Types of Criminal Record

 As regulated in Clause 4, Article 2 of the Law on Criminal Record, criminal record is a document issued by the Department of Justice or the National Centre for Criminal Record, which have the value to demonstrate that a person is with or without a criminal conviction; is prohibited or not prohibited from holding position, managing or establishing business or not.

As stipulated in Article 41 of the Law on Criminal Record, there are 2 types of criminal record card:

– Criminal record form 01 is issued upon request by Vietnam citizen or foreigners residing in Vietnam and State agencies, political organizations, political – social organizations to serve human resources management activities, business registration activities, establishment and management of enterprises or cooperatives.

– Criminal record form 02 is issued for the agency conducting the proceedings and at the request of individuals who want to know the contents of their criminal record.

Lawyers at ANT Lawyers, a law firms in Vietnam will be available to assist client to navigate through procedures to apply and obtain criminal record in Vietnam.

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Can Employer Terminate the Labor Contract with Employee Due To Covid 19 Outbreak

 Due to intricate occurrence of Covid 19, many enterprises are forced themselves to reduce the number of employees for maintaining the operation financially. Specifically, the employer has to make difficult decision to terminate the labor contract with the employee. The termination of the labour contract has to be considered carefully because of potential legal risks brought up which dispute lawyers in labour should be consulted before execution. Within this post, we are not trying to resolve all cases but only aiming to brief some matters of concern for preparation.

The employer could refer to the regulation in the Labor Code which allows “an employer may unilaterally terminate a labor contract if as a result of natural disaster, fire or another force majeure event as prescribed by law, the employer, though having applied every remedial measure, has to scale down production and cut jobs. Force majeure in this case is understood as (i) Enemy-inflicates destruction, epidemics (ii) Relocation or narrowing of the production and business sites, at the request of competent State agencies.

In particular, after applying corrective measures, over the time, considering enterprise’s financial potential is insufficient as well as the business production is reduced significantly due to epidemic, the employer may consider unilaterally terminate labor contract with employee. However, employer still have to abide by or ensure the rights to employee regarding the interests which employee is entitle to receive when being unilaterally terminated labor contract includes salary, severance allowance, social insurance, payment for untaken leave days, the tax payment which employer must paid for employee. Besides, employer also is subject to pay a compensation if consented by both sides are employer and employee.

Firstly, employer is obliged to pay salary to employee timely and fully as in the agreed labor contract by both parties;

Secondly, employer is responsible for paying the severance allowance to employee whom has worked regularly for full 12 months or longer at the rate of half of a month’s wage for each working year.

Thirdly, social insurance, employer is responsible for the fulfill payment of social insurance and perform the closing insurance book for employee after terminate the labor contract according to the law of social insurance.

Fourthly, if the income of employee subject to personal income tax, employer must extract from the income of employee to submit the tax to tax agency according to law on personal income tax.

If the client needs any other information or requires for further advice, our lawyers at ANT Lawyers in Vietnam will be available for service.

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Conditions set-up import company in Vietnam

 Before Vietnam joined World Trading Organization (WTO), distribution and import, export activities conducted by foreign owned entities are strictly regulated by Vietnam government. As such, foreigners could only conduct the import of goods through the Vietnam agents.

Since 2007, Vietnam has become an official member of WTO and it had to commit a route to open local market to foreign companies and traders, including foreign distributors. Within 02 years from the date of accession to WTO, regulations with services and trading activities have been eased up gradually to be more open. Since 2009, foreigner investors have been entitled to set up 100% foreign-owned companies to conduct activities related to the sale and purchase of goods including import and export, and distribution including acting as agents for purchase and sale, wholesale, retail and franchising. This opens up opportunities for foreign investors to expand their trading activities in Vietnam.

