New Amendments to Vietnam Construction Law

The National Assembly has passed the Law Amending and Supplementing some Articles of the Construction Law 2014 (Construction Law 2020). The Construction Law 2020 will take effect from 1 January 2021 and contain some notable points as below.

1. Pre-feasibility study

Construction Law 2020 promulgates new projects that are subject to preparing a pre-feasibility study (Pre-FS). In particular, the projects that must prepare a Pre-FS include:

  • Projects of national importance. This requirement is the same under Construction Law 2014. Criteria to determine whether a project is of national importance is regulated under the Law on Public Investment 2019;

  • Group A projects financed by public investment capital (vốn đầu tư công). Construction Law 2014 requires all Group A projects to prepare the Pre-FS. Criteria to determine whether a project falls within the scope of Group A projects is regulated under the Law on Public Investment 2019;

  • PPP projects under regulations governing PPP projects. Construction Law 2014 does not specify the requirement of preparing the Pre-FS of a PPP project; and

  • Projects that are subject to obtaining in-principle approval from the National Assembly or the Prime Minister. Construction Law 2014 does not require these projects to prepare the Pre-FS. Under the Investment Law 2020, the Pre-FS can serve as the proposal for implementing a project.

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Written by Nguyen Quang Vu On In ,

Determination of a group of affiliated enterprises under Vietnam merger control regulations

“Group of affiliated enterprises” (Nhóm công ty liên kết) is an important concept under the merger control regulations in Vietnam. This is because this concept is used to calculate (1) the relevant notification thresholds (e.g., market share, revenue, or total assets) of an economic concentration, and (2) the market share of a party to an economic concentration. Unfortunately, Decree 35/2020 provides an unclear definition of a group of affiliated enterprises. In particular, Decree 35/2020 defines that a group of affiliated enterprises means a group of enterprises which are jointly subject to control and governance by “one or more of the enterprises” within said group, or which shares the same management.

The following issues may arise from the definition of a group of affiliated enterprises under Vietnamese merger control rules:

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Written by Nguyen Quang Vu On In ,

Major New Restrictions On Telemarketing In Vietnam

In August 2020, the Government passed a new Decree 91/2020 to govern all forms of advertising via telecommunications means such as SMSs, e-mails, and phone calls. Decree 91/2020 will take effect from October 2020 and replace Decree 90/2008. Decree 90/2008 used to only impose restrictions on marketing text messages and e-mail (but not telephone). However, Decree 91/202 now introduces a range of new restrictions on telemarketing activities and corresponding sanctions. Texts, emails, or phone calls that are not compliant with these requirements will be deemed spam. In this post, we briefly discuss some notable points of Decree 91/2020.

Requirements for prior consents of the targeted consumers

Under Decree 91/2020, telemarketers are not permitted to make any marketing calls before obtaining the prior consent of the targeted consumers. Decree 91/2020 abolishes the “opt-out” regime where a marketer can consider the lack of response from a targeted customer as consent for receiving advertising messages.

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Written by Nguyen Quang Vu On In

Amendments to the interest expense cap under Decree 20/2017

In June 2020, the Government adopted Decree 68/2020 amending the rules on interest expense cap under Decree 20/2017. Under Decree 20/2017, the total interest expense which can be deductible for the purpose of calculating corporate income tax of a company must not exceed 20% of the company’s EBITDA. The restriction has caused massive objection from Vietnam enterprises since Decree 20/2017’s purpose is to regulate tax arising from related transactions but not to regulate corporate income tax in general. In addition, the Law on Corporate Income Tax does not contain an interest expenses cap.

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Written by Nguyen Quang Vu On