Lawyer in Vietnam Oliver Massmann Legal Update October 2015

1. Rechtsanwalt in Vietnam Oliver Massmann - Lawyer in Vietnam
- Vietnam - Legal Update October 2015
1. Decree No. 96/2015/ND-CP issued by the Government detailing a number of articles of Law
on enterprises (“Decree 96”)
Issuance date: 19 October 2015
Effective date: 08 December 2015
Decree 96 guides the Law on Enterprises 2014 on: (i) Registration, rights and obligations of social
enterprises; (ii) Seals of enterprises; (iii) Cross ownership between enterprises; and (iv) Liabilities of
state management agencies. Details are as follows:
Social enterprises will be established, divided, separated, consolidated, merged, dissolved according to
relevant requirements under the 2014 Law on Enterprises. The word “social” could be added to an
enterprise’s name. Enterprises which are formed as a result of the division, separation, consolidation,
merger must be social enterprises.
Regarding seals of an enterprise, persons who have the right to decide the quantity, appearance, contents
and form of the seals, the management and use of the seals are owners of private enterprises, Members’
Council, President of the company or Board of Directors, except otherwise regulated in the company’s
charter. The seal can be circle, polygon or in other shapes and is permitted to have words, images in
addition to enterprise code and enterprise’ name. Regulations on seals of branches and representative
offices are the same. We nevertheless note that Decree 96 is not to cover the management and use of seals
of organizations established under the following laws:
(a) The Law on Notarization;
(b) The Law on Lawyers;
(c) The Law on Legal expertise;
(d) The Law on Insurance Business;
(e) The Law on Securities; and
(f) The Law on Cooperatives.
Enterprises established before 01 July 2015 are permitted to continue using the granted seals without
having to announce form of seal except where making more seals or changing ink color of the seal. If an
enterprise wishes to make a new seal under this Decree 96, it is required to give back the existing seal and
the granted seal registration certificate as well. In case of losing seal or seal registration certificate,
enterprises are permitted to make new seals under this Decree 96.
Regarding the restriction of cross ownership between enterprises, Decree 96 defines cross ownership as
two (2) enterprises own shares of or contributed capital amounts to each other. Article 189.3 of 2014 Law
on Enterprise prescribes that “the subsidiaries of the same parent company in which the State owns sixty-
five (65) or more percent of its capital may not together contribute capital to establish an enterprise”.
According to Decree 96, the capital contribution for establishment of an enterprise is determined as

2. capital contribution, share purchase for establishment of a new enterprise or purchase of contributed
capital, shares of an already-established enterprise. Putting that aside, jointly contribution of capital for
establishment of an enterprise is when total shares, contributed capital amounts of such enterprises are
equal to fifty-one (51) percent or more of charter capital or of total common shares of relevant enterprises.
In case of violating these regulations, the president of the company, members of the Members’ Council or
members of the Board of Directors of relevant companies must together compensate for damages caused
to the company.
In addition, enterprises without State-owned shares/contributed capital amounts but already contributing
capital, purchasing shares before 01 July 2015 are permitted to purchase, sell, transfer, increase or reduce
their contributed capital amounts or shares without increasing the current rate of cross ownership.
2. Decree No. 83/2015/ND-CP issued by the Government guiding offshore investment (“Decree
83”)
Issuance date: 25 September 2015
Effective date: 25 September 2015
Decree 83 details the sequences, procedures for granting, adjusting the offshore investment registration
certificates applicable to both (i) projects subject to in-principle approval decision on offshore investment
and (ii) projects not subject to the same.
From 25 September 2015, offshore investment capital sources shall be denominated in Vietnamese Dong.
Remarkably, investors are permitted to send foreign currencies, goods, machines, equipment overseas
before being granted the offshore investment registration certificates for facilitating the establishment of
investment projects. Nonetheless, foreign currency transfer limit will not exceed 5% of the total offshore
investment capital and not exceed USD300,000.
In addition, for projects which are not subject to in-principle approval decision on offshore investment
and have capital amount registered to transfer overseas in foreign currencies equivalent to
VND20,000,000 or more, the investors must obtain the State Bank of Vietnam’s approval before the
offshore investment registration certificates are granted or amended.
3. Decree No. 91/2015/ND-CP issued by the Government on investment of State capital in
enterprises and management, use of capital, assets in enterprises (“Decree 91”)
Issuance date: 13 October 2015
Effective date: 01 December 2015
Decree 91 is to address State capital investment scale for establishment of state owned enterprises
(“SOEs”), in the following four (4) fields:
(i) Fields providing essential public products, services to ensure social security;
(ii) Fields directly serving national defense, security as regulated by the Government;
(iii) Natural resource fields with State exclusion; and
(iv) SOEs applying high technologies with great investment which can create a driving force for
prompt development of other sectors and fields and the whole economy system.

