The document provides updates on legal and business issues in Vietnam. It summarizes that: (1) Decree 85 amends regulations on e-commerce, extending licensing requirements to foreign entities with significant online sales or use of Vietnamese; (2) Decree 21 guides security transactions, defining reasonable periods and notice requirements; (3) Resolution 105 provides Covid-19 support measures like social insurance reductions and tax exemptions. It also relaxes work permit rules.

1. ASIA COUNSEL INSIGHTS
October 2021
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 Update:
• Advised Citigo Software Joint Stock
Company, owner of the KiotViet
platform on the signing of its US$45
million Series B investment from KKR,
Jungle Ventures and Beacon Fund.
• Advised proptech Rever on its
US$10.2 million investment from
Mekong Capital.
E-commerce
On 25 September 2021, the
Government issued Decree No.
85/2021/NĐ-CP to amend Decree
No. 52/2013/ND-CP on the
management of e-commerce
activities (“Decree 85”). Decree 85
will take effect on 1 January 2022.
Key changes of Decree 85 are
summarised below.
Applicable entities
Under Decree 85, e-commerce
management regulations (including
licensing requirements), will apply to
foreign entities conducting e-
commerce activities in Vietnam in
the following context:
• Operating an e-commerce
website under a Vietnamese
domain name;
• Operating an e-commerce
website with Vietnamese
language displayed; or
• Operating an e-commerce
website with over 100,000 annual
transactions in Vietnam.
Security transactions
On 19 March 2021, the Government
issued Decree 21/2021/ND-CP guiding
the Civil Code on security transactions
(“Decree 21”), replacing Decree
163/2006/ND/CP and Decree
11/2012/ND-CP. Decree 21 took effect
on 15 May 2021.
Key changes under Decree 21 are
summarised below.
“Reasonable period” definition
Under Decree 21, a “reasonable
period” is defined as either a period:
(i) which can be established through
past practice of the relevant parties;
or (ii) in which the relevant parties to a
security transaction can exercise their
rights and obligations under normal
conditions.
Under Decree 21, the secured
obligations must be performed by the
obligor within an agreed period. In the
absence of any such agreement, the
secured obligations need to be
performed within a “reasonable
period” from the date of notification
by the beneficiary. Decree 21 allows
parties to a security contract to freely
agree on any duration for the notice
period applicable to an asset
enforcement. In the absence of any
agreement on the relevant period, a 10
and 15 days’ prior notice period will
apply to the enforcement of movable
and immovable assets, respectively.
Security over equity interests
Decree 21 expressly requires that the
use of equity interest as a secured asset
needs to comply with the relevant
charter of the securing party in addition
to the law. Accordingly, the securing
party’s charter should be reviewed
carefully before any security over
equity interests is granted to ensure that
the charter does not contain any
restrictions that could hinder
enforcement.
Mortgagee protection
Decree 21 provides that if a mortgaged
property is the subject of a void civil
transaction, the relevant security
contract will be valid so long as the
mortgagee has received the valid
ownership certificate from the
mortgagor as security (without the
necessity of handing over the secured
assets). This provision aims to protect the
rights of mortgagees who enter security
contracts in reliance of the title
documents of a mortgagor.
About Asia Counsel
Asia Counsel is a dynamic international corporate and commercial law firm dedicated to serving clients in Vietnam. Our partners have over 14 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
Partner
E christian@asia-counsel.com
Minh Duong
Managing 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
Ross Macleod
Partner
E ross@asia-counsel.com

2. ASIA COUNSEL INSIGHTS
October 2021
In addition, the invested company will
have to apply for a trading license for
e-commerce services (which also
involves obtaining opinions from the
MOIT and the MOPS).
Separately, foreign investors investing
in innovative small and medium-sized
enterprises and start-ups will not need
to comply with general market access
conditions.
Covid-19 Support Measures
On 9 September 2021, the
Government issued Resolution
105/NQ-CP (“Resolution 105”) to
provide additional support measures
to businesses affected by the Covid-19
pandemic. Notable points are
summarised below.
