Legal Updates
‘‘ I don't need lawyers who win at all cost.
I really need them to win, but calculate the costs
No. 10/09
CHIEF EDITOR
Mr. Tran Duy Canh, Esq.
Capital Market
EDITOR
Mr. Le Hong Phuc, Esq.
Ms. Pham Thi Bich Lien, Esq.
Ms. Trinh Thi Anh Phuc, Esq.
Ms. Ngo Thi Bich Phuong, Esq.
Ms. Duong Thi Mai Huong
SECRETARY
Ms. Dao Le Thu
LUATVIET – ADVOCATES & SOLICITORS
www.luatviet.com
Ho Chi Minh City Office
Empire Tower, 9th Floor 26-28 Ham
Nghi, Ben Nghe Ward, District 1
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Tel: +84 (8) 3824 8440
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E-mail: canh.tran@luatviet.com
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District Hanoi, Vietnam
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Fax: +84 (4) 2220 3153
E-mail: phuc.le@hn.luatviet.com
,,
GUIDELINES FOR TENDER OFFERS OF SHARES
o n October 2, 2009, the Ministry of
Finance issued Circular No.
194/2009/TT-BTC providing guidelines
for tender offers of shares in a public
company (the PC), a fund certificate
issued by a public closed-end securities
investment fund (“SIF Fund”).
Cases that tender offer is required:
(a) A tender offer of shares with the
voting rights and of a fund certificate
that leads to an ownership ration up
to 25% or more of the shares with
- voting rights in a PC or of the
the
number of fund certificates issued
by a SIF fund:
- An organization, individual and
related person, who have not
hedl any share of a PC or a fund
certificate in a SI Fund, or have
been holding the shares but with
a ratio less than 25% and intend
purchasing the shares and a fund
certificate that leads to an
ownership ration up to 25% or
more of the shares with the
voting rights in a PC or an
amount of a fund certificate of a
SIF fund;
- An organization, individual and
related person who have been
holding more than 25% of the
shares with the voting rights in a
uatV et
ADVOCATES & SOLICITORS
October 2009
Capital Market
Guidelines for tender offers of shares........................1
Amended guideline on interest rate support........3
Issuance of government bonds denominated in
foreign currencies – third issuace in 2009.................4
Participation of shareholding credit institution
in UPCoM.......................................................................................................4
Enterprise – Investment
Regulations on coordination regime between
competent authorities in settlement of business
registration in Hanoi and Ho Chi Minh........................5
Increase of area minimum wage rates.........................6
Finance – Tax
Settlement of exchange rate differences in
enterprises....................................................................................................7
Tax obligation for organizations, individuals
doing business in Vietnam.........................................................8
Pit applicable to transfer of real estate and
receipt of inheritances and gift being real
estate..................................................................................................................8
Construction – Real Estate
Hanoi people’s Committee issued new
regulations on land compensation and support
of resettlement.........................................................................................9
Issuance of the certificates of land use right,
residential house ownership and ownership of
assets attached to the land.....................................................10
Guidelines on implementation of the Law on
tendering.....................................................................................................11
Regulation on payment of land usage for
projects of new urban zone...................................................12
Amendment on management of investment
projects of works construction...........................................12
Commerce
New regulation on oil & Gasoline business..........13
Multi-modal transportation.................................................14
Bill
Draft decree on the management of Casino and
prize-winning electronic games.......................................15
LuatViet News
LuatViet participated in the VnTPO 2009...............16
LuatViet published The Legal Guide for Doing Business
in Vietnam............................................................................16
Q & A Section
Newsletter Legal Updates
Capital Market
PC or of the number of a fund certificate
in a SIF fund and intend purchasing more
that the shares or the number of a fund
certificate that leads to their ownership
ratio up to 51%, 65% and 75%
respectively in the PC or the SI Fund;
(b) A public offer to where the offerees are
compulsory to sell the shares owned by the
offerees, including: (i) a PC makes
redemption of its shares in order to decrease
its Charter Capital; or (ii) a PC offers its
shares for sale pursuant to a decision made
by a competent court.
Cases that tender offer is not required
(exemptions):
(a) An investor subscribes for new shares of a
public company issued pursuant to an
issuance plan and of a fund certificate that
leads to an ownership ration up to 25%
onwards of the shares with the voting rights
and fund certificates approved by the
General Meeting of Shareholders (“GMS”) of
a PC or a Representative Board of a SI Fund;
(b) An investor acquires shares or a fund
certificate by way of assignment from an
exiting shareholder to an organization or an
individual that lead to an ownership ratio of
the assignee with a ratio more than 25% and
the transfer must be approved by the GMS
or a General Meeting of Investors of a SI
Fund; or
(c) Shares transfer is made within companies in
a group of companies, a general corporation
operating under the form of a parent
company and a subsidiary company.
Before transacting a tender offer, organization and
individual who purchases shares of a PC or a fund
certificate of a SI fund must report its transaction to
the State Securities Commission (“SSC”) and must
announce its extraordinary changes as required by
applicable laws.
Process for tender offer:
When conducting a tender offer to purchase,
investors must submit their Application Dossier for
registration of the tender offer to purchase to the
SSC, the PC, the fund management company that
LuatViet - Advocates & Solicitors
manages the SI Fund and the Representative
Board of such SI Fund. Within 03 days upon receipt
of the offer, the PC and the fund management
company will perform their obligations on
information announcement about such receipt.
Within 14 days upon receipt of the offer, the PC and
the fund management company must give
feedback to investors. The SSC must give their
written opinion on the tender offer within 07 days
upon receipt of a complete Application Dossier for
registration of the tender offer to purchase.
Foreign investors may not be entitled to offer to
purchase the shares and fund certificates that lead
to excess the ownership cap applicable to foreign
investors as permitted by applicable laws.
Withdraw of offer to purchase :
(a) Number of shares or fund certificates
registered for sale is less than the ratio
offered in the Application Dossier for
registration of the offer to purchase;
(b) A target company increases or decreases its
number of the shares with the voting rights,
or adds up the Share Certificate or converts
the preferential shares into the ordinary
shares, or decreases its Charter Capital; or
issues additional stocks or the target fund
issues fund certificate to increase its Charter
Capital of the fund.
(c) A target company sells all or part of its
business results or assets;
(d) A target company or a target fund is
dissolved.
This Circular takes effect after 45 days from the
date of signing.
October 2009 2
Newsletter Legal Updates LuatViet - Advocates & Solicitors

