Asia Counsel Insights provide readers a punchy update on legal and business developments in Vietnam. This edition has news on the new Vietnam competition law decree; integrated teaching programs for students in international schools; and State Bank of Vietnam lending rules for businesses impacted by the pandemic.

1. ASIA COUNSEL INSIGHTS
March 2020
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:
Acting for The Blue Circle on its turbine supply
agreement with General Electric for the
supply of 8 x 5MW Cypress platform wind
turbines to the 40 MW Hong Phong 1 Wind
Power Project.
• the total assets or the total revenue
in the Vietnamese market of an
enterprise or group of affiliated
enterprises of which the enterprise
participating in the economic
concentration is a member,
reaches VND3,000 billion or more in
the financial year preceding the
economic concentration.
• the combined market share of the
enterprises which intend to
participate in economic
concentration is 20% or more in the
relevant market in the financial year
preceding the economic
concentration.
Credit institutions, insurance and
securities companies are subject to
separate notification thresholds.
Decree 35 elaborates on the criteria
that the NCC must consider in making
its determination on whether the
economic concentration has a
substantial anti-competitive effect or
likely to have a substantial anti-
competitive effect.
COMPETITION
The Government issued Decree No.
35/2020/ND-CP on 24 March 2020
detailing certain articles of the Law
on Competition, which will come into
effect from 15 May 2020 (“Decree
35”).
Control
Under the Law on Competition, an
“acquisition of an enterprise” is
defined as a direct or indirect
acquisition (means that offshore
acquisitions may apply) of whole or
part of the capital contribution or
assets of another enterprise sufficient
to control or dominate the acquired
enterprise or a business lines of the
acquired enterprise. The acquisition
of an enterprise could be subject to
the notification of economic
concentration. Control means:
• the acquiring enterprise (the
“acquiror”) acquires more than
50% of: (i) the ownership of
charter capital; or (ii) total voting
shares of the acquired enterprise.
• the acquiror acquires more than
50% of the ownership or the use
rights of the assets of any business
line of the acquired enterprise.
• the acquiror has one of the rights
to: (i) decide on the appointment,
dismissal or removal of a majority
or all members of management
personnel; or (ii) decide on the
amendment or supplements to
the charter of the acquired
enterprise; or (iii) decide on
important matters relating to the
operation of the acquired
enterprise.
Notification threshold of economic
concentration
An enterprise which intends to
participate in an economic
concentration must make notification
of economic concentration to the
National Competition Committee if
one of the following thresholds is met:
• the value transaction of
economic concentration is
VND1,000 billion or more.
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, Unit 15.03 – 15.04, Level 15, Deutsches Haus, 33 Le Duan Boulevard, Ben Nghe Ward, District 1, Ho Chi Minh City

2. ASIA COUNSEL INSIGHTS
March 2020
Vietnam Fact Box
The Regional Comprehensive
Economic Partnership (RCEP),
the world’s largest regional
economic agreement by
GDP and population, is set to
be signed in late 2020. RCEP
includes all ASEAN member
states, China, Australia,
Japan, New Zealand, and
South Korea. RCEP will
institute common rules of
origin, slashing red tape for
inter-RCEP production chains.
Vietnam is predicted to
accrue significant benefits
from RCEP thanks to the
removal of trade barriers,
reduction inefficiencies
caused by multiple export
standards, and investment
protection.
EDUCATION
Circular No. 04/2020/TT-BGDDT
detailing a number of articles of the
Government’s Decree No.
86/2018/ND-CP dated 6 June 2018
on Foreign Cooperation and
Investment in Education was issued
on 18 March 2020 and will take
effect on 5 May 2020.
Accordingly, Vietnamese language
and Vietnamese studies programs
will be compulsory for pupils who are
Vietnamese citizens studying in
international schools invested/jointly
invested by foreign investors.
This Circular provides detailed
regulations on approval of
integrated education programs
(curricula combining international
and Vietnamese education). An
integrated curriculum must be
reviewed by an appraisal council
which will be set up in accordance
with the Minister of Education and
Training’s decision to ensure that the
content and duration of the
particular program are appropriate
to the pyscho-physiology of the
students and the fine traditions and
customs of Vietnam, and show no
social prejudices about gender,
ethnicity, religion, or social status.
INVESTMENT INCENTIVES
Decree No. 37/2020/ND-CP issued 30
March 2020 expands the business lines
eligible for investment incentives
under the Law on Investment No.
67/2014/QH13 and Circular No.
83/2016/TT-BTC Guiding the
Implementation of Investment
Incentive Programs. Decree 37 is
focused on developing Vietnam’s
already rapidly growing startup
economy by incentivizing investment
in business incubators, co-working
spaces for startups, SME product
distribution chains and technical
support facilities for SMEs. These types
of businesses are now eligible for
import duty exemptions on fixed assets
and land-use tax reductions or
exemptions based on the project’s
location.
Eligible enterprises may apply for
incentives at the relevant investment
registration authority prior to the
granting of an investment registration
certificate or afterwards. Only one
type of incentives may be applied for.
BANKING
On March 13, 2020, the State Bank of Vietnam issued Circular No. 01/2020/TT-NHNN.
Accordingly, affected companies may get support from credit institutions and foreign
bank branches if they have debts that arises from lending, financial leasing activities
where:
• the obligation to repay any principal and/or interest arises between January
23, 2020 and three months from the date the Prime Minister announces the
end of the Covid-19 epidemic; and
• the borrower is unable to pay the debts and/or interest on time due to
decreases in revenue caused by the impacts of Covid-19 pandemic.
Each credit institutions and foreign bank branches may restructure the repayment
periods, waive or reduce the interest and fees, maintain the credit rating for the
businesses affected by Covid-19 in accordance with their internal policies. To get
support from commercial banks, affected companies should provide the banks with
evidence how their business has been affected by the pandemic.
LABOUR
Decree No. 28/2020/ND-CP on
sanctions for violations of the
regulations on labour, social security,
overseas manpower supply on
contract basis was issued on 1 March
2020, and will take effect on 15 April
2020 and replace the current Decree
No. 95/2013/ND-CP (as amended).
Changes include:
• Mandatory execution of labour
contract will be a remedy for
violations related to probation
periods, such as: stipulating
multiple probation periods or
stipulating a probation term that
exceeds the maximum term
provided by law.
• Employers will now be
sanctioned if they institute
multiple disciplinary actions for
an employee’s single breach of
the internal labour regulations.
• Failure to provide the competent
authority with a copy the labour
contract of foreign employees
after their being granted with a
work permit will be subject to
sanction.