Costs and Financial Support
The Ministry of Labour, Invalids and
Social Affairs (“MOLISA”) will reduce
social insurance premiums and waive
late interest on 2020 and 2021 social
insurance premiums.
The Ministry of Finance will implement
policies on: (i) the exemption and
reduction of taxes, statutory fees,
charges and land rent; and (ii) the
introduction of preferential tax policies
relating to the import of goods
abetting Covid-9 prevention and
control.
The Ministry of Culture, Sports and
Tourism will reduce travel service
deposits by 80% and the processing
time for deposit refunds from 60 to 30
days, until the end of 2023.
The Vietnam General Confederation
of Labour will exempt trade union fees
and trade union contributions for
businesses affected by the Covid-19
pandemic in 2021 and 2022.
Labour Support
Local authorities will flexibly implement
and relax certain regulations on
granting and extending work permits
to foreign experts and technicians.
Further, foreigners having valid work
permits can now be assigned to work
in another city or province for up to six
months without needing to obtain a
new work permit.
MOLISA will also allow businesses to
increase employee monthly overtime
hours, subject to their current
requirements and the cap of 300
overtime hours per year).
Social networks
From 1 January 2022, a social
network (such as Facebook, Zalo
and Instagram etc.) will be deemed
as an e-commerce platform if it has
one of the following features (and
requests its users to, directly or
indirectly, pay fees to use such
features):
• Allowing users to open booths for
displaying and/or promoting
goods and services;
• Allowing users to create an
account to transact with
customers; or
• Posting news on selling/buying
goods and/or providing services.
Service provider obligations
Under Decree 85, the providers of e-
commerce trading floor services
need to comply with the following
additional obligations:
• Designating a focal point to
receive requests and provide
online information on legal
violations by its users to the State;
• Acting on behalf of foreign sellers
on the floor to settle consumer
complaints, and notifying such
sellers on their tax obligations;
• Acting as the focal point to
receive and settle consumers
complaints in case more than
two parties are involved;
• Storing information on order
transactions made on the floor in
accordance with accounting
regulations; and
• Jointly compensating relevant
parties for any damage resulting
from a failure to: (i) promptly handle
illegal business acts made on the
floor; or (ii) support and prove
information to the State to assist
investigations on illegal business
acts performed on the floor.
E-commerce market access
Foreign entities making investments, to
the effect of obtaining control rights, in
any of the leading five e-commerce
service enterprises in Vietnam, will be
required to implement
investment/acquisition registration
processes and obtain appraisal
opinions from the Ministry of Industry
and Trade (“MOIT”) and Ministry of
Public Security (“MOPS”).
The list of the five leading enterprises in
will be announced by the MOIT.
Control rights is defined as any one of
the following cases:
• Holding ownership of more than
50% of the charter capital or voting
shares of the company;
• Ability to directly or indirectly
appoint, relieve from duty or dismiss
the majority or all of the
management personnel of the
company;
• Right to decide important business
issues of the company, including: (i)
technology platforms and forms of
business organisation; (ii) industries,
occupations, geographical areas
and business forms; (iii) to adjust the
size of business and business lines;
and (iv) the form and method of
mobilising, allocating and using
business capital.
Vietnam Fact Box
On 30 September 2021, Peoples’ Committee of Ho Chi Minh City issued Directive 18/CT-
UBND to gradually reopen the economy in the city.
Under this directive, nine categories of commercial entities and activities were
permitted to resume operations from 30 September 2021, including:
▪ Business and production establishments in industrial parks, processing and exporting
zones, and hi-tech parks;
▪ Traffic and construction works;
▪ Enterprises and service providers operating in (i) food supply; (ii) sale, repair,
maintenance of vehicles, household and industrial equipment; (iii) real estate and
investment; (iv) e-commerce services; and (v) warehouses and transportation
activities, export and import of goods.
▪ Activities of representative offices and branches of foreign traders; and
▪ Activities supporting enterprises and citizens (e.g. notaries and lawyers).