Legal update on July 2021 (Part 2)

BLawyers Vietnam - Legal update

Our Vietnam legal update #169 would lead you on 03 legal issues:

I. Policies for supporting employers and employees facing difficulties due to the COVID-19 pandemic

On 1 July 2021, the Government issued Resolution No. 68/NQ-CP to announce some policies to support employers and employees facing difficulties due to the COVID-19 pandemic. Some notable policies are:

  • Reducing the insurance premium for occupational accidents and diseases: Employers are entitled to apply the payment rate equal to 0% of the salary fund as the basis for paying social insurance premiums to the Occupational Accident Insurance Fund for the employees within 12 months (from 1 July 2021 to 30 June 2022). Employers support the entire amount of money from the reduction of the above premium to employees.
  • Temporary suspension of contributions to the retirement and survivorship fund: Employers who have fully paid social insurance premiums or are suspending contributions to the Pension and Survivorship Fund until the end of April 2021 but are affected by the COVID-19 pandemic that led to reduction of their employees by 15% or more compared to April 2021, employees and employers are entitled to suspend the payment of this fund for 6 months from the time of application submission.
  • Supporting employees whose labor contracts are suspended and take unpaid leave: Employees working at places where their operations are suspended at the request of the authorities to prevent and control the COVID-19 pandemic who have a temporary suspension period or take unpaid leave within the term of the labor contract from 15 consecutive days or more, starting from 1 May 2021 to 31 December 2021, receive one support at the rate depending on the number of days of suspending contract or unpaid leave.
  • Supporting suspended employees: Employees who are suspended from work according to Clause 3, Article 99 of the Labor Code with employers and who are subject to medical isolation or in an area that is blocked for 14 days or more (from 01 May 2021 to 31 December 2021) are supported VND1,000,000/person.
  • People who must be treated for COVID-19 infection (F0) are supported VND80,000/person/day, the duration of support depends on the actual treatment time and not more than 45 days. Persons subject to medical isolation (F1) at the request of the authorities are supported with VND80,000/person/day, a maximum support period of 21 days. The application period is from 27 April 2021 to 31 December 2021.
  • Loan policy to pay salary for suspended employees: Employers are allowed to borrow capital at the Bank for Social Policies at 0% interest rate and without loan security measures to pay salaries to employees who have been suspended from work for 15 consecutive days or more according to Clause 3, Article 99 of the Labor Code, from 1 May 2021 to 31 March 2022.

The organization and implementation of policies are specified in this Resolution.

II. The obligations of organizations and individuals in foreign investment activities on the Vietnamese stock market

The Minister of Finance issued Circular No. 51/2021/TT-BTC dated 30 June 2021 guiding on the obligations of organizations and individuals in foreign investment activities on the Vietnamese stock market.

  • Defining the depository bank as a commercial bank or the branch of a foreign bank that has been granted a depository member certificate by Vietnam Central Securities Depository.
  • Supplementing regulations that foreign investors must open an indirect investment capital account to be allowed to conduct investment activities on the Vietnamese stock market.
  • The foreign investors open 01 indirect investment capital account at 01 depository bank which is licensed to do foreign exchange business; An issuers depository certificates in foreign countries shall open an indirect investment capital account at a depository bank which is licensed to conduct foreign exchange business.
  • When receiving entrusted capital, the securities investment fund management company, branch of foreign fund management company in Vietnam opens an an indirect investment capital account to receive capital from foreign investors without indirect investment capital account.
  • After being granted a securities trading code, foreign investors and issuers depository certificates in foreign countries shall open a securities depository account in accordance with the law on registration, depository, and compensation. deduction and settlement of securities transactions.
  • Regulating on obligations of foreign investors and trading representatives of foreign investors in investment activities on the Vietnamese stock market.
  • Regulating the activities of depository members, clearing members, securities companies, securities investment fund management companies, branches of foreign fund management companies in Vietnam, issuers depository certificates in foreign countries, economic organizations with foreign investors holding more than 50% of charter capital (instead of 51% as before).
  • In addition to the obligation to declare, pay and finalize taxes and fees according to Vietnamese law, to ensure that transactions are not aimed at creating artificial supply and demand, or manipulating securities prices, foreign investors must also oblige to report ownership and disclose information about securities transactions in accordance with the law on information disclosure on the stock market.

III. CIT incentives for investment projects

The Tax Department of Binh Duong province issued an Official Letter No. 10599/CTBDU-THTT dated 22 June 2021 to guide on the CIT incentives for investment projects. The contents are as follows:

  • In case an enterprise has a new investment project, an expansion investment project according to the provisions of the law on investment, which is located in an area or field eligible for CIT incentives, if it meets the statutory criteria and if the revenue is not limited to the application of CIT incentives, the new investment projects or expansion investment projects will benefit the CIT incentives.
  • Enterprises shall base on their actual production and business situation and compare them with the provisions of law to determine the conditions and levels of tax incentives that they benefit from.

For down-loading: 

Legal Update #169 (EN version)

Maybe you are interested in reading other updates: July 2021 (Part 1)June 2021 (Part 4) | June 2021 (Part 3)June 2021 (Part 2) | June 2021 (Part 1)May 2021 (Part 4) | May 2021 (Part 3)May 2021 (Part 2)May 2021 (Part 1)April 2021 (Part 5) 

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