Monthly Legal Briefing

Transcription

1 Monthly Legal Briefing Edition 1 January 2014 Banking & Finance Corporate Dispute Resolution Intellectual Property Real Estate & Infrastructure Banking & Finance Decree No. 01/2014/ND-CP on the purchase of shares in Vietnamese credit institutions by foreign investors page 3 Key contact Dr. Net Le Net.le@LNTpartners.com Mr. Huy Do Huy.do@LNTpartners.com Key contact Ms. Quyen Hoang Quyen.hoang@LNTpartners.com Mr. Hong Bui Hong.bui@LNTpartners.com Corporate Corporate - Compliance 1. Decree No. 04/2014/ND-CP providing regulations on invoices and provision of services page 4 2. Decree No. 03/2014/QD-TTg providing regulations on investment promotion activities page 5 3. Circular No. 13/2014/TT-BTC stipulating customs procedures for goods processing for foreign traders page 6 Corporate - Employment 1. Circular No. 01/2014/TT-BLDTBXH providing procedures for obtaining a labor outsourcing license page 6 2. Guidance No. 1803/HD-TLD providing guidance on the contribution of trade union dues page 7 1

2 3. Decision No. 13/QD-UBND guiding the assessment and approval for using foreign employees page 8 Key contact Mr. Huy Do Huy.do@LNTpartners.com Intellectual property Decree No. 08/2014/ND-CP guiding the implementation of the Law on Science and Technology page 9 Dr. Tuan Nguyen Tuan.nguyen@LNTpartners.com 2

3 Banking & Finance Decree No. 01/2014/ND-CP on the purchase of shares in Vietnamese credit institutions by foreign investors Decree No. 01/2014/ND-CP ( Decree 01 ), which sets out regulations on the purchase of shares in Vietnamese credit institutions ( VCIs ) by foreign investors, was passed by the Government on 3 January 2014 and took effect on 20 February The new Decree 01 replaces Decree No. 69/2007/ND-CP, which governed the same area. Specifically, Decree 01 governs the acquisition of shares by foreign investors in joint-stock VCIs and VCIs undergoing equitization. According to Decree 01, there are three forms of share acquisition: Purchase of shares in joint-stock VCIs; (ii) Purchase of shares in the event joint-stock VCIs sell their shares to increase charter capital or sell treasury shares; and (iii) Purchase of shares in the event VCIs transform their legal form into a joint-stock VCI. Decree 01 further sets a limit on foreign ownership in VCIs, which varies from 5% to 30% of the VCI s charter capital, depending on the type of investor (foreign individual, foreign organization or foreign strategic investor). Decree 01 also lists out conditions that are applicable to foreign investors purchasing the shares when the resulting shareholding would be more than 10%, as well as general conditions against strategic investors. On the other side of the transaction, the Decree specifies conditions against VCIs for selling their shares. Accordingly, Decree 01 sets out the relevant rights and obligations to which the foreign investors acquiring a VCI s shares are entitled. For more information about this legal brief, please contact the authors: Dr. Net Le Tel: Emai: Net.le@LNTpartners.com 3

4 Mr. Huy Do Tel: Emai: Huy.do@LNTpartners.com Corporate Corporate - Compliance 1. Decree No. 04/2014/ND-CP providing regulations on invoices and provision of services On 17 th January 2013, the Government has issued the Decree No.04/2014/ND-CP ( Dec 04 ) that amends the Decree No.51/2010/ND- CP ( Dec 51 ) on goods sale and service provision invoices. The Dec 04 includes the following notable changes: (a) (b) (c) (d) (e) (f) (g) Abandon the export invoice; Invoice issuance principle: To exclude on the individual, but remains the effect on the organization; (ii) individual no longer has the right to print the self-printed invoice and have an entity printed invoice; (iii) one invoice is issued only one time; The condition to use the self-printed invoice is furnishing the written request to tax authority for the approval on printing the self-printed invoice, the tax authority shall response in five (5) workings day on whether or not the entity has the right to print the self-printed invoice. Enterprise which has breached the invoice regulation or committed tax fraud or has high-risk on tax fraud shall not be permitted to print the self-printed invoice, but instead of buying the invoice from the tax authority. The pending time for such sanction shall be governed by the Sanction Decision on the tax fraud or requested by the tax authority. The organizations that use the monetary counting machine to print the invoice shall be governed by the Ministry of Finance. On the first time using the invoice printed on order, the organization shall furnish to the tax authority a written registration for usage of the invoice printed on order. The tax authority shall response in five (5) workings day on whether or not the entity has the right to print the invoice printed on order. Enterprise which has breached the invoice regulation or committed tax fraud or has highly-risky on tax fraud shall not be permitted to use the invoice printed on order, but instead of buying the invoice from the tax authority. The pending time for such sanction shall be 4

