VietNamNet Bridge – A series of new policies on SOEs, recruitment of Vietnamese workers in foreign organizations, foreign exchange, and gambling business for foreigners come into effect since September, 2014.

Transformation of SOEs to joint stock companies

Decree 69/2014/ND-CP regarding the transformation of State-owned enterprises (SOEs) to joint stock companies shall come into force since September 1, 2014.

Accordingly, forms of state-owned enterprise equitization will include (1) the current state capital value in the enterprise is maintained, while new shares are issued to mobilize more funds; (2) selling part of the existing state capital of the enterprise; (3) selling all existing state capital of the enterprise; (4) combining forms 2 and 3 and while issuing new shares to mobilize additional funds.

Foreign investors who are interested in buying shares of the equitized Vietnamese enterprises shall be required to open accounts at payment service providing institutions that are operating in the Vietnam’s territory, and observing Vietnamese laws.

All transactions in buying and selling shares, receiving dividends and profit repatriation from Viet Nam should be conducted through these accounts.

Tougher punishment on unfair competition  

Decree 71/2014/ND-CP, dated July 21, 2014, shall be valid from September 15, 2014 and supersedes Decree 120/2005/ND-CP handling of violations of Law in the competition domain with more serious fine.

According to the Decree 71, maximum fines for acts of unfair competition, other acts violating competition law are VND 100 million to individuals and VND 200 million to organizations.

A fine from VND 60- 80 million is applied to advertising act including comparing their products or services directly with those of the same kind of other enterprises; imitating other advertising products to mislead customers.

Recruitment of Vietnamese employees

Decree 75/2014/ND-CP dated July 28, 2014 of the Government detailing the implementation of a number of articles of the Labor Code on recruitment, management of Vietnamese employees working for foreign organizations, individuals in Viet Nam shall take effect since September 15, 2014.

This Decree provides orders of, procedures for the recruitment of Vietnamese employees working for the following foreign organizations, individuals including (1) Viet Nam-based non-profit representative offices of foreign economic organizations in Viet Nnam (including commercial, financial, banking, insurance, scientific-technical, cultural, educational, medical, legal consultation fields); (2) foreign diplomatic representative offices and Viet Nam – based representative offices of international organizations; (3) foreign non-governmental organizations granted operation registration licenses to operate in Viet Nam by authorities; (3) permanent offices of foreign news agencies, press, radio and television.

If the aforesaid wish to employ Vietnamese employees, they shall send the written request to employment service centers established by the State or assigned, authorized by the Ministry of Foreign Affairs.

Businesses may save over 200 hours for tax declaration

Businesses may save more than 200 hours each year for conducting tax declaration and payment, according to the Ministry of Finance’s new Circular No. 119/2014/TT-BTC which shall be valid since September 1, 2014.

This is part of the Ministry's efforts to reduce the time for enterprises to prepare and pay taxes by no more than 300 hours each year by the end of 2014 as ordered by the Prime Minister.

Enterprises shall not have to declare and pay value-added tax on products returned by foreign partners.

New regulations on foreign exchange

Decree 70/2014/ND-CP was issued by the Government on July 17, 2014 to detail Ordinance of foreign exchange 2005 and Ordinance of amendment and supplement a number of articles of foreign exchange Ordinance in 2013.

Decree 70/2014/ND-CP stipulates that in the territory of Viet Nam, payment transactions and money transfers for current transactions between residents and non-residents are free to perform in accordance with the provisions of this Decree this and other provisions of related law following to the principles: residents and non-residents are to purchase, transfer, carry out foreign exchange abroad serving for the need of payment and transfer for current transactions.

Residents and non-residents are responsible for the presentation of documents in accordance with the provisions of the Credit Institutions to purchase, transfer, carry out foreign exchange abroad serving for current transactions and take responsibility before the law on authenticity of papers, documents, which were produced to the authorized credit institutions.

When buying, transferring, carrying out foreign exchange abroad serving for current transactions, residents and non-residents do not have to produce documents relating to the certification of completion of tax obligations to the State of Viet Nam.

The shall be valid from September 05, 2014 and supersedes Decree 160/2006/ND-CP dated December 28, 2006 of the Government detailing Ordinance of Foreign Exchange.

Management of foreign exchange for the gambling business for foreigners

Ciruclar 15/2014/TT-NHNN, dated July 24, 2014 on the instructions on the management of foreign exchange for the gambling business for foreigners shall take force since September 6, 2014.

Accordingly, if gamblers have won cash winnings paid in foreign currency (hereinafter referred to as foreign cash winnings), they are entitled to exchange their foreign currencies for VND; transfer their foreign cash winningsoverseas through authorized banks; obtain the bank’s confirmation of transfer of foreign cash winnings overseas and deposit their foreign cash winnings into their demand accounts opened at authorized banks.

VGP/VNN