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Legal answers
New points of Enterprise Law 2020 – Part 3
Answered

At the 9th session, National Assembly XIV, Enterprise Law 2020 (Law) was approved and will officially take effect on January 1, 2021. The following will be 5 new points specified in the last 4 chapters (Chapter VII, Chapter VIII, Chapter IX, Chapter X) of LAW 2020, specifically the article will go into details as follows:

  1. Shorten the period of notice before suspending business from 2021:
    Clause 1, Article 200 of Law 2014 stipulates: Enterprises have the right to suspend their business but must notify in writing the time and duration of suspending or resuming business to the Business Registration Authority at least 15 days before the date suspending or resuming business. This provision applies in case the enterprise resumes its business before the notified time limit.
    However, Clause 1, Article 206 of Law 2020 shortened the period of notice before suspending business. Specifically: “Enterprises must notify in writing to the Business Registration Agencies no later than 03 working days before the date of suspending or resuming business before the notified time”.
    Thus, the period of notice before suspending business is shortened from 15 days to 03 working days at the latest.
  2. Provisions on exclusion of the case of dissolution due to revocation of enterprise registration certificate
    Point d, Clause 1, Article 207 of Law 2020 stipulates: “Enterprises are dissolved in case of revocation of their enterprise registration certificates, unless otherwise prescribed by the Law on Tax Administration.”
    This provision ensures consistency with the provisions of the Law on Tax Administration. At Point g, Clause 1 and Clause 2, Article 125 of the Law on Tax Administration 2019 provides:
    Article 125. Coercive measures to enforce administrative decisions on tax administration
    1. Measures of enforcing administrative decisions on tax administration include:

    g) Revoke the enterprise registration certificates
    2. The measures of enforcing administrative decisions on tax administration specified in Clause 1 of this Article cease to be effective after the tax debt is fully paid into the state budget. “
  3. Sole Proprietorship can be converted into Limited Liability Company, Joint Stock Company, Partnership Company
    According to Article 205 of Law 2020, a Sole proprietorship may be converted into a Limited Liability Company, a Joint Stock Company or a Partnership Company under the decision of the owner of the Sole proprietorship if all of the following conditions are satisfied:
    – The converted enterprise must fully meet the conditions prescribed in Clause 1, Article 27 of this Law;
    – Owner of a Sole Proprietorship undertakes in writing to take personal responsibility with all of his assets for all unpaid debts and commit to pay all debts when due;
    – The owner of a Sole Proprietorship has a written agreement with the parties of the unliquidated contract that the converted company will accept and continue to perform those contracts;
    – The owner of a Sole Proprietorship makes a written commitment or has a written agreement with other capital-contributing members on the admission and employment of the existing labor force of a Sole Proprietorship.
    Currently, Law 2014 only regulates cases where a Sole Proprietorship is transformed into a Limited Liability Company.
  4. Adding a case of termination of partnership membership
    According to Clause 1, Article 185 of Law 2020, general partners are terminated in the following cases:
    – Voluntarily withdraw capital from the company;
    – Death, disappearance, restriction or loss of civil act capacity, difficulty in cognition and behavior control;
    – Being expelled from the company;
    – Abiding by imprisonment or banned by a court from practicing certain jobs or doing certain jobs according to the provisions of law;
    – Other cases prescribed by the company’s charter.
    Compared with Law 2014, more cases of “having difficulty in cognition, behavior control” and ” Abiding by imprisonment or banned by a court from practicing certain jobs or doing certain jobs according to the provisions of law”.
  5. Supplementing the provision “exercising the rights of owners of a Sole Proprietorship in some special cases”
    Compared with the current regulations, Article 193 of Law 2020, supplementing the provisions of “exercising the rights of owners of a Sole Proprietorship in some special cases” is as follows:
    – If the owner of a Sole Proprietorship is detained, serving a prison sentence, or executing an administrative handling measure at a compulsory detoxification establishment or a compulsory education establishment, he / she may authorize another person to do his/her rights and obligations.
    – In case the owner of a Sole Proprietorship dies, the heir or one of the heirs according to the will or the law is the owner of the Sole Proprietorship under the agreement between the heirs. Where the heirs cannot reach agreement, they will register for conversion into a company or dissolution of the Sole Proprietorship.
    – In case the owner of a Sole Proprietorship dies without an heir, the heir disclaims the inheritance or is deprived of the right to inherit, the property of the owner of the Sole Proprietorship shall be handled in accordance with the civil law.
    – In case the owner of a Sole Proprietorship is restricted or loses his/her civil act capacity, has difficulties in cognition and behavior control, the rights and obligations of the owner of the Sole Proprietorship are exercised through his/her representative.

