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On 18 June 2012, the new Labour Code No. 12/2012/QH13 ("New Labour Code") was passed by the National Assembly of Vietnam. The New Labour Code took effect on 1 May 2013.
Some of the key developments provided for in the New Labour Code are: the increase of employee's salary during probation and temporary re-assignment period up to 85% of full salary; the extension of maternity leave duration to six months; the extension of annual leave entitlement for the Lunar Tet Holiday from four to five days; the grounds for termination of employment contract and other enhancements relating to labour relations. In order to implement the New Labour Code, the Government has also recently issued a number of decrees providing detailed guidance with respect to provisions relating to employment contracts, working hours, rest breaks, labour safety and hygiene, trade unions, and labour outsourcing.
With respect to corporate issues, the Government has issued a new Decree No. 05/2013/ND-CP ("Decree 05") amending Decree No. 43/2010/ND-CP ("Decree 43") on enterprise registration, which came into effect on 25 February 2013. Decree 05 contains provisions which would be of interest to investors intending to register their businesses. According to the previous Decree 43 and other relevant regulations, the investor had to determine and state the relevant economic sector codes and central product classification ("CPC") codes in its application for business registration. An application for business registration without the appropriate codes would be rejected by the local licensing authorities or forwarded to the central licensing authority (i.e. the Ministry of Planning and Investment) for further consideration, which often resulted in lengthy delays in the business registration process. In order to resolve this issue, the new Decree 05 allows the local licensing authorities to approve the application without the specified codes [thereby allowing the registered business to commence operations and then notify the Ministry of Planning and Investment to supplement the existing list of economic sector codes.
In addition, the Ministry of Planning and Investment has issued Circular No. 01/2013/TT-BKHDT ("Circular 01") to supersede Circular No. 14/2010/TT-BKHDT and provide new guidance on enterprise registration. Under Circular 01, enterprise registration and procedures have been made easier and more user-friendly. Examples include (i) providing for online enterprise registration; (ii) resolving disputes over enterprises' names in backup processes; and (iii) provision of procedures for dissolving enterprises.
In September 2012, the Government issued Decree No. 58/2012/ND-CP ("Decree 58"), allowing foreign investors to acquire up to 49% of the charter capital in an existing fund management company or to establish a new 100%-owned fund management company provided that some certain criteria are met. However, there was a lack of detailed guidance on this matter, and no 100%-owned foreign-invested fund management company was established despite the issue of Decree 58. This is set to change, however, as the Ministry of Finance has now issued Circular 212/2012/TT-BTC ("Circular 212") with effect from 1 March 2013. Circular 212 sets out the detailed conditions and procedures for setting up a 100% foreign-invested fund management company. In addition, it also permits the fund management company to provide securities investment consultancy service, which is a new clarification on the law. With the new developments under Circular 212, it is expected that Vietnam's securities market will become more attractive to foreign investors.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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