3. From 01 December 2015, total capital raised for serving SOEs’ business and production activities must
ensure that the rate of debt does not exceed three (3) times of the owner’s capital stated in the latest
financial statement of the preceding quarter or year of capital raising.
SOEs are still not permitted to contribute capital or invest in real estate (excluding state enterprises having
their main business line as trading of all types of real estate under the new Law on Real Estate Business
2014), banking, insurance companies, securities companies, venture capital funds, securities investment
funds or securities investment companies, except for special cases subject to the Prime Minister’s
decision.
Enterprises that have made contribution or investment in the mentioned restricted fields must implement
plans for restructuring and transferring all invested capital; otherwise the Member’s Council or President
of company will be accordingly punished.
Decree 91 also stipulates that SOEs have responsibility to preserve and develop the State capital invested
in the enterprise. For any increase or reduction of State capital invested in enterprises, the enterprises
must report to the representatives of owners and financial authorities to monitor and supervise the same.
4. Official Letter No. 3945/LDTBXH-LDTL issued by the Ministry of Labor, War Invalids
and Social Affairs guiding some regulations of the Labor Code (“OL 3945”)
Issuance date: 30 September 2015
Effective date: 30 September 2015
OL 3945 is to guide some contents of the Labor Code as follows:
The period when employees do not participate in unemployment insurance because of sick leave or
maternity leave from one (1) full month or more will be calculated to actual working time for being
entitled to severance allowance. Hence, employers must pay severance allowance to the employees in
question for such period.
During the probationary period under probationary agreement and/or labor contract, employees are not
subject to social insurance contribution scheme.
Employees who neither work nor receive wage for fourteen (14) working days or more in a month are not
required to contribute social insurance amounts in that month.
Wage serving as the basis for calculating overtime work, annual leave, holiday leave, etc. includes wage
paid by current work of employees or title, wage allowance and other additional payment.
5. Decree No. 88/2015/ND-CP issued by the Government on amending, supplementing a
number of articles of Government’s Decree No. 95/2013/ND-CP prescribing the handling of
administrative violations in the fields of labor, social insurance and supplying manpower
overseas (“Decree 88”)
Issuance date: 07 October 2015
Effective date: 01 January 2016
This Decree supplements Decree 95/2013/ND-CP with a number of violating activities subject to
administrative fine as follows:

4. (i) Violations on recruitment and management of employees;
(ii) Violations on recruitment and management of Vietnamese employees working for foreign
organizations, individuals in Vietnam;
- Violation on payment of trade union fees;
- Not signing labor contracts with the employee who continues to work in case of expiry of
probationary period;
- Amending more than once the term of labor contract by the annex or amending the term of labor
contract causing the changes of labor contract types;
- The dismissal of two (2) employees or more without discussion with the representative
organization of employees or without a prior 30-day-announcement to the relevant provincial
labor authority in case of changing the structure or technology or economic reasons;
From 01 January 2016, in case of not yet paying or late payment of compulsory social insurance, the
employer must pay an interest for the un-paid and late-paid social insurance premiums equal to two (2)
times of the average interest rate of investment from the social insurance fund in the preceding year,
calculated based on the late paid amount and the late payment period.
Time-limit for paying the labor accident, occupational disease mechanisms for the employee by the
employer is fifteen (15) days from the date of receiving payment decision of social insurance agency.
However, from 01 January 2016, this time-limit will be reduced to (ten) 10 days from the date of
receiving money from social insurance agency for more protection for employees in question.