Asia Counsel Insights gives readers a concise insight into legal and business developments in Vietnam. This edition has news on: changes to the social insurance and labour laws; feed in tariffs for power projects; changes to investment conditions for insurance enterprises.

1. ASIA COUNSEL INSIGHTS
November 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.
Deal Updates:
• Advised Topica, a leading
online education platform in
Vietnam on its Series D
investment from Northstar for
USD50 million.
• Advised The Blue Circle on its
tie up with Ayala Corp to
develop a portfolio of 1,500
MW of wind projects in
Southeast Asia.
Food safety
Circular 43/2018/TT-BCT (“Circular 43”)
was issued on 15 November 2018.
Under this circular the Ministry of
Industry and Trade has been given
authority to issue the Certificate of
food hygiene for production facilities
for certain food items depending on
quantity produced per year,
including:
(i) wine production with capacity of
more than 3 million litres per year; and
(ii) beer production with capacity of
more than 50 million litres per year.
For facilities producing less than the
prescribed amount, the local
Department of Industry and Trade
have authority over issuance of the
certificate of food hygiene for such
production facilities.
Circular 43 also updates the process
for issuance of the certificate after
application. Inspection of the
facilities must be organised within 10
working days and the certificate is
issued within four working days from
the date of satisfying the inspection.
Health
Health Insurance
From 1 December 2018 under
Decree 146/2018/ND-CP guiding the
Law on Health Insurance (“Decree
146”) 100% of the medical,
examination and treatment costs will
be covered by social insurance for:
▪ people who: contributed to the
revolution; receive monthly social
security benefits; or live in deprived
conditions;
▪ the conduct of medical
examination and treatment at
commune level; and
▪ medical examination and
treatment where the cost is less
than 15% of the statutory basic
salary.
Other cases are subsidized on a
sliding scale, but with most people
able to receive cover for 80% to 95%
of medical costs. In addition, social
insurance agencies must issue health
insurance e-cards to policyholders by
1 January 2020.
Banking
Freezing the assets of a foreign bank
branch (the “Branch”)
Circular 27/2018/TT-NHNN of the State
Bank of Vietnam dated 22 November
2015 will take effect on 10 January
2019. It regulates cases where the
assets of a Branch may be frozen by
the SBV to protect the Branch’s
customers, including where:
▪ the actual capital of the Branch
falls below the statutory capital
rate for more than 6 consecutive
months;
▪ the required solvency ratios are not
maintained by the Branch without
any applicable remedy proposed;
▪ the Branch’s accumulated losses
exceed 50% of the actual capital
and reserved funds recorded in its
latest audited financial statement;
▪ the foreign bank breaches
commitments with the SBV; or
▪ the foreign bank is likely
considered insolvent.
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
November 2018
Vietnam Fact Box
On 12 November 2018, the
National Assembly of Vietnam
passed Resolution No.
72/2018/QH14 to officially
approve the Comprehensive
and Progressive Agreement
for Trans-Pacific Partnership
(the “CPTPP”) and other
associated instruments. As a
result, a number of
Vietnamese laws will need to
be amended in accordance
with the schedule agreed
upon in the CPTPP, including:
the Labor Code, the Criminal
Code, the Criminal Procedure
Code, the Law on Insurance
Business, the Law on Food
Safety and the Law on Anti-
corruption.
• consolidation, division or
separation or termination of
operations of the employer.
Decree 148 takes effect on 15
December 2018.
Social insurance contributions for
foreigner workers
Under Decree 143 foreigners working
in Vietnam:
• with a work permit, practicing
certificate or practicing license
issued by Vietnamese authorities
and holding a labour contract of
indefinite term or a contract with
a term of one full year or above
shall be subject to compulsory
social insurance;
• under a secondment or reaching
retirement age shall not be
subject to compulsory social
insurance.
The contribution rates are:
• from December 1, 2018 to
December 1, 2021: 3.5% from
employer, 0% from employee;
and
• from January 1, 2022 onwards:
17,5% from employer, 8% from
employee.
Decree 143 takes effect on 1
December 2018.
Energy
On 10 September 2018, the Prime
Minister issued Decision No.
39/2018/QD-TTg amending several
articles of Decision No.37/2011/QD-
TTg dated 29 June 2011 on
mechanism for provision of
assistance in development of wind
power projects in Vietnam
(“Decision 39”).
Under Decision 39, the feed-in tariff
(FIT) for wind power of onshore and
offshore projects will be adjusted up
to VND1,928 (8.5 US cents) and
VND2,223 (9.8 US cents) per kWh,
respectively. The FIT are exclusive of
VAT and are adjusted in tandem
with fluctuation of VND/USD
exchange rates.
Wind power projects that reach
their commercial operation date by
1 November 2021, are entitled to
the preferential price for a period of
20 years. For other projects that
were put into operation before the
issue of this decision will enjoy the
new tariff from 1 November 2018 for
the remaining period of the relevant
signed power purchase agreement.
Decision 39 took effect on 1
November 1 2018.
Employment
The Government recently issued two
new decrees impacting on
employment law, namely: (i) Decree
No. 148/2018/ND-CP to amend a
number of regulations of Decree No.
05/2015/ND-CP on implementation of
the Labour Code (“Decree 148”); and
(ii) Decree 143/2018/ND-CP on
compulsory social insurance for
foreigner workers (“Decree 143”).
The Labour Code
Decree 148 brings in some changes to
the Labour Code that may impact on
enterprises:
• legal representative of the
employer may now authorize
another person to sign
employment contracts on behalf
of the employer;
• probation or internship periods are
no longer counted towards
working period for calculation of
severance or retrenchment
allowance;
• there are now certain cases where
an employer can extend the
period for completion of
outstanding obligations to the
employees to 30 days due to
events of force majeure, merger,
Insurance
Qualified Investor
The Government passed Decree 151/2018/ND-CP to cut down business and
investment conditions in areas managed by Ministry of Finance (“Decree 151”)
which took effect on 7 November 2018.
Decree 151 clarifies that an insurance enterprise in the form of a joint stock company
only needs to have two shareholders who are qualified investors and must together
hold a minimum of 20% of the total issued shares of the insurance enterprise.
There are also changes to the requirements of a qualified investor. A foreign investor
is qualified if it has seven years of experience operating in the insurance business in
which they intend to engage in Vietnam, instead of ten years as set out in Decree
73/2016/ND-CP (“Decree 73”). Additionally, a Vietnamese investor is qualified if it
has a minimum total assets of VND1,000 billion – in this case the investor can operate
in any sector not only securities, banking and financial services.