This document provides summaries of recent legal and business developments in Vietnam across various sectors: - New regulations have been introduced around social media networks, news websites, fire prevention insurance, food safety licensing, multi-level marketing, foreign trade promotion organizations, microfinance institutions, and innovative startup funds. - Recent decrees aim to better regulate social networks and news websites, introduce deductibles for fire insurance claims, relax some food business licensing while imposing stricter controls on additives, and increase protections against fraudulent multi-level marketing. - Regulations have also been updated for foreign trade representative offices, microfinance licensing and operations, and the establishment of innovative startup funds to invest in small businesses.

1. ASIA COUNSEL INSIGHTS
March 2018
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.
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Vietnam.
Telecommunications
Internet Regulations
Decree 27/2018/NĐ-CP dated 1
March 2018 amending Decree
72/2013/ND/CP on internet services
and online information will come into
effect on 15 April 2018.
Decree 27 regulates the
management of social network sites.
Social network sites must upload the
content of its user agreement on its
main page. Social networks must
have a solution in place to protect
users’ information and must also
ensure its user have the sole discretion
in permitting the social network site to
provide their information to other
individuals and organizations.
Regarding the management of news
websites, the requirement for an
information management procedure
to verify information has been
introduced. This is intended to better
enable the authority to stop
prohibited information from being
published.
Fire Prevention
Fire and explosion insurance
Decree 23/2018/ND-CP was issued on
23 February and provides several new
provisions on compulsory fire and
explosion insurance, including:
• 1% of the amount collected from
compulsory fire and explosion
insurance business shall be
contributed to the operation of fire
prevention and fighting (previously 5%
under Decree 130/2006/ND-CP).
• excess to be paid by the insured party
on each claim has been introduced.
The amount of excess payable is on a
sliding scale up to a maximum of 10%
of the claim.
• a formula has been provided to
determine the minimum insured sum
under each policy.
• in the event of an insured event, if the
inspectors find the premises did not
adhere to fire regulations, a maximum
of 10% may be deducted from the
insurance proceeds to be paid out.
Decree 23 will come into effect on 15
April 2018.
Food Safety
Licensing
On 2 February 2018, the Government
issued Decree 15/2018/ND-CP
implementing the Law on Food
Safety. The key changes are below.
• business entities trading in food
products can now self-declare
satisfaction with safety standards,
except for: food products
produced for children under 36
months old; health or dietary
supplements; and food for special
medical purposes which must still be
registered with the relevant
authority for declaration of
satisfaction of food safety
standards.
• more business entities are now
exempt from the need to obtain a
certificate of food safety (such as
mobile food vendors); and
• stricter controls are imposed on the
use of food additives to ensure
product safety.
Decree 15 came immediately into
effect on 2 February 2018.
About Asia Counsel
Asia Counsel is a dynamic international corporate and commercial law firm dedicated to serving clients in Vietnam. Our partners have over ten 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
March 2018
Vietnam Fact Box
According to the Foreign
Investment Agency,
Vietnamese businesses have
invested in 23 projects with a
total capital of USD 123.62
million in other countries in the
first quarter of this year.
Finance and banking sectors
had the largest interest from
Vietnamese investors with
USD105 million, accounting for
70.2% of the total investment
capital in the first quarter,
followed by manufacturing
and processing with USD19.9
million (13.3%) and retail and
wholesale sectors with USD8.5
million (8%).
Source: Vietnamnet
Business
Multi-level Marketing
The government issued Decree
40/2018/ND-CP on 12 March 2018
(effective from 2 May 2018) introducing
further conditions that must be satisfied
to conduct multi-level marketing.
These include having sufficient
finances, and systems in place to
conduct multi-level marketing
activities, such as having an IT system
for the management of the multi-level
marketing network, and systems for
dealing with queries and complaints
from the participants in the network.
This decree also puts in place further
protections against fake multi-level
marketing activities by banning a
number of fraudulent activities and
stipulating that: (i) goods must be
handed over immediately after
payment; (ii) trading invoices must be
issued by the businesses for
transactions; and (iii) sales bonuses and
commissions must be transferred by
bank transfer to record such payments.
Decree 40 also enhances the
management activities of the local
authorities over multi-level marketing.
Commerce
Foreign trade promotion organizations
Decree 28/2018/ND-CP, was issued on
1 March 2018 and has brought in a
number of key amendments to
regulations on foreign trade promotion
organizations (''FTPO'') and their
representative offices (''RO''). These
include:
• the chief representative and staff of
an FTPO's RO must be registered with
the regulator (previously under
Decree 100/2011/ND-CP (“Decree
100”), only the chief representative
was required to be registered with
the regulator;
• if the FTPO or concerned individuals
applying to establish a RO are on the
list subject to sanctions according to
the UN Security Council's resolutions,
the application shall be denied (this is
an additional disqualification factor);
and
• extending criminal liability to RO’s
that breach Vietnam’s labor code
regulations. This also leads to the RO
having its license revoked as was the
case under Decree 100.
Decree 28 took effect on 1 March 2018
replacing Decree 100 as the guiding
regulations applicable to FTPOs and
their ROs.
Banking
Micro Finance
Circular No. 03/2018/TT-NHNN on
licensing, organization and
operation of microfinance
institutions was issued on 23
February 2018.
This Circular sets out specific
conditions for the establishment
and operation of micro-finance
organizations including:
• the charter capital must be at
least equal to the regulated
capital, which will be defined by
the Government;
• it must have a suitably qualified
owner/founder and key
management persons;
• the company charter must be set
out in conformity with the laws;
and
• it must have a satisfactory
feasibility and business plan for
the first three years.
Circular 03 prescribes a maximum
term of operation of 50 years for a
micro finance license and places
single ownership limits.
Circular 03 comes into effect on 15
April 2018
Investment
Innovative start-up funds
On 11 March 2018, the government issued Decree 38/2018/ND-CP providing detailed
regulations on investing in small and medium-sized enterprises (“SMEs”).
A number of guidelines on establishment of innovative start-up funds are set out in
Decree 38. As such, a maximum number of 30 investors may jointly establish an
innovative start-up fund. Capital contribution may be in Vietnamese dong, gold, land
use rights and other assets which can be valued in Vietnamese dong. However,
investors are not permitted to use loans for their capital contributions.
Innovative start-up funds are not legal entities, and as such are not permitted to invest
in other innovative start-up funds. Decree 38 also prescribes other limits on investments
of the funds.
Decree 38/2018/ND-CP took immediate effect on 11 March 2018.