The document summarizes recent legal and business developments in Vietnam across various industries based on a newsletter from Asia Counsel, a law firm in Vietnam. Key updates include: - Foreign workers in Vietnam will be required to participate in Vietnam's social insurance scheme starting January 2018. - New regulations have been introduced for the pharmaceutical industry regarding drug pricing and retail margins. - Factoring operations of credit institutions in Vietnam will be regulated under a new circular issued by the State Bank of Vietnam. - Recent market reports indicate strong growth potential for convenience stores in Vietnam, with major brands expanding their presence.

1. ASIA COUNSEL INSIGHTS
May 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.
Key Dates:
• From 01 June 2017, the rate of
occupational accident and
disease insurance is 0,5% of
the employee salary fund on
which the social insurance
premiums are based.
Social Insurance
Draft Decree on Social Insurance for
Foreign Citizens
The Ministry of Labor, Invalids and Social
Affairs has published its draft decree
guiding the Law on Social Insurance.
Under the draft, foreigners working in
Vietnam (with a valid work permit or
practice license/certificate) will be
required to participate in Vietnam’s
social insurance scheme from 1 January
2018.
Foreign employees would need to
contribute 8% of their monthly salary,
while employers must contribute 14%, to
this fund. The funds will cover illness,
material, occupational diseases and
accidents, retirement and death –
similar to the current scheme applied for
Vietnamese employees.
Although this is welcomed by long-term
employees in Vietnam, some businesses
have expressed concerns as it would
increase the costs of hiring foreign
professionals.
Pharmaceuticals
On 8 May 2017, the Government issued
Decree 54/2017/ND-CP providing
detailed guidance and measures for
implementing the Law on Pharmacy
which takes effect on 1 July. This Decree
sets out the following:
• The pharmaceutical wholesale and
retail establishments are not entitled
to trade drug if its price has not been
declared on the website of the
Ministry of Health;
• The pharmaceutical wholesale and
retail establishments must list the drug
price at the purchase location and
such price is not allowed to be higher
than the declared price;
• The retail price of a pharmaceutical
product at a retail store shall include
the purchase price on invoices and
the retail margin calculated by the
retail margin rate times the purchase
price. The retail price of a
pharmaceutical product = the
purchase price + the retail margin
rate (%) (2% - 15%) * the purchase
price.
Banking
Factoring
The State Bank of Vietnam issued
Circular 02/2017/TT-NHNN dated 17
May 2017 regulating factoring
operations of credit institutions and
foreign bank branches. The key
provisions are:
• A financial leasing company
cannot be a factor.
• The factor must issue internal
regulations on factoring
operations. The internal
regulations must include
compulsory contents stipulated
under Circular 02. The factor
must send the regulations to the
SBV within 10 days of issuance or
amendment.
• Interest for late payment of
factoring interest must not
exceed 10%/year.
• Circular 02 sets out the accounts
receivables that can be used in
factoring transactions.
Circular 02 will take effect from 20
September 2017.
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, Level 5, 18 HBT Building, 16-18 Hai Ba Trung Street, Ben Nghe Ward, District 1, Ho Chi Minh City

2. ASIA COUNSEL INSIGHTS
May 2017
Vietnam Fact Box
Recent 2017 reports from Kantar
Worldpanel and IGD, market
surveyors, have revealed the
market potential in convenience
stores in Vietnam, with one-third
of households buying goods at
small supermarkets and
convenience stores.
Circle K, FamilyMart, B’s Mart
Ministop and Vinmart have
already made big expansions
across Vietnam. 7-Eleven is
expected to also enter the
market with a significant
investment.
From 2012 to 2015, the growth
rate in this field was almost 200%.
However, according to these
reports, there is more growth to
follow. Therefore, we are likely to
see these stores appear in even
greater numbers in the future.
Corporate Law
On 18 April 2017, the Ministry of
Planning and Investment issued
Circular 02/2017/TT-BKHDT on the
cooperation between the investment
registration office and business
registration office for foreign investors
which takes effect from 15 June 2017.
The following are of interest:
• Foreign investors and/or foreign
invested enterprises filing for
investment approvals such as
establishment of an enterprise,
investment in form of contribution
capital or purchase of share,
capital, amendment to investment
registration and business registration
contents will only need to submit
application dossier only with the
investment registration office and
they will cooperate with the
business registration office.
• Foreign investors and/or foreign
invested enterprises will only be
required to submit one set of a
passport or certificate of
incorporation and power of
attorney for filings if these
documents are required by both
offices.
This will reduce unnecessary
paperwork.
Telecommunications
On 24 April 2017, the Government
issued Decree 49/2017/ND-CP on
amending Article 15 of Decree
25/2011 providing guidance on Law
on Telecommunications and Article
30 of Decree 174/2013/ND-CP on
administrative penalty for violations
in post, telecommunications, IT and
radio frequencies. A few key points
of this Decree include:
• SIM cards can only be distributed
at designated registered
telecommunication locations.
• Distribution of already activated
SIM cards will result in an
administrative penalty of 30 to 40
millions VND.
• Telecommunication enterprises
are required to ensure correctness
and truthfulness of the information
provided by users. Failure to
comply will result in an
administrative penalty of up to
200 millions VND for enterprises
and up to 100 millions VND for the
enterprises` legal representative.
• Within 3 months from the effective
date of this Decree,
telecommunication enterprises
are required to comply with new
regulations.
Business Conditions
On 19 May 2017, the Government
issued Decree No. 66/2017/ND-CP
providing regulations on the business
conditions for hidden listening devices
and software used for voice and image
recording and GPS tracking (“Decree
66”). Under Decree 66, only the
following business establishments can
conduct the said business:
• Business establishments under the
Ministry of Public Security which are
granted the Satisfaction of security
and order conditions certificate by
the competent authority of the
Ministry of Public Security;
• Business establishments under the
Ministry of Defence which are
granted the Satisfaction of security
and order conditions certificate by
the competent authority of the
Ministry of Defence;
• Other business establishments which
are granted the Satisfaction of
security and order conditions
certificate by one by the competent
authorities of the Ministry of Public
Security;
Decree 66 shall take effect as of 7 July
2017.
Securities
Listings
On 12 April 2017, the Ministry of Finance issued Circular 29/2017/TT-BTC amending
Circular 202/2015/TT-BTC on listing securities. New provisions are:
• If the listing applicant is a parent company, the minority interest income will be
excluded from the after-tax profit and equity when calculating the ROE, a
condition for listing securities.
• A listed company may switch from Hanoi Stock Exchange to Ho Chi Minh City
Stock Exchange and vice versa if so approved by its general meeting of
shareholders and satisfying the requirements for listing on the new exchange.
• To be listed, a new company formed by a listed company being consolidated
with an unlisted company is no longer required to have no debt overdue for
more than 1 year or accumulated losses until the year of registration for listing.
The above provisions will take effect from 1 June 2017.