Circular No. 19/2014/TT-NHNN on Foreign Direct Investment

On 11 August 2014, the State Bank of Vietnam ("SBV") issued Circular No. 19/2014/TT-NHNN guiding the foreign exchange management of foreign direct investment in Vietnam. The Circular details the conditions for opening and using direct investment accounts in Vietnamese dong and foreign currencies, as well as the procedure for transferring investments to Vietnam through foreign currencies accounts and the obtaining of an Investment Certificate.

This Circular shall take effect from 22 September 2014 and annul Article 9 of the Circular No. 05/2014/TT-NHNN dated 12 March 2014.

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Circular No. 25/2014/TT-NHNN on Registration of Offshore Loans

On 15 September 2014, the SBV issued Circular No. 25/2014/TT-NHNN regulating the registration of offshore loans which are not guaranteed by the Government.

The following points are worth noting:

• The Circular requires registration with the SBV for medium term loans, long term loans, and short term loans which have been extended to or which have reached 1 year.
• Registration is not required for offshore loans signed with non-residents and where the type of agreement does not influence the withdrawal of the loan.
• If an offshore loan is conducted in Vietnamese dong, it must be approved by the Governor of the SBV.
• The Circular also details the procedures and application dossier for the registration of offshore loans.

This Circular shall take effect from 1 November 2014, replacing Circular No. 09/2004/TT-NHNN and Circular No. 25/2011/TT-NHNN.

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Circular No. 103/2014/TT-BTC on Tax Liabilities of Foreign Entities

On 6 August 2014, the Ministry of Finance issued Circular No. 103/2014/TT-BTC, which provides guidance on the fulfillment of tax liabilities for foreign entities doing business in Vietnam or earning income in Vietnam.

In particular, the Circular provides that:

• Tax payers will include foreign entities providing goods under all Incoterm conditions of delivery. Further, foreign entities which distribute goods or services in Vietnam, conduct negotiations under the name of foreign entities, and exercise import/export rights in Vietnam will be subject to withholding tax.
• Foreign entities using bonded warehouses or inland clearing depots as as a warehouse serving international transport, transit of goods, or storage of goods to be processed by other companies may not be subject to withholding tax.

This Circular takes effect from 1 October 2014, replacing Circular No. 60/2012/TT-BTC.

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Decree No. 96/2014/ND-CP on Sanctions of Administrative Violations in the Monetary and Banking Area

On 17 October 2014, the Government issued Decree No. 96/2014/ND-CP on sanctions of administrative violations in the monetary and banking area.

Under this Decree, the maximum fine level for a violation in the monetary and banking area has increased to VND 2,000,000,000 (approximately USD 100,000) for organisations and VND 1,000,000,000 VND (approximately USD 50,000) for individuals.

This Decree will take effect from 12 December 2014.

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Circular No. 10/2014/TT- BVHTTDL Guiding the Naming of Enterprises

On 1 October 2014, the Ministry of Culture, Sports and Tourism issued Circular No. 10/2014/TT-BVHTTDL guiding the naming of enterprises in accordance with tradition, history, culture, ethics, habits and customs of the nation.

In particular, the Circular provides that:

• Names of enterprises in Vietnam must not be identical with names of famous persons, country names during the time that Vietnam was under foreign occupation, names of individuals who are against good causes or historical development, names of historical people who are aggressors, names of individuals who are guilty to the country and nation, and other cases as stipulated by law.
• Names of enterprises in Vietnam must not contain words or symbols which are mean, vulgar, pornographic, depict violence, crime, or social vices, directly or indirectly threaten, insult, or disrespect other organizations and individuals, or express or insinuate regional, ethnical, religious, racial and sexist discrimination and segregation.

This Circular takes effect from 25 November 2014.

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Decree No. 103/2014/ND-CP on Minimum Wages

On 11 November 2014, the Government issued Decree No. 103/2014/ND-CP regulating region-based minimum wages for employees working for companies, cooperatives, cooperative groups, farms, households, individuals, and organisations hiring employees under labour contracts.

This Decree sets out the following minimum wages:

• VND 3,100,000/month (approximately USD 148) for enterprises operating in Region I.
• VND 2,750,000/month (approximately USD 131) for enterprises operating in Region II.
• VND 2,400,000/month (approximately USD 114) for enterprises operating in Region III.
• VND 2,150,000/month (approximately USD 102) for enterprises operating in Region IV.

The appendix attached to the Decree specifies the administrative divisions that each region covers. Region I covers selected central districts, including those in Hanoi, Ho Chi Minh City and Hai Phong.  It also covers Vung Tau. Region II covers districts in Da Nang, Hue, among numerous other provinces.

The wage paid to employees working in normal conditions, satisfying normal working hours per month and completing agreed works must not be lower than these region-based minimum wages for untrained workers doing unskilled labour. The minimum wage for trained workers must be at least 7% higher than those prescribed above.

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