Author: Vu Mai Trang

MONTHLY LEGAL UPDATE – OCTOBER 2019

NEW REGULATIONS ON FOREIGN EXCHANGE MANAGEMENT OF FOREIGN DIRECT INVESTMENT ACTIVITIES IN VIETNAM

 

By Phan Thi Minh

Legal Assistant

 

On 26 June 2019, The State Bank of Vietnam issued Circular No. 06/2016/TT-NHNN (“Circular No.06”) guiding on foreign exchange management to foreign direct investment in Vietnam, which was officially effective as of 06 September 2019 and replaced Circular No.19/2014/TT-NHNN dated 11 August 2018 (“Circular No.19”).

In general, Circular No. 06 fixed a number of provisions of Circular No.19 which are ambiguous and incompliant with Law on Investment 2014 and Law on Enterprise 2014 as follows:

1. Supplement of entities to be required to open direct investment capital account (“DICA”)

Previously, Circular No.19 regulated merely two (02) entities which are required to open DICA, including: foreign invested enterprise (“FDI Enterprise”) and foreign investor (“FI”) entering into business cooperation contract (“BCC”).

Circular No. 06 supplements a new subject which is a FI entering into public private partnership (“PPP”) in case of not establishing project enterprise.

2. Clarification of definition of FDI Enterprise

According to Circular No.06, FDI Enterprise refers to:

  • An enterprise established by FI and FI is required to implement procedure for issuance of Investment Registration Certificate (IRC).
  • An enterprise with FI(s) holding at least 51% charter capital of such enterprise as a result of (i) shares acquisition/capital contribution of FI; or (ii) being established upon split, de-merger, merger or consolidation; or (iii) being newly established in accordance with specialized laws.
  • Project Enterprise established by FI(s) to implement PPP project.

3. Expansion of supporting documents usable to open DICA other than Investment Certificate/Investment Registration Certificate

Apart from Investment Certificate/Investment Registration Certificate as prescribed in Circular No.19, FDI Enterprise and FI may use one of the following supporting documents to open DICA:

  • Incorporation and operation certificate;
  • Notice on satisfaction of conditions for share acquisition, capital contribution of FI;
  • Signed PPP with competent authority;
  • Other documentation certifying the capital contribution of FI in line with laws.

4. Clear provision on capital transfer transactions to be conducted via DICA

Circular No.19 has no detailed guidance on capital transfer transactions which are subject to conduct via DICA. According to Circular No.06, account which is used to pay transfer price in FDI Enterprise is regulated as follows:

  • The capital transfer transaction between a non-resident and a resident must be coursed through DICA. Currency for payment must be Vietnamese Dong.
  • The capital transfer transaction between two residents is not required to make through DICA. Currency for payment must be Vietnamese Dong.
  • The capital transfer transaction between two non-residents is not required to make through DICA. Currency for payment is either Vietnamese dong or foreign currency.

5. Payment of pre-investment costs of FI can be remitted directly from oversea

According to Circular No.06, FI is permitted to remit funds directly from foreign country to settle the payment of lawful costs in the course of implementation of pre-investment activities in Vietnam, which has no longer been required to make via operating account in foreign currency at a domestic bank as stated in Circular No.19.

6. Supplement of regulation on cases of closing opened DICA

According to Circular No. 06, FDI Enterprise (except enterprise established by FI and subject to issuance of IRC) is required to close its opened DICA in the following cases: (i) Upon conducting share acquisition, capital contribution or additional shares issuance, foreign capital ownership ratio falls below 51% on (ii) FDI Enterprise become public JSC whose shares are listed or registered at the Stock Exchange. In those cases, non-resident FI owning shares/contribution capital in the FDI Enterprise must open an indirect investment capital account to conduct receivable and payable transactions.

Download pdf version

BẢN TIN PHÁP LÝ – THÁNG 10, 2019

QUY ĐỊNH MỚI VỀ QUẢN LÝ NGOẠI HỐI ĐỐI VỚI HOẠT ĐỘNG ĐẦU TƯ TRỰC TIẾP NƯỚC NGOÀI VÀO VIỆT NAM

Phan Thị Minh – Trợ lý luật sư

Ngày 26/06/2019, Ngân hàng Nhà nước Việt Nam đã ban hành Thông tư số 06/2019/TT-NHNN (“Thông tư số 06”) hướng dẫn về quản lý ngoại hối đối với hoạt động đầu tư trực tiếp nước ngoài vào Việt Nam, chính thức có hiệu lực vào ngày 06/09/2019 và thay thế Thông tư số 19/2014/TT-NHNN ngày 11/08/2014 (“Thông tư số 19”).
Nhìn chung, Thông tư số 06 đã khắc phục được một số quy định chưa rõ ràng và không còn phù hợp với Luật Đầu tư 2014 và Luật Doanh nghiệp 2014 tại Thông tư số 19 như sau:

1. Bổ sung đối tượng phải mở tài khoản vốn đầu tư trực tiếp (“TKVĐTTT”)
Trước đây, Thông tư số 19 chỉ quy định hai đối tượng phải mở TKVĐTTT gồm: Doanh nghiệp có vốn đầu tư trực tiếp nước ngoài (“Doanh nghiệp FDI”) và Nhà đầu tư nước ngoài (“NĐTNN”) tham gia hợp đồng hợp tác kinh doanh (“BCC”).
Thông tư số 06 bổ sung thêm một đối tượng nữa là NĐTNN tham gia hợp đồng đầu tư theo hình thức đối tác công tư (“PPP”) trong trường hợp không thành lập doanh nghiệp dự án.

2. Làm rõ khái niệm Doanh nghiệp FDI
Theo Thông tư số 06, Doanh nghiệp FDI bao gồm:
• Doanh nghiệp được thành lập bởi NĐTNN và NĐTNN phải thực hiện thủ tục cấp Giấy chứng nhận đăng ký đầu tư (IRC).
• Doanh nghiệp có NĐTNN sở hữu từ 51% vốn điều lệ trở lên của doanh nghiệp do (i) có NĐTNN góp vốn, mua cổ phần, phần vốn góp vào doanh nghiệp hoặc (ii) được thành lập sau khi hợp chia tách, sáp nhập, hợp nhất hoặc (iii) được thành lập mới theo quy định của pháp luật chuyên ngành.
• Doanh nghiệp dự án do NĐTNN thành lập để thực hiện dự án PPP.

3. Mở rộng các tài liệu có thể sử dụng để mở TKVĐTTT ngoài Giấy chứng nhận đầu tư/Giấy chứng nhận đăng ký đầu tư
Bên cạnh Giấy chứng nhận đầu tư/Giấy chứng nhận đăng ký đầu tư như quy định tại Thông tư số 19, Doanh nghiệp FDI và NĐTNN có thể sử dụng một trong các tài liệu sau đây để mở TKVĐTTT:
• Giấy phép thành lập và hoạt động;
• Thông báo về việc đáp ứng điều kiện góp vốn, mua cổ phần, phần vốn góp của NĐTNN;
• Hợp đồng PPP đã ký với cơ quan nhà nước có thẩm quyền;
• Tài liệu khác chứng minh việc góp vốn của NĐTNN phù hợp với quy định của pháp luật

4. Quy định rõ về các giao dịch chuyển nhượng vốn phải thực hiện thông qua TKVĐTTT
Thông tư 19 chưa có hướng dẫn cụ thể về các giao dịch chuyển nhượng vốn bắt buộc phải thực hiện thông qua TKVĐTTT. Theo Thông tư số 06, tài khoản để thanh toán giá trị chuyển nhượng vốn tại Doanh nghiệp FDI được quy định cụ thể như sau:
• Bắt buộc phải thông qua TKVĐTTT đối với giao dịch chuyển nhượng vốn giữa người không cư trú và người cư trú. Đồng tiền thanh toán là đồng Việt Nam
• Không phải thông qua TKVĐTTT đối với giao dịch chuyển nhượng vốn giữa các nhà đầu tư là người cư trú. Đồng tiền thanh toán là đồng Việt Nam.
• Không phải thông qua TKVĐTTT đối với giao dịch chuyển nhượng vốn giữa các nhà đầu tư là người không cư trú. Đồng tiền thanh toán là đồng Việt Nam hoặc ngoại tệ.

5. Được chuyển tiền trực tiếp từ nước ngoài để thanh toán chi phí cho giai đoạn chuẩn bị đầu tư
Theo Thông tư số 06, NĐTNN được phép chuyển tiền trực tiếp từ nước ngoài để thanh toán các chi phí hợp pháp trong giai đoạn thực hiện hoạt động chuẩn bị đầu tư tại Việt Nam, không buộc phải thông qua tài khoản thanh toán bằng ngoại tệ của NĐTNN mở tại ngân hàng trong nước như Thông tư số 19.

6. Bổ sung quy định về các trường hợp phải đóng TKVĐTTT đã mở
Theo Thông tư số 06, Doanh nghiệp FDI (trừ doanh nghiệp được thành lập bởi NĐTNN và thuộc diện cấp IRC) phải thực hiện đóng TKVĐTTT đã mở trong trường hợp: (i) Sau khi thực hiện giao dịch chuyển nhượng cổ phần, phần vốn góp hoặc phát hành thêm cổ phần, tỷ lệ sở hữu vốn nước ngoài xuống dưới 51% hoặc (ii) Sau khi trở thành công ty đại chúng có cổ phiếu niêm yết hoặc đăng ký giao dịch trên Sở giao dịch chứng khoán. Trong trường hợp này, NĐTNN là người không cư trú có sở hữu cổ phần, vốn góp trong doanh nghiệp đó phải mở tài khoản vốn đầu tư gián tiếp để thực hiện các giao dịch thu, chi.