Capital Market

AMENDED GUIDELINE ON INTEREST RATE SUPPORT

o n October 9, 2009, the State Bank of

Vietnam (SBV) issued Circular No.
21/2009/TT-NHNN modifying a number of articles
(a) In respect of valuable papers purchased or
arose before February 1, 2009, commercial
banks, finance companies will carry out their
of Circular No. 05/2009/TT-NHNN dated April 07, support interest rate for the loan;
2009 detailing regulations on implementation of (b) In respect of valuable papers purchased or
interest rate support to organizations and arose from February 1, 2009, commercial
individuals borrowing medium and long-term loans banks, finance companies will carry out their
from commercial banks for carrying out their new support interest rate for the loan that is made
investment for production and business by the difference between the current debt
development. and the value of valuable papers which are
pledged or guaranteed by borrowers.
In addition to eligible borrowers in branches and
fields who are entitled to be supported the interest (c) In respect of borrowers having their money
rate, loans that are to carry out capital deposited at commercial banks, finance
requirements for the production and business cycle companies arising from February 01, 2009,
with a term more than 12 months in branches and the interest rate support shall be applied for
fields that are also be supported interest rate. the loan that is made by the difference
between the current debt and the deposit of
The Circular provides clearly that the medium and borrowes.
long-term loans offered by commercial banks, This Circular takes effect from the date of signing.
finance companies are not entitled to be supported
the interest rate, including:
(a) Loans in foreign currencies;
(b) Loans in VND for directly pay taxes, fees and
charges to the State Budget;
(c) Loans in VND for purchase of foreign
currencies to make payment abroad for
imported goods, or to make payment to
domestic distribution; capital for consuming
goods imported from abroad with the
purpose of forming equipment, materials and
assets for development of production and
business project;
(d) Loans calculated as credit account of
branches and fields.

Furthermore, the SBV also provides in detail the

level of interest rate support applicable to cases in
which borrowers can pledge, guaranty valuable
papers or when they deposit money at commercial
banks or financial companies as below:

October 2009 3
Newsletter Legal Updates
Capital Market
ISSUANCE OF GOVERNMENT
BONDS DENOMINATED IN FOREIGN
CURRENCIES – THIRD ISSUACE IN
2009
o n October 8, 2009, the Ministry of Finance
issued Decision No. 2476/QĐ-BTC guiding
issuance of government bonds denominated in
foreign currencies – third issuance in 2009.
The government bonds denominated in foreign
currencies have a term of one year with total
amount of USD200 million. The starting date of
issuance of government bonds is from October 10,
2009 to October 20, 2009. The method of issuance
of government bonds is underwriting.
Government bonds denominated in foreign
currencies shall be listed and traded in Hanoi
Stock Exchange and the interest rate is fixed for
whole the term of the bonds.
Bondholders are permitted to assign, donate,
bequeath, or use their bonds to pledge in their
credit transactions. They are required to declare
and pay tax on bond interest in accordance with
current laws and regulations.
This Decision takes effects from the date of
signing.
PARTICIPATION OF SHAREHOLDING
CREDIT INSTITUTION IN UPCOM
o
n September 24, 2009, the State Bank of
Vietnam (“SBV”) issued Official Letter No.
7430/NHNN-TTGSNH providing the participation
of unlisted public companies market for transaction
of securities (“UPCoM”) by shareholding credit
institutions (“institutions”).
Regulations on trading on UPCoM:
(a) The participation by the institution in UPCoM
is voluntary and it is up to each unlisted
shareholding credit institution to decide for
itself. It must comply with applicable laws on
securities and securities market and no
approval by the SBV is required. Upon
LuatViet - Advocates & Solicitors
participation in transactions in UPCoM, the
institution must comply with the Law on
Enterprises, the Law on Securities, the Law
on Credit Institutions and other
implementing regulations.
(b) In the event of any change to share
ownership of organizations or individual
owning 5% or more of the voting shares of
the institution, such change must be
approved in writing by the Governor of the
SBV, at the same time, the institutions must
report to the SSC on status of their share
ownership.
(c) Shareholders and management boards
such as the members of the Board of
Management, the Inspection Committee
and Executive Management, General
Directors, Chief Accountant must comply
with the provisions on transfer of shares and
reporting requirements for transaction of
share certificates that are similar with
provisions in listed market.
(d) Upon a change to the charter capital, an
institution must report the completion of the
procedure for its capital change, the list of
existing shareholders currently owning
major volumes of shares after each capital
change.
(e) Previously, in case an organization or
individual holding from 20% or more the
charter capital of a bank, such organization
or individual must pause their transaction
and must report to the SBV. Currently, in this
Letter, this provision is removed. It can be
seen as a positive signal for credit
institutions trading on UPCoM.
Requirements for foreign investors:
(a) Foreign organization and individual
(“Foreign Investors”) may subscribe for
shares of institutions being public
companies participating in UPCoM after
obtaining approval of the SBV.
(b) Foreign Investors must comply with
procedures under Decree No.
69/2007/ND-CP and Circular No. 07/
2007/TT-NHNN and they are required to
prove that their financial resources are
lawful.
October 2009 4
Newsletter Legal Updates LuatViet - Advocates & Solicitors

