Decree 46/2017 - New conditions for establishing a school in Vietnam

From 21 April 2017, Decree 46/2017 introduces a new set of conditions for establishment of domestic schools from kindergarten to university levels. The new conditions replaces various legislation of the same topics. However, these conditions do not apply to foreign-invested schools (FIE schools). In additions, schools established before 21 April 2017 need not to comply with the new and, in many cases, stricter conditions. The table below summarises the key conditions for setting a domestic school under the old regulations, setting up an FIE school under Decree 73/2012, and setting up a domestic school under Decree 46/2017.

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

Is hourly minimum wage in Vietnam permitted?

The Labor Code 2012 is silent whether a part time employee’s monthly salary could be lower than the monthly minimum wage published by the Government (currently VND 3,750,000 per month) as long as his/her hourly salary is higher than the hourly minimum wage converted from the monthly minimum wage.

Proxy contest in Vietnam

Vietnam securities regulations do not have specific regulations governing a proxy contest where a shareholder or group of shareholder actively seeks to obtain proxies from other shareholders in order to influence the decision of the Shareholder Meeting (e.g. electing new Board directors or approving certain important corporate matters). In particular, a shareholder, who seeks to obtain proxies from other shareholders in a Public Joint Stock Company (Public JSC), is not required to make any public disclosure or filing about its intention for the proxies obtained.

New Bank Lending Regulations Circular 39/2016 (2)

On 14 March 2017, the State Bank of Vietnam (SBV) has issued an Official Letter No. 1576/NHNN-CSTT (OL 1576) explaining several points of its Circular 39/2016, including:

confirmation that applicable interest rate of a loan can be described in general in a frame loan agreement and specified (with conversion to per cent per annum) in a relevant debenture note;
confirmation that commitment fee can only be applied one time only; and
a further guidance that if the bank and its customer agree on an interest rate calculated on the basis of a year having 360 days, then the loan agreement also has to include an interest rate calculated on the basis of a year having 365 days;
if the repayment period is restructured, overdue interest can be applied to overdue interest amount but it cannot be accumulated over overdue principal amount during the extended period; and
regarding floating interest, if the formula or its calculating factor is not clear which resulted to different interest rates, the lowest one shall be applied by default.

One important change made by Circular 39/2016 is that the loan period will start on the day immediately after the disbursement date rather than the disbursement date itself as provided by previous legislation. Consequently, interest payable by the borrower will also have to be calculated on that day. This change may appear small in theory but could cause material change in practice. This is because most banks are using software to calculate interest. And it appears that many systems have been set up according to previous practice which cannot be easily changed to reflect the change introduced by Circular 39/2016. The SBV however has not offered any clarification on this point.

This post is contributed by Nguyen Hoang Duy, an associate at Venture North Law Limited.

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Vietnam Business Law