Download pdf version

THÔNG BÁO NGÀY TRỢ GIÚP PHÁP LÝ MIỄN PHÍ

Công ty Luật TNHH bizconsult (sau đây gọi tắt là “bizconsult”) xin trân trọng thông báo về Ngày Trợ Giúp Pháp Lý miễn phí năm 2019.

Thực hiện nội dung tại Thông báo số 295/TB-ĐLSHN ngày 09/07/2019 của Đoàn Luật sư thành phố Hà Nội về việc tổ chức Trợ giúp pháp lý miễn phí hưởng ứng ngày Pháp luật năm 2019 và kết hợp chào mừng ngày truyền thống Luật sư Việt Nam ngày 10/10/2019, bizconsult tổ chức Ngày Trợ Giúp Pháp Lý miễn phí cho mọi người dân trên địa bàn quận Hoàn Kiếm, thành phố Hà Nội với thông tin cụ thể như sau:

Thời gian:

Từ 8h30 đến 12h và từ 13h30 đến 18h, thứ Sáu ngày 27/09/2019.

Địa điểm:

Trụ sở Công ty Luật TNHH bizconsult, số 20 Trần Hưng Đạo, phường Phan Chu Trinh, quận Hoàn Kiếm, thành phố Hà Nội.

Lĩnh vực thực hiện trợ giúp pháp lý:

Lao động; Bảo hiểm; Hôn nhân gia đình; Quy trình và thủ tục khởi kiện trong lĩnh vực dân sự tại Tòa án nhân dân.

Liên hệ

Mọi thắc mắc xin vui lòng liên hệ Ms. Trang (039.413.9468) hoặc Mr. Kiên (0978.952.461) để được hướng dẫn chi tiết.

Công ty Luật TNHH bizconsult mong muốn mang những kiến thức, trí tuệ, tâm huyết và sự hiểu biết pháp luật của mình để phục vụ cho cộng đồng xã hội, góp phần vào sự phát triển của Liên đoàn Luật sư Việt Nam nói chung và Đoàn luật sư TP Hà Nội nói riêng.

Download PDF

VIETNAM: TIGHTENED POLICY ON IMPORT OF USED MACHINERIES, EQUIPMENT AND TECHNOLOGICAL LINES

By Ha Hai.

From 2015, the import of used machineries and technological lines is subject to the Circular 23/2015/TT-BKHCN, which contains some inadequate points causing difficulties in import of used machineries, technological lines, especially those of more than 10 years old in fact. The provision that import of used machineries and technological lines for an investment project must be approved by the investment registrar authority was totally unreasonable and in fact unenforceable, which caused difficulties not only for import companies but also investment authorities. Meanwhile, the Circular required import companies to obtain approvals from the Ministry of Science and Technology, but was silent on the specific procedure to do so, resulting in import companies’ confusion and inactivity.

Repairing the shortcomings of Circular 23, the Prime Minister issued the new Decision 18/2019/QD-TTg to provide for a better legal framework for import of used machineries and technological lines, which helps in the restriction of trash imports into Vietnam. In principle, like most other countries in the world, it is prohibited to import into Vietnam any used machinery, equipment or technological lines that have been discarded as announced by exporting countries due to their obsolescence or low quality, causing environmental pollution; or failure to satisfy safety, energy saving or environmental protection requirements. In Vietnam, only the import of used machinery, equipment and technological lines meant to directly serve the manufacturing of enterprises in Vietnam is allowed. Used machineries and technological lines must be manufactured in accordance with National Technical Regulations (QCVN) on safety, energy saving, and environmental protection. In case of unavailability of National Technical Regulations (QCVN) for a machinery or technological line to be imported, it must be manufactured in conformity with technical indicators of Vietnam’s Standards (TCVN) or Standards of G7 countries or Korea with regard to safety, energy saving and environmental protection.

Regarding used machineries and equipment, the Decision retains the general rule that used machineries and equipment are only qualified for import if their ages do not exceed 10 years. However, the Decision loosens the maximum age for some specific machinery in the areas of mechanics (machine tools for working metals and other types of materials), wood production and processing, and paper and paper pulp production to 15 or 20 years. Machineries over the provided maximum age are subject to import approval from the Ministry of Science and Technology, which shall only be granted if remaining capacity or performance achieves 85 percent or above of the machinery/equipment’s design capacity or performance, and amount of raw materials or energy consumed does not exceed 15 percent of its design consumption level.