1. Conditions for foreign-owned company in import and export or distribution field:

According to Article 4, Decree No. 23/2007/ND-CP on 12 February 2007 by the Government providing regulation for implementation of Commercial Law regarding purchase and sale of goods and activities directly related to the purchase and sale of goods by enterprises with foreign owned capital in Vietnam (“Decree No. 23”), the conditions for an enterprise with foreign owned capital to be granted a business license for activities of purchase and sale of goods and activities related to purchase and sale of goods in Vietnam shall comprise:

a. It is an investor belonging to a country or territory participating in an international treaty of which the Socialist Republic of Vietnam is a member and in such treaty Vietnam has undertaken to open the market on activities of purchase and sale of goods and activities directly related to purchase and sale of goods;

b. The form of investment is consistent with the schedules undertaken in international treaties of which the Socialist Republic of Vietnam is a member and is consistent with the law of Vietnam;

c. The goods and services in which business is conducted are consistent with Vietnam’s undertaking to open the market and are consistent with the law of Vietnam;

d. The scope of operation is consistent with Vietnam’s undertaking to open the market and is consistent with the law of Vietnam;

e. It has approval from the competent State body.

With respect to foreign investors not in the category stipulated in clause (a) above, the Minister of Industry and Trade shall consider each application on a case by case basis and must approve activities of purchase and sale of goods and activities directly related to purchase and sale of goods before the authorized State body grants a business license.

2. Conditions of foreign-invested enterprises on implementation export rights

According to Circular No. 08/2013/TT-BTC dated on April 22, 2013 issued by the Ministry of Industry and Trade detailing the goods trading and directly related activities of foreign-invested enterprises in Vietnam (“Circular No.08”), foreign-owned enterprises which have been licensed to conduct export activities are permitted to export, purchase goods in Vietnam for export, including goods imported in Vietnam by them or other enterprises already finished tax liability and other financial obligations, under the following conditions:

a. Export goods which are not in the list of those banned from export, list of those temporarily suspended from export, list of those of which the right to export is not granted according to international commitments;

b. For export goods in the list of conditional export goods, enterprises must meet conditions as prescribed by law;

c. For export goods in the list of goods to be exported under roadmaps specified in international commitments, enterprises must comply with the committed roadmap;

d. The export commodities must be suitable with content of the right to export which enterprises have been licensed for implementation.

The foreign-invested enterprises already licensed for right to export are entitled to directly do procedures for export of goods at customs agencies as prescribed by law.

The foreign-invested enterprises already licensed for right to export are entitled to directly purchase only goods of Vietnamese traders who have business registration or right to import, right to distribute such goods for export; not entitled to organize the network of goods purchase in Vietnam for export, unless otherwise provided by law of Vietnam or International treaties to which the Socialist Republic of Vietnam is a contracting party.

3. Conditions of foreign-invested enterprises on implementation import rights:

Under Circular No. 08, foreign-owned enterprises which are licensed to import goods are permitted:

a. Import goods which are not in the list of those banned from import, list of those temporarily suspended from import, list of those of which the right to import is not granted according to international commitments;

b. Import goods belong in the list of conditional import goods, enterprises must meet conditions as prescribed by law;

c. Import goods belong in the list of goods to be imported under roadmaps specified in international commitments, enterprises must comply with the committed roadmap;

d. The import commodities must be suitable with content of the right to import which enterprises have been licensed for implementation.

The foreign-invested enterprises already licensed for right to import are entitle to directly do procedures for import of goods at customs agencies as prescribed by law.

The foreign-invested enterprises already licensed for right to import but not yet licensed for right to distribute are entitled to directly sell import goods for Vietnamese traders who have business registration or right to export, right to distribute such goods; not entitled to organize or participate in the network of goods distribution in Vietnam, unless otherwise provided by law of Vietnam or International treaties to which the Socialist Republic of Vietnam is a contracting party.

4. Conditions of foreign-owned enterprises on implementation distribution rights:

Distribution is defined as Decree 23 as “activities of wholesaling, retailing, agency for purchase and sale of goods and franchising in accordance with the law of Vietnam”. The right to distribution is defined as “the right to undertake directly activities of distribution”.

Under Circular No. 08, foreign-owned enterprises which have been licensed to conduct distribution activities shall be permitted:

a) To conduct wholesaling, retailing, franchising and agency for trading goods manufactured in Vietnam and goods imported into Vietnam, except:

i) For goods on the list of those banned from business and list of those of which the right to distribution is not granted under international commitments;

ii) For goods restrained for business or goods of conditional business, enterprises must meet conditions as prescribed by law;

iii) For distribution goods in the list of goods to be distributed under roadmaps specified in international commitments, enterprises must comply with the committed roadmap.

b) The distribution commodities must be suitable with content of the right to distribution which enterprises have been licensed for implementation.

