Classifying business lines under VSIC and Provisional CPC

Under the current forms applicable to investment procedures to obtain an Investment Registration Certificate or a registration of an acquisition by a foreign investor, the foreign investor and the target company must specify the business lines of the target company according to both Vietnam Standard Industrial Classification (VSIC) and Provisional Central Product Classification (Provisional CPC). The VSIC is based on the International Standard Industrial Classification, not the Provisional CPC. Therefore, there might be some discrepancies among the scope of services under the VSIC and the Provisional CPC. In other words, when registering business lines, foreign investors might face the issue where the scope of a class under one classification might not be covered by a corresponding one under the other classification.

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Written by Nguyen Quang Vu On In ,

Controlling of conflicts of interest in public companies and credit institutions under the Vietnamese Anti-Corruption Law 2018

The new Anti-Corruption Law 2018 expands to regulate anti-corruption practices in private sectors and includes a new mechanism on controlling conflict of interests. For private sectors, the provisions on controlling of conflict of interest under Anti-Corruption Law 2018 apply to, among other things, public joint stock companies, and credit institutions. It appears that other private companies are not subject to the provisions on controlling of conflict of interest under Anti-Corruption Law 2018.

Under the Anti-Corruption Law 2018, conflict of interest means a situation where the interest of a company official or his/her relative have or likely to have an influence on performance of such official’s duties. Company officials who may be subject to the rules on conflict of interest under the Anti-Corruption Law 2019 include:

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Potential (incorrect) limitation on Foreign-Invested Enterprises’ Leasing Office in Vietnam

Article 14 of the Law on Real Estate Business 2014 has the title “Entities which can purchase, receive assignment, lease, hire-purchase (thuê mua) real esates from real estate companies”. Article 14.2 of the Law on Real Estate Business 2014 provides that a foreign-invested enterprise (FIE), as a customer of a real estate company, is allowed to “purchase, hire-purchase houses, construction works to use for offices or business facilities in accordance with use function of such houses, construction works”. Article 14.2 does not include “leasing from real estate companies” from the permitted scope of purchase by an FIE. Technically, this could mean that an FIE is not allowed to lease office from real estate developers in Vietnam.

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Treatment Of E-Cigarettes Under Vietnamese Law

After years of existence, it is still arguable whether e-cigarette (thuốc lá điện tử) should be regarded as actual tobacco (thuốc lá). Accordingly, it is not clear how e-cigarette business should be regulated under Vietnamese law.

Under the Law on Tobacco Prevention 2012, tobacco is defined to be “a product wholly or partly manufactured from tobacco ingredients, processed in the form of cigarettes, cigars, tobacco shreds, pipe tobacco and other forms”. The word “other forms” could broadly cover many forms of product. However, from the definition, the key when identifying whether a product is a tobacco product is not its form, but its ingredients.

In most cases, e-cigarettes are battery-operated devices that work by heating a liquid solution (e-liquid), from which vapor is then produced. This e-liquid usually contains nicotine – a stimulant typically made from tobacco plants. Meanwhile, the definition of tobacco ingredients under the Law on Tobacco Prevention 2012 includes multiple forms of tobacco leaves, tobacco shreds, tobacco stalks and other substitute ingredients used for tobacco production.

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Written by Nguyen Quang Vu On In