Unlike the previous Circular 23 which provided the same conditions for used machineries/equipment and technological lines, the Decision 18/2019/QD-TTg requires more conditions for technological lines than machineries and equipment. Technological lines are not subject to the condition on maximum age, and must satisfy the condition on remaining capacity and material and energy consumption level as mentioned above. Furthermore, technologies of the technological line to be imported must not be prohibited or restricted from transferring, and being applied by at least three manufacturers of member countries of Organisation for Economic Cooperation and Development (OECD). Used technological lines are not subject to import approval from the Ministry of Science and Technology.

To be imported into Vietnam, used machineries, equipment, technological lines must obtain an Assessment Certificate from a licensed assessment company to assess their satisfaction with provided conditions by laws. The assessment certificate issued by the assessment company is required by the new Decision to conclude many more contents than previously, such as assessment method and procedure, name-number of standard QCVN, TCVN or G7, Korea about safety, energy saving and environmental protection, conclusion on satisfaction to each condition provided by laws.

Therefore, in fact, the assessment procedures by the assessment companies will be much more complicated and lengthy as the assessment companies shall have to prove the applicable standard and assessment method. This is not such an easy job as before as now the assessment company must determine the applicable standards, then choose the assessment method suitable to such machines and prove the assessment method and applicable standards. It may take some days for assessment on some big and old machines. Especially, assessment of a used technological line must be conducted at the exporting country while the technological line is operating. Practically, importers are advised generally to conduct the assessment on used machineries and equipment at the exporting country as well because if the assessment is conducted on arrival in Vietnam and any condition may be concluded to be unsatisfied after the assessment, the importer shall be applied with heavy fines and the machineries shall be deported, which is not only costly but also badly affects the importer’s reputation in Vietnam.

https://www.inhousecommunity.com/article/vietnam-tightened-policy-import-used-machineries-equipment-technological-lines/

Download PDF

VIETNAM: TIGHTENED POLICY ON IMPORT OF USED MACHINERIES, EQUIPMENT AND TECHNOLOGICAL LINES

Lưu ý: “bài viết này chỉ phát hành tiếng Anh cho tạp chí nước ngoài Asian- Mena Counsel”

By Ha Hai.

From 2015, the import of used machineries and technological lines is subject to the Circular 23/2015/TT-BKHCN, which contains some inadequate points causing difficulties in import of used machineries, technological lines, especially those of more than 10 years old in fact. The provision that import of used machineries and technological lines for an investment project must be approved by the investment registrar authority was totally unreasonable and in fact unenforceable, which caused difficulties not only for import companies but also investment authorities. Meanwhile, the Circular required import companies to obtain approvals from the Ministry of Science and Technology, but was silent on the specific procedure to do so, resulting in import companies’ confusion and inactivity.

Repairing the shortcomings of Circular 23, the Prime Minister issued the new Decision 18/2019/QD-TTg to provide for a better legal framework for import of used machineries and technological lines, which helps in the restriction of trash imports into Vietnam. In principle, like most other countries in the world, it is prohibited to import into Vietnam any used machinery, equipment or technological lines that have been discarded as announced by exporting countries due to their obsolescence or low quality, causing environmental pollution; or failure to satisfy safety, energy saving or environmental protection requirements. In Vietnam, only the import of used machinery, equipment and technological lines meant to directly serve the manufacturing of enterprises in Vietnam is allowed. Used machineries and technological lines must be manufactured in accordance with National Technical Regulations (QCVN) on safety, energy saving, and environmental protection. In case of unavailability of National Technical Regulations (QCVN) for a machinery or technological line to be imported, it must be manufactured in conformity with technical indicators of Vietnam’s Standards (TCVN) or Standards of G7 countries or Korea with regard to safety, energy saving and environmental protection.

Regarding used machineries and equipment, the Decision retains the general rule that used machineries and equipment are only qualified for import if their ages do not exceed 10 years. However, the Decision loosens the maximum age for some specific machinery in the areas of mechanics (machine tools for working metals and other types of materials), wood production and processing, and paper and paper pulp production to 15 or 20 years. Machineries over the provided maximum age are subject to import approval from the Ministry of Science and Technology, which shall only be granted if remaining capacity or performance achieves 85 percent or above of the machinery/equipment’s design capacity or performance, and amount of raw materials or energy consumed does not exceed 15 percent of its design consumption level.

Unlike the previous Circular 23 which provided the same conditions for used machineries/equipment and technological lines, the Decision 18/2019/QD-TTg requires more conditions for technological lines than machineries and equipment. Technological lines are not subject to the condition on maximum age, and must satisfy the condition on remaining capacity and material and energy consumption level as mentioned above. Furthermore, technologies of the technological line to be imported must not be prohibited or restricted from transferring, and being applied by at least three manufacturers of member countries of Organisation for Economic Cooperation and Development (OECD). Used technological lines are not subject to import approval from the Ministry of Science and Technology.

