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Posted in: Merger & Acquisition
The National Assembly of Vietnam passed a new Investment Law on 17 June 2020 which will become effective on 1 January 2021 (LOI 2020) and replace the current Investment Law 2014 (LOI 2014). In this briefing, we briefly discuss some new key points of LOI 2020.
This briefing is written by Ha Thi Dung and edited by Nguyen Quang Vu with the research assistance of Tran Kim Chi.
Please download our write up here.
The Competition Law 2018 defines an anti-competitive agreement to mean: (a) an act of agreement between parties in any form, and (b) which causes or has the ability to cause a competition-restraining impact. Under Article 3.3. of the Competition Law 2018, a competition-restraining impact means an impact, which removes, reduces, distorts or hinders competition in the market. The definition of anti-competitive agreement is a new provision under the Competitive Law 2018 which the Competition Law 2004 does not have.
The Competition Law 2018 continues to provide a list of specific agreements which may be considered as an anti-competitive agreement which is similar to that of the Competition Law 2004. However, due to the new definition under the Competition Law 2018, logically, an anti-competitive agreement must now satisfy two tests:
Introduction
In June 2020, the National Assembly passed a new Law on Enterprises 2020 (Enterprise Law 2020) to replace the Enterprise Law 2014 from 1 January 2021. The Enterprise Law 2020 was issued just four years after the Enterprise Law 2014 came into effect. So, in just 20 years Vietnam already has four different versions of the Law on Enterprises. Such frequent changes could cause concerns to investors since they will not know for sure that their rights as a member or shareholder in a company in Vietnam will not be adversely affected by another set of changes in 2025. The fact that many of the changes introduced under Enterprise Law 2020 are just wording changes (but at the same time fail to clarify various unclear issues under the Enterprise Law 2014) also raises questions about the quality of the law-making process in Vietnam.
This post is written by Nguyen Quang Vu. Our comments are based on the version of the Enterprise Law 2020 supplied by Mr. Truong Trong Nghia, a member of the National Assembly and Vietnam Business Lawyers Club (VBLC). Since the official version of the Enterprise Law 2020 has not been released, our comments are subject to change. For easy reference, a compared version between the Enterprise Law 2020, and the Enterprise Law 2014 in Vietnamese can be downloaded here.
The Competition Law 2018 does not exempt internal restructuring within the same group of companies from merger filing requirements. That said, arguably, internal restructuring between companies which are under the control of the same ultimate parent company is not subject to merger filing in Vietnam. This is because:
Under the competition law, the market share of a company is calculated by reference to the market share of the group of companies that such a company belongs to (the Group). Therefore, an internal restructuring does not have any impact on the market share of the Group and accordingly any anti-competitive impact on the market. Relying on Article 1 of the Competition Law 2018 which provides for the scope of application of the Competition Law 2018, one could argue that an internal restructuring transaction is not governed by the Competition Law 2018;