Enterprise – Investment

REGULATIONS ON COORDINATION REGIME BETWEEN COMPETENT

AUTHORITIES IN SETTLEMENT OF BUSINESS REGISTRATION
IN HANOI AND HO CHI MINH

o n June 23, 2009, the People ‘s Committee of

Ho Chi Minh City issued Decision No.
43/2009/QD-UBND providing the Regulation
days, from the date the request by an enterprise is
addressed to a corporate seal maker. The
corporate seal maker must complete the making of
the corporate seal, whereas the public security
between inter-departments in Ho Chi Minh City. In
must check the seal and register for the seal in
respect of Ho Chi Minh City, this Regulation took
order to return the seal and the seal model
effect from July 2009 and is implemented
certificate to the enterprise.
throughout the city.
In addition, the Regulations also provide
After Ho Chi Minh City has issued and applied this
regulations for coordination between the DPI, the
Regulation for 03 months, on October 20, 2009,
Department of Tax on issuance of the BRC and the
the People‘s Committee of Hanoi City issued
Tax Registration Certificate; the coordination
Decision No. 112/2009/QĐ-UBND providing
between the DPI and the Public Security to issue
Regulation on coordination regime between
the corporate seal to enterprises.
competent authorities in settlement of business
registration, tax registration and corporate seal
After a long-awaited period, the two separate
registration applicable to all enterprises
Regulations in Hanoi City and Ho Chi Minh City
established and operated under the Law on
already create favorable conditions for investors
Enterprises in Hanoi City (the “Regulation”). The
when they decide to establish their enterprises.
Regulation sets out the application dossier, the
Both Regulations provide the scope of subjects
procedure, cooperation method and
being enterprises established and operates under
responsibilities of related departments in Hanoi in
the Law on Enterprises. However, upon our
settlement of administrative procedures.
unofficial discussion with the DPI in Ho Chi Minh
City and Hanoi, the Regulations just apply to
Pursuant to this Regulation, each enterprise will
enterprises that conduct their business registration
have a unique company code. A company code
at Business Registration Divisions only (Enterprise
shall be stated in both a Business Registration
without foreign invested capital). In respect of
Certificate (the “BRC”) and a Tax Registration
enterprises with foreign invested capital, currently,
Certificate of an enterprise. A company code will
separate procedures for issuance of an Investment
exist for the whole life of an enterprise.
Certificate, a Tax Registration Certificate and a
Particularly, in case of conversion of a private
Corporate Seal are still in existence. It is unclear
enterprise; division, separation, merger and
whether enterprises with foreign invested capital
acquisition, sale of an enterprise; conversion of a
can be followed these Regulations.
depend enterprise into an independent one, and
vice versa, the change of the business registration
In Hanoi City, this Regulation takes effect after 10
and the tax registration content will lead to change
days from the date of signing. Decision
of a company code.
112/2009/QĐ-UBND replaced Decision No.
350/QĐ-KH&ĐT-CA-CT dated December 18,
The term for settlement of business registration
2006. Before the Regulation is applied in the Hanoi
and tax registration is 05 working days, from the
City as a whole, competent authorities are
date of receiving a complete and valid application
responsible for applying this Regulation on a pilot
dossier. The Department of Planning and
basis for 03 month period at Business Registration
Investment (the “DPI”) will return the result to the
Division No. 03 located at No. 1, Quang Trung
enterprise via its one stop service. The term for
Street, Ha Dong District, Hanoi City right after this
each corporate seal registration is 04 working
Decision is issued.

October 2009 5
Newsletter Legal Updates LuatViet - Advocates & Solicitors

Enterprise – Investment

INCREASE OF AREA MINIMUM WAGE RATES

o n 30 October 2009, the Government has

issued Decree No. 97/2009/ND-CP (“Decree 97”)
and Decree No. 98/2009/ND-CP (“Decree 98”)
providing area minimum wage rates.
The area minimum wage rate is used to pay
employees for doing basic work in normal working
conditions at the enterprises. The area minimum
wages shall apply to (i) calculate wage scales,
wage tables, all types of allowances and (ii)
calculate wage rate recorded in labor contracts and
to implement other regimes. The regulation on area
minimum wage rate will take effect as from 1
January 2010.
Note that the current general minimum wage rate
of VND650,000/month has not been adjusted yet.
As shown in the Government’s roadmap, from
May 01, 2010, the general minimum wage rate will
be increased equal to the lowest area minimum
wage rate of VND730,000/month.
One of the new points is that the lowest wage rate
payable to employees who have passed
vocational training courses (including employees
who have been trained by their enterprise) must
be equal to at least 7% higher than the area
minimum wage rates.
Decree No. 97 provides area minimum wage rates
applicable to employees working for companies,
Below are the new area minimum wage rates compared with the previous ones:
enterprises, co-operatives, co-operative groups,
farms, family households, individuals and other
Vietnamese organizations which hire employees
(“non-foreign owned enterprises”). Decree 98
providing minimum wages rates for Vietnamese
employees working in enterprises with foreign
owned capital, foreign bodies and organizations,
international organizations and for foreign
individuals in Vietnam (“foreign owned
enterprises”).
This area minimum wage rates can be amended
depending upon the economic growth rate, the cost
of living index, and labor supply and demand from
time to time.
Decree No. 97 shall take effect as from 1 January
2010 and replace Decree 110/2008/ND-CP of the
Government dated October 10, 2008 providing
minimum wages rates for Vietnamese employees
working in companies, enterprises, co-operatives,
co-operative groups, farms, family households,
individuals and other Vietnamese organizations
which hire employees.
Decree No. 98 shall take effect as from 1 January
2010 and replace Decree 110/2008/ND-CP of the
Government dated October 10, 2008 providing
minimum wages rates for Vietnamese employees
working in enterprises with foreign owned capital,
foreign bodies and organizations, international
organizations and for foreign individuals in Vietnam.