To be imported into Vietnam, used machineries, equipment, technological lines must obtain an Assessment Certificate from a licensed assessment company to assess their satisfaction with provided conditions by laws. The assessment certificate issued by the assessment company is required by the new Decision to conclude many more contents than previously, such as assessment method and procedure, name-number of standard QCVN, TCVN or G7, Korea about safety, energy saving and environmental protection, conclusion on satisfaction to each condition provided by laws.

Therefore, in fact, the assessment procedures by the assessment companies will be much more complicated and lengthy as the assessment companies shall have to prove the applicable standard and assessment method. This is not such an easy job as before as now the assessment company must determine the applicable standards, then choose the assessment method suitable to such machines and prove the assessment method and applicable standards. It may take some days for assessment on some big and old machines. Especially, assessment of a used technological line must be conducted at the exporting country while the technological line is operating. Practically, importers are advised generally to conduct the assessment on used machineries and equipment at the exporting country as well because if the assessment is conducted on arrival in Vietnam and any condition may be concluded to be unsatisfied after the assessment, the importer shall be applied with heavy fines and the machineries shall be deported, which is not only costly but also badly affects the importer’s reputation in Vietnam.

https://www.inhousecommunity.com/article/vietnam-tightened-policy-import-used-machineries-equipment-technological-lines/

Download PDF

NEW GUIDANCE ON FOREX MANAGEMENT TO FDI ENTERPRISES

Lưu ý: “bài viết này chỉ phát hành tiếng Anh cho tạp chí nước ngoài Asian- Mena Counsel”

By Phuong Phan.

In mid-2019, the State Bank of Vietnam issued Circular No. 06/2019/TT-NHNN dated June 26, 2019 (Circular 06) to provide guidance on foreign exchange management for foreign direct investment in Vietnam. This Circular shall take effect from September 6, 2019 and replace Circular No. 19/2014/TT-NHNN dated August 11, 2014 (Circular 19).

Direct investment and Capital Account

One of the noteworthy points under Circular 06 is that it clearly determines and construes foreign-invested enterprises, which are required to open the Direct Investment Capital Account (DICA), including (i) enterprises being established in the investment form of economic organisations, in which foreign investors are members or shareholders and must carry out the procedures to obtain Investment Registration Certificate (IRC) in accordance with the investment law, (ii) enterprises not subject to IRC and having 51 percent or more of the charter capital owned by foreign investors, for example enterprises having the foreign investors to contribute capital, purchase shares or portion of capital contribution to such enterprise which result in the foreign investors owning 51 percent or more of the charter capital of such enterprises (in this case the foreign investors obtained the notification on satisfaction of the conditions for capital contribution and share purchase (M&A Approval) and (iii) enterprises established by the foreign investors to implement PPP projects in accordance with the investment law (hereafter referred to DICA Enterprise).

The enterprises under (ii) and (iii) above are required to close DICA in the following cases: (i) after completing the transfer of shares, contribution capital or issuing the additional shares in order to increase the charter capital in such enterprises, the percentage of shares and contribution capital owned by the foreign investors at such enterprises is below 51 percent; or (ii) after such enterprises having become the listed enterprises with their shares listed or registered for trading on the Stock Exchange. In such cases, the non-resident foreign investors who own the shares, capital contribution in such enterprise must open the Indirect Investment Capital Account (IICA) in order to implement their revenue and expenditure transactions.

Screenshot 2019-09-11 at 10.44.31 AM

Capital contributions

One more notable point is that the foreign and domestic investors are allowed to contribute capital in Vietnamese dong or foreign currencies as provided in IRC, the establishment and operation licence under the specialised regulations (for the foreign-invested enterprises established and operated under the specialised regulations), M&A Approval, the PPP Contract signed with the competent state authorities and other evidence. This point will support the remittance banks to clarify the supporting documents provided by the foreign investor in order to allow the fund transfer without IRC requirement as usually did in the past. Thus, it being understood that in case the local enterprise which was incorporated by Vietnamese investors and then acquired by the foreign investors leading to such foreign investors owning 51 percent or more of the charter capital of such enterprise, the foreign investors should firstly obtain M&A Approval and then such enterprise opens DICA. Then the foreign investors implement the fund transfer through DICA and such enterprise will implement the procedures to recognise the foreign investors as the members/shareholders of such enterprise.

Circular 06 regulates more clearly the payment route regarding M&A transactions involving DICA Enterprise as follows: (i) the payment of transfer price between a resident investor and a non-resident investor must be implemented through DICA and in Vietnamese dong; (ii) the payment of transfer price between two non-resident investors is allowed to implement in foreign currency or Vietnamese dong and the payment of transfer price between two resident investors must be in Vietnamese dong, however, they both are not required to implement through DICA. Having said that, it seems to allow foreign investors to implement the offshore payment in foreign currency thanks to Circular 06. Before Circular 06, it is arguable that offshore payment for transfer price in the DICA Enterprises is allowed or it must be implemented through DICA.