5 governed by the Sanction Decision on the tax fraud or requested by the tax authority. (h) (j) Organization which has committed tax fraud or be incompetent to register shall use the invoice printed by the tax authority. After 12 month, complying with tax regulation, having the tax authority approval, those organizations shall have the right to use the invoice printed on order. As for the organization has the enterprise to be printed the invoice, shall report to the tax authority every 3 months instead of 6 months as currently. The organizations supply the software for self-printed invoice shall has the Enterprise Registration Certificate, in which has the business lines on programming or software publish, other than the entity use its own published software. This decree shall come into effect on 1 st March Decree No. 03/2014/QD-TTg providing regulations on investment promotion activities Decree No. 03/2014/ND-CP ( Decree 03 ), which details and guides the implementation of the Labor Code on employment, was passed by the Government on 16 January 2014 and took effect from 15 March The new Decree 03 replaces Decree No. 39/2003/ND-CP, which governed the same area. Decree 03 sets out new regulations to govern the recruitment of Vietnamese laborers by Vietnamese employers in industrial parks, exporting processing zones, high tech zones and economic zones (as stipulated under Article 11 and Article of the Labor Code). Particularly: Employers may directly recruit Vietnamese laborers or do so through employment service organizations or employee leasing organizations according to their requirements. (ii) Laborers have the right to directly contact employers or register at employment service organizations for job-seeking purposes. Employers, employment service organizations and labour outsourcing organizations have to give a public announcement about their recruitment at least 5 working days before the date of receiving the registration dossiers for recruitment. Employers are required to pay all fees for labor recruitment and such amount will be considered as a cost of production and business. Furthermore, employers have to make a report on the situation of a change in employment every 6 months and annually to the Office of Labor, War Invalids and Social Affairs or the Department of Labor, War Invalids and Social Affairs (for employers in the industrial zones) where their head office, branches or representative offices are located. 5

6 3. Circular No. 13/2014/TT-BTC stipulating customs procedures for goods processing for foreign traders Circular No. 13/2014/TT-BTC ( Circular 13 ), which stipulates customs procedures for goods received for processing in Vietnam for foreign traders and customs procedures for goods ordered for processing overseas, was passed by the Ministry of Finance on 24 January 2014 and took effect from 10 March Circular 13 provides some new regulations on the obligations of traders and the customs departments. The customs department now has the obligation to examine the use of raw materials, supplies and the trader s production facilities, and apply appropriate coercive measures in the event traders have fled or dispersed their assets. Traders now no longer have the right to extend the processing contract when it is complete, all processed products have been exported and the processing contract has expired. Circular 13 further includes in it some important amendments to its predecessor, Circular No. 117/2011/TT-BTC. Notably, the procedures for liquidating processing contracts are now divided into two distinct phases and the time limit to submit the liquidation dossiers is now as follows: 15 business days from completion or expiration of the processing contract; or (ii) 3 business days from the approval of the Customs Department managing the processing contract to dispose of redundant raw materials and supplies, temporarily imported machines and equipment, scraps, defective products and discarded products. Furthermore, for traders organised as groups or cooperations that either have specialised units to import raw materials and supplies for provision to subordinate units or have production facilities in multiple provinces and cities, they can choose the Customs Department of the locality where the production facility is situated or where the raw materials are imported to perform the processing contract. Corporate - Employment 1. Circular No. 01/2014/TT-BLDTBXH providing procedures for obtaining a labor outsourcing license Circular No. 01/2014/TT-BLDTBXH ( Circular 01 ), which provides detailed regulations and guidance on the implementation of some articles of Decree No. 55/2013/ND-CP implementing Article 54.3 of the Labor Code on licensing of labour outsourcing activities, payment of escrow deposits and regulating the list of jobs for which labor may be outsourced, was passed by the Ministry of Labor, War Invalids and Social Affairs on 8 January 2014 and took effect on 1 March

7 Circular 01 provides for the following: Certification of a foreign enterprise specializing in the business of labour outsourcing; (ii) Certification of conditions of a head office and the representatives of a labour outsourcing enterprise; (iii) Application for the issue, renewal and withdrawal of labour outsourcing licenses; and (iv) Responsibility for reporting labor outsourcing activities. Particularly, there are some noticeable points in Circular 01 as follows: Labour outsourcing enterprise will now only be entitled to relocate their head office, branch and representative office in the event of a fire, crash, damage, landslides causing damages, clearance of premise by the competent authorities and other case of force majeure. (ii) To certify the conditions on legal capital, the enterprise must comply with the procedures for business registration if it is newly established particularly, an escrow deposit with a certification from the banks is required for capital injection Otherwise, the enterprise must provide a written certification from an independent auditing organization on the existing capital in its financial statement satisfying the legal capital (i.e., VND 2 billion) in case of supplementation of labor outsourcing business lines. (iii) An enterprise whose licenses is for the provision of services will not be required to obtain a labor outsourcing license if its employees are transferred to another enterprise to perform services and are not subject to the latter s management and administration during the course of service (e.g., internal labour rules, working and break times, labor safety and hygiene, labor disciplines and material responsibilities). 2. Guidance No. 1803/HD-TLD providing guidance on the contribution of trade union dues Guidance No. 1803/HD-TLD ( Guidance 1803), which addresses the contribution of trade union dues, was issued by the Vietnam General Confederation of Labor on 29 November 2013 and took effect on 1 January Guideline 1803 replaces Guidance No. 826/HD-TLD. Under Guidance No. 1803, employees belonging to trade unions are obliged to contribute a monthly amount of 1% of their remuneration as trade union dues. However, the methodology for computing such dues vary as follows: 7

