Asia Counsel Insights gives readers a concise insight into legal and business developments in Vietnam. This edition has news on the amendment to the Law on Credit Institutions; new laws on forestry and fisheries; and new minimum wage.

1. ASIA COUNSEL INSIGHTS
December 2017
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.
Asia Counsel would like to wish all
readers a prosperous 2018!
Deal Update:
• Advised Thế Giới Di Động
“MobileWorld” on the legal
due diligence of Tran Anh
electronics retailer.
• Advised LeFlair, the online high
fashion retailer, on its Series A
fundraising.
Maritime
Maritime Sanctions
The Government issued Decree
142/2017/ND-CP on 11 December
2017 on maritime violations. These
include:
• a fine of VND20-40 million for failure
by an organization to register
change of name, technical
specifications and functions of the
vessel as required by law.
• a fine of VND90-150million will
apply to an organization using a
vessel beyond its life limit. The fine
varies depending on the type of
vessel.
The Decree also includes a fine of
VND6-20million for breaches of
container safety regulations,
including failure to obtain the
technical safety quality certificate,
or conduct timely maintenance of
the container. Operations of
containers may also be suspended
from 2 to 6 months due to the
above violations.
Employment
New Minimum Wage
On 7 December 2017, the Government
issued Decree 141/2017/ND-CP on
region-based minimum wage levels for
employees working under employment
contracts.
Region-based minimum wage levels will
be increased as follows:
• Region I, which includes major cities:
VND3,980,000 per month.
• Region II: VND3,530,000 per month.
• Region III: VND3,090,000 per month.
This is an increase of VND180,000 to
VND230,000 per month compared to
the current levels.
Decree 114 also states that employers
are not allowed to reduce the
allowances of employees who work
overtime, at night or in dangerous and
toxic environment when the minimum
wage levels are raised.
These provisions take effect on 1
January 2018.
Construction
Administrative Sanctions
Decree 139/2017/ND-CP of the
Government dated 27 November 2017
provides new administrative sanctions
in the construction sector.
The new decree places a greater
burden on the employer (e.g., project
owners, investors and main
contractors) of construction
companies, and individual contractors
to carry out due diligence.
Employers of foreign contractors will, to
an extent, need to ensure that such
foreign contractors comply with local
law requirements. For example,
employers will be subject to a fine of
VND 70 – 80 million for (i) allowing the
contractors to improperly perform their
tasks with Vietnamese contractors or
failing to use Vietnamese
subcontractors; or (ii) employing
foreigners to perform construction jobs
which can be met by the Vietnamese
labour market.
Decree 139 comes into effect on 15
January 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 ten 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
December 2017
Vietnam Fact Box
According to the Ministry of
Planning and Investment,
there were 126,859 newly-
established enterprises in
2017 with a total registered
capital of VND1.3 trillion,
equivalent to USD57.2 million,
being an increase of 15.2
percent and 45.4 percent,
respectively, compared with
last year. Wholesale, retail,
and motor vehicles business
sectors had the largest
number of registered
enterprises. In terms of
growth, real estate and
construction enterprises lead
the way, with the number
rising sharply by 62 percent.
Source: Vietnamnet
Banking
Change to Credit Institutions Law
On 20 November 2017, the National
Assembly of Vietnam passed Law No.
17/2017/QH14 amending and
supplementing a number of articles of
the 2010 Law on Credit Institutions
(Amended Law). The key changes
are below.
Under the Amended Law, managers
of a credit institution such as the
chairman, general director or
directors are not permitted to hold
similar positions in other companies.
The new regulations also apply stricter
criteria for people to qualify to act as
a manager and/or executive of a
credit institution. This includes, beyond
meeting the criteria under the Law on
Credit Institutions 2010, that a
manager or an executive must have:
• a bachelor’s degree; and
• a minimum number of years’
experience (for example, at least 3
years’ experience in the same
positions at a credit institution, or
• at least 5 years’ experience
working at a financial company,
bank, or accounting firm.
The Amended Law also provides that
a major shareholder of a credit
institution and its related persons may
not own 5% or more of another credit
institution. The Amended Law
specifically provides that a
shareholder cannot hold shares for
any other person in any form except
under an entrustment relationship.
The Amended Law also provides
grounds for early intervention action
by the State Bank of Vietnam (SBV)
against credit institutions which is not
yet under special control but has: (i)
failed to maintain liquidity
requirements for three consecutive
months; (ii)failed to maintain the
prudential limits for 6 months; and is
ranked “below average” by the
SBV.
If a credit institution is subject to a
one-year period of early intervention
by the SBV, it may apply a remedial
plan such as (i) downsizing
operations, (ii) increase its charter
capital; and/or (iii) not permitting
dividend/profit distribution.
The Amended Law comes into effect
on 15 January 2018
Forestry
New Law
The National Assembly issued the Law
on Forestry No. 16/2017/QH14 on 15
November 2017. The key points of this
law are as follows:
• foreign invested enterprises are
entitled to lease land from the State
to plant forests for timber production;
• there are specific provisions on the
authority to convert the permitted
purpose of use of a forest,
specifically, the National Assembly,
Prime Minister and Provincial
People’s Council have the right to
approve the conversion depending
on the scale and type of forest;
• if an investor leasing or having been
allocated a forest area wishes to
convert the permitted use, it must
restore the forest area by replanting
the forest to have a ratio of one
area of trees for timber production
to three areas of natural forest; and
• the law also includes prohibited acts,
such as illegal felling, destruction,
exploitation, and encroachment or
occupation of forests, with
corresponding sanctions.
The law takes effect on 1 January
2019.
Fisheries
On 21 November 2017, the National Assembly issued the Law on Fishery. This law
incorporates Vietnam’s commitments on illegal, unreported and unregulated fishing
activities to be in line with international laws on protection and conservation of
marine resources. In particular this new law puts more emphasis on regulating the
origin of seafood products. Below we set out some of the key points of this law:
• the maximum administrative penalty for violation of fishery provisions has been
raised to VND1billion for individuals;
• the term for leasing of sea surface for aquaculture has been increased to 30
years, with a maximum extension of not more than 20 years; and
• fish quotas with set limits on the number of fish and other sea creatures have
been added to fishing permits to ensure fisherman continue sustainable
exploitation of marine resources.
This law takes effect on 1 January 2019.