Conclusion

In summary, Circular 06 has some significant improvements regarding capital transactions and M&A pertaining to foreign-invested enterprises in Vietnam.

https://www.inhousecommunity.com/article/vietnam-new-guidance-forex-management-fdi-enterprises/

Download PDF

NEW GUIDANCE ON FOREX MANAGEMENT TO FDI ENTERPRISES

By Phuong Phan.

In mid-2019, the State Bank of Vietnam issued Circular No. 06/2019/TT-NHNN dated June 26, 2019 (Circular 06) to provide guidance on foreign exchange management for foreign direct investment in Vietnam. This Circular shall take effect from September 6, 2019 and replace Circular No. 19/2014/TT-NHNN dated August 11, 2014 (Circular 19).

Direct investment and Capital Account

One of the noteworthy points under Circular 06 is that it clearly determines and construes foreign-invested enterprises, which are required to open the Direct Investment Capital Account (DICA), including (i) enterprises being established in the investment form of economic organisations, in which foreign investors are members or shareholders and must carry out the procedures to obtain Investment Registration Certificate (IRC) in accordance with the investment law, (ii) enterprises not subject to IRC and having 51 percent or more of the charter capital owned by foreign investors, for example enterprises having the foreign investors to contribute capital, purchase shares or portion of capital contribution to such enterprise which result in the foreign investors owning 51 percent or more of the charter capital of such enterprises (in this case the foreign investors obtained the notification on satisfaction of the conditions for capital contribution and share purchase (M&A Approval) and (iii) enterprises established by the foreign investors to implement PPP projects in accordance with the investment law (hereafter referred to DICA Enterprise).

The enterprises under (ii) and (iii) above are required to close DICA in the following cases: (i) after completing the transfer of shares, contribution capital or issuing the additional shares in order to increase the charter capital in such enterprises, the percentage of shares and contribution capital owned by the foreign investors at such enterprises is below 51 percent; or (ii) after such enterprises having become the listed enterprises with their shares listed or registered for trading on the Stock Exchange. In such cases, the non-resident foreign investors who own the shares, capital contribution in such enterprise must open the Indirect Investment Capital Account (IICA) in order to implement their revenue and expenditure transactions.

Screenshot 2019-09-11 at 10.44.31 AM

Capital contributions

One more notable point is that the foreign and domestic investors are allowed to contribute capital in Vietnamese dong or foreign currencies as provided in IRC, the establishment and operation licence under the specialised regulations (for the foreign-invested enterprises established and operated under the specialised regulations), M&A Approval, the PPP Contract signed with the competent state authorities and other evidence. This point will support the remittance banks to clarify the supporting documents provided by the foreign investor in order to allow the fund transfer without IRC requirement as usually did in the past. Thus, it being understood that in case the local enterprise which was incorporated by Vietnamese investors and then acquired by the foreign investors leading to such foreign investors owning 51 percent or more of the charter capital of such enterprise, the foreign investors should firstly obtain M&A Approval and then such enterprise opens DICA. Then the foreign investors implement the fund transfer through DICA and such enterprise will implement the procedures to recognise the foreign investors as the members/shareholders of such enterprise.

Circular 06 regulates more clearly the payment route regarding M&A transactions involving DICA Enterprise as follows: (i) the payment of transfer price between a resident investor and a non-resident investor must be implemented through DICA and in Vietnamese dong; (ii) the payment of transfer price between two non-resident investors is allowed to implement in foreign currency or Vietnamese dong and the payment of transfer price between two resident investors must be in Vietnamese dong, however, they both are not required to implement through DICA. Having said that, it seems to allow foreign investors to implement the offshore payment in foreign currency thanks to Circular 06. Before Circular 06, it is arguable that offshore payment for transfer price in the DICA Enterprises is allowed or it must be implemented through DICA.

Conclusion

In summary, Circular 06 has some significant improvements regarding capital transactions and M&A pertaining to foreign-invested enterprises in Vietnam.

https://www.inhousecommunity.com/article/vietnam-new-guidance-forex-management-fdi-enterprises/

Download PDF

BẢN TIN PHÁP LÝ – THÁNG 09, 2019

MỘT SỐ QUY ĐỊNH MỚI VỀ SỞ HỮU TRÍ TUỆ

Ngày 14 tháng 6 năm 2019, Quốc Hội đã ban hành Luật số 42/2019/QH14 sửa đổi bổ sung một số điều của Luật Kinh doanh bảo hiểm và Luật Sở hữu trí tuệ (“Luật số 42”) để phù hợp với các quy định về Hiệp định Đối tác toàn diện và Tiến bộ xuyên Thái Bình Dương (CPTPP). Luật số 42 chính thức có hiệu lực thi hành từ ngày 01 tháng 11 năm 2019 với các điểm liên quan đến Sở hữu trí tuệ cần lưu ý như sau:

1. Tính mới và trình độ sáng tạo của sáng chế
Sáng chế không bị coi là mất tính mới nếu đơn đăng ký được nộp trong vòng 12 tháng tại Việt Nam kể từ ngày:
i. được người có quyền đăng ký hoặc người có được thông tin về sáng chế bộc lộ một cách trực tiếp hoặc gián tiếp;
ii. được bộc lộ bởi cơ quan quản lý nhà nước về sở hữu công nghiệp không đúng quy định;
iii. do người không có quyền đăng ký nộp.

