Asia Counsel Insights gives readers a concise insight into legal and business developments in Vietnam. This edition has news on the lowering of prudential ratios for restructuring banks; proposed ranking of foreign investment projects; the EU-Vietnam Free Trade Agreement and the mortgaging of off-the-plan property projects. We also want to take this opportunity to wish everyone a safe and enjoyable holiday season. Happy Holidays.

1. ASIA COUNSEL INSIGHTS
17 December 2015
Our 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.
About Asia Counsel
Asia Counsel is a dynamic
international corporate and
commercial law firm dedicated
to serving clients in Vietnam.
We are committed to helping
clients achieve their business
strategies and providing
outstanding legal services.
Banking Wrap
Lowering Reserve Ratio
The State Bank of Vietnam (“SBV”)
issued Circular 23/2015/TT- NHNN
(“Circular 23”) on 4 December 2015
amending Decision 581/2003/QD-
NHNN on compulsory reserves of credit
institutions. The major changes include:
 The SBV may lower compulsory
reserve rate, on a case-by-case
basis, for banks implementing a
restructuring plan or banks
participating in the restructuring of
other weak banks.
 The Banking Inspectorate may
assess the restructuring cases and
make recommendations on
lowering compulsory reserve rate to
the Monetary Policy Department.
 The Banking Inspectorate must
within 15 days of receiving monthly
report on compulsory reserves
make recommendations to the SBV
on handling violations.
Circular 23 takes effect on 28 Jan 2016.
Property
Foreigners’ right to lease out their
properties in Vietnam
The Ministry of Construction has
released a draft circular as
guidance for Decree
99/2015/ND-CP. One key point
from this draft circular is that
foreigners who are eligible to
own houses in Vietnam are now
entitled to lease their houses for
legally permitted purposes.
Foreigners are required to submit
an announcement regarding
the house leasing to the
competent authority with a brief
of the contents in the lease
agreement prior to the signing of
lease agreement. Another
announcement is required when
the lease agreement is
terminated.
Foreigners are required to
register the house leasing
activities if required by law.
Investment Law
Assessment of investment projects
In accordance with the Ministry of
Planning and Investment’s draft Circular
on supervision, inspection and assessment
of foreign investment, foreign-invested
projects shall be ranked A, B or C.
Ranking are in order of economic
efficiency and regulatory compliance,
and form the basis for approving project
expansion or implementing new projects.
 A-rank projects are in full compliance
with the laws and have a profitable
business outcome. These projects are
preferred for project expansion.
 B-rank projects are those not in
compliance with the laws due to
reasons beyond their control. Their
proposed will be approved only if
reasonable and feasible.
 C-rank projects are those not
compliant with the laws without proper
cause. They will be penalized for
breaches and cannot expand.
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 Suite G2021 The Manor 2 - Officetel 91 Nguyen Huu Canh St. Ho Chi Minh City
www.asia-counsel.com

2. ASIA COUNSEL INSIGHTS
17 December 2015
Financial Markets
Private placement of public companies.
Under Decree 60/2015/ND-CP, the
private placement of public companies
is subject to satisfying the following
conditions:
 Corporate governance: The general
meeting of shareholders must pass a
decision on placement and capital
utilization;
 Timing: There is a 1 year lock-up period
and the minimum period between two
tranches is 6 months;
 Industry requirements: An issuer
operating under specific regulations by
the competent authority must meet the
relevant conditions of business
investment;
 Cross-ownership: The issuer must not be
the parent company of the potential
purchaser or both of them must not be
the subsidiaries of the same company
In addition, if the private placement is
conducted in exchange for debts or
equity and capital contributions in other
enterprises, the financial statement of the
issuer must be audited and its proposed
swap ratio must be assessed by the
independent valuer.
Consumer
Criminal charges for
conducting illicit tobacco
activity
The Government has issued
Decree No. 124/2015/ND-CP
amending and supplementing
Decree No. 185/2013/ND-CP
regulating the penalties for
administrative violations in
commercial activities,
production and trading in
counterfeit and banned goods,
and protection of consumer
rights. Accordingly, Decree 124
set out some key points as
follows:
 If more than 500 packs of illicit
tobacco are found, the case
should be transferred to the
criminal proceedings agency
for criminal prosecution;
 If the legal proceeding
agency decides not to bring
the case into court, a fine
from VND 70,000,000 to VND
100,000,000 shall be applied.
Decree 124 takes effect from 5
January 2016.
Vietnam Fact Box
According to the World Bank,
Vietnam’s business environment
ranking has increased from the
position of 93rd to 90th.
In November 2015, total foreign
investment capital, registered
and raised, is 20.20 billion USD, an
increase of 16.7% compared to
the same period in 2014.
Manufacturing and Processing
Industries are the most attractive
sectors with foreign investors.
The Republic of Korea (South
Korea) is leading the investment
ranking in Vietnam with the total
investment capital, registered
and raised, is 6.3 billion USD.
Business
European Union -Vietnam Free Trade
Agreement (“EVFTA”)
The signing of a Declaration between
the EU Trade Commissioner and
Vietnam’s Minister of Industry and
Trade on 2 December 2015 marked
the conclusion of negotiations on the
EVFTA, which is anticipated to enter
into force in 2018. A Memo issued by
the European Commission on 4
August 2015 outlined some
expectations upon its
implementation:
 Nearly 100% of tariffs will be
eliminated over a 10-year period;
 A wide range of service sectors and
investment in manufacturing in a
number of key sectors will be open
to EU companies;
 EU companies will have access to
markets covering central and sub-
central level, including public
contracts with ministries and state-
owned enterprises in certain sectors;
 A transparent dispute resolution
system will be built-in to resolve
future disagreements on the
interpretation and implementation
of the EVFTA.
Property
The State Bank Vietnam has issued Circular 26/2015/TT-NHNN dated 9 December
2015 regulating the order and procedure of mortgage of an off-the-plan real estate.
Some notable provisions of Circular 26 are as follows:
 The developer or the buyer of an off-the-plan real estate project can mortgage
such assets.
 Circular 26 stipulates conditions for off-the-plan real estate to be mortgaged,
some of which are: (i) the real estate must be of the types eligible for mortgage;
(ii) investment application and technical drawing are approved; and (iii) the
foundation of the building has been completed.
 Agreement on the release of the mortgage must be notarized by public notary.
Circular 26 takes effect from 10 December 2015.