Depending on the method of business, investor could choose one of activities belonging to distributions rights. With each method, the investor needs to apply a suitable business registration issued by competent authorities.

Further, foreign invested enterprises whose investment registered retail business line in their investment certificate could open a single retail outlet in order to sell their goods to the end of user or customers. The setting up of retail establishments including the first retail establishments must abide by law regulations on state management for retail activities and be conformable with the related master plans of central-affiliated cities and provinces, where are expected for setting up of retail establishments. The setting up of retail establishments in addition to the first retail establishments are considered for each specific case based on the examination on economic demand of each locality where place retail establishment under the criteria: Quantity of retail establishments, stability of market, residential density and scale of district-level localities where are expected for the setting up of retail establishments.

Our lawyers of foreign investment practice at ANT Lawyers, a law firm in Vietnam are available to advise and provide client with service and representation for setting up a trading company in Vietnam.

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Restructure the Debt Payment due to Covid-19

 On March 13, 2020, the State Bank issued Circular No. 01/2020/TT-NHNN providing guidance for the credit institutions, foreign bank branches to restructure the debt repayment, exemption and reduction periods, charge, keep the debt group in support of customers affected by Covid-19 epidemic, which is an important legal grounds to support the economy.

Debt Recovery Lawyers in Vietnam

Accordingly, the debt group restructuring is carried out as follows:

Debts which are restructured repayment term are the principal amount and/or interest (including the debt balance of debts within the scope of regulation of Decree No. 55/2015/ ND-CP of June 9, 2015 of the Government on the credit policy for agricultural and rural development (amended and supplemented)), which fully meets the following conditions: arising from lending activities, financial leasing; Arising the obligation to repay the principal and/or interest within the period from January 23, 2020 to the next day after 03 months from the date the Prime Minister announces the end of the Covid -19 epidemic; Customers are unable to pay the debt principals and/or interests on time according to the signed contracts, loan agreements, financial leases due to the decrease in revenue and income due to Covid -19 epidemic.

The debt repayment restructuring shall be carried out in cases where the outstanding debt is still due or overdue for up to 10 days from the due date of payment or due under the contract, financial leasing agreements; or The overdue debt balance in the period from January 23, 2020 to the next day after 15 days from the effective date of this Circular.

Credit institutions, foreign bank branches may decide on rescheduling of repayment of outstanding debts in the above-mentioned cases, based on customers’ requests and assessments of credit institutions, foreign bank branch on the ability to repay the principal and/or interest of the customer in full after rescheduling, in accordance with the influence of Covid – 19 service and ensuring the credit institution, the foreign bank branch fails to restructure the debt repayment term for debts in violation of legal regulations and the restructuring time in case of extending an extended repayment period shall not exceed 12 months from the last day of the debt term, finance lease (the time the customer must pay all principal and interest under the signed contract, loan agreement, financial lease).

In addition, credit institutions and foreign bank branches shall decide on the exemption and reduction of interests and fees according to internal regulations for the outstanding debts arising from credit extension activities, except for bond purchase and investment activities for which the principal and/or interest payment is due within the period from January 23, 2020 to the next day after 03 months from the date of Prime Minister announced the end of the Covid -19 epidemic and the customer was unable to pay the debt on time, both principal and/or interest, according to the signed contract or agreement due to the decrease in revenue and income due to the impact of the Covid- 19 epidemic.

This Circular takes effect from the date of signing. From the effective date of this Circular, customers of credit institutions, foreign bank branches, other relevant organizations and individuals will have their debt repayment restructured, exemption and reduction periods, charge, keep the debt group unchanged. The Government has always issued policies, legal documents to support businesses, organizations and individuals to borrow credit during the period of the Covid -19 epidemic, so that they can help businesses as well as the country’s economy to maintain and develop in the future.

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Legal Regulations in Purchasing Real Estate in for Foreigners in Vietnam

 Vietnam has become a better place for foreigners to visiting and staying. Many chose Vietnam as home and they come to Ho Chi Minh City, Ha Noi, Da Nang, Phu Quoc, Nha Trang… to buy real estates for living. Many foreigners consider seeking understanding and with the advisory of their real estate lawyers in Vietnam to purchase the property under their name for best interest protection. There are a number of foreigners seek to cooperate with local Vietnamese under investment agreement to invest in properties. It has always been suggested the buyer or investor to receive legal advice from real estate lawyers and law firms in Vietnam before committing the investment to a certain extent.