Area 1 Area 2 Area 3 Area 4

Non-FDI VND980,000/ VND880,000/m VND810,000/m VND730,000/m

enterprises month onth onth onth
(VND800,000/ (VND740,000/ (VND690,000/m (VND650,000/m
month) month) onth) onth)

FDI VND1,340,000/ VND1,190,000/ VND1,040,000/ VND1,000,000

enterprises month month month /month
(VND1,200,000/ (VND1,080,000 (VND950,000/m (VND920,000/
month) /month) onth) month)

October 2009 6
Newsletter Legal Updates LuatViet - Advocates & Solicitors

Finance – Tax

SETTLEMENT OF EXCHANGE RATE DIFFERENCES IN

ENTERPRISES

o n 15 October 2009, the Ministry of Finance

issued Circular No. 201/2009/TT-BTC
on settlement of exchange rate differences in
generated from exchange rate at the time of
preparing financial statement, the difference shall
be settled as follows:
enterprises.
(a) For debts receivable by foreign currencies:
This Circular shall be applicable to both domestic At the end of a year, enterprises must
and foreign owned capital enterprises established readjust the year end balance of all types of
and operated in Vietnam (except enterprises foreign currencies, after clearing, if the
engaged in purchase and sale of foreign differences increase, enterprises will record
currencies). the differences to their financial income in the
year, if the differences decrease, enterprises
The settlement of exchange rate differences for will record the differences to their financial
foreign currency business in the period is expenses in the year.
described as follows:
(b) For debts payable by foreign currencies: At
(a) In the stage of construction investment to the end of a year, enterprises must readjust
create fixed assets of newly established the year end balance of all types of foreign
enterprises, exchange rate differences currencies, after clearing, if the differences
arising when settlement of items generated increase, enterprises will record the
from foreign currencies is reflected differences to their financial expenses in the
accumulatively, respectively in the balance year and record the differences as
sheet. When fixed assets to be completed reasonable expenses when calculating their
and construction investment is put into corporate income tax, if the differences
operation, the exchange rate differences will decrease, enterprises will record the
be apportioned gradually based on incomes differences to their financial income.
or expenses of production, business, the
This Circular shall take effect after 45 days from
apportion period will not exceed 05 years
the date of signing. This Circular shall replace (i)
from the date that the works put into
Circular No. 38/2001/TT-BTC dated June 05,
operation.
2001; and (ii) Circular No. 44 TC/TCDN dated July
(b) In the stage of production and business, the 08, 1997.
above differences will be recorded as income
or expense in financial year.
(c) In the stage of dissolution, enterprise
liquidation, the debt receivables or debt
payables will be calculated for liquidation
income or enterprise liquidation expenses
depending upon cases in which the
exchange rate difference increases or
decrease.
At the end of a year, as for exchange rate
differences arising due to re-evaluation of the
balance of a long term debts (over 01 year)

October 2009 7
Newsletter Legal Updates
Finance – Tax
TAX OBLIGATION FOR ORGANIZATIONS, INDIVIDUALS
DOING BUSINESS IN VIETNAM
o n October 9, 2009, the Ministry of Finance
issued Circular No. 197/2009/TT-BTC on
supplement to Circular No. 134/2008/TT-BTC
dated 31 December 2008 of the Ministry of Finance
providing detailed regulations on taxation
applicable to foreign organizations and individuals
doing business in Vietnam or having income
derived from Vietnam.
Within 20 working days from the date of signing a
contract, a Vietnamese party who signs a contract
with a foreign contractor; or a foreign contractor
who signs a contract with a foreign subcontractor,
must notice in writing to local tax offices where
such foreign contractor, such foreign subcontractor
registers to pay tax. Parties must inform local tax
offices that foreign contractor(s), subcontractor(s)
directly register and pay VAT based on a deduction
method, pay corporate income tax based on a
percentage rate of taxable turnover.
In cases where tender contracts, subcontracts
which were signed before the effective date of
Circular No. 134/2008/TT-BTC, the determination
PIT APPLICABLE TO TRANSFER OF REAL ESTATE AND RECEIPT
OF INHERITANCES AND GIFT BEING REAL ESTATE
o n September 04, 2009, the General
Department of Taxation issued Official
Letter No. 3598/TCT-TNCN providing guidelines
for PIT applicable to transfer of real estate
assignment, receipt of inheritance and gift being
real estate.
Based on the time of tax filing, PIT shall be applied
as below:
(a) An individual with a contract for transfer of
real estate lodged a valid VAT file with
competent administrative bodies prior to
January 1, 2009 and the tax office issued the
tax credit note on transfer of land use right,
will pay the tax under the tax credit note. In
case the tax office has not issued the tax
credit note for tax payment, Point 1.1 of
Article 4 of Circular No. 161/TT-BTC by the
Ministry of Finance dated August 12, 2009
LuatViet - Advocates & Solicitors
of VAT and corporate income tax obligation shall
be carried out under the instruction of Circular No.
05/2005/TT-BTC of the Ministry of Finance dated
January 1, 2005 providing guidelines for taxation
of foreign organizations not having Vietnamese
legal entity status and foreign individuals doing
business or having income in Vietnam until the
contracts completes, except following cases:
(a) For goods, services not subject to VAT
based on regulation of VAT law which is
effective before 1 January 2009 provided by
foreign contractors, foreign subcontractors,
and are subject to VAT from 1 January 2009
onwards, the calculation of VAT taxable
turnover to foreign contractors, foreign
subcontractors shall be carried out under the
instruction of Circular No. 134/2008/TT-BTC.
(b) For incomes of foreign contractors,
subcontractors being business individuals
paid after January 1, 2009, the calculation
shall be carried out under PIT regulations.
This Circular shall take effect after 45 days from
the date of signing.
shall be applied.
(b) An individual having income from receipt of
inheritance and gift being real estate who
lodged a valid VAT file to the competent
administrative body prior to January 1,
2009, must not be subject to payment of PIT
for such income.
(c) A residential individual having income from
receipt of inheritance and gift being real
estate who lodged a valid file to the
competent administrative body within a
period from January 1, 2009 to June 30,
2009, must not be subject to PIT payment
for such income.
This Official Letter replaced Official Letter No.
3456/TCT-TNCN dated August 21, 2009 by the
General Department of Taxation on PIT applicable
to transfer of real estate assignment, receipt of
inheritance and gift being real estate.
October 2009 8
Newsletter Legal Updates LuatViet - Advocates & Solicitors

