Asia Counsel Insights gives readers a concise insight into legal and business developments in Vietnam. This edition has news on: the new enterprise registration decree; clarification from the Ministry of Industry and Trade on retailing; and registration of e-commerce websites.

1. ASIA COUNSEL INSIGHTS
August 2018
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.
Deal Update
• Advised Tam Tri Medical Joint Stock
Company on the investment by
Vietnam Opportunity Fund managed
by Vinacapital.
• Advised Pacific Holdings, the owner
of a series of medical and dental
clinics in Vietnam on its financing.
Trading
Retail and end consumers
MOIT issued official letter No. 6219/BCT-
KH on 7 August 2018 to provide further
guidance on Decree 09/2018/ND-CP.
According to the official letter, the act
of selling to traders and entities that do
not utilize the goods for the purpose of
wholesaling is considered to be act of
“wholesale retailing”.
The official letter states that the act of
selling to entities for its consumption and
day to day purposes without using such
items directly in the process of
production or investment
objectives/registered business lines of
the entity is considered as a retailing
activity. For example, selling goods to a
company for an employee’s day to day
use.
Based on this, foreign invested
businesses intending to distribute goods
to other business entities for
consumption purposes as set out in the
official letter are required to apply for a
permit to set up a retail outlet.
Banking
Prudential limits
On 31 July 2018, the State Bank of
Vietnam issued Circular No.
16/2018/TT-NHNN amending and
supplementing Circular 36/2014/TT-
NHNN providing prudential ratios
and limits for operations of credit
institutions and branches of foreign
banks with the following key points:
• Minimum safety ratios and limits in
banking operations can be
calculated based on exchange
rates used for converting foreign
currencies into VND and USD.
• Banks and branches of foreign
banks must ensure that the
maximum ratio of short term capital
used for medium term and long-
term lending is not in excess of 45%
in 2018 and 40% in 2019. For non-
bank credit institutions, such ratio
must not exceed 90%.
Circular 16 took immediate effect on
31 July 2018.
Education
Standards for principals
Circular No. 14/2018/TT-BGDDT was
issued on 20 July 2018 providing
standards for general education
school principals (“Circular 14”).
Under Circular 14 a prospective
principal must meet professional
quality and capability requirements
to lead and administer a school,
including:
• Standard 1: Professional qualities
• Standard 2: School administration
• Standard 3: Building of the
educational environment
• Standard 4: Development of the
relationship between the school,
family and society
• Standard 5: Foreign language and
information technology usage
Assessment of prospective principals
is based on each standard.
Circular 14 takes effect from 04
September 2018.
About Asia Counsel
Asia Counsel is a dynamic international corporate and commercial law firm dedicated to serving clients in Vietnam. Our partners have over eight 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 15, Deutsches Haus, 33 Le Duan Boulevard, Ben Nghe Ward, District 1, Ho Chi Minh City

2. ASIA COUNSEL INSIGHTS
August 2018
Vietnam Fact Box
According to the General
Statistics Office of Vietnam,
total retail sales and revenue
from consumption of services
in July amounted to
VND371,500 billion. This was
an increase of 1.6% over last
month and 13.3% compared
to the same period of last
year.
Total retail sales and total
revenue from consumption of
services within the first seven
months of the year 2018
amount to VND2,493,400
billion, an increase of 11.1%.
(thoibaotaichinhvietnam)
Trading
Rice export business
The Government recently issued
Decree 107/2018/ND-CP on rice
export business (“Decree 107”) to
replace Decree 109/2010/ND-CP.
Decree 107 provides more
alternative options for rice export
business entitie. For example, business
entities will no longer be compelled
to own warehouses and processing
plants, as it will be permitted to enter
into a lease agreement for such
facilities with a minimum lease term
of five years. In addition, the
minimum amount business entities
must provide reserves is now 5% of
the volume of such business entity’s
rice (instead of 10% as set out in the
previous decree).
Business entities exporting organic
rice, parboiled rice and
micronutrient-fortified rice are now
not required to satisfy conditions on
the facilities or obtain the certificate
of eligibility for rice export business
nor to maintain the circulation
reserve.
Decree 107 will come into effect on 1
October 2018.
Commerce
E-commerce
Circular 21/2018/TT-BCT (“Circular
21”) was recently issued amending
Circular 47/2014/TT-BCT and
Circular 59/2015/TT-BCT of the
Ministry of Industry and Trade
regarding the management of E-
commerce websites and E-
commerce activities via
applications on mobile devices.
Circular 21 revokes the procedures
for notifying e-commerce websites
and registering e-commerce
website rating activity.
In addition, all business entities with
an e-commerce website
designated for provision of an e-
commerce trading floor, online
promotion service, or online
auction service must register such
e-commerce website with the
competent authority. Previously,
only business entities operating in
trade promotion or enterprise
support were required to conduct
registration of e-commerce
websites.
Circular 21 will come into effect on
18 October 2018.
Banking
Founding shareholders of banks
Circular 17/2018/TT-NHNN amending,
supplementing articles of circulars
prescribing licensing, business
network and foreign currency
operations of credit institutions and
branch of foreign banks (“Circular
17”) was issued on 14 August 2018.
Under Circular 17, a minimum of 50%
of the capital contribution/shares of
the founding shareholders of credit
institutions and branch of foreign
banks must be maintained at all times
time rather than for a period of 5
years as previously.
Circular 17 also repealed some
provisions applicable to founding
shareholders:
• liability for the legality of the
contributed capital source;
• undertaking of financial support to
the bank; and
• requirement that at least two
founding shareholders must be
organizations.
Circular 17 comes into effect on 1
October 2018.
Corporate
Enterprise registration
The government issued Decree 108/2018/ND-CP (“Decree 108”) on 23 August 2018
to amend Decree 78/2015/ND-CP of the Ministry of Planning and Investment
regarding enterprise registration. Decree 108 set out a number of significant
changes, in particular:
• The procedure to convert a business household into an enterprise has been set
out, whereas previously in practice this was not possible due to there being no
clear process despite it being permitted under the Law on Enterprise;
• Removed the requirement for a number of specific enterprise registration
documents to be stamped with the enterprise’s seal for submission; and
• The authorization letter for an individual to conduct the enterprise registration
procedures is no longer needed to be certified by a notary public.
Decree 108 will come into effect on 10 October 2018.