On 17 June 2020, the National Assembly voted to approve the new Law on Investment 2020, replacing the 2014 law. This law will take effect from 1 January 2021. The key changes introduced by the law include the following:
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The law updates the list of business lines subject to conditional market access. It now prohibits debt collection services, but also removes certain businesses from the "conditional" category such as franchising and logistics.
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Investors may now establish enterprises that are innovative start-ups or investment funds without having to obtain an "Investment Registration Certificate". This would streamline the market entry and licensing procedures for start-ups seeking to tap into the Vietnamese market.
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The law also removes the need for an "acquisition approval" from the licensing authorities for transactions that will not increase the extent of foreign ownership in the target company. This would effectively streamline certain M&A transactions.
On 17 June 2020, the National Assembly voted to approve the new Law on Enterprises 2020, replacing the 2014 law. This law will take effect from 1 January 2021. The key changes introduced by the law include the following:
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Enterprises will now be able to decide whether or not to have a corporate seal. The procedures for notifying the seal specimen have also been abolished.
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State-owned enterprises ("SOEs") have been redefined to comprise enterprises having more than 50% capital being owned by the State, in contrast to the current requirement for 100% State ownership under the existing legislation. As SOEs are subject to different rules surrounding corporate governance and other regulations, this would impact investors that may have minority stakes in Vietnamese enterprises with certain State capital.
On 15 May 2020, Decree No. 35/2020/ND-CP (guiding the Law on Competition) came into effect. This decree provides the specific merger filing requirements. It includes the criteria for general cases as well as those for special businesses, namely credit institutions, insurance companies and securities companies.
For the general cases (i.e. all businesses except the above three cases), filing is required if the transaction falls under any of the following categories:
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the value of the intended transaction is VND 1,000 billion or more;
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the total assets of a participating company, or the group of affiliate companies of which such company is a member, in the Vietnam market were at least VND 3,000 billion in the preceding fiscal year;
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the total sales turnover or purchase turnover of a participating company, or the group of affiliate companies of which such company is a member, in the Vietnam market was at least VND 3,000 billion in the preceding fiscal year; or
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the combined relevant market share of the participating companies is at least 20% in the preceding fiscal year.
On 6 April 2020, the Prime Minister issued the long-awaited Decision No. 13/2020/QD-TTg to encourage the development of rooftop solar projects in Vietnam. There are two key changes introduced by this decision:
The first is that the decision now makes specific allowance for power purchase agreements ("PPAs") to be signed with parties other than Electricity of Vietnam ("EVN"), for rooftop solar projects. This allows investors to now engage in electricity distribution for such projects to private parties, provided that output does not exceed 1MW and the EVN grid is not used. The terms of the PPA and the applicable tariff will be subject to the parties' determination. Similar PPAs for other projects (e.g. floating / ground-mounted) still remain unregulated.
The new feed-in-tariffs ("FiTs") are: (i) VND 1,783/kWh (7.69 US cents/kWh) for floating solar projects, (ii) VND 1,644/kWh (7.09 US cents/kWh) for ground-mounted solar projects and (ii) VND 1,943/kWh (8.38 US cents/kWh) for rooftop solar projects. The FiTs exclude VAT and may be subject to exchange rate adjustments.
