Divestment from insurance sectors by State-owned Enterprises
Earlier this month, the Prime Minister approved the restructuring plan for securities and insurance sectors in Decision 1826/2012. According to Decision 1826/2012, all State-owned or State-controlled enterprises including commercial banks are required to divest from insurance companies. In particular, these SOEs are required to reduce their ownership interest in insurance companies to less than 20% charter capital of the relevant insurance companies by 2015. Currently, there are several insurance companies controlled by SOEs including PetroVietnam Insurance Company, Post Telecom Insurance Company, Vietnam Airline Insurance Company, BIDV Insurance Company, Vietinbank Insurance Company, AgriBank Insurance Company, and Petrolimex Insurance Company. If Decision 1826/2012 is implemented in practice then one could expect an increased number of deals regarding insurance companies in the next couple of years.
The Land Law 2024 introduces major amendments to the land use regime in Vietnam. One of the most interesting new amendments is the ability of a land user who lease land from the Government with annual rental payment (such user, Annual Land User) could now sub-lease or, subject to certain conditions, sell the land (via a sub-lease or sale of the lease rights) together with the assets attached to such land to another person. Previously, most land users who pay land rental for the whole term in advance could sublease or sell its land to another person. In our opinion, if implemented properly, the new amendment could improve the supply side of the real estate market substantially.
While it is common in practice for the Chief Representative of a Representative Office (RO) to act on behalf of the RO in opening and using the RO's bank account, there are instances where the parent company may wish to authorize another person (Authorized Person) to handle these matters. The key question is the validity of such authorization and whether the Chief Representative's acknowledgment of such Power of Attorney (POA) should be sought.
Short answer: The authorization for the Authorized Person should originate from the RO, not the parent company. If the authorization is granted by the parent company, it should be recognized by the Chief Representative as the "legal representative" of the RO. This acknowledgment would then serve as a concurrent authorization by the RO.
In this post, we highlight some key changes to regulations on industrial zone land under the new Land Law 2024.
State-owned developers
Regarding areas eligible for investment incentives (those with underdeveloped socio-economic conditions) that are unable to attract private developers, the Land Law 2024 allows the State to lease or allocate land to a public-service entity (đơn vị sự nghiệp công lập) to develop industrial zones.
Under the Land Law 2013, it appears that only economic organization, foreign-invested company, and Vietnamese individual residing oversea can become industrial zone developer (IZ Developer).
IZ Developer’s option to change method of payment for land rental
The Land Law 2024 expressly allows the IZ Developers using industrial zone’s land via annual rental payment method to change to the one-off land rental payment method for all or part of the leasable land area.
The Land Law 2013 also generally entitles a land user using land on annual rental payment to change to using land with one-off land rental payment. However, the law does not make clear whether the change can be made for separate land parcels in the industrial zone. Accordingly, one may take a strict view that the IZ Developer may only convert all industrial zone land to one-off rental payment instead of a portion of it.
The new regulation of the Land Law 2024 may provide flexibility for both a IZ Developer and its tenants in negotiating the suitable land rental payment method.
After the expiration of the preferential Feed-in Tariff (FiT) policy for solar and wind power projects in Vietnam, the energy selling price of solar and wind power plants in Vietnam will now be up to the parties’ negotiation in a power purchase agreement (PPA) but must be within the electricity generation price (EGP) bracket approved by the competent authorities. For that purpose, on 1 November 2023, the Ministry of Industry and Trade (MOIT) issued Circular 19 regulating the mechanism for establishing EGP brackets for solar and wind power plants (Circular 19).
From 1 January 2025, under the new Land Law 2024, Vietnamese who reside overseas and still hold Vietnamese nationality (Vietnamese citizens) will be treated as Vietnamese individuals residing in Vietnam in the matters relating to land use rights in Vietnam, while the land use scheme applicable to persons having Vietnamese origin (người gốc Việt Nam) remains as same as to the one applicable to overseas Vietnamese under the Land Law 2013. This is one of the key changes under the Land Law 2024 relating to Vietnamese residing overseas. This article provides some highlights of the land use scheme applicable to these two groups of land users: (i) Vietnamese citizens and (ii) persons of Vietnamese origin.