 

Above are 5 new points specified in the last 4 chapters (Chapter VII, Chapter VIII, Chapter IX, Chapter X), these regulations will be valid when Law 2020 takes effect (from January 1, 2020).

Hope the above information is helpful to The Valued Readers.
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New points of Enterprise Law 2020 – Part 2
Answered

At the 9th session, National Assembly XIV, Enterprise Law 2020 (Law) was approved and will officially take effect on January 1, 2021. The following will be 5 new points specified in the next 3 chapters (Chapter IV, Chapter V, Chapter VI) of Law 2020, specifically the article will go into details as follows:

  1. Amending regulations on the Supervisory Board in State Enterprises:
    According to Clause 1, Article 103 of Law 2020: “Based on the size of the company, the representative agency that decides the establishment of the Supervisory Board has from 01 to 05 Supervisors, including the Head of the Supervisory Board. The term of Supervisor is no more than 05 years and may be reappointed but not more than 02 consecutive terms in that company. If the Supervisory Board has only 01 Supervisor, that Supervisor is also the Head of the Supervisory Board and must meet the criteria of the Head of the Supervisory Board.”
    According to Clause 1, Article 102 of Law 2014, “Based on the size of the company, the representative agency decides to appoint 01 Supervisor or establish a Supervisory Board consisting of 03 to 05 Supervisors. The term of Supervisor is no more than 05 years and is reappointed, but each individual may be appointed as the Supervisor of a company no more than 02 terms.
    Thus, we can see the differences here are:
    Firstly, Law 2020 stipulates: State enterprises must have a Supervisory Board, this Supervisory Board has a number of Supervisors from 1 to 5 people. In it must have 1 Head of the Supervisory Board. Law 2014 stipulates: State enterprises can appoint one person or establish a Supervisory Board from 3 to 5 people, and do not required to have a Head of Supervisory Board.
    Secondly, the new regulation for Supervisors is reappointed but no more than 2 consecutive terms in that Company, that is, if 2 terms are not consecutive, they will still be reappointed as Supervisors. However, Law 2014 does not allow reappointment of Supervisors for more than 2 terms (regardless of whether the term is continuous or not).
  2. Supplementing the regulations on depository certificates (basis common shares) without voting rights
    Under Clause 6, 7, Article 114 of the Law 2020 adding new provisions on depository certificates (also known as basis common shares) do not have the following voting rights:
    6. Common shares used as the underlying asset to issue depository certificates without voting rights are called basic common shares. Depository certificates without voting rights have economic benefits and obligations corresponding to basic common shares, except voting rights.
    7. The Government shall provide for depository certificates without voting rights.
  3. Amending regulations on rights of Common shareholders
    Law 2020 has amended and supplemented for Law 2014 a number of contents related to common shareholder rights, specifically as follows:
    Firstly, the amendment of regulations on shareholders or groups of shareholders has some special rights:
    Article 114 of Law 2014 stipulates that: shareholders or groups of shareholders have some special rights, namely: Shareholders or groups of shareholders owning 10% or more of the common shares for a continuous period of at least 06 months or one Other ratios are smaller than those prescribed in the company’s charter.
    Article 115 of law 2020 stipulates that shareholders or groups of shareholders have some special rights: Shareholders or groups of shareholders owning 05% or more of the common shares or one Other ratios are smaller than those prescribed in the company’s charter.
    Secondly, expand one of the rights of a shareholder or group of shareholders related to reviewing, searching, extracting documents of the company, specifically:
    Law 2020: Provisions on the right to review, search and extract contracts, transactions must go through the Board of Directors and other documents, except documents related to trade secrets, business secrets of the company.
    Law 2014: None of the above.
  4. Adding obligations of shareholders
    Accordingly, besides inheriting the provisions on obligations of common shareholders in Article 115 of Law 2014, Clause 5 Article 119 of Law 2020 adds the following content: “Confidentiality of information provided by the company according to the regulations specified in the company’s charter and the law; only use the information provided to perform and protect their legitimate rights and interests; prohibit the distribution or copying of information provided by the company to the group, other organizations and individuals.
  5. Adding responsibilities of joint-stock company managers
    Compared to the current regulations, Clause 5 Article 165 of Law 2020 adds the responsibilities of a joint stock company manager as follows: “Member of Board of Directors, Director or General Director and other managers are violating the provisions of Clause 1 of this Article shall personally or jointly compensate for lost interests, return the received benefits and compensate all damage to the company and the third party.

 

The above are 5 new points specified in the next 3 chapters (Chapter IV, Chapter V, Chapter VI) of Law 2020, these regulations will be valid as soon as the Law 2020 takes effect (from January 1, 2020).