Quy định mới của Luật số 42 đã kéo dài thời gian nộp đơn đăng ký sáng chế không bị coi là mất tính mới từ 6 tháng lên 12 tháng và quy định phạm vi đối tượng nộp đơn đăng ký rộng hơn so với quy định cũ của Luật Sở hữu trí tuệ.

Ngoài ra, Luật số 42 còn bổ sung quy định giải pháp kỹ thuật là sáng chế được bộc lộ trong các trường hợp trên sẽ không được lấy làm cơ sở để đánh giá trình độ sáng tạo của sáng chế đó.

2. Hiệu lực của Hợp đồng sử dụng Nhãn hiệu (“Hợp đồng Li-xăng”)
Kể từ ngày 14/01/2019, Hợp đồng Li-xăng giữa các bên không cần phải đăng ký tại Cục Sở hữu trí tuệ mà vẫn sẽ có hiệu lực pháp lý đối với bên thứ ba.

3. Nghĩa vụ sử dụng nhãn hiệu
Trường hợp có tranh chấp phát sinh do bên thứ ba yêu cầu chấm dứt văn bằng bảo hộ vì nhãn hiệu không được sử dụng trong năm (05) năm liên tiếp thì việc bên nhận chuyển quyền sử dụng nhãn hiệu theo Hợp đồng Li-xăng vẫn được coi là hành vi sử dụng nhãn hiệu chủ sở hữu nhãn hiệu.

4. Quyền tự bảo vệ
Luật số 42 quy định tổ chức/ cá nhân là đối tượng của hành vi lạm dụng thủ tục bảo vệ quyền sở hữu trí tuệ (cố ý vượt quá phạm vi hoặc mục tiêu) có quyền yêu cầu Tòa án buộc bên lạm dụng phải bồi thường cho những thiệt hại do việc lạm dụng gây ra (bao gồm chi phí hợp lý để thuê luật sư).

Ngoài ra còn có những quy định được sửa đổi, bổ sung như sau:
1. Tên gọi, chỉ dẫn là tên gọi chung của hàng hóa theo nhận thức của người tiêu dùng có liên quan trên lãnh thổ Việt Nam không được bảo hộ với danh nghĩa chỉ dẫn địa lý ;
2. Từ chối hoặc hủy bỏ chỉ dẫn địa lý do “có khả năng gây nhầm lẫn” thay vì “sẽ gây nhầm lẫn” với nhãn hiệu đang được bảo hộ tại Việt Nam ;
3. Đơn đăng ký xác lập quyền sở hữu công nghiệp được nộp dưới dạng giấy hoặc dạng điện tử theo hệ thông nộp đơn trực tuyến ;
4. Bổ sung quy định về Đề nghị quốc tế và xử lý đơn Đề nghị quốc tế để bảo hộ chỉ dẫn địa lý ;
5. Các thiệt hại về vật chất có thể được xác định do chủ thể quyền sở hữu trí tuệ đưa ra phù hợp với quy định của pháp luật .

LEGAL UPDATE – SEPTEMBER 2019

NEW REGULATIONS ON INTELLECTUAL PROPERTY LAW

On June 14th, 2019, the National Assembly enacted Law No. 42/2019/QH14 on amendment and supplement of a number of articles of Law on Insurance Business and Law on Intellectual Property (“Law No. 42”) to comply with the Intellectual Property regulations set forth in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Law No. 42 will officially take effect from November 1st, 2019 with points related to Intellectual Property noted as follows:
1. Novelty and inventive step of patent

A patent shall not lose its novelty if the patent application is submitted within 12 months in Vietnam from the date that:

i. The patent is directly or indirectly disclosed by the person who is entitled to registry or the person who has information about it.

ii. The disclosure of the patent by the State administrative agency of industrial property rights is inconsistent with the laws;

iii. The patent application is submitted by the person who is ineligible for registration.

The patent shall not be considered losing its novelty as new regulation of Law No. 42 extends the time limit for submission of patent application from 6 months to 12 months. Besides, Law No. 42 provides wider range of the applicants than the former regulations of Law on Intellectual Property.

