Asia Counsel Insights gives readers a concise insight into legal and business developments in Vietnam. This edition has news on penalties on breach of environmental regulations; new minimum wage decree; and proposed new decree on special economic zones. This is our last edition for 2016. We wish all readers a Merry Christmas and a prosperous New Year. See you in 2017.

1. ASIA COUNSEL INSIGHTS
5 December 2016
Asia Counsel Insights provide an
overview of the key trending legal
and business issues in Vietnam and
how they may impact your
business. Please enjoy your read.
Key Dates
 From 26 January 2017 to 1
February 2017: Tet holidays
 1 January 2017: New Civil Code
takes effect
This is our last edition for 2016.
We wish all readers a Merry
Christmas and a prosperous
New Year. See you in 2017.
Mining
Decree 158/2016/ND-CP
On 29 November 2016, the
Government issued Decree
158/2016/ND-CP detailing a
number of articles of the Mineral
Law. Decree 158 adopts a number
of new criteria for selection of
entities to be licensed for mineral
exploration in areas not subject to
auction of mining rights, including:
 Having a minimum charter
capital equal to 50% of the
total estimates of the mineral
exploration plan;
 Having used advanced and
modern technologies and
equipment for maximum
mineral extraction; and
 Meeting environment
protection requirements and
financial obligations in relation
to mining activities.
Decree 158 shall replace Decree
15/2012/ND-CP and take effect as
of 15 January 2017.
Investment
Draft decree on special economic
zones (SEZs)
In late November 2016, the
Government published for public
comment a draft decree on industrial
zones, export processing zones and
economic zones which will replace
Decree 29/2008/ND-CP (as amended
from time to time).
The draft introduces a new incentive
scheme, which includes CIT rate of
10% for 30 years, tax exemption for 4
years and tax reduction by 50% for the
next 9 years, for the following projects:
 Projects in high preferential sectors
implemented in economic zones
located in areas with specially
difficult economic-social
conditions.
 Projects in economic zones with (i)
investment capital of at least
VND6000 billion disbursed in 3
years and (ii) more than 3,000
employees or total annual
revenue of at least VND3 billion
after 3 years of having revenue.
 Projects implemented in economic
zones in economic-technical
infrastructure sector, including
power plants, water supply and
drainage system, seaports, airports,
new or clean energy, energy saving
technology and oil refinery.
 High-tech manufacturing projects
with investment capital of at least
VND12 billion disbursed within 5
years of approval of the projects.
The draft decree also introduces three
new types of SEZs, which shall be
entitled to special incentives from the
Government, including:
 Supporting industrial zones which
specialize in supporting industries
and services for these industries;
 Eco-industrial zones where there are
cooperation in manufacturing for
efficient use of resources and
environment protection; and
 Industrial and urban service zones
which include subzone such as
industrial zones and urban service
zones built for sustainable
development of such subzones.
About Asia Counsel
Asia Counsel is a dynamic international corporate and commercial law firm dedicated to serving clients in Vietnam. Our partners have over nine years of
experience in working on complex and challenging matters in Vietnam. We are committed to helping clients achieve their business strategies and providing
outstanding legal services.
If you have any questions on any of the items discussed above, please do not hesitate to contact us.
Christian Schaefer
Managing Partner
E christian@asia-counsel.com
Minh Duong
Partner
E minh@asia-counsel.com
Asia Counsel Vietnam Law Company Limited, Level 5, 18 HBT Building, 16-18 Hai Ba Trung Street, Ben Nghe Ward, District 1, Ho Chi Minh City

2. ASIA COUNSEL INSIGHTS
5 December 2016
Vietnam Fact Box
In 2016, Vietnam’s real estate
market has been an
attractive source of FDI.
According to the Ministry of
Planning and Investment (,
from January – November
2016, real estate was the
second highest attractor of
FDI in Vietnam, with 49 new
projects bringing in US$740.93
million in total.
Manufacturing and
processing remain the
dominant FDI source,
contributing to 74.1% of total
FDI inflow in Vietnam
(US$13.41 billion).
(Source: Ministry of Planning and
Investment)
Employment
Increase of regional minimum salary
from 1 January 2017
The Government has issued Decree
153/2016/ND-CP on 14 November 2016
to provide regional minimum salary
applied to employees working under
labour contracts governed by the
Labour Code. Decree 153 re-classifies
a number of districts into 4 regions with
different wage areas (Area I to IV),
particularly:
Area Current rates New Rates
I 3,500,000 VND 3,750,000 VND
II 3,100,000 VND 3,320,000 VND
III 2,700,000 VND 2,900,000 VND
IV 2,400,000 VND 2,580,000 VND
These new minimum salary rates are
the lowest rates used as a basis for the
employers and employees to agree on
the salary for the employees.
Accordingly, the salary paid for the
employees must not be lower than the
minimum salary applied for employees
who do the simplest works and must be
7% higher than the regional minimum
salary applied for employees who
have been trained or completed
professional training courses.
Tax
Tax for licensing of trademark
The Ministry of Finance (MOF)
issued an Official Letter No.
15888/BCT-CST dated 7
November 2016 guiding the
withholding tax policy for
licensing of trademarks.
The MOF opined that the activity
of licensing a trademark to a
Vietnamese party by an offshore
entity on a licensing fee basis is
an activity of licensing of
trademark under the Law on
Intellectual Property.
Accordingly, the income of the
offshore entity arising from the
licensing fee is subject to the
withholding tax which will
include two components: 10%
corporate income tax and a
10% value added tax (if tax
credit method is applied) or a
5% value added tax (by
calculating tax directly on the
basis of added value).
All relevant tax declaration
before this official letter which is
not compliance with this
guidance will not be revised.
Environment
Penalties for breach of environmental
regulations and environmental
protection fee for wastewater
The Government enacted Decree
154/2016/ND-CP on environmental
protection fee for wastewater (“Decree
154”) dated 16 November 2016 and
Decree 155/2016/ND-CP on penalties
for environmental administrative
breaches (“Decree 155”) dated 18
November 2016. Below are some
highlights.
 A fine of up to VND 1 billion for
individuals infringing environmental
regulations and up to VND 2 billion
for organizations.
 The organizations or individuals
discharging wastewater into
environment must pay the
environmental protection fee,
including:
- Domestic wastewater: 10% of
VAT exclusive selling price of
1m3 of clean water and
collected by the clean water
providers.
- Industrial wastewater: fixed fee
of 1.5 million dong and
additional variable fee.
Decree 154 takes effect from 1 January
and Decree 155 from 1 February 2017.
Administration Fee
Fees for registration of technology transfer agreement
A technology transfer agreement is not obliged but encouraged to register with the
local authorities. The registration will be subject to a fee charged from 1 January 2017
under Circular 169/2016/TT-BTC dated 26 October 2016. The fee depends on whether
the agreement only requires a registration or if the agreement requires an approval.
(i) registration: the fee is 0.1% of total value of the transfer agreement up to a cap of
VND10 million but with a floor of VND5 million.
Any amendment of the registered agreement will be subject to the fee of 0.1% (zero
point one per-cent) of total value of the amended agreement but the fee will not
exceed VND 10 million but not less than VND 3 million.
(ii) approval: the fixed fee for pre-approval step is VND 10 million. The fee for issuance
of certificate is as subject to registration procedure above depending on whether
such application is for first time or an amended registration.