2011 31 August

Legal & Regulatory updates in Vietnam

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BANKING AND FINANCE

On the selection criteria for strategic shareholders of the equitised State-owned commercial bank (SOCB). Circular № 10 of State Bank of Vietnam, 22 April 2011

This Circular defines the purposes and minimum requirements that SOCBs have to meet in selecting either domestic or foreign strategic shareholders. An example of such requirement includes the requirements for foreign strategic shareholders to have minimum total assets equaling to US$20 billion in the year prior to date when they register to become strategic shareholders and have over 5 years of experience in international banking operations. Such applicants cannot be strategic or majority shareholders or promoters of any other credit institution in Vietnam.


LABOR

On stipulating the general minimum salary. Decree № 22/2011/ND-CP, 4 April 2011

According to Decree 22, the new minimum salary in Vietnam shall become effective as of 1 May 2011 and shall amount 830,000 VND per month. This new minimum salary shall be used as base in the calculation of other income variables, such as pensions.


INVESTMENT

On guiding the establishment and operation of registered science & technology organizations which carry activities of foreign investment in Vietnam. Circular № 01 of Ministry of Science and Technology, 16 Ma rch 2011

According to Circular 01, science & technology organizations having foreign investment capital in Vietnam shall be established upon satisfying conditions contained in Article 13, Decree 80/2010/ND-CP dated 14 July 2010. In cases of science and technology organizations acting under a joint venture arrangement between a Vietnamese organization and a foreign individual or between a foreign organization and a Vietnamese individual, then the capital of the foreign party must account for at least 10% of the total operating registered capital of the organization and such capital should not be lower than 100 million VND.

On build-operate-transfer (BOT), build-transfer-operate (BTO) & build-transfer (BT) contracts. Decree № 24 of Government, 5 April 2011

This Decree has supplemented a number of articles contained in Decree № 108/2009/ND-CP, including Articles 4, 8, 11, 12. In terms of relevant investment sectors covered under Decree 108, Decree 24 expands the number of sectors which are eligible to receive special incentives. Such sectors, referred to as “infrastructure facilities”, include on that basis areas relating to medical health, education, training, occupational training, culture, sports, and working headquarters of State bodies.


SECURITIES

On guidance relating to administrative sanctions in the securities sector

Circular № 37 of Ministry of Finance, 16 March 2011

The guidance under new Circular 37 states that any registered trading organization, joint stock company, organization or individual found to intentionally have provided false information or concealed the truth in a trading application will be fined from 150 to 200 million VND. Also, another provision stipulates the maximum fines that any entity or individual can receive, amounting to 500 million VND, for the offence of insider trading in order to purchase or sale of securities.


1 September 2011