Construction – Real Estate

HANOI PEOPLE’S COMMITTEE ISSUED NEW REGULATIONS

ON LAND COMPENSATION AND SUPPORT OF ESETTLEMENT

o n September 29, 2009, Hanoi People’s

Committee issued Decision No.
108/2009/QD-UBND regarding land compensation
and support of resettlement within the City.
Households, individuals using land without
stipulated documents had been using the land
stably before October 15, 1993 and being certified
by the Communal People’s Committee on the
situation of having no dispute, no breach on
planning, no encroachment and occupation of
security protection frame for public works,
roadway, roadside, pavement or land for public
usage at the time of land use commencement shall
enjoy the compensation and support of
resettlement.
People whose habituated agricultural land has
been taken from 30 to 70 percent shall be
supported to re-stabilize within 06 months if they
do not have to move for living and within 12
months if they have to move for living.
than the value of a minimum resettlement area
shall enjoy the disparity amount. In case where the
households and individuals have enjoyed the
disparity amount but the total amount of
compensation and support clarified in the
compensation plan is not enough for payment of
land usage or resettlement, they are entitled to
gradually pay the remaining amount if having
request. The Decision also stipulates that the
compensation plans that are approved before
October 01, 2009 shall not be re-considered in
accordance with the new level of compensation
and support.
The Decision takes effect from October 01, 2009
and replaced Decision No. 18/2008/QD-UBND
dated September 29, 2008.

People whose habituated agricultural land has

been taken more than 70 percent shall enjoy the
double time limit of supporting. Households,
individuals directly cultivating, who satisfies one of
the conditions for compensation, when being taken
their agricultural land by the State, shall be
supported with the money for job changing and
making equivalent to 5 times of the stipulated
agricultural land price of the actual taken land. The
correct understanding of such regulation shall
contribute to prevent the fact that the land
speculator in urban areas race for purchasing land
in rural areas for unrighteous interest.

Regarding the resettlement, the households and

individuals satisfying all conditions for enjoying a
resettlement area of minimum land area or
apartment (40m2 of land and 45m2-apartment)
and the compensation and support amount less