Hope the above information is helpful to The Valued Readers.
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New points of Enterprise Law 2020 – Part 1
Answered

At the 9th session, National Assembly XIV, Enterprise Law 2020 (Law 2020) was approved and will officially take effect on January 1, 2021. The following will be 6 new points specified in the first 3 chapters (Chapter I, Chapter II, Chapter III) of Law 2020, specifically the article will go into details as follows:

  1. Change of definitions of State enterprises:
    According to Clause 11, Article 4 of Law 2020, definition: “11. State enterprises include enterprises where the State holds more than 50% of charter capital, the total number of voting shares as stipulated in Article 88 of this Law”.
    The above provision replaces Clause 8, Article 4 of Law 2014: “8. State-owned enterprise is an enterprise in which the State holds 100% of charter capital. “
  2. Removing the regulation “Report of changing information of enterprise managers
    Article 12 of Law 2014 stipulates: “The enterprise must report to the business registration office where it is headquartered within 05 days from the date of changing information about full name, name, contact address, nationality, citizen ID card number, people’s identity card, passport or other lawful personal identification of the following people: Members of the Board of Directors for joint stock companies; Member of Supervisory Board or Supervisor; Director or General Director.
    However, Law 2020 has repealed this provision.
  3. Change of regulations on registration Dossier for Limited Liability Companies, Joint Stock Companies:
    There are two new points for the registration Dossier of Limited Liability Company, Joint Stock Company:
    Firstly, according to the provisions of Article 21 and Article 22 of Law 2020, it supplement the provisions on legal papers of the legal representative in the registration dossier of the Limited Liability Companies, Joint Stock Companies.
    Second, the new law uses the term “legal papers” instead of using the term “citizen identification card, identity card, passport or other legal personal identification”.
  4. Adding subjects not allowed to establish enterprises:
    Points c, đ and g, Clause 2, Article 17 of Law 2020 adds 3 subjects who are not entitled to establish and manage enterprises in Vietnam:
    c) Officers, non-commissioned officers, professional armymen, workers and defense officers in agencies and units of the Vietnam People’s Army; officers, non-commissioned officers, police workers in agencies and units of the People’s Police of Vietnam, except for those appointed to be authorized representatives to manage at State enterprises;
    (d) People with difficulties in cognition and behavior control;
    (g) Organizations that are legal entities prohibited from doing business or operating in certain fields as prescribed by the Criminal Code.
    Previously, Clause 2 Article 18 of Law 2014 has not specified 3 above groups of subjects.
  5. Change of regulations on notification of seal specimen enterprises:
    According to Article 44 of Law 2014:“Before using, enterprises are obliged to notify the seal specimen to the business registration agency for public posting on the National Business Registration Portal”.
    However, the above provision has been abolished by Article 43 Law 2020.
  6. Amending and supplementing the regulations on handling of contributed capital in some special cases
    Article 53 Law 2020 amends and supplements a number of provisions in Article 54 regarding the handling of contributed capital in some special cases, specifically as follows: there are 3 new points:
    Firstly, in case a member has limited or lost civil act capacity, has difficulty in cognition and behavior control, the rights and obligations of that member in the company are exercised through a representative. Currently, done through guardians. (Clause 3 Article 53 Law 2020 replaces Clause 2 Article 54 Law 2014).
    Second, adding regulations: “8. In case a member of a company is an individual held in detention, serving a prison sentence, or executing an administrative handling measure at a compulsory detoxification establishment or compulsory education establishment, such member shall authorize others perform some or all of their rights and obligations at the company. ” (Clause 8 Article 53 Law 2020).
    Third, add regulations: “9. In case a member of a company is an individual banned from practicing certain jobs or works by a court or a member of the company being a commercial legal entity is banned from doing business or operating in certain fields under the law. If such member does not practice or do prohibited work at that company or the company suspends or terminates the relevant business line according to a court decision”. (Clause 9, Article 53 of Law 2020).

 

Above are 6 new points specified in the first 3 chapters (Chapter I, Chapter II, Chapter III) of Law 2020, these regulations will be valid when Law 2020 takes effect (from January 1, 2020).

Hope the above information is helpful to The Valued Readers.
Bizlawyer is pleased to accompany with you!

Regulations on Passport with electronic chips
Answered

On November 22, 2019, the National Assembly promulgated the Law On Exit And Entry Of Vietnamese Citizens. Accordingly, this Law has enacted a new regulation on Passport with electronic chips for Vietnamese citizens.

