View of the State Bank of Vietnam on P2P lending

On 8 July 2019, the State Bank of Vietnam (SBV) expresses its view and recommendation to credit institutions in Vietnam (CIs) on peer-to-peer lending activities (P2P Lending). The SBV’s view is as follows:

· P2P Lending is built on a digital platform which connects borrowers and lenders without having to go through financial intermediaries (such as CIs). All lending activities will be recorded on the platform.

· The SBV acknowledges that P2P Lending is not specifically regulated by current regulations.

· Besides its potential to create additional way to mobilize capital, P2P Lending can give rise to the following risks: (1) misleading information provided by P2P Lenders about the product’s safety, (2) the lack of oversight on P2P Lending’s platform in terms of cybersecurity, (3) P2P Lenders’ using customer information for predatory lending activities, and (4) P2P Lending being considered as activities of CI.

New guidance of the State Bank of Vietnam (SBV) on foreign direct investment

M&A lawyers in Vietnam usually spend a great deal of time (and client’s monies) to figure out how and when payment for an M&A transaction should be made. This is partly due to the fact that the SBV has not issued any guidance on foreign exchange control for investment activities under the Investment Law 2014 since 2015. From September 2019, hopefully, the situation will be significantly improved thanks to the new Circular 6/2019 of the SBV. Under Circular 6/2019,

· Foreign-invested enterprises, which must open a Direct Investment Capital Account (DICA), include, among others, (1) enterprises which are incorporated by, among others, foreign investors and are issued an Investment Registration Certificate (IRC), and (2) enterprises which are first incorporated by Vietnamese investors but are later acquired by foreign investors who own 51% or more of the charter capital of such enterprises. Previously, enterprises under (2) are not required to open a DICA if they do not have an Investment Registration Certificate. However, it appears that an enterprise, which is a subsidiary of a DICA enterprise, is not required to open a DICA.

· The DICA is used by a DICA enterprise to handle fund transfers for capital transactions such as capital contributions by shareholders/members of the DICA enterprise or loans from foreign lenders. For M&A transactions including secondary transfer of shares/capital contribution, the DICA plays an important role because the SBV requires payment for secondary transfer of capital in a DICA enterprise to be made via DICA. The bank which operates DICA could require various supporting documents in order to allow monies can be transferred in or out of the DICA.

Key Approvals And Contracts Required For A Wind Farm Project In Vietnam

Below is a list of key approvals and contracts required for a wind farm project in Vietnam (the Project):

Permission by provincial People’s Committee for the Project to carry out wind measurement;
Report on wind measurement result to the provincial People’s Committee;
Approval of the Pre-Feasibility Study of the Project;
Approval of the basic design part of the Feasibility Study of the Project;
In-principle Approval of the Project under the Investment Law 2014;

When a security deposit in Vietnam can be forfeited?

Deposit (đặt cọc) is a form of security interest. Deposit means a sum of money, precious metals, gemstones or other valuable objects delivered by one party to another party for a period of time as security for the entering into or performance of a contract. Article 328.2 of the Civil Code 2015 provides that the deposit receiver (i.e., the secured party) can own the deposit when the depositor (i.e., the securing party) “rejects” (từ chối) the performance of the contract. The word “rejection” indicates that the relevant party may need to clearly refuse to perform the contract. And the Civil Code 2015 is not clear whether a failure to perform could constitute a rejection of the performance contract. To clarify this point, a deposit agreement should specify that a failure to perform the contract is deemed to constitute a rejection of the performance of the contract.

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Vietnam Business Law