NEWS

This update outlines the legal framework for taking out security in Vietnam. It examines the most used contractual structures, security assets, and typical enforceability issues when setting up a credit facility with a Vietnamese borrower. It also provides a high-level summary of the security vehicles available under Vietnamese law and touches on the most important structures and prevalent legal issues when taking out security in Vietnam.

In this Draft Decree administrative penalties for cybersecurity violations are set out. It will likely enter into force early 2022 and together with the draft decree on personal data protection it will form the cybersecurity regime in Vietnam and is influenced by the European Union's General Data Protection Regulation.

Several tax-related draft decrees are expected to be approved shortly. In January 2022, the Government promulgated Decree on tax exemption and reduction. A Draft Decree to remedy some issues of Decree 15 is pending. In February 2022, the Ministry of Finance of Vietnam released a Draft Decree on tax administration amending some articles of Decree 126/2020 guiding the Law on Tax Administration and Decree 123/2020 on invoices.

The Draft Law on E-Transactions provides a new definition and new requirements for digital platforms, expands the scope of application, contains a provision on the data protection in e-transactions and finally, clarifies the application of electronic agreements and signatures.

Decree 101, effective August 1, 2024, outlines new regulations for land registration, LURCs, and land-attached assets in Vietnam. Key changes include clearer timelines for registration, new LURC issuance requirements, unique LURC codes, and improved access to land information. These updates aim to streamline the land registration process and enhance transparency for land users in Vietnam.

A recent amendment to Vietnam's regulations governing employee stock ownership plans (ESOPs) has significantly simplified the process for foreign entities to offer these benefits to Vietnamese employees. The State Bank of Vietnam's Circular No. 23/2024/TT-NHNN, effective from August 12, 2024, has removed several hurdles, making it easier for companies to implement offshore-issued ESOPs.

Circular 15 addresses the issues that have arisen from the expiration of regulations on FiTs for solar and wind power plants that were not completed yet. Some guidance is given how FiTs should be handled for the so-called transitional plants.

Decree 59 introduces the electronic identity (eID) for individuals and companies. This eID can be used for electronic identification and authentication. Both Vietnamese and foreign citizens will get an eID. There is a difference in application for individuals and companies.

The biggest concern for companies was the requirement to localise data. However, this requirement does not always apply, only under certain circumstances. Also, in case of violation of the Law on Cybersecurity, an overseas service provider will be required to store data locally. Finally, any activity of taking advantage of cybersecurity measures to violate the law might even result in the obligation to compensate if the violation has infringed the lawful rights and interests of others.

In this edition of Chambers Global Practice Guides: Private Equity 2022, ACSV Legal contributed to the Vietnam chapter on Law & Practice and Trends & Developments. The guide provides the latest legal information relevant for PE and M&A such as the structure of transactions, terms of acquisition documentation, public-to-private takeovers, mandatory offer thresholds and hostile takeover offers.

This legal update highlights several remarkable points under Circular 7, which transposes regulations of the RCEP free trade agreement into Vietnamese law. Circular 7 implements the RCEP's transitional safeguard measures and antidumping measures.

The Draft Circular proposes to tighten the management of non-government guaranteed offshore loans to control Vietnam’s overall borrowing exposure. It is unclear when the Draft Law will be approved and promulgated by the competent authorities.