Asia Counsel Insights provide readers a punchy update on legal and business developments in Vietnam. In this edition, we provide a summary of changes to the hiring of foreign labour; new securities law sanctions and regulations; new regulations on the issuance of corporate bonds.

1. ASIA COUNSEL INSIGHTS
Tet February 2021
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 Updates:
• Advised Kim Healthcare Group
Corporation on USD24 million investment
from series B investors including Singapore
private equity funds, ABC World Asia and
Aura Group.
• Established the subsidiary for the Anytime
Fitness master franchise in Vietnam and
registration of the master franchise with
the Ministry of Industry and Trade.
Working Conditions and Labour Relations
On 14 December 2020, the Government issued Decree
No. 145/2020/ND-CP elaborating articles of the Labor
Code on working conditions and labor relations (“Decree
145”), which came into effect on 1 February 2021.
Under Decree 145, methods of salary payment are to be
decided at the discretion of the contracting parties, as
specified in the applicable employment contract. Further,
the payment of any fees related to the opening of bank
accounts and bank transfers is now to be the responsibility
of the employer. Decree 145 further states that time spent
by: (i) apprentices or trainees on carrying out certain
activities, (ii) leaders of employee representative
organizations on carrying out related tasks, and (iii)
employees on undergoing medical exams (subject to
certain conditions), will now all be included in the
determination of working hours for salary entitlement.
Decree 145 also states that employees working as: (i)
aircraft crew or aviation staff; (ii) enterprise managers; or
(iii) ship crew must provide at least 120 days advance
notice in regards to the unilateral termination of a labor
contract with a term of 12 months or more, or a period
equal to a quarter of the term for a contract of less than
12 months.
In addition, Decree 145 provides significant developments
on gender equality, particularly in explicitly upholding the
right of all employees to equality in the workplace.
Employment of Foreign Workers
On 30 December 2020 the Government issued Decree No
152/2020/ND-CP on employment of foreign workers, taking
effect on 15 February 2020 (“Decree 152”).
Decree 152 states that employers utilising foreign workers
must provide the relevant authorities with information
regarding the demand for any foreign employee to fill a
position that cannot be fulfilled by a Vietnamese worker at
least 30 days prior the employee’s planned start day.
The Decree introduces more stringent criteria for determining
experts and skilled workers permitted to work in Vietnam.
Incoming experts must now provide evidence of at least
three years work experience, with verified tertiary
qualifications (or five years with a practicing certificate
provided in lieu of tertiary qualifications), in their relevant
field. Further, skilled workers must now also provide proof of
five years of relevant work experience.
Decree 152 also lists a number of exceptions to foreigners that
require work permits, including: (i) foreigners married to
Vietnamese citizens; (ii) owners, capital contributors,
members or chairpersons of companies with capital of three
billion VND or more; and (iii) others listed under Article 7 of
Decree 152. Under Decree 152, work permits (issued for a
period of two years) can now only be extended for another
two year period on one occasion. Upon the expiry of the
extended work permit, a new work permit must be applied
for.
About Asia Counsel
Asia Counsel is a dynamic international corporate and commercial law firm dedicated to serving clients in Vietnam. Our partners have over 14 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
Partner
E christian@asia-counsel.com
Minh Duong
Managing 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
Ross Macleod
Partner
E ross@asia-counsel.com

2. ASIA COUNSEL INSIGHTS
Tet February 2021
Securities Law Sanctions
Decree 156/2020/ND-CP issued by the Government on 31
December 2020 in relation to sanctioning administrative
violations in the securities and securities market (“Decree 156”)
has introduced increased fines for individuals and
organizations that commit administrative violations in the field
of securities and securities markets. In respect to using insider
information to trade securities as well as violations of securities
market manipulation regulations, the maximum fine level is
now ten times the illegal revenue for organizations, and five
times the illegal revenue for individuals.
In addition, those who commit the above violations may be
subject to additional sanctions, including:
• suspension of securities business and service activities for
a period of one to three months;
• suspension of securities practicing certificate for a period
of 18 to 24 months; and
• other additional sanctions contained under Decree 156.
In relation to the private offering or issuance of securities,
Decree 156 stipulates a fine of between VND100,000,000 VND
VND150,000,000 for: (i) the private offering or issuance of
securities in contravention of a registered or approved plan;
(ii) the failure to amend or supplement the application dossiers
of an offer or private placement of securities upon detecting
inaccurate information; or (iii) omitting content as prescribed
by law. Decree 156 also introduces stricter penalties for
violations on public offer rules, for example the maximum
penalty for offering securities to the public without meeting
the required legal conditions is now VND600,000,000. This
amount is large for Vietnam standards but not in other
jurisdictions.
In addition to the fines, violators shall also be subject to
additional penalties and remedies as stated in Decree 156.
Derivative Securities
On 31 December 2020, the Government issued
Decree No.158/2020/ND-CP on derivative securities
and derivative securities markets (“Decree 158”). This
Decree provides conditions for derivative securities
trading as well as derivative securities clearing and
settlement services.
Derivative securities trading
Securities companies (“SCs”) and fund managers
(“FMCs”) are only allowed to trade derivative
securities after obtaining a certificate of eligibility for
derivative securities trading from the State Securities
Commission. SCs and FMCs must also meet standards
on charter capital and equity as well as human
resources and other conditions set out under Article
4.2 and 4.3 of Decree 158.
Under Decree 158, an SC may engage in derivative
securities brokerage, derivative securities trading and
derivative securities investment consulting. FMCs,
however, are only permitted to carry out derivative
securities investment consulting.
Derivative securities clearing and settlement services
SCs, commercial banks and foreign bank branches
are allowed to provide derivative securities clearing
and settlement services after obtaining a certificate
of eligibility for providing derivative securities clearing
and settlement services from the State Securities
Commission. In order to obtain this certificate, the
above-mentioned organizations are required to
satisfy the conditions as stipulated in Article 9 of
Decree 158, such as having a securities depository
registration certificate and meeting the minimum
capital adequacy ratio within the last 12 months.
New Securities Regulations
On 31 December 2020, the Government issued Decree No.155/2020/ND-CP implementing the Securities Law. The key
changes are below.
Decree 155 regulates share offering below par value for both public and private offerings. This is permitted if, among
other things, sufficient equity capital surplus (based on the most recent audited financial statement) to offset the
negative surplus arising from the offering of shares below par value.
Under Decree 155, a public company is allowed to determine a maximum foreign ownership rate which is lower than
the prescribed rate, however such a determination must be approved by the General Meeting of Shareholders and
stipulated in the company's charter. Decree 155 also states that in cases where a conditional market access industry
does not specify conditions on foreign investor charter capital ownership ratios, the maximum foreign ownership ratio
will be set at 50% of the company’s charter capital.
Decree 155 also regulates the required conditions for a share offering converting an LLC into a JSC, including that
capital contributors or company owners must undertake to jointly hold at least 20% of the charter capital of the issuer
for at least one year from the end of the offering.