Clause 4, Article 2 of the Law on Exit and Entry of Vietnamese Citizens stipulates: “Passport containing electronic chips” refers to a passport embedded with electronic equipment storing encoded information of its holder and digital signature of issuing body“. Passport with an electronic chip is issued to Vietnamese citizens who are at least 14 years old. Passport types that will be attached with electronic chips include:

  • Diplomatic passport;
  • Service passports;
  • Regular passports.

Thus, by the time this Law comes into effect, Vietnamese citizens aged full 14 or older may choose to grant passports with electronic chips or passports without electronic chips.

The promulgation of regulations on passports with electronic chips is a new provision to create favorable conditions for Vietnamese citizens to carry out immigration procedures at border gates more quickly, and at the same time, Electronic chip are also more secure.

Citizens’ passports issued before the effective date of this Law will continue to be valid until their expiry date.
The Law On Exit And Entry Of Vietnamese Citizens takes effect on July 1, 2020.

Regulations on issuing architectural practice certificates
Answered

On June 13, 2019, the National Assembly promulgated the Law on Architecture 2019 stipulating architectural management and architectural practice; rights, obligations and responsibilities of agencies, organizations and individuals in architectural activities.

Accordingly, this Law promulgates new regulations on conditions for granting architectural practice certificates as follows:

  • Having university or higher degree in architecture;
  • Experience in providing architectural services for at least 03 years at an organization practicing architecture or cooperating with an architect practicing as an individual;
  • Satisfying the test for granting architectural practice certificates;
    Individuals who have won a national architectural award or an international architectural award are exempt from meeting the conditions for providing architectural services for at least 3 years.
    Individuals with 10 consecutive years or more directly participating in state management of architecture, training at the university level or higher in the field of architecture, practicing architecture are exempt from meeting the conditions pass the test.
    The Law on Architecture 2019 takes effect on July 1, 2020.
Cases of termination of unemployment allowance
Answered

On May 29th, 2020, the Government issued Decree No. 91/2020 / ND-CP amending a number of Articles of Decree No. 28/2015 / ND-CP dated March 12, 2015 of the Government detailing Implementing a number of articles of the Employment Law regarding unemployment insurance, this Decree takes effect from July 15, 2020

Under the provisions of Clause 9, Article 1 of Decree 61/2020/ND-CP amending and supplementing Point b, Clause 1, Article 21 of Decree 28/2015/ND-CP, The employee is determined to have a job to stop receiving unemployment benefits when falling into one of the following cases:
– Concluded a work contract, a seasonal labor contract or a certain job with a term of full 1 month or more. The date on which a worker is determined to have a job is the date the employment contract and labor contract take effect as prescribed by law.
– There is a recruitment or appointment decision for cases not subject to labor contracts or employment contracts. The date on which the employee is determined to be employed in this case is the date on which the employee is recruited or appointed in the employment or appointment decision.
– There is a certificate of business household registration if the employee is the owner of the business household or has a business registration certificate for the case that the employee is the owner of the enterprise. The date on which an employee is determined to have a job is the date the employee notifies the employment service center about the business household or enterprise commencing its business.
– The employee announces employment for the employment service center. The date on which the employee is determined to have a job is the date stated in the notice of employment of the employee.

Thus, it can be seen that, in addition to amending and supplementing cases identified as having jobs to stop receiving unemployment benefits, Decree 61/2020/ND-CP also supplements the case of The employee is the head of business household, the owner of the enterprise.

Citizens with citizenship can freely choose the place to issue passports
Answered

On November 22, 2019, the 14th National Assembly passed the Immigration Law of Vietnamese citizens 2019, this Law takes effect on July 1, 2020.

One of the highlights of this Law is the recognition of the fact that only a citizen’s identity will be required without any passport anywhere. According to Clause 3, Article 15 of the Law on Immigration of Vietnamese Citizens No.49/2019/QH14, first-time passport applicants are made at the Immigration Department of the provincial Police Department of permanent residence or temporary residence . Particularly for holders of Citizenship Identification cards, they shall be carried out at the provincial-level Police Immigration Management Office at convenient places.

Thus, citizens with citizenship can easily choose the place to issue a passport instead of having to do it in a permanent or temporary place as previously prescribed. At the same time, the applicant for a secondary passport from the second time will be made at the Immigration Department of the Police Department of the province or city directly under the Central Government, where it is convenient or the Immigration Department of the Ministry. Police. Instead of the current one, only the case of reissuing a valid passport can go through the Immigration Department of the Ministry of Public Security and the expired passport will have to go to the Immigration Department of the Provincial Police, Central-affiliated cities of permanent or temporary residence.