8 For enterprises that do not follow the State s salary regime, which includes: enterprises of all economic sectors; cooperatives; international organizations operating in Vietnamese territory; and operating offices of foreign partners in business cooperation contracts, the trade union dues will be based on the remuneration actually received by employees (i.e., the amount before deduction of premiums of social insurance, health insurance and unemployment insurance). (ii) For enterprises where it is difficult to identify employee salaries, the executive committee of the grassroots trade union will impose a fixed rate of contribution upon approval of their superior trade unions. In such case, the minimum contribution must not be less than 1% of the basic salary as prescribed by the State. (iii) For employees working overseas, trade union dues will be based on the salary under their labor contracts. For employees on business trips abroad, trade union dues will be based on the salaries they are subject to under the regime imposed by the State. Furthermore, the maximum contribution ceiling of 10% of an employee s salary, which was provided in Guidance No. 826/HD-TLD, has now been abolished. However, employees who are currently eligible for allowances from social insurance for one or more months are exempt from union contributions during the period of receiving this allowance. Unemployed individuals, employees earning no income or employees on private leave for one or more months will also be exempt from union contributions during the period of unemployment, non-income and private leave. 3. Decision No. 13/QD-UBND guiding the assessment and approval for using foreign employees Decision No. 13/QD-UBND, which guides the examination and approval of using foreign workers, was passed by the People s Committee of Ho Chi Minh City on 3 January 2014 and took effect on the same date. Under this decision, the People s Committee of Ho Chi Minh City authorizes the director of the DOLIA, the head management units of industrial zones and export processing zones and the head management unit of high-tech zones (ii) to receive, examine and approve each employer using foreign workers for each position; and to examine and approve contractors recruiting foreign workers to hold positions in which Vietnamese workers are not competent. 8

9 Accordingly, the above authorities will use their own seal to implement the authorization. For more information about any of these legal briefs, please contact the authors: Ms. Quyen Hoang Tel: Emai: Mr. Hong Bui Tel: Intellectual property Decree No. 08/2014/ND-CP guiding the implementation of the Law on Science and Technology Decree No. 08/2014/ND-CP ( Decree 08 ), which provides detailed regulations and guidance on the implementation of a number of articles of the Law on Science and Technology, was passed by the Government on 27 January 2014 and took effect on 15 March Decree 08 replaces Decree No. 81/2002/ND-CP guiding the same area. Decree 08 will apply to organizations or individuals engaging in scientific and technological activities or other activities relating to science and technology, and covers some of the following key issues: Regulations on scientific and industrial organizations on the following issues: Establishment of scientific and technological organizations, under which Decree 08 will assign the authority with competence in establishing such organizations. This includes the establishment of scientific and technological organizations with foreign capital, state scientific and technological organizations, and the dependent scientific and technological organizations in foreign countries; Restructuring of scientific and technological organizations; Dissolution of scientific and technological organizations; 9

10 (ii) Registration for scientific and technological activities, including the following: The registration procedure; and The Certificate of Registration for scientific and technological activities, which includes procedures for issue, amendment, supplementation and re-issue, as well as the authority with the competence to carry out such functions. (iii) Branches and representative offices of either domestic or foreign scientific and technological organizations, including the following: Conditions for establishing the branch or representative office; and Rights and liability of the branch or representative office; (iv) Scientific and technological target gaining capital from the State Budget; (v) Granting the ownership and use right of the results of scientific and technological research and development; and (vi) Assessing the scientific basis and technology of the investment project, and socioeconomic program and development. For more information about this legal brief, please contact the authors: Mr. Huy Do Tel: Dr. Tuan Nguyen Tel:

11 For further information, please contact: Ho Chi Minh City Head Office Unit 03, Level 21, Bitexco Financial Tower No.02 Hai Trieu Street, District 1 Ho Chi Minh City, VIETNAM Tel: Fax: Hanoi Office Unit 08A, Level 2, International Centre 17 Ngo Quyen St., Hoan Kiem Dist. Hanoi, VIETNAM Tel: Fax: LNT & PARTNERS is a leading full-service independently ranked local law firm in Vietnam with offices in Ho Chi Minh City, Hanoi, Hong Kong, and San Francisco. The firm is among Vietnam s most prominent, representing a wide range of multinational and domestic clients, including Fortune Global 500 companies as well as well-known Vietnamese listed companies on a variety of business and investment matters. For more information about any of these legal briefs, please contact the individual authors or your usual LNT contact. Hong Kong Office (Affiliate) Two International Finance Centre Level 19, 8 Finance Street Central, Hong Kong CHINA Tel: Fax: San Francisco Office 101 California Street Suite 2710 San Francisco, CA USA Tel: Fax: