This document summarizes recent legal and business developments in Vietnam discussed in the July 2017 issue of Asia Counsel Insights. Key points include: - Asia Counsel registered Vietnam's first social enterprise in Danang and assisted with an acquisition of a cinema chain. - Vietnam's new Tourism Law simplifies licensing and allows foreign investors to provide international but not domestic tourism services. Tour guides must be Vietnamese nationals. - A new decree increases monthly pensions and social insurance allowances by 7.44%. - Recent laws address technology transfer, support for small and medium enterprises, economic crimes, and term deposit transactions at banks.

1. ASIA COUNSEL INSIGHTS
July 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.
Deal Updates
• Asia Counsel registered one of
the first social enterprises in
Danang.
• Acted for Blue HK on its
acquisition of Beta Media
which owns the Beta Cineplex
cinema chain.
• Successfully obtained a VIAC
award for a US investment fund
against a Vietnamese listed
company.
National Administration of Tourism,
instead of the current two-steps of
reviewing by both the provincial and
central licensing authority of tourism.
• Registration of the star rating of a
tourist accommodation
establishment (eg hotel) is no
longer mandatory under the new
Law. Registration of a hotel class is
now on voluntary basis.
• A foreign invested enterprise may
only provide international tourism
service for inbound foreign tourists
and not outbound service for
Vietnamese tourists unless stated
otherwise in an international treaty
that Vietnam is a party.
• Tour guides must have a tour guide
professional certificate by the
relevant tourism authority and must
be a Vietnamese national. Tour
guides must be employed by a
travel business, have a service
contract with a travel business or
be a member of professional tour
guide association.
.
Social Insurance
Decree 76/2017/ND-CP
On 30 June 2017, the Government
issued Decree 76/2017/ND-CP on
adjustment of the monthly pension,
social insurance allowance and other
allowances. Under this Decree, from
the 1 July 2017 these allowances have
increased by 7.44% for eight groups of
people, including amongst others:
• Officials, civil servants, laborers and
employees on monthly salary;
• Persons on monthly labor accident
or occupational disease allowance;
• Persons on monthly working
capacity loss allowance; and
• Persons on monthly allowance
(under Decree 91/2000/QD-TTg
dated 4 August 2000 and Decision
613/QD-TTg dated 6 May 2010).
Decree 76 comes into effect on 15
August 2017.
New Law on Tourism
Key Changes
On 19 June 2017, the National
Assembly passed the new Law on
Tourism no. 09/2017/QH14, which will
be effective from 1 January 2018.
Key changes are:
• All domestic travel businesses are
now required to establish an
enterprise and obtain domestic
travel business license. The
conditions to obtain such license
include a requirement to deposit
an amount of capital at a
commercial bank and having a
manager with vocational
experience in the travel sector;
• The statutory timing for issuance
of international travel business
license is shortened from 20
working days as set out under
the current law to 10 days under
the new Law. The application
dossier will be submitted,
reviewed and processed by the
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, Level 5, 18 HBT Building, 16-18 Hai Ba Trung Street, Ben Nghe Ward, District 1, Ho Chi Minh City

2. ASIA COUNSEL INSIGHTS
July 2017
Technology
Law on Technology Transfer
The National Assembly passed the
Law on Technology Transfer on 19
June 2017 (effective from 1 July
2018). The key points are below:
• Any organization that has the
right to transfer technology is also
entitled to make capital
contribution by transfer of
technology to investment
projects (unless it is a State
project). The technology
contributed in this case must be
valued;
• Certain regulations prescribe the
process of inspecting the
technology to be contributed as
capital into investment projects
to try and avoid the transfer of
any outdated technology into
Vietnam; and
• Subject to limited exceptions,
technology transfer agreements
involving any technology transfer
from Vietnam to offshore and
offshore technology transfers into
Vietnam must be registered.
Technology transfers within
Vietnam using the State budget
must also be registered.
Corporate
SME Law
Law No. 04/2017/QH14 on Support
of Small and Medium-Sized
Enterprises (SMEs) was passed on
12 June 2017 by the National
Assembly. This law regulates
sources of support for SMEs.
The law introduced a new form of
entity, the startup investment fund
(“SIF”). A SIF is formed from capital
contributed by private investors to
invest in startup SMEs, which have
an operational duration of 5 years
or below and have not yet
conducted an IPO. Investment
from a SIF must not exceed 50% of
a startup’s post-investment charter
capital. SIFs and other investors in
startup SMEs are entitled to
exemption or reduction of
corporate income tax (CIT) on
income from their investment
according to the CIT Law.
There remains a question as to
how a SIF is established and
whether there is a special
regulatory scheme for operations
of the fund. However, upcoming
Government Decrees on
implementing the Law on SMEs are
expected to address this.
Vietnam Fact Box
The total revenue from
domestic retail sales &
services increased by 10.16%
to VND 1.9 trillion (USD $83.65
million) in the first half of 2017.
The total value for 2017 is
estimated to be VND 3.9
trillion (USD $168.7 million). The
Ministry of Industry and Trade
will begin a domestic market
development scheme and 71
new projects to promote
domestic trade, along with a
campaign "Vietnamese
people prioritize Vietnamese
goods" until 2020.
Source: Domestic Market
Department of the Ministry of
Industry and Trade
Criminal Law
Economic Crimes
On 20 June 2017, the National
Assembly passed the Law No.
12/2017/QH14 amending the Penal
Code. The key amendments to
economic crimes are:
(i) In addition to the crimes set out
under Article 76 of the Penal Code,
a corporate legal entity will bear
criminal liabilities for crimes set out
under Article 300 (Terrorism
financing) and 324 (Money
laundering);
(ii) For criminal liabilities that apply to a
corporate legal entity, the
offending entity may also be
prohibited from operating in certain
fields or mobilizing capital for a
period of 1 to 3 years;
(iii) The crimes on multi-level marketing
business are now applied when a
person (a) conducts this business
without an operation certificate for
multi-level marketing; or (ii) does not
comply with the contents of an
issued operation certificate for
multi-level marketing business.
The Law will take effect from 1 January
2018.
Banking
Draft circular on term deposit transactions
The State Bank has proposed a draft circular on term deposit transactions at credit
institutions and foreign bank branches (“Banks”). Below are the significant points:
• The Bank may accept term deposits from non-residents, i.e. foreign entities or
foreign individuals present in Vietnam;
• The term deposits will be agreed by the parties on the basis of a term deposit
contract, and also subject to residual term/validity duration of the incorporation
certificate of the non-resident in Vietnam (individual/legal entity respectively);
• Depositors are only permitted to use their money in their payment accounts in
order to make term deposits; and
• The draft circular also stipulates other contents, such as scope of acceptance of
term deposits of each kind of Bank, and use of money in a term deposit.