These cases are converted visa purposes
Answered

On November 25th, 2019, the 14th National Assembly passed the Law amendments to a number of articles of the Law on entry, exit, transit, and residence of foreigners in Vietnam, this Law takes effect from July 1st , 2020.
One of the most prominent changes in the Law on amendments and supplements this time can include the regulations on changing visa purposes. Previously, the 2014 Law on Entry, Exit, Transit, and Residence of Foreigners in Vietnam stipulates that visas of foreigners in Vietnam are valid for one or more times and must not change their purpose.
According to Article 1 of the Law amendments to a number of articles of the Law on entry, exit, transit, and residence of foreigners in Vietnam 2019, foreigners in Vietnam are allowed to change their visa purposes in the the following case:
– He/she presents document proving to be an investor or a representative for foreign organization investing in Vietnam as per the law of Vietnam;
– He/she presents document proving his/her relationship with person inviting or sponsoring in terms of parents, spouse, children;
– He/she is invited or sponsoring by agencies or organizations and presents work permit or confirmation of eligibility for work permit exemption according to labor laws;
– He/she makes entry by electronic visa and presents work permit or confirmation of eligibility for work permit exemption according to labor laws.
In particular, in the past, only the case of common visas for children under 14 sharing passports with parents, this Law also adds cases of general visas, which are:
Visas shall be issued according to lists issued by immigration authorities with respect to foreigners visiting and travelling or transiting by sea who have the need to enter inland for visiting and tourism purposes according to programs organized by international tourism enterprises in Vietnam; members of foreign military ships travelling under official programs of tours outside of central-affiliated cities and provinces where their ships anchor.

Provisions on tax administration for enterprises having associated transactions.
Answered

On June 24, 2020 The Goverment issued Decree No.68/2020/ND-CP amending Clause 3, Article 8 of Decree 20/2017/ND-CP providing for tax administration of enterprises having associated transactions.
Accordingly, amending and supplementing regulations on total deductible interest expenses when determining taxable income for enterprises having associated transactions as follows:
Total loan interest expenses (after subtracting deposit interests and loan interests) arising in the period to be deducted when determining taxable income of the enterprise must not exceed 30% of the total net profit from business activities during the period plus interest expenses (after deducting interest on deposits and lending interests) incurred during the period plus amortization costs incurred in the period.
The non-deductible loan interest expense shall be carried forward to the next tax period when determining the total deductible loan interest expense in case the total deductible loan interest expense of the subsequent tax period is lower than the prescribed level. as above. The time for transferring loan interest expenses shall be no more than 05 years from the year following the year the loan interest expenses are not deducted.
The above provision does not apply to loans of taxpayers:
Credit institutions under the Law on Credit Institutions;
Insurance business organizations under the Insurance Business Law;
Official development assistance (ODA) loans;
Preferential loans of the Government shall follow the mode of the Government’s borrowing foreign loans to enterprises;
Loans for implementation of national target program (new rural program and sustainable poverty reduction);
Loans for investment in programs and projects implementing the State’s social welfare policies (resettlement houses, worker houses, students and other public welfare projects).
Decree 68/2020/ND-CP takes effect from June 24, 2020 and applies to the 2019 corporate income tax period.

Residence mode of Residents at accommodation establishments while waiting for exit
Answered

On June 10, 2020, the Government issued Decree 65/2020 / ND-CP on organization, management and regimes for people staying at accommodation establishments while waiting for their exit. force from June 15, 2020.
This Decree details the management organization and regimes (including diet, clothing, accommodation, daily life, contact, visits, receipt of gifts, medical examination and treatment, burial expenses), for executors of expulsion sentences, foreigners who are subject to administrative sanctions are expulsion and foreigners who have completely served their imprisonment sentences of staying at accommodation establishments of the Ministry of Public Security in waiting time for exit procedures (collectively referred to as residents).
Accordingly, the regime of stay of residents staying at accommodation establishments during the time of waiting for exit is prescribed as follows:
Residents are arranged in a dormitory room by gender (male and female);
Minimum accommodation area is 03 m2/person, in case of having small children, the minimum accommodation area is 04 m2, with enameled tiles or beds, toilets, mats, blankets and curtains.
Residents who are homosexual, transgender, and unidentified people may be arranged separately.
Residents staying in one of the following cases are arranged in separate rooms in isolation rooms:
Residents suffering from Group A infectious diseases and a number of Group B infectious diseases in accordance with the law on prevention and control of infectious diseases (Group A and Group B infectious diseases are detailed in the Law on Prevention and Control of Diseases of Infectious diseases were issued by the 12th National Assembly on November 21, 2007)
People with mental illness or other illness lose their ability to perceive or control their behavior.