Regulations on digital wallets in Vietnam

Digital wallets are an important tool for the development of e-commerce and fintech industries. The State Bank of Vietnam (SBV) has issued certain regulations on digitial wallets. However, these regulations seem to be inadequate.

Under Decree 101/2012, a digital wallet is regarded as a payment intermediary service (dịch vụ trung gian thanh toán) whereby the wallet user is issued a digital account associated with an electronic media (e.g., a mobile phone) and containing a monetary value. The monetary value in a digital wallet is secured by monies transferred from the user’s bank account to the wallet service provider’s account. User can only inject and withdraw cash from a digital wallet through the user’s account. Monies in the wallet service provider’s account can only be used to pay for goods or service providers or to return to the wallet user. The Law on Anti-money Laundering 2012 requires a digital wallet service provider as a financial institution with new technology to meet face-to-face with its clients when the clients first make a transaction with the service provider.

In light of the above regulations,

• An user without a bank account cannot have a digital wallet in Vietnam. This could hinder the growth of digital wallet.
• Direct money transfers between two digital wallets are not permitted. In practice, the SBV is allowing certain digital wallets to conduct direct monies transfer on a pilot basis.
• An user cannot withdraw cash or inject cash directly to his/her digital wallet. This must be done via a bank account.
• Monies in a digital wallet may not be used as security for lending.
• A digital wallet provider is required to meet face to face with its customer whenever a wallet is issued. 

5 September 2018 - Update to reflect the requirements under Anti-money laundering regulations.

New Law on Technology Transfer in Vietnam

A new Law on Technology Transfer will take effect from 1 July 2018. The new Law on Technology Transfer reintroduces the requirement for registration of cross border transfer of technology which was abolished under the existing Law on Technology Transfer in 2006. The registration is the condition for a technology transfer contract to be valid. However, the new law does not impose any specific restriction on a technology contract like maximum contract period or cap on technology transfer royalty. Without these limitations, it is not clear on what basis the licensing authority would register or refuse to register a technology transfer contract.

This post in part is contributed by Nguyen Linh Chi, an intern at Venture North Law Limited.

Is information property under Vietnamese law?

In many circumstance, information (e.g. user data) is more important to a business than its physical assets. This leads to an important question about the legal nature of information under Vietnamese law. Under the Civil Code 2015, a property (tài sản) is object, money, valuable papers and property rights. Except for intellectual property rights (including trade secret and data compilation) which are clearly recognised as a property right, the law is not clear whether other types of confidential information can be regarded as property.

The Civil Code 2015 also recognises and protects “civil rights” (quyền dân sự). Civil rights can be established as the result of the business operation or production operation. Accordingly, in theory, information, which is created (or generated) from business operation or production operation, could arguably be subject to civil right of the relevant entity which creates such information. However, the problem is there may be more than entities which create the information.