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Vietnamese new laws in 2015 - what foreign investors should know

“In 2014, the National Assembly passed many important laws related to the operation of the enterprises. These laws are effective in 2015 and are expected to help improve environment of business and investment in Vietnam”.

1. Brand-new Enterprise Law

The Enterprise Law which is effective from 01 July 2015 will help:

♦ Reduce time and cost for enterprise establishment.

♦ Strengthen the business freedom under the Constitution in 2013.

♦ Reduce risk and increase the activeness and agility in business activities of enterprises.

♦ Simplify the legal procedures by setting up the electronic information database system.

♦ Protect the legal rights and interests of investors better.

Some important changes:

♦ Right to freely conduct business: the type of industry isn’t written in the Business license, the enterprises will really have the right to freely conduct business and are allowed to do what are not prohibited by laws.

♦ Seal of enterprise: The enterprise will be free to choose the use of seal. The form and content shall be decided by the enterprise but it is required to register with the licensing authority.

♦ Capital contribution deadline: within 90 days from the business license issue date.

Legal representatives : Limited company and Corporation can have more than 01 legal representatives.

2. Investment law 2014

The law takes effect from the date of 01 July 2015 and will create the open investment environment for investors.

♦ Scope of business: this is the first time Investment Law defines list of only 06 prohibited and 272 conditional business lines. In addition to these industries, investors are completely free to choose the business to do.

♦ New definition of foreign investor: Foreign investor is now any foreign individual or organization established in accordance with the foreign law. This new definition is expected to make clear the concept of the foreign investor.

♦ Complete regulations on investment incentives: amended law completed the provisions of investment incentives as well as the principles, conditions to apply incentives to attract foreign investment with selection and quality.

3. Law amending and supplementing a number of articles of the Law on taxes

Although this law has only 6 Articles but it regulates and modifies a variety of important issues in the current tax laws, including the Law on Corporate Income Tax (amend provisions for a number of enterprises income, expenses as well as the tax rate and the tax incentives for certain fields of investment); Personal Income Tax Law (revise tax regulations for individual business, taxable income from capital transfer and real estate transfer).

For value added tax, the law adds the object not subject to tax imposition as offshore fishing vessels; changed three commodity groups subject to 5% tax rate into not subject to tax as fertilizer; food for poultry; machinery and equipment used exclusively for agricultural production.

This law takes effect from 01 Jan 2015.

4. Customs Law (Amended)

An important point in the new Customs Law is boosting management method from pre-inspection to post – inspection. Inspection after customs clearance with a period of 5 years is specified strictly about the objects, conditions and penalty when a violation is detected.

The law also define one-door mechanism, which allows the customs declaration people to submit electronic information documents to make customs procedures; the new rules on priority for businesses; customs documents; customs declaration …

This law is effective from 01 Jan 2015.

5. Bankruptcy Law 2014

Under the new bankruptcy law, the criteria determining the company unable to pay is “not perform its paymentobligations” rather than “no ability to pay”.

The deadline is determined within 3 months from the date of maturity, not “required by the creditor” as defined in the Bankruptcy Law 2004.

Procedures for bankrupt companies also have changes. Under the old Bankruptcy Law, the company can’t go bankrupt if its assets aren’t liquidated. To solve this problem, the Bankruptcy Law 2014 allows the company to declare bankruptcy before liquidating assets.

This law takes effect from 01 Jan 2015.

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