New guidance on registration of mortgage of land use right and construction works - Part 1

New guidance on registration of mortgage of land use right and construction works - Part 1

On 25 November 2019, the Ministry of Justice (MOJ) issued Circular 7 guiding some contents of mortgage of land use right and asset attached to land (Circular 7/2019). Circular 7/2019 will take effect from 10 January 2020 and replace Joint Circular 9 of the MOJ and Ministry of Natural Resources and Environment (MONRE) dated 23 June 2016 (Joint Circular 9/2016) on the same subject matter. In general, Circular 7/2019 only provides some guiding and supplementing provisions for Decree 102 of the Government dated 1 September 2017 (Decree 102/2017) rather than providing detailed guidance as Joint Circular 9/2016.

Competent authority managing the registration of mortgage

Previously, the document detailing the registration of mortgage over land use right and asset attached to land is usually a joint circular of the MOJ and MONRE. However, since joint circular is no longer legislative document (văn bản quy phạm pháp luật) under Law on Laws 2015. Accordingly, the unified authority to manage the security interest registration is vested in MOJ. Under Decree 102/2017, the MOJ now has the authority to issue or to submit for the Government to issue legislative documents on the registration of security interest, which includes Circular 7/2019.

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Written by Nguyen Quang Vu On In ,

New Decree on Vietnam Competition Law Sanctions

In September 2019, the Government issued new Decree 75/2019 providing administrative sanctions regarding violation of the Vietnam new competition law. Decree 75/2019 details violation in competition including violation of (a) competition-restricting agreements, (b) abuse of a dominant market position or monopoly position; (c) economic concentration; and (d) unfair competitive practices. Set out below are some notable changes in Decree 75/2019:

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Written by Nguyen Quang Vu On In ,

Treatment of a Board Chairman with related interests in a Vietnamese company

To control contracts between a Vietnamese joint stock company (JSC) with its related persons, the Enterprise Law 2014 requires such a contract to be approved by the Board or the Shareholders Meeting of the JSC. If the related party contract is to be approved by the Board,   the law prohibits a Board member with related interests from voting on such contract. However, if the Board Chairman is the Board member with related interests, the law does not make clear that the Board Chairman should also not involve in other steps relating to approval of the related party contract. These other steps include preparing the draft Board resolutions, convening and chairing the Board meeting to consider the contract. These steps could be key to decide whether the related party contract could be approved.

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Written by Nguyen Quang Vu On In

Contract Structure for Senior Managers in Vietnam – Part 2

When a company hires a senior manager, it usually wants to (1) hire the manager for a fixed term only, and (2) have the flexibility to fire the senior manager if he/she does not perform as expected. However, under the Labour Code 2012, a fixed-term contract is limited to three years, and to fire or to change the work of an employee, the employer must satisfy various strict conditions.

To overcome these restrictions, the employer may specify in the employment contract with the senior manager that the senior manager is employed to work for two different jobs. These two jobs are:

·         The senior-level job that the employee is recruited for. The senior-level job will provide the senior manager with all the salaries and benefits associated with such job; and

·         an entry-level job with minimum wage and benefit.

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Written by Nguyen Quang Vu On In