The new Law on Enterprises came into effect on 1 July 2015, bringing with it numerous changes to corporate governance in Vietnam. For example, both limited liability companies and joint stock companies may now decide on their number of seals, the form, the contents, and the management and use of such seals in their charter, provided a seal sample is sent to the business registration authority for publication on the National Enterprise Registration Portal. Companies may now also have more than one legal representative in their charter, provided at least one resides in Vietnam.
However, the law also tightens the time limit in which a limited liability company is required to pay up its charter capital. Under the former Law on Enterprises, this time limit was 36 months from the date of incorporation. This has now been shortened to 90 days, failure of which requires the company to decrease their charter capital.
Under the former Law on Investment, investors that wish to incorporate a foreign-owned company are required to apply for and obtain an Investment Certificate, which comprises of proof of the incorporation and approval of their project. The new Law on Investment and Law on Enterprise (which came into effect on 1 July 2015) now requires a two-step procedure. Provided it is not a project of some national significance, investors generally now need to obtain (1) an Investment Registration Certificate as proof of approval of the investor's project; and (2) an Enterprise Registration Certificate, akin to an incorporation certificate, that all local and foreign corporations need to obtain.
While the two-step process appears to complicate the incorporation procedure, the law envisages a much faster processing time for incorporation. However, as of the date of this round-up, there has been no guiding legal instrument as to how the licensing authorities would implement the new laws, thereby causing delays as the authorities are at a limbo on how to deal with applications - particularly for those that had been lodged prior to the new law's effectiveness and where there is no clear transitional procedure in place. The guiding decrees for the new laws are expected to come out soon, which will shed some light on the process.
The widely-anticipated Law on Housing, which took effect on 1 July 2015, aims to remove the many restrictions placed on house ownership by foreigners in Vietnam. The new law now states that foreign individuals permitted to enter Vietnam and foreign-invested companies, branches and representative offices may purchase properties. The right of sub-lease, sale, inheritance, and mortgage are now attached to these properties in a similar treatment as for Vietnamese buyers. Foreigners may own up to 30% of a single apartment building or more than 250 houses in a single administrative ward, but may only own houses for a limited duration of 50 years (with a possibility of renewal upon expiration).
However, while the law appears to be liberal in allowing any foreign individuals "permitted to enter Vietnam" to purchase properties, such sweeping permission may be narrowed in the upcoming guiding decree. This guiding decree is expected to further particularise the procedures and other provisions in the Law on Housing for which there may be ambiguity.