October 2009 9
Newsletter Legal Updates
Construction – Real Estate
ISSUANCE OF THE CERTIFICATES OF LAND USE RIGHT, RESIDENTIAL
HOUSE OWNERSHIP AND OWNERSHIP OF ASSETS ATTACHED TO THE
LAND
A
fter a long-awaited period, on October 19,
2009, the Government issued Decree No.
88/2009/ND-CP on the issuance of
Certificates of land use right, residential house
ownership and ownership of assets attached to the
land (“Certificate”).
The Certificate is granted to the people having land
use right, ownership of residential house and
ownership of assets attached to separate land lot.
In case where the land user has been using a
number of agricultural land lots for perennial plant,
land for aquaculture, land for salt production
located within one commune, ward, town, if having
request, shall be granted a Certificate for all the
land lots.
For the land lot being of a number of land users,
house residential owners and owners of assets
attached to the land, the Certificate shall be
granted to each of land users, house residential
owners and owners of assets attached to the land.
The Certificate shall be granted to the applicant
requesting for the issuance of the Certificate after
the completion of financial obligations, except for
the cases of having no financial obligation or being
exempted or owed under the applicable laws and
regulations. In the cases of leasing land, the
Certificate shall be granted after the signing of a
Land rental Contract and completion of financial
obligations.
For the persons receiving the assignment of land
use right and ownership of residential house,
construction works of organization which invests
and build for sale, in the file for issuance of the
Certificate, in addition to the stipulated documents
(such as: Sale and Purchase Contract, copies of
Decision on Approval of project, planning...), they
LuatViet - Advocates & Solicitors
must have documents showing that the
assignment has been carried out at the real estate
transaction center.
Domestic organizations, religious units, foreign
organizations and individuals, Vietnamese people
residing in foreign countries who carry out project
in Vietnam shall submit the file and obtain the
Certificate at Office of Land Use Right Registration
under the Department of Natural Resources and
Environment (Office of Land Use Right
Registration of provincial level).
Vietnamese people residing in foreign countries
has the right to own a residential house in Vietnam,
the community of a ward can submit the file and
obtain the Certificate at Office of Land Use Right
Registration under the Official of Natural
Resources and Environment of communal level; or
Official of Natural Resources and Environment or
Communal People’s Committee for communal
level.
The time limit for issuance of the Certificate,
accounting from the date of receipt of a valid file is
no later than 50 days for the first issuance; for the
cases of issuance for changes on ownership of
assets in the Certificate: no later than 30 days, for
the case of re-issuance of the lost Certificate: no
later than 20 days.
This Decree takes effect from December 10, 2009,
replaced Decree No. 95/2005/ND-CP dated July
15, 2005 and amends a number of provisions of
Decree No. 181/2004/ND-CP, Decree No.
198/2004/ND-CP, Decree No. 197/2004/ND-CP,
Decree No. 90/2006/ND-CP, Decree No.
84/2007/ND-CP, Decree No. 29/2008/ND-CP, and
Decree No. 51/2009/ND-CP.
October 2009 10
Newsletter Legal Updates
Construction – Real Estate
GUIDELINES ON IMPLEMENTATION OF THE LAW ON
TENDERING
o n October 15, 2009, the Government issued
Decree No. 85/2009/ND-CP providing
guidelines on the implementation of the Law on
Tendering and selection of construction
contractors in accordance with the Law on
Construction. The provisions stipulated in this
Decree are fairly in compliance with the
requirements of the World Bank applicable to the
tender package sponsored by the World Bank.
Based on the characteristic, scale of the tender
package, the pre-qualification of the contractors
might be carried out in order to select the qualified
contractors in accordance with the requirements of
the tender package for invitation of tendering
participation. The Investor is empowered with a
number of authorities: to approve in the process of
tendering; to approve the tender invitation
documents; to consider to abrogate the decision
on approval on prior tender result in case of
unsuccessful negotiation and contract completion;
to approve on the result of goods offer in
procurement of goods; to permit for amendment of
the work load in the contract.
The selling price of a tender invitation document
(inclusive of tax) shall be decided by the Investor
based on the scale, characteristic of the tender
package, maximum price is 01 million VND for
domestic tendering. The fee for evaluation of result
of contractor selection, even in the case where can
not select a contractor, shall be 0.01% of the price
of the tender package and maximum of 50 million
VND. The fee for the Consultation Council to solve
the petition of the contractors on the result of
contractor selection shall be 0.01% of the
proposed contract sum of the contractors having
petition but no less than VND2 million and no more
than VND50 million.
LuatViet - Advocates & Solicitors
The valid period of tender documents must be
stipulated in detail in the tender invitation
documents, no more than 180 days from the date
of tender closing. In case where need the
extension of the valid time of the tender
documents, the party calling for tender may
request the contractors to extend for one or more
times but the total time limit of extension request
does not exceed 30 days.
Cases in which a direct appointment of a
contractor stipulated in the Decree include:
(a) Tender package for consultancy services with
a tender package price of less than 03 billion
dong, tender package for the procurement of
goods with a tender package price of less
than 02 billion VND.
(b) Tender package for construction and
installation, tender package for selection of
general construction contractor (except for
selection of general design contractor) with a
tender package price of less than 05 billion
VND being in the list of development
investment project stipulated in Article 1.1 of
the Law on Tendering.
(c) Tender package for the procurement of
assets with the price of less than 100 million
VND for maintenance of regular activities of
the State owned bodies, organizations.
This Decree takes effect from December 01, 2009,
replaces Decree No. 58/2008/ND-CP dated May
05, 2008, Decision No. 49/2007/QD-TTg dated
April 11, 2007.
October 2009 11
Newsletter Legal Updates
Construction – Real Estate
REGULATION ON PAYMENT OF LAND USAGE FOR PROJECTS
OF NEW URBAN ZONE
o n October 01, 2009, the Ministry of Finance
issued Circular No. 192/2009/TT-BTC providing
guidelines on model of land usage payment for
projects of new urban zone, residential house,
technical infrastructure in industrial zones that is
stipulated in Resolution No. 33/2008/NQ-CP dated
December 31, 2008 of the Government.
First-rank investors whose land is allocated or
whose land usage purpose is changed for the
implementation of the projects of new urban zone
investment and building, projects of building of
residential house for sale or for rent, projects of
investment, building and doing business of
technical infrastructure in industrial zones shall pay
the land usage payment in accordance with the
progress.
AMENDMENT ON MANAGEMENT OF INVESTMENT PROJECTS
OF WORKS CONSTRUCTION
o n October 15, 2009, the Government issued
Decree No. 83/2009/ND-CP amending a number of
Articles of Decree No. 12/2009/ND-CP dated
February 12, 2009 of the Government on
management of investment projects of works
construction.
For projects with capital of the State, the State
manages the project at all phases of the Project
until the time the operation of the construction
works. The people who make decision on the
investment shall be responsible for preparing
capital in accordance with the schedule of project
implementation, but no more than 3 years for
projects of Group C, no more than 5 years for
projects of Group B.
The authority of evaluation of the works
construction investment projects stipulated in
Article 10 is supplemented: The people who make
decision on the investment shall be responsible for
evaluation of the project before approval.
LuatViet - Advocates & Solicitors
The first payment is 70% of the total land usage
payment. The second payment of the remaining
30% of the total land usage payment shall be paid
after the construction works are completed and
handed over for use and no later than 18 months
from the date of the first payment of the land
usage.
In case that at the time of second payment of land
usage, the land price regulated and publicized by
the provincial People’s Committee changes 20%
or more, the financial authority must re-consider
the land price for calculation of the remaining 30%
of the total land usage payment and inform the tax
offices for issuance of Notice on land usage
payment.
The Circular takes effect after 45 days from the
date of signing.
The key body of evaluation is the professional unit
directly under the persons who make decision on
the investment.
The works construction investment projects using
30% or more of State capital shall be adjusted if
they are affected by the force majeure or having
elements giving more effectiveness for the project.
The examination, selection of architected design
for construction works including public
construction works of I size, special size;
construction works with specific architecture and
construction work decided by the Investor. The fee
for selection is calculated to total investment
capital of the project. The author of architecture
selected shall be protected its intellectual property
right.
This Decree takes effect from December 01, 2009.
October 2009 12
Newsletter Legal Updates LuatViet - Advocates & Solicitors

Commerce

NEW REGULATION ON OIL& GASOLINE BUSINESS

o n October 15, 2009, the Government issued

Decree No. 84/2009/ND-CP on business of oil and
gasoline.
This Decree is applicable to Vietnamese traders, is
not applicable to traders importing, producing and
making up oil and gasoline without circulating oil
and gasoline in the market.
Traders registering their business in the area
relating to import, export, production and
distribution of oil and gasoline or oil and gasoline
services business; reservation of oil and gasoline
circulation must satisfy the conditions on Permit,
technical material facilities, safety in distribution
and circulation ...in accordance with this Decree.
The selling price of oil and gasoline is in
accordance with the market regime with the
management of the State. The key trader has the
right to decide the wholesale price and is
responsible for participating in price stabilization in
conformity with the applicable laws and regulations
and shall be compensated reasonable expenses
when participating in price stabilization.
The Traders are only permitted to circulate in the
Vietnamese market the oil and gasoline, which has
quality in accordance with the National technical
Standard and Applicable Publicized Standard.
Trader doing oil and gasoline business must comply
with the current regulations on quality management
of oil and gasoline in the process of importing,
manufacturing, making up, reserving, transporting
and selling to consumers; is responsible for quality
of oil and gasoline in the distribution system under
his management; must ensure the accuracy of the
oil and gasoline measurements, sell oil and
gasoline of right quality and quantity.
This Decree takes effect from December 15, 2009,
replaced Decision No. 04/2009/QD-TTg dated
January 09, 2009 and Decree No. 55/2007/ND-CP
dated April 06, 2007.

