[Legal Updates] Letter Of Quick Legal Update 20190819

LEGAL UPDATES

[Legal Updates] Letter Of Quick Legal Update 20190819

1. New guidance on direct investment capital bank account in Vietnam (DICA)

Circular No. 06/2019/TT-NHNN issued on June 26th, 2019 by the State Bank of Vietnam guiding the foreign exchange management for the foreign direct investment in Vietnam.

This Circular shall be applied to enterprises with foreign direct investment, foreign investors, Vietnamese investors in the enterprises have foreign direct investment capital, foreign investors participating in business cooperation contracts (hereinafter referred to as BCC), foreign investors participate in investment contracts in the form of public-private partnerships (hereinafter referred to as PPP), organizations, individuals related to foreign direct investment activities in Vietnam.

According to this Circular, enterprises include (i) enterprise which established in the form of Investment in establishment of a business organization, in which the Foreign Investors are members or shareholders, and it is required to have the Investment Registration Certificate in accordance with the law on invest; (ii) Enterprise which are not required to have the Investment Registration Certificate but 51% of its charter capital or more is held by Foreign Investors; and (iii) Project Management Enterprise established by the Foreign Investors to implement the PPP project in accordance with investment law are deemed as enterprises with foreign direct investment and shall open a direct investment account in an authorized bank (DICA).

In cases, the following enterprises which have opened a direct investment account, have to close such account, and at the same time the foreign investors who are non-resident own the shares, contribution capital in the enterprise open an indirect investment account under the regulations of foreign exchange:

  • The enterprise which has the foreign investors own under 51% of its charter capital, except it is required to obtain the Investment Registration Certificate under the regulations of the investment laws;
  • The enterprise which is not required to have the Investment Registration Certificate but has the demand to have one and obtained the Investment Registration Certificate from the Competent Authority in accordance with the regulations of the investment laws;
  • The direct foreign investment enterprise has stocks listed on the stock exchanges or registered for trading on the Stock Exchange.

Circular No. 06/2019/TT-NHNN comes into effect on September 06th, 2019.

2. Reducing fees  for New Company Registration 

Circular No. 47/2019/TT-BTC issued on August 05th, 2019 by Ministry of Finance on amounts, collection, payment, management and use of fees for providing information about enterprises, charges for enterprise registration.

According to this Circular, entities eligible for fee, charge exemption include:

  • Enterprises supplementing and changing information due to administrative boundary changes shall be exempt from enterprise registration charges and fees for publication of business registration contents;
  • Register to dissolve enterprises, suspend business; termination of operation of branches, representative offices and business locations shall be exempt from enterprise registration charges;
  • Enterprises that make enterprise registration via electronic networks are exempt from enterprise registration charges;
  • State Agencies request to provide information for administration management are exempt from fees of providing enterprise information;
  • Small and medium enterprises converted from business households are exempted from enterprise registration charges and fees of providing enterprise information for the first time;

Fees, charges for enterprise registration are changed as follow:

  • Charges for enterprise registration: 50,000 VND per registration;
  • Fees of publication of the contents of enterprise registration: 100,000 VND per registration;

Circular No. 47/2019/TT-BTC comes into effect on September 20th, 2019.