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 amendments to regulations on foreign investment in education sector in Vietnam

In June 2018, the Government issued Decree 86/2018 on cooperation with and investment by foreign investors (Decree 86/2018). Decree 86/2018 replaces Decree 73/2012 as from August 2018. In comparison with Decree 73/2012, Decree 86/2018 introduces certain notable changes as follows:

• Decree 86/2018 no longer applies to foreign investment in vocational education (đào tạo nghề).  
• For the first time, joint cooperation with foreign investors is permitted at all level of education including preliminary schools, secondary schools and high schools. Under Decree 73/2012, joint cooperation is only permitted for university education.
• Decree 86/2018 expressly provides that a foreign investor to invest in education sector by contributing capital or to purchase shares and capital contribution from (1) a Vietnamese educational institution or (2) a foreign-invested business entity that establishes an educational institution in Vietnam. Decree 86/2018 also defines a foreign-invested educational institution as an education institution invested by foreign invested business entity.
• Decree 86/2018 increases the cap on number of local students that a foreign-invested primary, secondary school, or a high school can enrol to 50% of the total students. Under Decree 73/2012, the cap is 20%.
• Decree 86/2018 makes it more difficult for foreign investors to invest in universities in Vietnam by increasing the minimum investment amount to VND 1,000 billion (from VND 300 billion).

This post is contributed by Ha Kieu Anh, a legal trainee at Venture North Law.