According to the Law on housing 2005, foreign organizations and individuals investing in construction of houses for sale and lease in Vietnam have the right to own the houses in Vietnam. However, according to the provisions of the Law on housing 2014, the house owners expand and include foreigners being investors building the houses under investor projects, foreign organizations operating in Vietnam and foreign individuals being allowed to enter Vietnam under the provisions of the Law on Entry, Exit, Transit and Residence of Foreigners in Vietnam; and are not entitled to diplomatic privileges and immunities.

Under the provisions of the Law on housing 2014, foreign organizations and individuals are allowed to own apartments, individual houses (villas and townhouses) in commercial housing projects. The total number of foreign individuals/organizations owned does not exceed 30% of an apartment building or does not exceed 10% or 250 houses of a housing project. Foreign individuals may own houses for up to 50 years and are allowed to extend for no more than 50 years. Foreign organizations own the houses according to the time limit on the Investment Registration Certificate and the extension period. During the time of owning the houses, foreign individuals are allowed to sublease, but foreign organizations are not allowed to sublease the houses.

For foreign individuals/organizations, when buying the houses in Vietnam, it is necessary to have a well drafted sales contract for purchase and sale of the houses because all rights and obligations related to the purchase, sales and ownership of houses are regulated in the contract. Therefore, the buyer should consider the contract carefully, usually with the help of real estate lawyers whom understand Vietnam laws before signing, in order to protect their legitimate rights and interests.

The foreigner when buying and selling the houses, especially off-plan house, need to also pay attention to the regulations on payment schedule in the contract. According to Article 57 of the Law on housing 2015, the payment in the purchase, sales, lease sales of the off-plan real estate in Vietnam is carried out in installments, and the first time must not exceed 30% of the contract value, the next times must be in accordance with the construction schedule, however, not exceeding 50% of the contract value when not handed over when the buyer is an enterprise with foreign investment, not exceeding 70% the value of contract, if the buyer is the foreigner individual the payment is not exceed 50% the value of the contract before handing over the house to the buyer. Until the buyer is issued with a certificate of land use right, ownership of houses and other assets attached to the land, the buyer shall pay no more than 95% the value of contract.

Foreigners in Vietnam need to be assisted to be familiar with the laws relating to the purchase and sale of real estate in order to protect their legitimate rights and interests when participating in transactions in Vietnam. It is important that the foreigners consider using the services of law firm in Vietnam specializing in real estate to advise and help manage the transaction.

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Which Form of Investment - Branch or Company?

 Foreign entities can set-up company or branch offices in Vietnam to carry out business activities.

There are several main different aspects between opening a branch office or establishing a foreign owned company in Vietnam.

Conditions

Permits for establishment of Vietnam-based branches of foreign enterprise shall each have a valid term of five years.

Foreign enterprise must choose between establishing a 100% foreign capital enterprise or forming a joint-venture with domestic investor or company.

Certificate

The Branch office needs to apply and obtain the operation license of a Branch;

A foreign owned company will need to apply and obtain the investment certificate (“IC”) to operate in Vietnam.

Capital

Optional, foreign entity will decide how much money to invest in branch. The allocation capital for branch is capital for the subordinate units.

Mandatory, foreign entity will need to provide minimum capital as required by Vietnam Law in conditional investment area.

Obligation of owner

For branch office in Vietnam, owner takes full responsibility;

For company, owner takes responsibility within the capital contributed into the company in Vietnam;

Other matters

For branch office setting up in Vietnam, the procedure is less complicated compared to those for the establishment of a 100% foreign owned company; the branch office is able to carry out trading and some other activities as stipulated by Vietnam laws and the WTO commitments which Vietnam enters. The business lines of a branch have to be aligned with the business lines of the headquarter of the foreign entity.

Setting up foreign owned company would be more complicated than the setting up of the branch office, however this form of investment has more flexibility and freedom as it is a stand alone Vietnam entity recognized under Vietnam laws.

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