Asia Counsel Insights provide readers a punchy update on legal and business developments in Vietnam. In this edition, we provide a summary of changes to the investment regulation; decree on housing affecting residential development and Covid-19 tax relief.

1. ASIA COUNSEL INSIGHTS
May 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:
• Advising a UK based investment fund
on its investment in a rooftop solar
portfolio in Vietnam.
• Advising G Group and G Pay on their
Series A investment by KB Securities.
Project Suspension
An investment project may be
suspended for up to 12 months at the
discretion of the Government, if such
investment project could impact
national security and defence.
Termination of Facade Transactions
Licensing authorities may decide to
terminate any investment project
formed by facade transactions, as
determined by a court or arbitration
centre. Licensing authorities may
also request a court to declare a
transaction invalid.
Share Swaps
Decree 31 prescribes for the first time
the ability for foreign investors to
undertake share swaps with
Vietnamese investee companies.
Outward Direct Investments
Decree 31 prescribes the process to
apply for approval for outward direct
investments and allows the filing of
online applications for offshore
investments with investment capital of
less than VND20 billion.
New Decree on Investment Law
On 26 March 2021, Decree
31/2021/ND-CP Guiding the
Implementation of the Law on
Investment (“Decree 31”) was adopted
by the Government to replace Decree
118/2015/ND-CP (“Decree 118”).
Notable updates from Decree 31
include:
Foreign Investment Sector Restrictions
Decree 31 provides a list of business
sectors that are subject to investment
restrictions, which includes: (i) a list of
prohibited business sectors; and (ii) a list
of conditional business sectors for
foreign investors. Prohibited sectors
now include 25 business sectors (such
as press activities and private
investigation services). Conditional
business sectors include 58 business
sectors (including advertisement,
education and logistics services). The
market approach conditions for foreign
investors are posted in the National
Investment Portal
(vietnaminvest.gov.vn). Any business
lines that are not included in the list
(such as management consultancy) are
open 100% foreign ownership on the
same conditions as domestic Vietnamese
investors.
Any business sectors that are not
committed under international treaties to
which Vietnam is a party, are subject to
Vietnamese domestic laws. If Vietnamese
law is silent on restrictions for a specific
business sector, foreign investors will be
treated on the same terms as local
entities and will therefore, no longer need
to obtain ministerial opinions (as per the
previous regulations).
Furthermore, non-WTO-member foreign
investors are entitled to receiving the
same investment conditions as WTO-
member foreign investors, unless stated
otherwise in any applicable law or treaty.
Additional Investment Conditions
In addition to sector restrictions, foreign
investors are further subject to legal
conditions relating to: (i) the use of land,
labour, and natural resources; (ii) the
production and provision of state
exclusive business sectors; (iii) real estate;
and (iv) equitization.
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
May 2021
Tax Deferrals for 2021
In order to help alleviate some of the difficulties from Covid-19, the Government of Vietnam
issued Decree no. 52/2021/ND-CP on 19 April 2021 (“Decree 52”) to defer the payment of
value-added tax, corporate income tax, personal income tax and land rent for 2021 for
eligible taxpayers.
The deferrals are applicable to enterprises, household business and individuals operating in
several manufacturing and service sectors as set out in the Decree, such as agriculture, textiles,
construction, real estate trading, transport and warehousing, health care, travel agencies,
tourism services, as well as microenterprises, and credit institutions and foreign bank branches
providing assistance for enterprises, organizations and individuals affected by Covid-19 as
prescribed by the relevant governmental authority.
More specifically, declaration for VAT is deferred from 3-5 months depending on the
declaration period. Corporate income tax declared in the first and second quarters of 2021
will be deferred for 03 months.
The deadline for annual payment of land rent which are due in beginning of 2021 for direct
lease of land by the State to enterprises, organizations, household businesses or individuals
under decisions or contracts of competent authorities will be deferred for 06 months starting
from 31 May 2021.
Taxpayers eligible for deferral are to submit an application for tax deferral under the form
provided in Decree 52.
to investment following the
build - transfer (BT) method: all
references to BT projects have
been removed to consolidate
projects performed following
the build-transfer (BT) method
under the single governance of
the laws on public-private
partnership (PPP) investment.
• Stricter regulations on the
handover of apartment
maintenance funds: Under
Decree 30, apartment project
owners must open a funding
account for the purpose of
receiving and managing
apartment building
maintenance funds. This
account must be notified to the
provincial Department of
Construction in writing. This new
addition is aimed at preventing
apartment project owners from
abusing apartment
maintenance funds whilst the
apartment buildings are yet to
be handed over to the
management committee of
the apartment building.
• Personal documentation for
administrative procedures:
Personal identification
documentations (including ID
card, citizen card, passport, etc.)
are no longer required for all
Vietnamese citizens issued with a
personal identification when
implementing procedures
related to real estate trading or
residential housing.
Housing Decree Amendments
On 26 March 2021, the Government
issued Decree 30/2021/ND-CP
(“Decree 30”) on Amendments to
Decree 99/2015/ND-CP on Guidelines
for the Law on Housing (“Decree 99”).
The aim of Decree 30 is to amend and
update elements of Decree 99 in
order to minimize and clarify
administrative procedures related to
housing. Some notable provisions are
below.
• Amendments to the evaluation
process for housing projects:
under Decree 30, all housing
investment policy approvals are
brought under the regulations on
investment. In other words, policy
approvals for housing projects
now belongs to the competency
of investment authorities
including the Ministry of Planning
and Investment and the relevant
Departments of Planning and
Investment.
The investment authority
evaluating the housing
investment policy must consult
with the Ministry of Construction
or Department of Construction
during the approval process, as
the case may be.
• Investor selection process for
housing investment projects:
Under Decree 30, the following
investors are eligible to be
project owners for commercial
housing projects: (i) investors
who have won bidding or
auctions for land use rights to
implement housing projects
meeting the criteria under the
Law on Housing; and (ii)
investors having land use rights
meeting the criteria as set out
the Decree and the Law on
Housing.
If there are multiple investors for
a commercial housing project,
the investors may collectively
authorize one eligible investor
or form an enterprise meeting
the above criteria to carry out
the procedure for recognition
of housing construction project
owner.
• Removal of regulations related
Vietnam Fact Box
According to the
Ministry of Planning and
Investment’s Foreign
Investment Agency, as
of 20 April 2021, Vietnam
has attracted USD12.25
billion in foreign direct
investment (FDI), which is
equivalent to 99.3% of
the FDI obtained in the
same period in 2020.
Foreign investors have
invested in 53 provinces
and cities nationwide, in
which Long An Province
took the lead with a
total registered
investment capital of
nearly USS3.3 billion. Can
Tho City and Ho Chi
Minh City were second
and third with over
USD1.3 billion and
USD1.1 billion,
respectively.