Asia Counsel Insights gives readers a concise insight into legal and business developments in Vietnam. This edition has news on: offshore securities investments; conditions for opening vocational education centres; and wind power projects.

1. ASIA COUNSEL INSIGHTS
March 2019
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:
• Acted for JWD InfoLogistics Public
Company Ltd on its acquisition of a
minority interest in Transimex, a logistics
company listed on the Ho Chi Minh City
Stock Exchange.
• Advising UIZA on its Seed round, led by
Sequoia.
• Advising Hiip on its pre-Series A round, led
by Vnet and Rentracks.
• removing various facilities and
personnel conditions that were
previously required; and
• removing the condition for such
companies to record their banking
operations in their business licenses
issued by the State Bank of Vietnam.
Decree 16 further provides that these
companies must satisfy the following
conditions:
• fulfill all financial duties to the State
and not have any outstanding tax
liabilities;
• have internal procedures and
systems for internal control, audit,
risk identification and management
related to the activities of offshore
indirect investment; and
• be in compliance with regulations
on capital, financial safety norms,
and investment limits.
Labour
Compulsory insurance for foreigners
On 18 March 2019, the MOLISA issued
Official Letter No. 1064 to clarify
application of compulsory social
insurance for foreign employees.
The letter advises that a foreign
employee must meet the following
conditions to be subject to the
compulsory social insurance scheme:
• have a labour contract with an
indefinite-term labor contract, or
definite-term of at least one year
with a Vietnam based employer;
• possess either a work permit,
practicing certificate, or
practicing license, granted by
the competent state authority of
Vietnam;
• be younger than 60 years old for
men, or 55 years old for women;
and
• not be an intra-group transferee.
Investment
Offshore securities investment
The government issued Decree
16/2019/ND-CP on 1 February 2019
regulating the offshore indirect
investment activities of securities
companies, fund management
companies, and insurance companies
(“Decree 16”). Decree 16 is effective
on 20 March 2019.
Decree 16 eased conditions for these
companies to receive the indirect
offshore investment license by:
• allowing these companies to
register for the license after
recording profits for three
consecutive years of profits (rather
than five as previously stipulated).
Profit figures must be demonstrated
through financial statements and
independent auditors approved by
the Ministry of Finance;
About Asia Counsel
Asia Counsel is a dynamic international corporate and commercial law firm dedicated to serving clients in Vietnam. Our partners have over nine 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, Unit 15.03 – 15.04, Level 15, Deutsches Haus, 33 Le Duan Boulevard, Ben Nghe Ward, District 1, Ho Chi Minh City

2. ASIA COUNSEL INSIGHTS
March 2019
Vietnam Fact Box
Vietnam has made
continued efforts to become
an ever more investment-
friendly nation. Many
business conditions have
been removed to ease
investment. For instance, the
Ministry of Health eliminated
1,363 / 1,871 business
conditions and 169/234
licensing procedures; the
Ministry of Finance also
simplified and eliminated 176
procedures in accordance
with Decision 2141/QD-BTC.
Investment
Wind Power Project Development
The Ministry of Industry and Trade
issued Circular No. 02/2019/TT-BCT
regulating wind power project
development and power
purchase agreements (PPA) for
wind power projects in Vietnam
(“Circular 02”).
The key provision of Circular 02 is
that PPAs for wind power projects
brought into operation before 1
November 2018 are permitted to
be re-executed with the power
purchaser in order to take
advantage of the new power tariff
specified in Decision No.
39/2018/QD-TTg.
Any such re-executed PPAs will be
able to apply the new power tariff
from 1 November 2018 until the
date of expiry of the original signed
PPA.
The tariffs are 8.5 US cents/kWh for
onshore wind power projects and
9.8 US cents/kWh for offshore wind
projects (exclusive of VAT).
Circular 02 took effect on 28
February 2019.
Business
Science and Technology Enterprises
The Government recently issued
Decree 13/2019/ND-CP providing
regulations on Science and
technology enterprises (“Decree 13”).
Decree 13 took effect on 20 March
2019.
Under Decree 13, a company holding
a Certificate of science and
technology enterprise (“CSTE”) issued
by the local Department of Science
and Technology or the Ministry of
Science and Technology (as
applicable) will be entitled to
preferential treatment, including tax
incentives, land and water surface
fees and credit incentives. To obtain
a CSTE, a company must:
• be incorporated and operated
under Vietnamese law;
• be able to create or apply
the scientific and technological
results/achievements in its
business activities. The scientific
and technological results must
be certified and recognized by a
competent state agency; and
• have the income of their
scientific and technological
projects accounting for at least
30% of the total turnover.
Business Condition
Labor Outsourcing Service
The government issued Decree
29/2019/ND-CP on 20 March 2019
regulating labour outsourcing activities
(“Decree 29”). Decree 29 will replace
Decree 55/2013/ND-CP (“Decree 55”).
Decree 29 has removed certain
conditions on enterprises to obtain the
Labor Outsourcing License, including
the requirement to have a minimum
capital of at least VND 2 billion, and
the requirement to have a lease of 2
years or more for the registered head
office.
The term of the Labour Outsourcing
License has been increased from 36
months (as under Decree 55) to 60
months under Decree 29. In addition,
under Decree 29, the term of the
Outsourcing License can be extended
several times with the maximum
duration of each extension being 60
months. This is an improvement on from
Decree 55 where Labor Outsourcing
License could only be extended twice
with each extension only being for a
maximum period of 24 months.
Decree 29 will take effect on 5 May
2019.
Investment
Conditions to establishment of foreign invested vocational training institution
The government issued Decree 15/2019/ND-CP on 1 February 2019, which offers
detailed instruction on the implementation of law on vocational training. Decree 15
took effect on 20 March 2019.
The investor is required to have at least VND5 billion in investment capital to open a
vocational training centre; VND50 billion and VND100 billion to open a secondary
vocational training school and vocational college, respectively.
The foreign investor’s project would need to be in line with the national planning for
vocational training network. The investor must have land use area of at least 1,000 sqm
for a vocational training centre; land use area of 10,000 sqm for an intermediate level
vocational training school in urban areas or 20,000 sq.m if the school is located in non-
urban areas; and land use area of 20,000 sqm (urban) and 40,000 sqm (non-urban) for
college level vocational training institution.