The adjustment of the retail price of oil and

gasoline is carried out in accordance with the
following principle: the time limit between the
consecutive two times of adjustment no less than
10 days regarding the case of decrease; when
adjusting the retail price of oil and gasoline, the key
trader must send the decision on the price and the
price plan to the competent authorities. In case the
element forming the fluctuation resulting to the
decrease of the basic price in the limit of 12% (≤
12%) in comparison with the current retail price,
the key trader must correlatively decrease the
retail price; in case the element forming the
fluctuation resulting to the increase of the basic
price in the limit of 7% (≤7%) in comparison with
the current retail price, the key trader has the right
to correlatively increase the retail price.

October 2009 13
Newsletter Legal Updates LuatViet - Advocates & Solicitors

Commerce

MULTI-MODAL TRANSPORTATION

o n October 19, 2009, the Government issued

Decree No. 87/2009/ND-CP on multi-
modal transportation.
The license has a validity of 5 years. Organizations
which were granted their multi-modal
transportation licenses, must carry out the
procedure for re-issuance of the license upon
Multi-modal transportation means the goods expiry of such license.
transport by at least two different modality of
transports on a basis of a multi-modal This Decree takes effect from December 15, 2009,
transportation contract. replaced Decree No. 125/2003/ND-CP dated
October 29, 2003.
International multi-modal transportation goods
shall be free of customs examination, except for
case there has signal of doubt of transportation of
drug, weapon and forbidden goods.

Enterprises are only permitted to conduct

multi-modal transportation if they satisfy all of the
following conditions:

(a) Obtaining their Business Registration

Certificates (or Investment Certificates) in
which the line of business of multi-modal
transportation is registered.
(b) Maintaining maximum assets equivalent to
1 SDR
80.000 or having an equivalent
guarantee.
(c) Maintaining a professional liability insurance
coverage for multi-modal transportation
business or having equivalent guarantee.
(d) Possessing an international multi-modal
transportation business license.

The issuance of the international multi-modal

transportation business license is under the
authority of the Ministry of Transport within the
time limit of 10 working days from the date of
receipt of a valid file for issuance of a license.

October 2009 14
Newsletter Legal Updates LuatViet - Advocates & Solicitors

Bill

DRAFT DECREE ON THE MANAGEMENT OF CASINO

AND PRIZE-WINNING ELECTRONIC GAMES

C urrently, there is stil lack of detailed

regulations on the business of casino and
prize-winning electronic games in Vietnam.
In comparison with the Decision 32/2003/QD-TTg,
the conditions seem to be stricter but clearer that
only the hotel with at least 5 star rate and a
The avaiable regulations in this sector include: to-be-appointed administrator eligible in terms of
professional skills shall conduct the prize-winning
- Decision No. 32/2003/QD-TTg of Prime electronic games. The present prize-winning
Minister dated 27/2/2003 promulgating the electronic games businesses can maintain their
regulation on business in prize-winning operation and, unless reaching the standard of 5
electronic games for foreigners; star rate hotel by 2020, shall not be re-licensed.
Furthermore, the enterprises planning to establish
- Decision No. 91/2005/QD-BTC dated new casino business shall have relevant
8/12/2005 and Decision 84/2007/QD-BTC at-least-ten-year-experience; a project inclusive of
dated 27/10/2007 of the Ministry of Finance recreation complex and the required legal capital,
on promulgation of regulations on financial among other requirements. At present, according to
management of prize-winning electronic Announcement 96/TB-VPCP, investment project of
game business; casino business must have at least 4 billion USD
- Announcement No. 96/TB-VPCP dated investment capital. Additionally, casino area and
4/5/2007 of the Government Office prize-winning electronic games must stand fairly
conveying opinions of the Prime Minister on isolated from other business areas.
the project oriented towards the
development and management of the casino This draft decree is expected to be approved in the
business in Vietnam. first quarter of 2010 and will once approved
replaces Decision No. 32/2003/QD-TTg dated
27/3/2009 of the Prime Minister.
In line with the needs for development of the
country in general and tourism & recreation in
particular, the Ministry of Finance has prepared,
and is currently calling for opinions on a draft
decree on the management of casino and
prize-winning electronic games in order to
strengthening the State management, as well as to
create a transparent legal corridor for the investors
to run the business in this area. Under this draft
decree, the Government still holds the position that
only foreigners and overseas Vietnamese may
participate in such games. Accordingly, the
employees working for casino businesses who fall
under the gambling subjects as aforesaid shall not
permitted to engage themselves in casino and
prize-winning electronic games of those
businesses.

October 2009 15
Newsletter Legal Updates LuatViet - Advocates & Solicitors

LuatViet News

LUATVIET PARTICIPATED IN THE VnTPO 2009

T he largest International Conferences &

Exhibitions focusing on real estate investment
held 21-22 October 2009 (VnTPO 2009) is one of
as a moderator of panel discussions. Under Mr.
Tran Duy Canh’s direction, the discussions on real
estate development in Northern provinces &
Mekong areas, particularly a current hot topic in
the most eagerly awaited events in 2009, drawing
Vietnam, Casino business, created an exciting
numerous local & international investors, project
atmosphere and provided necessary and valuable
owners and specialists, Government leaders and
information to the participating guests.
more than 500 real estate projects. Mr. Tran Duy
Canh, Managing Partner of LuatViet Advocates &
VnTPO 2009 is regarded the largest forum for real
Solicitors, and one of the founders of Vietnam
estate managers and investors in Vietnam.
Tourism Property Association, an organizer of
VnTPO 2009, participated in this event and acted

LUATVIET PUBLISHED THE LEGAL GUIDE FOR DOING

BUSINESS IN VIETNAM

L uatViet published a book titled “A Legal

Guide for Doing Business in Vietnam”
on 22 October 2009. The book provides an
overview on Vietnam investment law in the context
of the country’s integration into the world
economy. The book is divided into 12 chapters,
organized based on some key issues of Vietnam
business & investment law such as incorporation,
forms of investment, finance market, labour and
employment, WTO commitments on market
opening, land and real estate, intellectual property,
M&A, tax policy, bankruptcy of enterprises,
competition law, dispute resolution and
immigration. The book is compiled by practicing
lawyers of LuatViet based on their actual
experience, which can be quite valuable to other
perspective of investors, especially foreign
investors.