In addition, Law No. 42 supplements the regulations that a technical solution which is a patent disclosed in the above cases shall not be used as a basis for evaluating the inventive step of such patent.

2. Validity of the Trademark Licensing Agreement (“TLA”)

The TLA between the parties is legally binding upon third parties without being registered at the National Office of Intellectual Property.

3. Obligation to use the trademarks

In the event that a dispute arises due to a request for termination of validity of Trademark Certificate of Registration of the third party as the trademark has not been used for five (05) consecutive years, the use of licensed trademark by a licensee is still considered the use of the trademark owner.

4. Self-defense right

According to Law No. 42, an organization/individual that is abused by intellectual property defense procedures (intentionally exceeding the scope or purpose of the procedure) is entitled to request the Court to compel the abusing party of compensation for damages caused by abusive procedures (including reasonable fees for hiring a lawyer).

Moreover, there are additional amendments as follows:

1. Names and indications, which are the common name of goods and widely accepted by consumers in Vietnam, are ineligible for protection as geographical indications;

2. Refusal or cancellation of geographical indications due to “potentially confusing” instead of “will cause confusion” with protected trademark in Vietnam;

3. An application for registration of industrial property rights shall be submitted in paper or electronic form according to the online filing system;

4. Supplementing provisions on International proposals and processing of International proposals for protection of geographical indications;

5. Material losses caused by intellectual property’s infringement can be determined by the intellectual property right’s holder in accordance with provisions of laws.

NEW LAW ON COMPETITION TAKES EFFECT

Lưu ý: “bài viết này chỉ phát hành tiếng Anh cho tạp chí nước ngoài Asian- Mena Counsel”

By Nguyen Thu Huyen.

Vietnam’s National Assembly passed the new Law on Competition (New Competition Law) on June 12, 2018 and it will be taking effect on July 1, 2019, 14 years after the implementation of the Law on Competition 2004.

The New Competition Law governs (i) the acts in restraint of competition, economic concentrations which have or may have a competition-restraining impact on Vietnam’s market; (ii) unfair competitive acts; (iii) competition legal proceedings; (iv) dealing with breaches of the law on competition; and (v) State administration of competition.

The New Competition Law extends the scope of its applicable entities that consist of “related domestic and foreign agencies, organisations and individuals”, apart from organisations and individuals conducting business and industry and professional associations operating in Vietnam. These broadened regulations aim to create the mechanism to settle anti-competitive acts and/or cases which may be implemented overseas but have or may have a competition-restraining impact on Vietnam’s market and to control acts relating to competition of state authorities. This content is to meet the requirements of economic integration and create a fair competition environment for both domestic and foreign organisation/individuals.

Pursuant to the New Competition Law, there are significant changes in regulating “acts in restraint of competition”, which are defined as actions that cause or may cause a competition-restraining impact, including “practices of agreement in restraint of competition, abuse of dominant market position, and abuse of monopoly position”. Under the 2004 version of Law, the “acts in restraint of competition” apply only to enterprises and consist of “economic concentration”, meanwhile, these matters are now no longer provided.

The approaching method under the 2004 version of the law to control “agreements in restraint of competition” is solely based on “combined market share”. At present, the New Competition Law manages these agreements by its nature or ability to have a significant competition-restraining impact in the market. The term “significant competition-restraining impact” is newly provided and shall be determined by the National Competition Committee according to market share ratio, barriers to market access or expansion, restriction of research, development and renovation of technologies, etc. The New Competition Law further provides three more types of agreements in its list of “agreements in restraint of competition”, including: agreements not to trade with parties not participating in the agreements; agreements to restrain the product sale market or sources of supply of goods and services of parties not participating in the agreements; and other agreements which have or may have a competition-restraining impact. In addition, the New Competition Law provides the new term of “significant market force”, which is a ground to verify “a dominant market position” of an enterprise, apart from the one of “holding of 30 percent or more of the market share in the relevant market”.

The management of economic concentration is another noteworthy change of the New Competition Law. Unlike the 2004 version of the law, which determines the prohibited economic concentration by relevant market share ratio, presently, economic concentration shall be prohibited if it causes the effect or is capable of causing the effect of significantly restricting competition in the market of Vietnam. The “significantly restricting competition effect” shall be also confirmed by the National Competition Committee based on specific elements provided in this New Competition Law. Regarding “the unfair competitive acts”, the New Competition Law does not re-provide and refer to other acts that are governed under other relevant laws, and “illegal multi-level sales” are excluded from unfair competitive acts.

One last remarkable point of the New Competition Law is to strengthen and ensure the independence of the state administration of competition by having new regulation on the National Competition Committee, which is an agency under the Ministry of Industry and Trade, being in charge of advising and assisting the Minister of Industry and Trade in exercising the function of state administration of competition; carrying out competition legal proceedings and to perform other duties in accordance with the laws.

Download PDF