rights of Yellow Card Holders

Yellow Card Holders can only participate in business activities set out in paragraph 3.1.1.4 (either as employees or customers), with the additional requirement of negative test results.

3.1.1.3 Business' Activities Not Allowed Yet

In this phase, the following businesses will not be allowed to open yet due to a high risk of infection:

a. Karaoke, discotheque, bar, and massage services; and

b. On-site dining services, amusement parks, sports facilities, and commercial centres (except for supermarkets inside the building).

3.1.1.4 Enterprises with less than 100% Employees being Green Card Holders

If the number of employees being a Green Card Holder is less than 100%, enterprises must ensure that all employees who work in departments having direct contact with outsiders must be Green Card Holders. For other departments without direct contact with outsiders, employees working therein can include Green Cardholders and Yellow Card Holders. These enterprises are only permitted to participate in the following businesses:

a. Operations of the transhipment points of agricultural products and food at the wholesale markets of Binh Dien, Hoc Mon, and Thu Duc;

b. Production activities in industrial parks, export processing zones, and high-tech zones;

c. E-commerce services;

d. Activities in pharmaceutical and medical equipment production chains;

e. Activities in food production chains;

f. Petrol and gas stores;

g. Specific activities in the construction sector;

h. Delivery, transportation, and logistic services;

I. Banking and financial services;

j. Telecommunication, journalism, IT, electricity, and postal services;

k. Public services, notary, environment cleaning, and funeral services; and

l. Machinery, equipment maintenance and repair services

3.1.2 Pandemic Developments Not as Expected

In this scenario, only Green Cardholders could participate in permitted economic activities. Enterprises will only assign employees with a Green Card to work directly with people from outside. For employees with a Yellow Card, enterprises should switch to any of the following working methods depending on the actual situation: a. online, b. 3 on-site, or c. 1 destination 2 ways.

3.2 Phase 2: Likely from 1/11/2021 to 15/1/2022

3.2.1 Pandemic Developments as Expected

In addition to approved business activities of the first phase, the following business lines are permitted, subject to the requirement of holding a Green Card: commercial centres, fitness centres, outdoor activities facilities, on-site dining services with no more than 20 people.

3.2.2 Pandemic Developments Not as Expected

Depending on the seriousness of the pandemic and recommendations of the health authorities, HCMC will revert to the previous phase or implement a stricter control mechanism.

3.3 Phase 3: Likely from 15/01/2022 Onward

3.3.1 Pandemic Developments as Expected

All economic activities are permitted, but only Green Card Holders can participate in activities or services such as karaoke, discotheque, bar, and massage services.

3.3.2 Pandemic Developments Not as Expected

Depending on the seriousness of the pandemic and recommendations of the health authorities, HCMC will revert to the previous phase or implement a stricter control mechanism.

4. Long-term Governmental Support for Enterprises

Enterprises in HCMC are eligible to enjoy specific support upon the approval of the Draft Plan, as set out below.

4.1 Financial Support

The State Bank of Vietnam (SBV) -HCMC Branch will direct credit institutions in the city to

a. Restructure the loan's term;

b. Exempt from or reduce interest and fee; and

c. Retain debt category to support enterprises impacted by the pandemic according to applicable laws.

Institutions in the banking sector will cooperate with local authorities to accelerate implementation and connect banks with enterprises for price stabilisation schedules. Furthermore, enterprises will be assisted and guided in performing credit procedures and given support to see if they qualify for new support policies of the Government and the SBV.

4.2 Taxation Support

The Tax Department of HCMC will:

• Defer payment of value-added tax, corporate income tax, personal income tax and land rents for enterprises according to Decree No. 52/2021/ND-CP dated 19 April 2021; and

• Simplify and handle timely all relevant procedures in implementing the above supports.

4.3 Support in Customs Procedures

The Customs Department of HCMC will:

• Continue to cooperate with local authorities, enterprises associations, and the Vietnam Logistic Association to assist and support enterprises in administrative procedures relating to customs clearance;

• Accelerate the application of online public services, aiming to serve enterprises 24/7; and

• Gradually shift to accepting digital and scanned documentation, replacing physical copies to minimise the risk of infection.

4.4 Market Extension Support

The Centre for Trade Promotion and Investment of HCMC will:

• Support enterprises with costs for booth rental, participation, exhibitions and, trade promotions to seek new markets;

• Discuss with associations, foreign investors, and foreign-owned enterprises to assist them in resolving business difficulties and bring them back on track; and

• Assist enterprises in selling goods domestically, connecting value chains, approaching material sources, providing high-quality commodities from other provinces, and extending domestic markets and distribution channels.

4.5 Support in Labour Matters

The Department of Labour, Invalids and Social Affairs of HCMC will assist enterprises in applying for employees and employers support packages as stipulated in Resolution No. 68/NQ-CP dated 1 July 2021.

In addition to the above, the HCMC's authorities will consult and request further support from the Prime Minister, the Government, and authorities at ministerial level for enterprises to ensure the sustainability of the city's economy in the long run.

For more information, please contact:

An Tran / Senior Associate

an.tran@acsvlegal.com  

Thien Pham / Junior Associate

thien.pham@acsvlegal.com

© 2021 ACS Legal Vietnam Company Limited – All rights reserved

This legal update is not an advice and should not be treated as such.

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