The book, written in both Vietnamese and English,

professionally designed and printed in Econo 100
paper, and provided totally free of charge to
interested investors..

Bản tin tháng 10/2009 16

Newsletter Legal Updates
Q & A Section
Question 1:
The joint stock company of that we are the shareholders
had taken place on the extraordinary meeting of the
General Meeting of Shareholders (the “GMS”) on
October 06, 2009. However, before the meeting was
held, the website of our Company had post the
Regulation on organizing the GMS. Accordingly, the
Regulation was approved at the meeting of the Board of
Management on September 27, 2009, and it would
come into effect from October 6, 2009, at the GMS.
However, in the GMS dated October 6, 2009, the
organization Board did not raise the Regulation to the
GMS for us to approve it. Please kindly advice whether
the action of the Organization Board of this meeting is
illegal or not? What could the shareholders do in this
case ? 2
Answer:
The Regulations on organizing of the General Meeting
of Shareholders are the internal management rules of
the Company and that can be issued to manage how to
organize the General Meeting of Shareholders.
Item k Clause 2 Article 108 of the Law on Enterprises of
2005 stipulates that the Board of Management have the
rights and duties to make decisions on the
organizational structure and internal management rules
of the Company. As above regulation, the Regulations
on organizing of the General Meeting of Shareholders is
issued and approved by the Board of Management, do
not need the approval of the General Meeting of
Shareholders.
However, the Regulations on organizing of the GMS
must be in accordance with the Charter of the Company
and the 2005 Law on Enterprises. In case of the
shareholder does not agree to the content of the
Regulations on organizing the GMS or the shareholder
reckons that this Regulation is not in accordance with
the Charter of the Company and the 2005 Law on
Enterprises, the shareholder or the group of
(2) Article of LuatViet’s lawyers posted on the Investment Bridge Section – Securities Investment Newspaper 121 (749) dated October 09, 2009
(3) Article of LuatViet’s lawyers posted on the Investment Bridge Section – Securities Investment Newspaper 124 (752) dated October 16, 2009
LuatViet - Advocates & Solicitors
shareholders have the right to complain to the Board of
Management of the Shareholding company for the Board
of Management to reconsider its decision. Otherwise, a
shareholder or a group of shareholders holding more
than ten (10) per cent of the total ordinary shares for a
consecutive period of six months or more, or holding a
smaller percentage as stipulated in the Charter of the
Company, shall have the right to request the convening
of the extraordinary meeting of the GMS in order to
resolve this problem (Clause 2 Article 79 of the 2005 Law
on Enterprises). Moreover, the shareholder can wait until
the next GMS to recommend his/her opinions in writing.
This recommendation must be sent to the Company no
later than three working days prior to the date of opening
of the GMS, unless the Charter of the Company
stipulates another time-limit (Clause 2 Article 99 of the
Law on Enterprises of 2005).
Question 2:
My company has been dealt with breach by the State
Securities Commission (SSC) due to its breach of the
regulation on tender offer of securities. The SSC
requested the Board of Management to convene the
extraordinary meeting of the GMS to inform
shareholders of such breach and, concurrently, to inform
shareholders of returning the money paid by them for
buying securities if they request. After that, base on the
request of the SSC, the Board of Management approved
this decision and inform the GMS. However, at the
extraordinary GMS, a member of the Board of
Management supposes that the GMS has to approve
this decision, instead of just informing like that. Is the
opinion of the member of the Board of Management right
or wrong? 3
Answer:
According to the Article 13 of the 2006 Law on Securities,
registration of a tender offer of shares or bonds is a
required obligation of the issuing organization.
Accordingly, before implementation of the tender offer of
October 2009 17
Newsletter Legal Updates
Q & A Section
securities, public companies have to submit the
application file for registration of a tender offerof
securities to the SSC. Within a time limit of thirty (30)
days from the date of receipt of a valid application file,
the SSC shall consider and issue a certificate of
acceptance [of registration] of the tender offer of
securities to the issuing organization.
Your company is a public company. Therefore, it must
comply with the procedure stipulated in Article 13 of the
Law on Securities of 2006. Accordingly, it appears that
your company breached such regulation, therefore, it
was dealt with breach by the SSC.
For the meeting of the GMS, Clause 3 Article 97 of the
2005 Law on Enterprises stipulates that the Board of
Management must convene an extraordinary meeting of
the GMS in the following cases:
(a) The Board of Management considers it
necessary to do so in the interests of the
company;
(b) The number of the remaining members of the
Board of Management is less than the
number of members required by law;
(c) Upon request by a shareholder or a group of
shareholders as stipulated in clause 2 of
article 79 of this Law;
(d) Upon demand by the Inspection
Committee;
Disclaimer::
Newsletter legal updates is designed for general information only. The information contained therein should not be
construed to be formal legal advice or the formation of a lawyer - client relationship. Persons receiving this are
encouraged to seek our lawyers for advice regarding their legal issues. If you wish to unsubscribe, please follow the
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LuatViet - Advocates & Solicitors
(e) In other cases stipulated by law and the
Charter of the company.
Currently, there are no specific regulation of laws
providing that the SSC has the right to request the
public company to convene an extraordinary meeting of
GMS. In principle, except the Charter of your company
has the regulations on the other cases the Board of
Management must convene an extraordinary meeting of
GMS, your company does not need convene an
extraordinary meeting of the GMS.
However, your company is required to comply with
regulations on corporate information disclosure as
stipulated in the Law on Securities.
According to item a Clause 4 Article 101 of the Law on
Securities, a public company must disclose information
upon request of the SSC on the occurrence of the
events: There is information relating to the public
company that seriously affects the lawful interests of
investors.
According to Clause 4 Article 100 of the Law on
Securities, information shall be disclosed by way of the
mass media, by publications of organizations and
companies, and on the information network of the Stock
Exchange or Securities Trading Centre, but not by way
of an extraordinary meeting of GMS.
October 2009 18