Our Vietnam legal update #156 would lead you on 03 legal issues:
I. Detailing and guiding the implementation of several articles of Law on Investment of 2020
The Government issued Decree No. 31/2021/ND-CP dated 26 March 2021 on detailing and guiding the implementation of several articles of the Law on Investment of 2020 with the following notable contents:
- Definition on “other areas that affect national defense and security” for helping investors and State authority identify easily when performing the procedure for investment guideline approval and applying appropriate conditions in case the foreign investors investing by contributing capital, purchasing shares, and purchasing stakes of business entities in Vietnam.
- Business lines excluded from the commitments to market access are those for which, according to an international agreement on investment, Vietnam has no commitments, or reserves the right to issue inconsistent measures with the market access obligations, national treatment obligations, or other non-discriminatory obligations between domestic and foreign investors are specified in international agreement on such investment.
- Market access conditions for business lines excluded from the commitments are applied as follows:
- In case there is no regulation by Vietnamese law to restrict market access for that business lines, foreign investors are entitled to access the market as prescribed for domestic investors;
- In case Vietnamese law has regulations on restricting foreign investors in market access to such business lines, the provisions of Vietnamese law shall be applied;
- Regulations on the way to apply the conditions for market access of foreign investors to Vietnamese business lines that have not committed before and after the effective date of the new legal written.
- In addition to the applicable subjects and applicable principles, this Decree also regulated the list of business lines restricted to foreign investors and the conditions that need to be met when accessing the market.
- Regulations on investment incentives, especially investment projects with an investment scale of VND 6,000 billion or more, in addition to the conditions of at least disbursement of VND 6,000 billion within 3 years, they must also meet the condition that has a total minimum revenue of 10,000 billion VND per year or employs 3,000 regular employees or more on average annually.
- Changing and adjusting regulations on investment guideline approval and investor selection.
- Regulations on outward investment activities and procedures for the issuance, adjustment to outward investment registration certificates for projects shall be issued the investment registration certificates.
II. Deductible expenses when determining the taxable income of CIT on supporting, sponsoring expenses of enterprises for Covid-19 epidemic prevention and control activities
On 31 March 2021, the Government issued Decree No. 44/2021/ND-CP with the following content:
- Expenses that are paid for support and sponsorship in cash or in kind of enterprises through units receiving support and sponsorship for Covid-19 epidemic prevention and control activities in Vietnam (listed in this Decree) will be counted in deductible expenses when determining taxable income.
- The dossier to determine the expenses for support, sponsorship includes:
- Confirmation of support, sponsorship or other confirmation documents of support, sponsorships signed and stamped by the enterprise representative and by representative of the receiving unit;
- Legal invoices of support and sponsorship in cash or in kind.
- This regulation is applied for the CIT period of 2020 and 2021.
III. Debt rescheduling, exemption or reduction of interest and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic
On 02 April 2021, the State Bank issued Circular No. 03/2021/TT-NHNN amending and supplementing several articles of Circular No. 01/2020/TT-NHNN on the debt rescheduling, exemption or reduction of interest and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic with the notable points as follow:
- Credit institutions, foreign branch bank (“CI&FBB”) reschedule debt repayment terms for debt balances when they fully meet the conditions listed in the circular, typically as:
- Arising before 10 June 2020 from lending and financial leasing activities.
- The obligation to repay principal and/or interest arises from 23 January 2020 to 31 December 2021.
- CI&FBB assess that customers are unable to repay their principal and/or interest on time according to contracts or agreements due to declining revenue and income as the impact of Covid-19.
- The rescheduling time of the repayment term is suitable with the impact of Covid-19 on customers and does not exceed 12 months from the date the CI&FBB performs the rescheduling of the repayment term.
- CI&FBB shall decide on the exemption or reduction of interests and fees for the debt balance of debts arising before 10 June 2020 from credit extension activities (except for purchase and investment of corporate bonds) that are due during the period from 23 January 2020 to 31 December 2021 and the customers are unable to repay the principal and/or interest on time as agreed upon in the contract, agreement due to the decrease in revenue and income as the impact of Covid-19 pandemic.
Maybe you are interested in reading other updates: April 2021 (Part 1) | March 2021 (Part 4) | March 2021 (Part 3) | March 2021 (Part 2) | March 2021 (Part 1) | February 2021 (Part 2) | February 2021 (Part 1) | January 2021 (Part 5) | January 2021 (Part 4) | January 2021 (Part 3)