3. ASIA COUNSEL INSIGHTS
Tet February 2021
Vietnam Fact Box
PERSONAL DATA PROTECTION
On 9 February 2021, the Ministry
of Industry and Trade has
completed a draft Decree on
personal data protection for
public comment. Under the
draft Decree, personal data
includes primary personal data
(e.g. name, date of birth,
address, identity information,
marriage status, etc.); and
sensitive personal data (e.g.
political views, health status,
genetic traits, biometrics,
criminal records, financial
status, etc.). In principle, the
disclosure of personal data must
be consented to by the person
holding such data, save for
certain exceptional cases. The
draft also provides that any
unauthorized disclosures of
personal data may be subject
to a fine of up to VND80mil.
Under Decree 153, the applicable transfer lock up period is
now at least: (i) three years for strategic investors; and (ii)
one year for professional securities investors, from the date
of completion of the tranche issuance.
Transitional period
Any corporate bonds issued before 1 January 2021 must
continue to comply with Decree 163 until its maturity,
except in regards to disclosing and reporting obligations.
SCC’s approval for bond issuance
Private issuance of corporate bonds by public companies,
securities company and fund management companies
must be approved by the State Securities Commission
(SCC). This SCC approval is not applied to corporate
bonds privately issued by the other companies.
Methods of bond issuance
Decree 153 also provides for four methods of bond
issuance, including: direct issuance, insurance via a
bidding organisation, underwriter or bond issuing agent.
However, the direct issuance method is allowed for credit
institution only.
Information Disclosure
Decree 153 strengthens information disclosure regime to
improve the transparency in the corporate bond market.
The issuer is required to make a range of disclosures to
public via the stock exchange. The disclosures are made
prior to issuance and on a periodic basis.
Enterprise Registration
Decree 01/2021/ND-CP on enterprise registration took effect on 4 January 2021 to
replace Decree 78/2015/ND-CP and Decree 108/2018/ND-CP (“Decree 01”). Under
Decree 01:
• an enterprise code will serve as a tax code and social insurance code;
• the procedures on the notification of seal, change of managerial personnel and
private share placement have been removed;
• in an application dossier for a change of enterprise registration content, it is no
longer required to state the amended content of the charter in the decision,
resolution, meeting minutes of the owner, members’ council or the general
meeting of shareholders;
• it is no longer necessary to submit a hard copy of application dossiers to the
Department of Planning and Investment if an application has already been
submitted on the National Business Registration Portal;
• if the legal status of an enterprise is “no longer under business operation at the
registered address”, the enterprise will not be allowed to register or provide
notification of any changes to the enterprise registration content; and
• in case the enterprise registration certificate is not issued, the fee for announcing
the registered enterprise content shall be refunded.
Corporate Bonds
On 31 December 2020, the Government adopted Decree
153/2020/ND-CP guiding the Law on Securities 2019 on
corporate bonds (“Decree 153”), which took effect from 1
January 2021 to replace Decree 163/2018/ND-CP (“Decree
163”) and Decree 81/2020/ND-CP (“Decree 81”).
Entities purchasing corporate bonds
Decree 153 provides a list of the specific entities that can
purchase corporate bonds, which includes professional
securities investors and strategic investors. Contrastingly,
Decree 163 and Decree 81 did not provide explicit
restrictions on the entities permitted to purchase corporate
bonds.
Conditions for bond issuance
Under Decree 153, the below conditions for bond issuances
have been removed:
(i) minimum term of operation of at least one year;
(ii) outstanding balance of issued bonds at the time of
issuance must not exceed five time the equity of the
issuer in the most recent financial statement; and
(iii) six-month pause between bond issuance tranches
(only for non-convertible bonds and bonds with no
warrants).
Lock-up period for bond transfers
Under Decree 163 and Decree 81, convertible bonds and
bonds with warrants attached were subject to a lock up
period of one year on transfers from the date of completion
of the tranche issuance.